18 February 2011 19:07 [Source: ICIS news]
HOUSTON (ICIS)--LyondellBasell’s North American polyethylene (PE) margins have continued to be pressured by supplier outages and rising feedstock costs, its chief executive said on Friday.
Speaking on an earnings conference call, CEO Jim Gallogly said the recent fire at Enterprise Products’s natural gas liquids (NGL) plant in Mont Belvieu, ?xml:namespace>
Producers were citing tight industry supply and the rising raw material costs as their rationale for PE increases, he said.
But the company said Friday that it planned to restart the cracker over the weekend, likely loosening supply.
Gallogly also cited recent cold weather-related disruptions in the central US, particularly around
The lagging PE results continued a trend from the 2010 fourth quarter, the company said, when profits dipped by $70m (€51.8m) from the third quarter amid outages and rising feedstock costs.
Specifically, US ethylene prices increased by about 10 cents/lb ($220/tonne) in the fourth quarter, while PE producers were only able to raise prices by around 5 cents/lb, Gallogly said.
"It didn't keep pace with the ethylene price increases," Gallogly said.
Fourth-quarter volumes were also down after an extended outage at INEOS’s two Chocolate Bayou crackers in
In addition, LyondellBasell had an unplanned outage at one of its 873,000 tonne/year Channelview crackers in Texas in the quarter, it said.
LyondellBasell was able to recoup some of the lost PE margins with ethylene sales at strong prices, Gallogly said.
Also, tight PE supply was partly offset by rising domestic demand, he noted. While much of the US PE market in 2009 and early 2010 was defined by strong exports to
LyondellBasell posted a fourth-quarter net income of $874m, up from a loss of $850m in the year-earlier period as sales rose 20%.
The company’s stock traded lower in midday Friday trading on the New York Stock Exchange, moving at $37.65/share, down 94 cents, or 2.4%.
($1 = €0.74)
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