ORLEN’s model petchem margin remains unsustainably weak: bank

02 March 2012 11:31  [Source: ICIS news]

LONDON (ICIS)--An assesed model petrochemical margin for PKN ORLEN remains unsustainably weak despite rising 15% month on month in February to €607/tonne ($809/tonne) from €527/tonne in January, an investment bank said on Friday.

"We anticipated a rebound in the profitability of petchems, having seen Asian prices rising, and arguing that the past few months have brought an unsustainable weakness in petchems," said Robert Rethy, an analyst at Prague-based WOOD & Company investment bank.

"Still, the petchems margins are below acceptable levels and we expect further improvements during 2012," he added, noting that the February model margin was down 20% year on year from €757/tonne.

Overall, trading conditions remain difficult downstream, with the sharply rising crude prices "not helping matters at all", said Rethy.

The January margin was the lowest monthly figure experienced by Polish petrochemical producer ORLEN since June 2009.

During 2011, the margin reached a high for the year of €821/tonne in May before sinking during the remainder of the year as Europes economic woes intensified, ORLEN said.

Germany is ORLENs most important petrochemical export market.

($1 = €0.75)

By: Will Conroy
+44 20 8652 3214

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