27 July 2012 19:20 [Source: ICIS news]
HOUSTON (ICIS)--LyondellBasell benefitted from low-cost ethane and propane feedstock costs during the second-quarter of 2012, and will continue to have that advantage in the near term, the company's chief executive said on Friday.
The company's second-quarter 2012 earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 11% year on year to $1.77bn (€1.43bn), in part because of low-cost natural gas liquids (NGLS), said CEO Jim Gallogly.
Substantial builds in ethane and propane inventories have helped to keep prices for those materials down, which helped the company maintain strong margins, even as sales prices declined, Gallogly said.
"This situation has been and continues to be favourable for US ethylene producers," he said. "We believe that it will stay this way for the foreseeable future."
Propane has become a bigger factor in recent months, both in helping to keep ethane prices low, and in use as a feedstock itself, Gallogly said.
The company has done work on its cracker furnaces to enable it to take advantage of both propane and an ethane/propane mix as a feedstock, he said, adding that the furnace agility has contributed to stronger margins.
"I will tell you that we optimise our feed slate every hour," Gallogly said. "We are always looking at where the market is going and what we ought to be running."
While prices for NGLs are beginning to climb in the third-quarter, Gallogly said he is still confident about maintaining a cost advantage for the balance of the year.
"I'm feeling pretty good about it near term," he said. "The fundamentals look good for the rest of the year."
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