05 November 2012 16:06 [Source: ICIS news]
LONDON (ICIS)--The performance of Polish petrochemical producers is slipping in tough markets, Erste Group Bank said on Monday.
“Polish petrochemical companies, after reporting strong third-quarter results (due to high refinery margins and the LIFO [Last In First Out accounting] effect) seem deserving of an underweight call, especially when taking into consideration the recent sharp drop in refinery margins,” the bank said in a report for investors.
Grupa Lotos, Poland's second largest refiner which also has a fledging petrochemical business which it aims to build up, “seems to be the top candidate for an underweight call”, according to the report.
Synthos, the major synthetic rubber producer which has enjoyed an extended bull run in profitability in recent years, partly because severe weather has several times undermined East Asian rivals who produce natural rubber, is also struggling, Erste said.
“There is a similar [difficult] situation on the SBR/PBR [styrene butadiene rubber/polybutadiene rubber] market, which has been experiencing a significant squeeze in margins, leading to a deterioration of the market environment for Synthos,” the report added.
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