Little change in PET markets as Spain's LSB files for insolvency

21 June 2013 19:06  [Source: ICIS news]

LONDON (ICIS)--Speculation regarding the future of assets belonging to La Seda de Barcelona (LSB) is rife in the polyethylene terephthalate (PET) related markets after news that LSB has filed for insolvency, yet not much has changed, industry players said on Friday.

"There is a lot of speculation," a source said, echoing comments made by many others.

In reality, however, there is very little that has changed since LSB made its announcement on Monday after failing to successfully renegotiate its debts.

Artenius operates a 140,000 tonne/year unit at Adana in Turkey and a 170,000 tonne/year site at El Prat de Llobregat, Spain, both of which are running well, according to an Artenius source.

The company also has a 200,000 tonne/year plant in San Giorgio di Nogaro in Italy that is focused on technical polymer production and can run on campaigns.

In May, LSB subsidiary Artenius announced it would not be restarting its PET plant in Volos, Greece, which had been idled since December last year.

Artenius' new 150,000 tonne/year PET Simpe plant at Acerra, Italy, is near completion.

Industrias Quimicas Asociadas LSB (IQA), the ethylene oxide (EO)/ethylene glycol (EG) producer in Tarragona, Spain, was operating close to capacity this week, albeit 20% lower than it was earlier in June.

IQA has capacity to operate 100,000 tonnes/year of EG and 135,000 tonnes/year of EO at the site, according to ICIS data.

The news has not impacted the market, other than to cause speculation as to what will happen to EO/EG producer IQA, purified terephthalic acid (PTA) producer and PET feedstock provider Artlant PTA in Sines, Portugal, and successful preform manufacturer APPE, which comes under the LSB umbrella, should LSB go into receivership.

Many in the industry have been readjusting for months now to allow for LSB PET plant restrictions and/or closures.

LSB, which began refinancing its debts in September 2012, said it had been faced with a “bad market over the past two years, and in particular the oversupply, the high costs of raw materials and insufficient margins”.

"If we stay in limbo ... after two or three months, then there could be problems," an LSB source concluded.

There has so far been no sudden change.

There will perhaps be more of a reaction from markets once the insolvency is finalised, but for now the theories being discussed are just that - theories.

($1 = €0.76)

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By: Caroline Murray
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