PTT Global Chemical (PTTGC) expects earnings from its aromatics business to improve in the second half of this year on stronger demand and better product spreads, company CEO Bowon Vongsinudom said on 15 May.
“We see softer aromatics spread [so far] in 2014 but we expect to see a rebound when high-cost producers start to cut their run rates, and as demand for derivative products, such as polyester improves, as the Chinese economy picks up, probably in the second half of this year,” Vongsinudom told ICIS on the sidelines of the Asian Petrochemical Industry Conference (APIC).
PTT Global Chemical
CEO Bowon Vongsinudom
Consequently, the March-quarter paraxylene-condensate spread dropped by 42% year on year to $387/tonne, it said.
“Aromatics product price is facing difficulty due to the heavy increase in PX capacities throughout this year,” Vongsinudom said, but added that benzene prices should remain relatively stable.
PTTGC is expecting overall product demand to be better this year, he said.
“As the world economy is expected to improve this year from the recovery of both European and US economies, we expect overall demand of our products to improve,” Vongsinudom said.
Product spread at the company’s refinery business is projected to “slightly increase” from last year, with petroleum product consumption seen to rise by 1.2m bbl/day to 92.4m bbl/day, he said.
“Supply of petroleum products will also increase, however, in the lower rate of approximately 0.9m bbl/day from the increase in production of Middle East and Asia,” Vongsinudom said.
Meanwhile, the company’s polymers business will continue to play a key role in PTTGC’s business performance, according to the PTTGC executive.