By: Arif Habib Limited
Petrochemical margins shrank during Nov-15, attributable to lower oil prices, which ended down 7.3% MoM to average USD 42.9/bbl (WTI). PSF margins stood at USD 247/ton, PVC at USD 257/ton and PTA at USD 107/ton. The latest monthly figures are negative for both LOTCHEM and ICI.
Shrinking end-product (PSF) prices off-set gains from cheaper inputs: PSF margins fell marginally by 1% MoM (down 37% YoY) to USD 247/ton as higher PTA prices (USD 615/ton) (up 1% MoM) pushed up input costs. Moreover, there was a 2% MoM decline in PSF prices to USD 1,085/ton. However, the drop in margins was dulled by lower MEG prices (USD 599/ton), down 9.8% MoM. The decline in MEG prices was mainly due to weaker downstream product demand.
PVC margins remain dull MoM due to rising Ethylene prices: PVC margins plunged by 23.4% MoM (down 28.2% YoY) to USD 257/ton during Nov-15. The diminution in margins is mainly on the back of the rise in Ethylene prices, up 10% MoM to USD 997.5/ton; coupled with decline in PVC prices, down 4% MoM to USD 760/ton. PVC prices were down due to abundant product availability coupled with bearish buying in major Asian market, mainly in China.