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Recently released market study: Czech Republic Petrochemicals Report Q1 2010

New Energy research report from Business Monitor International is now available from Fast Market Research

 
PRLog - Dec. 10, 2009 - According to BMI's latest Czech Republic Petrochemicals Report, the Czech petrochemicals industry is likely to be heavily influenced by the fortunes of Poland's PKN Orlen, the owner of the Czech refiner Unipetrol, which is planning large cuts in capital expenditure to combat its mounting debt problem. PKN Orlen has been struggling with debt and by early 2009 its foreign-currency-denominated debt rose above the net debt-to-earnings ratios defined in credit agreements. Despite an arrangement with creditors to temporarily breach the debt limit, PKN Orlen is under pressure to make cuts with Unipetrol likely to suffer swingeing cuts in capital expenditure in 2009. This will put a freeze on Unipetrol's expansion, thereby limiting growth beyond 2009 when the sector is likely to experience a recovery. Whether Czech producers like Unipetrol can continue to increase their overseas sales in 2009 is yet to be seen, as their main exporting partners - Germany, Slovakia and Poland - are all suffering in the current economic climate. Unipetrol was expected to report an operating loss in Q109, although smaller than that recorded in Q408. According to reports, the loss is attributed to the price of crude oil and its derivatives, the weaker Czech crown against the US dollar, and a narrowing Brent-Ural price differential. Some product margins are showing signs of improvement, but earnings are being hit by low refinery margins and low demand for fuels. Results in the petrochemical segment were hurt by weak demand resulting in lower prices, mainly affected by a slump in olefin margins. While polyolefin margins recovered from the low in Q408, they still remained under historical levels. In May 2009, Unipetrol announced that it would end production of oxo alcohols, with the closure of the company's 50,000 tonnes per annum (tpa) plant at Litvinov at the end of the month after 40 years in operation. The company cited a significant drop in demand caused by the global economic and financial crisis for the plant closure. The move will free up raw materials, particularly propylene and hydrogen, which will be diverted to other units within Unipetrol. The Litvinov cracker has the capacity to produce 525,000tpa of ethylene and this is due to be expanded to 545,000tpa in mid-2009. A further expansion to 595,000tpa is planned during a turnaround scheduled for 2011. However, the decline in demand from polyolefins producers could lead to a postponement of capacity expansion in 2009. At present we see no scope for refinery capacity expansion, although the international oil company (IOC) partners controlling the refining system will be obliged to continue investing in upgrading the plant as EU fuels specifications change. Eni is also expanding its fuels retailing presence in the Czech Republic, and this acquisition fits well with this strategy.
         


For more information or to purchase this report, go to http://www.fastmr.com/catalog/product.aspx?productid=43266

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.

BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including Daily Alerts, monthly regional Insights, and in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

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Source:Fast Market Research
Phone:1.800.844.8156
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State/Province:Massachusetts - United States
Industry:Energy, Industrial, Research
Tags:unipetrol, debt, margins, cuts, orlen, fuels, pkn, petrochemicals, plant, closure
Shortcut:prlog.org/10444221
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