PKN Orlen sees 1Q 2012 operating profit down 33%

(foxbusiness) -- Poland's largest refiner PKN Orlen SA (PKN.WA) expects its first-quarter operating profit to reach about 900 million zlotys (USD282 million), down 33% from a year earlier, the company said Thursday in a preliminary estimate of its earnings.

PKN Orlen said the impact of higher sales volumes offset the negative impact of the tough macroeconomic environment in which Europe's refineries now operate.

Higher crude oil prices, which increased the value of PKN Orlen's mandatory oil reserves, are expected to increase operating profit by about PLN700 million, PKN Orlen said.

Sales volumes rose 2% on the year, boosted by retail sales and sales of petrochemicals.

Throughput of crude rose 4% on the year in the first quarter, driven by increased utilization at PKN's Plock refinery, mainly its PX/PTA petrochemical complex, and its Czech unit Unipetrol.

MRC

(Reuters) - Czech downstream oil group Unipetrol expects to post a small first-quarter operating loss as a fall in margins year-on-year outweighed the positive impact of currency moves and operations with CO2 allowances, it said on Thursday.

The company, majority owned by Poland's PKN Orlen, said it did not book any one-off charges or gains in the first three months of the year.

It said operations with CO2 allowances helped to raise operating profit by roughly 155 million crowns in the first quarter while exchange rate changes provided a 156-million-crown boost.

Unipetrol reported an operating loss of 5.94 billion crowns in the fourth quarter of 2011 due to impairment charges.

MRC

(trend) -- SOCAR plans by 2014 to launch polypropylene and low density polyethylene production, SOCAR head Rovnag Abdullayev told reporters.

"Currently, the design work is being carried out as part of creation of shops for the production of polypropylene and low density polyethylene," said Abdullayev. He said the new facility will allow SOCAR to provide raw material to new chemical industrial park to be established in Sumgayit.

"The company is now working with the Ministry of Economic Development of Azerbaijan on a project to create a new park," said the SOCAR head. In particular, SOCAR has been working to clean up territory which is on the balance of the Azerkimya production association, set aside for the park.

Upon the completion of this work, the area will be transferred to the Economic Development Ministry. Small enterprises for the production of the final chemical products will be created in this area.

The purpose of the chemical park is development of small chemistry, in particular the production of the final chemical products ranging from packaging to plastics.

The placement of the new park on the territory of the production association is appropriate in terms of proximity to major chemical companies so that these small enterprises will be able to partially or completely use products manufactured by enterprises that are part of Azerkimya. Smaller enterprises will also be able to purchase raw materials, both in the new complex on the oil and gas processing and production of petrochemical products and import products or technologies needed for them.

MRC

MOSCOW (MRC) -- In Q1, the volume of chemical production in Russia fell by 0.6%, the output of resin and plastic products grew by 2.8%, according to MRC analysts.

In March, the volume of chemical production in Russia grew by 1% year on year, according to Rosstat. In Q1, the production of chemicals fell by 0.6%. The largest decline in output fell on propylene, polypropylene and polyethylene (due to the accident at Stavrolen) and mineral fertilizers.

Last month, the production of mineral fertilizers (in terms of 100% of the basic substance) made 1,568 tonnes, 14% up than in February. In Q1, the production of mineral fertilizers decreased by 8% year on year. The production of caustic soda (in terms of 100% the basic substance) in March reached 94,800 tonnes. Over the first three months, of production of caustic soda rose by 8.2%.

In March, the production of ethylene and propylene made 202,000 tonnes and 96,800 tonnes, respectively. In January-March, the total production of ethylene and propylene decreased by 8% and 15% respectively year on year. The decline in production was due to an accident at Stavrolen in December. The production of styrene made 46,500 tonnes, styrene production grew by 0.9%.
The production of polyethylene, polypropylene, polystyrene and polyvinyl chloride last month reached 126,000 tonnes, 52,900 tonnes, 27,100 tonnes and 63,700 tonnes, respectively. In Q1, the production large volume polymers in Russia fell by 4%.

In March, the output of plastic products grew by 2.3% year on year. Production of pipes, fittings and hoses increased to 35,600 tonnes; plates, films and sheets unreinforced - to 66,900 tonnes; plates, films and porous sheets - to 13,500 tonnes, windows, boxes and polymer window sills - to 1.4 million sq.m.

In general, over the first three months, the production of plastic products increased by 3%. The production of pipes, fittings and hoses made 99,100 tonnes (up 7%), plates, films and sheets unreinforced - 170,200 tonnes (up 4%), plates, films and porous sheets -36,900 tonnes (up 20%); windows, boxes, polymer window sills - 3.2 million square meters (up 22%).

MRC

MOSCOW (MRC) -- Ukrainian producer Linik stopped on Monday the production of polypropylene (PP). The suspension of production resulted from the lack of feedstock for PP production, the production is to be resumed after the 20th of May, according to MRC analysts.

On Monday, Ukrainian producer Linik stopped the production of PP. The suspension resulted from the company's stoppage of oil refining in mid-March, and long-term turnaround of Ryazan refinery (TNK-BP Group), which is the main supplier of propane-propylene fraction (PPF) for the production of polypropylene.

After stoppage of its oil refinery Linik had to switch to the imported feedstock (PPF) from Ryazan oil refinery. Last month, Ukrainian producer managed to produce about 6,400 tonnes of polypropylene using both own stocks of PPF and feedstock from Russian refinery.

In April, Ryazan refinery stopped on long-term turnaround (about 45 days), and therefore the supply of PPF to Ukraine was suspended, and as a consequence, Linik had to stop the production of PP. Over the last fortnight, Linik produced about 2,800 tonnes of polypropylene. However, in late May Linik plans to resume the production of PP.

Over less than four months 2012, Linik produced about 23,600 tonnes of PP, which by one third down year on year.

MRC