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Braskem lowers production of ethylene in Brazil, PP in the US on drop in demand

June 01/2020

MOSCOW (MRC) -- Braskem has given an update on the impact that the coronavirus disease 2019 (COVID-19) pandemic is having on the company and measures it is taking to tackle current challenges, said CHemweek.

It has reduced staffing levels at its facilities to the minimum and cut by 50% the number of industrial workers and contractors at its sites. The company says that plant utilization rates in Brazil and the US were reduced in response to lower demand and inventory effects in the petrochemical and plastics production chain.
Utilization rates will be adjusted according to market demand and the potential opportunities for export to other regions, especially with the resumption of activities in Asia, the company says. In Brazil, adjustments so far included reduction in ethylene production to about 65% of its total capacity, which is 3.6 million metric tons/year (MMt/y), while in the US the company reduced its polypropylene (PP) production to about 85% of the 1.6 MMt/y total capacity.
Measures to preserve liquidity and maintain financial strength include disbursement of a revolving credit facility of USD1 billion; reduction of administrative expenses by approximately 10%; reduction of planned investments for 2020 from USD721 million to USD600 million; and working capital optimizations.

As MRC informed earlier, Brazils sole polyethylene (PE) producer Braskem will raise LDPE and PP prices for the rest of May by Real 150/mt (USD26.61/mt), according to industry sources, while HDPE and LLDPE prices will remain unchanged. Braskem is currently renegotiating its naphtha contract with Petrobras, as prices in North America have edged up on higher crude. The Brazilian petrochemical companys JV with Idesa in Mexico also has limited feedstock supply. In the beginning of May, the company reduced the price of all PE grades in May to address falling demand and a decline in international feedstock prices.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided.
Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
Author:Anna Larionova
Tags:petroleum products, PP, PE, petrochemistry, Braskem.
Category:General News
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