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Braskem posts loss on charges, lower margins outside Brazil

August 07/2020

MOSCOW (MRC) -- Braskem posted a net loss of R2.5 billion (USD468.1 million), including a provision of R1.6 billion related to geological damage at its Alagoas salt mining site, said Chemweek.

The company's second-quarter results included an additional R1.6bn related to the geological event it has been accused of causing in Alagoas state. The increase in EBITDA is mainly due to lower feedstock costs and lower general and third-party service expenses in Brazil and Mexico.

In the US, the company's new PP plant in La Porte, Texas, has reached 100% completion in the second quarter, with "first production operations on commercial scale" expected for the third quarter of this year.

Second-quarter capacity utilisation rates in Brazil and the US were temporarily reduced due to lower demand and inventory effects in the petrochemical and plastics production chain.

The operating capacity of Braskem's petrochemical complexes in Brazil fell to 64% in May. However, with the recovery in demand in June, the capacity utilisation of the complexes increased, resulting in a rate of 75% for this month.

In the US, capacity utilisation rates fell to 88%, and then normalised in June, resulting in a rate of 90% in the quarter.

As MRC informed earlier, Supply disruptions caused by the coronavirus have forced Braskem to lower its targets for the amount of recycled plastic it plans to sell this year. A new global sales target of 10,000 tonnes of resin made from mechanically recycled plastic, up from the company's previous target of 20,000 tonnes before the pandemic.

Earlier it was reported that the structure of Braskem Idesa polyethylene (PE) sales by destination over the past twelve months has changed due to sales in Asia. Total sales in the first quarter of 2020 were up 2% compared to the same quarter last year, but sales to Asia accounted for only 13% of sales made in the same period in 2019.

According to MRC DataScope, imports of PE to Russia decreased by 7% in January-June this year and reached 328,000 tonnes. The largest decrease in external supplies fell on high-density polyethylene (HDPE).

Braskem is a Brazilian petrochemical company headquartered in Sao Paulo. The company is the largest petrochemical company in South America and the fifth largest in the world in terms of production.
Author:Anna Larionova
Tags:PE, LLDPE, LDPE, HDPE, Braskem.
Category:General News
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