MOSCOW (MRC) -- Rompetrol Rafinare (Navodari, Romania) reports a net loss of USD9.6 million year on year (YOY) for its petrochemicals business in the second quarter, widening from a loss of USD6.1 million, mainly due to increased pressure on margins and lower propylene production volumes, reported Chemweek.
Sales fell USD10 million YOY to USD27.7 million for the quarter, with production volumes of propylene declining by almost 50% to 20,000 metric tons. Production volumes of ethylene, however, rose to 14,000 metric tons, a rise of 5,000 metric tons compared to the prior-year period.
The company says that due to high market volatility and margins pressure, its polyethylene (PE) plants “continued to operate at the most economical rate.” This include its high-density polyethylene (HDPE) plant remaining in a non-operating status for the entire first half of the year, it says. Rompetrol’s low-density polyethylene (LDPE) plant uses 100% imported ethylene as feedstock, while its polypropylene (PP) plant uses raw materials produced and delivered internally by the Petromidia refinery, it says. The company’s petchems business is the only producer of PP and PE in Romania.
Rompetrol reported a group net loss of USD38.7 million in the second quarter, widening substantially from a loss of USD5.4 million a year earlier, on sales that declined 56% YOY to USD596 million. This was due partly to negative gross refining margins between April and June this year, as well as the shutdown of the Petromidia Navodari refinery in Romania in March and April for a scheduled turnaround, it says.
As MRC informed earlier, the petrochemical activities of Romanian Rompetrol Group have been integrated in the refinery arm since November, 2013, in a move designed to cut costs and increase the overall efficiency of the group’s operations. "The integration of the two companies represents the continuation of Rompetrol Group’s strategy to concentrate the production activity in a single activity", said then Rompetrol in a statement.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Rompetrol Rafinare is majority owned by Kazakhstan’s KMG International with a 54.63% stake, with the Romanian state holding the remainder.
MRC