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Braskem announced its results for Q3

November 11/2020

MOSCOW (MRC) -- Braskem's third-quarter net loss widened on the back of an additional provision related to its former mining operation in Alagoas and the depreciation of the Brazilian real (R) against the US dollar, said the company. 

The Company's recurring EBITDA was USD699 million, 126% higher than 2Q20, mainly explained by (i) the better spreads of PE in Brazil, PP in the United States and PE in Mexico and (ii) an increase in sales volume in Brazil and in the United States due to the recovery in demand for resins in the Brazilian market and PP in North America. In relation to the same period of the previous year, the Company's recurring EBITDA in US dollars was 69% higher, due to (i) the better spreads of PE and PVC in Brazil, PP in Europe and PE in Mexico and (ii) the increase in sales volume in Brazil, United States and Mexico. In Brazilian Real, the recurring EBITDA was R3,765 million, 127% and 129% higher than 2Q20 and 3Q19, respectively, due to the depreciation of the Brazilian Real against the US dollar.

Braskem incurred an additional provision of R3.56bn in the third quarter related to the geological damage caused by its former salt mining operation in the state of Alagoas in northeast Brazil.

In the third quarter, due to the recovery in demand for resins in the Brazilian market and demand for polypropylene (PP) in North America, the utilisation rate of the crackers in Brazil normalised to 87%, as well as the operation rate of the industrial units in the US.

Production at Braskem's new PP plant in the US was at 36,000 tonnes in October, close to the monthly production capacity of the plant of around 38,000 tonnes.

As MRC reported previously, Brazilian petrochemical producer Braskem's 450,000 mt/year polypropylene (PP) plant in LaPorte, Texas, along the Houston Ship Channel completed its initial commercial production, as per the company's statement as of Sept. 10. "The launch of commercial production at our new world-class PP production line in La Porte clearly affirms Braskem's position as the North American polypropylene market leader," Braskem America CEO Mark Nikolich said in a statement. With a USD750 million investment, the new PP plant's construction started in October 2017 and was completed in June, 2020.

Braskem operates five other US PP plants in Texas, Pennsylvania, and West Virginia, with a cumulative capacity of 1.57 million mt/year that the company acquired. The new plant in La Porte, Texas, is Braskem America's first PP new build.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

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:PP, PE, Braskem.
Category:General News
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