MOSCOW (MRC) -- Braskem (Sao Paulo, Brazil) reports a net loss for the third quarter of 1.413 billion Brazilian reais (USD258 million), down from a loss of RD888 million (USD222 million) in the year-ago quarter, reporter Chemweek.
The company attributes the loss mainly to RD1.413 billion in additional costs related to mining damage in Alagoas and to depreciation of the reais versus the US dollar. Revenue totaled R15.992 billion (USD2.972 billion), up 20% year-over-year (YOY) from RD13.368 billion (USD3.370 billion). Resin sales volume increased both sequentially and YOY.
“In the third quarter, in line with the company’s strategy of prioritizing sales to the Brazilian market, the company surpassed 1,050,000 (metric) tons of resins sold, a historical sales record in Brazil,” says Braskem. “In the United States, sales normalized and in the quarter, the company recorded a sales volume in excess of 400,000 tons of (polypropylene (PP)in the North American market.”
Recurring EBITDA was USD699 million, 126% higher sequentially owing to a better spreads for PE in Brazil and Mexico and PP in the US, and increased sales volume in Brazil and the US. The figures increased 69% YOY on better spreads for polyethylene (PE) and polyvinyl chloride (PVC) in Brazil, PP in Europe, and PE in Mexico, as well as higher sales volume in Brazil, the US, and Mexico.
In Brazil, EBITDA was USD529 million, up 148% sequentially and 94% YOY, the result mainly of higher resins and chemicals sales volumes better spreads in PE. Resin sales volume increased 47% sequentially and 20% YOY. “Due to the recovery in demand for resins in the Brazilian market, the utilization rate of the crackers in Brazil normalized and, in the third quarter, was 87%, which represented an increase compared to 2Q20 (17%) and 3Q19 (2%),” says Braskem.
EBITDA in the US and Europe totaled USD133 million, up 223% sequentially and 47% YOY. Braskem cites higher sales volume in the US, noting that its production units in the US operated at 99% during the quarter - up 9% sequentially and 8% YOY. PP demand in Europe was down on depressed demand into automotive. Combined resin sales volume increased 10% sequentially and 8% YOY.
Mexico’s EBITDA came to USD97 million, “in line” sequentially and YOY. The Braskem Idesa joint venture imported 42,000 metric tons (8,000 b/d) of ethane from the US to complement supply from Pemex, allowing it to lift PE utilization to 84% in the quarter. Resin sales volume dropped 2% sequentially on inventory replenishment while increasing 12% YOY on improved availability of product for sale.
We remind that 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 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 first 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).
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