MOSCOW (MRC) -- Versalis, the chemicals subsidiary of Eni (Rome, Italy), reports an adjusted operating loss of €66 million (USD77 million) in the second quarter, compared with a EUR28-million adjusted operating loss in the corresponding period of last year, said Chemweek.
Eni cites lower sales and production volumes caused by lower demand “in connection with the ripple effects on the economy” of the COVID-19 pandemic. A revenue figure for Versalis has not been disclosed.
Versalis’s petrochemical sales volume was 1.02 million metric tons in the second quarter, down by 9% year on year (YOY). The reduction was seen mainly in the business’s intermediates and elastomers product lines due to weaker demand from their main end-markets, particularly the automotive sector, as a result of the worldwide economic downturn following the lockdown measures to contain the spread of COVID-19. These trends have been partly mitigated by higher sales volumes for polyethylene (PE) and styrenics due to brisk demand for certain sub-segments tied to the COVID-19 emergency, such as packaging and single-use plastics, Eni says.
Versalis achieved a strong rebound in margins in the intermediates and PE segments driven by higher demand and lower availability of products imported from outside Europe. Styrenics and elastomers reported flat margins YOY as a result of the economic downturn. In particular, steam cracker margins had a strong recovery in March and April when oil market fell abruptly, driving down naphtha feedstock prices. This trend nevertheless began to reverse after the implementation of OPEC+ cuts, which supported feedstock prices, Eni says.
Eni says there was lower availability of products from Versalis's plants due to longer maintenance standstills at its main production hubs in response to the COVID-19 emergency, particularly at the Priolo and Brindisi, Italy, complexes. The average operating rate at Versalis’s petchem plants was 60% in the second quarter, down from 69% in the year-earlier period, Eni says.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.