MOSCOW (MRC) -- The coronavirus pandemic has provided some opportunities hygiene products, but there are also risks in other petrochemical products, Borealis CEO Alfred Stern told S&P Global following their third quarter results Nov. 4.
The company saw polyolefin sales volumes increase in the third quarter compared with the same quarter in 2019, as hygiene and healthcare segments experienced strong demand amid the coronavirus pandemic. Demand from the automotive and pipes sector was subdued in early summer but climbed higher in Q3, with automotive demand recovering to 90% of 2019 levels.
"Demand for hygiene products has continued higher, we manufacture material to make non-woven facemask and PPE, as you can imagine there is good demand from those segments but also across the entire hygiene sector," Alfred said.
The CEO added that the company would seek sales opportunities in new segments in the coming year to maneuver through the low European price environment for polyolefins. Borealis expects demand for healthcare and hygiene applications to remain strong in Q4, while a full recovery in automotive demand was expected nearer the end of 2021.
"When we look at our demand situation, we are actually quite positive about where we stand this year and I expect those opportunities will continue to exist next year, is it in all the same sectors the we sold in the past? No, we will not come out [of the pandemic] in the same place so this will require some agility and finding some new laces of business."
However, Borealis was anticipating continued pressure in its upstream business which had experienced low margins amid the coronavirus pandemic. "The biggest struggle I see is the supply/demand imbalance and how the feedstock markets develop, this will not be resolved in 2021, we will continue to see a lower margin and a lower price environment in 2021 with opportunities across demand."
As MRC informed before, Borealis has recently announced that its new naphtha cavern in Porvoo, Finland has been safely commissioned as of October 2020. Having invested around EUR25 million in the construction of this 80,000 m3 facility, Borealis can now source and store naphtha for its Porvoo operations from the global market in a more flexible, cost-efficient, and secure way. The cavern can also accommodate renewable naphtha, making it possible for Borealis customers in future to draw on certified renewable polypropylene (PP) and polyethylene (PE), as well as renewable base chemicals, ethylene, propylene and phenol.
According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, 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.
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
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