Austria-based polyolefins and base chemicals provider Borealis AG has posted a net profit of 351 million euros ($390.2 million) in the second quarter of 2015 up from 143 million euros ($158.9 million) in the same period last year. However sales for Q2 2015 dropped slightly to 2.03 billion euros ($2.25 billion) from 2.09 billion euros ($2.54 billion) for the same period in 2014.
The Vienna-based firm said the result reflects improvements in all three portfolios of Borealis, particularly the polyolefins segment.
In a statement, Borealis said that despite lower feedstock costs, polyolefin prices did not retreat, driven by a tight market as a result of solid demand combined with a supply shortfall. In addition, imports of polyolefins into Europe have been uncompetitive following the weakening of the euro. However, in the first quarter of 2015, the falling monomer prices did cause large negative inventory effects for polyolefin producers.
Borouge, Borealis' joint venture with the Abu Dhabi National Oil Company in Abu Dhabi, UAE, is now seeing all five polyolefin plants running as planned. The only remaining unit to be started-up is the cross-linked polyethylene (XLPE) plant which is scheduled towards the end of 2015 and will complete the start-up of the Borouge 3 mega project.
Borouge 3 will deliver an additional 2.5 million metric tons of capacity when fully ramped up, bringing the total Borouge capacity to 4.5 million tonnes, making Borouge the biggest integrated polyolefins complex in the world. Borealis and Borouge will then have approximately 8 million tonnes of polyolefin capacity.
Borealis chief executive Mark Garrett told PRW: "The size of the increase in the second quarter was distorted by the shortage of supply. Feedstocks dropped dramatically. So this was a market phenomenon. We expect margins to normalize in the third and fourth quarters."
In July, Borealis announced a 160 million euro ($177.8 million) investment in its production location in Stenungsund, Sweden. The investment entails the upgrade and revamp of four cracker furnaces. The work is scheduled to begin in late 2016 and be completed by 2020.
