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European polyolefins may come under pressure in H2 2015: Borealis CEO

European polyolefins prices may come under pressure in the second half of 2015 as supplies rise on restarts of new crackers and polymers plants, Borealis’ CEO Mark Garrett said Thursday in an interview.

“Some of the major crackers have restarted recently. This includes Shell’s Moerdijk cracker… Ineos have also ironed our their problems,” Garrett said by telephone.

Some of the major European crackers including Shell’s 900,000 mt/year Moerdijk cracker in the Netherlands, Total/Ineos’ joint-venture 740,000 mt/year Naphtachimie cracker in Lavera, France and Dow’s 565,000 mt/year Bohlen cracker in Germany have yet to run at full run rates following their recent restarts after their respective maintenance.

European polyolefin supplies will “normalize” as these crackers begin production at full steam, Garret said.

While Shell’s Moerdijk cracker restarted early July after having been shut since October 2014, the Naphthachimie cracker in Lavera was shut from mid May to mid-June.

Dow’s Bohlen cracker suffered an unplanned outage in early July and was restarted within a few weeks.

Borealis Thursday announced a net profit of Eur351 million ($390 million) for the second quarter of 2015, nearly 1.5 times up from Eur143 million in Q2 2014.

The company cited a solid performance of its polyolefins segment in the second quarter as the prime reason.

“In the second quarter of 2015, integrated polyolefin producers saw strong industry margins. 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,” the company said.

Second quarter 2015 saw a sharp rise in polyolefin prices, with both low density polyethylene and homopolymer polypropylene reaching record highs, Platts data showed.

LDPE spot prices reached their peak in early June at Eur1,698/mt, while PP saw a peak of Eur1,580/mt, both FD NWE.

Polyvinyl chloride spot prices reached a high not seen since the same month in 2006 at Eur950/mt FD.

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