PTTAR predicts H2 gain

       PTT Aromatics and Refining hopes the second half of this year will see results as the global economy improves, said president and chief executive Chainoi Puankosoom.
       Mr Chainoi said a global economic rebound and oil demand growth during the winter season will improve its oil refinery business as well as its gross refining margin in the second half. For the first half, the gross refining margin stood at the average of $3 per barrel.
       "It is unlikely to reach $7-8 per barrel,the high seen last year. The improvement in margins depends on the magnitude of the recovery," said Mr Chainoi.
       He said aromatics products prices should also improve in the latter half of the year, as stimulus spending by the Chinese government has driven demand in various industries and raw materials to increase significantly.
       Prices of paraxylene (PX), PTTAR's main petrochemical product made from aromatics, have surged strongly since the second quarter. PX is mostly used for producing polyester for the textiles and automobile industries.
       A relatively small gross refining margin has cut down refinery production capacity, leading to lower production of naphtha crackers.
       The limited output of naphtha, a feedstock for aromatics, as well as improving demand have pushed the price and margin for PX and benzene. Both are currently in high demand in China.
       "This trend [growing demand of PX and benzene] should continue in the latter half of the year, though I am not sure how long it will last," he said.
       In the second quarter, PTTAR earned net profit of 4.21 billion baht, a 2.7%improvement year-on-year and up 142%from 1.74 billion in the first quarter.
       First half net profit was 5.95 billion baht (2.01 baht a share), up 6.5% from 5.59 billion (1.89 baht a share) from a year earlier.
       Second quarter sales dropped 31.8%to 51 billion baht from the same period last year. This 8.9% rise from the 42.9 billion recorded in the first quarter was due to crude stock gains and improved aromatics price and margin.
       With investments Mr Chainoi said Section 67 of the Constitution resulted in the suspension of its $180-million complex upgrade for condensate residue in Map Ta Phut. It is awaiting a permit,which depends on the government finalising its position on the section.
       The section, which guarantees environmental and community well-being against harmful projects, is waiting for the relevant guidelines to be formed.
       The lack of guidelines has stopped state agencies from granting operating permits to the private sector.
       "Construction was completed in March. The complex incurs an opportunity loss of $130,000 per day because we haven't been granted the permit,"said Mr Chainoi.
       PTTAR is also going ahead with its $220 million Euro4 standard production plan, which should see construction begin by the year-end and operations start in late 2011.
       "If Section 67 is not decided by then,construction will not start as no permit would be given," said Mr Chainoi.
       Shares of PTTAR closed at 19.10 baht,down one baht, in trade worth 853.3 million baht.