Demand for refined oil is forecast to remain high in Asia, particularly in China and India where demand is expected to grow by 5-5.3% this year. Demand for plastics and textile products will spur significant growth in aromatics. The global economic recovery will keep average prices of both crude and aromatics products higher than last year.
PTT Aromatics and Refining expects its gross integrated margin will top US$5 per barrel this year due to rising demand for oil and aromatics products. The company's gross integrated margin last year, excluding stock gains and hedging costs, was $4.24 a barrel, up from $3.06 a year earlier. PTTAR plans to increase production at its plants to full capacity, 280,000 bpd, up from 254,000 barrels last year. Refined oil will account for 60% of production and aromatics 40%. PTTAR successfully cut production costs at its refinery and aromatics plants last year by US$50 mln. It plans to further reduce costs this year by US$200 mln.
However, net profit at PTT Chemical fell 42% last year in line with the slump in olefins product prices from a peak in 2008. In the first nine months of 2008, petrochemical prices peaked with high density polyethylene (HDPE) at US$1476/ton, only to fall by 23% to US$1134 with the global recession. The company's 2009 spread margin from naphtha to HDPE fell by 13% year-on-year to US$587/ton. The company also expects a slow recovery this year due to delays at PTT's sixth gas separation plant resulting from the Map Ta Phut deadlock.