Haldia Petrochemicals Ltd (HPL) has incurred a loss of Rs 247 crore in the first quarter. As a persistent downtrend continues in polypropylene and ethylene prices, HPL plans to keep away from the markets with a planned shutdown, starting the third week of July, as per Economic Times.
HPL’s MD Partha S Bhattacharya told ET, "Polymer prices have crashed over the past few months, which is impacting the company's margins. Accordingly, to tide over the situation, we've taken the decision to go in for a 12-18 day shutdown, beginning third week of July. This will help us stay away from creating an inventory in a falling market and also to carry out annual maintenance and repair work. We hope the polymer market will recover from August. By the time the market sees some recovery we will be ready with our plant after repairs and maintenance work. We have suffered huge losses in Q1. We will have to recover from Q2 so that we can achieve a positive EBIDTA in the current fiscal.”
Bhattacharya said increase in interest rates in China is largely affecting polymer markets. Small and medium enterprises in China are the life-blood of chemicals and polymer demand in China as most buyers belong to this category. Polyolefin exports that would have gone to China are now being diverted to Europe. This surplus availability in the global market is pushing down prices further.