Softening trend in naphtha, improved product prices boost operating profit at HPL

Decreasing naphtha prices along with stronger product prices have contributed to higher operating profit in July for Haldia Petrochemicals Ltd (HPL) as per HPL sources 75% o its naphtha requirement as imports. HPL had shut its plant in end-July for a month long maintenance shutdown to concur with the heavy inventory stockpiles of 41,000 tons driven by a lackluster polymer market outlook. HPL is ready to restart its operations with a current stock position at that has dwindled to around 17,000 tons. Rising feedstock costs amid a decreasing trend in polymer prices piloted losses for two years at HPL. Some relief came by way of a 5% duty waiver, that uptil now was being paid by HPL for naphtha imports. However, HPL has not got any relief from the State Government, whose notification of HPL as an oil company has impacted the company's bottomline. Losses to the tune of Rs.270 crore were recorded for the April-June quarter this year, almost equivalent to loss incurred in entire 2010-11.
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