Despite runaway oil and feedstock prices eroding profits in the past quarter, Nova Chemicals Corp. envisages a recovery. As hurricanes Katrina and Rita wreak havoc on the petrochemical industry centred in states in the Gulf of Mexico, these disasters could give Nova an added lift this year. Nova does not have any facility in the U.S. Gulf Coast and stands likely to gain from redirected volume from the U.S. Gulf coast at a margin premium. Nova pays less for domestic feedstock from Alberta, than competitors who rely on Gulf Coast suppliers. Nova seems "bullish" on its prospects for the next quarter, as in the June to August period, the petrochem major witnessed the largest polyethylene sales three-month period in the history of the North American industry.
Nova, spun off as a separate entity in late 1990s, following the multibillion-dollar merger of Calgary-based gas shipper Nova Corp. and TransCanada PipeLines, has been was battered by misfortune in Q2. Its 2004 profits of US$27 million was followed by a loss of US$25 million due to industry destocking and volatile costs for feedstock benzene. Four of Nova's plants in Sarnia, were badly affected by a short but costly electrical outage. Production at its huge Alberta operations was severely limited due to tornadoes. However, the rest of the year appears brighter for the company and the industry.
23-Sep-05 
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