Factbox: Brazil's Braskem reports $708 million quarterly loss

Houston — After delaying its earnings release twice, Braskem reported net loss of $708 million in the fourth quarter of 2019 on Friday, saying the result was affected by provisions to cover financial compensation due to suspended operations at chlor-alkali and ethylene dichloride plants in Alagoas.

The company also mentioned in its earnings statement, released late Friday, that a pre-coronavirus down cycle in the petrochemical industry affected its operations in 2019, with global demand for chemicals and thermoplastic resins below expectations.

Braskem made provisions of Real 3.4 billion, or $825 million, considering the reports exchange rate of Real 4.12/$1. However, the exchange rate on Friday, when Braskem report was released, was at Real 5.32/$1, which would result in a provision of $639 million.

Net revenue was down 21% on the quarter, reaching $3 billion, while EBITDA dropped 49%, to $254 million.

On Monday, Braskem scheduled its Q4 and year-end 2019 earnings call for Wednesday afternoon.

INFRASTRUCTURE

**Enterprise Products Partners' ethylene export terminal on the Houston Ship Channel is contracted for 75% of its 1 million mt/year capacity on a take-or-pay basis, and Navigator Gas, its 50% partner in the venture, does not expect operational disruptions that would force a writedown on the investment amid coronavirus pandemic uncertainty, according to Navigator.

**Braskem is working to acquire sea salt from third parties in Brazil or abroad to feed its chlor-alkali plant in Alagoas and eventually enable the company to restart that plant and a downstream ethylene dichloride facility that have been shut since May 2019.

**Braskem's average polyvinyl chloride utilization rate in Q4 2019 was 78%, up 21 percentage points from 3Q 2019.

**Braskem PP production in the US market was down 8% on year to 334,302 mt in the Q4, while sales were at 355,615 mt - up 8% year on year but down 3% compared to Q3. Its capacity utilization rate was 84%.

**In Mexico, Braskem PE output was 11% higher on year at 215,896 mt during the Q4, while PE sales were 5% up year on year and quarter on quarter at 206,693 mt. Its capacity utilization rate was 82%.

PRICES

Olefins

**Non-LST ethane prices rose 5.1% to 10.25 cents/gal on Monday.

**US spot ethylene for April was flat Monday at 8 cents/lb FD Mont Belvieu and 7.50 cents/lb FD Choctaw.

**Non-LST propane prices fell 1 cent on the day to 27.75 cents/gal.

**April US spot polymer-grade propylene prices rose 1.5 cents/lb to 24 cents/lb FD USG on Monday, while April spot refinery-grade propylene was flat at 10 cents/lb FD USG.

Polymers

**Braskem decided not to increase its domestic delivered prices for LDPE and LLDPE in April, refuting previously announced hikes of Real 300/mt.

**Export LDPE prices were unchanged on the day at $937-$959/mt (42.5-43.5 cents/lb) FAS Houston

**Export HDPE blowmolding were flat Monday at $662-$684/mt (30-31 cents/lb) FAS Houston

**Export LLDPE butene prices were static day on day at $662-$684/mt (30-31 cents/lb) FAS Houston

**Export homopolymer PP prices were flat at $1,058/mt FAS Houston

**Post-consumer FOB Los Angeles bottle bales for both premium and curbside grades were flat day on day at 18 cents/lb and 8 cents/lb, respectively, while the FOB Chicago marker also was flat at 11.50 cents/lb.

Aromatics

**US spot MTBE prices rose 5.42 cents/gal to 65/50 cents/gal FOB USG on Monday.

**April US methanol was flat at 68 cents/gal.

**US April benzene closed down 4 cents/gal at 97 cents/gal on the day Monday.

**Prompt-month US styrene monomer was assessed flat on the day at $400/mt, while May styrene prices rose $20/mt to $410/mt.

**FOB USG April and May toluene (nitn) prices rose 1 cent to 100 cents/gal on Monday.

**FOB USG April and May mixed xylenes was stable at 104 cents/gal.

**FOB USG paraxylene prices were flat Monday at $505/mt.

**USGC light straight-run naphtha prices fell 10.5% to 34 cents/gal from 38 cents/gal on Friday.

**NYMEX May RBOB settled at 70.16 cents/gal, up 1.00 cents.

TRADE FLOWS

**Navigator Gas has seen charter rates decline significantly as a result of the pandemic, and vessel utilization has fallen from 97.3% in January to the mid-80% levels last seen in mid-2019 as customers are being more cautious with inventory management and consumption amid coronavirus pandemic uncertainty, the company said in its Q4 2019 earnings release on Saturday.

**Braskem imported 96,000 mt of ethylene dichloride in Q4 2019 to feed downstream PVC production during the continued shutdown of its sole EDC plant with capacity of 520,000 mt/year.