Borouge plans to increase petchem sales to China after completing turnaround

Borouge plans to increase its polyethylene and propylene sales to China this year after completing a turnaround in the second quarter that reduced sales by 13% from the same period last year, executives said on a July 31 conference call.

Second-quarter sales dropped to 1.137 million mt as the turnaround at Borouge 3 was completed, the company said in a July 31 statement to the Abu Dhabi stock exchange. Production dropped 30% over the same period, it said. Revenue also fell 13% to $1.305 billion. Borouge has a total production capacity of 5 million mt/year of polypropylene and polyethylene. It also produces ethylene.

Revenue from ethylene and "others" in the second quarter rose 42% year over year, the only category to show a gain, it noted. The company's olefins conversion unit operated at a "high-capacity utilization rate." Any excess ethylene produced but not needed for internal use "can be sold in the market," the company said. The Platts-assessed global ethylene index was $761.56/mt on July 30, holding gains since $669.60/mt on May 16, the lowest since August 2023, according to S&P Global Energy data.

Asia Pacific accounted for 57% of the second-quarter volume, down from 66% in the same period last year, as sales to China dropped during the second-quarter turnaround, the company said. No more maintenance is planned for the rest of the year, CEO Hazeem Sultan al-Suwaidi said during the call.

Sales during the quarter were focused on higher-margin regions, with the Middle East and Africa's share growing to 34% in the 2025 period from 28% in the same period last year, the company said.

Above benchmarks

The average premium for its polyethylene was $249/mt over benchmarks and its polypropylene sold at a premium of $141/mt over benchmarks, the company said in the statement. Benchmark prices represent HDPE blow molding NEA CFR for polyethylene and Raffia NEA CFR for polypropylene, according to the company. Its actual average selling price of polyethylene was $1,081/mt and polypropylene was $1,025/mt, it said.

Its "through the cycle" guidance remains at premiums of about $200/mt for polyethylene and $140/mt for polypropylene, it said. Premiums were 26% higher from a year earlier for polyethylene and 2% more for polypropylene over the same period.

"During the turnaround, all major maintenance activities were completed effectively, enabling the high performance of B3 assets for the next six years," the company said. Some 140,000 mt of inventory was sold during the turnaround, it said.

Borouge 3 has an ethylene plant with capacity of 1.48 million mt/year, a butene 1 plant with a capacity of 28,000 mt/year, two linear low-density polyethylene and high-density polyethylene plants with capacity of 540,000 mt/year each, two Borstar polypropylene plants with capacity of 480,000 mt/year each, and third Borstar polypropylene plant with capacity of 470,000 mt/year, a low-density polyethylene unit with capacity of 350,000/mt year and a cross linked polyethylene unit with a capacity of 80,000 mt/year, the company said in an email. The company also has Borouge 1 and Borouge 2 operating units.

Borouge's shareholders, Abu Dhabi National Oil and Austria's OMV, have proposed combining Borouge with Borealis -- which is 75% owned by OMV and 25% by ADNOC -- along with the acquisition of Nova Chemicals to create Borouge Group International.

The proposed company would have a nameplate capacity of 13.6 million mt/year in 2026, the companies said in March. ADNOC and OMV will each own 46.94% of the final merged company, with the remaining 6.12% shares traded on the Abu Dhabi stock exchange. The deal is still expected to be completed in the first quarter of 2026, the company said.