Petrotahlil :He also said during the company's quarterly earnings call that Westlake's joint venture -- 1 million mt/year cracker in Lake Charles, Louisiana -- was expected to ramp up to full rates throughout the third quarter after starting up in May. Westlake owns 10% of the plant, while Lotte Chemical owns the rest, though Westlake has an option to increase its ownership to 50% over the next three years.
The company plans to add total 340,195 mt/year of capacity at Geismar and two plants in Germany, and the project is part of the plan. Westlake has not specified how much capacity would be added to each of the plants, but a source familiar with the company operations said the bulk of the addition would be at the Geismar facility.
Westlake's vinyl chloride monomer capacity outstrips its PVC capacity, and the Geismar project would help close that gap, market sources have said. VCM is the direct precursor to PVC, a construction staple used to make pipes, window frames, vinyl siding and flooring, and other products.
Westlake reported quarterly net income of $119 million, down 57% from $278 million in the second quarter of 2018, because of "slower economic growth in the face of international trade uncertainties that weighed on prices and margins," CEO Albert Chao said during the call.
The company's vinyls segment net income declined 52% on the year to $129 million primarily because of lower caustic soda and PVC prices. Domestic and export caustic soda prices had been pressured by high inventories and lower export demand, particularly from Brazil, until a production embargo that limited output to 50% at Norsk Hydro's 6.3 million mt/year alumina refinery - the world's largest - was lifted in May, allowing the plant to ramp back up to normal rates for the first time since March last year.
Bender noted that Alunorte's ramp-up has improved caustic soda demand, as has import flows into India after its Bureau of Indian Standards began granting import licenses earlier this year.
"We are seeing demand being reasonable," Chao added. "And we expect the price to be improved gradually also."
Chao also said that while domestic PVC prices have risen 2 cents/lb after the US market accepted the increase announced in June by producers, he expects domestic PVC prices to remain "relatively flat" for the rest of 2019.
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