Petrotahlil - Japanese chemical major Sumitomo Chemical has lowered its 2020-21 operating income forecast on the back of weaker demand from the auto sector during the Covid-19 pandemic.

The company foresees lower shipments of its petrochemical products, including plastics and synthetic rubbers and battery materials cathodes and separators for electric vehicles for the 2020-21 fiscal year that began on 1 April.

Sumitomo Chemical's profitability during April-June fell as demand for these products declined. Product shipments also fell because of regular maintenance at PetroRabigh from March to mid-April.

Sumitomo Chemical forecasts a gradual economic recovery in the second half of the 2020-21 fiscal year. But the impact of Covid-19 may continue to lower product shipments to the auto sector throughout the year, the company said, although Japan's domestic car output began to pick up in June.

The company announced in May its plan to cut its investment target in the petrochemical and plastic business for April 2019-March 2022, on the back of the Covid-19 pressuring plastic demand.

Sumitomo Chemical has production capacity of 3.1mn t/yr of ethylene and 403,000 t/yr of methyl methacrylate monomer. Its polymer production capacity includes 1.7mn t/yr of polyethylene, 1.7mn t/yr of polypropylene and 3.3mn t/yr of polyolefin. Sumitomo Chemical also manufactures 100,000 t/yr of ABS resins at its joint venture with Mitsui Chemicals Nippon A&L.

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Source : Argus

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