SK Incheon Petrochem, the petrochemicals unit of the nation‘s top refiner SK Innovation, is expected to post record-high operating profits this year, largely backed by swift sales of the company’s paraxylene products used to produce polyester textiles and plastic bottles. 

SK Incheon Petrochem expects to log operating profit that could surpass the record number achieved last year, the company‘s officials said. The petrochemicals unit of SK innovation last year logged an annual operating profit of 374.5 billion won ($344.2 million).

As of the third quarter this year, SK Incheon Petrochem’s operating profit reached 256.1 billion won, down from 315.4 billion won during the same period last year.

Given the recently increased margins of PX products and the company‘s recent petrochemicals sales record, industry sources expect this year’s final operating profit to outstrip that of 2016. SK Incheon Petrochem’s earnings from PX products are forecast to continue next year if the margin continues to pick up or at least stay on the same level.

According to the industry, the PX margin started to pick up significantly in July this year, largely due to short supply. The petrochemical industry also expects the better margin to continue in the following year.

SK Incheon Petrochem annually produces some 1.3 million tons of PX at its condensate-based plants in Incheon. Of the PX products, 95 percent are exported to China, with the remaining going elsewhere in Asia. The company’s PX products sales accounted for some 20 percent of its combined sales as of the third quarter this year.

By Shim Woo-hyun (ws@heraldcorp.com)