Karachi: Engro Polymer and Chemicals (EPCL) recently held a corporate briefing to discuss the current market conditions and the company's outlook. The briefing follows a report of a consolidated loss of Rs825 million for the first quarter of CY25, showing a slight improvement from a Rs901 million loss in the same period last year.

Management noted a decline in international ethylene prices to US$870 per ton, which improved the core delta to US$265 per ton. However, this figure remains below the historical average of US$370 per ton. Additionally, PVC prices are under pressure, currently standing at US$700 per ton, due to weak global demand from the construction sector.

Despite these challenges, PVC volumetric sales increased by approximately 20% year-on-year, reaching 54 kilotons in the first quarter of CY25. The largest consumer of PVC was the Pipes and Fittings segment, which accounted for 53% of total demand, followed by the Film and Sheet segment at 16%.

EPCL management expressed optimism about future demand, anticipating a recovery in the construction sector supported by ongoing monetary easing. Producing one ton of PVC requires roughly 15 MMBTU of energy, and the company is exploring alternative energy options in response to high gas tariffs for captive power plants.

The company commissioned its Hydrogen Peroxide plant in February 2025 and its HTDC in March 2025. Earnings contributions from Hydrogen Peroxide are expected to begin in the second quarter of CY25, with a sales target of 10-12 kilotons for the year. The HTDC is projected to deliver energy savings of approximately 1 MMBTU per ton.

During the first quarter, caustic prices were higher due to tight supply, before stabilizing. The domestic caustic soda market remains balanced, with EPCL maintaining a 20-25% market share alongside competitors Sitara, Ittehad, and Nimir.