Refinery shutdown knocks HaiKe

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Date: Wednesday 23 Jul 2008

LONDON (ShareCast) - The temporary closure of its oil refinery facilities for a major overhaul sent China-based petrochemical firm HaiKe Chemical tumbling today.

“As a result of consistently high oil prices and in the absence of further price adjustment notices for oil products, the margins of the petrochemical side of the business have reduced to a level at which operations are not profitable,” warned the AIM listed firm.

As a result, company bosses decided now is as good a time as any to carry out essential maintenance that will completely shutdown the refining operations and help reduce the group’s “exposure to further risk”.

But they think further price adjustments, anticipated by the end of the year, will prompt an increase in the price of refined oil products and the resumption HaiKe’s oil refining operations during the current financial year.

Future capital expenditure plans for the petrochemical side of the business have been deferred, although speciality chemical expansion plans will continue as previously flagged.

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