• 2Q26 net profit came in at THB12.2bn (vs. a net loss in 2Q25 and +278% q/q), driven by the full-quarter realization of stronger chemical margins across aromatics and polyolefins
• Market GRM and aromatics P2F came in at USD15.6/bbl (+194% y/y, -7% q/q) and USD329/tonne (+86% y/y, +19% q/q), respectively
• Expect softer polymer margins in 3Q26F as Asian crackers gradually restart operations, easing supply tightness
• Maintain HOLD with an FY26F TP of THB34

2Q26 as expected. PTTGC reported a 2Q26F net profit of THB12.20bn (vs. a net loss of THB3.61bn in 2Q25 and THB3.23bn in 1Q26), marking a strong turnaround both y/y and q/q. The result is in line with our estimate but better than Bloomberg consensus. We believe that 2Q26 is most likely representing the peak quarterly earnings of 2026. 

The outstanding performance is driven by: i) a surge in chemical prices and margins across both aromatics and polyolefins; and ii) resilient refinery performance despite the 41-day ex-refinery diesel price cut. However, earnings were partially offset by: i) net inventory and hedging losses of THB2.73bn; and ii) a c.THB1.75bn provision expense of the mothballing of the polyols plant.

Market GRM and aromatics P2F were USD15.6/bbl (+194% y/y, -7% q/q) and USD329/tonne (+86% y/y, +19% q/q), respectively. Normalized profit came in at THB13.74bn (recovered from net loss y/y and +24% q/q), reflecting a substantial improvement both y/y and q/q.

Business performance

Source: PTTGC, DBS

2Q26 key operating metrics 

Refinery:  Utilisation was at 96% (vs. 103% in 2Q25 and 103% in 1Q26), following government-imposed export restrictions. In 2Q26, JET/GO/ULG/HSFO crack spreads averaged USD62.9/63.0/29.0/2.5 per barrel (+73%/+78%/+200%/n.a. q/q). The stronger spreads were driven by: a) limited refined product availability due to supply constraints, as exports from refineries in the conflict-affected region were heavily curtailed; and b) low global fuel inventories.

Despite the sharp increase in crack spreads, market GRM came in at USD15.6/bbl (+194% y/y, -7% q/q). This is weighed down by: i) a surge in crude premium costs to c.USD15–20/bbl; and ii) the 41-day ex-refinery diesel price cut, under which PTTGC absorbed c.THB2.25bn of costs.

Crude inventory impact: PTTGC posted a net inventory loss (including NRV impact) of THB1.94bn (vs. a loss of THB1,891mn in 2Q25 and a gain of THB7,182mn in 1Q26), driven by the c.USD10/bbl decline in Dubai crude prices during the quarter. Moreover, there is a net hedging loss (both realised and mark-to-market) of THB791mn (vs. a THB7.99bn loss in 1Q26).

Aromatics:  Utilisation was at 90% (vs. 84% in 2Q25 and 87% in 1Q26). In 2Q26, PX and BZ margins averaged USD308/tonne (+29% y/y, -6% q/q) and USD172/tonne (+7% y/y, +6% q/q), respectively. Margin improvement was supported by supply disruptions and cost-push effects from geopolitical tensions in the Middle East. In addition, stronger condensate residue margins were driven by the c.USD30/bbl increase in diesel prices. Market P2F registered at USD329/tonne (+86% y/y, +19% q/q).

Polymers:  Utilisation was at 109% (vs. 109% in 2Q25 and 98% in 1Q26). In 2Q26, HDPE/LLDPE/LDPE prices averaged USD1,419/1,358/1,634 per tonne (+36%/+32%/+36% q/q). The increase was driven by the full-quarter impact of supply disruptions (force majeure) across chemical plants in Asia following the US–Iran war. Adjusted EBITDA came in at THB5.14bn (vs THB1.58bn in 2Q25 and THB-126mn in 1Q26).

Non-recurring items: i) c.THB1.75bn provision expense of mothballing of the polyols plant; and ii) THB556mn forex gain.

3Q26 outlook

(+) Refinery – Crack spreads to remain elevated despite lower crude. Refining cracks have not normalised alongside crude and we do not expect them to in 3Q26. Although Dubai crude has corrected sharply from its peak, diesel, jet and gasoline cracks remain well above 2Q26 averages, while LSFO is at a record high, supporting our expectation of market GRM of USD15–19/bbl.

The disconnect reflects several structural factors. First, refinery restarts lag upstream production, with complex refineries requiring weeks—not days—to resume operations after shutdowns, leaving product supply constrained even as crude availability improves. Second, regional inventories are being rebuilt after significant drawdowns during the Hormuz disruption, creating incremental demand beyond underlying consumption. Third, product prices adjust more slowly than crude, allowing cracks to widen as crude falls more rapidly than refined products. Finally, distillate demand remains resilient, led by freight and industrial activity, while the recovery in gasoline demand is more gradual, keeping middle-distillate markets tight.

On 3Q26TD, Jet/gasoil/ULG spreads average at USD62.5/65.5/33.2 per barrel, -1%/+4%/+15% q/q.

Crack spreads (USD/bbl)

Source: PTTGC, DBS

(-) Chemicals – Scarcity premiums are falling. Polyolefins remain the weakest segment in the chemical chain. As naphtha has rebounded while PE and PP prices remain largely flat, cracker margins have compressed sharply, with HDPE, LLDPE and PP spreads falling well below historical mid-cycle levels and approaching cash-cost territory for many naphtha-based producers. We expect 3Q26 polyolefin spreads to average only USD250–300/tonne, roughly half the level seen in 2Q26.

The margin squeeze reflects both cyclical and structural factors. Polymer supply has recovered faster than feedstock availability, as Middle Eastern exports resumed immediately after shipping disruptions eased, while refinery and naphtha supply normalised more gradually. At the same time, Asian cracker restart rates are increasing, adding fresh supply into an already oversupplied market. More importantly, the structural downcycle remains intact, with global PE and ethylene markets not expected to bottom until 2028–29, while another 3.6mtpa of new ethylene capacity is scheduled to start up during 2026, delaying any meaningful recovery in polyolefin margins.

On 3Q26TD basis, HDPE/LLDPE/LDPE spreads averaged at USD291/272/473 per tonne, -45%/-42%/-36%.

PE spreads (USD/tonne)

Source: PTTGC, DBS

Maintain HOLD with FY26F TP of THB34, based on 0.51x P/BV (in line with its five-year average). Our rating is supported by i) earning peaking out in 2Q26 after full-quarter realisation of strong refinery and chemical margins, supported by supply disruptions arising from the war; ii) a sharp decline in polyolefins margins after a fresh restart of Asian crackers; iii) remain cautious on the longer-term chemical outlook. Global demand could be pressured by inflationary headwinds, while additional supply of c.23/15mtpa of PE/PP capacity is expected to come onstream by 2028, posing downside risks to margins.

Access more at DBS Insights Direct