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Near parity in natural-gas and petroleum precursors began to impact what had been a strong export business for restructuring polyolefin giant, LyondellBasell. In a monthly update of its performance, the company reported that while export strength out of North America in its materials unit, particularly polyethylene, had diminished as August drew to a close, overall, the company was ahead of its restructuring target goals.

PlasticsToday Staff

October 8, 2009

1 Min Read
LyondellBasell ahead of restructuring schedule despite narrowing margins, exports

LyondellBasell reported that its chemicals business, which includes polymer feedstocks, posted global August earnings of $117 million ($102 million U.S., $15 million rest of the world), with year-to-date (YTD) earnings of $480 million ($441 million U.S., $39 million ROW). The company says the August and YTD results are ahead of benchmarks outlined in its restructuring plan, with the fixed costs also staying below the restructuring budget.

In olefins, increased co-product prices are leading toward parity in naphtha and ethane in North America, where 75% of ethylene is generated from natural-gas liquids (NGL). The natural gas-petroleum gap had been exploited by North American resin producers, particularly in polyethylene, which utilizes NGLs for ethylene, to create an export advantage over petroleum-based resins. In Europe, the company said olefins performance was break-even on EBITDAR (earning before income taxes, depreciation, amortization, restructuring). The company’s intermediate chemicals and derivatives business saw generally steady margins, which presumably helped the company decide to restart its U.S. Chocolate Bayou facility on August 30, after previously announcing plans to shutter the site.

The company’s polymers unit announced that August, like July before it, was strong and is ahead of its year-to-date plan. U.S. polyethylene (PE) was boosted by a strong export market, with margins down slightly, while August polypropylene, European PE, and Advanced Polyolefins had results similar to July. Looking at the remainder of 2009, LyondellBasell believes the polymers outlook has weakened on signs of declining U.S. PE export opportunities. —[email protected]

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