Like almost all other resin makers, US-based LyondellBasell (LYB, Houston, Texas; www.lyondellbasell.com) struggled with the economic slowdown, especially towards the end of 2022. Olefins and polyolefins in Europe and Asia were hit hard, with production throttled back significantly in some cases, reaching a low in Europe of 60%. Here, weaker consumer demand for durable consumer goods was particularly apparent, and the company faced costs closing the Houston refinery (see Plasteurope.com 26.04.2022) and the sale of its Australian polypropylene plant.

With this in mind, the company under CEO Peter Vanacker said it expects the market environment to remain challenging in the first half of 2023. However, the chairman suspected that demand bottomed out in December 2022.

Utilisation is set increase again in the first quarter, according to the company, and should average around 80% for olefins, polyolefins, and intermediates. However, a five-year maintenance plan for one of the large US crackers and overhauls of several acetyl and propylene oxide plants are scheduled for 2023. All of this is expected to weigh on results, and the company followed its standard script by not offering detailed forecasts on financial figures.

For the first time, the group confirmed that it was not too happy with the progress of integrating A. Schulman operations purchased in 2018. The concerns following the USD 2.25 bn (EUR 2.11 bn) deal, which brought the compounding and distribution of technical materials of that company into the resin maker’s Advanced Polymer Solutions unit (APS), likely had more to do with high costs for raw materials and energy than at other divisions.

As a result, from January operations for Catalloy TPO and polybutene are to be separated out and added in equal parts to the two polyolefin areas of responsibility. Additionally, Vanacker seeks to run APS as a separate entity in the future, which apparently means not as one of the six segments, and focus more on compounding. This feeds further speculation about a possible sale of these activities.

Last year, the development of the global economy led to a 30% decline in both company EBITDA and net profit to USD 6.5 bn and USD 3.9 bn respectively. In view of inflation and higher sales prices in the first half of 2022, sales increased, unsurprisingly, by 9% to just under USD 50.5 bn.

The individual polymer and intermediate product segments showed diverse development. While the olefins and polyolefins activities in the Americas shed almost half of EBITDA to end up at USD 2.7 bn versus USD 5.3 bn, the combined businesses in Europe and Asia barely eked out a positive number of USD 112 mn after USD 1.75 bn the year prior.

Intermediates was the only segment to post better EBITDA with a rise of 35% to USD 1.87 bn. APS, the otherwise smallest division, surrendered about a quarter of the metric with a fall in EBITDA to USD 312 mn from USD 409 mn after a negative fourth quarter.