Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What is LyondellBasell's outlook for the polyethylene industry in China, considering lower crude prices and reduced licensing sales? A: Peter Vanacker, CEO, explained that despite lower crude prices, China's demand remains weak, and investment-driven stimulus initiatives have not yet supported direct consumption. The polyethylene trade deficit in China is expected to remain significant even with new capacity. The demand for additional licenses has dropped, impacting future capacity buildup. Kim Foley, EVP, added that while NAFTA prices have decreased, polyethylene prices in China have also dropped, compressing margins. The Bora joint venture continues to operate at technical minimums, indicating challenges for other capacities.
Q: Could you discuss the potential tariff impacts on US feedstocks like ethane and propane if exports to China are heavily tariffed? A: Peter Vanacker noted that trade policies are dynamic, and LyondellBasell is working closely with customers to navigate potential changes. Kimberly Foley added that while ethane and polyethylene are mentioned in potential tariff exemptions, LPG is not, which is significant for Asia's PDH units. The US ethane forward curve is expected to remain low before rising later in the year.
Q: Why is now the right time to proceed with the metathesis unit given the current market uncertainty? A: Peter Vanacker emphasized that the decision aligns with LyondellBasell's strategy to grow and upgrade the core. The Flex 2 project offers an attractive investment with a mid-teens IRR. Despite market volatility, the company is committed to investing in projects that will strengthen its position and profitability in the long term.
Q: How might reduced US polyethylene exports to China affect domestic supply and prices? A: Peter Vanacker stated that LyondellBasell is not a major exporter of polyethylene and has strong domestic volumes due to its differentiated portfolio and customer relationships. Kimberly Foley added that trade flows are adjusting, with exports shifting to Southeast Asia and other markets, ensuring that LyondellBasell remains well-positioned globally.
Q: What is the impact of potentially reduced European assets on LyondellBasell's EBITDA, and when will decisions be announced? A: Peter Vanacker indicated that the European strategic review is progressing well, with updates expected by mid-year. The focus is on upgrading the portfolio, which should enhance EBITDA. The company aims to emerge stronger from the cycle, with a more focused and profitable European presence.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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