Materials maker LyondellBasell Industries saw sizable drops in sales and profit in the second quarter of 2023.
Sales for the quarter at Houston-based LBI were down 30 percent to $10.3 billion vs. the same quarter in 2022, as profit slid 55 percent to $715 million. In an Aug. 4 news release, officials said that global olefins and polyolefins margins improved modestly during the second quarter, driven by lower feedstock costs in both the U.S. and Europe.
Second-quarter sales in LBI's Olefins & Polyolefins-Americas unit were down 35 percent to $2.23 billion, with operating profit also dropping 35 percent to $524 million. At the firm's Advanced Polymer Solutions unit —including North America's largest compounding business — sales were down 18 percent to $960 million, but operating profit slumped 65 percent to $9 million.
Polyethylene resin sales volume in pounds for O&P-Americas in the second quarter was down 6 percent to 1.65 billion pounds, with polypropylene resin sales volume down 5 percent to just over 575 million pounds. At APS, compounding sales volume in pounds was down 2 percent to almost 815 million pounds.
Looking to the third quarter, officials said that LBI "expects typical benefits from summer seasonality to be more than offset by soft demand due to ongoing economic uncertainty."
"Stagnant demand, volatile feedstock costs and new capacity in North America and China are challenging petrochemical margins," they said. "The company believes current market conditions will persist amidst challenging economic conditions and a slower than expected recovery in China."
CEO Peter Vanacker added that LBI "is steadfast in our resolve to advance on the three pillars of our long-term strategy despite near-term macro challenges."
"Our rapid progress is laying the necessary groundwork to extend our leadership in Circular & Low Carbon Solutions," he said.
In June, LBI announced the closing of a color concentrates plant in Akron, Ohio, that employed 64. Production from the site will be moved to a plant in San Luis Potosi, Mexico. The plant was part of LBI's APS unit.
LBI also has made two sustainability-focused deals this year. In March, the firm acquired Italian compounder Mepol srl for an undisclosed price. Mepol, based in Riese Pio X, Italy, makes recycled, high-performing technical compounds at plants in Italy and Poland.
Then in April, LBI acquired full ownership of recycling plants in the Netherlands and Belgium. The firm had owned half of Quality Circular Polymers BV in a 50-50 joint venture with Veolia Environment SA of France. The QCP mechanical recycling plants make blends using household plastic waste.
On Wall Street, LBI's per-share stock price was up more than 1 percent to $97.50 in pre-market trading Aug. 4. The price has increased 16 percent since Jan. 1.