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LyondellBasell to Continue Reducing Americas Run Rates for Olefins and Polyolefins
10/31/2022
In its recent quarterly earnings update on Friday, resin major LyondellBasell (LBI) said it will continue to reduce operating rates in the Americas to match lower demand and manage its inventories.
"We expect to operate our Olefins and Polyolefins (O&P) Americas assets at a rate of approximately 75% in the fourth quarter," said LBI's O&P Executive Vice President Ken Lane.
The lower run rates would come alongside lower seasonal demand and further capacity additions, which will keep markets well supplied, Lane noted during the Q3 call. "Margin pressures could be offset by moderating feedstocks and energy costs. Also, with lower demand, we expect continued easing of logistical constraints."
LBI plans to lower operating rates follows other producers that have lowered rates to help reduce the glut of resin stuck in Houston warehouses due to poor demand.
Dow said back in late August it was lowering its global polyethylene operating rates temporarily by 15% to help balance high inventories.
The reduction in utilization rates has paid off for producers as September inventory levels dropped by just over 575 million lbs and more than 700 million lbs including August. PE contracts for October also appear to be headed towards a rollover from September levels, ending a three-month skid of $.11/lb.
By The Plastics Exchange.
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