Company News
March 19, 2025
European Update
European Polyether Polyol Prices Surge Amidst Supply Shortage
PUdaily | Updated: March 18, 2025
The European polyether polyol market has been facing noticeable supply chain pressure in recent months. Major European suppliers like Repsol and Dow are operating at low rates with reduced production levels, resulting in a relatively tight supply in the market. From February to March 2025, polyether polyol prices have surged by EUR 100/tonne due to the supply shortage. With a further widening supply gap and increased imports from China, European polyether polyol prices are anticipated to keep rising from March to April.
Additionally, there is a relatively small number of local traders in Europe, mainly due to the following reasons:
– Limited profit margins: Profits for polyols are relatively low, making large-scale trading markets unsustainable.
– High transport costs: Traders in Europe are feeling the strain of significant cost pressures.
In contrast, there are more traders in the Middle East and Africa regions, particularly in the African market, where large traders are not uncommon. Therefore, the focus of global polyether polyol trade is gradually shifting.
Shell’s Strategic Adjustment of Chemical Assets
Shell is considering selling its chemical assets in Europe and the U.S., with Morgan Stanley conducting a strategic review, according to a report from the Wall Street Journal. This move reflects the dual challenges facing the chemical industry. Uncertainty in regional markets: Shell owns multiple chemical complexes in Europe and the U.S., such as Rheinland in Germany, Moerdijk in the Netherlands, Mossmorran in the UK, Deer Park in Texas, Geismar and Norco in Louisiana, and Monaca in Pennsylvania. The operation of these facilities is affected by global market fluctuations and regional supply-demand dynamics. Particularly in Europe, amid the tight supply and continuous price increases of polyether polyols, the operational efficiency and profit margins of these assets are under severe tests. Margin pressure and strategic restructuring: Shell’s chemical business has been continuously incurring losses over the past three years, although the losses shrank in 2024 (reducing from USD 717 million to USD 392 million). As the European chemical industry faces significant pressure, strategic reviews and potential asset divestments have become important means for Shell to optimize resource allocation and reduce risks. Potential buyers include private equity and Middle Eastern companies who seek to expand capacity in the West. It reflects not only the market attention on chemical assets but also indicates potential shifts in the global chemical industry in the future.
Market Restructuring: Changes in Supply Chain Flows and Global Trade Patterns
By linking the current situation in the European polyether polyol market with Shell’s strategic adjustments, several underlying trends can be observed.
Supply Tightness Driving Price Increases
European producers are challenging to meet market demands due to the fragmented and relatively inefficient production models. Although Chinese products fill the supply gap, they also exacerbate the regional supply-demand imbalance. Consequently, price hikes become an inevitable trend. The continuously rising prices also prompt local producers to reevaluate their asset allocations and production strategies.
Cross-Regional Trade and Capital Restructuring
Global chemical giants like Shell are responding to losses and risks through strategic reviews and asset sales. In the future, if more companies choose to divest assets in Europe, it could lead to a round of capital restructuring and portfolio rebalancing.
Reallocation in the Global Supply Chain
With industry leaders like Shell increasing their investments in China and Singapore, the global polyol supply chain is gradually shifting its focus from Europe and the U.S. towards Asia. This trend not only underscores the reallocation of cost and production advantages but also is poised to have far-reaching implications on the future global trade landscape. Transport costs and trade barriers remain crucial variables in the polyether polyol market, potentially leading to more cross-regional collaborations and M&A restructuring in the future.
March 18, 2025
It’s Official
LyondellBasell and Covestro announce permanent closure of PO11 unit at Maasvlakte
March 18, 2025 09:00 ET | Source: LyondellBasell
MAASSVLAKTE, Netherlands, March 18, 2025 (GLOBE NEWSWIRE) — LyondellBasell (LYB) and Covestro have jointly decided to permanently close the Propylene Oxide Styrene and Monomer (POSM) production unit (PO11) at the Maasvlakte site in the Netherlands. This decision comes after thorough and careful consideration and is driven by the continued pressure on Maasvlakte’s profitability due to global overcapacities, a strong increase of imports from Asia and high costs of European production. Unfortunately, this situation is expected to continue, so longer-term profitable production is not anticipated.
“While the decision to shut down the PO11 unit is difficult, we must ensure all assets within our portfolio are a long-term strategic fit,” said Aaron Ledet, executive vice-president, I&D and Supply Chain. “We are prioritizing our core assets which play a key role in our technology differentiation and circularity or provide attractive returns over the cost of capital. We take our obligations toward our employees, European employee reps, councils and unions seriously. We have engaged with them in line with these obligations and will continue to do so. We would like to thank them for the constructive dialogue. We are also in communication with customers, suppliers and other parties across the value chain and will continue to do business as usual. There is no change to our working relationship, and we continue to focus on providing an exceptional customer and supplier experience.”
“As part of our Sustainable Future Strategy, we’re continuously working to optimally position Covestro to be a reliable partner for our customers and to operate competitively in a challenging market environment,” said Hermann-Josef Dörholt, head of the Performance Materials Business Entity at Covestro. “Due to global overcapacities, persistently weak demand, and high costs in Europe, we have jointly decided with LYB to close the PO11 plant. We will support LYB in implementing this change as socially responsibly as possible. At the same time, we remain committed to the European market and will continue to supply customers with our renowned polyether polyols portfolio.”
The Maasvlakte site, a joint venture between LYB and Covestro, has been operational in the Rotterdam region since 2003. Between now and the end of 2026, LYB will carry out a process to safely shut down and prepare for the demolition of the asset.
In 2024, LYB announced a strategic review of European assets of its Olefins & Polyolefins (O&P) and Intermediates & Derivatives (I&D) business units. LYB has taken the next step in evaluating the option to seek alternative ownership for the O&P sites in the strategic assessment. At this time no decisions have been made and various outcomes remain possible.
About LyondellBasell
We are LyondellBasell (NYSE: LYB) ― a leader in the global chemical industry creating solutions for everyday sustainable living. Through advanced technology and focused investments, we are enabling a circular and low carbon economy. Across all we do, we aim to unlock value for our customers, investors, and society. As one of the world’s largest producers of polymers and a leader in polyolefin technologies, we develop, manufacture and market high-quality and innovative products for applications ranging from sustainable transportation and food safety to clean water and quality healthcare. For more information, please visit www.lyondellbasell.com or follow @LyondellBasell on LinkedIn.
About Covestro
Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas. Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are also used in sectors such as sports and leisure, telecommunications and health, as well as in the chemical industry itself.
The company is geared completely to the circular economy. In addition, Covestro aims to achieve climate neutrality for its Scope 1 and Scope 2 emissions by 2035, and the Group’s Scope 3 emissions are also set to be climate neutral by 2050. Covestro generated sales of EUR 14.2 billion in fiscal year 2024. At the end of 2024, the company had 46 production sites worldwide and employed approximately 17,500 people (calculated as full-time equivalents).
Editor’s Note: This one hurts. I worked at ARCO Chemical and Lyondell in the late 1990s when construction started on this plant. I still have photos somewhere of the reclaimed land it was built on!
March 13, 2025
Urethane Highlights from BASF Investors Call
BASF SE (BASFY) Q4 2024 Earnings Call Transcript
Feb. 28, 2025 8:46 AM ETBASF SE (BASFY) Stock, BFFAF StockBASFY, BFFAF
BASF SE (OTCQX:BASFY) Q4 2024 Earnings Conference Call February 28, 2025 3:30 AM ET
Company Participants
Stefanie Wettberg – Senior Vice President, Investor Relations
Markus Kamieth – Chief Executive Officer
Dirk Elvermann – Chief Financial Officer
Markus Kamieth
Yes. Thank you, Stefanie. Good morning, everyone. Welcome to our first conference call in 2025. In a challenging market environment, BASF has performed well, thanks to the strong performance of our core businesses, where we leveraged our strong market positions to grow EBITDA before special items by 18% compared with 2023. Overall, EBITDA before special items of BASF Group increased by 2%.
Lower-than-projected capital expenditures and our continued strong focus on net working capital led to a free cash flow of around €750 million, exceeding our forecast range of €100 million to €600 million. We are also making good progress in terms of portfolio management. The signing of the agreement to sell BASF’s Decorative Paints business to Sherwin-Williams marks an important step in unlocking the value of our standalone businesses.
So let’s begin with an overview of BASF’s performance in the fourth quarter. The €15.9 billion sales matched the level of prior year quarter. Volumes of BASF Group, excluding precious and base metals increased by 3%, thanks to the Agriculture Solutions segment in particular. The Chemicals & Industrial Solutions segment also increased volumes in the last quarter of the year. Prices excluding precious and base metals were slightly positive. Overall prices steadily recovered throughout 2024 compared with the respective quarter of the previous year.
Currency headwinds slightly dampened sales growth and were mainly related to the Brazilian real.
In an overall stable market environment, the Materials segment recorded slightly lower volumes in both divisions. In the Monomers division, volumes declined particularly in the PA6.6 and PA6, while in the Performance Materials division, volumes decreased mainly in engineering plastics. Specific margins improved in both divisions with the highest contribution from the MDI value chain.
Nonetheless, EBITDA before special items in the Materials segment declined slightly. Higher earnings in the Monomers division could not fully compensate for lower earnings in the Performance Materials division.
Thomas Wrigglesworth
Thanks very much, Stefanie. Good morning everybody and thank you for the presentation. Two questions, if I may. Firstly, can you talk a little bit about the kind of China recovery story that you’ve been talking to in 2024? Clearly, the latest data point in chemicals at a headline level looks a bit weaker in the fourth quarter. And then on the other side, we’ve also had some of your peers talk more positively about MDI in China as well.
So keen to get your thoughts on how China is progressing? And the second question is, any comments on kind of near-term trading and how you’re thinking about 1Q noting that obviously the Ag Solutions business is very important to that first quarter performance? Thank you.
Markus Kamieth
Yes. Thanks, Tom. Markus here. I will take the first question, and I’ll hand over for current trading to Dirk. On China, your observation is correct. We were also based on — or after a rather solid and good development in the third quarter, a little bit disappointed on the dynamics, business dynamics overall in China in the fourth quarter. Towards November-December, we saw some cooling off also on the volume side and in particular, the upstream markets have cooled off in the last weeks of the year. So that dynamic was clearly there.
Overall, I have to say the year 2024 for us in China was a good one. We had volume growth in overall, if you discount the precious metal related businesses, if you look at the chemicals businesses, so to say, of roughly 5% in 2024, which is roughly in line with market also in China. So volumes overall in China were not the biggest challenge. The biggest challenge remain low margins because everything is long, and in the fourth quarter, it was a bit compounded overall because the year-end finished rather weak on the volume side.
You asked about MDI. I don’t want to now specifically get into individual products and pricing dynamics. But overall, I would say, our feeling is that across the board, I don’t want to call it a good pricing environment in China because, as I said everything stays long, but the first attempts to raise prices now in certain commodity areas are successful.
And I think overall, the start of the year is giving us some indications that also the volume growth holds up. So overall dynamics towards the end of the year were not favorable, but overall, China stays on track. Dirk?
March 11, 2025
New CEO at BASF Corporation
Personnel changes at BASF
Heather Remley, President, Global Engineering Services, Ludwigshafen, will assume responsibility as President & CEO BASF Corporation, Florham Park, New Jersey, effective April 1, 2025. The current CEO of BASF Corporation, Marc Ehrhardt, has decided to leave the company at his own request. Christian Aucoin, Senior Vice President, Global Operations Agricultural Solutions, Limburgerhof, will, as President, succeed Heather Remley at the same time.
https://www.basf.com/global/en/media/news-releases/2025/03/p-25-036
March 11, 2025
Leggett & Platt Sells Two Segments
ABM International has acquired Gribetz International and Porter International. Photo courtesy of ABM.
ABM International acquires 2 Leggett & Platt segments
Sheila Long O’Mara //Executive Editor, Furniture Today//March 10, 2025
MONTGOMERY, Texas – Industrial machine supplier ABM International has acquired the factories and other assets of Gribetz International and Porter International from Leggett & Platt.
Both companies had been part of the Global Systems Group, a division of Leggett & Platt. Terms of the deal that closed at the end of February were not disclosed.
The move combines the companies under the ownership of fourth-generation family-owned ABM International under the leadership of Neal Schwarzberger, president. The acquisition includes two factories – one in Sunrise, Fla., and one in Carthage, Mo. – totaling 100,000 square feet.
The new division of ABM International will be consolidated as Gribetz and will be managed by Paul Block, president of sales. Block had been with Leggett’s global systems group for more than 15 years.
“I am excited about the synergies these companies will create for the mattress and home furnishings industries,” Block said.
In addition to the real estate deal, 70 employees that work in the two new factories remain with the new division. Block said the sales, service and support teams that the organization’s customers have worked with in the past are in place under the new ownership structure.
Founded in 1947, ABM International specializes in sewing equipment, single-needle quilters and other specialized equipment used in mattress and upholstery manufacturing. Gribetz International was founded in 1940, and Porter was founded in 1948. Both companies were acquired by Leggett in the 1990s, and in 2010, Leggett acquired Galkin Automated Products, a sewing machine specialist founded in 1908.
The deal is part of Leggett’s ongoing restructuring that was announced last year.
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