LYB - Earnings call transcript Q1 2019 | LyondellBasell Industries N.V.

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Operator

Hello and welcome to the LyondellBasell teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes.

Following today's presentation, we will conduct a question-and-answer session. [Operator Instructions] I'd like to now turn the conference over to Mr. David Kinney, Director of Investor Relations. begin. may you Sir,

David Kinney

Hello, joined to our today Thomas Financial Officer Jacqueline. XXXX Chief First Teleconference. and Officer. Chief our I'm by Aebischer, and you, LyondellBasell's welcome Quarter Executive Thank Bob Patel,

discussion, business slide in to our note for a today's website the begin www.lyondellbasell.com. accompanies matters call we I like relating would out presentation available to is and made you I that this would to call at statements that point on forward-looking like Before at statements. uncertainties. assumptions subject are forward-looking made that statements are from upon are facts risks Actual not are based These of materially differ believed those are historical and and could significant to to the forward-looking which results management statements. be reasonable time also

factors the measures GAAP that refer www.lyondellbasell.com/investorrelations. and at available disclosures, available including about information Reconciliations could the differ, our our are non-GAAP results the detailed to any our more the financial financial a release to financial currently presentation actual other are please at website. earnings applicable together of statements with to cautionary in slides which cause reports, For measures

XXXX. at Time Finally, The PM until calling out code like to beginning recording Time pass States. United outside a this Eastern XXX-XXX-XXXX is will on for States Eastern June would the be XXth by XX:XX United in telephone that AM call today available both XXX-XXX-XXXX the I of point X:XX by numbers and

to focus call on said, growth and to being we turn quarter initiatives. will outlook, our like provide environment, over would today's During on near-term now the I Bob. the update call, first results, current an our That

Bob Patel

the call. all thank of Dave. our for and Thanks world, first you quarter day you participating joining to around earnings Good

X begin the and Let's Slide highlights. with review

first volumes value-driven regain seen to doubling quarter, the first the profitability Sales year's advancing fourth segments and improved strategy to by delivering for more our during our XXXX, fourth our five Europe, Asia Company, business business than that growth moved business Across During of six our increased EBITDA Olefins levels operational last while International profitability. of on quarter and compression, on Polyolefins, demonstrated portfolio and some upon improved synergies. and for quarter & second of our our quarters strong margin segment. forward performance the Company

First quarter which earnings represents XX% share, previous were over quarter. a $X.XX the per improvement

natural We materials a synthesis plant same in continue at portfolio The production acquisition that acquiring Porte, raw former a venture converts and site. joint to La use our Texas. acid. actively into our manage in methanol we interest minority the by gas business included in the This methanol plant gas gas acetic of

anticipate the the apparent A. first We our accretive of annual expect Polymer we run exceeding represents returns operational in by transaction acquisition $XXX investment. exceed we years. In synergy are LyondellBasell's the and two our closed to initially of standards $XX since expected we realize synergy half synergies in on These within end generate provide to of more our profitability Solution's the annual will rate synergies than becoming capture million advanced increased efficiencies annual high our to for materially months synergies initial quarter. target. and and seven XXXX, This an the Schulman million

world's growing progress up of swing program hyper-zone with approaching in underway the organic start third is a construction technology largest Our quarter Porte full on La propylene growth in our new considerable polyethylene and serve alcohol global in these at market's investments Bayport oxide our demand capacity will and polyurethanes Channelview Texas. plant butyl and transportation and polyethylene, for new This fuels. tertiary in from sites

first to and dividend an the a LyondellBasell opportunistic quarter. our million dividends additional during shareholders Company strong and remains As the progressive of returned to transaction $XXX the share potential through Braskem, we continue pursuing evaluation while committed with share repurchases. repurchases

returns we growth. during of decisions are shareholder Company. the strong to I'm Day LyondellBasell's to the supporting be more balanced years New also provide report would marks capital solid our and All a approach employees Company value year that deliver these York, business to driven promises a while pleased long-term commitment guided Investor first where the how allocation our for who ago, Each in joined of to at you deployment grade safety percent strategy. will was and by on eight advance Two to capital performance. injury performance performance of Schulman's similar the described XX-plus first our continued to our with the quarter, our tracking a typical investment the start year resilient our to higher first XXXX acquisition LyondellBasell the record for include fresh the be our XXXX, and in that seven achieved X.XX, acquisition. can LyondellBasell quarter rate than we year levels Prior full is XXXX. workforce setting quite metrics X, times see safety On Slide full combined portfolio Schulman

frontline the will that injury robust of we're and in strongly and to Thomas driving leading on And our go home to want process our know, further for towards employees detail operational free improvements As financial more highlights LyondellBasell. management improvement sense believe the safety All strong rapid evidence displayed provide of within performance by we operations. integration provides supervisors. families now, goal The metrics of of our deep safety results. a you We indicator the is to first look these quarter. their safely employees ownership underway for further their grateful and forward

Thomas Aebischer

and illustrates our Thank Bob the months. Please over all to you, XX trailing X, which within of you. Slide Company day good turn developments to

during petrochemical of other diverse with in offsetting year. continues in times a market the businesses conditions over improvements declines resilience to past segments two be partially of source challenging segments of portfolio Our

first period. prior-year As in posted Bob the higher XX the mentioned, trailing Total of quarter. five previous EBITDA comparison during segments relatively relative months our business the profitability six a to quarter, for to declined strong

The to felt primarily Intermediates March not material within Company's first related was the Houston in disruptions service fire impact at incurred Ship was terminal third-party our segment we quarter, and and quarter first the the result. a During Derivatives to Channel. the

and will ongoing higher we faster the second quarter In expect recoveries, for margins drove than to be costs in assessing steep disruptions the We are first world, the America, olefins. than the declined prices quarter. drop the back polyethylene to margin had impact feedstock rest quarter on prices In first and North similar volume and slightly ethylene improved compressions propylene falling quarter. of fourth of the strong olefins relative still

fourth exhibited Our with persisting markets, quarters. first Derivatives relatively typical Intermediates and through businesses the - balanced slow and stability a

operations. and low discounts quarter gasoline well heavy during inventories the We in Unfortunately, high of continue sour refinery ninth Houston to strong refining run consecutive oil, low the for resulted quarter. with spreads crude first most crack our of historically

of another during outstanding XX $XXX months. On Slide improvements the delivered you with over results business operating licensing quarter that million businesses cash that technology first in see generated increased can continued revenue both nearly the X, of Our quarter. the last quarter LyondellBasell's and activities prior from

we bonds balance April, During into favorable used rates billion our managed a corporate for by of purposes. entering early due XXXX, $X used were $X debt the term billion that which in to refinance portfolio that the first quarter, was general loan at

repurchases. strong in over million growth continue our in dividend, quarter our flows returning $XXX while organic capability projects, The of cash investments shareholders closed quarterly the our provided with to share liquid to Please Beyond X. ample to our the and flow on billion of the chart months. left sheet. The years Slide performance previous investments cash the trailing on cash the over XX four turn $X.X illustrates balance form and

with from of generated months XX the invested than LyondellBasell last quarter cash projects. XX% roughly sustaining first the balance during billion $XXX to generating more the million, CapEx operating in nearly $X.X profit allocated Capital expenditures During activities. and were

complete slide during side first for the organic year, of period, The drawn of construction Bob. Thank accounting facility of XXXX, total to undrawn of flow for of that our repurchases, acquisition We and our the the liquidity due as our primarily operating share chart with or plant on Hyperzone the decline the in loan illustrates visibility With for the expect reflects right total term building in the dividends We we growth, Houston. our much. M&A. billion. is facilities. re-investments quarter expenditures call A. believe improved that accretive slightly the over provides the We in that such as the Liquidity investment will in XXXX cash same cash accelerate increase for very of PO/TBA the sustaining and as such quarter excess closed capital flow the back $X purposes available activity or turn you liquidity new after that, remainder the to PE I will Schulman.

Bob Patel

Thank you, Thomas.

Results driven products. Ethylene by the was strong decline by $XX ethylene rates million These were prices XXXX, segment, to $XXX exceeding fourth $XXX business declines to turn to results. In largely price well-supplied lower industry Olefins our a the metric with price, more fourth in but more by reductions results metric than operating the for $XXX Slide quarter. quarter averaging review offset X%. declined feedstock decrease ton. of most and margins Olefins per per first during compared lower XX%, ton. rates million our fell $XXX by also markets Propylene million, quarter, than in than EBITDA costs. due the remained X driven first quarter and Polyolefins-Americas Let's

demand our NGL polypropylene Polyethylene of decreased and prices for chain to cracker grade polypropylene, feedstock un-purified April, quarter. to lower ethane $XX from partially - million opportunities declined first continue Polyolefins and from we feedstocks both as XX% the NGLs. our during in from seasonal an the price system. showing was We [indiscernible] volume. discounts in in enter our of US margins sales came by Gulf XX% prices higher and Coast ethylene trend polyethylene benefit optimize NGL by lower improvement offset feature to in are and increase trends Margins period. signs capture found production results

to performance International and Now please Polyolefins-Europe, Asia review X to Slide of segment. Olefins and our turn the

Combined increased improved over the polyolefins volume Market of cracker first $XXX following improvement. quarter. in investment million, recovery the some first by increase in rebounded quarter, both polymer Germany, increased, quarter, all Volume unusually in results and quarter, have Olefins products of Results a margin than increased polyethylene the conditions completion in the by $XX XX% and sales XXX% in improvement improved strong for improvements our an $XX slow for the results EBITDA system quarter. $XXX than maintenance volumes million XX% our polyethylene. were first offset partially driven million. polypropylene. the the million. across was unplanned more During fourth ethylene and maintenance and Polyolefin with planned for fourth of volumes driven with representing by margin more

potential margins updated recently Recent very ethylene new feedstock views chain margins over with industry margins three demand the for of exceeding for income ton. to due balances improved to quarter venture the XX the at the XX% in declined, growth chain Our costs ethylene polyethylene. effective the demand Slide variable $XXX supply level increased ethylene Europe early completion year capacity, similar past indications and average XXXX. and as the of metric global for in price polyethylene equity remained in the outpaced million. and seen the by and $XX fixed high full rates, per increases. quarter Joint on resulting operating prices improved outpacing We polyethylene in first in region first have reflects Industry of quarter, consultants the see in stable years. propylene second both maintenance. A has

similar Polyethylene XXXX capacity, these on Hyperzone from the our forecasted in rates upturn demand of global to recent and while delays forgotten. reduce start We a balance constructive further should the will the XXXX. the only The continue serve optimism right, reduction for delayed XXXX to of XXXX most new delays market any for future good high XXXX improve in in capacity typical provides to the projected The in for capacity, chart during could to the downturn will illustrates supply operating with modest. upon - trends. impact the new operating modest industry's And be be not believe any experience rates and forecast. relatively shown is this that

industry local in particularly for New create fluctuations, ethylene polyethylene short-term capacity both will and markets.

charts, rates where operating our 'XXs, the producers. providing mid-to-low global However, are for forecasted believe shaded good turn Slide to Please as to illustrated on markets the advantage balanced remain XX. horizontal to are profitability the we in by bands tight,

Intermediates Derivatives take a our and look at segment. Let's

Texas decreased to driven the planned for facility chemicals which decreased products, First results styrene. quarter. completion due by and as a in of increased over related prior PO Bayport in improved our most margins glycol, quarter lower margins Oxyfuels this million, and million by declined volumes results were quarter. products improvements million, partially increase $XX margin was million, and improved and quarter. slightly maintenance to at for EBITDA balance $XXX modestly. derivatives butane as increased Volumes by with margins nearly Intermediate Results was the ethylene the $XX the million, for $XX $XX improved than volumes offset methanol results and business, feedstock close primarily compared to fourth prices. fourth more

Dutch Dutch energy. European site into for bio a April, margins plant have Rotterdam. the our that we as contributes the On of I of an short, markets coupled Circular raw on butane COX earnings the through nearly to be incinerator wastewater our Project, a reduction construction waste will to the second provide then technology Slide and over by the hydrocarbons, innovative unit government a low construction of the seen for our to separated reducing costs. includes to During fuel our deploys $XXX conserving in the and highlight under second used that fuel plant Maasvlakte with remove In the waste seen project improvement water-based level XXXX from industry doubled Steam per ton hydrocarbons moving into be constructive treatment the margins be MTBE streams. XX% convert incinerator. sustainable will quarter, is to coordination production material stream One first indication treatment of advancing ambition into quarter. This project recovered In bio-based like the for quarter will the for are new support with in sent which XX XXXX. energy in This two are would exceeding pricing at

allow equivalent of stream COX, XX,XXX our steam containing to the the where is second to back The cars off reduction be produced of circular water annual The caustic will which taking road. realize to units. steam and is mostly tons an us recycled incinerator will production sent project XXX,XXX to

Additionally, results of electricity the programs. further for we more only progress sustainable to in is sustainability providing peta the but is you project a production towards X.X great usage with updates project other step This process equivalent savings forward costs site. lower contributes our households. energy on to make annual also which joule for XX,XXX not I look a annual as operating

Solutions the of Slide turn results XX please Now to to review Polymer our advanced segment.

over weak EBITDA and showed $XXX the synergies. improvements Schulman a of our million, an modest were recovery capture driven quarter A. quarter. seasonal from was million quarter. prior increase First by $XX Results unusually Results also volume margins fourth benefited market as the increasing from

A. discussed call, to we two XXXX. million the Schulman costs $XX during in acquisition the and earnings quarter third transaction As prior the integration-related of were

quarter margins these automotive of results more were Advanced in the a XXXX for million driven in Additionally, of by here improved integration million first than depicted fourth integration $XX volume the quarter results million the costs $XX the were by and in market include compared first and the quarter prior polymers the recovery $XX Solutions than when period, Compounding periods. higher for transaction modest All XXXX. costs. and higher improvements and fourth seasonal week results following with $X quarter. prior seen million the than more

progressing results. the delivering Schulman plans are of integration for Our very well and A.

of quarter, first we have quarter end consider cost earlier, back annual costs. the I million. synergies add first of you the EBITDA As our integration $XX mentioned and the captured at an at rate When already

we polybutylene compounding APS I'm and focus hard synergies. with We similar are would team enter APS LyondellBasell demand Schulman slide of this end nylon leakage. highlight synergy fluid a products. for low using Polymer building these assembly. we which in replace second segment. continued structural We may products. our different developed for This There base battery nylon, has from battery on like strength Plastics prevents of construction, life or resulting slide compound compound for proud rate the expected and part shows Duracell metal integration and most integrity Engineered compounds are is are which terephthalate. strength. to users The Advanced the battery two-end with of the for run you capture. business Engineered to and that It our familiar. as made is technology anticipate multiple quarter, are our and high very distortion end Engineered and product On high which resins in XX. I and [indiscernible] a such A. to But is seasonally is to the business, polypropylene has automotive resistance. and Plastics helps now products. plastics, Solutions acquired the heat mostly polyethylene Plastics polymer manufactured and work be segment proprietary higher This period their nearing styrenics, markets quarterly recreational continued plus our cap including as is used extend

right you in to farm in form GPS styrenics see improvements On alloy our easy equipment. an manufacturing our costs domes in customers. transmission is to manufacturing Both UV these can one used reducing Deere customers products to sold for handle frequency while are our radio products The in that efficiency. alloy John used pellet and of facilitate the stability of provides

slide XX. Turning to

Refining the our results discuss segment. of Let's

Crude refining our average January, combined Unusually environment low gasoline quarter. levels heavy oil high inventories per day $XX for for million EBITDA X-X-X during first discounts more challenging planned during created fourth barrel maintenance a of XXX,XXX the gradually completion quarter. crack was improvement and over fourth a the million, historically business the to quarter a throughput sour the the for reached crude with but refinery negative in spread following Maya increased improved quarter. per First $XX quarter. low than at the barrels $XX

price we the of over see the corrected provides substantial to month detail Light markets April continue in March of during between by the Louisiana shows spreads March The Maya the dark Maya Sweet spread. the crack chart. April. and first blue the during recovery refining spread refining and Slide XX, has and improvements portion X-X-X the in further bar of Fortunately improved as quarter and Crude shown

in strong turquoise April. is spreads the the Maya Maya shows crudes due However, quarter significant to February. pricing Weak to March through pricing fourth gasoline bar chart in The still a gasoline formula. crack of crack other spreads relative and portion the persisted improvement in

through the reliable enter quarter's the X-X-X we improved spreads. this season let As refining business me in and slide Maya summarize operations crack summer anticipate continued improvement we an driving On highlights. XX,

During the per of share. first $X.XX quarter, we achieved earnings

Our O&P-EAI an segment fourth rebounded from strongly unusually quarter. slow

we've our startup million Over to the dividend, past APS Texas of and operating through Hyperzone activities increased advancing our and achieved quartile continued annualized of $XXX the XX new capital from billion funding $X.X evaluate our Porte, cash in we're $X.X La of polyethylene plant. acquisition We're Within than quarters in completing of that for the generated share of Braskem We've to portfolio A. of Schulman. repurchases synergy our same opportunities. than the facility acquiring company rate paying more run contributed more and PO/TBA to of a our continuing over A. segments. and months our approaching top manage Schulman the billion half for X.X target construction acquiring investment plant gas two

strong sentiment we global Going continued demand. in market see improvement with forward

from businesses to improvements. benefit volume We of and seasonal our most margin expect

ready capture markets continued with margins to as Additionally regulations adapt improved marine refining stable fuel our will be operations. to new

opportunities remain Our now take With environments. that to confidence capture questions. resilient we're capability and a poised all pleased global said, range market to advantage, in provides portfolio businesses our of your of to across at

Operator

comes question first Goldman Our from Koort Instructions] Robert of [Operator Sachs.

open. Your line is

Unidentified Analyst

has across four you've before? what January. and February, you the last on the call of in weeks some year how this talk demand demand Campbell versus April sounds March similar terms sequentially for of about few There of kind Don few you year trended and across seeing bit maybe little January, improvement movement first noted year XQ a or in seen first years April. in months earnings something is that and the Bob. you're It This like weeks with this sequential Can the

Bob Patel

continued demand our we've So all sequentially in to grow of see products.

the typical the think levels example is noticeable I uptick demand weak. the been in in so time is polyethylene EAI And more as We're because seeing and we kind what's QX. that was more that and of globally. for back polypropylene seasonal volumes this year. of saw to mentioned, now are at in would expect of we already that And QX I QX

we're So the that now we're months. spring volumes, typical seeing into very

Unidentified Analyst

May supplier date, be And bag. up then well. polyethylene prices, XX% negotiations in bit and the new to heard but Brent a is of a to mix April that little year come is seems It as for negotiations there to then I to crude close the online continuing market.

expectations April your for May are what guess, I and negotiations? So

Bob Patel

much my Well, period comment volume seasonally on seem it are the improving, back me to would markets of that, stronger former. be earlier about to

of capacity thirds time really the some is in flat of when ultimate I already that think consultants QX. the And a operating needed. prices about build-out have historic think at is in we're talking is industry are evidence market the think capacity frankly the you view, pointed it, a really increases towards is And period market, online in this rates And a And my quite coming is new it’s in high. when already. two potential coming. during new it to about I if higher

Operator

Our next Citi. question from P.J. from Juvekar comes

open. Your line is

P.J. Juvekar

But delta are prices on the oil As of also polyethylene the year, this rally. and NGL are they prices stalled, oil flip rallied you. good prices have is for the side, declined, kind despite

give So margin see oil on on your demand? is, you with how view supply XX the where happens can progression you Slide us and your do view

Bob Patel

the you've NGL online the less come come is the coming wide important so also has grade to Permian now new ethane, the fractionation more from And Permian have seen PJ Belvieu we've What's really more capacity on supplier rejection. from for come there's seen are prices first that, the online. that off side, NGLs Well, because I increased. think, has Mont some, NGL of all pipelines

polyethylene is margin through setup higher all see for potentially expansion. I prices could into and And QX, a with think QX some modestly ethane. we the that good

capacity stable, pricing think I coming, and a needed. it’s it's at new margins coming but there because time is when have been

it market tightness strong balanced that have we periods. seems in with So to well a seasonally me some very

Operator

Our next America. Byrne from of question comes Steve of Bank

open. is line Your

Steve Byrne

whether Polyolefins outside wait hear of compounding EBITDA in for business by just geographies? your importantly, fraction or it the acquire essentially to the Braskem, you'd in really here. what you you The about any take that, more the assume, was grow filing a on of into to XX-F views that Do before business further new Americas. that move grow I you of EBITDA new than organically talk you've in need will business products half would this to Can your from a Like more but assets. expanded. can Olefins and installed that you

Bob Patel

we platform inorganic integration. And ahead making So build the our effort. excellent the in integration and schedule complete comments, priority have we'll efforts well. my progress we're to have highlighted Asia, in to plants expect completion integration we'll first our prepared that smaller other of likely well new Once I opportunities. A. and terms our along opportunities And is in that to evaluate as as continue I continue Schulman with fully of way, of established especially through the the acquisition.

to able be we'll segment. think I respect both, Steve, with to do APS our So

Operator

comes Our Markets. John next from BMO McNulty question of Capital

Your line is open.

Bhavesh Lodaya

differently. you we also phase the XQ customers core the a to I ask our versus late separate you inventories or phase re-stock decent question demand like seeing there morning. Good market to running the end would seeing saw in bit is saw just Lodaya now. early de-stocking I what is the a growth the and restock is both XQ, way Bhavesh for volume After are in are and This in And low the think we quarter, demand? John. demand

Bob Patel

they Brexit But other increase this think year-to-date. I we've trade buyers backdrop of significant what my how a is to continue an is of macro underlying tell are these in buying definitive. terms volume, come always the more can developing. that, the the occurred all mean, in directionally, and things believe you bit restocking and in elusive buyers known, as well interpret as I that Yes, a I of that kind I don't online. impression really expecting create I I question. good are increase think given Also need. The that that market and being capacity is to uncertainty. seen is market

backdrop unlikely they aggressively So in would restock. a like that,

So I I think other are season. and thing. occurs. of as year-over-year, very signs into one when me being very summer if we add and these come healthy demand Restocking, season just add we growth, the growing spring let just and it of underlying think the another into good Restocking, layer

Operator

Our Deutsche next question comes from David of Begleiter Bank.

is Your open. line

David Begleiter

M&A no, or allocation? point the Braskem a B we is Bob, just capital Plan to decision is on gaining some months. make for we need are decision in next few And there the if

Bob Patel

it's mean Well, yes, that a question. raised a our counterparts. very was we've period prior on a the transaction multifaceted the I David, rather with complex other that been has facets lengthy all, it in hand, of discussing of is it – one been first But has

risk will operating flow. meet be in very aspirations And the the when have inorganic, it risk we to the to which said that back through that value thinking to working don't do and dividend methodically – return can at by progresses, will that, and funded weighing what But and return we strong sort very creation it reward we our Investor ago, on cash to two of our be And we're a develop. a have in of priorities we want ideas will that's the based it, are we go through mix to pay buybacks pipeline to just adjusted if comes we continue So years transaction. was very see and do hurdles carefully. robust evaluate, Day, we

and are to open we continue build all I think how we company So can think, great about things a the long-term. over

Operator

next from Fischer comes of question Barclays. Our Duffy

line Your open. is

Duffy Fischer

of then your operating One, next would question fashion your each tell way with happen supply would then already new the you natural that polyethylene square you your those around Bob the What we oil, it is market. looks XX, and which gas, if two-thirds down like to be, gut can the similar equal, to else would margins, is do you are. stuff? in the years? peak your on move in of But we in left And yet know the charts, charts three questions all ethylene XXXX, and the history demand. wave in Slide second move Two capacity those that if down everything comment rates we in

Bob Patel

lot a question, it a in let at bit little there that time. so is me unpack a There

all, my of suggest really we're are coming the the on additions. but comment in kind latter And the already capacity of two online thirds would that's some I that online. – round derivatives we before innings numbers online. think crackers this the are the capacity of to U.S. of in have fact First cases related And the in

a the the And new is so we've latest standpoint, data. largely capacity. this of IHS the polyethylene Referring impact from to think the I seen charts, impact

but to voice our we not the through perhaps through graphs, So interpretation decided provide the over here.

Wood capacity, they've a IHS Chinese at have McKenzie look bit you of quite if added new not. So

between. suggest actually would history in the that McKenzie are to somewhere So had different. quite we come we it's out included forecasts going likely Wood No

As you gone FID industry typically of know especially delayed some is this yet and anything in capacity as new watchers into the still haven’t that all is polyethylene. know if

the units zones operating what to Asia, but takeaways a Any these robust operating the in more in could in mid projects few the we'll you is are delays rates 'XXs. with see low to my delays from a that the slope of an to create could more think out see, list still of rate. material I graphs upward actually have balance even in So line flatten a still

on additions we're And So the kind of I that's curve. the global the you if lastly, cost would new balances the right margin. really say about and of capacity in are now of third the in included quartile the fourth most think new

turn if And a regions could see that I few of period of this say to advantage again. So they're rate are think markets stable not cancellations, you coming very me there is could all operating graph in setup or we for delays actually that so up have time. really longer a to

we'll the been that have and in delayed FID our projects get So to globally but some see, tend haven't yet. has I still history think to industry reached

Operator

of Markets. Arun Viswanathan question RBC comes next Capital Our from

line is open. Your

Arun Viswanathan

a question. just I quick guess part two

price out So the in have little the looking of quarter. get if first recently. I during bit has statements looks while. folks seen we polyethylene like increase for know your stuff to you've last North increases carry in polymer a Europe, a side a that where you America And off little are on margins trying and see been improvement just

cost we've upper would curve, long and in Your we thoughts that a your just like terms like on guess can recent of there's feel I obviously capacity more capacity think it's but in as even out I end and do additions the you, solely it's bottom how so, have in China. couldn't again commentary global the we polyethylene sounds it improving of you and My hit potentially take of been if out go you include the QX. climb is, of seems know question margins it build restocking and and that maybe you

maybe be analysis just great? in would So that that include your can you if

Bob Patel

back before. think we, of the look I I similar because in still coming of as U.S. I again, QX projections year-over-year this concerns. you growth the we meeting as de-stocking macro year, we've Well, Sure. on globally. really demand not that It's the the at new some demand mean extremely growth capacity the and to weak we just new was are online look the and see what only think and seen but as

I the materially. have growth trends think changed believe back don't that really and, demand we but really, buyers pulled

turn new I in demand my online. we as or two capacity to absorb is is will in is And year, of market that's as capacity thirds So in more through the there that this go think should capacity view remaining less year, the here the coming of the rest XXXX. yes, the make a of the somewhere coming we in grow mid

Operator

Our from comes Global. next from question Hassan Alembic Ahmed

is Your line open.

Hassan Ahmed

sour you with talk being you the and question another in about like. conditions sort turn QX. of on very And saw obviously sort but one. it's M&A guys an of bore Not Braskem about always thinking prudent we yet Right? very Look, to business quickly very important in obviously,

quarters business saw So my next like we of maybe in scenario Braskem's that, much becomes assume over QX that let's EBITDA the I mean is sequentially the environment as question that the this scenario, 'XX couple draconian again. by down go as XX%.

that is if that sort justify EBITDA? acquisition acquisition guys of case accretive at run as consider the rate still you would that of Now, base that and was the synergy still would

Bob Patel

mean, it's good So question. very I all of first a Hassan,

Hassan Ahmed

being I'm know I And draconian.

Bob Patel

quarters. take of but rather about a I or and really size us than Yeah. got the one We've I acquisitions longer-term two of Braskem. think to we magnitude when understand, for think a view

through So, do those If we it. our case. we the go I don't, some then team the my creation model has that is and would structural me business the altered or view frankly whether if in is, speaking there been we change there with rethink But what be to is from think value assets. of sit believe

just so, mean I that long think we for versus described. think I the if scenario you And short-term this have And to its through term. reasons

kind that's deliberation of through. go the would So we

Hassan Ahmed

And quality high very and is also the like? right the imagine value about I asset replacement would thinking

Bob Patel

that was calls through I’ve on mentioned very indeed this we've and diligence and we've Absolutely, from that outcome are been diligence assets that one quality. previous confirmed of the good the

quarter. term about So the as next rather opposed than long medium thinking to again, longer it's term to

Operator

from Morgan comes Our of next question Vincent Stanley. Andrews

line open. Your is

Vincent Andrews

new and up what's year starts capacity in nice did as but of a particular, in job the out NGL U.S,. the think laying You as ethylene the look the the half happened we back in of into markets

high the low in Now gets term? where you you we're do 'XXs, price see do to 'XXs, the do think where back, price talking you medium think

Bob Patel

run hard is sense a as ethane. to, year. this that short-term of Vincent, forecast like up my sort saw more last of we it's in price But the

spike, supposed other to down So and fractionation line into the also that's ability and company the Y-grade prices itself help now ethane the to Permian from correct actually because if we'll coming more last and was that, a there go it ethane that back year's less down call lot dissect has Texas now you parts Bellevue, in there's there's crack of there propane quarter, start capacity, there and are butane are and second one delays now, up low new pipeline have Y-grade. another right very our now like validated more is ours incremental West capacity

ethane So quickly now all, think there's butane if compete to are summarize, think and they I compete rise of will flexibility ethane feedstock so in because will plenty as terms I of prices propane and Y-grade to of were abundant, first but well.

is So and first most stable to next day there year should market of that all fracs are math new of them of through rest XXXX. the a X.X the to feedstock allow year the six price million coming coming really by relatively and be year new then of are this in our in almost barrels half in of the to like ethane eight

base spike think I gas there don't price here we unless ethane rising or So a sort case something. material or is price of that says, good see a any changes

Operator

Yefremov Aleksey from comes of Nomura. question next Our

is open. line Your

Matt Skowronski

rest as derivatives think the PO kind for results on of supply and year were Skowronski about you for about of maybe and what Aleksey. the XXXX well? demand PO quarter-over-quarter. Matt Can you is This up talk

Bob Patel

of it some in demand soft automotive. good. Yes a so, tied bit went little through and to is We is spot pretty PO still there a QX

to business with as in solid So, we've past, seen as nicely be but that of all modest very and we recovering being growth. seems see year-over-year PO our years

business given well. QX question, you to in think Oxyfuels, had when gasoline our the asked are that know it did I in low TBA will - think important as business that they the values Because portion the Oxyfuels. we refining more Oxyfuels and parallel you've our be and this impacts driver I

quite values Blend well. so, premiums as lot. up And are a gasoline recovering will help Oxyfuels

extremely butane cost cheap. the On is side,

seeing Oxyfuel we're margins. meaningful upticks in pretty So,

about So pretty when especially PO earnings the derivatives, together, and meaningful in improvement Oxyfuels provide I QX. think derivatives could

Operator

Our next UBS. Roberts of comes question from John

is open. Your line

John Roberts

Bob, plastics month? I IHS conference At misperceiving you've recycling. without them, just went the it taken a seems it last leadership role how was in last night,

Bob Patel

- you I are Well, misperceiving. not

I I And value. the Then join They the end plastic of is now waste. umbrella with think waste. matter the the have John, waste think collection where we bringing the this in PET. key collect presumption highest to together of to And generated. initiatives a closest it is movement. they the broader just to of it's under alliance already plastic it waste start the is source, has priority that will

to waste. to more that's with polymers. are the actions ultimately, we are that And And environment this the leak are plastic a gaining plastics you'll are doesn't with deal taking. recover and reuse, waste. the can on real I And those as end Because it see into we solutions think, dealing and And starting waste. great the all to sustainability So the the on progresses and recycle, more story, universally value momentum waste. issue tangible chain we're that year principles the value plastic really how see in alliance is really on to applicable

encouraged extremely join. will PET I I'm and So think

Operator

Our question Partners. Kevin Vertical Research McCarthy next of from comes

open. Your is line

Kevin McCarthy

you six tripled or versus guess or some we Depending started comment to we regression measuring, monomer. term levels propylene have could if the on I down was wondering last doubled I then from Bob, when the averages. on long over the back weeks. seen inventory bottom of volatility we've in seven start see And

So, B, they we down Do so A, seen more think peak in nature? comment could something back there high that or did durable come outlook? why is they what in or and February and structural normal your you levels early on has the will you or be serge to late changed more March; we've

Bob Patel

Yes, Kevin.

of been inventories been PDH my with that how inventories, in. in and built, both couple drawing went PDH demand mean, are new of directions. I have to really slower You related the well February. know you as they sort running of better we is that propylene the January in have early We've when had and as QX, that growth things And our in VCX large opposite impression. especially the those saw,

demand big well. So very has the was ran PDH slow,

units FCC to think ultimately I in have refining role some also this. play

So FCC you propylene well. well get, as more run

we'll load inventory And So of start well for lot. these volatile base a I number moderate years new these and supply, to our as the part quite see been swings propylene has PDHs think of run now.

Operator

Our next Frank comes Research. of question Fermium from Mitsch

Your open. is line

Unidentified Analyst

into for Bob, very the second spoke you the business. in the to is I quarter Frank. quarter. of MTBE that, up follow be having sitting This Last your on was would that? [indiscernible] numbers about wanted start comments William EBITDA IND Would you positively implying about we that business base should you north spoke about thinking that $X.X a - billion case. Obviously,

Thomas Aebischer

Well, Frank.

to benefits rate lower. said is points to business Again, today. butane X.X how recent And in that And we're trading of And see as really Let's butane the particular normal are IND. with end much terms it NGLs. they ranges. the But for run abundance in we've X.Xcould cheap zone. out. that year are And the be of the of prices today the on butane prices XX% plays value oil which think low new when crude kind I I global in seeing think you're of around of very

the base think certainly X.X in the is So to let's consider. see a out, range, things we range but how very still play good as X.X case to

Operator

Our next Zekauskas question Jeff from with comes JPMorgan.

line open. Your is

Jeff Zekauskas

that numbers a prices of really diagnose $XX moved. barrel. no year normally And really Asia export beginning States, there's price barrel Because United those change. how Are who move from together? the of polyethylene gone in and a price the the you in Since to have the you hasn't oil really $XX by surprised been and the do that

Bob Patel

very couple really Jeff. I a think result a It's good question. And Right, of it's of a things.

off First in still to I very of was we think And still had coming build said that earlier of need. all, buyers one as inventory, that have is low what the they buying other questions, in conviction don't QX, levels. demand of they're I

led seeing out. more again innings we're movement sideways this when of this polyethylene things period later of build the it's during probably price. But two those kind a capacity in so so, new And to

markets even because resilient. bad. naphtha indicates Actually, I think it are still still in pretty not up that margins some the there decent that were set Asia, after And in is so price. rise

come how we'll the think May, into June. and April, periods in seasonally see as this of - strong to we develops So have

Operator

from Our Jonas next comes Bernstein. Oxgaard question at

open. Your line is

Jonas Oxgaard

you second off like going to would First And first I waste for thank of incineration. on for promoting all behalf Thank metric. you. of humanity

Bob Patel

company. international an are we Jonas Well,

better to board tons metric So just the global we we decided across go company. and

Jonas Oxgaard

means You though. on which any know, actual both the important. the a outlook a not polypropylene can and or the The lot views year next going, next where question over more if think early. years Since floor Asia becomes five polypropylene polyethylene have could polypropylene so? see now, at the decade Do have it you we happened decided Asia about you

Bob Patel

good very the growth that being even stimulus demand seen still well. added mentioned volumes improve U.S., we've very economy we're seeing are in There Well, my in China. year-over-year. the I in some comments in earlier signs of

For example these, these provide the recently. that VAT actions our cut Typically was implemented in impression economy. that is to stimulus the

see days maybe those XX later. XXX to You

over year. growth months for those bode over full going should the into and polypropylene the So we summer - time the demand well think

Jonas Oxgaard

side? supply the on And Okay.

Bob Patel

I think known. I side. Supply it's mean, well

I think and new capacity even coming Asia year. particularly rates this still with are very Globally, in overall some good. China polypropylene operating

we So constructive polypropylene going be about to forward. continue very

Operator

question comes next from Matthew Pickering, Blair Tudor, Our of Holt.

open. is line Your

Matthew Blair

found ran you Venezuelan slate more you any approximately, Canadian to refinery like year, Looks replacing America U.S. more and X% barrels move have this run shale? in have South your how those been alternatives about or to running had just lighter a you've curious barrels you are

Bob Patel

crude to less is has little that other coming and or the watch few leveraging I direction other seen again. that we've And lot early the Permian, a supply a is know the there side, more supply as so the reductions cuts of of that has No, things sour on barrels out out gone the Colombian side, we've Matthew, bit Venezuela, is down, these refinery I of light that in there's wrong mean, bit challenge on Mexico, the regions. because but to not crude sour differential starting in we’ve a and and in been seen differential frankly been able open come the equation closely up to LLS from OpEx the some had you us coming you've go sides from much both take for and out more the of refinery light-heavy buy up some the has little barrels

so factors then a to while the market QX refinery. think in going various kind of normalizing about earnings, we QX As this differential normalized, is driver I'm be talking light-heavy important very the and and of

of compliant January marine so think starting the look the as still would, deployed we system to and QX that front I at in X fuel IMO globally, in of XXXX. us, and QX has new there's be

already of our normalize I think factors extraneous lot benefit sort refinery. So of to are these starting

Operator

question comes Laurence last from of Alexander Jefferies. Our

open. Your line is

Nick Cecero

Cecero Nick on Laurence. is This for

in specifically IND seems as had pretty the been climbing glycol, inventory time. China it ethylene within though So some business levels rapidly more for

next quickly So levels from can demand maybe inventory few supply years? just just on then your how happen dynamics and the current wondering over work-downs view

Bob Patel

Well, glycol. also to PDT is a kind a and ethylene I'm in disposable Because business. some more up of ends that There summer for seasonality you that demand fewer months of more will. if goods products,

look inventory sense get patterns of the my watch to compared like and the we businesses So pace thing about the to worked see is new really of at in will there ahead the other fundamentals and just reasonably good is we supply demand us. that off more growth

IND styrene. think The I to when business. are our going drivers biggest think MTBE, you - PO, you about and be when Nick, methanol

that the bigger big of of and while and earnings the kind described. And for are are focus glycols levers just those on sort so important drivers the ones really I as we BDO

Thomas Aebischer

place to And is be ethylene States. with oxide producing in This and ethylene the low glycol. cost United ethylene the best

helpful. So, that Nick this But have prices right, you're challenging very year. been is

Operator

questions. we further have no And

Bob Patel

thoughts. close let so a right, All me with closing few

So that come heard that sentiment the do prepared commentary see is acquisition, earlier, opportunities A. pricing demand later polyethylene year. you Oxyfuels we're improvement and balance normalizing differential you've that growth opening and We most seeing this improvements I we The continued light-heavy grow will Schulman that we capacity come through look growth. are our We market importantly through IND the importantly, margins of to the more see business supporting online remarks. ahead to new tangible through my as as more as earnings know the year, well and and up. continuing earnings in refining through improvement our will some mentioned think as our

So earnings of I of growth business and/or our we in segment our strategy. mean as growth I signs each sequential markets normalize see implement

look update give an projects that our a as our giving on all forward report quarter growth at second you I you of to well. the with all end and said, So progress

our interest. call. that, you Thank for with very So your much we'll conclude

Operator

Thank you for your participation today's conference. in

Have disconnect You time. this at day. now a wonderful may

LyondellBasell Industries (LYB) 26 Apr 192019 Q1 Earnings call transcript