The polyolefin market may continue to be in short supply

LyondellBasell CEO Bob Patel recently said that because customer demand exceeds production, the polyolefin market supply may continue to be tight by the end of 2022.

Patel said on the company's first-quarter earnings conference call: "We expect the polyolefin market to remain tight until at least the end of this year because of very high demand, low inventory, and loss of some capacity during the planned shutdown. Customers. Orders are currently in a backlog, and output cannot meet demand."

In mid-February, the winter storm caused a large-scale shutdown of petrochemical equipment in the Gulf Coast and inland areas of the United States, and the inventory further dried up. Container shortages and rising freight rates in Asia limit arbitrage. Logistics restrictions make this situation worse. China’s polyethylene market is facing a structural shortage, and because North American suppliers focus on replenishing inventories and clearing backlogs for domestic customers, U.S. exports to China have plummeted. Patel said: "We believe that the tight global polyolefin market may continue into the second half of this year. Continued improvement in liquidity and related economic activities may maintain strong production and profit margins until 2022. The past two years , The global demand for polyolefins has increased by 14%, surpassing the long-term trend of 4% and 5% annual growth of polyethylene and polypropylene."

The company’s report shows that the company achieved a net profit of US$1.07 billion in the first quarter of this year, an increase of 45.4% from the US$736 million in the first quarter of 2020.