LyondellBasell beats profit estimates as Middle East disruptions lift margins (updated)

LyondellBasell Industries

31/07/2026 17:29

Adds details from post-earnings call in bullets 5-10
By Khusbu Jena
July 31 (Reuters) - Petrochemicals manufacturer LyondellBasell LYB.N on Friday beat Wall Street estimates for second-quarter profit, as global supply disruptions lifted polymer margins, and increased operating rates at its North American assets.
LyondellBasell said geopolitical instability created supply-constrained conditions across its businesses, driving higher polymer margins and favorable co-product pricing. 
Adjusted earnings were $4.30 per share for the quarter ended June 30, above analysts' average estimate of $3.41, according to LSEG data.
Sales rose 20% to $9.18 billion, slightly exceeding estimates of $9.15 billion.
The company said the conflict disrupted production, feedstock availability, logistics and trade flows, tightening global supply and supporting polymer spreads.
Its North American olefins and polyolefins assets ran at about 90% utilization, including cracker utilization of roughly 95%.
Chief Executive Peter Vanacker said LyondellBasell estimates about 6 million metric tons of polyethylene capacity, equal to 20% to 25% of Middle East supply, was damaged in the conflict and is not expected to restart until at least 2027.
The conflict disrupted production, feedstock availability, logistics and trade flows, Vanacker said. 
Higher Asian freight rates effectively closed the arbitrage from Asia to Europe and Central America, increasing demand for U.S. and European material.
Chinese producers reduced imports and raised exports, mainly to Southeast Asia, despite lower operating rates, to capture higher export prices amid regional shortages, he added.
Chinese polyolefin inventories have fallen about 30% from pre-conflict levels, while operating rates remain in the mid-70% range.
LyondellBasell maintained its 2026 capital-expenditure plan of $1.2 billion and said sustaining capex should decline by about $100 million following the sale of four European assets.
The Petrochemicals maker remains on track to generate $500 million in incremental cash by end-2026 through fixed-cost cuts and lower capex.

 (Reporting by Khusbu Jena in Bengaluru; Editing by Shreya Biswas and Shailesh Kuber)
 ((Khusbu.Jena@thomsonreuters.com))