Global petrochemical producer LyondellBasell has lowered operating rates at its refining and petrochemical system across the world in the second quarter of 2020 due to weak demand caused by the COVID-19 pandemic, according to the company’s CEO Bob Patel on Friday. He noted that LyondellBasell’s olefins & polyolefins units would run at 70%-80% of nameplate capacity this quarter in the US and 80%-85% in Europe.
Despite the reduction, LyondellBasell does not expect to shut its cracker and polyethylene (PE) units, market sources told SSESSMENTS.COM. According to Patel, the demand decline did not reach a level where the company would consider shutting PE capacity. Patel expected the drop to have reached a near-term bottom in April and would begin improving in May. Patel also added that the company expected diminishing prospects of further significant declines in US PE prices, given the rise in ethane pricing.
As SSESSMENTS.COM noted, other petrochemical producers such as ExxonMobil, Phillips 66, and Eastman Chemical, have announced efforts to adjust operations and reduce costs to deal with the pandemic. On April 30, Dow said it is shutting its PE train in Freeport, Texas, a gas phase PE unit in Seadrift, Texas, another gas phase PE unit in Bahia Blanca, Argentina, and two elastomers units in Louisiana to avoid oversupply.
