Good start for some major chemical suppliers in 2012

Despite the odd bump, some of the major global chemical suppliers are reporting promising starts to 2012.

LyondellBasell’s net income for the first quarter dropped 9.2 per cent year on year to US$599 million on weak European and Asian sales of olefins and polymers (O&P), the company said in a press release.

But O&P earnings in the Americas were up 23.6 per cent year on year at US$598 million and up strongly on the US$407 million reported for the 2011 fourth quarter.

“We had a solid start to 2012 as margins in North American olefins and our Houston refinery rebounded from the weak levels experienced in the fourth quarter of last year,” said Jim Gallogly, CEO of Netherlands-based LyondellBasell. “Benchmark margins in both businesses were excellent at the end of the quarter, and the momentum has continued into the second quarter.”

“The European olefins and polyolefins markets recovered from a very poor fourth quarter but were pressured by rising raw material costs, and generally remain weak,” he added. “We continue to see steady results from our Intermediates and Derivatives, and Technology segments, as well as our differentiated businesses within Olefins & Polyolefins – Europe, Asia, International.”

BASF is also reporting a solid start to 2012. According to the company, first quarter 2012 sales rose 6 per cent to 20.6 billion euro, but income before special items decreased to 2.5 billion euro, down 7 per cent compared to the same period in 2011.

In the company’s plastics segment, sales were slightly reduced compared with the first quarter of 2011. “Higher prices and currency effects made a positive contribution to sales development; sales volumes were weaker. Lower margins led to a significant decline in earnings,” the Germany-based company said in a press release. “Furthermore, the scheduled maintenance of the MDI and TDI plants in Geismar, Louisiana, negatively impacted earnings in the polyurethanes division.”

“Increased raw material costs could not be fully passed on in all business areas, which put pressure on our margins,” said Dr Kurt Bock, chairman and CEO of Germany-based BASF.

For the second half of 2012, however, BASF expects an increase in sales and earnings compared with the second half of 2011. “[We] expect to earn a high premium on its cost of capital once again in 2012,” the company said.