LyondellBasell Industries N.V.NYSE
LyondellBasell: Excess Margins Will Soon Lead To Excess Supply
Thu, Jun. 23, 12:31 PM
- LyondellBasell (LYB +0.2%) is downgraded to Neutral from Overweight with an $80 price target, cut from $100, at J.P. Morgan, which says cracks had formed in its former thesis that LYB should be able to sustain a free cash flow yield of ~10%/year for a longer period.
- "The possible outcome of these small cracks... is that the market may demand a higher free cash flow yield from LYB to discount future risks,” J.P. Morgan writes, estimating that LYB's free cash flow currently is ~8%, based on 2017 EPS estimates.
- The firm also believes that LYB's annual capex, which was forecast at $1.5B, now seems closer to $2B, as the company invests into increasing its propylene oxide and TBA capacity, which reduces LYB’s free cash flow generation by more than 1% annually.
Mon, Jun. 13, 3:43 PM
- LyondellBasell (LYB -1.4%) is downgraded to Market Perform from Outperform with an $87 price target, cut from $105, at Cowen, which says reflects a period of margin pressure which could last into 2018 as chemical pricing gets more challenging as a result of headwinds from higher costs, increasing capacity and slower demand growth.
- The firm also notes its underlying thesis that oil prices remain below $60/bbl through 2017 and into 2018; if oil prices were to rise above $60 and continue to slowly increase, the U.S. advantage in ethylene and ethylene chain costs re-expands as pressure on natural gas liquids prices is relieved, allowing for a stronger U.S. penetration of export markets and higher global ethylene prices.
- However, Barron's included a favorable profile this weekend of LYB, which noted that the stock had dropped 20% as rivals add capacity but cost efficiency could boost shares 20%.
Tue, May 17, 10:43 AM
- The Gulf Coast petrochemical boom and Chinese expansion are leading to an oversupply of the world’s two most common plastics, polyethylene and polypropylene, which will result in falling prices and profits as well as delays and cancellations of plans to build or expand petrochemical plants, according to a new report from the IHS research firm.
- Companies including Exxon Mobil (NYSE:XOM), Chevron Phillips (CVX, PSX), Dow Chemical (NYSE:DOW), BASF (OTCQX:BASFY) and LyondellBasell (NYSE:LYB) have multi-billion-dollar Gulf coast expansion projects underway, with many planned for completion in a year or so.
- Some companies already are placing planned projects on hold indefinitely; Ascend Performance materials said yesterday that it was delaying construction of a $1.2B propane dehydrogenation plant.
Fri, May 13, 9:02 AM
- LyondellBasell (NYSE:LYB) declares $0.85/share quarterly dividend, 9% increase from prior dividend of $0.78.
- Forward yield 4.18%
- Payable June 7; for shareholders of record May 24; ex-div May 20.
Fri, May 6, 4:36 PM
- Lyondell Basell (LYB +0.4%) failed in its first attempt to restart the crude distillation unit at its 263K bbl/day capacity Houston refinery, and will try again to restart the unit by early next week, Reuters reports.
- The 120K bbl/day Unit 536 CDU has been shut since April 11 to repair leaks in the attached 91K bbl/day vacuum distillation unit; the refinery has been running at 32% capacity ever since.
- A fire broke out on the refinery's 42K bbl/day coking unit on April 8, which is expected to be shut for at least three months to repair piping, which is thought to have failed and caused the fire.
- Now read Reuters: Lyondell's Houston refinery expects to boost production
Tue, May 3, 10:58 AM
- LyondellBasell (LYB -1%) expects to increase production at its 263K bbl/day Houston refinery this week following the restart of a vacuum distillation unit attached to the large crude unit on Sunday night, Reuters reports.
- The refinery has been running at 32% since April 15 when the 91K bbl/day VDU was shut, the last of four major production unit outages last month that began with an April 8 fire on a coking unit.
- The refinery likely will boost production to at least the 147K bbl/day capacity of the Unit 537 CDU that processes heavy crude oil at the refinery, according to the report; production on the unit has been cut back because the VDU could not process residual crude being produced by the CDU.
- Now read LyondellBasell downgraded at Nomura as ethylene, polyethylene peak
Wed, Apr. 27, 3:48 PM
- LyondellBasell (LYB -0.3%) is downgraded to Neutral from Buy with an $89 price target at Nomura, which sees key commodity products (ethylene, polyethylene) and key feedstock (ethane) approaching peak conditions in 2016.
- The firm says it is concerned about additions of ethylene and polyethylene capacity globally will outstrip demand in 2016-18, thus it foresees ethylene utilization falling by 3%-4% and polyethylene by 5% through 2018-19.
- Nomura says ethylene and PE margins in Asia are at a nine-year high, and a return to cycle average could mean $0.10-$0.20/lb. downside vs. $0.29/lb. today, and higher capacity in North America likely will result in a lower domestic PE price premium vs. Asian markets.
- Now read Enjoy LyondellBasell's dividend while the company makes adjustments
Fri, Apr. 22, 7:03 AM
- LyondellBasell (NYSE:LYB): Q1 EPS of $2.48 beats by $0.20.
- Revenue of $6.74B (-17.6% Y/Y) misses by $340M.
Thu, Apr. 21, 5:30 PM
Wed, Apr. 20, 6:27 PM
- Lyondell Basell's (NYSE:LYB) Houston refinery is running at ~32% of its 263K bbl/day capacity while making repairs to four production units, Reuters reports.
- The refinery may operate at ~85K bbl/day for up to a month as repairs are made to a vacuum distillation unit attached to its largest crude distillation unit, and a coking unit is expected to remain shut for three months following an April 8 fire, according to the report.
- The source of the fire is believed to be a failure of piping on the coking unit and not a rupture in a seal on a pump, but LYB reportedly may be forced to replace piping throughout the unit to prevent additional failures if the piping was a type not suited for use on the coker.
Fri, Apr. 8, 2:22 PM
- Today's massive fire at LyondellBasell's (LYB -0.1%) Houston refinery on Friday will force the company to cut output by as much as 25%, since it will take up to a month to fix a coker that was damaged in the blaze, Reuters reports.
- The fire reportedly has been extinguished, with no reports of injuries.
- The fire was the second in less than 24 hours at a major Houston-area plant following yesterday's fire at Exxon's Baytown refinery.
- Now read Exxon Mobil's secret weapon against low oil prices
Fri, Apr. 8, 12:58 PM
- Firefighters are battling a huge fire at LyondellBasell's (LYB +0.2%) 263K bbl/day refinery in Houston; LYB shares, which had sported a 2% gain before the news, are now hugging the flatline.
- Reuters reports that the fire ignited in a gas plant on an old 42K bbl/day delayed coker unit; sources on the scene say the fire is "very bad" and that inventory in the gas plant likely will need to burn out.
Wed, Feb. 17, 9:14 AM
- LyondellBasell (NYSE:LYB) declares $0.78/share quarterly dividend, in line with previous.
- Forward yield 4.0%
- Payable March 14; for shareholders of record Feb. 29; ex-div Feb. 25.
Wed, Feb. 3, 11:31 AM
- Dow Chemical (DOW +2.8%) is upgraded to Top Pick from Outperform with a $60 price target, raised from $51, at RBC Capital, citing catalysts such as strong above-market volume growth, sustainable margin expansion, solid growth pipeline, and more than two years years of self-help from cost cutting and DuPont merger synergies.
- RBC also believes yesterday's news that CEO Andrew Liveris will be stepping down next year clears a path for Ed Breen and potential new management to drive upside to synergy targets.
- RBC also downgrades LyondellBasell (LYB -2.8%) to Outperform from Top Pick with a $95 price target, lowered from $105, as compression in the oil-to-gas ratio and oncoming capacity now appear to be primary drivers of the stock.
- Despite the downgrade, the firm likes LYB's industry-leading buybacks and organic growth, and says the stock still represents good value at 7.9x its estimated 2017 EPS.
Tue, Feb. 2, 7:07 AM
- LyondellBasell (NYSE:LYB): Q4 EPS of $2.20 beats by $0.06.
- Revenue of $7.07B (-31.3% Y/Y) misses by $530M.
Mon, Feb. 1, 5:30 PM