LyondellBasell’s Q4 2024: Diverging Views on CAPEX, Capacity Rationalization, and Renewable Demand

These are the key contradictions discussed in LyondellBasell's latest 2024Q4 earnings call, specifically including: CAPEX allocation for circular plastics, European capacity rationalization expectations, MoReTec process status, and demand for renewable polyethylene:



Challenging Operating Environment and Strategic Focus:
- LyondellBasell Industries reported earnings of $6.40 per share and EBITDA of $4.3 billion for 2024, with $3.8 billion in cash from operations.
- Despite the challenging year for the petrochemical industry, the company remained focused on value creation, maximizing cash generation, and returning capital to shareholders.

Industry Performance and Demand Outlook:
- Industry margins for key segments, such as polypropylene and polyethylene, were at about 60% of historical averages in Q4 2024.
- While the current downturn is significant, LyondellBasell anticipates a cyclical recovery in volumes and margins as global demand for durable goods returns.

Circular and Low-Carbon Solutions (CLCS) Growth:
- LyondellBasell's CLCS volumes increased by 65% in 2024 to over 200,000 tons, with plans to achieve $1 billion in incremental EBITDA by 2030.
- Growth is supported by strategic investments in technologies like MoReTec and strong demand from brands moving towards more sustainable packaging.

Capital Allocation and Strategic Initiatives:
- The company invested $1.8 billion in capital expenditures in 2024, prioritizing strategic growth projects and high-return capital expenditures.
- Strategic initiatives such as the transformation of the Houston refinery and the strategic review of European assets are expected to lead to durable improvements in EBITDA margins.