Chemicals Update – Financial results of 2024: struggles and successes amid industry headwinds

The fading European petrochemical industry is on everyone’s lips these days. Rationalization actions, strategic reviews of assets, and plant shutdowns have transformed from ‘breaking news’ to something that the industry has become accustomed to in the past two years. At the beginning of the new year, the industry majors were summing up their results and assessing performance in Q4 2024 and the entire last year. Although some are yet to disclose these valuable indications, others have already presented them.

• ExxonMobil reported earnings of $33.7 billion for the year across all segments, a 6.4% decrease from $36.0 billion in 2023. In the Chemical Products segment, 2024 earnings were $2.6 billion, an increase of $940 million compared to 2023. Despite continued bottom-of-cycle market conditions, overall margins improved as the company benefited from lower ethane feed costs at its advantaged North American assets and improved high-value product sales and realizations. Chemical product sales were steady year on year, reported at close to 20 million tons. However, in Q4, earnings in this segment dropped almost 87% from the previous quarter to $120 million, driven by weaker margins from increased North American ethane feed costs, seasonally higher expenses, and China Chemical Complex start-up preparation costs, with cracker, polyethylene, and polypropylene units scheduled to come online in 2025.
• Shell posted adjusted earnings of $23.72 billion for the full year 2024 across all segments, compared to $28.25 billion in 2023, with the Chemicals and Products business contributing $2.9 billion in 2024, down from $3.6 billion a year earlier. The quarterly figure showed a loss of $229 million, compared to a gain of $463 million in the previous quarter. In Q4 2024, the company maintained the utilization rates of its chemical plants at 75%, just 1% lower than in Q3 2024. However, they rose from 62% in Q4 2023. Shell expects to raise them to 78-86% in Q1 2025. Chemical sales volumes dropped by about 3% to below 3 million tons in Q4 2024 but rose by 6% to almost 12 million tons for the full year.
• TotalEnergies reported adjusted net income of $18.3 billion across all segments in 2024, which was 21% lower than in 2023. In the Refining & Chemicals sector, the company’s adjusted net operating income amounted to $2.2 billion in 2024, a 53.2% decrease from $4.7 billion in the previous year, reflecting lower refining margins globally. However, the figure for the last three months of 2024 increased by 32% quarter-on-quarter to $318 million, amid a $10/t increase in European refining margins. The company had lower income in this segment, though, compared to the Q4 2023 figure of $633 million. In 2024, TotalEnergies’ petrochemical production, including olefins and polymers, dropped by 6% on an annualized basis in Europe, but rose by 21% in the Americas and 8% in the Middle East and Asia. The utilization rate of the steam crackers in Q4 2024 was 79%, down from 85% in the previous quarter, but up from 60% in Q4 2023. The full 2024 figure also showed an increase from 69% to 79%.
• LyondellBasell’s yearly net income dropped 35.5% to $1.4 billion, down from $2.1 billion in 2023. The company reported a loss of $603 million in Q4 2024, compared to a gain of $573 million in the previous quarter. “Slower global growth, particularly in China, structurally higher energy costs, regulatory impacts in Europe and other regions, along with the potential for capacity additions to outpace demand, have introduced sectoral challenges,” said the company’s CEO, Peter Vanacker. LyondellBasell kept utilization rates “low” as olefins and polyolefins demand remained soft, particularly in Europe. In Q1 2025, it expects moderate demand improvements across most businesses as customers begin restocking after year-end inventory management; and aims to operate its assets at 75-80%.

However, some companies made better profits from their performance.

• Although Methanex reported a net income of $164 million in 2024, which was $10 million lower than in 2023, the last quarter of 2024 brought the company $45 million, up from $31 million in Q3 2024 and from $33 million in Q4 2023. The average realized price rose to $370/t in Q4 2024, compared to $356/t in the previous quarter. Production volumes also rose by almost 39%, driven by higher production from Chile, New Zealand, Geismar, and Egypt, which was partially offset by lower production in Trinidad.

UAE’s Borouge, a joint venture between ADNOC and Borealis, achieved a 24% year-on-year increase in net profit to $1.24 billion, driven by record production and sales volumes. The company delivered record production of 5.2 million tons, supported by exceptional utilization rates of 110% for polyethylene and 98% for polypropylene units, with record annual sales reaching 5.3 million tons. The high-value infrastructure solutions segment represented 40% of total sales volume in 2024. The high-growth market in Asia Pacific remained the top destination for Borouge’s products, accounting for 63% of total sales volumes for both the quarter and the full year. Borouge’s net profit in Q4 2024 also rose by 1% quarter-on-quarter and by 15% year-on-year, reaching $331 million.

• OMV, which holds a 75% stake in Borealis, stated that its lower contribution from Fuels & Feedstock and Energy was partially offset by considerably higher results in Chemicals. Its clean net income decreased by 18% year-on-year to €2.8 billion in 2024. The Clean Operating Result of the Chemicals segment increased to €459 million, up from €94 million in 2023. The company’s average utilization rate of its crackers stood at 84%, up from 80% in 2023. While the utilization rates at the Schwechat, Porvoo, and Stenungsund steam crackers improved considerably compared to Q4 2023, the utilization rate at the Burghausen steam cracker was lower. Looking ahead to 2025, the company aims to increase its cracker utilization to 90%.

Certainly, the industry faced mixed performance in 2024, with several major players reporting varying financial results. While some companies experienced declines due to challenges such as soft demand and increased costs, others showed resilience and improvements. Companies like Methanex and Borouge reported positive results with increased production and higher sales volumes. Overall, the sector is navigating a period of instability, with some players maintaining steady output and seeking ways to optimize operations for future growth.

By Svitlana Synoha, Market Analyst – Chemicals, SSY.