Dow confirms idling of Terneuzen cracker in Q2

Dow Inc. has confirmed the idling of operations at its LCH3 steam cracker in Terneuzen, the Netherlands, for economic reasons during a Jan. 30 earnings call, as per Chemweek.

The news follows the company’s announcement on Jan. 23 of a maintenance postponement at the unit, which stakeholders also attributed to economic difficulties.

“Last week, we postponed a maintenance turnaround at one of our ethylene crackers in Europe,” Dow Chairman and CEO Jim Fitterling said in the earnings call. “This will result in us idling this asset starting in second quarter until market dynamics improve.”

Dow stressed that the idling of the unit is not the outcome of a previously announced strategic review of select European assets.

“While we announced idling of a cracker and to avoid the turnaround cost this year, I don’t want you to assume that that’s the answer to the European strategic review. [It] is just something that we have the ability to do this year to manage the short-term situation,” Fitterling said.

“Right now our plan is to idle the cracker,” Dow’s CFO Jeff Tate said Jan. 30 in response to a question from CW. “We will be able to avoid the turnaround costs this year that we would’ve incurred related to that. From an ethylene perspective, we’re still balanced and will be able to supply our needs in Europe. We’ll still be in good position there,” he said.

Dow has “adequate ethylene supply to meet contracted customer commitments and will work directly with customers to address their specific needs,” the company’s press office said previously in its Jan. 23 statement. “The Dow team will continue to monitor both market conditions and Dow’s European asset strategy to determine when market conditions warrant completing the turnaround and returning to operations,” it said.

The LCH3 cracker has an annual nameplate production capacity of 680,000 metric tons of ethylene and 286,000 metric tons of propylene, according to S&P Global Commodity Insights data.

European ethylene markets are currently facing reduced spot availability of material going into February, amid an increase in contractual volume intakes, according to market sources. Despite this, producers continue to maintain low cracker run rates, with cautiousness surrounding structurally weak derivative demand.

Spot prices in Europe have risen through January off the back of reduced spot supply and an increase in feedstock naphtha pricing.

ExxonMobil, Sabic and Versalis all separately announced last year the permanent closure of a total of four naphtha crackers in France, the Netherlands and Italy, removing about 2 million metric tons per year (MMt/y) of ethylene capacity from the European market. ExxonMobil and Sabic implemented the closures of one cracker each in France and the Netherlands last year, removing about 1.1 MMt/y of capacity from the market. The first closure by Versalis at Brindisi, Italy, was recently reported for implementation in April this year, with the second at Priolo planned for an unspecified time before 2027. The Versalis closures will remove a further 980,000 metric tons per year of ethylene capacity from the market.

The closures are all in response to the structural downturn in the European olefins market, where overcapacity, weak demand and high costs continue to weigh on competitiveness.

A further 1-2 MMt/y of ethylene capacity may need to be rationalized to restore Europe’s olefins sector to a healthier balance, Commodity Insights has said previously.

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Petrochemicals manufacturer LyondellBasell (LYB.N), opens new tab said on Wednesday it has signed power purchase agreements in Europe for wind energy to support its commitment to reducing greenhouse gas emissions, said the company.

Chemical companies are entering deals to purchase renewable electricity to help them reach their carbon dioxide emissions reduction targets.

Under the 15-year agreement with European energy firm Vattenfall, LyondellBasell will secure 450 gigawatt-hours (GWh) annually of offshore wind energy to support its circular and low-carbon solutions in Germany, the company said.

Additionally, the company signed a 10-year agreement with renewable energy company wpd, securing 79 GWh annually of onshore wind power from the Licata project in Sicily, Italy, set to begin in 2026.
The chemicals maker had previously signed long-term renewable power purchase agreements with energy companies Buckeye Partners and Engie North America in 2022.

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Dow Inc. reported a decline in sales and a net loss for the fourth quarter of 2024, noting persistent softness across most regions and markets, said the company.

For the quarter, Dow posted a net loss of $35 million, an improvement from the $95 million loss in the same period last year. Results reflect restructuring and one-time costs in both periods. Reported operating EBIT was $454 million, down 19% year-on-year due to lower prices but 10% above analyst consensus as reported by S&P Global Capital IQ.

In response to weak conditions, Dow announced a $1 billion cost-cutting plan, including a 4% reduction in its workforce. Additionally, the company plans to cut 2025 capital expenditures by $300 million to $500 million and maintain lower capex levels "until we see a clear recovery materialize."

Dow continues to face a "challenging macro environment," said Dow Chief Financial Officer Jeff Tate. The focus remains on cost and operating discipline to mitigate the impact of weak end markets, he said. "We continue to see strength in areas related to electronics and energy from both an industrial as well as a consumer standpoint," Tate said. "Packaging continues to be strong and resilient for Dow, and we're pleased with that consistency of performance there. Areas that are more interest rate sensitive [including building and construction and household durables] continue to be soft and challenging for us.”

Net sales for the quarter were $10.4 billion, a 2% decrease year-over-year. Dow noted that volumes were up 1% compared to the prior year, driven primarily by improved supply availability following some US ethylene and ethylene oxide restarts. Adjusted operating earnings per share were $0.00, down from $0.43 in the previous year.

Packaging & specialty plastics segment net sales were $5.3 billion for the quarter, down 6% versus the year-ago period. Operating EBIT was $447 million, down 33% due on lower margins. Local prices decreased 5% year-over-year, primarily driven by lower functional polymers and polyethylene prices. Segment volume was down 1% year-over-year, as polyethylene demand growth was offset by lower merchant hydrocarbons and non-recurring licensing revenue.

Industrial intermediates & infrastructure net sales were $2.9 billion, flat versus the year-ago period. Operating EBIT was $84 million, up from $15 million in the year-ago period, driven by higher operating rates and improved supply availability in the Industrial Solutions business. Local prices declined 1% year-over-year. Volume increased 1% year-over-year, driven by improved supply availability.

Performance materials & coatings net sales were $2 billion, up 4% versus the year-ago period. Segment operating EBIT was a loss of $9 million, an improvement from a loss of $61 million in the year-ago period, driven by lower fixed costs and volume gains. Local prices decreased 2% year-over-year, primarily due to lower prices in Consumer Solutions. Volume was up 5% year-over-year, driven by gains in both businesses. On a sequential basis, net sales were down 11%, primarily due to seasonally lower demand.

“We remain confident that Dow will benefit from the completion of our near-term incremental growth projects and an enhanced focus on operational discipline in 2025,” said Dow chairman and CEO Jim Fitterling. “In addition, we are optimistic that we will see further demand growth in attractive end markets such as packaging, energy and electronics.”

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The European Commission has launched a new biotech and biomanufacturing hub to support companies, especially start-ups and small and medium-sized enterprises (SMEs), to bring innovative products to the EU market and increase their competitiveness, as per Chemweek.

“Biotechnology is one of the fastest growing innovative industries in the EU, which has the potential to revolutionize health, agriculture, food and feed and industry in Europe over the coming years. A thriving biotechnology and biomanufacturing sector will be key to building a more competitive, innovative and resilient EU, that succeeds in its green and digital transitions,” the Commission said.

The hub will also help biotech and biomanufacturing companies identify the support available to them at EU level and how to access it, the Commission said. This includes sources of EU funding, research infrastructures and resources available to help them scale up, such as networks, pilot and testing facilities and market insights, it said.

It will also offer support with the intellectual property protection that innovative companies are entitled to; the processes for authorizing new biotech products, such as human and veterinary medicines or feed and food ingredients, and the support offered to applicants throughout these processes; and the rules and requirements that companies must comply with when developing and marketing biotech products in the EU, the Commission said.

The continuous development of the hub will be supported through a dedicated taskforce of SMEs advisors under the Enterprise Europe Network, it said.

“The biotech and biomanufacturing hub is a key deliverable of the Commission's strategy to boost biotechnology and biomanufacturing in the EU. This strategy, published in March 2024, announced the establishment of the hub to better support scale-up and to ease navigating regulations,” the Commission said.

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The Sherwin-Williams Company (SW; Cleveland) reported fourth-quarter net income up 34.8% year over year to $480.1 million on net sales up 0.8% to $5.29 billion, as per Chemweek.

Adjusted earnings totaled $2.09 per share, up 15.5% year over year but behind analysts’ consensus estimate of $2.25 per share, as reported by S&P Capital IQ. Higher sales in paint stores was partially offset by lower sales in the consumer brands and performance coats segments as well as a 1.3% unfavorable currency translation.

“Sherwin-Williams delivered strong fourth quarter results despite continued demand choppiness in the majority of our end markets,” said SW president and CEO Heidi Petz. “We expanded adjusted segment margin in all three segments, and adjusted diluted earnings per share and EBITDA grew by double-digit percentages.”

SW expects full-year 2025 adjusted earnings of $11.65-$12.05 per share, up 5% at the midpoint year-on-year. For full-year 2025, it expects net sales to be up by a percentage in the low single digits. “We expect demand softness to persist in several end markets well into the second half of the year, if not into 2026. At the same time, we have significant above-market growth opportunities in every one of our businesses,” Petz said.

The company expects first-quarter net sales to be up or down by a low-single-digit percentage. “Based on customer sentiment and the macro-economic indicators we see at this time, we expect first quarter 2025 consolidated net sales will be up or down a low-single digit percentage compared to the first quarter of 2024 with the paint stores group at or above the high end of that range,” Petz said.

Paint stores segment sales increased 3.4% year over year to $3.04 billion, while segment profit was up 6.9% to $606.4 million. Volumes grew by a low-single-digit percentage, and selling prices increased on raised sales. Net sales increased in in residential repaint, protective and marine and new residential, the company said.

Performance coatings segment sales fell 1.6% year over year to $1.59 billion, while adjusted segment profit fell 0.3% to $277.9 million. Low-single-digit percentage sales volume growth was offset by selling prices decreases. “Performance was led by packaging, which increased in all regions and by a low-double digit percentage overall, and coil, offset by a decrease in general industrial. Performance coatings segment profit increased primarily as a result of the Argentine Devaluation that was recorded in the fourth quarter of 2023, partially offset by lower net sales,” SW said.

Consumer brands segment sales fell 4.3% year over year to $662.2 million, while adjusted segment profit was up 9.8% to $82.0 million. A 5.5% impact from unfavorable foreign currency translation in Latin America was partially offset by modest sales volume growth and selling price increases. “Segment profit increased primarily due to non-recurring expenses recorded in the fourth quarter of 2023, including the Argentine Devaluation and impairment related to trademarks, as well as effective cost control in the fourth quarter of 2024. These increases were partially offset by lower net sales,” SW said.

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