OxyChem Q1 earnings down on weak PVC, caustic pricing

Occidental Petroleum Corp. (Oxy; Houston) on May 8 said OxyChem, the company’s chemical subsidiary, turned in first-quarter net income $141 million, down 32% sequentially from $206 million and down 28% year over year from $196 million, as per Chemweek.

Sales totaled $1.188 billion, down 2% sequentially and flat year over year. Oxy attributed the sequential earnings decline to lower realized caustic soda and polyvinyl chloride (PVC) prices along with higher ethylene and natural gas costs. Adjusted income of $164 million, down 23% sequentially from $214 million and down 18% year over year from $201 million.

“We had a strong start to 2025 in our chemical business and overcame some short-term operational impacts limited to the first quarter,” said Sunil Mathew, senior vice president and CFO at Oxy, during the company’s earnings call. “While uncertainty remains around global trade, we anticipate modest domestic demand growth in the caustic and PVC markets through the second and third quarters. We also expect some rationalization of domestic capacity in the second half of the year that should help rebalance some of the recent supply growth in the domestic market.”

Mathew said he expected domestic PVC demand to grow by about 4-5% in 2025. He noted, however, that demand has been weak in China, and the oversupply there is weighing on the export market.

“If you look at China's PVC exports, it has grown significantly over the last few years,” he said. “The export market share has grown from almost zero in 2020 to around 30% in 2024. So these lower export prices also put downward pressure on domestic prices.”

Mathew expected domestic demand for caustic soda in 2025 to be “quite similar” to 2024. He said recent capacity expansions on the US Gulf Coast will continue to pressure pricing, but rationalization expected in the second half should yield improvement.

mrchub.com

US tariffs on China started to show a larger impact on downstream markets, such as the nylon industry, as a 20% cut in Chinese caprolactam production rates was revealed by fertilizer market sources to Platts, part of S&P Global Commodity Insights, as per Chemweek.

Chinese caprolactam manufacturers have cut production rates by approximately 20% amid shrinking downstream demand and pressure from US tariffs, leading to tighter supply and higher prices for byproduct ammonium sulfate in global markets.

The production cuts are primarily driven by financial pressure on manufacturers who are “losing money from their main business,” according to a producer in the ammonium sulfate market. The impact was first observed in downstream industries including nylon production before cascading to caprolactam producers, who have responded by reducing operational rates to minimize losses.

This 20% reduction in capacity utilization is expected to decrease China’s ammonium sulfate output from approximately 22 million metric tons (MMt) produced in 2024 to between 18-19 MMt in 2025, significantly tightening global supply, according to sources.

“This trend is not going to last for just a couple of days, it might turn to a normal situation,” an industry source said, adding that market conditions are unlikely to improve during the second quarter of 2025.

With caprolactam producers facing continued pressure from US tariffs, the ammonium sulfate market is expected to remain tight with elevated prices throughout the second quarter of 2025. “The economic development lacks vitality,” a source said.

mrchub.com

Propylene prices dropped in China, while remaining stable in Korea, as per Polymerupdate.

On Wednesday CFR China propylene prices were assessed at the USD 800-810/mt levels, a day on day fall of USD (-5/mt). An industry source in Asia informed a Polymerupdate team member, "Prices quoted lower on the back of a slowdown in regional buying activities."

Meanwhile, FOB Korea propylene prices on Wednesday were assessed at the USD 775-785/mt levels, unchanged from Tuesday?s assessed levels.

In plant news, Liaoning Kingfa Science and Technology has shut down its propane dehydrogenation (PDH) unit on April 30, 2025 for maintenance. Further details on the duration of the shutdown could not be ascertained. Located in Liaoning, China, the PDH unit has a propylene production capacity of 600,000 mt/year.

mrchub.com

Songwon Industrial Group (Ulsan, South Korea) reported a 7.8% year-over-year rise in first-quarter sales to 275.7 billion South Korean won ($195.7 million), as per Chemweek.

Net profit declined 27% year over year to 4.8 billion won and EBITDA stood at 21.9 billion won, down by 1.2%. Its income was hurt mainly by margin pressure and increased labor-related costs following a court ruling in South Korea that negatively impacted performance.

In its outlook, the company anticipates market conditions to remain challenging, with intense pricing competition and persistent oversupply continuing throughout the year. While overall demand is still expected to align with earlier industry forecasts, ongoing economic uncertainty, changing global regulations and potential new trade tariffs may further disrupt market dynamics.

The company expects customers to continue facing difficulties in making accurate longer-term forecasts, resulting in volatile order patterns and adding to the overall unpredictability.

First-quarter sales in Songwon’s industrial chemicals business stood at 208.1 billion won, higher by 8% year over year. The company said the first quarter was characterized by robust demand and partly as a result of the easing of congestion in shipping lanes compared to the previous period.

Its fuel and lubricant additives business achieved higher revenues supported by strong demand and improved logistics lead times and availability. After the seasonally weak final quarter of 2024, coatings delivered a robust performance in the first quarter, with both revenues and volumes up sequentially, despite persistent market oversupply and intense price pressure.

Sales in the performance chemicals business increased by 7.4% year over year to 62.9 billion won. Tin intermediates started 2025 slowly in terms of volume and revenue compared to the final quarter of 2024 but showed year-over-year improvement. Higher tin ingot prices, favorable foreign exchange rates and new business contributed to stronger sales revenue, improved margins and market share gains. The performance of polyvinyl chloride continued to be impacted by Korea’s sluggish construction market as well as reduced demand and aggressive pricing competition. However, the business noted a slight improvement toward the end of the quarter resulting from good business recovery in Korea and emerging opportunities across various regions.

For thermoplastic polyurethanes and solution polyurethanes, the first quarter proved to be challenging, with weaker demand across industries due to the Asian holiday period, as well as economic depression in the domestic market and foreign exchange pressure, Songwon said.

mrchub.com

DCM Shriram Ltd. (Delhi) said that sales in its chemical business during the fiscal fourth quarter ended March 31 grew 51.8% year over year to 8.1 billion Indian rupees ($83.3 million), as per Chemweek.

Operating income in the chemical business rose more than threefold to 1.6 billion rupees from 510 million rupees in the prior-year quarter.

The company said lower input prices coupled with efficiencies from its new power plant resulted in an improvement in cost structure. Caustic soda volumes were up by 29% year over year in the fiscal fourth quarter at 190,746 metric tons due to additional capacity. DCM Shriram said the reciprocal tariffs are not expected to have any direct impact on the caustic soda business. “These market uncertainties are expected to add volatility to the caustic prices,” it added.

Polyvinyl chloride (PVC) volumes were down 10% on year, and prices also declined by 3%. The company projects PVC demand in India to grow due to the increased construction and agricultural activities.

DCM said that its affiliate Shriram Farm Solutions registered 8.6 billion rupees in revenue, up by 17% year over year, in the fiscal fourth quarter, driven by volumes. Operating loss widened to 190 million rupees from an operating loss of 100 million rupees in the year-earlier quarter. Its business units include seeds, crop protection, specialty nutrition and basic nutrition.

Sales in the fertilizer business stood at 3.6 billion rupees, up 3% year over year, with volumes rising 6%. This unit turned to an operating profit of 60 million rupees from an operating loss of 60 million rupees in the corresponding period of the previous year. Sales volume in the fiscal fourth quarter stood at 104,408 metric tons, up 6% year over year. Operating income rose 12.7% year over year to 256 million rupees. Prices were lower by 4% year over year due to lower gas prices.

DCM’s other business units include bioseed, sugar, cement and Fenesta building systems.

mrchub.com