LyondellBasell faces risks from fluctuating raw material costs (crude oil, natural gas), potential unplanned facility interruptions, global economic instability, and regulatory changes. Lower demand and pricing in the chemical and refining industries are also risks. The company's planned exit from the Houston refinery carries costs ranging from $610 million to $980 million, with potential for further expenses. Uncertainties in tax treatment and legal proceedings add to the risk profile.
Financial Upside
Improved olefins margins, driven by favorable ethane and natural gas costs, and higher polyethylene prices, are a positive for LyondellBasell. The sale of the EO&D business generated a $293 million pre-tax gain. The acquisition of a 35% stake in NATPET, a Saudi Arabian joint venture, offers access to advantaged feedstocks and expansion potential in the polypropylene business. Easing interest rates could boost demand for durable goods, benefiting polypropylene and related businesses.
