ExxonMobil's chemical business delivers 'best quarter in company history'

ExxonMobil's chemical business "delivered their best quarter in company history" during Q2 2021, as the global economic recovery increased demand, the company said July 30.

The "best-ever earnings" were buoyed by strong margins for Atlantic Basin polyethylene and polypropylene, the company said, with tight supply, healthy demand and shipping constraints boosting margins in the US and Europe.

"The last 18 months are a testament to the underlying resilience in demand for chemical products and that is especially true in a surging global economic recovery, as these products are widely needed for food packaging, hygiene and the recovering automobile sector among others," Darren Woods, ExxonMobil CEO said.

"This year, polyethylene and polypropylene margins across the US and Europe increased by more than 140% versus the fourth quarter of last year. The recovery in Asia has been more challenging due to pockets of COVID resurgence, higher supply and increased crude and naphtha prices," Woods said.

"The strong margins in the Atlantic Basin are a result of several factors. First hurricane impact in late 2020, followed by winter storm Uri earlier this year which reduced inventory levels. Second, unplanned industry shutdowns and turnarounds. Third, global shipping constraints for finished products caused by port congestion, container availability and increased shipping costs from Asia to the US. And then, finally, demand growth in the US commensurate with growth in GDP," he continued.

"Our chemical business has benefitted from this tightness with 70% of our polyethylene capacity located in these regions. A material portion of this is typically exported to Asia but was redirected to Europe and North America, enabling us to capture more than our share of demand growth," Woods added.

Overall earnings for the company's chemical business totaled $2,320 million (Eur1,956 million), up from $1,415 million in the year-ago quarter. Prime product sales totaled 6,513 kt, up from 5,945 kt in the year ago quarter.

The company added that it expects its chemical plant project near Corpus Christi, Texas, to start up in Q4 2021 "ahead of schedule and under budget." The project has "recently reached mechanical completion of a monoethylene glycol unit and two polyethylene units" which will produce chemicals used for medical, automotive and packaging products.