Low polyethylene (PE) inventories in the US will drive integrated margin recovery this year after 2025 had the lowest US polyolefins margins in a decade, LyondellBasell said today.
North American integrated-PE margins averaged $580/t in 2025, putting them $250/t below the historical average of $830/t. North American polypropylene (PP) margins were $40/t, seven times lower than the historical average of $290, according to LyondellBasell.
Olefins production volumes fell in the fourth quarter because of planned and unplanned facility maintenance. Inclement weather in January further disrupted production through in beginning of 2026. LyondellBasell expects PE prices to rise in the next quarter as buyers seek to replenish diminished stocks.
The company expects an operating rate of 85pc of its olefins and polyolefins Americas assets, up from 75pc last quarter, in anticipation of this increased demand.
Demand for PP remains low as the durable goods market is showing no sign of recovery. Interest rates cuts and softening inflation are expected to improve demand, but consumer confidence is lagging. Oversupply in China is further dragging down margins in the global market.
"[Last year] was another exceptionally challenging year," said chief executive Peter Vanacker. "Industry margins remaining deeply depressed across all of our core businesses. Industry margins were approximately 45pc below historical averages, even worse than the already difficult conditions we saw in 2024."
The company expects modest improvement in the first quarter due to the higher PE prices as well as improved seasonal demand and a resilient packaging market.
