Shell's CEO pledges to turn around the company’s struggling chemicals business https://t.co/pZ1dlBEtbx ...

Market Overview - A-share market shows divergence with resource cyclical stocks experiencing significant pullback, causing the Shanghai Composite Index to fall below 3600 points; AI-related hardware and software sectors saw a collective rise, boosting the ChiNext Index [1][3] AI Sector Performance - AI-related hardware and software sectors, including liquid cooling servers, AI agents, and PCB, exhibited strong gains; leading AI server company, Industrial Fulian, hit the daily limit and reached a historical high with a market capitalization exceeding 700 billion yuan [3][10] - Notable stocks in the liquid cooling server concept include Sihuan New Materials, Yingweike, and Chunzong Technology, all achieving daily limit increases [5][6] Resource Sector Performance - Resource cyclical stocks, which led gains last week, faced high-level corrections; sectors such as steel, non-ferrous metals, and chemicals saw significant declines, with steel stocks dropping over 3% and individual stocks like Anyang Steel and Baosteel falling more than 5% [15][16] - In the futures market, several previously popular commodities, including glass and coking coal, dropped over 6%, while lithium carbonate fell by 6% [16][17] Regulatory Changes - The Dalian Commodity Exchange announced adjustments to trading limits for certain futures contracts, including industrial silicon, polysilicon, and lithium carbonate, to maintain market stability [17]

Financial Performance - Reported Net Income increased by 19% year-over-year to $11.3 million[12] - Adjusted Net Income increased by 27% year-over-year to $12.0 million[12] - EBITDA increased by 6% year-over-year to $50.6 million[12] - Adjusted EBITDA increased by 8% year-over-year to $51.4 million[12] - Free Cash Flow decreased by 62% year-over-year to $11.2 million, impacted by higher working capital[10, 12] Volume and Sales - Global sales volume grew 1% year-over-year, driven by Polymers, Crop Productivity, and MCT business, offset by decline in commodity consumer surfactants[9] - Surfactants Adjusted EBITDA decreased by 1% to $34.5 million due to lower demand in commodity consumer end markets, offset by growth in agricultural and oilfield end markets[20, 25] - Polymers Adjusted EBITDA increased by 17% to $25.6 million, driven by sales volume growth in North America and Europe[20, 30] - Specialty Products Adjusted EBITDA decreased by $2.1 million primarily due to order timing fluctuations within the pharmaceutical business[20] Strategic Initiatives - The Pasadena, Texas site is now operational and expected to provide benefits in the specialty alkoxylation business[11, 41] - The company is on track to close the sale of Philippines assets during the fourth quarter[11]

Analyst's Disclosure:I/we have a beneficial long position in the shares of BA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Over fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns w ...

Core Insights - Select Water Solutions achieved significant milestones in sustainability and operational growth in 2024, focusing on water recycling and environmental responsibility [1][2][3] Sustainability Achievements - In 2024, Select treated or recycled 20.0 billion gallons (477 million barrels) of produced water, marking a 9% increase from 2023 [1][4] - The company increased environmentally-responsible wastewater disposal volumes by 41% compared to 2023 [1][4] - Select reduced total Scope 1 and Scope 2 emissions by 8% year-over-year, supported by investments in infrastructure and fleet upgrades [1][4] Performance Against Targets - Select exceeded its annual water recycling target by 324% and employee safety target by 49% as part of its sustainability-linked credit facility [1][4] - The company achieved a total recordable incident rate (TRIR) of 0.54 and a lost time incident rate of 0.25 in 2024 [4] Future Goals - For 2025, Select established a target to increase recycled produced water volumes by 14% at fixed facilities, with an annual increase of 17.5% until reaching a target of 403 million barrels per year by 2029 [8] - The company aims to reduce TRIR by approximately 1.5% each year, outperforming the industry average by 35% by 2029 [8] Commitment to Stakeholders - Select's 2024 Sustainability Report emphasizes its dedication to environmental stewardship and sustainable development within its operational communities [4][5] - The company plans to continue regular reporting on its ESG policies and performance through its website and annual reports [5]

Core Insights - Olin Corporation (OLN) reported a second-quarter 2025 loss of $1.3 million, or a loss of $0.01 per share, compared to a profit of $74.2 million, or $0.62 per share, in the same quarter last year. Excluding one-time items, earnings were $0.05 per share [1][7] - Revenues increased by approximately 6.9% year over year to $1,758.3 million, surpassing the Zacks Consensus Estimate of $1,669.1 million [1][7] Segment Review - **Chlor Alkali Products and Vinyls**: Revenues reached $979.5 million, up around 6.4% year over year, exceeding the consensus estimate of $955.4 million. Segment earnings were $64.9 million, down from $99.3 million in Q2 2024 [2] - **Epoxy**: Revenues rose approximately 4.2% year over year to $331.2 million, beating the consensus estimate of $305.9 million [3] - **Winchester**: Revenues increased by about 10.2% year over year to $447.6 million, driven by higher military sales, surpassing the consensus estimate of $401.9 million [3] Financials - Olin's cash balance at the end of Q2 was $223.8 million, with a net debt of approximately $2.8 billion. The company repurchased around 0.5 million shares for $10.1 million during the quarter, with about $2 billion remaining in share repurchase authorizations [4] Outlook - Olin anticipates adjusted EBITDA for Q3 2025 to be between $170 million and $210 million, citing ongoing market challenges and potential rising costs. The company emphasizes a disciplined capital allocation strategy focused on maximizing cash generation [5] Price Performance - Olin's shares have declined by 54.1% over the past year, compared to a 19.4% decline in the industry [6]

Summary of Conference Call on Chemicals Industry Industry Overview - The chemical cycle is entering a phase of potential recovery after experiencing one of the sharpest downcycles in 20 years, with a projected US$50 billion turnaround in assets driven by China's anti-involution and deflating investment cycle [1][2][3] - Investor sentiment towards the commodity chemical cycle is currently the most bearish seen in two decades, with equities priced at 0.5-0.7 times tangible book value, indicating a significant capacity reduction is already factored in [2][5] Key Companies and Ratings - Upgrades were made for several companies: - **PTT Global Chemicals** and **PETRONAS Chemicals** upgraded to Overweight (OW) - **Tata Chemicals** received a double upgrade to OW due to global capacity cutbacks and focus on self-help measures [4][7] - **United Tractors** was lifted to Equal Weight (EW), while **IRPC** remains Underweight (UW) due to high cash costs and a challenging balance sheet [4] Market Dynamics - The current downcycle is characterized by reduced utilization rates, with production outside China at 2016 lows and an average utilization rate of 75%, with some companies experiencing rates as low as 50% [2][3] - The recovery is expected to be driven by increased utilization as companies in the coverage remain lower on the cash cost curve and benefit from good domestic/regional consumption [3][11] Financial Metrics - The EV/EBITDA multiple has been raised to 8.5x for below midcycle 2026 estimates, indicating stable pricing and margins for olefins in 2025, with improvements noted for HDPE/LDPE, PVC, and Paraxylene [5][11] - Industry EBITDA per ton for Asia is approximately 50% below the last downcycle, suggesting limited downside and peak oversupply [5] Supply and Demand Factors - China's anti-involution is expected to slow capacity growth by 25% from 2025 to 2028, which is seen as a positive development to address the supply glut [3] - Permanent closures and reduced utilization outside of China are anticipated to help restore balance in the market [3] Cost Structure and Feedstock Changes - The US shale revolution is positively impacting Asia, with a projected 20-25% reduction in operating costs as US ethane gains a larger share of the feedstock mix [2][22] - Companies are increasingly resorting to cheaper ethane feedstock to tackle lower product spreads, enhancing their competitive position [23][24] Capacity Adjustments - Global petrochemical capacity has seen cutbacks amid industry headwinds and muted profitability, with several companies announcing permanent closures and temporary halts in production [20][21] - The total book value in the coverage could see a re-rating as the cycle turns, with significant contributions from major players like Reliance Industries, Indian Oil Corp, and Tata Chemicals [18] Conclusion - The chemicals industry is poised for a potential recovery, driven by strategic capacity adjustments, improved cost structures, and favorable market dynamics. The focus on self-help measures and the impact of US ethane on operating costs are critical factors to watch in the coming years [1][2][3][4][5]

Group 1 - LyondellBasell Industries N.V. (NYSE: LYB) is set to report its earnings on August 1st before the market opens, with investors closely monitoring the results due to the contentious nature of LYB stock [1] - The upcoming earnings report is significant for investors as it may influence stock performance and investor sentiment towards the company [1] Group 2 - The investing group Ian's Insider Corner offers features such as a Weekend Digest, trade alerts, and direct access to insights from the leader, Ian Bezek [2] - Ian Bezek has a background as a hedge fund analyst and has conducted extensive research in Latin American markets, focusing on high-quality growth stocks [3]

Adnoc’s planned takeover of Covestro for nearly €12 billion ($14 billion) has been hit by an in-depth EU probe under the bloc’s tough new foreign-subsidy rules https://t.co/HACuqq07Hh ...

Summary of Conference Call Notes Industry Overview - **Industry**: APAC Energy & Chemicals - **Focus**: Impact of China's regulatory changes on refining and petrochemical sectors Key Points 1. **Assessment of Old Facilities**: Several Chinese provinces have initiated assessments of old refining and petrochemical facilities, defined as those over 20 years old or at the end of their design service life. Regulators will decide on relocation, renovation, or closure based on these assessments [1][2][3] 2. **Potential Capacity Closure**: The potential closure of Chinese refining capacity is viewed positively for non-China refiners, as it may reduce the risk of increased oil product exports from China. Companies highlighted include Reliance Industries, HPCL, and BPCL, which are rated as "Buy" [2][3] 3. **Current Capacity Statistics**: Approximately 30% of China's current crude distillation unit (CDU) capacity consists of old facilities. State-owned enterprises (SOEs) dominate this segment, typically exhibiting higher energy efficiency due to ongoing capacity upgrades [3][10] 4. **Chemical Sector Outlook**: Despite potential closures in the Chinese chemical sector, the existing surplus is expected to persist. Companies such as Lotte Chem, PTTGC, PCHEM, and Hanwha Solutions maintain "Sell" ratings due to this ongoing surplus [2][12] 5. **Chemical Capacity Data**: Old facilities account for 9-13% of mainland China's capacity in key chemical products like ethylene. However, closures would only address about 7% of the global surplus in ethylene, indicating insufficient impact on global supply-demand balance [12][15][16] Additional Insights - **Energy Efficiency Considerations**: The assessment of old facilities includes energy efficiency metrics, which are generally higher for SOEs compared to private entities [3][10] - **Market Implications**: The anticipated closures could lead to a tighter market for non-China refiners, potentially increasing their margins and market share [2][3] - **Regulatory Challenges**: The implementation of closures may face challenges without significant fiscal support and changes in local government incentives [2] Conclusion The regulatory changes in China regarding old refining and petrochemical facilities could have significant implications for both local and international markets. While the potential closure of capacity is seen as beneficial for non-China refiners, the chemical sector may continue to struggle with surplus issues.