2025 was a year to forget for chemical giants Dow (NYSE: DOW) and LyondellBasell Industries (NYSE: LYB). Both stocks plummeted to multiyear lows. Coincidentally, they both fell by exactly 41.7%. 2026 is already looking a lot better for materials sector investors. Materials and energy are the best-performing stock market sectors in 2026. And Dow and LyondellBasell are both up over 15% year to date at the time of this writing. Where to invest $1,000 right now? Our analyst team just revealed what they belie ...

Peter Vanacker: Thank you, Dave, and welcome to all of you. We appreciate you joining us today as we discuss our first quarter results. These are challenging and volatile times, but I am proud that our team continues to navigate extremely well. Let's begin with Slide 3, where we highlight continued leadership in safety performance, LYB. Our operational success starts with our core focus on safety. Our goal zero commitment is to operate with zero incidents through ownership, excellence and teamwork. This is ...

Core Insights - The company reported strong safety performance with a year-to-date total recordable incident rate of 0.12, highlighting its commitment to safety during operational challenges [1] - The company is focusing on growing and upgrading its core businesses, emphasizing strategic criteria such as leading market positions and attractive returns [5][6] - The company aims to enhance its portfolio by concentrating on low-cost feedstocks in the U.S. and the Middle East while increasing access to circular and renewable feedstocks in Europe [6][8] Financial Performance - The company achieved earnings of $0.62 per share and an EBITDA of $715 million in the second quarter, with cash generation resuming and robust cash returns to shareholders exceeding $500 million [16][23] - The cash improvement plan is on track to deliver $600 million in incremental cash flow for 2025, with a focus on reducing working capital and fixed costs [12][14] - The company plans to reduce its 2025 CapEx guidance to $1.7 billion, reflecting a $200 million reduction from initial guidance [13][15] Segment Performance - The Olefins and Polyolefins Americas segment reported an EBITDA of $318 million, a more than 25% improvement from the first quarter, driven by higher integrated polyethylene margins [25] - The Intermediates and Derivatives segment generated an EBITDA of $290 million, an increase of $79 million, primarily due to improved margins for styrene and propylene oxide [30] - The Advanced Polymer Solutions segment maintained an EBITDA of $40 million, despite challenges in automotive markets and a slight decline in volumes [33] Market Dynamics - The company expects continued steady demand in the polyethylene market, with domestic sales rebounding to the highest volumes since Q2 2022 [27][36] - In Europe, high feedstock costs and insufficient regulatory support have challenged competitiveness, leading to closures of over 20% of ethylene capacity since the beginning of the decade [8][9] - The company is closely monitoring the Chinese market, where despite significant capacity growth, it remains a net importer of polyethylene from cost-advantaged regions [11] Strategic Initiatives - The company is advancing its MoReTec-1 chemical recycling plant in Germany, which is expected to meet growing demand for circular plastics [10] - The planned sale of European assets is anticipated to free up cash and reduce recurring CapEx, aligning with the company's strategy to optimize its portfolio [15][41] - The company is deferring the Flex-2 project and MoReTec-2 investment decisions until market conditions improve, preserving options for future growth [20][72]

Core Insights - LyondellBasell Industries N.V. (LYB) reported a fourth-quarter 2025 loss of $140 million or 45 cents per share, an improvement from a loss of $603 million or $1.87 per share in the same quarter last year [1] - The adjusted loss was 26 cents per share, down from earnings of 77 cents in the prior year, missing the Zacks Consensus Estimate of 18 cents [1] Financial Performance - Net sales for the quarter were $7,091 million, exceeding the Zacks Consensus Estimate of $6,984.4 million, but down approximately 9.2% from $7,808 million in the prior-year quarter [2] - The company generated $2.3 billion in cash from operating activities in 2025, with $450 million spent on capital expenditures in the fourth quarter and $1.9 billion for the year [6] - LyondellBasell distributed $2 billion to shareholders through dividends and share buybacks in 2025, ending the quarter with $3.45 billion in cash and cash equivalents and $8.1 billion in total available liquidity [6] Segment Performance - The Olefins & Polyolefins — Americas segment saw revenues decline by about 15.1% year over year to $2,337 million, missing the consensus estimate of $2,536 million [3] - The Olefins & Polyolefins — Europe, Asia, and international segment revenues fell 5.5% year over year to $2,336 million, also missing the consensus estimate of $2,378 million [4] - The Intermediates and Derivatives segment reported sales of $2,153 million, a decline of roughly 9% year over year, missing the consensus estimate of $2,203 million [4] - Advanced Polymer Solutions revenues were $777 million, down around 6% year over year, missing the consensus estimate of $837 million [4] - The Technology segment's revenues increased by approximately 2% to $177 million, surpassing the consensus estimate of $137 million [5] Outlook - The company is managing feedstock and energy price volatility, with expectations for polyethylene price increases in North America due to tight inventories and seasonal demand recovery in Europe [7] - LyondellBasell plans to align operating rates with global demand, targeting 85% utilization in Olefins & Polyolefins Americas, 75% in Olefins & Polyolefins EAI, and 85% in Intermediates & Derivatives [8] - The Cash Improvement Plan target has been raised from $1.1 billion to $1.3 billion by the end of 2026 [10] Stock Performance - LyondellBasell's shares have declined by 34% over the past year, compared to a 21.7% decline in the Zacks Chemicals Diversified industry [11]

Dow (NYSE:DOW) Q4 2025 Earnings call January 29, 2026 08:00 AM ET Company ParticipantsAndrew Riker - VP of Investor RelationsDavid Begleiter - Managing DirectorFrank Mitsch - PresidentJeff Tate - CFOJim Fitterling - Chair and CEOKaren S. Carter - COOKevin McCarthy - PartnerMatthew Blair - Managing DirectorMike Sison - Managing DirectorVincent Andrews - Managing DirectorConference Call ParticipantsChris Parkinson - Senior Research Analyst of Chemicals, Agriculture and PackagingDuffy Fischer - Equity Research ...

4Q 2025 Results January 29, 2026 Agenda ▪ Performance Update ▪ Operating Segment Details ▪ Outlook ▪ Transform to Outperform to Deliver >$2B Near-Term Op. EBITDA Uplift ▪ Navigating the Near-Term with Financial Flexibility and Decisive Actions Performance Update Solid 4Q Results Supported by Strong Self Help Actions to Manage the Near-Term and Strengthen Long-Term Competitiveness Accelerating Strategic Actions in 2026 3 Net Sales $3.3B Operating EBITDA Returned to Shareholders Full Year 2025 $40.0B $1.5B No ...

Summary of Key Points from the Conference Call Industry Overview - **Lithium Market**: Lithium prices have increased significantly at the start of 2026, with lithium carbonate (battery-grade) prices rising approximately 14% year-to-date (YTD) to around $17,000 per ton excluding VAT, and lithium hydroxide prices increasing about 19% YTD to approximately $15,000 per ton excluding VAT. This bullish sentiment has positively impacted Albemarle Corporation (ALB) shares, which are up about 14% YTD despite a strong rally in the second half of 2025 [1][2][3]. Key Insights - **Supply Chain Dynamics**: Downstream cathode manufacturers are currently stockpiling, with inventory levels at approximately 36,500 tons, the lowest since March 2025. The expected restart of CATL's Jianxiawo mine has been delayed to around the Chinese New Year in February 2026, contributing to supply-side volatility. The overall supply-demand setup for lithium is expected to tighten favorably in 2026, which should benefit ALB through better pricing support and improved cycle dynamics [2][3]. - **Polyethylene (PE) Outlook**: ICIS forecasts a slight increase in feedstock costs for polyethylene, rising from approximately 15.5 cents per pound to about 18.1 cents per pound year-over-year. The U.S. and Canada will maintain a cost advantage, although the gap will narrow. Global PE capacity is expected to expand by about 8 million metric tons this year, which is roughly double the incremental demand [3][4]. - **Polyvinyl Chloride (PVC) Market**: New production capacity added in late 2024 has increased U.S. PVC production by around 6%. Domestic sales remained flat through 2025, prompting producers to manage supply-demand imbalances. Westlake Chemical (WLK) has rationalized about 15% of its global PVC capacity, which represents approximately 5% of U.S. PVC nameplate capacity. Export prices are under pressure due to increased competition, particularly from China [6][7]. - **Propylene and Polypropylene (PP) Trends**: Demand for propylene derivatives is expected to improve seasonally, but high inventory levels will take time to normalize. Contract prices for propylene are projected to remain stable in 2026 unless there is a significant supply disruption. The U.S. polypropylene market is anticipated to mirror the second half of 2025, with high inventories and modest demand fluctuations [7][8]. Additional Noteworthy Developments - **SABIC Divestitures**: SABIC announced the divestiture of its European petrochemical business to AEQUITA for an enterprise value of approximately $500 million. This acquisition is expected to synergize with AEQUITA's existing olefins and polyolefins business [11]. - **Joint Ventures in Biofuels**: Corteva (CTVA) and BP have formed a joint venture named Etlas, aimed at producing biofuel feedstock from crops, targeting an output of 1 million metric tons per annum by the mid-2030s, with initial supply expected to begin in 2027 [11]. - **BASF's Renewable Energy Initiative**: BASF has commissioned a 1 million metric ton ethylene cracker at its Verbund site in Zhanjiang, China, which will be the first to operate using 100% renewable energy for its main compressors [11]. - **Market Performance**: The S&P 500 has shown a year-to-date increase of 0.9%, while various chemical companies have reported mixed performances, with ALB up 10% and WLK up 7.3% [35]. This summary encapsulates the critical insights and developments from the conference call, focusing on the lithium market, chemical industry dynamics, and notable corporate actions.

Core Insights - Petrobras and Braskem have signed long-term feedstock supply contracts valued at $17.8 billion, marking a significant milestone in the Brazilian petrochemical industry [1][2][18] Group 1: Overview of the Agreements - The agreements consist of two major contracts: one for petrochemical naphtha worth $11.3 billion and another for natural gas liquids (NGLs) worth $5.6 billion, set to commence in January 2026 [3][4] - The naphtha supply deal will provide 4.116 million tons in 2026, increasing to 4.316 million tons by 2030, ensuring a stable supply for Braskem's operations [5][6] Group 2: Strategic Shift and Expansion - Braskem is transitioning from naphtha to more competitive NGLs like ethane, aiming to enhance Brazil's position in global petrochemical production [2][11] - The $5.6 billion contract for ethane, propane, and hydrogen is crucial for expanding Braskem's Duque de Caxias facilities, expected to run for 11 years starting in 2026 [6][7] Group 3: Long-term Supply Commitments - From 2026 to 2028, Petrobras will supply 580,000 tons of ethylene equivalent annually, increasing to 725,000 tons per year starting in 2029, supporting Braskem's expansion plans [10][11] - Additional propylene supply agreements valued at approximately $940 million will further support Braskem's diverse production lines, ensuring access to necessary feedstocks [14][15] Group 4: Strategic Influence and Future Outlook - Petrobras is increasing its influence over Braskem as Novonor plans to divest its stake, indicating a trend of state-controlled entities shaping Brazil's petrochemical sector [12][13] - The collaboration between Petrobras and Braskem is expected to unlock nearly $800 million in investments, driving growth and modernization in the Brazilian petrochemical industry [7][18]

Group 1: Market Outlook - Citi has reduced the price target for Dow Inc. to $23 from $25, maintaining a Neutral rating due to a weakening polyethylene market [1] - The firm has also lowered estimates for other chemical companies, indicating price discounting in polyethylene and a negative outlook for PE-exposed companies in 2026 [1] Group 2: Financial Performance - In Q3 2025, Dow Inc. reported net sales of $10 billion, with growth in the Industrial Intermediates & Infrastructure segment [2] - The company achieved a $1 billion reduction in CapEx spending and completed a strategic partnership with Macquarie, selling a 49% equity stake in U.S. Gulf Coast infrastructure assets for approximately $3 billion [2] - Dow's operating cash flow was $1.1 billion, an increase of $330 million year-over-year, with $4.5 billion in cash and cash equivalents and $10 billion in available liquidity [3] - The company returned $249 million to shareholders through dividends in the quarter [3] Group 3: Company Overview - Dow Inc. is an American chemical company that produces coatings, industrial intermediates, plastics, and related products [4]

Core Insights - China's new petrochemical capacity is raising concerns about potential oversupply in the global market, which could negatively impact smaller petrochemical producers [1][3] - The forecast indicates an 18% increase in polyethylene production in China this year, significantly outpacing the expected 10% growth in demand, leading to a 13% decline in polyethylene imports [1][4] Industry Overview - China has become the world's largest producer of ethylene and polyethylene, having built seven petrochemical complexes in the last decade, surpassing the United States [2] - As the largest consumer of petrochemicals, China's imports reached 15 million tons last year, but increasing domestic production is shrinking the market for other producers [3] Future Projections - China's polyethylene production capacity is expected to grow by another 16% by 2026, potentially worsening the existing structural imbalance due to surplus production capacity [4] - Some new production capacity is being delayed, as seen with BASF's new petrochemicals plant in China, which has postponed its operations [4] Demand Dynamics - Petrochemicals are the primary driver of crude oil demand growth, accounting for 95% of total oil demand growth over the five years leading to 2024, with significant demand growth observed in China [5] - The rapid growth in petrochemical demand in China mirrors trends seen in other sectors like solar power and electric vehicles, where government support led to oversupply and overcapacity issues [5]