Chemicals

2nd Quarter 2017

Sales in the Chemicals segment considerably exceeded the level of the previous second quarter. This was largely the result of significantly higher prices, especially in the Monomers division. Currency effects had a positive influence on sales, whereas volumes declined slightly. Income from operations (EBIT) before special items improved considerably compared with the second quarter of 2016, primarily through higher margins in the Monomers and Petrochemicals divisions. The negative impact on earnings in the second quarter of 2017 caused by the North Harbor accident at the Ludwigshafen site was compensated by insurance payments. Fixed costs were slightly reduced overall.

Factors influencing sales, Chemicals
2nd Quarter 2017

Petrochemicals

Sales in the Petrochemicals division increased considerably compared with the previous second quarter. Higher prices for raw materials as well as continuing high demand on the market led to a significant spike in sales prices, especially for steam cracker products in Europe. Sales volumes declined slightly overall, primarily as a consequence of the still-limited production of oxo alcohols and plasticizers in Ludwigshafen. Improved margins, especially for steam cracker products, ethylene oxide, glycols and acrylic monomers, led to a considerable increase in EBIT before special items. Fixed costs declined thanks to insurance payments in connection with the accident at the North Harbor.

Monomers

Compared with the second quarter of 2016, sales in the Monomers division grew considerably, mostly as a result of price increases in the isocyanates business. Sales volumes rose slightly, predominantly through higher volumes of MDI, and currency effects provided a slight tailwind. The considerable increase in EBIT before special items arose primarily through the higher levels of prices and volumes. Earnings were also positively influenced by the restructuring of our caprolactam production in Europe. Fixed costs declined compared with the same quarter of the previous year.

Intermediates

The Intermediates division also considerably increased its sales, primarily as a result of price increases in all regions and product lines. Sales volumes remained stable. We achieved higher volumes of amines in addition to polyalcohols and acids, while sales volumes decreased of butanediol and derivatives as well as acetylene and carbonyl derivatives due to more extensive plant maintenance turnarounds. The divestiture of the Evans City, Pennsylvania, site in the first quarter of 2017 slightly dampened sales growth. The turnarounds and the startup of new plants in all regions resulted in higher fixed costs, considerably reducing EBIT before special items.