Chemicals

Q2 2020

In the Chemicals segment, sales¹ declined considerably compared with the second quarter of 2019 in both divisions, but especially in the Petrochemicals division.

The sales decrease was primarily the result of significantly lower prices in both divisions. In the Petrochemicals division, the decrease in prices was largely due to higher product availability on the market and lower raw materials prices. The lower prices in the Intermediates division mainly reflected continued weak demand.

By contrast, we were able to increase sales volumes in the Chemicals segment thanks to the positive development of volumes in the Petrochemicals division. Following the scheduled turnarounds of our steam crackers in Port Arthur, Texas, and Antwerp, Belgium, in the second quarter of 2019, we were able to significantly increase volumes of steam cracker products in the second quarter of 2020 and compensate for the decrease in sales volumes in the rest of the portfolio as a result of the corona pandemic. Sales were reduced by lower sales volumes in the Intermediates division due to the effects of the corona pandemic, especially in the acids and polyalcohols business and in the butanediol and derivatives business.

Income from operations (EBIT) before special items was considerably below the level of the prior-year quarter. The considerable decrease affected both divisions, but in particular the Intermediates division. Here, the decline in earnings was primarily due to lower volumes and higher fixed costs, primarily as a result of the gradual startup of the new acetylene plant in Ludwigshafen, Germany. Higher margins on the back of lower raw materials prices had an offsetting effect and led overall to positive EBIT before special items in the Intermediates division.

EBIT before special items declined in the Petrochemicals division, mainly due to scheduled turnarounds in Nanjing, China, and lower margins. In addition, an unscheduled turnaround occurred in June at our steam cracker in Port Arthur, Texas.