Business
OMV raises European petchem margins, polyolefin volumes guidance
OMV raises European petchem margins, polyolefin volumes guidance
About this update from Borouge Plc
OMV AG (Vienna) has raised its full-year margins forecast for olefins, polyethylene (PE), and overall polyolefin sales volumes after seeing better-than-expected performance in the first half of 2025, despite anticipating continued pressure on the European chemical markets, as per Chemweek.OMV sees its PE margin for the year now coming in “significantly above” its previous forecast of €400 per metric ton stated in guidance issued in April, and also expects higher ethylene and propylene margins that it previously projected earlier this year.The ongoing process of olefins capacity rationalization in Europe is likely to add support to surviving producers, according to OMV’s CEO Alfred Stern, with up to 4 million metric tons per year of production capacity to potentially close by the end of this year, he said July 31 during the company’s second-quarter earnings call.OMV is “basically left with assets that are very strongly positioned on the European cash cost curves” because the company has made its steam crackers in Europe more flexible in terms of feedstocks they can use, he said.In prepared remarks ahead of the call with analysts, Stern said that several of the company’s European indicator margins had been “stronger than expected” in the first six months of this year. “Although demand remained subdued, margins benefited from lower feedstock costs and capacity closures at European crackers,” he said.However, OMV remains cautious for the second half of the year, as demand is “not expected to show significant improvement and the potential impact of tariff implementation on the market remains uncertain.”Despite these potential market headwinds, Stern said OMV had increased its full-year outlook for European olefin indicator margins from its previously assumed value of about €520 per metric ton for ethylene to “above” that figure, and to “above” €385 per metric ton for propylene from its previous estimate for around that level.For polyolefins, OMV now expects its PE indicator margin to be “significantly above” €400 per metric ton, up from “above” that level. However, it has downgraded its forecast for its polypropylene (PP) indicator margin to be “around” €400 per metric ton, having been expected to be “above” that figure previously.OMV has also ramped up its expectations for polyolefin sales volumes and now anticipates full-year volumes of around 4.3 million me...