Plastics producer Westlake Chemical’s (Houston, Texas / USA; www.westlake.com) net profit plunged 58% to USD 421m (EUR 383m) in 2019 in the face of lower global sales prices for its major products, particularly caustic soda and polyethylene. Sales fell 6% to USD 8.12 bn. “We experienced a difficult economic environment in 2019 as a result of slower global economic growth, which has been impacted by international trade tensions,” said CEO Albert Chao.

Sales at the Vinyls segment dipped 4% to USD 6.336 bn, while operating income fell 51% to USD 451m due to lower global sales prices for caustic soda and PVC resin. These negative factors were partially offset by lower purchased ethylene, ethane feedstock and fuel costs as well as higher sales volumes.

At the Olefins segment, sales contracted 12% to USD 1.782 bn while operating income plummeted 55% to USD 260m amidst lower selling prices as a result of increased olefins production from new industry capacity. Factors that partially compensated for these headwinds were higher sales volumes and lower feedstock and fuel costs.

Other major plastics producers have suffered earnings losses last year. Among these are LyondellBasell, Dow and Trinseo – see Plasteurope.com of 07.02.2020, 04.02.2020 and 11.02.2020.

In terms of its 2020 business expectations, Westlake said chlor-alkali and PVC remain constructive, as integrated facilities in North America are benefiting from low-cost feedstocks and natural gas. At the same time, the outlook for demand growth is expected to outpace industry capacity additions.

Westlake noted that recent trade resolutions, such as the agreement between the US, Mexico and Canada (USMCA) as well as the phase one agreement between China and the US – see Plasteurope.com of 12.12.2019 and 21.01.2020 – have spurred positive signs for global demand and improved pricing. The company added that it is not clear yet to what extent the coronavirus outbreak would affect its products.