Daily Chemical Reactions

Integration – Allows Westlake To Effectively Shoot From Its HIP, OMV To Outperform Competitors In High-Cost Regions
June 13, 2024
Commodities Mentioned:
Ethane, PVC, Chlorine, Ethylene, Naphtha, Crude Oil, Natural Gas, Coal, LNG, Chlor-Alkali, Hydrogen, EVs, R-HDPE, SAF, Hydrogen, Biodegradable Polymers, Polyethylene
Companies Mentioned:
OMV, Westlake, Borealis, Borouge, ADNOC, Olin, Formosa Plastics, Oxy, Aramco, Enterprise Products, Celanese, BASF, Chevron, QatarEnergy, Haldia Petrochemicals, Petrobrazi, Danimer Scientific, Tesla

Daily Chemical Reaction

Integration – Allows Westlake To Effectively Shoot From Its HIP, OMV To Outperform Competitors In High-Cost Regions

Key Findings

  • General Thoughts: We joined investor events at Westlake and OMV today, where both highlighted the benefits of integration, though from different starting points, and product upgrading as keys to their long-term strategies.
  • Supply Chain/Commodities: Westlake’s integrated specialty product push differentiates it from Chlor-vinyl peers, and OMV’s push downstream comes with a competitive advantage. Both strategies are return-enhancing.
  • Energy/Upstream: We discuss North American petrochemical production cost advantages and the need for those in high-cost areas, such as Europe, to take a more cost-effective, integrated approach to outperform peers.
  • Sustainability/Energy Transition: We discuss the sustainable and circular product push at OMV, highlighting its efforts and resin buyer/brand-owner ambitions, and switch gears to discuss Chlor-vinyl sector decarbonization.
  • Downstream/Other Chemicals: We flag Westlake views of US building and construction markets, discuss recent China wholesale inflation statistics, and recently elevated trade policy disputes between China and the EU.

Exhibit 1: Integration and portfolio “upgrading” is core to Westlake and a primary strategic driver at OMV and peers.

Source: Westlake – Investor Day, HIP Teach-In, June 2024

See PDF below for all charts, tables and diagrams


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