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.