N.A. Chems and Pkg‘g: Plastics Monthly: July Plastics: A jagged decent from peak

Research evidence excerpt

N.A. Chems and Pkg‘g: Plastics Monthly: July Plastics: A jagged decent from peak

isk as

Gaurav Sharma

the PE S/D could more quickly return to oversupply. Our 2Q EBITDA estimates for Associate Analyst

DOW and LYB are inline/1% below consensus but our expectations for 3Q are gaurav-l.sharma@ubs.com

21%/22% below consensus, respectively. We have a Buy rating on WLK, since +1-212-713 4312

there was less of a price spike in PVC and there is less room for earnings to go

Nicole Grueneberg

down, though we’re still in a better position than 4Q25 trough earnings. We’d Associate Analyst

also argue the non-housing part of WLK's downstream business continues to nicole.grueneberg@ubs.com

grow. Our WLK EBITDA estimates for 2Q/3Q is 5% and 7% above consensus, +1-212-713-2469

respectively.

U.S. PE contract falls in June, spot/export prices continue to slide

N. America PE contract prices declined 15 cpp M/M in June which was in line with

market expectations. Spot domestic prices are off ~30 cpp from their peak in April

and export prices are down ~26 cpp over the same timeframe. Domestic spot

prices are still up ~11 cpp since the conflict in the Middle East began.

According to CMA, producers are expected to operate at 92.6% in June, vs.

96.3% in May. Final ACC data showed domestic demand dropped ~8.9% M/M in

May (latest available) to 2.85B pounds while exports declined ~5.5% M/M to

2.52B pounds. PE inventory increased to 53.8 days in May vs. 42.5 days in April but

is expected to fall to 47.6 days in June. DOW’s Texas 8 cracker was down for part

of 2Q and the company's Poly6 320kT unit (3% of DOW’s total PE, 1% of NA

supply) remains offline and is expected to restart in 2H26. The Golden Triangle

project (CP Chem/Qatar Energy) is expected to come online in 4Q26 bringing 2M