LyondellBasell (LYB) Advanced Recycling Chosen for EU Fund
LyondellBasell Industries N.V. LYB has been chosen to receive a grant of €40 million from the European Union ("EU") Innovation Fund. The grant will help fund the company's fully-electrified, industrial-scale advanced recycling demonstration plant in Wesseling, Germany. The company's MoReTec plant was chosen as one of 41 projects in the EU Innovation Fund's 'Third Call for Large Scale Projects.' The EU is committing €3.6 billion to fund innovative clean-tech projects to aid in decarbonization.
LyondellBasell will gain valuable operational experience and additional technological know-how by investing in the first industrial-scale advanced recycling demonstration plant, which will allow it to scale up and fully commercialize its MoReTec technology.
The MoReTec technology developed by the company demonstrates a high level of innovation in the recycling of polyolefin waste to produce pyrolysis oil and pyrolysis gas. Pyrolysis oil can be used in place of fossil-based materials in the production of polymers. Usually pyrolysis gas streams are consumed as fuel. However, the MoReTec technology allows the pyrolysis gas to be recovered as well, contributing to polymer production and displacing fossil-based feedstocks, lowering CO2 emissions.
The technology incorporates electrification of the core reaction process, allowing the unit to run entirely on renewable energy. Scalable single train design, low operating temperatures due to catalyst use and innovative heat transfer design are additional benefits of this differential technology. These benefits enable the MoReTec technology to achieve high plastic-to-plastic conversion rates, thereby increasing the circularity of plastic waste.
Shares of LyondellBasell have gained 15.4% over the past year against 11.4% decline of its industry.
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The company, on its third-quarter call, said that it anticipates seasonally lower demand across most industries in the fourth quarter. Higher feedstock costs, new industry capacity and slowing Chinese demand growth continue to put pressure on global olefins and polyolefins margins. Following the end of the summer driving season, oxyfuels and refining margins are projected to fall.
Nonetheless, oxyfuel margins are expected to remain significantly higher than historical averages. LyondellBasell plans to operate its assets in line with market demand during the fourth quarter, with average operating rates of 85% for North American olefins and polyolefins (O&P) assets, 75% for European O&P assets and 70% for Intermediates & Derivatives assets.
LyondellBasell Industries N.V. Price and Consensus
LyondellBasell Industries N.V. price-consensus-chart | LyondellBasell Industries N.V. Quote
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and Hawkins, Inc. HWKN.
Denison Mines has a projected earnings growth rate of 100% for the current year. It currently carries a Zacks Rank #1 (Strong Buy). DNN delivered a trailing four-quarter earnings surprise of roughly 225%, on average. The stock is up around 61.3% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #1. AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 24.7% in a year.
Hawkins has a projected earnings growth rate of 21% for the current year. It currently carries a Zacks Rank #2 (Buy). Hawkins delivered a trailing four-quarter earnings surprise of roughly 27.5%, on average. HWKN shares are up around 67% in a year.
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