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LyondellBasell's Spheripol Selected by Sonatrach and TOTAL JV

Zacks Equity Research

 LyondellBasell Industries N.V.  LYB recently announced that Sonatrach Total Entreprise Polymeres Spa (“STEP”) has chosen its Spheripol technology for a 550,000 tons per year polypropylene (PP) unit, which will be constructed in Arzew, Oran province, Algeria. Notably, STEP is a joint venture (JV) between Sonatrach and TOTAL S.A.

LyondellBasell stated that Spheripol technology enables customers to diversify and enhance their polypropylene product portfolio with outstanding monomer efficiency. Spheripol is a leading PP process technology with more than 25 million tons of licensed capacity. The latest fifth generation Spheripol technology includes process improvements, which maximizes operational efficiency.

The plant will start operations using Avant ZN (Advanced Ziegler-Natta) catalyst, which includes non-phthalate, metallocene and chromium catalysts for the full range of polyolefin production.

Notably, new licensees may take advantage of LyondellBasell’s in-house expertise of continuous production improvement. They can leverage the company’s sustainable product development and catalyst knowhow by the joining Technical Service program, which is optional.

Shares of LyondellBasell have lost nearly 35.8% in the past year compared with the industry’s decline of 42.3%.

LyondellBasell’s adjusted earnings per share of $2.75 in the second quarter missed the Zacks Consensus Estimate of $2.84.

The company generated revenues of $9,048 million, down roughly 11.3% year over year. The figure also trailed the Zacks Consensus Estimate of $9,256.2 million.

LyondellBasell anticipates low-cost natural gas liquid feedstocks to continue driving strong chain margin in the Olefins & Polyolefins Americas unit as well as Oxyfuels and Related Products business. The company intends to initiate operations in the Hyperzone HDPE plant during the second half of 2019.

Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Alamos Gold Inc AGI and Arconic Inc ARNC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 140% for 2019. The company’s shares have surged 69.9% in the past year.

Alamos Gold has projected earnings growth rate of 280% for the current year. The company’s shares have rallied 63.9% in a year’s time.

Arconic has an estimated earnings growth rate of 42.7% for the current year. Its shares have moved up 17.7% in the past year.

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