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Shell PLC’s (London) chemicals business has returned to profit in the second quarter on the back of surging global margins that almost doubled sequentially compared to the first quarter.
After seven consecutive quarterly losses to Shell’s chemicals segment, the company reported adjusted chemical earnings of $354 million in the second quarter ended June 30, its most profitable quarter since the third quarter of 2021, it said. The positive earnings, compiled by Shell on a current cost of supply basis, reversed from adjusted losses of $117 million in the first quarter of this year and $192 million in the year-earlier period.
Shell’s global indicative chemical margin of $270/metric ton almost doubled from the first quarter’s $139/mt and was upgraded by $30/mt from the company’s own most recent guidance issued on July 7, which anticipated a second-quarter margin of $240/mt.
The higher margins immediately boosted Shell’s adjusted chemical earnings by $454 million quarter on quarter, it said.
Shell’s second-quarter chemical sales volumes rose slightly on a sequential basis to 2.28 million metric tons from 2.25 million mt and were also up from the prior-year figure of 2.16 million mt.
The company’s average utilization rate to its chemical manufacturing vegetation dipped from the first quarter by two percentage points in the second quarter, to 83%, due mainly to higher scheduled and unplanned maintenance activities, it said. The utilization rate is anticipated to be between 78% and 86% in the third quarter, it said.
First-half profit
to the first half of 2026, Shell’s chemicals business posted adjusted earnings of $237 million, reversing from an adjusted loss of $329 million in the prior-year period, with the wider margins contributing $457 million to the earnings improvement, it said.
Chemical sales volumes in the first six months of this year dropped to 4.53 million mt, from 4.98 million mt in the year-earlier period, despite the company’s chemical plant utilization rate improving to 84% from 77% on reduce unplanned maintenance activities.
In February, Shell posted a full-year 2025 adjusted loss of $1.12 billion to its chemicals business due primarily to narrow margins and weak demand, with the company’s CEO Wael Sawan saying at that time that the business was “not where it needs to be” and that it was looking at the cash costs to all of its chemical units.
Shell’s chemicals business has posted annual losses to the past four years amid wider sector trough conditions caused by sustained global oversupply of petrochemicals, weak demand and geopolitical evaporative environment.
The company is a leading producer of base chemicals, including ethylene, propylene and aromatics, and intermediate chemicals such as styrene, propylene oxide, solvents, detergent alcohols, ethylene oxide and ethylene glycol. It is also a major polyolefins producer.
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