Performance Warning: Shell's Chemical Division to Face Losses in Q4 2025, Supply and Demand Pressure Drags Down Results

On January 9, Zhuangsu Shijie learned that Shell recently released its business update report for the fourth quarter of 2025, warning that its chemicals and products division is expected to incur losses in that quarter, while the performance of other business segments is expected to remain stable. The report indicates that the indicative chemical profit margin is expected to decrease from $160 per ton to $140 per ton.

 

"Following the adjustment of the chemical sub-sector, significant losses are expected to occur, mainly reflecting the impact of a (non-cash) deferred tax adjustment of a joint venture," Shell stated in the update report.

 

Below the break-even point

 

Shell also disclosed that the adjusted earnings for its Chemicals and Products division in the fourth quarter may be "below breakeven," representing a significant decline from the $550 million profit in the third quarter of 2025. Additionally, the company noted that the performance of its trading and optimization business in the fourth quarter is expected to be weaker than in the third quarter.

 

Despite facing the aforementioned challenges, Shell has confirmed that its oil, gas, and liquefied natural gas production forecasts remain within the previously issued guidance range.

 

The company also stated that the daily production of its predominantly petroleum upstream business in the fourth quarter is expected to remain between 1.84 million and 1.94 million barrels of oil equivalent, in line with the anticipated guidance.

 

Multiple Challenges Await Resolution

 

The Institute for Energy Economics and Financial Analysis (IEEFA) recently released a report indicating that Shell's petrochemical plant in Pennsylvania continues to face multiple challenges, including oversupply, weak demand, insufficient operating rates, and declining profit margins.

 

The report emphasizes that the petrochemical project located in Monaca, Pennsylvania, has construction costs reaching $14 billion, more than doubling the initial budget. This project, once regarded as a "transformational investment," has now left investors deeply disappointed.

 

"Regarding the current state of the petrochemical industry, the Monaca plant is facing an unfavorable market environment and significant uncertainty due to oversupply and weak demand," said Todd Leahy, Director of North America at IEEFA and author of the report.

 

Leahy pointed out in the report that the long-term viability of the project may be called into question.

 

The report also shows that between 2021 and 2024, Shell's chemical business revenue has declined by 43%.

【Copyright and Disclaimer】This article is the property of PlastMatch. For business cooperation, media interviews, article reprints, or suggestions, please call the PlastMatch customer service hotline at +86-18030158354 or via email at service@zhuansushijie.com. The information and data provided by PlastMatch are for reference only and do not constitute direct advice for client decision-making. Any decisions made by clients based on such information and data, and all resulting direct or indirect losses and legal consequences, shall be borne by the clients themselves and are unrelated to PlastMatch. Unauthorized reprinting is strictly prohibited.