Company: OXY-WT
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000797468-25-000029
Chunk: 180

Company: OCCIDENTAL PETROLEUM CORP /DE/
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 180
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table of contentsMANAGEMENT’S DISCUSSION AND ANALYSIS

CHEMICAL SEGMENT

BUSINESS STRATEGY

OxyChem concentrates on the chlorovinyls chain, beginning with the co-production of caustic soda and chlorine. Caustic soda and chlorine are marketed to external customers. In addition, chlorine, together with ethylene, is converted through a series of intermediate products into PVC. OxyChem seeks to be a low-cost producer in order to generate cash flow in excess of its normal capital expenditure requirements and achieve above-cost-of-capital returns. OxyChem’s focus on chlorovinyls allows it to maximize the benefits of integration and take advantage of economies of scale. Capital is employed to sustain production capacity and to focus on projects and developments designed to improve the competitiveness of segment assets. Acquisitions and plant development opportunities may be pursued when they are expected to enhance the existing core chlor-alkali and PVC businesses or take advantage of other specific opportunities. The expansion and conversion of the Battleground chlor-alkali plant to membrane technology continued in 2024 with completion expected in 2026. In 2024, capital expenditures for OxyChem totaled $685 million. 

BUSINESS ENVIRONMENT

Although the United States economic growth was higher than that of 2023, depressed growth in China continues to negatively impact the global market. While domestic demand increased for most products during 2024, product prices declined due to impacts of global supply exceeding demand, especially on chlorine and chlorinated derivatives products, including PVC. With the downward pressure on chlorinated product prices and margins, caustic soda prices increased across the year. 

BUSINESS REVIEW

BASIC CHEMICALS

Chlor-alkali operating rates increased in 2024 as global demand for most products returned to modest levels of growth. Despite the demand growth, global supply continued to exceed global demand on most products; therefore pricing and margins continued to decline across 2024. 

VINYLS

Domestic PVC demand realized appreciable 8% growth in 2024. U.S. Gulf Coast exports also increased year over year by 3%. Industry utilization rates averaged 85% in 2024, resulting in a net production gain of 1.2 billion pounds year over year. Given the high interest rate environment, housing starts continued to decline for the third consecutive year. Construction markets have largely offset the housing market segment and resulted in year over year demand gains. PVC exports continue to be an important outlet for PVC production and