Dow (DOW) 16th Annual Wells Fargo Industrials & Materials Conference summary

Macroeconomic and Industry Environment

• Global demand across key end markets remains stable, with supply increasingly constrained due to Middle East conflict and infrastructure damage, supporting tighter markets for several quarters.

• Polyethylene demand is robust, especially in packaging, with April export records and high operating rates; consumer and infrastructure applications show seasonal strength.

• Automotive demand is declining, but retail spending for DIY and coatings remains stable.

• Americas benefit from strong feedstock availability and cost advantages, increasing export opportunities.

• Volume growth is outpacing historical performance, with Q2-to-date volumes up low single digits compared to prior years.

Market Dynamics and Industry Trends

• Global polyethylene packaging demand remains resilient, and industry inventory levels are declining.

• Tightening supply is stabilizing European markets, benefiting local producer margins.

• Oil-to-gas spread remains at multi-year highs, with no near-term catalyst for reversion.

• Global oil inventories are at multi-year lows, increasing operational stress as demand peaks.

Operational Performance and Pricing

• All operating segments are performing well, with positive pricing momentum, especially in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure.

• April saw a $0.30/lb price increase in polyethylene, exceeding forecasts; a $0.20/lb increase is announced for June, though not included in current guidance.

• No significant order cancellations observed, indicating stable underlying demand.

• Export margins have improved due to the conflict, with Americas prioritized for supply.

• Polyethylene pricing remains below prior peaks despite substantial increases; high-value sales are prioritized.