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Huntsman updates Q2 outlook, overall on target

June 29/2020

MOSCOW (MRC) -- Huntsman (The Woodlands, Texas) has reaffirmed its second-quarter guidance that overall sales will be down 30-35% year-over-year (YOY). However, the company saw sales improve between April and May, and it expects the trend to continue in June, said Chemweek.

Results in the polyurethanes division are expected to be modestly better than forecast, mainly on stronger performance in China and in US construction. Results in the textiles effects division have been weaker than expected, largely owing to prolonged mandatory shutdowns in key textile manufacturing regions, says the company. Huntsman expects adjusted EBITDA in the textiles effects division will likely be slightly negative for the second quarter.

Results in the performance products division are likely to be in-line with the prior guidance, while results in the advanced materials division may fall slightly short because of a deeper-than-expected trough in aerospace, Europe, and India.

As MRC reported previously, in April 2020, to further aid in the fight against the COVID-19 pandemic, LyondellBasell (LBI) donated a key ingredient to Huntsman Corporation to produce hand sanitizer for US first responders.

We remind that, in January 2020, Indorama Ventures Public Company Limited (IVL), a global chemical producer, completed its acquisition of Huntsmans world-class integrated oxides and derivative businesses, including a large flagship site on the US Gulf Coast (USGC) at Port Neches, as well as Chocolate Bayou and Dayton in Texas, Ankleshwar in India, and Botany in Australia, as per IVL's press release.

The acquisition is a profitable and growing end applications business along with unique products and geographical profile among the crowded olefins space. It has a well-integrated assets base with an extensive infrastructure and future expansion possibilities. The area is adjacent to many USGC feedstock suppliers. The cash value of USD2.0 billion makes it the largest acquisition by Indorama Ventures ever and now our capital employed is nicely spread over plastic, chemicals and fibers. The transaction value translates to an EV/EBITDA of ~5.7x and is expected to add substantial synergies to Indoramas existing 450kta Ethane/Propane Cracker and our 550kta EO/EG. IVL will now be integrated from Ethane to PET as well as the high-margin EO and PO derivative businesses.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.  At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, petrochemistry, Huntsman.
Category:General News
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