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Huntsman says polyurethanes much stronger than expected

September 09/2020

MOSCOW (MRC) -- Huntsman says its polyurethanes segment is performing well above expectations owing to continued strength in construction-related markets, faster improvement in automotive demand, and higher overall margins, reported Chemweek.

The company says third-quarter results in its other segments are still roughly in line with previous guidance.

During its second-quarter earnings call on 28 July, Huntsman forecast a 30% year-over-year (YOY) decline in the segments third-quarter adjusted EBITDA, but the company now expects a figure close to the year-ago value of USD146 million.

During the second quarter of 2020, the polyurethanes segment turned in adjusted EBITDA of USD31 million, down 80% YOY, and revenue of USD730 million, down 28% YOY, both reflecting lower average selling prices for methylene di-para-phenylene isocyanate (MDI) and lower overall polyurethanes sales volumes.

As MRC informed before, 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.

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 DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of more than USD7 billion. Its chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operate more than 75 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 10,000 associates within its four distinct business divisions.
Author:Margaret Volkova
Tags:PP, PE, poliuretan, homopolymer PP, propylene, HDPE, ethylene, footwear, Huntsman, Indorama Ventures PLC, Russia, USA.
Category:General News
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