In This Article:
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MDI Imports: Imports into the Americas dropped by 60% by the end of March, with a greater than 75% drop from China.
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MDI Pricing: Chinese MDI prices fell but have stabilized and recovered by 10% recently.
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Tariffs Impact: North American MDI tariffs have a significant impact, with only 1 kiloton imported from China in early April.
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Raw Material Prices: Falling raw material prices are contributing to margin expansion in MDI markets.
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Huntsman Corp (NYSE:HUN) is well-positioned to benefit from North American MDI tariffs, as it produces virtually all of its Americas material in North America.
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The company has seen stabilization and a 10% recovery in Chinese MDI prices, indicating potential market recovery.
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Huntsman Corp (NYSE:HUN) is focused on capitalizing on short-term changes and volatility, aligning costs to longer-term market realities, and exploring options to enhance its portfolio.
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The company has a strong balance sheet with $1.3 billion in liquidity and long-term debt maturities in 2029, 2031, and 2034.
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Huntsman Corp (NYSE:HUN) is actively pursuing cost savings, aiming to double its savings to $100 million, particularly focusing on calibrating its cost structure in Europe.
Negative Points
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There is a significant disconnect between orders and downstream demand, with double-digit drops in some order patterns.
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The company is experiencing volatility in volumes and pricing, with uncertainty impacting customer confidence and inventory levels.
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Huntsman Corp (NYSE:HUN) faces challenges in the European market due to high energy costs, taxes, and regulation, affecting investment and profitability.
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The company is dealing with disruptions from planned turnarounds and unplanned outages, impacting EBITDA.
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There is uncertainty around the impact of tariffs and antidumping investigations on the North American MDI market, which could affect future demand and pricing.
Q & A Highlights
Q: Can you elaborate on the bullwhip effect and inventory levels in the current market? A: Peter Huntsman, CEO, explained that while there is a bullwhip effect, the guidance for the second quarter remains firm. He noted a disconnect between order patterns and actual production, particularly in the automotive and aerospace industries. Inventory levels are leaner, and the volatility is more pronounced on a monthly basis.
Q: How is the trade uncertainty impacting your long-term growth potential and asset footprint? A: Peter Huntsman, CEO, stated that the company's asset footprint is well-positioned for a protectionist world, with most products being domestically produced in North America and Asia. The biggest impact on earnings would be an improvement in North American residential and commercial construction.