US Huntsman sees early signs of recovery in MDI

HOUSTON (ICIS)–Huntsman is seeing early signs of a possible recovery in the market for methylene diphenyl diisocyanate (MDI), the CEO of the US-based polyurethanes producer said on Tuesday.

“I believe that we’re seeing some early signs of recovery in pricing and margins return,” said Peter Huntsman, CEO. He made his comments during an earnings conference call. “As we sit here today, it is fair to say that there are more positive than negative movement in the MDI industry.”

MDI was among the first major chemicals to experience declines in demand and margin, the consequence of a confluence of factors, according to Huntsman.

Interest rates rose, which slowed down North American construction, an important end market for polyurethanes. In China the housing market collapsed, and Europe experienced industrial decline.

At the same time, projects that were announced before the COVID-19 pandemic started coming online, which created excess capacity.

What followed was what Huntsman has described as the worst destocking cycle ever.

Destocking has finally ended, and Huntsman’s volumes have increased during the past few quarters.

In China, publicly reported prices for polymeric methylene diphenyl diisocyanate (PMDI) have reached three-year highs, he said. Moreover, those prices have been remarkably stable.

China’s recovery should continue through the decade and remain very gradual, he said.

In the US, multiple companies have publicly announced price increases in multiple segments, Huntsman said. It is the first time that has happened in two years, and it is another sign that destocking has ended.

Europe remains a struggle, and the region has yet to decide whether it will change energy policy or adopt protectionist measures, Huntsman said.

Globally, utilization rates are likely in the upper 80% range, Huntsman said. Europe has the loosest market conditions and the US has the tightest.

HUNTSMAN EXPECTS SLIGHTLY LOWER Q1 EARNINGS
For the first quarter, Huntsman expects adjusted earnings to decline slightly year on year, as shown in the following table. Figures are in millions of dollars, and they show adjusted earnings before interest, tax, depreciation and amortization (EBITDA).

$millions	Q1 25	Q1 24
Polyurethanes	45-60	39
Performance Products	25-35	42
Advanced Materials	40-45	43
Corporate	-40	-43
Total	70-100	81

Source: Huntsman

Overall, Huntsman expects its maleic anhydride (MA) business to benefit from a recovery in the construction market. MA is used to make unsaturated polyester resin (UPR).

Huntsman should receive an earnings boost from a polyurethane catalyst project, which is advancing towards completion, commissioning and commercialization. That project should contribute $5 million in EBITDA in the second half of 2025 and another $10 million in 2026.

The company also completed an investment in a performance amines product line that serves the semiconductor market. It is now qualifying those products with its downstream electronic customers. The project should contribute $5 million to $7 million in EBITDA in 2025 and a similar amount in 2026.

Thumbnail shows polyurethane foam. Image by Shutterstock.