The Woodlands, Texas — MDI urethane margins expanded in Q4 2015 compared with the same period in 2014, and this will continue into the 2016 financial year, Peter Huntsman, ceo Huntsman Corporation told analysts in a conference call on 11 February 2016.
2016 to be more profitable for MDI: Huntsman
"All in, EBITDA [earnings before interest, taxation, interest, depreciation and amortisation] for our Polyurethanes business will improve in 2016," Peter Huntsman said. The firm will "be able to capture some of the margin on falling raw material prices," he added. This will be due to: "a combination of lower raw materials costs... coupled with economic growth, " Huntsman said. He continued that "economic vitality will determine how well we're able to keep that expanded margin."
In the fourth quarter "our differentiated MDI products delivered approximately 20% EBITDA margins," he said, adding "the market for undifferentiated MDI products "are challenging" so the firm continues to aim for "greater differentiation ... approximately, 70% of our 2016 capital expenditures are targeted on our downstream differentiated MDI business," Peter Huntsman said.
Huntsman "won't repeat the significant maintenance outage we had in the first half of 2015," he said.
Peter Huntsman put operating rates at around "mid to upper 80%s. Europe, I think, is probably around 90%, the US is probably in the low to mid-90%s, and China would be in, I would suspect, in the mid to upper 70 percentile."
He continued: "The further downstream you go, the more specialty you go, and the less impact capacity utilisation is going to have on margins."