Adjusted EBITDA was up 1% from 2017 to 2018 and reached $247m in the third quarter of 2018.
Ceo Peter Huntsman took part in a conference call with US financial analysts. He said: 'earlier this year we pointed out that we had a $40m short-term spike in margins in the third quarter of last year. We estimate that perhaps we have $15m of this spike remaining in Q3 of this year. We do not expect any of these spike margins in the fourth quarter'.
The ceo added: 'We have absorbed an additional $50m impact from our unplanned outage in Rotterdam, Netherlands MDI facility'.
He said this was caused by a supplier. He also added that in the third quarter: 'We have absorbed about $50m of feedstock price increases and benefitted by about $20m from the operation of our recent expansion in China.'
Volumes in the US rose 17% in comparison with quarter three 2017 and 6% of this came from the Demilec acquisition.
He added that US customers are benefitting from the plant start up in China because material Huntsman makes in the US can now stay there, helping the business there to grow.
Peter Huntsman was keen to remind investors of his company's strategy of moving into higher-added-value downstream products. He said that this was important because future declines in MDI pricing will not affect profitability too badly.
'Our global exposure to component pricing is contained to less than 30%, said Peter Huntsman. This is because of the company's entry into downstream markets.
'We will be a bit more exposed to the component market in China', he said, 'We will transition this volume over time as we have done in European and Americas'.
Downstream, he explained, margins were unchanged between the quarters. This is because the company had been able to recoup raw material price rises.
'We continue to see solid growth in our downstream differentiated and formulated businesses. We saw a 6% year-over-year growth in volumes in our differentiated business.'
He said that his firm estimates MDI demand to be growing at around 6% or 400 kT/year indefinitely. If all the expansions and new capacity happens as planned by 2022, capacity will be growing at around 5%/year, Peter Huntsman added.
Sean Douglass, is Huntsman's cfo. He said his firm plans to use all the polymeric MDI it makes in the US in its downstream businesses.
'We're always going to have to make polymeric MDI,' he said. 'Our plan is to take it downstream through acquisitions like Demilec and turn component commodities into high value.'