The Woodlands, Texas – MDI levels look set to stay tight well into this year, according to senior Huntsman executives who were speaking to analysts. The company’s new splitter, due on stream in H2, is sold out before it starts operation.
Huntsman: MDI set to remain tight
CEO Peter Huntsman told the meeting that profitability not capacity is his company's aim. He said: 'The MDI industry will be growing at 5 or 6% globally, I don't have a problem with us being essentially sold out. We have plenty of MDI I think in the world. Huntsman needs to have better MDI, better margins, low costs and be able to take a great business and make it even better.’
Utilisation rates are unusually high in the US, particularly when compared with the utilisation in Europe where, he said, the percentage utilisation was in the mid-80s. He said: '[It is] probably 110-120% in the Americas, and Asia is a little bit less than Europe.’
Tony Hankins, vice president of the polyurethanes business, said: 'The inventory level is as low as it's ever been in MDI. We see continued strong demand in North America, I think that our customers are running on low inventory as well. We're flat out, we can't run any harder than we're running now. In Huntsman Building Solutions, we have an eight-week backlog in orders, so we can sell every molecule we make.'
The company confirmed that it expects the MDI splitter in Geismar to be mechanically complete ,and to be on stream in the second half of the year. It is expected to contribute $45m/year to EBITDA.