Baltimore, Maryland — “The NAFTA region continued to grow in 2016 compared to 2015 the growth rate was still positive but not as high as it has been,” said Steve Burns, vice president Americas, of Huntsman’s polyurethane division. Burns was speaking on the side-lines of the CPI meeting here in October.
Nafta PU growth continues in 2016: Huntsman's Burns
He continued: “It is maybe starting to hit a plateau. But I think this year is going to be strong when they add up all the production numbers. It’ll be one of the strongest on record. Interest rates are low, so financing costs are down, and our employment rate is gradually rising.”
“The automotive sector has come right the way back. It is healthy now as it was in 2000. On the housing side we’re still down at the 1.1- 1.2 m housing starts a year compared to 1.5 m at height.”
Burns is upbeat about the prospects in construction citing data which shows “the growth of insulation is exceeding that of other components in commercial roofing.” He continued: “People are increasing the amount of insulation they using the roof when this is replaced.”
Replacement roofing accounts for between 70-75% of roofing sales in the commercial sector, Burns suggested.
Huntsman is also seeing good growth in insulated metal panels, he added. That market is “still doing relatively well in South America,” he said. This is because of investments in the cold chain to keep food and perishable items fresh.
“Spray foam,” he explains, “is a residential story, and it’s fighting fibreglass and taking market share. It had a good year as well,” Burns said. Spray foam tends to be used in the higher end housing starts, he added.
Materials supply and demand is “pretty balanced in the US,” he said, with some imports from Europe and China. He added that the company’s expansion in Geismar, Louisana, “is serving us well because it’s giving us material for growth.” But, once the second MDI plant in China is built that will give Huntsman “material to satisfy a growth conditions in North America.”
In 2015 Huntsman bought Italian materials and machinery company Tecnoelastomeri. “We are really happy to have bought that business into the fold,” Burns said. Huntsman has reorganised and strengthened the management team, he said. The goal is to “grow that business in North America. We think there’s some potential, they have great products.”
Huntsman joined the US Polyurethane Manufacturers’ Association (PMA) in 2015, and exhibited for the first time at the organisation’s recent meeting in Las Vegas, Nevada, where it formally announced its presence with Tecnoelastomeri. PMA member companies typically process polyurethane elastomers which is often based on TDI and Mboca.
“Mboca is coming under pressure, and we think that the Tecnoelastomeri products might be interesting to people looking to get away from TDI and Mboca solutions.” The Tecnoelastomeri products are based around MDI, he explained.
Looking south of the US, Burns said: “Mexico has done fairly well. The automotive business has been drifting southward into Mexico and the business there keeps growing. The US Canada and Mexico almost function as one market. South America is quite different.
“Automotive continues to be a really strong market for us in the NAFTA region, is actually down quite a bit in Latin America, mainly driven, I think, by Brazil.”
The Brazil Olympics may have generated more activity, but it was swamped by the decline in the economy and the impeachment of the president. “I have fairly limited expectations next year for Brazil, unfortunately. I hope are bottoming out and some improvement but it looks like it might be a long road back from Brazil and Venezuela is a similar situation.
Things are “a little better in Colombia, Chile, Peru and Argentina has surprises. They have elected a new government that is more pro-business and more open. It’s not all bad news in South America but is quite different to North America,” Burns concluded.