UpdateCelanese chief calls fourth quarter 'very chilly'

03 February 2009 20:19  [Source: ICIS news]

(Adds David Weidman statements throughout)

HOUSTON (ICIS news)--Celanese chief executive David Weidman on Tuesday characterised his company's fourth quarter as "very chilly" as the global recession seemed to freeze demand everywhere.

"There was huge destocking in that space," Weidman said in an earnings conference call. "It was very chilly in the fourth quarter."

The freeze in the September-to-December period led the Dallas-based company to post a quarterly loss of $159m (€124m), compared with a profit of $214m during the same period last year.

Celanese's full-year profit of $278m represented a 34% decline from $426m earned in 2007.

Weidman noted that historically weak market conditions had brought about a huge change for the company late in the year, coupled with an unprecedented inventory destocking by customers.

The destocking also affected Celanese's big bet on acetic acid production in China, Weidman said.

In April 2008, Weidman said he expected acetic acid pricing in China to stay in the $600-$650/tonne range for at least the next year and possibly last through 2010, compared with what he termed traditional levels in the $500-$550/tonne range.  

Celanese's current pricing for acetic acid produced in China is in the range of $350-400/tonne, Weidman said.

US Gulf acetic acid contract prices have dropped almost 30% since April 2008, currently in a range of $500-600/tonne during the week ended 3 February, according to global chemical intelligence service ICIS pricing.

Weidman said he expected destocking in China and throughout the world to be played out by the end of 2009, adding he did not expect a short-term recovery in the global economic picture.

"We would expect volumes to remain under pressure in 2009, even with the easing of inventory destocking," Weidman said.

($1 = €0.78)

For more on acetic acid, visit ICIS chemical intelligence
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By: Lane Kelley
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