US Celanese CEO expects little improvement in world economy

28 July 2009 18:56  [Source: ICIS news]

HOUSTON (ICIS news)--At best, the world economy will improve little during the rest of the year, Celanese CEO David Weidman said on Tuesday.

"We're not seeing signs of a widespread strong recovery," Weidman said in a conference call, noting that global consumption and demand for its products was down, and acetic acid prices in China were at historical lows.

"We expect the economic environment to remain challenging during the second half of 2009," he added.

Weidman said acetic acid prices in China right now are $350-$400/tonne (€245-280/tonne) and that he expects those values to hold for the near future.

Such prices are well below the $600-$650/tonne prices that Celanese reported in the spring of 2008, but Weidman said the company has weathered "incredibly challenging" times since then.

The company also has benefitted from a global acetic acid utilisation rate of 80%, he said.

Celanese continues to see its future in China, Weidman added. "China provides the greatest opportunity for near- and long-term growth," he said.

Weidman said there had been modest improvement in Celanese's acetyl business in Europe and the Americas.

Celanese has proposed raising prices on acetic acid and other materials recently, with a proposal to raise list and off-list prices for acetic acid by 2.5 cents/lb ($55/tonne) effective in mid July in the US, Canada and Mexico, and by $50/tonne in central and South America.

Second-quarter earnings for the US acetyls producer fell 22% to $104m, down from $134m in the same period last year, the company said.

Weidman said he thought global demand and consumption would pick up sometime in 2010 and into 2011.

"If history holds, this is temporary and not permanent," he said.

Celanese's stock has fallen from a 52-week high of $40.15 to $24.50 in mid-morning trading.

But the NYSE-traded shares have shot up spectacularly since the stock market plunge of late last year, when Celanese shares hit a low of $5.71 in late November.

US Gulf acetic acid export prices now range $480-$550/tonne FOB (free on board), according to global chemical market intelligence service ICIS pricing.

($1 = €0.70)

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