Huntsman CEO cautious about macro-economy, oil prices

05 May 2011 17:18  [Source: ICIS news]

HOUSTON (ICIS)--Huntsman is wary of high oil prices, unemployment and the fragility of the US and European economic recovery, the CEO of the US chemical producer said on Thursday.

“As I look at the industry longer term, I continue to express caution regarding the macro-economic conditions of high oil prices, stubbornly high unemployment rates, and the fragility of the US and European economic recovery,” Peter Huntsman said during a conference call on the company’s first-quarter results.

However, at the same time Huntsman remains confident about its prospects, the CEO said. He added that the company continued to run its plants at high operating rates amid strong demand, particularly from Asia, and is benefiting from access to competitive feedstocks in North America.

“At a time when crude oil appears to be moving toward historical highs, we are benefiting by having nearly 50% of our raw material purchases North American-based,” he said.

“Our integrated natural gas-based manufacturing will continue to allow us to access competitive North American feedstock,” the CEO added.

Meanwhile, the company has not seen “anything that is material at this time” to indicate high oil prices were triggering demand destruction or product substitution in the market, Huntsman said. However, the CEO added that in its textile effects business the company had noted rising demand for polyester because of record prices for cotton.

At the same time, Huntsman said the company continued to see “robust growth” and strong demand for its products in Asia, despite China tightening monetary policies to curb inflation.

“Across the board, as we look at our Asian capacities – amines, polyurethanes (PU), titanium dioxide – we are essentially sold out in Asia,” he said.

Peter Huntsman also said that while the company continued to be interested in smaller, bolt-on acquisitions, it would not be very active in the mergers and acquisition market. Rather, he said, Huntsman is focused on paying off debt and strengthening its balance sheet.

For more on Huntsman and other producers, visit ICIS company intelligence
Read Paul Hodges’ Chemicals and the Economy blog

By: Stefan Baumgarten
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