Huntsman Europe FM on MDI products costs it $25m in Q2

31 July 2013 18:23  [Source: ICIS news]

HOUSTON (ICIS)--Huntsman's force majeure declaration on methyl di-p-phenylene isocyanate (MDI) products in Europe cost the company $25m (€19m) in Q2 earnings before interest, tax, depreciation and amortisation (EBITDA), the CEO said on Wednesday.

Huntsman made the declaration because of a lack of raw materials and offtake from the company's MDI plant in the Netherlands, said Peter Huntsman, CEO.

He made his comments during an earnings conference call.

Although the plant is now running at full rates, Huntsman expects a further $10m hit in Q3 EBITDA because production is still catching up with demand.

In April, Huntsman declared force majeure on pure MDI and pure MDI-based variants. 

Huntsman’s two MDI units at Rozenburg, the Netherlands, came back on line in early May and were running steadily, following the resolution of upstream and downstream limitations.

However, a technical difficulty affected output at one of the units at the end of May. This, along with already low stock levels, led to Huntsman extending the force majeure to standard MDI and associated variants in June.

A company source said early in July that the company lifted the force majeure on standard crude MDI and associated crude MDI variants from its Rozenburg site.

Huntsman’s force majeure on pure MDI and pure MDI-based remained in place, although it was expected to be lifted soon, the source said at the time.

Additional reporting by Heidi Finch

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($1 = €0.75)

By: Al Greenwood
+1 713 525 2645

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