US Huntsman expects relief from higher raw-material prices

Source: ICIS News


HOUSTON (ICIS)--The recent run-up in prices for Huntsman's raw materials are being caused mainly by higher oil prices and stricter environmental standards in Asia, both of which are short-term trends, the CEO of Huntsman said on Tuesday.

OPEC has been a little more disciplined in the past in terms of limiting production, said Peter Huntsman, CEO. He made his comments during an earnings conference call.

However, based on the trends Huntsman is seeing in its oilfield-services businesses, a new wave of crude capacity is coming into the market in the next quarter or two.

"I think crude-oil prices, probably, in my opinion, have probably peaked, stabilised and maybe even you're probably going to see some erosion in that pricing in the next couple of quarters," Huntsman said.

The other source of raw-material pricing pressure is largely coming from Asia, and Huntsman is experiencing this in its advanced-materials and textile-effects divisions, he said. These are caused largely by stricter environmental policies being adopted by China, India and throughout southeast Asia.

"I don't like the short-term volatility, but I think, longer term, these countries and regions are implementing the right decision by enforcing these tougher environmental standards," Huntsman said.

Producers will either shut down or make the investments necessary to comply with the stricter regulations, he said.