US Celanese sees auto improvement beginning in Q3

HOUSTON (ICIS)—US auto production should begin to pick up in the back half of this year as supply of resin and microchips improves, US Celanese CEO Lori Ryerkerk said Friday.

Vehicle production has been hampered this year particularly because of a shortage of microchips, as the coronavirus pandemic caused a spike in demand for computers and other products that rely on the chips.

Both the US and Germany saw a large drop-off in auto production, and those are two of the company’s largest markets for engineered materials, Ryerkerk said during the company’s Q2 earnings call.

The amount of material that Celanese sells to the auto sector fell by 8% quarter on quarter but Ryerkerk said that the decline was smaller than the mid-teen drop in automobile build rates in North America and Germany.

During the quarter, there were also industry-wide shortages of several resins, including polybutylene terephthalate (PBT) and nylon.

Because of the chip shortage, automakers have focused on producing higher-end models, a segment in which Celanese specialises.

Auto production should begin to increase in Q3 and additionally in Q4, she said.

Although the company normally sees a decline in its engineered materials business in Q4, that will not be the case this year. She expects auto production to ramp up as more supply of raw materials and chips becomes available.

Meanwhile, Celanese is focusing more on the electric vehicle (EV) segment of the auto industry. Most of new vehicle sales in the European Union are now EVs, Ryerkerk noted.

EVs have been a focus for Celanese the past two years because it believes more opportunities exist for market share growth in electric vehicles than in traditional ones.

Thumbnail image shows an automobile. Photo by Xinhua/Shutterstock