US Celanese sees auto sector flat next year as chip shortage will persist

HOUSTON (ICIS)–Auto industry demand for commodities will be flat next year compared to 2021 due to the ongoing shortage of microprocessor chips, US Celanese Chairman and CEO Lori Ryerker said during the company’s Q3 earnings call Friday.

But Celanese anticipates 15% growth in the auto sector next year due to its increased focus on elective vehicles and the production of lithium-ion battery separators.

“We expect auto builds to be flat year on year if you look at the industry and globally,” she said during the earnings call. “That changes region to region – Asia is doing a bit better, Europe a bit worse and the US in between them.”

That is a growing consensus among many in the industry, she said.

“While we all hoped that the chip shortage was going to improve, most things you read now from knowledgeable people say it will probably be the end of next year before it improves.”

The computer chip shortage is global and has been affecting vehicle production both in the US and worldwide for months. Semiconductor chips are vital to production as they are used to control the engine, antilock brakes, power steering, fuel-monitoring systems as well as heating and air conditioning.

Celanese began diversifying its portfolio toward electric vehicles, batteries and some medical applications several years ago.

The company’s Engineered Materials segment saw volume decline by 2% in Q3 from Q2 as the business tried to offset approximately 8,000 tonnes of lost production due to sourcing constraints and further declines in automotive build rates globally amid the semiconductor shortage.

The company has made a “rapid pivot” from traditional auto to focus more on high-volume, high-margin projects, Ryerker said.

About 10-15% of its Engineered Materials portfolio is now designated to electric vehicles.

The company expects continued growth in medical. Some medical applications were stagnant in the quarter, but the company saw growth in products such as wearable devices and the use of inhalers in Asia.