HOUSTON (ICIS)–Huntsman sees “no reason to panic, nor to be overly optimistic” as it enters Q3, CEO Peter Huntsman told analysts during the US-based chemical producer’s Q2 earnings call on Friday. Volatility from tariffs US housing expected to improve China may act on overcapacities Dividend payments to continue Supply chains were “pretty thin right now” as companies keep inventories low on the expectation that energy costs will be coming down, Huntsman said. “People are ordering just what they need for the next 30 days or so,” he said. “Right now, I am not seeing a pick-up [in orders] that would give me a great deal of optimism, conversely I am not seeing a big drop-off that would give me pessimism,” he said. TARIFF UNCERTAINTIES A big issue for Huntsman is the volatility caused by the unpredictability of the tariff policies, he said. The company could live with crude oil at $100/barrel, if that was the new normal, the CEO said. However, “what is very difficult is when you have a market that goes from $100 to $30 to $100” per barrel, “and you are dealing with massive working capital changes, that’s not enlightened trade policy”, he said. Huntsman, for its part, was not moving much product overseas and trade did not impact it, “all that much”, he said. Likewise, most of Huntsman’s raw materials are supplied within the region where the company produces, “and we don’t hear a lot of noise from our raw material suppliers”, he said. However, the situation is different for the company’s customers. Customers in auto, aerospace or construction were much more exposed to tariffs and trade,  Huntsman said, adding, “The further downstream you go, the greater volatility there is”. CAPITAL SPENDING AND RESTRUCTURING In the current environment, Huntsman will “continue to be extremely prudent” about spending capital beyond the requirements of spending on safety, maintenance and reliability, he said. “We remain focused on our cost structure and making sure that our business expenses are in line with market conditions and our cash generation,” he said. The company will also keep reviewing its asset portfolio as it cannot be, “sitting around, waiting for things to get better”, the CEO said. Huntsman’s global restructuring programs are expected to deliver approximately $100 million of annualized run rate savings by the end of 2026. The full program includes the closure of seven sites, including three downstream polyurethane (PU) facilities in Europe and the Middle East, one plant in Canada, one site in the US, a sales and administrative office in Germany, and the closure of a maleic anhydride (MA) facility in Germany. However, Huntsman has no plans to shut down its methylene diphenyl diisocyanate (MDI) plant in Europe, the CEO said. The company’s European MDI production was among the most competitive in the region and would be so for years to come, he said. “If we get to the point where we can’t justify the operations of our European [MDI] facility, I think there will probably be other facilities that come to that conclusion before we do,” he said. While competitors may consider plant closures, it was hard and expensive to shut down a chemical facility in Europe, where companies and plants usually operate interdependently, with one plant relying on the supplies of another, he added. Looking beyond Q3, the company expects an improvement in demand from the construction end market, and “perhaps some gradual change” as China was moving to focus on its overcapacities, he said. CONSTRUCTION MARKETS The current problems in the “incredibly anemic” North American housing market were largely around interest rates and affordability, “and I believe that is something that will be addressed, can be addressed,” Huntsman said. A “meaningful change” in interest rates could result in “quite a rapid recovery” in the North American housing market and take Huntsman to “normalized levels of MDI,” the CEO said. Potential home buyers wanted to commit to what is usually the largest purchase in their lifetime, but the high interest rates and uncertainties were holding them back, he said. “I am very hopeful that those markets will recover, and we will be in a much stronger position next year,” he said. Meanwhile, China was still suffering from the “implosion” of housing values, affecting consumer confidence there, he said. However, longer-term China would recover as it was a “very competitive place”, with a well-educated workforce, he said. In Q2, construction represented about 55% of Huntsman’s global sales volumes and about 50% of revenue. By region, about 40% of total construction revenue came from North American sales, mostly into residential housing; 25-30% from Europe, driven by commercial sales; and about 20% from Asia, where the majority of sales went into infrastructure and commercial markets. MDI While there was little market information on it, Huntsman estimates that the global MDI industry is operating at around 80-85% of capacity, Huntsman said. MDI utilization rates are influenced by the unusual trade patterns amid the tariff uncertainties, he said. MDI that was coming from China to the US was being scaled back, remained in China, or went into other markets, he said. There were even MDI exports from Europe to the US, he said. “For some reason, we have seen [MDI] imports coming into the US, from Europe, of all places, increase”, he said. “I can’t imagine in my wildest dreams why somebody would do that”, given the high cost of European MDI and the US tariffs, he said, adding: “It’s being done, that’s the market.” China is Huntsman’s most profitable market for MDI, and “our business in China is performing quite well”, compared with North America and Europe, he said. “We run our plant in China at pretty high rates because we have got good market demand there” as that country’s automotive sector continues to perform well, he noted. OVERCAPACITY While China’s government seems to be moving to address the overcapacities in its chemicals and other industries, it was not likely to shut down MDI plants, Huntsman said. China’s MDI plants had good technology and scale, and they were vertically integrated, he said. Those plants were very competitive, compared with older, sub-scale MDI plants in Europe that were struggling with supply chain costs, he said. Huntsman, for its part, does not plan to build a new MDI facility, even with the US tariff protection, the CEO noted. “I personally believe that there is more than enough MDI in the world today,” he said. DIVIDENDS The company expects to maintain its quarterly dividend at $0.25/share, despite recording a fourth consecutive net loss in Q2 2025. “For the time being, we feel comfortable where we are”, with regard to dividend payments and cash generation, Huntsman said. However, if paying dividends turns out to be “materially harmful” to Huntsman’s balance sheet the company may cut or halt the dividend, he indicated. If construction markets should deteriorate further next year or the global economy slips into recession, Huntsman’s board would make “appropriate decisions” about dividends, he added. In related news, Dow has cut its dividend because of the downturn in the chemical industry. Q2 NET LOSS Huntsman swung to a Q2 net loss amid weak demand, especially in the construction market, lower selling prices and volumes, as well as $124 million in restructuring and plant closing costs. Year on year, sales and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell in all of Huntsman’s business segments; Polyurethanes; Performance Products; and Advanced Materials. The gross profit and gross profit margin fell as sales fell at a faster rate than cost of goods sold. Three months ended 30 June: (in million US$) Q2 2025 Q2 2024  +/- % Sales                              1,458                                1,574 -7.4% Cost of goods sold                              1,276                                1,331 -4.1% Gross profit                                 182                                   243 -25.1% Total operating expenses                                 302                                   209 44.5% Net income /(loss)                                (158)                                     22 N/A adjusted EBITDA                                    74                                   131 -43.5% Please also visit: US tariffs, policy – impact on chemicals and energy Macroeconomics: Impact on chemicals Thumbnail image: Huntsman’s CEO and president, Peter Huntsman

MADRID (ICIS)–Mexico’s chemicals sources expressed mixed reactions to the US decision to postpone 30% tariffs for 90 days, with some players highlighting continued market uncertainty and underlying demand weakness affecting operations. One chemicals industry source said that the delay merely postpones rather than resolves trade tensions affecting market confidence. “This is nothing more than postponing the matter for 90 more days, continuing the uncertainty. Ultimately, I don’t think the US will implement any of the big tariffs rates they are announcing or threatening with,” said one source. “The fact that they’re kicking the ball around creates a lot of uncertainty and, in general it continues to greatly affect the market.” Other sources, however, were unfazed. One distributor said that, “no-one was talking about this”, in the market as of Friday morning, local time. Mexico’s chemicals trade group Aniq and the country’s sole polyethylene (PE) producer Braskem Idesa did not respond to a request for comment at the time of writing. Beyond tariff concerns, chemicals markets in Mexico remain in the doldrums, with the polypropylene (PP) market especially challenged, as sluggish economic conditions are affecting consumer demand across North America. Mexico’s manufacturing has the US industry as its main end market. In both countries, manufacturing activity remains in the doldrums, with Mexico’s having contracted now for more than 12 months in a row. Earlier on Friday, S&P Global said Mexico’s manufacturing PMI had risen slightly from June, although it remained in contraction territory. The 90-day reprieve provides temporary relief for Mexican exporters while the US administration considers its approach to bilateral trade relations. Thumbnail image: Mexican trucks cross the border into the US at Laredo, Texas (Image source: US Council on Foreign Relations)

LONDON (ICIS)–Senior editor for recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Bale prices drop in eastern Europe and Italy Market under downward pressure for August Holiday season absences and planned maintenance reduce trade

LONDON (ICIS)–Annual inflation in the eurozone remained stable in July from the previous month at the European Central Bank’s (ECB’s) target of 2.0%. Food, alcohol and tobacco are expected to be the biggest drivers of overall inflation for July, followed by services, non-energy industrial goods and energy, statistics agency Eurostat said in a flash estimate, which is subject to revision. The ECB held interest rates at its latest meeting in July as inflation settled at its target level. Europe’s economy this year has been influenced by uncertainty over the impact of US trade tariffs on the EU, although a deal has now been agreed between Donald Trump and European Commission president Ursula von der Leyen. Preliminary economic data from Eurostat has shown that economic growth slowed in Q2 from the previous quarter, with GDP growing by just 0.1%.

SINGAPORE (ICIS)–US President Donald Trump signed on 31 July an executive order modifying the US tariff rates for several countries which will take effect on 7 August. The new tariffs range from a baseline rate of 10% to 41%, with the rates for Brazil scaled back to 10% from 50% previously, according to Annex I of the White House announcement. Trump has also added a 40% transshipment tariff to all countries. Implementation was pushed back by a week from the initial schedule of 1 August. US tariffs for Thailand, Cambodia, Indonesia, the Philippines and Malaysia were set at 19%, while a higher rate of 20% apply to Vietnam and Taiwan. Both Thailand and Cambodia received lowered rates after they agreed to a ceasefire relating to a border dispute. For Singapore, which was not listed among countries which have a sizeable trade surplus with the US, a 10% baseline tariff applies. For Myanmar and Laos, the US tariffs were set at 40%. Meanwhile, US tariffs for Canada were increased to 35% from 25% previously on “continued inaction and retaliation”, the White House said. In late July, the EU, Vietnam, Indonesia, the Philippines, Japan and South Korea had struck trade deals with the US. Pakistan was the latest country to have struck a trade deal with the US, lowering the US tariffs on Pakistani goods entering the US to 19% from 29% previously. For India, which has yet to strike a deal with the US, tariffs were set at 25%. With China, negotiations with the US are still ongoing, with the 90-day pause on US reciprocal tariffs set to expire on 12 August. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

HOUSTON (ICIS)–US President Donald Trump on Thursday extended the deadline for a trade deal with Mexico by 90 days, leaving in place the current agreement, according to a post on social media. Trump said Mexico will continue to pay a 25% fentanyl tariff, a 25% tariff on cars, and a 50% tariff on steel, aluminium and copper. “Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many,” Trump wrote in the post. Trump said the US will continue negotiating with Mexico over the next 90 days, “with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer”. Mexico President Claudia Sheinbaum said in a social media post that the call with Trump was, “very good”. “We avoided the tariff increase announced for tomorrow and gained 90 days to build a long-term agreement through dialog,” Sheinbaum wrote. The US has proposed a 30% tariff on Mexican imports, applicable to imports that do not comply with the USMCA, a regional trade agreement. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

MADRID (ICIS)–Brazil’s central bank has maintained the benchmark Selic rate at 15.00% but the decision was “overshadowed” by US President Donald Trump’s executive order to implement 50% tariffs on Brazilian imports from 6 August. Although the decision includes significant exemptions which will limit the potential economic damage, the tariffs are expected to slow the Brazilian economy further. The Banco Central do Brasil (BCB)’s monetary policy committee (Copom) said it left the Selic unchanged following a more adverse and uncertain global environment in the wake of tariff announcements which affected financial conditions worldwide. “The global environment is more adverse and uncertain due to the economic policy and economic outlook in the US, mainly regarding its trade and fiscal policies and their effects,” said Copom. “[This scenario] requires particular caution from emerging market economies amid heightened geopolitical tensions.” Trump’s executive order earlier this week confirmed that 50% tariffs will take effect on 1 August 1 although, contrary to expectations, significant exemptions were added to cover some key exports from Brazil including civilian aircraft, orange juice, and most mining products. “By our estimates, the exemptions cover almost half of Brazil’s exports to the US (as most agriculturals are not exempt). This suggests that the actual hit to GDP will be smaller [than initially expected],” Capital Economics stated. Earlier this week, US chemicals trade group, the American Chemistry Council (ACC), said in an interview with ICIS that tariffs on Brazilian goods, and the potential for retaliation from Brazil, was a major concern for the sector. For its part, Brazil’s chemicals trade group Abiquim confirmed to ICIS that after Trump’s tariffs announcement, Brazilian chemicals producers had seen export orders cancelations for specific resins and compounds used in fertilizer production. SLOWDOWNCopom said late on Wednesday that Brazil’s domestic economic indicators are showing economic activity moderation, as expected, although the labor market remains strong. However, US tariffs are still a concern. “The committee has been closely monitoring the announcements on tariffs by the US to Brazil, which reinforces its cautious stance in a scenario of heightened uncertainty. Moreover, it continues to monitor how the developments on the fiscal side impact monetary policy and financial assets,” it said. “The current scenario continues to be marked by deanchored inflation expectations, high inflation projections, resilience on economic activity and labor market pressures.” Headline inflation and underlying measures remain above the inflation target. Inflation expectations for 2025 and 2026 from a focus survey remain above target at 5.1% and 4.4% respectively. Copom’s projection for Q1 2027 stands at 3.4%. “The current scenario continues to be marked by de-anchored inflation expectations, high inflation projections, resilience on economic activity and labor market pressures,” said Copom. “Ensuring the convergence of inflation to the target in an environment with de-anchored expectations requires a significantly contractionary monetary policy for a very prolonged period.” TARIFFS HIT TO GDPCapital Economics previously estimated that tariffs would subtract only 0.3-0.5% from GDP over three years, with exemptions lessening the impact further. The less-damaging-than-expected US tariffs on Brazilian goods cheered the financial markets on Thursday, with the Sao Paulo Bovespa stock exchange up nearly 1% in morning trading. “It’s clear that Brazil has been singled out by President Trump and that an agreement to delay or remove the tariffs entirely is looking unlikely. The justifications for the US tariffs are highly political in nature and include Trump’s concerns about the trial of former president [Jair] Bolsonaro,” said Capital Economics. “This may make it hard to appease the US, particularly with trade concessions. Comments from President Lula suggest that he is hesitant to back down and that Brazilian policymakers are against retaliation.” Front page picture: Brazil’s Santos Port in Sao Paulo state and Latin America’s largest Source: Port of Santos authority

BARCELONA (ICIS)–Pressure caused by global overcapacity plus the impact of the tariff war in shifting supply chains mean that more consolidation is required to create strong, global chemical industry leaders, according to the CEO of Austria’s OMV. OMV’s merger of its polyolefins business, Borealis, with Adnoc’s Borouge operations and the addition of Canada’s NOVA Chemicals will create a leader capable of adjusting its manufacturing footprint and supply networks to deal with increasing global competition, according to Alfred Stern. The CEO said the merged group, to be known as Borouge Group International, will have around 70% of its production in feedstock-advantaged regions and one of the industry’s highest proportions of advantaged, premium products. Speaking to ICIS on the sidelines of the company’s second-quarter financial results conference on 31 July, he said the merged group: “Will have a leading suite of technologies [that] will allow us to extract significant synergies of at least $500 million. It will have a truly global footprint, allowing us to supply our customers across the globe and optimise our network.” The deal – which the companies say will create the world’s fourth largest polyolefins player with more than $60 billion in sales – should be closed in the first quarter of 2026 subject to more regulatory clearances. It has already been passed by the EU and China. The merged group will be headquartered in Austria. Stern pointed out that supply chains have shifted in Asia in particular, with the addition of significant capacities over the years, especially in China. He added: “The second piece is the tariff discussions and all these things will change the shape of the industry. This is driving the need for consolidation – look at Europe where significant capacity closures have already happened, and in China they previously said any plant older than 30 years [must close] and now they have reduced that to 20 years, which will take out capacity.” The CEO said that the 1.4 million tonnes/year Borouge 4 project will initially be owned by OMV and Adnoc before being added later to Borouge Group International. Interview by Will Beacham Thumbnail photo: Borealis’ polypropylene plant 5 at its Schwechat, Austria, complex (Source: Borealis)

SINGAPORE (ICIS)–Wacker Chemie recorded a Q2 net loss of €19.2 million year on year due to weak demand amid “trade policy uncertainties”, the German chemicals firm said on Thursday. in € million Q2 2025 Q2 2024 % Change H1 2025 H1 2024 % Change Sales 1,412.9 1,467.9 -3.7 2,891.2 2,957.4 -2.2 EBITDA 114.3 154.7 -26.1 233.6 315.2 -25.9 EBIT -11.3 37.6     – -18.7 89.0     – Net income -19.2 34.8     – -22.6 83.2     – Sales declined in the first half of the year primarily as a result of lower volumes, particularly in the Polysilicon division, Wacker said. The company’s Q2 EBITDA margin stood at 8.1%, down from 10.5% in the second quarter of 2024. “Customer demand in numerous segments remained weak in Q2. Trade policy uncertainties are hampering the economy,” Wacker President and CEO Christian Hartel said in a statement. “There are no signs of a recovery so far, which is why we revised our outlook for 2025 on 18 July,” Hartel added. The company now expects sales in the range of €5.5 billion-5.9 billion for this year, down from €6.1 billion-6.4 billion in its previous forecast. EBITDA for the full year is expected to be between €500 million and €700 million, down from €700 million-900 million.