Huntsman: Cheap benzene supports margins

OREANDA-NEWS. Lower benzene costs should help offset lower margins for gasoline blendstocks, Huntsman chief executive Peter Huntsman told analysts on the company's quarterly earnings call.

The Woodlands, Texas-based petrochemical manufacturer buys approximately 200mn gallons of benzene annually.

"As the cost of oil has decreased, so has the cost of benzene, and as we have indicated, in many of our end markets we provide differentiated customer-specific products, and as such we expect a near-term margin expansion from the decline in benzene," Huntsman said. "In addition, PO/MTBE pricing is highly correlated to the cost of premium gasoline, which has decreased. Lower PO/MTBE margins will partially offset the benefit of lower benzene costs."

Huntsman took its Port Neches, Texas PO/MTBE unit offline for maintenance 26 January; that unit will be offline for roughly 60 days, executives said.

Overall Huntsman reported a fourth quarter loss of \\$32mn, down from a \\$41mn profit the year before, as lower PO/MTBE selling prices and a stronger US dollar versus European currencies caused its polyurethane division revenues to fall 2pc to \\$1.2bn in the fourth quarter. MDI urethanes sales increased in North America and Asia but were flat in Europe.

Huntman's performance products, advanced materials and textile effects segments also saw a decrease in profits on lower sales volumes. The company's pigments and additives segment saw a decline as well due to weaker demand in Europe, Huntsman's largest market. The company took down its Calais, France facility on February 12, with an estimated start-up in summer 2015.