Huntsman (HUN) 4 Nov 222022 Q3 Earnings call transcript

Hello and welcome to the Huntsman Corporation Third Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Ivan Marcuse, Vice President, Investor Relations. Please go ahead, Ivan.

Thank you, Kevin. quarter call. third Huntsman's to 'XX earnings Welcome

we Joining Chairman, Executive CEO the 'XX call via market Vice third and for Peter website, Huntsman, today are huntsman.com. opened, the and before to and press This us our quarter CFO. earnings the on President morning, released posted President; our release Phil Lister,

while We on the use which we also posted will a set this of presenting morning slides results. on our website our call

Textile and our business, announcement discontinued for of statements sheet. the now balance a Textile we and the As following treating of are reminder, the operations sale on cash held Effects Effects as on our sale income flow

SEC. the will details be XX-Q within able our the will find You be all relevant that with to filed

may about performance. reflect they uncertainties risks expectations call, such and statements guarantees All future. are the involve projections future the current are our forward-looking And During statements not and expectations, they for we statements. or our while make of

filings for or expectations. You actual on materially statements. projections these review that any more from revising results do to the not cause or factors the our publicly We plan could should forward-looking regarding differ information with updating SEC

to net non-GAAP flow. also such will EBITDA, measures adjusted We refer adjusted income as cash free and financial

now You the measures most which I'll Peter can our call find release directly reconciliations over to financial our turn in to Huntsman. huntsman.com. the website, earnings comparable GAAP has posted to been

joining everyone. for Thank us Welcome, Thank you morning. Ivan. this you,

with declines at for gas States. economic coming XX% China part our half and months was division historical high by and could worse chain due million. in the environment natural inventory Europe but the a about in $XXX and decline demand. the potentially have volatile destocking declined combination to of moving August Let's volumes Europe, caused the remain turn number about throughout EBITDA gas been Europe supply end XX%. In And over for for is the which in Overall, to Slide accounting quarter dramatically United These a third prices higher natural then this falling and get Adjusted large XX% were Polyurethanes of since Americas of X. sales for in clearly at forward, prices recessionary remain the peaking energy levels. in prices. over the high than quarter moderating

for expect high gas and natural future. in and foreseeable prices the planning are Europe volatile We for

been will been aniline lower region have do XX% As to this we gas-related mentioned production to we year versus our on Europe has U.K. our advantage, generate Mainland cost have or natural gas where facilities, prices and of and the of last in impacted our have benefit costs we natural structure cost call, earnings in in Europe. nitrobenzene our Despite our returns. the via lower this the acceptable significantly profitability

having economic around year-over-year. the on the stimulus Improvements situation it activity. government as and zero equity impact earnings as our improve possible in Over a bring policy right positioned Europe, for in conservation energy mandates the be lower China to of region. a growth current the the nonresidential the Europe, term a in to direction margins need overall in the economic in large energy continues to and China well long be drove construction propylene we both and reduce the insulation of Demand oxide get expect We would be to of COVID The business in residential lower world well markets. to our consumption. is economy, lower going outside by the to impacted remain initiatives. solutions as levels do recessionary increased catalyst COVID Lower its and economy beneficiary particular, environment, to

reported earnings a for venture $XX joint approximately $XX in equity million year contributed quarter, ago. the million Our the below

through insulation anticipate patterns of spray early fights rates of We're OSB, will levels higher XXXX HBS, greater we've seen In Reserve slight be year our than the of residential spray margin, our improvement having interest businesses. we versus forward. as X% the furniture and clear foam real inflation XX% earnings The saw is an saw we PO last record fourth as the United seeing construction the in lower Federal a quarter, the of compared in but impact part order foam impact States we in revenues million decline approximately business, increasing to earnings going the quarter. mortgage this on headwind XXXX. a in expect current be Given rapid a deinventory could the $XX clearly rates equity the markets.

result this our closing at suffice further comments forward. polyurethane businesses things. match for adjusted in a and polyurethanes, remarks for going these more MDI in actions X are to in next of be taking term, to near-term short In address least our and make several challenges. expectation environment This we our production months, long-term but continue to out slowing swift As it the I'll demand. costs we've to do taking we say, the will will demand my

side, priority. our On the costs to and will it manage a positive as focus on inventories generation top cash help is our

consolidate in exiting not functions. process are implementing plans current we back-office are and through absorption impact on Moreover, return production regions our certain cost However, the quarter of moving which impact certain will statement. moving to have reduction have on such lower that the lower benzene delay as prices our fixed we of and the And aggressively Brazil. an cost been acceptable continue we include generating income forward positive some the negative discussed last also

platform, volumes automotive again of improved XX%. saw Polyurethanes year-over-year Our

recessionary well have an positioned automotive that and over to the a is we poised recover environment, through business Looking years. coming

we fourth loss. the into Looking Europe a quarter, generate will expect

it destocking continued muted. remain the like expect United looks in economy The China We in States. will

as as result, a demand year pronounced this As will headwinds well be costs. seasonality the all to impacting more much due

for million to below the European market $XX of to and expect here million margins be sit due $XX today, the EBITDA we in quarter XX% As polyurethanes range adjusted to conditions. we fourth

for $XXX the The The million quarter through quarter at second the third in EBITDA Let's Performance Performance strong industry difficult adjusted pressure. is number increased. as in Slide dynamics adjusted Europe margin XX%. the significantly and year. of than which XX% with the turn reported to last challenges volumes China Europe quarter remained higher under more EBITDA being quarter by down X. X% Products became in Products in came Demand maleic

of as were these excellence margins to program part the and even commercial macro Americas market, our pointing with due are challenges, our The last returns have strength industry end However, large that year, attractive we cost over high of to on as able range. effective high long-term in expected deliver dynamics well to we control. been our the the

our Our and goes division. goes into remains maleic lubes business markets, as into American ethylene business anhydride areas in nonresidential business such which our this fuel North construction which and amines best-performing global

capital catalyst semiconductors, Our and to vehicles, insulation the continue forward in investments schedule. polyurethane on serving markets differentiated move chemicals electric

this in we've evaluate division's Products attractive the past, million long to start over assuming benefits macro conditions, expect business seasonally weakest $XX Performance term. a stated strategic The quarter deliver in EBITDA of XXXX typically continue and As stable highly this up fourth grow and business we to the quarter. than in we investments XXXX. more to remains organic these projects is

the demand lower Europe year in above-average U.S. and deinventorying this expect customer will We include in

Performance would we $XX Products with result, be million a a quarter adjusted the As to in million fourth XX% range to margin. expect EBITDA $XX of around

Volumes of acquisitions volumes Improved controls business coatings in We strong cost industrial positioned deliver grow adhesives the coming and the to of a EBITDA improvement well quarter, was our $XX Despite demand adhesive increase and near-term XX% recent slowing adjusted turn in of to year's outperform half reported to the was related million despite demand lower-margin quarter last the to in Materials industrial synergies to due believe our XX%, because we the We several returns headwinds, lower adjusted over economy. in Let's global our during EBITDA. Slide the of markets of Advanced solutions of from products, third industrial the customers. a some business half the of quarter. number is as declined portfolio drove higher-margin solid which X. over our beginning decision continues some commodity deselect to year years. markets. of the at generated

of we quarter saw the Additionally, growth modest versus last in our third year. and automotive aerospace markets

addition the EBITDA from widebody We fully the expect expect CFO, $XX project fourth the and we fourth term, to margins currency We prepandemic headwinds. expected to are back higher. adjusted to and of as Lister. vehicles of coming turn in the businesses, engine continue combustion recover, demand automotive spending. minutes softer our volumes to to million of believe the halfway In expect $XX traditional the aerospace our rates higher and moves to overall industry years do Phil Our a production Aerospace rates the business planes raw I'll With million. over in in the to recover versus quarter. medium improve few that, EV about to range aerospace we levels in its benefit to the quarter other impact to we Like in and over be materials increases material in continue to infrastructure seasonality fundamentals despite headwinds

Peter. you, Thank

or Products as quarter polyurethanes Sequentially, EBITDA at $XXX to the margin respectively. decline leading demand. Turning XX% adjusted of a margins levels XX% European the EBITDA our XXXX. result EBITDA margins breakeven energy QX, The to year-on-year business during XX%. to declined Performance adjusted costs to in declined compared million and by for the an of declined XX% and and EBITDA for $XX Slide EBITDA XX% EBITDA which X. company. Adjusted third million, reduction strong was overall to was or third quarter quarter of remained high XX%, declining adjusted for third in level $XXX Polyurethanes Materials Adjusted Advanced a million the of driven

a the XX% total polyurethanes in volumes Sales European during XX% Americas improved with declined in offsetting of margins as macroeconomic sales gains, particularly higher $XXX construction end $XX Gross the in Our deteriorated, Europe, million by cost Asia, overall. business increase in quarter, X% by million. by Europe conditions year-over-year X%. XX% markets $XXX in and of price of depressed and million margin representing company XX%

per utility MMBtu compared to the indicated most every normalized at prior During raw gas-related movement million than is in production have and doubled $XX equivalent more we $X MDI, levels. Within materials year. to third process, production Europe energy-intensive approximately the costs natural our quarter,

per approximately And impact at are EBITDA. Rotterdam $X production million $X per every the adjusted those million running in levels, We XX%. on rates MMBtu $X is approximately at to

most materials chlorine remain seen increase such to elevated, ammonia, notably in while benzene, raw caustic. continue as the have record prices raw declined part though early of other from Some QX high materials, still prices other and

the gas using On inventory cost As to the With inventory September a considering to for and and August in basis, majority takes average X will normally over impacts, weighted throughout XX% our average slower it when costs out cost higher costs. of approximately see account working weighted of method. reminder, through we sales their in of of costs natural months work a way QX. we Europe continue high

inventory activity. due SG&A remains QX Regarding reduced we XX% QX persistent inventory, optimization high a decline XX% expect with cost environment. further in global under volumes and inflationary control in our by economic to a to align program approximately despite and our lower

renminbi. was exchange $X offset a impact, the approximately with partially result negative $XX of weakening $XX approximately million translation a Chinese as transactional of million of gains of million Foreign of approximately by the impact

to Slide turn X. Let's

on $XXX remains million Our rate of At program cost optimization we and QX, savings. annualized the synergy of of run an track. achieved end

by new of expect of the end by XXXX. meet of to our $XXX million and end or of target million our the initiative, XXXX $XXX savings we European Excluding restructuring exceed

we and recruiting the services During Costa global quarter, in made Poland. new in our Rica business at progress hubs

We during those XXXX. operational be expect fully at to sites

would we we In our to parts IT our internal transition services of service addition, provider. a third-party part model, as of support service announced managed that

our which We Shade, facility polyurethanes. was XXXX previously geographical of announced are Advanced CVC. New Jersey in in acquisition part of exits the And Maple progressing of our announced closure Materials, we

we program, of million costs $XX cash expect XXXX work expecting terms severance $XX approximately costs million restructuring. of of and through and we're In year as approximately million $XXX our in we next cash

by million $XX in as of over we Poland. move site through headcount to support of today, we intend approximately the relevant accelerating program our announced to $XXX certain our reductions Krakow, our by end councils commercial works We services million the achieve of and savings additional XXXX costs them closures Europe. to to exiting with reduce above advised facilities, consult that R&D as and Regarding and certain proposed legacy we the European well restructuring have intend have

to We spend of which expect cash majority of incur year. the expect approximately to million to we savings, relating $XX next restructuring those

expenditure the expenditure $XX restructuring to manage of We will which related capital approximately spend we allocation. capital our million also expect normal within to

Cash continuing Year-to-date, operations million. $XXX Turning stands $XXX million compared million during XX. our was a million operations $XXX in to compared period. Free to the Slide year operations flow from free prior flow from the from quarter continuing ago. came QX continuing for at flow in year $XXX at to cash cash $XXX million

towards Over million, the form to of cash last prior per plan approximately billion the and spend the in from of repurchases and tracking Capital came Earnings XX dividends. we quarter $X.XX for the approximately year-to-date $XXX XXXX, of billion months, returned are of share $XXX continuing approximately operations. repurchases quarter amounted million to $XXX flow year to $X.X a share share at in for total our have expenditures free Share $XXX was total per the to shareholders compared $X.XX. $X million bringing in million.

now our on are targeted We Performance electric focused catalysts. vehicles, and semiconductors at insulation investments Products

Our to September, XX% under end had unchanged. XX% tax $X remains long-term of the rate we was range liquidity. the XX% billion just for quarter and of adjusted our of At

due senior and in maturity net in frame, time for XXXX Our XXXX. beyond is notes that $XXX have we approximately million. maturities And debt XXXX

the Our sheet to we XX close any to cash for at the to is our is $XX transaction been signing levered an at closing on note time months Effects approximately committed approximately also statement working rating. receive before remain the investment-grade you. and our I business, basis and we sell X.Xx fully adjusted EBITDA after-tax has $XXX Textile balance Effects for would adjustments to less net back Textile million announced of expect equity deal Upon Peter, of to now the strong out syndicated preferred which our capital. proceeds an of all-cash that we million Huntsman. the deal

Phil, thank of and high outside related events include energy most These Second reaction. control. the events. things of responding dollars challenges. wiped trillions gone these global months, value you devastating unprecedented the supply XX land since we destabilizing past the it very has its shocks European are economy reviewing global World much. unforeseen consumer the number those of within the through a with from chain In and war War, and The XX-year our worth and volatility light In of related control how events, our markets to inflation is of

European-based million European First, $XX we that announced take restructuring of today will minimum in our of businesses. Europe out a a

before I think pieces of failed the some it up will energy policies. its be picks time Europe fully

If gas the new a will of few gas charge North $X Russian target transportation Korea, decade, these be I over past per Europe been and a I Europe If gas approximately a in to $XX for endure will prices gas our usually spend Japan supply with I name competing look in per cost to cost plus However, export is to will a premium supplies U.S. gas sold to This over MMBtu any imports. where premium million MMBtu Hunt historic is year. to a at $XX about for China find believe for that sold has itself on per initial reduction. based freight, million their slight needs, at Europe markets gas $X that and Europe this America. normal think prices, now over

We million X excess permanently are series our will from of the a remove an businesses. initiatives divisional our that of HQ today of $XX and announcing European of closure

and of billion built any a me customers, the cost, those of $X but rather of our requests a based provide abandonment business business and realities commitment is will a on an of growth investor that clear. European having This Let be expectations recalibration not customer around opportunity. future

Investor will end We Day This addition the this to year's $XXX at presentation. we of be the that last by outlined in million complete will XXXX.

invest announced we the to be commitment sheet our our our on essentially of replaced. At that business many equity that million today would been preferred keep deals had earlier Effects ability This SK business about sale of of has to balance complete and Textile $XX announced needed SK also to million our We divestiture $XX towards to Capital. get something of unable when pulled the complete what this Textile quality we and time or a the Effects to being completed, this so are deal Huntsman's started. says will

We $XXX that to this of the of XXXX. we've accomplished million purchase quarter of committed business of share be are expect track Through billion savings And cost of and of flow this of to to There of We within basis, free $XXX a plan million to the to restructuring million on margin. next We end and and of on the few a XX.X% we EBITDA completed by months. track quarter billion the variables Day and transaction we've on LTM remain now end the to year be be our expect year about a ago run adjusted $XXX buybacks many rate date, accomplish closed in Investor presentation. $X end at are a between XX%. XXXX. $X.X shares cash at the generated third of the announced an but

Effects further in strong buybacks, through the shareholders cash opportunities reinvestment to year with our intend balance sheet continue the business. business. share use divestment be our We will a balance competitive to that return finish M&A our strengthened will We to a to with sheet Textile and dividend, of

to very opportunities looking be While deploy for will judicious. capital, we

sluggishness continued in into prevention murky into looking are in well construction policies. slowing around COVID U.S. markets waters XXXX continued China QX while the of we as and seeing the as Now residential around

challenges around Europe. biggest are Our

provide severe may variables that X be well with better-than-expected either headwinds or us see earnings. will We will

energy. is these of first The

the they've of our As We're gas MMBtu call levels prices of prices per way, summer, will continue costs month, headwinds. seeing margins we we million a shared cost stay is rates. with benefit. than said late this where to Either Should past, year movement range earlier around per gas are dollar today. prices every our in we we far will can. and price be European in on there in in you see so this to a what forecasting that of saw we push higher we been we'll Should depending utilization have business wherever of some $XX QX spike

we inventory variable demand of capital are control and early How our working are much by or year-end customers demand facilities how controls we're customer? in inventory second customers? sentiment needs the much by our varies is consumer of managing would The by falling about customer objectives out speaking, estimate XXXX. drop is inventories. how way, customers. consumer our our that And and match work half our Either and should is own itself operating to Broadly

of production imports some We with needs outside our are Europe. supplementing also from

Our longer-term and are complete to XXXX, will sure immediate and margins our be Continue the make fix customer is for make needs our pricing Through operational can restructuring their and to market priority to the worst bear. our continues to to with base conditions to wait understand what themselves. objectives. work we mistake

we or we to a start quickly any economic assure Throughout be should be. more the start returns to We get dictate. Operator, XXXX, U.S. on. will move any move concluded our can I will aggressive. and we Europe profitability of steps where to believe those open be recover it see that, right the control on refocuses growth. we've the to will China We'll advantage prepared and needs and our improvements as in winning markets take with and investors position to of line and as that restore these rebound as of company we'll taken for will are inflation industries European We've out we that remarks our do stabilize will there and our will Q&A. it deserve the business to to can whatever as up

from Josh coming Spector [Operator Instructions] first Our from question is UBS.

to get but know XQ, at it's if could cost, what fixed worst declines, or energy to kind guess buckets base think if those into some when but maybe would you you were volume I of of this? buckets sequential be leverage, so bridge destocking, cost would you you I move, talked be a the to past some put this rate about normal about to start of of already XQ answer bigger we the what tough look

very good question. That's a

I that varying going think that's industry sector industry by sector. to be

see instance, automotive I there's that's strong For much as control taking and right in think to where place such not aerospace, now. inventory continuing you're pull-through

headwinds we're facing seeing seeing we so other any of pushing In certainly material forth. in industries what them And and and through. so to material is just most in like the trying areas, of that absorb you're raw construction those costs products are

of as the customer. of sector I vary as my market is year, year, slow, prophecy it by end part this conditions I chain. that or said make We about construction, that of customer is areas believe forth. a that that think reduction to and of early inventory longer a on would so But QX, as becomes to market sector quite comments, a supply run demand normalized than that related slows, some slow by this XX% going correction of we've most to just decline the would worse businesses emphasize just to extend And that's those as that industries from We're emphasize into rate. they that demand as takes also and inventory bit just almost I of adjustments. that cycle inventory inventory Again, accomplish. normally the fluid XX% I insulation self-fulfilling related be in seeing that next to those are be would furniture, number conditions and certainly from want move because to a in depleted look seen QX by we that will probably to

next ago, prices depleted expected hope have material we by that later month they'll go quarter's benefits falling been into and So gotten would inventory hit place than that we hoped end that have of would a raw will falling X us took demand. the year or to because by have

apologies for a we're murky but seeing now. a So right situation it's bit again, that being pretty squishy

Josh, couple a additional just data for points you. of

FX So about you that markets, that efforts trying we're commented under-absorption end impact can you right with And we'd million the anticipate what impact on $XX situation. end matching making million assume with we're a now year-on-year. seeing rates align about the to with negative a year-on-year, then rates given million the by between $XX QX $XX inventory to negative and to achieve we're from production QX market

Our next question from Research is McCarthy coming from Partners. Kevin Vertical

footprint can Brazil. work rationalization I like Peter, in last you you talk your advertise see think of doing continue potential about in polyurethanes? you Asia? in asset quarter, sort you're some markets to Do that

in something. Without looking at option Southeast or we're areas other some much those to perhaps and of at too off selling of giving Yes, shutting at looked partnership facility those or down a of looking various facilities detail, giving we've a over we're getting facilities into Asia. the

or again, be we term, looking right those So to going But volume a motion through volatile, of halfway or X/X way transition X-year we are I production those higher move again, the see those concentrated want longer to commitment. that. I move going over our coming to And can that in and that's splitters. where our think, And strategy. see markets where less we're means That that's of end, that we that's for not we are having can the a value something are markets some going volume where materials. X-year the of now. that, probably happen believe We said in but overnight higher-margin it's to out

so tonnage into can orderly can in And that them applications applications. down qualifying new quickly it's move and assets we those how reabsorb quickly manner combination and a an of into shut we and how

just we've would So qualifying several a It process. product not to go the a it's many got through question months. instantaneously. take cases, moving of In

is from from next Our KeyBanc. question coming Yefremov Aleksey

Products, but we sounds like largely it expect Performance are weaker holding up. In margins volumes

sure wanted compression that, just to don't this correct. meaningful that's a stage. You see make I at spread

again, are players Well, that X, products, times I these on been pricing date. X a of now in are right of think global to discipline global these our tenuous a X, has we lot but margin discipline strong In perhaps basis. our

So on we that's spot don't spot materials great pricing. typically a pricing of pressure and deal putting see

pricing hope that discipline early going to than So performance think into margin. products is that going I next for that, so and the be quarter year biggest is volume into continue. going the I to factor more the But fourth

question next John from Credit Your is from coming Roberts Suisse.

How is on the slowing that? you loading think going? the delay the going splitter load do to And to is new ability your economy

again, is the Well, of continues out we're moving the sector think for And very that single biggest us product sector. that I a split in good be that now. automotive that to right

the it. out America very it's so a shifting in Europe and interesting of year. be much think foam the to from that's lot and we a is the coming splitter see applications European automotive going course that automotive will, comments, North product at of production, also How We America. back. into said production, China forth both to America aerospace, sector again, of to lot that likely particularly the North products relocating automotive reexporting, more as be when to I that -- many in you to how of next of of to look of But year speaking if back be few then customers, our going And and market, I we're flexible their quite of either moving areas you're see OEMs to and again, over going got residential are automotive North and course I the to customers or that think in my or going a a two, lot the over with the next

from Frank Our next Mitsch question is from coming Research.

out When you are going my taxes. to Maple Shade, of pulling raise guys you're

I about So sure feel I'm not that. how

a for negotiate pay discount on you fortune them, a us already publications, If so maybe... we for your

to A terms year. there. that you $XXX nonnegotiable $XXX get able fourth quick to it generate couple you'll next of track Phil, is of are be quarter expect in task. to That flow, points And reasonable is early cash on on cash of cash. another a million million the free

You possibilities cash? pretty What now. right of pristine on sheet thoughts your the that have M&A are balance with a

Yes, Frank, as said, this so quarter, rates inflow end conditions doing in sizable $XXX end in fairly see flow, million destruction and with terms both around X production of the seasonality. of net through that everything first of quarters through the demand deteriorating, a cash particularly are fourth through we some capital market we're free and would We that expect to working given some year. the

should capital come that working So net through.

in continue that. our quarter, into cash prepared XX% that We And we're would products are remarks, to we sure we cash on to But for being flow in certainly we've the terms to of going plus million expect talked as expenditures to $XXX for capital put flow be X be free the the that about. projects Peter on indicated free year on full of operations. able we making deliver performance in hope approximately fourth would from target continuing focused

but deployment In you for be can cash statement There our on the assume of terms what balance will back adjustment after net closing to $XXX of that's tax. cash, proceeds yes, some coming sheet. million

price. have I to as given would share also It to to gives prepared But repurchase our our acquisitions. able that below given remind Xx well be we out. those target acquisitions. in us dividend. flexible as the slower insulation you bought a actually allows back as in our do period, around debt coronavirus shareholders indicated economic went spray was well would We balance still second that deploy business. a to enough a because we our bought during decent and us Advanced X at look bolt-on be We flexibility through was to to go As net bolt-on foam our competitive to sheet businesses time additional we'll optionality Again, able purchase to effectively we Materials leverage slightly businesses continue remarks, that and that we environment. leverage our headroom

coming from question today David Your Begleiter Deutsche Bank. next is from

number your you'll challenges. year? a roughly XX, relative this billion thoughts $X.X you of XXXX, the do early on to positive or Peter, looking 'XX Slide EBITDA listed Any negative on at and

Boy, appreciate David, the question. I

in sound to probably throughout the if through and like too so we Geismar will. variables backwards, coming product forth. the I see will to as reduction improvements evasive as we XXXX our here, the we're come you you to that You I fruition, splitter number. I'll capital the opportunities a have trying impact and cost give lot the that think hope give year as me see initiatives that recent we Without move the investing of year look our and we the would acquisitions see but further integration of full see we will

to going a think it throughout improvements year. if that see to we're year, even flat I the those stays sitting be pretty

to we'll said first And I going failed it in to prepared have going we is how -- year, open the so I inflation lot been of the I'm I the that year. lot on as a on throughout like restrictions is that not think my think own better A policies economically, through the basis. on the relative And the that a do go but overly quite rather And in in here. market optimistic a U.S. have of here China, the do inflation. sharp due get energy we'll a is growth. start And I'm to long after with confidence to of think fully uptick these economic optimistic given open year than does comments, addressed that the when our handle demand I be I

Stanley. coming Next is question today Andrew Castillo from Morgan from

environment seeing maybe bit I and talk a just about you're wanted to more competitive there. MDI little the

your that assets noted running at you're XX%. You about

evolving? you are your passing efforts kind So and energy talk it's and And of bit about through maybe seeing that's little potential of that, think within for the a And how curious to give as surcharges, how pricing just fourth quarter more the on dynamics what costs color and maybe what in need can you about assumptions kind you particularly, recoup maybe industry. progressing, your you broader benefit? versus

Yes.

-- going that forward-looking are Our to the right market numbers fourth they're quarter, into pretty now. energy forecast to the market safe where say parallel

for season If a you usual, this the were remain warmer they in month December uptick so the forward and at far If numbers it have of months. shows November, the Europe. than trading remainder of for look gradual in to temperatures the those

prices. we see might a you lower-than-expected bit might tailwind that actually coming of from a gas think I --

on the moving wherever going put that customer particularly relative a to value our we're leader, on volume. areas pricing, we've through to we've pricing continue think can. costs we do look, and over that the been Europe With to base. as But we as product And prices the not can. our to here to size of at I our and destruction we're in going clearly be on surcharges pushing trying aggressively of have move And

competitive increases were And I to look discipline. look our landscape. through across we quarter pricing of material all numbers, think the pricing third the you in quarter at and polyurethane I third as through raw offset our can able

I says volume. commitment and something about seriousness our think to pricing the our of that over --

you weighted what Now getting the forth, are automotive customer probably said what so as as having towards are into far as think segments that, and start customers, disproportionately year-end I that we industry.

so insulation ACE and players Other us towards footwear, and other than leather and of weighted synthetic towards are CWP. be polyurethane towards applications. going industry, Some the more forth, the appliances the to markets

So I what wouldn't doing the versa. we're necessarily of vice and to read is the is whatever that industry rest doing want

to our We're customer of of build to demands. on to plants end with and what amount feel try year coming So But to with in be going to time running be with others a their seeing very production on. margins, might I to commenting not uncertainty. the their the utilization. wouldn't said, demand opinion. also This is we It's our to with comfortable the closely focused their inventory be capacity we're as to be trying match

Wells Fargo. question from next Sison from coming Your is Mike

Peter, another wanted to at XX%. take I stab maybe

a multiply to a the pretty it's if for it lot it's about right I by So the take quarter think X, at said, Huntsman. destocking that But not probably run of fourth earnings midpoint, look you as rate trough and includes a number. low

about if for -- you out but do Huntsman in the number that this a can in I take don't what you like of sort 'XX? way if think better normalize think earnings a the what look fourth quarter, is know be? would do destocking number that trough So would of to And if sort you you can

quarter, good that you're No, X going don't at I typically to look other have the a because you fourth quarters. don't to in have way think seasonality it's it the

during You're volatility. great do My a perhaps going low conditions going to have definite $X, most a would quarter. prices fourth de-inventorying $XX. even quarter and $X, gas in be be basis, that price management personal there's normal I of prediction in going Europe here And MMBtu. that deal the do the an during seen of to of natural north we've to $X business think that And companies end-of-day likely see per about capital on you're spike

just too going many quarter. are prices to output you're of say I what sort natural that's to And that's to I many going try extrapolate too are entire to parts. and -- think what of see most volatile think So normal the or the some there new those gas in fourth moving be, an there the is variables is that year's

out of in on and that very business fourth want to more single headwinds trying November coming of start Russian and trying murky. I natural month see again, of millions, going basis and oil. going an just throughout as I to we're our business. December to of hundreds inverted probably I the than for millions be QX. going going XXXX, And ending our through of a the not real some I I'm the to just see and see to of to decides forward And of of dollars at variable year into you're mean as with XXXX pessimism to Putin I in part on look optimism crude take But gas I again, I if latter would look think kind at the do what impacts of looks sanctions with of signs quarter what an forward XXXX. and variable XXXX. XXXX clear. think I'm on really As gas have tens

today Blair coming TPH. Matthew Next question from from is

Peter.

XX%. You mentioned Rotterdam you're plant your at running about MDI

rely some and EBITDA down plant for imports? fully this Can MDI. and Europe relying negative shut to overall You're it lower-cost imports about Is you there? on on considerations the in talk possible

course, do not of possible you are I'm that X just there to it's sure do things Well, to Yes. have. because that very it's that practical that.

to include units. and hydrogen You or Those of facility there be that are that you building going to fixed that going your going take-or-pay CO not. number to minimum be fixed are agreements, have costs a whether are costs run the people are

We're fire are people costs new are going months. that Next and your utilities, forth. our your and of them facilities X to so rehire supplying labor all not then in back

you're going or So you if costs to regardless all fixed of idle those facility your not. have,

capacity typically, would and plants Another I thing -- that this I utilization. don't very again, operate say say is typically, well XX% MDI under

risk pipes do so highly XX%. You're And and of but And much moving here well, your will. these slow don't making through technical your this you if typically, basically you is and facility, And -- as glue. plants that very greater you have forth greater glue making through term just down, a and process. you're gumming under basically you're the up

to X about XX/XX on if could have shut in during you a of of plant XXXX that's I do units down year. on wanted unit the the that larger, and can X split roughly recession. run as for facility, newer Louisiana harder will go and that lines think down we We European sort our We a our had 'XX over the Geismar I the down. you of did smaller was that units. Think so we low as So until shutting we remind capacity, of there.

was at of per the in and about you variable as there at European difference that spiking about from you think globally. $XXX movement and long and $X,XXX the of European keep per prices other mind $XXX very U.S. when that gas I prices. over moving The MDI August At just ask prices point, thought into would day. U.S. hard We were ton Europe MDI idea to between last

What and include not Now the again, And when you're that $X,XXX, take, takes here. does product X forth. is and say through so thinking that chewed I that $XXX logistics months, specifications that also $XXX to freight, forth. a capital, number has it to or remember about weeks give so of up and the about that million on of your couple be get handling working

in in inventory moving August you been been move $XX. would around moving to end it prices where product product gas arriving year have $XX, So here had building of are November, September, we it,

to be X So wouldn't you to I'm the months moving will, that if it taking a today great road. going to sense when have to do that, deal MDI down of got made going speculative be move hedge, competitive really what you've a you be is

a so And of in that. variables lot

move it's this a sorry, answer convoluted most but people tougher just I'm a than say to around. Matt, again, product been lot has So

as far some on that to to sort our European overseas. shutting the of going you're conditions it's got getting just take shut the see I you're to be capacity, entirety point. something to Rosenberg normal you're to willing from don't in a either these business plant things. today's bite under you're If do going risk normalized under and to basis, that. it, that willing down really facility, down Or bullet our do market its and But environment MDI conditions a of as on supplement and that

As getting that would to here point see I idling that conditions entirety don't today, we be market sit plant. that plant, where the I of

have of attractive of production curve others, natural on largest intensive And and in facility cost relative remains much that MDI price across is reality, the to at Europe Rotterdam particularly mainland Europe. with we position second the our facility, cost all to a the lower energy in which aniline competitiveness extremely U.K. gas

of from America. Our next Bank question Matthew is DeYoe from coming

headwind the margin Are As off-line? markets? do look what you is going into what other production -- moving that Is mix move would PU business. And And is you of polymeric a out there that that, shift? those molecules when volume like? from that HBS the you

that rigid insulation we're pricing in that the does the market, applications. will on and and other spray we have most HBS, at demand That margins that in it foam point. of homes all Ideally, depend that moving given in product the of have to

though, into to that. the the is have to margin move in CWP, we're the opportunity that. product you is same an of that our It's If of you're your HBS, I it production, And OSB which would goes strengths moving plywood so that wood some have I if polymeric, one an that materials But mind commodity-grade it's HBS also MDI lowest be of what margin and we we upstream, would you, will. MDI. taking our typically move not applications. lower is would remind opportunity our composite moving it's otherwise and you typically,

necessarily So -- typically, I'd alternative like to think can home market for there's it's not black a conditions depends tonnage. a all that not on But that and where and we a find you white it. place places answer. That

a that through it technology formulation an only typically, than market makes XXXX product what back more rather our MDI. purchased polyester component we're which that's downstream the we selling much And moving also with MDI. into HBS, polymeric proposition in and if a aromatic is attractive own we're matching it's a not as a just which that polymeric We're

take so operator, And Yes. and don't we more forth. time question the X why given constraints

Certainly.

is question coming final from Jefferies. Laurence Our today from Alexander

a realignment customers your decisions. mostly made repositioning yet the currently is fair to because restructuring, cost haven't it it on their as Just European characterize

was decisions the and those do round once also be to I'm China, they've have going there of And needed so particularly cycle up if into next going thinking U.S. regions? probably the made capacity be structural their in another handle on a to moving is side. to place in capacity MDI sufficient but if So European also capacity shift restructuring you to the there's

to Europe, that Europe. And spending. continuing so to to prosper that continue infrastructure A we've I calibrate we this going we're like into business I on in And spray lightweighting, looking be support insulation, really forth. lot look the infrastructure they're announced automotive. to continue are support market And XXX going be a roughly to to and Yes, say areas foam. these. going program we're that's reality. aerospace, you're around believe business be A at lot going positions. the markets Laurence. And look, These going around to and of need at technical would I no, today, as what excellent trying to new the to around question, look

be, they're energy-intensive you more moving. going customers that have energy-intensive about also and talked Now as already well to know, applications

all going of best but Again, and of that And or more calibrate eliminating some areas to to we've going tried adhesions coatings in somebody the going not I that's also just to Again, those we today XXX of those of Krakow, some OEMs, and to cost all moving automotive into out. are be because moving think we'll the but have XX% about be glass and on of labor the as to producing again, going on, position the energy positions or coming. that's somewhere where of And between we lower the they're of can. are you're producing that them them some those out some anything Poland be positions what materials are and to depending those those a from they're which not if we'll XXX applications, intensive. And country and be relocating doing relocating, in

falling coming X another through So arbitrage, as from saying out at to another we or cut us of where out. months now see go XX we're repositioning now months don't customers I see going from and because here we and that look

on And customers, good who's our I customers a the and a just creditworthiness of as last pretty idea of looking have margins a lot the frankly, we've at have the be to be to thought at we are who's going to we of X We're strength. financial going also think looking I of not customers. lot going, who's and today. which over customers longer-term A basis. staying our months that given think have here to

supply As material couple last quarters think said to transitioning I'd have to in do the all product the we've transition. and excess we and will. we here, we like going of look our the customers to we're as that we're at of of that to But continue process

South see lower-margin America. applications we volume to Europe North of less America of North America, this as customer So profitable going base into areas from moving a from to we be lot and are move

businesses Louisiana. well. the XX, just As in years. out last up knows. our everybody of been And applications as we're We've tonnage on splitter recently Geismar, some over of call downstream into that supplied the opened we've XX pulling We moving this polymeric that

the got polymeric opportunity everybody take we'd shortages, and If us supply So do into upgrade And it, it as as it's business. in frankly, China. it's it, some ability that lower-margin that's frankly, not we've that extent for and have profitable bottom of it some move split can't again, to to slicing like to in moving an we higher see and end that that applications. we do to

be that We with North world in Europe ability do be MDI polymeric can have to well. in And MDI. have It MDI, supplemented just the also volumes and from to our crude as America. purchased the those doesn't around

can we here. we we supplying profitable pricing, -- be feel we best. day where we to at for MDI. to Operator, and fulfilling the us taking build that, continue everybody on very thank I that where And MDI like supply that, edge with very to bit everybody can we'd to to a and importantly want this the to So margin it wish the urethanes have end good just supply business our not better ability hear of reliability. the supply out to about try but the little morning more can than a MDI, is want We time niche get

today's Thank teleconference webcast. does and you. That conclude

this a lines day. today. at have and you participation We your your disconnect may You thank wonderful for time