Huntsman Corporation (HUN) Q4 2025 Earnings Call February 18, 2026 10:00 AM EST
Company Participants
Ivan Marcuse – Vice President of Investor Relations & Corporate Development
Peter Huntsman – Chairman, President & CEO
Philip Lister – Executive VP & CFO
Peter Huntsman Chairman, President & CEO
Ivan, thank you very much. As we review 2025 results, I think it is worth commenting on a bit on this past year and on our focus on 2026. I often end my prepared remarks with these words, we will continue to focus on what we can control and where we can create value. I do not say this to be repetitive, but rather to emphasize where our focus needs to be.
Our industry started this past year 2025, with optimism that North American housing was going to pick up. Chinese consumer confidence was going to recover. And Europe would finally realize their fall lease and do something to reinvigorate their industrial competitiveness. Instead, shortly after our call, Liberation Day was announced in markets and consumer confidence was thrown into chaos. China repositioned and rechanneled their trade and stood toe-to-toe against the U.S. while their domestic market slowed. Europe policymakers focused on what was making them uncompetitive and decided to double down and lost a record amount of chemical production throughout the year.
In North America, we saw U.S. housing and durable goods struggle to show any growth. Despite these hurdles, we continue to cut and restructure our cost basis, closing multiple facilities. We achieved growth in most of our tonnage that exceeded the general market while attempting to lead multiple price increases. And perhaps most importantly, we converted 45% of our EBITDA to free cash flow, a higher percentage than many in the industry.
As we look out over 2026, we anticipate a gradual recovery in North American homebuilding and durable goods as well as an improvement in the Chinese domestic markets. We are seeing some very early signs of both improved volumes and pricing in Europe. It is too early to say these increases will fully materialize, but we remain hopeful.
While we don’t control the outcome of these large macro changes, we will be more than ready to take advantage of any opportunities to expand margins and increase revenues should they come along and by focusing on those items we can control and conditions we can influence.
On the strategic front, I believe that 2026 will continue to be another year of changing market dynamics. Even if we start to see a recovery, we will likely see further opportunities for mergers, joint ventures, and industry consolidation. As always, we will be willing to engage with interested parties and push where there is an opportunity for value to be created. We will not be sitting on the sidelines waiting to see what comes along.
Like 2025, we have set expectations internally to, at a minimum, generate enough cash to cover our dividend. This requires more than just moving inventory about and we will continue to be focused on further structural change in how and where we do business to accomplish this. With regards to pricing and growth, we will push to grow our assets at a better pace than the general industry and do this by winning business through new product development and innovation, pushing to fill out capacities and upgrade materials through our MDI splitter in Geismar capacity increases in high-purity amines for the tech industry and catalysts and expanding capabilities and material usage in aerospace, power and the fast-evolving auto industry.
We will also be selectively using AI tools if they make economic sense to further reduce our costs, simplify our processes and expand our R&D capabilities. In short, I hope that 2026 will be a year of recovery compared to 2025. The coming weeks should signal to what degree we will see demand returning to the North American construction industry and China’s moves following the Chinese New Year’s, the March National People’s Congress and President Trump’s visit to China in early April. The next several weeks should be anything but boring.
Kevin McCarthy Vertical Research Partners, LLC
Okay. Very helpful. And then, Peter, I wanted to follow up on a comment that you made in your opening remarks to the effect that we may see more in the way of mergers, JVs and industry consolidation this year. Were you referring to the industry in general? Or do you see opportunities for those sorts of strategic actions in the polyurethanes arena, for example?
Peter Huntsman Chairman, President & CEO
I think both. I think that if you look, in general, is the most direct answer I can give. But I also have to look at where there is the most payoff. That’s usually where you’re seeing the largest number of divestitures, closures, possible joint ventures and so forth.
I think it’s something like MDI, where in the U.S., you have 4 manufacturers. I would imagine that the cost curve between those 4 manufacturers is pretty steady, and it’d probably be pretty tough to see a merger take place of 1 of those 4 — or 2 of those 4 manufacturers coming together. So the U.S. might be a rather limited area in the area of MDI.
I look at some place like Europe, I think the cost curve, again, this is just my opinion, but the cost curve in Europe, when you look at facilities and an MDI facility that would be in Antwerp or in Rotterdam, and you compare just the integration and the scale, and then you take some facilities that are far smaller where they’re taking raw materials they’re producing it in country A, moving it to country B, where they’re processing it in MDI, moving it to country C, where they’re splitting it.
Again, you have a much greater cost curve in Europe. And I would assume that you’ve got leaders and laggards in Europe that you don’t see in Asia, you don’t see that in North America. That could easily precipitate possible closures. It could precipitate possible combination of assets taking place. And so I would say that it has to do with both the chaotic nature of the manufacturing footprint, costs and so forth that are associated with that.
The next area that you’re going to see for material cost savings is going to come about through possible mergers and so forth. So again, these are just my observations, but I continue to believe that there will be opportunities as there have been in ’25 and in ’26.
Now does that mean they make financial sense? You’ve seen some very large companies that have just shut down assets some that have sold them off at a loss, others that have sold them for almost nothing. I mean, we — I think we were pretty public with our German maleic anhydride facility. We tried to sell it. We got to a point where we even tried to pay people to take it, and we’re unsuccessful in all of that. So we finally decided to shut it down. So every company is going to vary. And just because there’s a deal out there doesn’t mean that you’ve got to pursue it. But it does mean that there’s, I believe, continues to be opportunity for churn.
Michael Harrison Seaport Research Partners
Peter, I was hoping that you could talk in a little bit more detail about how you’re thinking about MDI margins playing out over the next quarter or 2. It sounds like in polyurethanes, you’re still expecting overall margins to kind of be under pressure, but I’m curious where you might be maybe a little bit more optimistic?
Peter Huntsman Chairman, President & CEO
Well, I think the 2 things when you think about margins expansion. One is how much — what is the industry doing around volumes. And obviously, the more that you sell out of a fixed asset, the better your margins are going to be even if pricing doesn’t change. And so typically, going into the March, April, May time frame, you’re usually seeing demand picking up quite substantially.
I don’t see anything right now, at least that is equivalent to the Liberation Day we saw a year ago that kind of threw people into chaos. Interest rates are steady, if not dropping a very small percentage. Homes are becoming more affordable as builders are building smaller homes and simpler homes, if you will. And I remain optimistic having spoken to some of our customers and having spoken to some of banks and lenders and so forth in this area that recovery in volume is going to be something that we should see increasing over the next 2 quarters here.
I would also hope that pricing initiatives that have already been set, we sent out price increase notifications yesterday in our MDI business in North America, largely to offset rising benzene and natural gas costs. That obviously needs to happen just to offset the headwinds of natural gas and benzene as similar price increases have gone into effect in Europe to offset those costs and hopefully gain some traction there.
And China will probably have to wait until after the Chinese New Year. It started yesterday and goes into the early parts of March before we see what’s happening in China, where we’re seeing an RMB price today of around RMB 14,000 for polymeric MDI. So I anticipate that we will see both an improvement in volume demand and in pricing.
Michael Harrison Seaport Research Partners
All right. And then for my follow-up, I was hoping that you could maybe give us an update on the potential for share gains in spray foam insulation in North America? And kind of where do we stand in terms of rolling out that spray foam insulation product line in Europe and in Asia?
Peter Huntsman Chairman, President & CEO
Well, Europe and Asia, we’re going to continue to look at opportunities there as they come and perhaps looking at third parties and so forth. Our main focus on Building Solutions is going to be North America. We continue to make steady progress in gaining market share.
And at the same time, we’re also doing that with increasing margins. and lowering our own costs, consolidating our manufacturing footprint and providing customers with new solutions and new product innovation. So I think that our Building Solutions, urethane spray foam business today is probably in as good a shape as it’s been in the last 3 or 4 years. So I continue to be optimistic about the direction of that business.
Patrick Cunningham Citigroup Inc., Research Division
Peter, you’ve taken a lot of steps to rightsize the cost structure and footprint in Europe, particularly in polyurethanes. Do you still feel there’s more to go from either you or the industry? And I know in the past you’ve been skeptical about things like antidumping or energy policy reform in Europe. But have any of the more recent calls to action or radical policy reshift given you any more encouragement at this point?
Peter Huntsman Chairman, President & CEO
Yes. I remain hopeful that European policymakers will eventually do the right thing as I had an opportunity a couple of quarters ago to meet with President Ursula von der Leyen, I told they need to do 3 things. They need to restart their nuclear — refocus on nuclear production. They need to move away from this crazy green new deal that’s run them into the ground. And I apologize, for using the F word, but they need to start fracking.
And so they — she said — she took her head and said, “Yes, we need to talk.” But the problem is there’s just — there’s too much talk and there’s too little action. But I continue to be optimistic that action will come about. I believe that in Europe — look, we’ve got 2 issues there, and I’ve already touched on the first one of what I consider to be a very wide structural issue with the industry of small facilities that I question just how competitive they are. Again, I don’t run one of those. And so I don’t know what goes on in those boardrooms and so forth. But there does seem to be more capacity than needed to satisfy the industry.
There is a pretty disparate cost curve in Europe. And Europe continues to struggle with high energy costs. And so I think that there needs to continue to be a consolidation or a refocus on those 2 things. As far as our cost structure in Europe, as I look at that cost savings of $100-plus million that Phil talked about earlier. Most of those 500 reductions that we’ve seen in the company and the 7 site closures, sadly have taken place in Europe.
And do we have more that we could be doing there? I’m really strained to see where there’s large material change that can happen there by cost cutting further. I think that we want to position the business with the realization that Europe continues to be a $20 trillion economy. As much as we struggle in certain areas of polyurethanes, we continue to do very well in Europe in aerospace, in power, in coatings, in certain adhesion formulations, in our thermoplastics polyurethanes and elastomers businesses.
So not all is on fire in Europe. I just think Europe is capable of doing a lot more than what they’re doing. And we hope that there — we’re able to see a recovery. I’d remind you that it was just 4 years ago, our most competitive MDI produced anywhere in the world was Europe. Europe was the most profitable end of our MDI business a couple of years ago. So it can be great again, and I’ll spare Phil Lister saying, let’s make Europe great again. But — so we’ll go on to the next question here.
Michael Sison Wells Fargo Securities, LLC, Research Division
Peter, can you talk a little bit about the cost curve now? You sort of mentioned that Europe used to be your highest — or lowest cost or highest margin area. So where are we now maybe industry-wide for the regions? And then at some point, if things don’t improve in Europe, I mean, what do you do with your assets there? Does it make sense to just reduce exposure and sell out the U.S.? Or what are the options if this downturn continues, which I hope it doesn’t.
Peter Huntsman Chairman, President & CEO
Yes, I hope it doesn’t either. Europe’s got too much potential. And I think that what we’re seeing right now, our biggest headwinds where I look at our MDI production in Rotterdam versus Geismar versus Caojing. We have basically the same technology. We have the largest line in Caojing. We have the most lines in Geismar. We look at our cost for benzene in the 3 regions is basically flat. Our cost for chlorine and so forth is essentially caustic and essentially flat.
The big drivers is energy — is natural gas and energy costs. And so that’s what fundamentally needs to change in Europe. And unfortunately, today, I think that the seeds have been sown that I’m not sure that there’s going to be a fast change taking place. Now that’s why we’ve made the [indiscernible] that we’ve made in the last couple of years in Europe, which I think will address a lot of these issues going forward.
The bottom line is that Europe, if demand is not going to improve. And if they’re going to leave themselves open for a cheaper product to come in from Asia and from the U.S., eventually European policymakers have got to determine if they want to protect homegrown industry in Europe. And 2 macro things need to happen. There needs to be less production in Europe and European policymakers need to decide if they want to stop cheaper products from coming into Europe.
Michael Sison Wells Fargo Securities, LLC, Research Division
Got it. And then just a quick follow-up on — sort of the industry consolidation potential. If Huntsman ends up being a buyer of stuff, where do you want to focus those acquisitions? And then what are the potentials for Huntsman to divest stuff if things aren’t going to improve longer term?
Peter Huntsman Chairman, President & CEO
Well, we’re going to — in my opinion, we’re going to have to do both. Because we don’t have the ability today. We’re not going to go out today with the balance sheet that we have today and stretch that balance sheet and put it in jeopardy. So that’s why I say in my comments. We’ve got to be creative. We’ve got to be smart and you’ve got to look at things such as joint ventures or possible mergers and — or some sort of consolidation play.
And I think we can continue to expand and to grow the business without — necessarily without going out and taking on more debt. Now if we’re able to sell something or monetize something, I think we’ve been very consistent over the last couple of years. Our primary focus is going to be to expand our applications and the footprint that we see in Advanced Materials and we would like to invest in those type of applications.
That’s not necessarily saying that we’re going to go out and we have to invest in epoxy. But when we look at areas like aerospace and adhesions, and we look at the power systems and so forth. We’ve been looking at some of the automotive areas that polyurethanes is participating in around battery potting and so forth. These are going to be the sort of applications and product innovation that’s going to be rewarded over the next decade.
So where would we be buying? Probably — well, first of all, going to be buying where there’s best opportunity, but that’s — that it would be in that area. But again, I want to end this by where I started it and that is we’re not going to go out today and take the balance sheet we presently have. We’re going to have to do some work before we go out and just start adding on more debt or see a material change and improvement in the industry.
Ryan Weis KeyBanc Capital Markets Inc., Research Division
Right. Okay. That’s helpful. And I was just curious, can you — you guys had some comments in the prepared remarks just around kind of the inventory levels in the U.S. But I was wondering if you could maybe comment on where you believe MDI inventories are in both Europe and Asia?
Peter Huntsman Chairman, President & CEO
Are you talking about our inventory levels or that of customers and the industry in general?
Ryan Weis KeyBanc Capital Markets Inc., Research Division
Just the industry in general.
Peter Huntsman Chairman, President & CEO
Yes. I would say ours are very low. And again, I cannot speak for every customer that’s out there, but just anecdotally, it feels like the supply chains between us and the consumer is quite low. And I — it’s all companies right now in that supply chain are trying to control cash and trying to control inventories and working capital.
Building suppliers, OSB producers, auto industries that are having to write off billions of dollars on EVs and so forth. They’re all focused on cash right now and inventory control. So one of the unknowns that we may well see going into ’26 is — and I say this just having lived through a bunch of other sudden rebounds in the industry. This industry typically does not recover over the course of 4 or 5 quarters.
It usually gets to a point where people realize products are tight. And all of a sudden, we can’t restock in time for a demand upswing. And all of a sudden, you find out there are shortages. When we look back in 2018, we look back on every couple of years, this seems to happen. I wouldn’t be surprised if that were to happen in ’26 in certain regions of the world.
Matthew Blair Tudor, Pickering, Holt & Co. Securities, LLC, Research Division
Peter, could you talk about your expectations for global MDI capacity growth in 2026? I think there’s reports that one of your U.S. competitors is looking to add capacity this year. I think that would raise global capacity by roughly 2%. Is that — do you agree with that? Is that something you’re seeing as well? And do you expect any material increases in Asia MDI capacity this year?
Peter Huntsman Chairman, President & CEO
Well, Asia, I’ll hit that first. Asia continues to be our most profitable MDI market and supposedly the one that’s most oversupplied with MDI. There was a lot of talk earlier in ’25 that with the tariffs going up in the U.S. that a lot of that Asian material that was going into the U.S. had merely washed back into Europe and into China and flood those markets.
We have not seen that take place. So as I look at capacity additions in China, I think that they may well be coming on, but I question how much impact they’re going to have and we’re not seeing that material necessarily leaving China any more than it has over the last couple of years.
In the U.S., yes, I think we are seeing the impact of some of that incremental debottlenecks, some of that expansion that’s been taking place over the last couple of years with one of our competitors here. I would remind you that typically, companies go out about 12 — 6 to 12 months before capacity comes into the market, and you start cutting deals.
You start talking to people about pricing and what you don’t do is bring up a new line of 50,000 metric tons, for example, and all of a sudden tell your sales and marketing, we go sell it now that we’re producing it. And so the impact of that volume coming into the market, which from what I’ve publicly read is sometime in the middle part of this year.
I would say from a pricing point of view, from a supply point of view, it’s probably being felt in the fourth quarter of this last year and the first quarter of this year. Having said that, we are talking about an expansion of about, what, low to mid-single digits in North America of actual capacity that’s coming in. So I’m not sure that it’s going to have a material adverse change to the market.
Matthew Blair Tudor, Pickering, Holt & Co. Securities, LLC, Research Division
Great. And then is there any major turnaround activity we should be on the lookout for later in the year for Huntsman? Like any sort of MDI downtime in Q2 or Q3 that we should be aware of?
Philip Lister Executive VP & CFO
No. Just our normal turnaround activity. We had the once in 4-year major Rotterdam turnaround last year. But normal turnaround activity across all 3 regions. We do have to make sure that our plants remain reliable. So there will be periods of planned outages, but nothing abnormal.
Jeffrey Zekauskas JPMorgan Chase & Co, Research Division
In the first quarter, your polyurethanes range — first quarter of ’26 is $25 million to $40 million in EBITDA. And last year, you made $42 million. So is the reason why your urethanes EBITDA should be down is that prices are lower year-over-year and that I would expect that volumes would be higher? And why is the range so big? And what’s the difference between the lower end of the range and the higher end of the range? Do you need to get prices up in the first quarter? What’s the real dynamic there?
Peter Huntsman Chairman, President & CEO
Well, we do need to get prices up in the first quarter. We’ve got rising natural gas costs in the first quarter, that right now, as I sit here right now, represent about a $10 million headwind that we weren’t anticipating a couple of weeks ago in our polyurethanes business. So yes, I do see some headwinds. I do see that coming down.
I would remind you that as we look at the first quarter of last year’s $42 million, that was coming off of the fourth quarter. I don’t want to get into too much detail here. That was coming off of a fourth quarter in 2024 of $50 million and leading to a second quarter of $31 million of this last year. So we were seeing a polyurethanes businesses last year that was in a nose dive, if I could put it mildly. And I look at polyurethanes this year, I certainly have more optimism in the market. We are starting it from a low basis, obviously, in the fourth quarter going into the first quarter.
I do hope that we’re able to do better than that median range. And that adjustment, the range that we gave literally, we argued about that just over the last couple of days internally because of the headwinds that we’re seeing. And as we look at natural gas prices, this very week in Europe are starting to come down.
So again, this is something that if we were to have this call 2 weeks from now, it could be maybe a few million dollars difference one way or the other. But I think directionally, we’re seeing volumes coming up. We’re pushing prices. And I would say that the business is heading certainly in a different direction in ’26 than it was in ’25.
Jeffrey Zekauskas JPMorgan Chase & Co, Research Division
Okay. And when you look at polyurethanes prices for Huntsman, did they sequentially move lower through the course of 2025? And then for Phil, is your base case that working capital is a use in 2026?
Peter Huntsman Chairman, President & CEO
Yes. I’ll let Phil answer on the working capital. In 2025, yes, we did see pricing pressure on a downward basis in all 3 regions. That was being — pricing actually came down in Europe and the U.S., about the same, started higher in Americas. It’s still higher in the Americas today, but both came down about the same amount throughout 2025 and Asia, less so.
Hassan Ahmed Alembic Global Advisors
Peter, a couple of quarters ago, I believe it was Q1 of ’25 — actually, maybe it was Q2, you mentioned that sequentially in polyurethanes, you guys see an 8% to 10% volume uptick. And you only saw a 3% volume uptick in Q2 last year. So obviously, I mean, Liberation Day, tepid demand globally, presumably all those factors went into that. But as you look at Q2 of this year, particularly keeping in mind some of the lean inventory comments you made, could we be gearing up for a pretty big sort of volume uptick within polyurethanes?
Peter Huntsman Chairman, President & CEO
It all depends on the macro issues around the construction season, and we’ll certainly know that by the end of March. I would — in my opinion, it’s mostly going to be around construction. And that will lead to construction demand will also led to increased — usually increased durable goods in North America. And that’s where we had our biggest miss this last year.
So again — and at the same time, remember, Hassan, we’re also going to be pushing through price increases. And it’s — you’ve got to balance that very carefully as to how much do you want to increase prices and push for price increases and hold the line on pricing and how much do you want to go after volume. So it’s a tough line to walk, and we’ll follow the macro economic indicators.
Hassan Ahmed Alembic Global Advisors
Very helpful. And as a follow-up, I mean, again, it seems that just from the sounds of it, you seem a little more comfortable about pricing as it pertains in polyurethanes as it pertains to North America, particularly keeping in mind this incremental capacity that’s coming online. Is it fair to assume that we should see a healthy pricing trajectory in North America despite this capacity coming online, particularly keeping in mind some of the comments you made about how — I mean, you sort of presell ahead of this capacity coming online?
Peter Huntsman Chairman, President & CEO
Yes, Hassan, you’ve got to remember, I am my father’s son. I grew up in a household where polystyrene was considered to be the greatest petrochemical product ever produced. And so yes, I’m always going to be pushing for better prices. I’m always going to be optimistic about demand and pricing and so forth.
So take what I say with the grain of salt in those areas. I would say that it is simply too early to say in the North American market. and largely to the Chinese market, which you well know that the pricing in China is usually going to be the 2 weeks or so after Chinese New Year’s is over. Usually you see quite a bit of volatility, hopefully upward pressure on pricing there.
North America, it’s just too early to tell. Again, we’ve got pricing announcements that are going — that have gone out to our customers. And we’re also seeing some pricing announcement and some small bits of traction in Europe on pricing as well. But I don’t want to get the wagon ahead of the horses here, so — and say that somehow, I’m announcing that we’ve been successful in getting prices through in Q1. We’ve made the announcements. They will likely see the impact in Q2, if anything, and we’ll continue to push for that.
Turner Hinrichs Morgan Stanley, Research Division
This is Turner Hinrichs on for Vincent. What drove the less severe than expected seasonal drop in North American polyurethanes last quarter?
Philip Lister Executive VP & CFO
So polyurethanes overall in North America grew slightly, and that’s really around some of the business wins that we’ve seen in the early part of the year. I don’t think there was anything material that we saw in quarter 4, which was particularly different. What we saw in polyurethanes in Q4 was that the outage that we’d expected in Rotterdam to last a little bit longer actually was a little shorter, and therefore, that provided some upside overall.
Ivan Marcuse Vice President of Investor Relations & Corporate Development
Turner, sequentially, you still saw seasonality in North America. What we said in the prepared remarks was December, we were maybe a little bit more aggressive in terms of how we thought that there would have been more of a seasonal decline than less, but you still saw the normal seasonality.
Turner Hinrichs Morgan Stanley, Research Division
Makes sense. So as a follow-up, we’re about a year into significant tariffs having been placed on U.S. MDI imports. And I’ve seen trade reports that indicate imports of Chinese origin MDI have dropped something like 80%. Could you speak to how you’ve seen tariffs play out in terms of regional demands dynamics?
Peter Huntsman Chairman, President & CEO
Yes. We’ve seen those same numbers, the public data on Asian imports. That doesn’t mean that Asian players are not bringing product in from Europe. But that poses a number of questions in and of itself on the economics behind something like that. I am surprised this past year to see the amount of product that is coming in from Europe, particularly around smaller sites that I wouldn’t consider to be very competitive, but what do I know?
If I mentioned earlier, again, this is just — I’m not speaking on behalf of the company, it’s my own thoughts. I mentioned earlier about a rebound that can suddenly happen. And as I look in the North American market, if you see a rebound in housing, and I’m not talking about a historical recovery in housing. But if you see a usual, maybe a little bit better than usual, certainly better than last year, rebound in housing.
With the constraints that have been put into place by tariffs and just by the macroeconomics, tariffs aren’t the only thing that discourage trade as well. I could see that there a scenario where you could see the U.S. running into supply issues before other areas of the world. And again, I want to be very clear. I’m not saying that I’m going to see a rebound here in Q2 or anything, I’m just saying that as you look at that fundamental basis where the U.S. used to have a pretty healthy chunk of its production of its supply side, at least, being satisfied by imports that have been cut off. U.S. — in my opinion, U.S. will probably be the first to feel tightness should that occur.
Salvator Tiano BofA Securities, Research Division
I just want to go back on the capacity additions in the U.S. that you were asked about before. Firstly, if I heard correctly, I think there was a mention that it’s low to mid-single-digit capacity growth in North America. And I just wanted to check with your industry intelligence, essentially, what are you seeing in terms of the actual number? Because at least what we’ve seen from some trade publishers talks about more of a 20% or more increase in the 1-point-something million ton market?
And secondly, Peter, you mentioned that you saw most of the impact already in Q4. I’m just trying to understand, if I were to think like a buyer of MDI and inventories in the supply chain are very limited, as you’ve said before. How would they be already benefiting from that capacity addition coming midyear if I cannot restock anymore and I have to wait, wouldn’t theoretically, that means that all the pricing impact will only come when the new capacity comes online because there’s no opportunity for a seller — sorry, a buyer to restock further?
Peter Huntsman Chairman, President & CEO
Well, okay. So I’m not trying to avoid an answer to the question, but you’re asking me to kind of get into the mind of the person who’s bringing on the capacity, which I haven’t the foggiest idea yet. Just because that capacity is coming on doesn’t mean it’s all going to come on in one day, and it’s all going to flood the market in one day.
Oftentimes, it takes quarters to be able to integrate and to be able to bring on capacity. And I know in our case, when we’ve brought on capacities in the past, it sometimes takes you up to a year to sell the product out. You’re not going to want to bring on 100,000 tons of new product and somehow sabotage your existing 500,000 tons of product that you’ve got — that you’re already selling by cutting costs and so far by cutting prices.
So how a certain competitor or producer will bring on capacity, when they bring it on, what impact they want to have on the market and so forth is all yet to be seen. And my comments are — were that earlier that I believe as we have seen in the past with this particular producer, product is bled into the market usually on an as-needed basis. They obviously, will probably be expanding their footprint.
But how they do it and how soon they choose to do it and what impact they choose to have on the market, that’s kind of out of my — I just simply don’t know. But again, I — it’s very, very rare that you’d all of a sudden see 100,000 tons startup on Wednesday and it floods into the market, and you’re going to be seeing that lower margins and lower price immediately.
