Huntsman Earnings Call: Pricing Power Meets Uncertainty

Huntsman ((HUN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Huntsman’s latest earnings call carried a cautiously upbeat tone, as management highlighted strong pricing power, high plant utilization, and early signs of recovery in several key end markets. Executives stressed that these gains are real but fragile, with limited visibility beyond the second quarter and meaningful exposure to raw‑material and energy volatility.

Pricing Power Lifts Margins

Huntsman is aggressively raising prices to stay ahead of rising raw‑material costs, especially benzene, which settled at $4.71. Management expects price and mix to finally turn positive in the second quarter after several quarters of pressure, giving a much‑needed boost to margins.

Operations Running Near Full Tilt

Executives described operational performance as excellent, with plants running at high utilization and MDI assets in the U.S. and China largely sold out. This strong execution supports both volume and pricing, helping the company capture the benefits of tightening supply in its core markets.

MDI Market Tightens Globally

Huntsman sees industry MDI utilization rising from the low‑to‑mid‑80s to the high‑80s, and in some regions nearing 90%. With the company’s Chinese operation and much of its U.S. capacity sold out, tighter supply is putting upward pressure on prices but also raising the risk of short‑term shortages.

Advanced Materials Back in Growth Mode

The Advanced Materials segment is rebounding, supported by strong demand in aerospace and power markets that are growing faster than GDP. Management noted that these positive trends are continuing quarter over quarter, contributing to better profitability in this higher‑value business.

European Polyurethanes Show Green Shoots

In Europe, Polyurethanes volumes are up about 4% year over year, signaling a modest recovery from a weak base. The company highlighted early strength in composite wood products, technical insulation, and adhesives, coatings and elastomers, suggesting a broader industrial improvement.

Performance Products Poised for Q2 Step‑Up

Performance Products is set for a near‑term earnings lift, with EBITDA guided to $30 million to $40 million in the second quarter versus $26 million in the first. Strengthening maleic fundamentals and pricing gains that outpace raw‑material costs are the main drivers of this expected improvement.

Chinese PO/MTBE JV Turns Positive

Huntsman’s PO/MTBE joint venture in China has swung into the black, contributing a low‑ to mid‑single‑digit millions of dollars. Profitability is currently being driven by favorable PO margins over propylene, offering a modest but welcome tailwind to earnings.

Semiconductor Amines Capacity Builds Future Optionality

New specialty amines capacity aimed at semiconductor customers is progressing through qualification, laying the groundwork for growth in a high‑tech niche. Management expects this business to contribute more than $5 million in 2026 as volumes ramp toward a steady‑state run‑rate.

Demand Outlook Still Cloudy

Despite near‑term strength, Huntsman repeatedly flagged limited visibility beyond the second quarter and questioned how durable current demand will be. Executives warned that persistent inflation and higher consumer prices could curb activity later in the year, especially in construction‑related markets.

Raw‑Material and Energy Costs a Key Swing Factor

The company expects to absorb well over $100 million in raw‑material costs in the second quarter, making successful pass‑through critical to protecting margins. While North American gas is below $2 per MMBtu, European energy remains far more expensive, keeping cost volatility front and center.

JV Outage and Logistics Disruptions Add Noise

An ethylenamine joint venture facility near the Strait of Hormuz suffered outages, creating a potential $4.5 million to $5 million quarterly headwind. With sea routes constrained, Huntsman is relying more on trucks, which raises logistics costs and adds variability to supply chains.

Supply Tightness Raises Risk of Strain

A series of outages, including at least one Middle East producer representing about 4% of global MDI capacity, is pushing industry utilization toward 90% and above. At these levels, any additional disruption can trigger pronounced supply strain, price spikes, and short‑term volatility.

Shifting Trade Flows and Chinese Competition

Disrupted trade routes and shifting Chinese export economics are reshaping global flows and competitive dynamics for several Huntsman products. Some European customers are now sourcing maleic on a FOB U.S. basis, reflecting changing cost curves and regional arbitrage.

UK Aniline Plant Under Persistent Pressure

Huntsman’s U.K. aniline facility continues to suffer from weak economics driven by elevated European gas prices and import competition. Even as gas has fallen from roughly $20–$22 to about $15 per MMBtu, management remains wary about the site’s long‑term competitiveness.

Limited Pre‑Buying But Inventory Risks Loom

The company has seen some customers pre‑buying MDI ahead of anticipated price hikes, equivalent to just two to three days of extra demand. While not yet a sign of panic buying, management cautioned that a buildup of inventory could become a risk if this behavior accelerates.

PO/MTBE Still a Murky Business

Despite the current profit contribution, Huntsman described its PO/MTBE business as one of the murkier parts of the portfolio due to volatile economics. Differences in gasoline pricing and refining dynamics across markets mean earnings from this JV could swing significantly over the near term.

Guidance Points to Strong Q2 but Hazy H2

Management guided to a stronger second quarter supported by firm pricing, higher MDI utilization, and a step‑up in Performance Products EBITDA to $30 million to $40 million. However, they reiterated that sustaining mid‑teens Polyurethanes margins and current volume strength into the third quarter will depend heavily on demand resilience and easing supply disruptions.

Huntsman’s earnings call painted a picture of a company capitalizing on tight markets, strong pricing, and operational excellence, yet acutely aware of macro and geopolitical risks. Investors are likely to welcome the near‑term earnings uplift, but the real test will be whether today’s price and volume gains can withstand a more uncertain second half of the year.