Dow says it expects a $350-million headwind to second-quarter EBITDA, mostly due to a slower-than-expected demand recovery in the automotive and consumer durables end markets.
The demand decline will particularly impact Dow’s polyurethanes business, where second-quarter demand is expected to decline by about 25–30% year on year (YOY). Dow had previously expected a 15–20% YOY demand decline for polyurethanes in the second quarter.
About two-thirds of the EBITDA impact “can be attributed to the delayed and slower recovery in the automotive, construction, appliance, and furniture sectors,” Dow president and CFO Howard Ungerleider said in a virtual conference presentation this morning. The rest “is being driven by margin pressure due to lower demand, which is negatively impacting pricing power, along with MEG softness,” he added.
On the positive side, volumes in plastics have been “resilient,” and will be roughly flat YOY for the quarter, according to Ungerleider. The do-it-yourself (DIY) coatings end market has also held up well, he says. “Solid demand trends continue in the packaging, home care, industrial and institutional cleaning, and health and hygiene industries,” Ungerleider adds.
Due to the lower-than-expected demand and profits, Dow “will be taking further cost actions,” according to Ungerleider. Details of additional cost reductions have not been disclosed, and will be announced when the company releases second-quarter earnings. Dow has previously announced plans to cut over $1 billion in cost, including reductions in capital expenditure and operating expenses.
Despite the slow recovery in some end markets, Dow says that sales are on the rise. “It is encouraging to see the pace of recovery accelerate in June in almost every value chain in our portfolio,” according to Ungerleider.
By: Vincent Valk
Source: Chemical Week
PepsiCo Europe and crop nutrition company Yara have announced a long-term partnership aimed at providing European farmers with low-carbon crop nutrition solutions to help decarbonise the food value chain. Under the agreement, Yara will supply PepsiCo with up to 165,000 tons of fertiliser per year by 2030, covering around 25% of the food and beverage giant’s crop fertiliser needs across Europe.
BASF has signed an agreement to sell its flocculants business for mining applications to Solenis, a specialty chemicals manufacturer. The divestment of the flocculants business to Solenis is part of BASF’s ongoing portfolio optimisation with the aim of focusing on strategic core areas.
ADAMA Ltd. a leading crop protection company, announced that its board of directors has appointed Gaël Hili as its President and Chief Executive Officer, effective October 1, 2024. Hili will join the Syngenta Group Leadership Team and will be based in Tel Aviv.
