Sector News

US Eastman sees destocking but no big slowdown – CEO

October 29, 2018
Energy & Chemical Value Chain

Eastman Chemical is seeing some “pockets of destocking” in the market, but no evidence of a broader slowdown – with the exception of automotive in China, Mark Costa, the CEO of the US-based producer, said in an update on Friday.

Destocking was occurring in areas such as coatings and tyres, the CEO told analysts during Eastman’s Q3 earnings call.

Eastman expects potential destocking could be driven by trade concerns in China.

The US-China trade dispute may affect Eastman customers’ ability to export back into the US, in areas such as specialty plastics or consumer durable goods, he said.

“I think it’s really important we don’t overreact to what’s going on in the fourth quarter right now,” Costa added.

It was hard have insight into primary demand, especially in Q4 when there is normal destocking anyway, he said.

“We are not in a position where we say we see a primary demand problem out there in the market place” apart from auto issues in China, he said.

And even in auto, much of Eastman’s supply in China goes to the luxury market which still sees growth, he said.

Overall, orders were holding up relatively well in October across Eastman’s specialties business, the CEO added.

Looking at 2019, Eastman assumes raw and energy material prices fairly stable, as well as similar economic growth as in 2018, he said.

Lowering ethylene exposure

Costa also updated on Eastman’s progress on work to minimise ethylene production at its Longview, Texas site, thus mitigating exposure to the ethylene market.

For a $20m investment Eastman is improving cracker flexibility to include refinery-grade propylene (RGP) in the feedstock slate, enabling it to ramp up polymer-grade propylene (PGP) production,

As a result, Eastman will be able to reduce ethylene production in 2019 by about 80%, “relatively to normal”, while producing more propylene, Costa said.

Eastman’s propane purchases will drop by half, ethane purchases will be about 20% less, while the company will be buying about 150,000 tonnes of RGP, he said.

“This is a $20m investment, with a payback of less than a year, just a great investment opportunity for us,” the CEO said.

By Stefan Baumgarten

Source: ICIS News

comments closed

Related News

December 3, 2023

CF Industries completes acquisition of Waggaman ammonia production facility

Energy & Chemical Value Chain

CF Industries Holdings, Inc. (NYSE: CF) today announced that it has closed its acquisition of Incitec Pivot Limited’s (“IPL”) ammonia production complex located in Waggaman, Louisiana. Under the terms of the agreement, CF Industries purchased the Waggaman ammonia plant and related assets for $1.675 billion, subject to adjustments.

December 3, 2023

Virent and Johnson Matthey: behind the pioneering technology that enabled the first 100% SAF trans-atlantic flight

Energy & Chemical Value Chain

The Virgin Atlantic flight was powered entirely by SAF, that was a drop-in replacement for conventional jet fuel, but made solely from sustainable feedstocks. This was enabled through the inclusion of a new bio-based aromatic jet fuel blending component.

December 3, 2023

COP28: Cepsa, C2X eye €1B investment in green methanol plant at Huelva, Spain

Energy & Chemical Value Chain

Cepsa SA (Madrid) has agreed a deal with C2X, an independent firm owned by AP Moller Holding with AP Moller-Maersk as minority owner, to develop a 300,000 metric tons per year renewable methanol plant at Huelva, Spain.

How can we help you?

We're easy to reach