Huntsman (NYSE:HUN) executives used the company’s fourth-quarter 2025 earnings call to frame 2025 as a year in which macroeconomic hopes gave way to volatility, while management emphasized cost actions, cash generation and early signs of improving conditions in select end markets.
Management’s view of 2025 and early 2026 demand signals
Chairman, CEO and President Peter Huntsman said the industry entered 2025 expecting improvement in North American housing, a recovery in Chinese consumer confidence and steps by European policymakers to improve industrial competitiveness. Instead, he said “Liberation Day” disrupted markets and consumer confidence, China rechanneled trade while its domestic market slowed, and Europe “lost a record amount of chemical production” amid what he described as policy decisions that hurt competitiveness. He also said U.S. housing and durable goods “struggle[d] to show any growth.”
Looking to 2026, Huntsman said the company anticipates a “gradual recovery” in North American home building and durable goods, and improvement in China’s domestic markets. He added that Huntsman is seeing “very early signs” of improved volumes and pricing in Europe, while cautioning it is too early to know whether those increases will fully materialize.
Cost savings plan and restructuring progress
In response to questions, CFO Phil Lister said Huntsman targeted $100 million of cost savings tied to roughly 500 headcount reductions—about 10% of the workforce—and the closure of seven facilities. Lister said Huntsman had achieved an annualized run rate of $100 million by the end of 2025, and expects about $45 million of in-year savings to flow through 2026 results, excluding inflation. He added there should be additional savings in 2027.
Peter Huntsman said the majority of those reductions and site closures “sadly, have taken place in Europe.” He said he “strain[s] to see” where further large, material cost changes could come from additional cuts, while also arguing Europe remains a significant economy and that Huntsman continues to perform well there in several businesses including aerospace, power, coatings, certain adhesion formulations, thermoplastics, and elastomers.
Polyurethanes and MDI: pricing, costs, and capacity commentary
On margins in MDI and polyurethanes, Peter Huntsman said volume leverage is important, noting the seasonal pickup typically seen in March through May. He said he did not see a comparable shock to the prior year’s disruption, and cited steady-to-slightly lower interest rates and improved housing affordability through smaller, simpler homes. He said he is optimistic that volumes could improve over the next two quarters based on conversations with customers and lenders.
Huntsman said the company sent North American MDI price increase notifications “yesterday,” aimed largely at offsetting rising benzene and natural gas costs, and noted similar increases in Europe. He said China pricing typically becomes clearer after the Chinese New Year period, referencing polymeric MDI pricing around CNY 14,000 at the time of the call.
When asked directly about the company’s Q1 2026 outlook for polyurethanes, management referenced a segment EBITDA range of $25 million to $40 million. Peter Huntsman said natural gas costs in Q1 represent about a $10 million headwind that was not anticipated a couple of weeks earlier. He said the range reflected internal debate given volatility in costs, adding that European natural gas prices had started to come down that week.
Peter Huntsman also said polyurethanes pricing moved lower through 2025 across all three regions. He said pricing fell in Europe and the U.S. by about the same amount during 2025, with Asia seeing less pressure.
On inventories, he said Huntsman’s inventories are “very low,” and that anecdotally supply chains between Huntsman and end consumers appear lean as companies focus on cash and working capital control. He said the industry can experience sudden rebounds that lead to shortages when restocking cannot occur quickly, adding he would not be surprised if that happened in 2026 in certain regions.
On U.S. MDI capacity additions, Peter Huntsman acknowledged incremental expansion by a competitor and said the effect can be felt before start-up as suppliers begin commercial efforts ahead of new capacity. He characterized the increase as “low to mid-single digits” in North America and said he was not sure it would have a material adverse market impact. In a later exchange, he added that capacity typically ramps over time rather than flooding the market in a single day.
Europe: green shoots, cost competitiveness, and policy concerns
Discussing Europe, Peter Huntsman said he is seeing announced price increases across most producers, along with some pickup in construction and auto, and continued demand in areas tied to power infrastructure and aerospace (though not necessarily within polyurethanes). He cautioned that earlier price increase efforts in North America had fallen through after the prior year’s disruption, but said he would “take anything we can get.”
He repeatedly emphasized that Europe’s structural challenge is energy cost, saying that while benzene and certain other input costs appear broadly similar across regions, “the big drivers is energy, is natural gas and energy costs.” He said Europe also faces a wide cost curve and what he views as excess capacity, especially among smaller and less integrated facilities. He said policymakers ultimately need to decide whether they want to protect homegrown industry, adding that two macro outcomes would be “less production in Europe” and action to stop cheaper product imports.
Aerospace, advanced materials, and strategic positioning
In aerospace, Peter Huntsman said Huntsman expects to grow “slightly better than the build rate,” distinguishing aircraft build rates from delivery rates due to certification delays. He noted Huntsman content is higher on wide-body aircraft than narrow bodies, and said wide-body production remains below 2019 levels despite long backlogs. He said Huntsman has longstanding contracts for major structures and is also adding content per plane through new internal applications such as adhesives and components.
On narrow-body aircraft, he said meaningful step-change opportunities would likely require major redesigns such as composite wings or fuselages, which he does not expect in the foreseeable future, though he does see incremental opportunities in adhesives and lightweighting.
On advanced materials, Peter Huntsman said the segment should be “stable before anything else,” and highlighted the Americas as the area with the greatest opportunity for growth and margin improvement as industrial activity and building recover. He said Europe and Asia remain strong regions for advanced materials.
Strategically, Peter Huntsman said 2026 could bring further opportunities for mergers, joint ventures, and consolidation, particularly where there is “chaos” and a wide cost curve. However, he said Huntsman is not in a sale process and reiterated that the company does not comment on rumors or M&A activity. He also said Huntsman will not stretch its balance sheet, suggesting the company would need to be “creative” with structures such as joint ventures rather than adding debt.
On the balance sheet and liquidity, Lister said the company is “not concerned at all in 2026” about leverage ratios under the updated credit agreement, noting the agreement’s EBITDA definitions differ from the company’s publicly reported adjusted EBITDA and include various baskets. He also outlined liquidity, referencing an $800 million revolver, a securitization program of roughly $300 million, and over $400 million of cash at year-end, while stating the company has no interest in issuing equity “to help shore up the balance sheet.”
Finally, on working capital, Lister said the company reduced its cash conversion cycle by 10% in 2025 and is targeting another reduction in 2026. He said that absent significant macro changes, Huntsman is targeting an overall working capital inflow, supported by initiatives across inventory, accounts receivable, and accounts payable.
About Huntsman (NYSE:HUN)
Huntsman Corporation is a global manufacturer and marketer of specialty chemicals with headquarters in The Woodlands, Texas. Founded in 1970 by entrepreneur Jon Huntsman Sr., the company has grown through strategic acquisitions and organic expansion to establish a broad portfolio of products serving diverse end markets. Huntsman maintains a presence in more than 30 countries, operating manufacturing facilities across North America, Europe, Asia-Pacific, Latin America and the Middle East.
The company organizes its operations into several core business segments, including Polyurethanes, Performance Products, Advanced Materials, and Textile Effects.
