Hassan Ahmed

Hassan Ahmed inquired about the commercial ramp, specifically the $40M-$50M and incremental $20M-$25M demand, asking for clarity on forecasted versus contracted volumes and the company's conviction level. He also asked for details on the New Jersey regulatory opportunity's timeline and size, and about the key assumptions behind achieving sub-virgin cash costs for the Gen-2 design, including energy, scale, and yields.

Answer

CEO Dustin Olson expressed high conviction in the commercial ramp, attributing past delays to market education and customer adoption timing rather than technology or demand. He highlighted increasing customer shipments, revenue, and trial volumes, along with technical successes in film, pouches, and wrappers. Regarding New Jersey, Mr. Olson explained the painstaking but progressive dialogue with the NJDEP, noting the state's thoughtful approach to plastic-to-plastic solutions and the significant demand awaiting approval. For Gen-2, Mr. Olson detailed how learnings from Ironton and Durham indicate high scalability, leading to reduced CapEx per pound and significantly lower operational costs due to nearly 100% polypropylene yield recovery and efficient scaling of operations.

Hassan Ahmed inquired about the commercial ramp, specifically the $40M-$50M and incremental $20M-$25M demand, asking how much is forecasted versus contracted and for details on the conviction level. He also asked for timelines regarding the large New Jersey opportunity and the key assumptions behind achieving sub-virgin cash costs for Gen 2 design work, including energy, scale, and yields.

Answer

CEO Dustin Olson expressed high conviction in the commercial ramp, noting increasing customer shipments, revenue, and trial volumes, and highlighted the foundational nature of current work for future facilities. He acknowledged the slow but progressive education process with New Jersey regulators, emphasizing PureCycle's APR certification for recycled content. For Gen 2, Olson explained that learnings from Ironton and Durham research indicate high scalability, nearly 100% polypropylene yield recovery, and significant operational cost benefits from scaling, potentially leading to sub-virgin costs. Incoming CFO Donald Carpenter did not directly answer these questions.

Hassan Ahmed inquired about PureCycle's strategy for allocating production and leveraging pricing power given the high demand, and asked for details on the new in-house compounding project.

Answer

CEO Dustin Olson described PureCycle's product as a specialty, not a commodity, allowing for strategic customer and segment selection to maximize margins. He highlighted the new in-house compounding project as critical for meeting specific customer needs and winning large contracts. Olson stated the compounding facility is expected to be operational by the end of the year and is likely to be a model for future plants, as it provides a significant competitive advantage by delivering a reliable, drop-in ready product.

Hassan Ahmed inquired about the accelerating momentum of customer trials moving from pilot to industrial stages and sought to clarify the commercial significance of the partnership with Brückner in the BOPP film market.

Answer

CEO Dustin Olson confirmed the positive momentum in trials, noting that the growing customer funnel is building a foundation for all future growth projects. He clarified that Brückner is a premier equipment supplier, not an end customer, and their successful trial validates PureCycle's product for the entire BOPP film market, which is a 'game changer' that will open doors to numerous brand owners.

Hassan Ahmed asked for an update on unit economics, including sales price, feedstock costs, and potential EBITDA margins, given recent milestones. He also inquired about future growth projects and their timelines.

Answer

Executive Dustin Olson reaffirmed confidence in the previously stated aggregate sales price of around $1.36 per pound and favorable variable costs. He noted that while feedstock prices fluctuate, the company's vertical integration and technology flexibility provide a cost advantage. Olson also reiterated the breakeven operating ranges for Ironton (40-50%) and the overall company (80-90%). Regarding growth, he highlighted the readiness of sites in Augusta and Antwerp, the benefit of pre-purchased long-lead equipment, and the critical learnings from Ironton that will enhance future project designs and capital efficiency.

Hassan Ahmed inquired about near-term production milestone consistency into Q4, the potential timeline for achieving meaningful revenue and EBITDA, and the level of interest in new joint ventures following the SK Geo Centric partnership termination.

Answer

CEO Dustin Olson confirmed high confidence in reproducing production milestones and noted the current focus is on matching output to commercial demand. While declining to provide specific 2025 revenue projections, he expressed strong optimism for a significant commercial ramp in Q4 2024 and into 2025. Olson also stated that partner interest is growing with Ironton's success and characterized the SK relationship as 'delayed, not over.'

Hassan Ahmed asked about the significance of the ACI acquisition and product innovations for HIP's projected 5-7% sales growth in 2026, despite similar housing starts. He also questioned the long-term role of the ethylene/polyethylene portfolio, given oversupply, and if divestment would be considered.

Answer

Steve Bender, Executive Vice President and Chief Financial Officer, stated that ACI will be a significant contributor, expanding the portfolio into silicone and cross-linked polyethylene. He emphasized that product innovations, like PVC-O pipe, are key drivers for HIP's revenue and margin growth. Regarding the broader portfolio, Mr. Bender reiterated a focus on value creation, noting that near-term capital deployment opportunities are predominantly in HIP, but they would invest in PEM if a valued opportunity arises.

Hassan Ahmed asked about the drivers behind the HIP segment's sales guidance for 5-7% growth in 2026, despite similar housing starts, specifically inquiring about the significance of the ACI acquisition and product innovations. He also questioned the long-term role of the ethylene/polyethylene portfolio, given global oversupply, and whether Westlake would consider divesting it.

Answer

Steve Bender, Executive Vice President and Chief Financial Officer, Westlake Corporation, highlighted ACI as a significant contributor due to its broader portfolio (silicone, cross-linked polyethylene) and emphasized product innovations like the PVC-O plant and Westlake Royal exterior businesses as key drivers for revenue and margin growth, keeping long-term guidance on track. Regarding the portfolio, he stressed a focus on value creation, noting that near-term capital deployment opportunities are predominantly in HIP due to North American underbuilding, but Westlake continues to evaluate both PEM and HIP for the best investment returns.

Hassan Ahmed sought clarification on the bridge to 2026 EBITDA, asking if it's fair to assume a $500 million year-over-year increase from self-help initiatives, including $200 million in cost savings, $100 million from footprint optimization, $200 million from avoiding 2025 operational issues, and acquisition accretion. He also asked how the $727 million impairment charge in the PEM segment relates to valuation data points from the OxyChem deal and potential valuation leakage in Westlake's current portfolio structure.

Answer

Steven Bender, EVP and CFO, confirmed that Mr. Ahmed had well-outlined the direction of Westlake's thinking regarding cost reduction, improved reliability, and asset optimization, acknowledging the challenges of unplanned outages and higher planned turnarounds in 2025. Regarding the impairment, Mr. Bender explained it was a mechanical process triggered by the extended trough in the chlorovinyls business, emphasizing that it does not reflect an impairment of the assets themselves, as the business is expected to perform well in the medium to long term.

Hassan Ahmed sought a bridge to 2026 EBITDA, asking if it was fair to assume a $500 million year-over-year increase based on cost savings, asset optimization, resolution of operational issues, and acquisition accretion.

Answer

Steve Bender (EVP and CFO) confirmed that the analyst's outline of the three pillars—cost reduction, improved reliability, and asset optimization—accurately reflects Westlake's strategic direction. He acknowledged the impact of both planned and unplanned outages in 2025 and the company's determined focus on improving the bottom line through these initiatives.

Hassan Ahmed of Alembic Global Advisors asked for Westlake's view on the North American chlor-alkali supply picture through the end of the decade, given some announced projects. He also inquired about any signs or discussions of capacity rationalization in China for products like ethylene, polyethylene, and chlorovinyls.

Answer

President & CEO Jean-Marc Gilson stated that Westlake sees stability in the chlor-alkali market going forward, with a potential demand uplift by the end of the decade. Regarding China, he acknowledged that while low prices should prompt restructuring, not much has been seen yet. CFO Steven Bender added that while China's NDRC has made announcements, any action will take time.

Hassan Ahmed of Alembic Global Advisors inquired about global capacity rationalization trends in the PVC market and the current state of the global PVC cost curve. He also asked about the status of anti-dumping duties on epoxy and their potential to restore profitability to that business.

Answer

Jean-Marc Gilson, President and CEO, described the global PVC market as oversupplied, particularly in Asia, with ongoing rationalization in Europe due to high energy costs. On epoxy, he stated that while anti-dumping duties have been implemented, their impact on profitability has been muted, as some major producers were not affected, thus limiting a quick recovery.

Hassan Ahmed pressed on how Westlake expects to achieve value recognition without separating its businesses and questioned the company's positive view on caustic soda pricing, which seems divergent from some negative consultant outlooks.

Answer

President and CEO Jean-Marc Gilson emphasized the continuous growth of the HIP business, which provides a stable, high-margin foundation, while the cyclical PEM business is positioned for a strong rebound. EVP and CFO Steve Bender addressed the chlor-alkali question by noting that major consultants' average price forecasts for 2025 are actually higher than 2024 levels, supporting Westlake's constructive view based on current market demand.

Hassan Ahmed revisited TT volumes, noting Q4 declines and a weak Q1 outlook, and asked what anti-dumping related market share gains are baked into the $800 million to $900 million EBITDA guidance, given 800,000 tons are 'up for grabs.' He also asked if Chemours expects to be in line with or better than the typical 2% to 3% market volume growth. Finally, he inquired about the comfort level with the 1.1 million tons of capacity rationalizations since 2023 and potential rationalizations in China due to anti-involution.

Answer

CEO Denise Dignam stated that the focus for TT is on executing their global price increase and delivering value through pricing efforts, with duties being helpful but not the primary driver. She projected a stable market without expectations for significant growth, emphasizing Chemours' focus on value and pricing with stable volumes. Ms. Dignam reiterated confidence in the 1.1 million tons of announced capacity rationalizations but could not speak to additional rationalizations in China from anti-involution, noting they haven't seen much more than that.

Hassan Ahmed from Alembic Global Advisors questioned the TT segment's volume declines in Q4 and Q1, asking what anti-dumping related market share gains were factored into the $800M-$900M EBITDA guidance.

Answer

President and CEO Denise Dignam emphasized Chemours' focus on executing its global price increase and delivering value through pricing efforts, projecting a stable market without expectations for significant growth. She reiterated confidence in growth opportunities for TSS and APM. Ahmed also asked about the 1.1 million tons of capacity rationalizations since 2023 and potential further rationalizations in China due to anti-involution. Dignam confirmed confidence in the 1.1M tons figure, based on public announcements, but could not speak to additional rationalizations in China.

Hassan Ahmed from Alembic Global Advisors expressed concern about the Titanium Technologies (TT) segment, asking if the strong sequential volume growth at the expense of price signaled a departure from the industry's 'value over volume' strategy. He also requested a long-term outlook for TiO2 supply and demand dynamics beyond 2026.

Answer

President & CEO Denise Dignam pushed back on the conclusion of dropping price, emphasizing the strategy is focused on commercial excellence and winning based on value proposition. For the long-term TiO2 outlook, she noted no major demand trigger this year but expects improvement next year. She highlighted the supply side as the key story, with significant capacity rationalization in China creating a more balanced market and improving trends for fair-trade zones.

Hassan Ahmed requested a more granular view of the 2025 guidance for the Titanium Technologies (TT) segment, asking about the underlying assumptions for pricing, volumes, and any potential boost from anti-dumping measures. He also asked for Chemours' perspective on global TiO2 supply additions in 2025.

Answer

CEO Denise Dignam stated that the guidance does not bake in a significant macroeconomic change but reflects opportunities created by declining Chinese exports into the EU and Brazil. Regarding global supply, she indicated that Chemours anticipates net capacity additions for TiO2 in 2025 to be on the low side of industry forecasts.

Hassan Ahmed inquired about the potential opportunity for the Titanium Technologies (TT) segment from global antidumping measures. He also sought clarification on the segment's Q3 volume performance and the rationale behind the Q4 guidance for a sequential decline, questioning the degree of seasonality after a prolonged destocking cycle.

Answer

CEO Denise Dignam acknowledged that antidumping actions are helpful but stressed that the company's core strategy is to control what it can by driving a low-cost position via its TT Transformation Plan. She attributed the solid Q3 volume performance to commercial and operational excellence. For Q4, she confirmed the expected decline is due to normal seasonality, especially in North America, but noted that there is potential for upside in 2025, particularly if interest rates fall.

Hassan Ahmed asked for confirmation on the expectation of strong 2026 volume growth driven by market share gains from anti-dumping, and the confidence in Q1 pricing and beyond, considering industry profitability and the absence of 'sloppy' pricing. He also inquired about Tronox's thoughts on further rationalization, particularly in China, given the improving backdrop and anti-involution dynamics.

Answer

CEO John Romano agreed that 2026 volume growth is primarily driven by business restructuring and anti-dumping initiatives, with market demand improvement being an additional catalyst. He confirmed confidence in Q1 pricing due to industry-wide announcements, low industry profitability, and the permanent closure of 1.1 million tons of Western supply capacity since 2023. Regarding rationalization, Romano noted that the Fuzhou closure was difficult and that he would have expected more capacity closures in China already. He suggested that continued expansion of anti-dumping initiatives and high sulfur prices (up 160% since early 2025) could drive further rationalization, potentially a mix of both in and outside China, depending on the pace of market recovery.

Hassan Ahmed sought clarification on Tronox Holdings' 2026 volume outlook, asking if it's fair to assume meaningful year-on-year volume growth primarily from market share gains due to anti-dumping, with demand growth being additional upside. He also asked if the confidence in Q1 and beyond pricing was driven by the absence of sloppy pricing (e.g., from bankruptcies) and the industry's low profitability. As a follow-up, he inquired about thoughts on further rationalization, particularly in China, given the improving backdrop and the anti-involution trend.

Answer

CEO John Romano confirmed that Tronox is not forecasting tremendous demand growth, with 2026 volume primarily driven by business restructuring and market share recapture from anti-dumping, which could lead to being sold out with 100,000 tons of gains. He agreed that pricing confidence stems from the industry's need to return to profitability, the absence of isolated price reductions, and the permanent closure of significant Western capacity (1.1 million tons since 2023). Regarding further rationalization, Romano noted that the Fuzhou closure was difficult and that while he would have expected more capacity to exit China already, continued expansion of anti-dumping initiatives and high sulfur prices (up 160% since early 2025) could drive more rationalization, potentially a mix of both in and outside China, depending on the pace of market recovery.

Hassan Ahmed from Alembic Global Advisors questioned the rationale for the dividend cut, asking if a variable policy was considered, and inquired about progress in accelerating the rare earth elements business via partnerships.

Answer

CEO John Romano and CFO John Srivisal stated the dividend was reduced to align with the macro environment and enhance financial flexibility, adding it will be re-evaluated as the market recovers. On rare earths, Romano confirmed active discussions with governments and partners in the U.S., Saudi Arabia, Brazil, and Australia to accelerate opportunities.

Hassan Ahmed asked for the rationale behind expecting pricing momentum in the seasonally weaker second half of the year and sought an update on the anti-dumping opportunity and on-the-ground customer interactions.

Answer

CEO John Romano explained that pricing gains are being driven by supply shifts from anti-dumping duties, not just seasonal demand. He confirmed they are already achieving price increases in Europe in Q2. He also noted that they are actively regaining share in Europe and are in discussions with customers in India ahead of the expected duties, positioning themselves to capture volume.

Hassan Ahmed questioned the seemingly conservative 2025 guidance, asking if it was based only on volume growth, and requested an update on the potential 600,000-ton market share gain from antidumping duties.

Answer

CEO John Romano clarified the guidance includes assumptions for both volume growth and price improvement in the second half of the year, but is also impacted by $50-$60 million in temporary mining costs. On antidumping, he confirmed they are seeing benefits in Europe and Brazil and noted that newly recommended duties in India, a major market, are factored into their volume growth expectations and should provide a significant tailwind.

Hassan Ahmed questioned the guidance for a steep Q4 demand decline given lean customer inventories, asking if it signaled a new industry paradigm. He also asked how much of the 650,000 tons of tariff-impacted volume Tronox could capture.

Answer

CEO John Romano attributed the Q4 slowdown to broader economic uncertainty and customers managing year-end balance sheets, not a fundamental paradigm shift in inventory strategy. Regarding tariffs, he used the U.S. as an example, where strong duties have reduced Chinese imports to just 24,000 tons in a million-ton market, suggesting a significant potential capture for Tronox in regions like Brazil where new duties are substantial.

Hassan Ahmed inquired about the potential for a significant volume uptick in polyurethanes in Q2 2026, given lean inventories, and the expectation for a healthy pricing trajectory in North American polyurethanes despite incremental capacity.

Answer

Peter Huntsman, Chairman, CEO, and President, stated that a significant volume uptick in Q2 depends on macro issues like the construction season, which will be clearer by the end of March. He noted the delicate balance between pushing price increases and pursuing volume. He added that it's too early to definitively predict a healthy pricing trajectory in North America, with pricing announcements likely impacting Q2.

Hassan Ahmed asked about the potential for a significant volume uptick in polyurethanes in Q2 2026, given lean inventories, and the confidence in a healthy pricing trajectory for North American polyurethanes despite incremental capacity.

Answer

Peter Huntsman (Chairman, CEO and President) stated that a volume uptick depends on macro construction season issues by the end of March, and balancing price increases with volume pursuit. He expressed inherent optimism for pricing but cautioned it's too early to tell for North America and China, with impacts likely seen in Q2 if successful.

Hassan Ahmed of Alembic Global Advisors asked to quantify how far polyurethane volumes are below normal levels and sought more detail on the intense competitive environment in Europe.

Answer

Chairman, President & CEO Peter Huntsman estimated that volumes were about 5-8% below normal, primarily due to an 'incredibly anemic' housing and construction market. Regarding Europe, he sees no near-term resolution to the competitive pressure, noting that some producers appear to be prioritizing volume over value.

Hassan Ahmed sought confirmation that the long-term outlook for U.S. MDI producers is highly favorable due to tariffs and anti-dumping actions against Chinese imports. He also theorized about potential Chinese polyurethane and PDH capacity rationalization due to tariffs on U.S. LPG imports.

Answer

CEO Peter Huntsman agreed that the combination of existing 301 tariffs, new 'Trump tariffs,' and a separate, long-term anti-dumping case would almost certainly have a positive impact on the North American MDI market. He detailed the different tariff buckets and their potential longevity. Regarding Chinese rationalization, Huntsman acknowledged it was an excellent and well-thought-through point, agreeing that significant changes in global supply chains are likely to play out over the next couple of quarters.

Hassan Ahmed asked about the potential for volume recovery to 'normal' levels now that destocking is over and whether Huntsman's global footprint is an advantage in the current tariff environment.

Answer

CEO Peter Huntsman pointed to 2021 as a benchmark for a sold-out environment, noting the company is better positioned now with its Geismar splitter. He affirmed that the company's strategy of producing locally, with over 90% of products sold within their region of manufacture, is a significant advantage.

Hassan Ahmed asked about the risk of industry fragmentation if state-owned players like ADNOC acquire European assets. He also inquired about the potential for an inventory restocking cycle, given changes in corporate appetite for holding inventory.

Answer

Chairman, CEO and President Peter Huntsman suggested the ADNOC-Covestro deal doesn't fundamentally change industry dynamics unless a company is splintered. Regarding inventories, he explained that they are currently low due to high capital costs and anemic demand. He does not foresee a widespread restock until genuine demand returns, at which point a price spike is likely due to the chemical industry's slower supply response.

Hassan Ahmed from Alembic Global asked to revisit Celanese's $650 million-$750 million free cash flow guidance, specifically questioning its resilience if demand does not improve significantly from Q4 levels, and how this impacts other factors like the $100 million working capital uplift. He also inquired about the confidence in achieving an incremental $500 million in asset sales by 2027 and whether that target could potentially be higher.

Answer

Scott Richardson, President and CEO of Celanese, expressed strong confidence in achieving the $650 million-$750 million free cash flow target, even in low demand scenarios, by leveraging various financial tools and managing timing. Chuck Kyrish, CFO, affirmed the aggressive pursuit of divestitures, expecting another deal in 2026, and stated that the $1 billion total target by 2027 is a probability-weighted number that could theoretically be exceeded as part of their debt paydown strategy.

Hassan Ahmed revisited Celanese's $650M-$750M free cash flow guidance, asking about its resilience if demand remains flat from Q4 levels and its impact on working capital, and inquired about the confidence in achieving an incremental $500M in asset sales by 2027, including the potential for a higher figure.

Answer

VP of Investor Relations Bill Cunningham expressed strong confidence in achieving the $650M-$750M free cash flow target, even in low demand scenarios, due to the company's ability to manage working capital and other levers. President and CEO Scott Richardson confirmed aggressive pursuit of divestitures, feeling good about another deal in 2026, and noted that the $1 billion target by 2027 is probability-weighted and could potentially be exceeded.

Hassan Ahmed asked for more granularity on Celanese's path to a $2 per share quarterly EPS run rate, starting from Q3's $1.34, considering self-help, Micromax, and reduced interest expense. He also inquired about the impact of 'anti-involution' in China, particularly with PetroChina's announced study of asset retirements, on the acetyls chain and Celanese.

Answer

Scott Richardson, President and CEO, affirmed the continued focus on achieving a $2 per quarter EPS run rate, acknowledging it might take longer if demand remains low. He noted that current actions for next year position Celanese in the $1.75-$2 range, with additional cost savings and pipeline growth, plus any demand improvement, pushing it to the target. Regarding anti-involution in China, Mr. Richardson observed a palpable dialogue on the ground but no direct impact yet, though he expects it to be an important step for improving asset profitability in China.

Hassan Ahmed sought granularity on Celanese's near-term guidance, specifically the path to a $2/share quarterly EPS run rate via self-help and reduced interest expense, and views on anti-involution impacting the acetyls chain in China.

Answer

President and CEO Scott Richardson reiterated focus on controllable actions to reach the $2 run rate, noting that cost actions and the EM pipeline position them near $1.75-$2, with any demand improvement closing the gap. He acknowledged the palpable dialogue on anti-involution in China, expecting it to be an important step for asset profitability, though direct impact is hard to quantify.

Hassan Ahmed of Alembic Global Advisors asked if best practices from the Acetyls business model could be applied to Engineered Materials to improve stability. He also inquired about the progress of the planned $1 billion divestiture program amid macro uncertainty.

Answer

CEO & President Scott A. Richardson confirmed that elements of the Acetyls model are being applied to EM, particularly in standard grade materials, by optimizing make-vs-buy decisions. Regarding divestitures, he reported that the MicroMax process is proceeding well, with second-round bids expected within a month, and expressed increased confidence in other divestiture projects.

Hassan Ahmed of Alembic Global Advisors asked how best practices from the Acetyls business model could be applied to Engineered Materials, especially with potential reshoring. He also inquired about the status of the company's $1 billion divestiture program.

Answer

CEO & President Scott A. Richardson explained that elements of the Acetyls model, like make-versus-buy decisions and optimizing production in low-cost assets, are already being applied to standard grades in EM, such as nylon. Regarding divestitures, he reported that the MicroMax process is progressing well, with second-round bids expected in the next month. He also expressed increased confidence in the non-MicroMax divestiture projects compared to a quarter ago, despite their complexity.

Hassan Ahmed of Alembic Global Advisors asked how best practices from the acetyls business model could be applied to the Engineered Materials segment. He also requested an update on the $1 billion divestiture plan amid a weakening macro environment.

Answer

CEO Scott A. Richardson explained that elements of the acetyls model, like make-versus-buy analysis and production optimization, are being applied to standard grade EM products like nylon and polyester. On divestitures, he reported that the MicroMax sale process is progressing well, with second-round bids expected within a month. He also expressed increased confidence in completing other non-MicroMax deals.

Hassan Ahmed sought to confirm if a $2/share EPS run rate implies over $1 billion in annual free cash flow, which, combined with divestitures, would significantly aid debt paydown. He also asked if the revised earnings power for the EM business is now higher than originally anticipated.

Answer

CEO Scott Richardson agreed that the company's cash generation capability is not fully recognized and that over $1 billion in free cash flow at those earnings levels is 'in the right range.' On EM's earnings power, he pivoted away from long-term forecasts, stating they are focused on improving current performance. He drew a parallel between the current nylon market and the acetyls market during the 2008-2009 crisis, expressing confidence in their playbook to drive improvement.

Hassan Ahmed asked if the Q2 EPS guidance of $1.25 to $1.50 should be considered the run rate for the second half if the macro environment doesn't change, and questioned if the company's earnings leverage to a recovery is the same as in prior years.

Answer

CEO Scott Richardson stated the company is working to drive the run rate much higher than the Q2 guidance, citing actions like complexity reduction, optimizing the acetyls model, and reversing margin compression. Regarding earnings leverage, he noted the company is aligning its efficient manufacturing footprint with geographic demand shifts, particularly the growth in Asia, to ensure it can enjoy the operating leverage it has historically had.

Hassan Ahmed of Alembic Global Advisors asked how Celanese is adapting its forecasting to volatile customer buying patterns and questioned the basis for confidence in the sustainability of Acetyl Chain margins.

Answer

COO Scott Richardson explained the company is leveraging its newly integrated systems to remain flexible and adapt to rapid market shifts. CEO Lori Ryerkerk and Richardson attributed sustainable Acetyl Chain margins to their advantaged global cost position, proprietary technology, and network flexibility.

Hassan Ahmed asked for clarification on reconciling the Q1 2026 guidance with the full-year 2026 guidance, considering growth, margin reversals, and seasonality, and then inquired about Solstice's M&A strategy given its new public status and recent chemical valuation trends.

Answer

David Sewell (President and CEO) attributed the reconciliation to continued transitory costs from the Honeywell split (TSA agreements) and the nuclear loan repayment as 2026 one-time factors. Tina Pierce (CFO) detailed Q1 year-over-year margin headwinds, including stationary OEM sales dynamics, ramped corporate expenses, and TSAs (heavier in H1). She also noted strong growth in nuclear, electronic materials, refrigerants, and defense, a conservative stance on construction, price covering inflation, and a slight FX tailwind. Regarding M&A, David Sewell emphasized a strong balance sheet and a robust pipeline, stating that M&A is on the table for strategic, high-return opportunities, and they might move faster for attractive bolt-on assets.

Hassan Ahmed sought clarification on how to reconcile the Q1 2026 guidance with the full-year 2026 guidance, particularly regarding the bridge from Q1 to the full year, considering growth, margin reversals, seasonality, and other factors. He also asked about Solstice's M&A strategy, especially in light of recent chemical valuation run-ups, and whether the company might accelerate M&A despite being a new independent entity.

Answer

David Sewell, President and CEO, attributed the reconciliation to two main 2026 one-time situations: continued transitory costs from the Honeywell spin-off (TSA agreements) and the nuclear loan repayment. Tina Pierce, CFO, elaborated on Q1 year-over-year margin decline drivers, including more OEM sales in stationary refrigerants (454B kicking in later in Q2 2025), ramped corporate expenses, and TSAs (roughly $30 million, heavier in the first half). She also outlined 2026 expectations: strong growth in nuclear, electronic materials, refrigerants, and defense; conservative stance on construction; price covering inflation; slight FX tailwind; and the $30 million nuclear loan repayment impact. Regarding M&A, David Sewell expressed gratitude for a strong balance sheet and a robust M&A pipeline. He stated that M&A is on the table if it fits strategy and return profile, and Solstice might move faster for attractive bolt-on assets at the right price.

Hassan Ahmed asked for a sequential bridge for Olin's Q1 guidance, specifically seeking the impact of natural gas price swings and weather-related capacity shutdowns, as well as the effect of copper pricing.

Answer

Ken Lane, Olin's President and CEO, provided a year-over-year bridge instead, highlighting a significant $40 million increase in turnaround spend for Q1 2026 compared to Q1 2025. He also noted significantly higher power and natural gas costs, exacerbated by Winter Storm Fern, which led to proactive asset shutdowns and higher power prices. Lane mentioned that the Winchester facility in Oxford, Mississippi, was still down due to the storm.

Hassan Ahmed sought a deeper understanding of Olin's Q1 guidance, requesting a sequential bridge. He asked about the impact of natural gas price swings on EBITDA, and what Q1 guidance would look like under normal nat gas prices, without weather-related shutdowns, and with normal copper pricing.

Answer

Ken Lane, Olin's President and CEO, declined to provide specific metrics, citing complexity. He offered a year-over-year bridge, highlighting a $40 million increase in turnaround spend for Q1 2026 compared to Q1 2025. Lane also noted significantly higher power and natural gas costs, including impacts from Winter Storm Fern, and that Winchester's Oxford, Mississippi facility remained down. He indicated that Epoxy improvements and Winchester declines would be a net wash year-over-year.

Hassan Ahmed inquired about the potential increment to 2026 EBITDA from self-help initiatives, the Dow contract, the absence of epoxy turnarounds, and cost-cutting efforts, considering the implied 2025 EBITDA guidance.

Answer

Ken Lane, President and CEO, and Todd Slater, CFO, discussed the Beyond 250 cost reductions, projecting a $70 million-$90 million run rate into next year, including benefits from the new Dow agreement at Stade. They noted potential upside for 2026 but also a major VCM turnaround in the first half of 2027 as a headwind, promising more details in the Q4 earnings call.

Hassan Ahmed asked about Olin's potential EBITDA increment in 2026, focusing on self-help initiatives, the Dow contract, and cost-cutting efforts, while considering the impact of the epoxy business and turnarounds.

Answer

President and CEO Ken Lane highlighted the Beyond 250 cost reductions, projecting a $70-$90 million run rate into 2026, including benefits from the new Dow agreement at Stade, with further details expected in the Q4 earnings call. CFO Todd Slater noted a major VCM turnaround in the first half of 2026 as a potential headwind.

Hassan Ahmed of Alembic Global Advisors asked for a reconciliation of the Q3 EBITDA guidance range of $170-210 million, noting that positive sequential drivers seemed to suggest a result at the higher end compared to Q2's $176 million.

Answer

President and CEO Ken Lane explained that the wide guidance range reflects significant market uncertainty. While lower turnaround costs are a tailwind, this is offset by headwinds such as higher raw material costs in the Winchester segment and EDC pricing stabilizing at a new, lower level. He emphasized that while the company aims for the high end, the primary focus remains on maximizing cash generation in a challenging market.

Hassan Ahmed of Alembic Global Advisors questioned Olin's Chlor Alkali operating rates during Q1, seeking to understand how high they went as the company took advantage of unplanned industry outages.

Answer

President and CEO Kenneth Lane confirmed that operating rates were elevated in Q1 versus expectations due to the deferral of a planned turnaround to meet spot demand. However, he emphasized this was opportunistic and that rates have since returned to lower levels as the turnaround moved into Q2, reflecting Olin's disciplined approach of aligning production with demand at desired value levels.

Hassan Ahmed questioned the near- and medium-term supply outlook for chlor-alkali, citing potential capacity creep from adjacent industries.

Answer

CEO Kenneth Lane stated that Olin's view is that the market will remain relatively balanced, as capacity closures are occurring sooner than new additions. He emphasized that current market economics are far from justifying new investments, and even if all announced projects materialize, the net impact on supply should be neutral.

Hassan Ahmed from Alembic Global Advisors questioned the Q4 EBITDA guidance, asking why the sequential improvement isn't greater given the reduced hurricane impact. He also sought a qualitative preview for 2025.

Answer

President and CEO Kenneth Lane explained that the Q4 guidance reflects normal seasonality in a weak trough market for Chemicals, but more significantly, a weaker outlook for Winchester. The Winchester segment is experiencing continued retailer destocking and typical Q4 seasonality. For 2025, Lane anticipates continued market uncertainty similar to 2024 until interest rates are cut more aggressively, delaying a demand recovery in key markets like housing.

Hassan Ahmed inquired about the current status of ethylene capacity rationalizations, specifically seeking an update on the previously mentioned 20 million tons. He also asked about Dow's rationale for proceeding with the Alberta Path to Zero project, considering potential impacts of lingering "phantom capacity" on future upcycles and the project's broader landscape implications.

Answer

Jim Fitterling, Chair and Chief Executive Officer, stated that there isn't dramatically new data on ethylene capacity rationalizations, with 15%-20% of European capacity firmly announced. Regarding the Path to Zero project, he explained that current market changes are expected to lead to the next upcycle, with demand in high-volume markets like housing and infrastructure poised for recovery. Fitterling emphasized that Path to Zero will add a first-quartile cracker while Dow exits fourth-quartile positions, with project returns at the low end but potential upsides from cost mitigation and low-carbon product premiums. He also noted that detailed engineering design is complete and long-lead items are procured, providing a good handle on costs.

Hassan Ahmed inquired about the latest updates on ethylene capacity rationalizations, specifically the 20 million tons figure previously discussed. He also sought clarification on Dow's decision to proceed with the Alberta Path2Zero project, questioning its broader market impact and potential for 'phantom capacity' to impede future upcycles.

Answer

Jim Fitterling, Chair and Chief Executive Officer, stated there isn't dramatically new data on ethylene capacity rationalizations, with 15-20% of European capacity exiting. He emphasized that Path2Zero will add a first-quartile cracker while Dow exits fourth-quartile positions, with favorable returns and potential upsides from cost mitigation and low-carbon product premiums.

Hassan Ahmed sought Dow's perspective on the broader industry rationalization and new project cancellations, specifically questioning the impact of China's anti-involution policies and whether China's historical trend of completing announced projects is changing.

Answer

Chair and CEO Jim Fitterling detailed confirmed global ethylene capacity rationalization of about 9,300 kilotons, with significant portions in Europe, Middle East, Africa, and Asia Pacific. He noted speculation on additional closures, particularly in China due to anti-involution policies. Fitterling acknowledged China's track record of completing announced projects but suggested potential delays due to a slow market and self-sufficiency in certain product grades.

Hassan Ahmed inquired about the broader outlook for industry rationalization and new project cancellations, specifically focusing on the impact of China's anti-involution policies and whether the historical trend of Chinese projects never being canceled is changing.

Answer

Jim Fitterling, Chair and Chief Executive Officer, outlined confirmed global capacity rationalization of 9,300 kilotons, with significant portions in EMEA and Asia Pacific. He noted speculation of an additional 13 million metric tons of closures, including 7 million tons in China due to anti-involution policies. While acknowledging China's track record of completing announced projects, he suggested potential delays in some Chinese capacity due to a slow market, self-sufficiency in certain grades, and pressure from anti-dumping duties.

Hassan Ahmed from Alembic Global Advisors posed two questions: first, on the philosophy of maintaining a fixed dividend in a cyclical industry instead of a variable one, and second, on the polyethylene supply-demand outlook, given concurrent capacity closures and new project announcements.

Answer

Chairman and CEO Jim Fitterling responded that a competitive, fixed dividend is a core part of Dow's 128-year investment thesis, valued by its investors. He stated the reduction creates a better balance of shareholder returns and capital flexibility. Regarding polyethylene, he noted that closures are in high-cost regions like Europe, while new capacity is still required to meet long-term global demand growth, with current dynamics reflecting an adjustment to trade shifts.

Hassan Ahmed revisited the topic of China's reliance on U.S. feedstock imports (ethane, LPG), asking how Chinese producers might react if tariffs persist and if this could accelerate global capacity rationalization.

Answer

Chair and CEO James Fitterling agreed with the premise, noting that the affected Chinese assets are currently operating at negative cash margins, which he believes is a key reason for the ongoing tariff discussions. He stated that while this creates pressure for rationalization, the immediate and larger issue is that the tariff uncertainty is stifling overall global demand.

Hassan Ahmed of Alembic Global Advisors asked for clarification on the Packaging & Specialty Plastics (P&SP) guidance, specifically the underlying assumptions for polyethylene and ethane pricing amid announced price hikes and rising costs.

Answer

COO Karen S. Carter explained that while Dow has announced $0.12 per pound in price increases for Q1, rising feedstock costs are currently outpacing the rate of price implementation, leading to a margin squeeze. She affirmed that margins have become unsustainable and Dow will be "resolute" in achieving its price increases. CEO James Fitterling added that feedstock cost spikes are typical for the season and are expected to moderate.

Hassan Ahmed asked for insights into the strategic review of Dow's European polyurethane assets and the broader outlook for the polyurethane market cycle, considering destocking, supply dynamics, and recent industry transactions.

Answer

James Fitterling, Chair and CEO, stated that Dow is positioned for a recovery in construction and durables markets, which drive polyurethane demand. He clarified that the European asset review is a strategic portfolio shift to focus on low-cost assets and is not a reflection on the polyurethane business itself, which he described as good and diverse. He added that destocking has run its course, but a broader economic turn is needed to spur demand.

Hassan Ahmed of Alembic Global Advisors sought a baseline 2026 EBITDA and free cash flow outlook in a continued weak demand scenario and asked about the impact of potential EU anti-dumping measures on ABS.

Answer

President & CEO Frank Bozich reiterated his belief in a macro-driven demand recovery. EVP & CFO David Stasse highlighted that 2026 free cash flow will benefit from lower restructuring costs and reduced interest expense from potential rate cuts. Regarding ABS, Bozich is encouraged by EU anti-dumping dialogue and potential Chinese capacity rationalization, noting that tariffs on Chinese goods, including those transshipped via Mexico, would ultimately benefit Trinseo's local production.

Hassan Ahmed of Alembic Global Advisors inquired about the sustainability of strong consumer electronics volume growth, the company's confidence in its Q2 free cash flow guidance, and the impact of industry-wide styrene shutdowns.

Answer

CEO Frank Bozich stated that strong consumer electronics demand has continued into Q2 and is not seen as pre-buying ahead of tariffs, but rather as success in winning new applications with recycled materials. He also noted that styrene plant closures have not negatively impacted Trinseo's business. CFO David Stasse expressed confidence in achieving breakeven free cash flow for Q2, citing working capital levers and the collection of a $21 million licensing fee in April.

Hassan Ahmed sought perspective on the full-year 2025 outlook based on Q1 guidance and asked about normalized EBITDA margins for the rebounding Engineered Materials segment.

Answer

CEO Frank Bozich declined to provide a full-year guide but expressed confidence in positive earnings momentum, citing the Deepak license deal, SG&A savings, PC asset closure benefits, and an expected normalized contribution from AmSty. Regarding EM margins, Bozich stated defining 'normal' is difficult but pointed to positive momentum from a strong portfolio, growth in PMMA and consumer electronics, and high demand for circular solutions.

Hassan Ahmed of Alembic Global Advisors asked if LyondellBasell would consider acquiring smaller recycling companies given lower valuations, and inquired about the company's general strategy for expansion in that area.

Answer

CEO Peter Vanacker responded by highlighting the significant investments already made over the past five years across the portfolio and noted the company has latent growth potential from running assets below full capacity. He concluded that while the company monitors the market, there is 'nothing concrete' to announce regarding M&A.

Hassan Ahmed of Alembic Global questioned how LyondellBasell will create value from its European asset review, given a potentially crowded market for asset sales and the high cost of shutdowns in the region.

Answer

CEO Peter Vanacker responded that most peer announcements have been for shutdowns, not sales, and that LYB's assets for review are 'good assets' with advantages like feedstock flexibility and favorable logistics. He suggested that there may be better strategic owners for these assets as LyondellBasell pivots its own investment focus to more advantaged regions like the Middle East. CFO Michael McMurray added that the process is ongoing.

Hassan Ahmed asked for an explanation of why methanol demand has remained resilient compared to other chemicals and inquired about the demand outlook amid macroeconomic volatility. He also asked about the company's strategy for managing U.S. natural gas price risk, especially with the increased exposure from the pending OCI acquisition.

Answer

Executive Rich Sumner attributed methanol's demand resilience to stable energy applications and, crucially, constrained global supply from regions like Iran and Russia, which has balanced the market despite slower traditional demand. For U.S. natural gas, he highlighted the company's active rolling hedge program and noted that they see opportunities to lock in favorable long-term costs for the new OCI assets.

Hassan Ahmed asked about the drivers behind the pricing delta between North American and Asian markets. He also inquired about the company's natural gas hedging strategy in light of price movements and the potential impact of U.S. tariffs on Canadian products.

Answer

President and CEO Rich Sumner attributed the Atlantic pricing premium to structural supply constraints in Europe and the Americas, compounded by Red Sea trade disruptions. He confirmed the company's gas hedging strategy remains around 70% covered. Regarding tariffs, he stated the direct business impact would be marginal due to supply chain flexibility, though they are monitoring potential retaliatory measures.

Hassan Ahmed of Alembic Global Advisors asked for details on the New Zealand gas contract structures, including potential restitution for non-delivery, and sought insights into the global methanol inventory situation and non-MTO demand in China.

Answer

President and CEO Rich Sumner explained that New Zealand gas contracts have restitution clauses if available gas is not delivered, and these discussions are ongoing. On demand, he described the market as structurally tight, with strong global demand growth outside of MTO and high operating rates in China limiting latent supply, keeping inventories tight.