<b>Huntsman expects the global MDI market to improve rapidly</b>

Huntsman is optimistic about the development of downstream industries and the rapid recovery of markets outside Europe.

Against the background of the global spread of the new crown epidemic, the compound annual growth rate of the global methylene diphenyl diisocyanate (MDI) market is more than 5%. Peter Huntsman, chairman, president and chief executive officer of Huntsman Corporation, the global leader in MDI's polyurethane business, believes this volatile market will become even more tense in the future.

"The fundamentals of the MDI market are tight, and the scale of (MDI) single-line projects ranges from 400,000 tons to 600,000 tons. The global capacity utilization rate may reach as high as 90%. When you You're going to see a lot more volatility like this when you're getting 2-3% gains in a sector. Mentioned by Mr. Huntsman at Deutsche Bank's Global Basic Materials Conference June 9-10, 2021.

In a conversation with David Begleiter, a chemical research analyst at Deutsche Bank, Mr. Huntsman revealed that his company has 30% of its production capacity in China, half of which is aggregated MDI and more The production capacity of commercial products, and 15% is the production capacity of raw materials.

Speaking of the outbreak, Peter R. Huntsman said: "I would not say it has no impact. As the Chinese market continues to develop, we are in the downstream industry of aggregated MDI In the process of development, and benefited from it. When the price surged in just a few days, we told the market that it was due to the Chinese New Year holiday at that time, and the capacity of nearly 1 million tons / year in the beginning of the first quarter due to maintenance or operational issues. We have advised our customers that this is only a temporary issue.”

Huntsman provided valuable insight into the market, saying: "I don't see capacity being impacted in any significant way, nor are there any shutdowns. I'm Think that all the capacity for demand is being unleashed by production. We have a fairly large supply market and the demand market is balancing it. Also, I don't think there's going to be a big change in margins, but there's been a recent Reports of supply issues with 3rd party suppliers. Over the past few months we have seen a few hiccups that have cost us millions."

In terms of regional growth, Mr. Huntsman believes that the situation in the European market is improving, and the situation in China is also very stable. "Globally, Europe is recovering, China is doing well, and North America is doing pretty well. The industry looks fairly balanced at the moment. The shift could happen towards the end of 2021. If European demand continues to be like it is now, we'll see that in the fourth quarter." See, the demand from the automotive and construction industries is not optimistic. If you look at the number of new installations around the world, this is a single digit growth, 4-7% depending on the application side. In terms of capacity, there are no projects under construction in North America , there is little progress in Europe either. While China gets a bad rap for volume-for-profit, Europe's chemical industry will come under pressure and will outsource manufacturing to China due to stringent environmental regulations. I think markets outside of Europe will continue Doing well and will recover quickly."

Sharing his views, Mr Huntsman said: "The market is very demanding and shrewd. When we look at our peers, we see that many of them are EBITDA has improved a lot. You might be frustrated at the market as a whole, but at the micro level, it's a nice improvement."

After introducing the company's strategy, he said: "It is difficult to adjust the production margin in the MDI plant. In the long run, the sales price increase at a lower cost must be Higher than production growth. Intermediate business must be divested and merged with other businesses.

"I feel like downstream processing is generating more cash flow. So we're going to focus 70% of our MDI business on downstream. We're going to focus on just a few geographies , may close several units. We will focus more on blends and expand the application of terephthalic acid (TPA). Although this does not necessarily mean that the MDI market is right or wrong, the long-term goal is to reduce volatility and increase stability sex and cash flow, added Mr. Huntsman.

On a broader question about M&A activity, Mr Huntsman said: "Synergies are helping us create value for our shareholders. We are looking at globalization. In the architectural painting industry , if we can generate cost synergies, we can double the volume. We are honored to acquire Gabriel Performance Products. As our specialty chemical portfolio expands, we will have a great springboard for business growth.”

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