The Urethane Blog
June 27, 2023
US New Home Sales Unexpectedly Explode Higher In May
by Tyler Durden
Tuesday, Jun 27, 2023 – 10:09 AM
New home sales have been dramatically outperforming existing- and pending-home sales as unprecedentedly low inventories send buyers into the arms of incentivizing homebuilders. However, expectations were for a 1.2% MoM decline in May but instead new home sales exploded 12.2% MoM!!!
Source: Bloomberg
That is the 3rd straight month of MoM gains and sends new home sales up 20% YoY!!!
New home sale completely decoupled from existing-home sales, now at their highest since Feb 2022…
Source: Bloomberg
The median home sale price $416,300 which was an increase from last month but only after huge downward revisions for past 4 months
Housing activity has seen a resurgence this year, as anticipated by a very simple leading indicator: the change in the level of mortgage rates…
Source: Bloomberg
As Bloomberg’s Simon White notes, while longer-term yields are still much higher than they were a few years ago, they have essentially gone nowhere in the last nine months. Thus the change in mortgage rates has been falling.
That’s been enough to give housing and other interest-rate sensitive sectors such as autos a boost. But that impulse will soon start to fade unless yields and mortgage rates start to fall.
https://www.zerohedge.com/personal-finance/us-new-home-sales-unexpectedly-explode-higher-may
June 22, 2023
RV Bust Kicks Into High Gear As Winnebago Records Big Revenue Miss
by Tyler Durden
Thursday, Jun 22, 2023 – 08:00 PM
Let’s look back at our coverage of the boom and bust in the RV industry over the previous two years:
- April 2021: RV Sales Just Hit An All-Time High
- March 2022: RV Shipments Soar To Record For This Time Of Year
- July 2022: “All Of A Sudden, It Came To A Halt”: After Posting Fresh Records Just Months Earlier, RV Industry Grinds To A Halt
- Nov 2022:RV Boom Over? Monthly Shipments Plunge As Dealerships Overflow With Campers
- May 2023:RV Bust Worsens As Dealers Discount Trailers
We previewed last month that RV dealerships nationwide were heavily discounting motorhomes and towable trailers. The RV bust has now clobbered motorhome maker Winnebago Industries, who reported the third quarter (ended May 27) revenues that missed amid higher discounts and waning sales volumes.
Winnebago reported a 38.2% year-over-year plunge in the quarter due to sliding unit sales related to souring RV retail market conditions. Discounts were much higher than in the same quarter last year, an attempt by management to spark demand. However, high interest rates are curbing demand.
Revenue fell the most in the Towable RV segment, down 52% to $384.1 million. The decline is primarily due to lower unit volume associated with ‘challenging’ retail market conditions and discounts and allowances versus a year ago. Revenues declined 27.5% in the Motorhome RV segment.
Winnebago shares were flat in Wednesday morning trading in New York while investors digested the news. Shares remain 26% below the peak established in early 2021 during the boom.
Taking a look at the results from the RV Industry Association’s April 2023 survey of all manufacturers showed that total RV shipments ended the month with 31,216 units, a decrease of (-45.4%) compared to the 57,192 units shipped in April 2022. RV shipments are down (-52.1%) through April, with 109,816 units.
A record monthly drop in data going back three decades is an ominous sign of an impending recession.
Gues who killed the RV bubble? Well it’s the very same ones who allowed for record low interest rates…
Towable RVs, led by travel trailers, ended the month down (-48.6%) compared with last April with 26,860 shipments. Motorhomes finished the month down (-12.4%) compared to last year’s with 4,356 units.
One surprising data point from the report is that parked mobile home shipments continue to surge because of the worst housing affordability in a generation. For some, the ‘American Dream’ consists of a trailer home, or as millennials call it, a ‘tiny home,’ as inflation eats away wages for two years.
The boom is over. The bust is underway. Those who didn’t panic during the Covid era can find great deals this summer.
https://www.zerohedge.com/markets/rv-bust-kicks-high-gear-winnebago-records-big-revenue-miss
June 20, 2023
Abu Dhabi’s ADNOC in almost $11 billion approach for Covestro -sources
Story by By Emma-Victoria Farr, Ludwig Burger and Patricia Weiss • 2h ago
FILE PHOTO: A general view of ADNOC headquarters in Abu Dhabi© Thomson Reuters
(Reuters) -Abu Dhabi National Oil Company (ADNOC) has approached German plastics and chemicals maker Covestro AG with a takeover proposal worth more than 10 billion euros ($10.9 billion), two people familiar with the matter said on Tuesday.
The energy giant has made an informal offer for a per share price in the mid-50 euros, which compares with a Monday closing price of 40.31 euros, said the sources, asking not to be named because the matter is confidential.
ADNOC and Covestro declined to comment.
Covestro, a maker of transparent polycarbonate plastics, as well as chemicals for insulation and upholstery foams, in April issued earnings guidance that reassured markets about its growth prospects. It also resumed a share buyback programme.
Earlier on Tuesday it confirmed its outlook for 2023.
Shares in Covestro were up 14% at 46 euros at 1400 GMT, trading at their highest in more than a year.
A combination would give energy giant ADNOC, also a maker of refined products and petrochemicals, access to more advanced materials that go into electric vehicles, thermal insulation for buildings as well as coatings, adhesives and engineering plastics.
It would also support Abu Dhabi’s plans to diversify the economy away from energy.
As part of that transformation strategy, which also invited foreign investment, ADNOC began floating units in late 2017.
Over the past two years, it has separately listed businesses offering investors exposure to its petrochemicals, fertilisers, drilling services, gas as well as logistics businesses.
ADNOC Chief Executive Sultan al-Jaber is leading the company’s push into new energy, low carbon fuels, such as ammonia and hydrogen, as well as liquefied natural gas and chemicals.
ADNOC has expanded in Europe previously, agreeing to buy 24.9% of Austrian oil and gas group OMV last December.
The OMV deal would indirectly also increase ADNOC’s holding in both European petrochemicals maker Borealis and Abu Dhabi-listed petrochemicals company Borouge.
A move for Covestro would mirror the expansion of other Middle Eastern energy and petrochemical players into European materials and plastics businesses.
Saudi Aramco in 2018 acquired the shares it did not already own in synthetic-rubber maker Arlanxeo from German co-owner Lanxess for 1.4 billion euros.
SABIC, also of Saudi Arabia, in the same year purchased a stake of almost 25% in Swiss chemicals maker Clariant.
Thanks to a 2007 deal to buy GE’s plastics unit, SABIC competes with Covestro in polycarbonate plastics.
June 20, 2023
Jiahua Chemicals invests $20 million in Mexico
Reading time 1 minChristian Fernsby ▼ | June 20, 2023
Jiahua Chemicals, one of the leading companies in the production of polyurethane in China, has announced an investment of $20 million for the construction of a new plant in Ramos Arizpe, Coahuila.
Mexico Jiahua Chemicals
This new facility, which is expected to begin operations in early 2024, aims to supply the automotive industry market in the country.
The new Jiahua Chemicals plant will enable the manufacture and supply of polyurethane inputs for the growing demand of the domestic automotive industry.
Jiahua Chemicals annually produces 1.6 million tons of polyurethane raw materials and has eight plants and two distribution centers in Asia and Europe, focused on research and development of biobased products, carbon negative products and rigid biofoams for the automotive industry.
Jiahua Chemicals’ presence in Mexico underscores the country’s importance as one of the world’s leading polyurethane markets. Mexico currently ranks fourth in the polyurethane market, after China, the United States and Germany.
With the new plant in Ramos Arizpe, Jiahua Chemicals expects to strengthen its position in the Mexican market and meet the growing demand for polyurethane inputs from the automotive industry in the country. ■
https://www.poandpo.com/companies/jiahua-chemicals-invests-20-million-in-mexico/
June 19, 2023
Quadrant, Synonymous with Quality and Customer Service, Returns to Spray Foam Industry: Highly Experienced Team, Same Great Products
Quadrant Performance Materials (QPM) today launched as the latest spray foam manufacturing company to serve the construction industry.
McKinney, TX, June 14, 2023 –(PR.com)– With a people-first approach in all aspects of the business, Quadrant is positioning itself as a relationship focused company, delivering superb service and exceptional products.
“We are very excited to be back serving the spray foam industry. We had people in this industry ask Quadrant to return and that spray foam was not the same without us,” said QPM President & CEO Robert Jamieson. “We believe we can deliver high-touch service, great products, and back that with a team of the best and most experienced people in the industry. Our people, with an average experience tenure of 20 years, are ready to go, to help lead the industry, driving service, and product innovation.”
The new line of spray polyurethane products, EnviroSeal®, includes an HFO closed-cell spray foam, and three open-cell insulation products, No Mix, High Yield, and OCX. EnviroSeal® products are environmentally friendly, have low global warming potential, and deliver outstanding comfort and savings for home and building owners.
For more information on the line of spray foam products, please visit www.QuadrantPM.com or call 972-542-0072.
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