The Urethane Blog
July 22, 2021
Foam Shortages Backlog Appliances. Furniture, RVs, Cars And More
By Dawn Geske
07/19/21 AT 11:54 AM
Another product shortage is proving to be a literal pain in the backside for consumers, and this one is affecting multiple industries.
Foam is in short supply nationwide, causing delayed deliveries for a myriad of products that are made with the padding, including furniture, mattresses, vehicles, boats, recreational vehicles, and appliances, USA Today reported. It has also backlogged the building construction and steelmaking industries, the news outlet said.
Foam, which is used in everything from seats and upholstery to insulation and molds for casting steel, began running short in February. This is when five plants in the U.S. shut down due to the harsh winter storms that swept the South. These plants -– four in Texas and one in Louisiana — produce propylene oxide, the main chemical used to make foam.
According to USA Today, the plants were only temporarily closed for a few days, but it took weeks to get back up to full production as flooding and power outages damaged equipment, which were operating at 120% capacity to meet consumer demand.
Chemical plants have yet to catch up as consumer demand remains strong for furniture, RVs, boats, and cars. Consumers are waiting months for new products in these categories and shipment delays stretched from 30 days to as long as a year,
“This has put everything in disarray,” Zachary Moore, editor and analyst for Independence Commodity Intelligence Services, a petrochemical research firm, told the news outlet.
The furniture industry was the hardest hit because it uses a large amount of foam in its products, and shipment delays stretched from 30 days to as long a year, Jerry Epperson, managing director of Mann, Armistead & Epperson and EverChem Specialty Chemicals, told USA Today.
Boats have decreased to the point where dealers have nearly none in stock, taking a year to arrive compared to the previous average of two to three weeks. Sales jumped 60% after a double-digit surge in 2020, Ray Lewis, manager at Oquossoc Marine, a boat dealer in Oquossoc, Maine, told the news outlet. The dealer is no longer taking orders for new boats for delivery this year.
Recreational vehicles aren’t faring any better as some orders are taking up to a year, compared to the normal two to three months. Lead times on appliances have increased to six months, up from two to three months, according to USA Today.
Cars are being affected by foam shortages as well as a semiconductor chip supply disruption, but they are better positioned to weather the bottlenecks. The chip shortage that is hurting the auto industry was caused by the high demand for the part in tech products during the pandemic as consumers scooped up these devices as they stayed home during lockdown orders.Related StoriesVehicle Production Dips Again As Automakers Challenged By Chip ShortagesMore Automakers Feel Impact Of Chip Shortages
But according to Cox Automotive there were 1.13 million unsold vehicles at dealerships in the U.S. as June closed. This was down from 1.78 million at the close of May and down from 2.24 million at the close of April.
Other product shortages that are also affecting the U.S. include short supplies of chicken, pork, ketchup, paper, metal, lumber, chlorine, gasoline, and steel.
https://www.ibtimes.com/foam-shortages-backlog-appliances-furniture-rvs-cars-more-3255123
July 22, 2021
Polyurethane Foam Association Will Hold November Conference in
Charlotte
COVID-19 International Travel Restrictions Necessitated Relocation
LOUDON, TN (July 22, 2021)—The Polyurethane Foam Association (PFA) has decided to
move is November 3-4, 2021 meeting from the Omni King Edward Hotel in Toronto, Ontario to
the Omni Charlotte, in Charlotte, NC.
This was done because of ongoing international travel restrictions imposed due to COVID-19.
“Since there is still uncertainty about travel between the U.S. and Canada this fall, members
preferred a U.S. location for this meeting,” said Russ Batson, Executive Director of PFA. “We’re
grateful to Omni Hotels and Resorts for helping us relocate to their Charlotte property so our
meeting can go forward at a first-class facility with robust attendance.”
PFA returned to in-person meetings in May, hosting its spring meeting at the Vinoy Renaissance
in St. Petersburg. About 40 people participated remotely, in part due to company travel
restrictions.
Batson predicted that in-person attendance in November will move toward pre-pandemic levels,
and noted that CertiPUR-US ® will hold its sessions live in conjunction with PFA’s November
conference. “We’ll maintain the online option for attending, but we’re eager to welcome most of
our colleagues back for food, drink and networking.”
PFA’s twice-a-year meetings include flexible polyurethane foam manufacturers, chemical
suppliers, equipment makers, and other companies supporting the industry. Discussions cover
EHS best practices, legal and regulatory activity, developments in end-user markets, and
technical innovations. A Call for Papers for the November 4 Technical Session will be sent out
shortly.
The Polyurethane Foam Association is a trade association founded in 1980 to help educate foam
users, allied industries, and other stakeholders. PFA provides facts on environmental, health and safety issues and technical information on the performance of FPF in consumer and industrial
products. FPF is used as a key comfort component in most upholstered furniture and mattress
products, along with automotive seating, carpet cushion, packaging, and numerous other
applications.
To learn more, visit www.pfa.org.
July 22, 2021
Polyurethane Foam Association Will Hold November Conference in
Charlotte
COVID-19 International Travel Restrictions Necessitated Relocation
LOUDON, TN (July 22, 2021)—The Polyurethane Foam Association (PFA) has decided to
move is November 3-4, 2021 meeting from the Omni King Edward Hotel in Toronto, Ontario to
the Omni Charlotte, in Charlotte, NC.
This was done because of ongoing international travel restrictions imposed due to COVID-19.
“Since there is still uncertainty about travel between the U.S. and Canada this fall, members
preferred a U.S. location for this meeting,” said Russ Batson, Executive Director of PFA. “We’re
grateful to Omni Hotels and Resorts for helping us relocate to their Charlotte property so our
meeting can go forward at a first-class facility with robust attendance.”
PFA returned to in-person meetings in May, hosting its spring meeting at the Vinoy Renaissance
in St. Petersburg. About 40 people participated remotely, in part due to company travel
restrictions.
Batson predicted that in-person attendance in November will move toward pre-pandemic levels,
and noted that CertiPUR-US ® will hold its sessions live in conjunction with PFA’s November
conference. “We’ll maintain the online option for attending, but we’re eager to welcome most of
our colleagues back for food, drink and networking.”
PFA’s twice-a-year meetings include flexible polyurethane foam manufacturers, chemical
suppliers, equipment makers, and other companies supporting the industry. Discussions cover
EHS best practices, legal and regulatory activity, developments in end-user markets, and
technical innovations. A Call for Papers for the November 4 Technical Session will be sent out
shortly.
The Polyurethane Foam Association is a trade association founded in 1980 to help educate foam
users, allied industries, and other stakeholders. PFA provides facts on environmental, health and safety issues and technical information on the performance of FPF in consumer and industrial
products. FPF is used as a key comfort component in most upholstered furniture and mattress
products, along with automotive seating, carpet cushion, packaging, and numerous other
applications.
To learn more, visit www.pfa.org.
July 22, 2021
Dow Inc. (DOW) CEO Jim Fitterling on Q2 2021 Results – Earnings Call Transcript
Judging by the questions, it seems that the analysts are mainly interested in polyethylene . . .
Jim Fitterling
Thank you, Pankaj and thanks to everyone for joining us today. Starting on Slide 3, Dow continue to capture strong demand across our value chains during the second quarter. Team Dow is focused on execution, cost discipline and balanced capital allocation, enabled us to deliver our strongest quarterly earnings performance in the company’s history, both pre and post spin with substantial growth in net sales and earnings year-over-year and sequentially.
We achieved double-digit sales gains in all operating segments and businesses. A 66% increase in sales relative to the year-ago period, was led by local price improvement of 53% combined with a 9% volume increase. Robust demand and the recovery of the global economy continues from the onset of the COVID-19 pandemic.
Sales increased 17% sequentially, underpinned by tight supply and demand fundamentals across all of our value chain. We delivered higher operating EBIT of $2.8 billion year-over-year and $1.3 billion sequentially, with improvements in all segments and businesses. These gains were fueled by strong top line growth and margin expansion.
We also benefited from increased equity earnings, up more than $370 million year-over-year, led by higher margins at Sadara and the Kuwait joint ventures. Sequentially, equity earnings were up $54 million primarily from the Thai joint ventures.
Cash flow from operations was $2 billion and free cash flow was $1.7 billion, up significantly both year-over-year and sequentially. This enabled a valid execution of our capital allocation priorities. We continued our proactive liability management actions by reducing gross debt by more than $1 billion in the quarter, and reducing our annual interest expense by $35 million. Today Dow has no substantial long-term debt maturities due until the end of 2025.
We also returned more than $700 million to shareholders in the quarter through our industry-leading dividend and we resumed our share buyback program to cover dilution. Finally, we continue to advance Dow’s ESG priorities by releasing our consolidated ESG report, INtersections, which provides enhanced transparency on our environmental, social and governance priorities. The interactive digital report can be found at the top of our corporate website.
In summary, Team Dow maintained a relentless focus on meeting increasing customer demand despite lingering supply impacts across many value chains and marking a strong rebound from Winter Storm Uri. We continue to execute on our operational and financial playbook, delivering another strong quarter and a solid first half performance.
The Polyurethanes & Construction Chemicals business increased net sales compared to the year-ago period on strong local price in all value chains, demand recovery and durable goods and appliances and construction end markets and currency tailwinds. Despite industry supply chain challenges across a number of end markets, including mobility, the business delivered sequential sales growth on increased local price and volumes.
Howard Ungerleider
Moving to Industrial Intermediates & Infrastructure, strong consumer demand for durable goods continues underpinned by order strength throughout the value chain. Housing and construction markets particularly in the U.S continue to support robust demand for polyurethane applications. Industrial and oil related and markets are expected to continue to see gradual recovery sequentially, providing additional support for solvents and other industrial solutions. We also expect $30 million of additional planned maintenance turnaround spending at our joint ventures in the quarter.
Kevin McCarthy
Yes. Good morning. Jim, I wanted to ask you about industrial intermediates where your operating income more or less doubled sequentially. Two parts. Can you talk about the upside relative to your expectations 3 months ago? How much might have been polyurethanes versus other industrial chemicals? And then given that momentum and your sales forecast of flat to up 3%, do you have a strong view today as to whether third quarter could be flat, up or down profit wise sequentially?
Jim Fitterling
Good — that’s a good question. In Industrial Intermediates & Infrastructure on the polyurethane side, we saw strong demand for both polyols and isocyanates in the polyurethane side and in construction chemicals for chemicals that are made from those raw materials going into not only single-family homes, but also larger construction like commercial construction. I think those demands are going to continue to stay strong and the supply demand will continue to be tight. You saw strong pricing in both PO as well as isocyanates. There’s not a lot of new capacity coming on in that space.
And then additionally, in ethylene oxide and ethylene oxide derivatives in the industrial solutions business, those end markets are continuing to grow. And on top of that, we’ve several new capacity adds that are coming for things like pharmaceutical incipient, a product called polyethylene glycol that we just made an expansion on, we’ve got some other materials coming through there. And we have a host of low VOC solvents in that portfolio that go into the coatings sector.
So around the world, as coatings move away from traditional organic solvents into waterborne or lower VOC solvents, that benefits our portfolio. That same trend, by the way, helps us in cleaning chemicals or cleaning products that you might use in your home, and we see that both from a brand owner and an industrial side as well. So I think those will continue our expectation on third quarter in those businesses are very similar to second quarter.
July 22, 2021
Dow Inc. (DOW) CEO Jim Fitterling on Q2 2021 Results – Earnings Call Transcript
Judging by the questions, it seems that the analysts are mainly interested in polyethylene . . .
Jim Fitterling
Thank you, Pankaj and thanks to everyone for joining us today. Starting on Slide 3, Dow continue to capture strong demand across our value chains during the second quarter. Team Dow is focused on execution, cost discipline and balanced capital allocation, enabled us to deliver our strongest quarterly earnings performance in the company’s history, both pre and post spin with substantial growth in net sales and earnings year-over-year and sequentially.
We achieved double-digit sales gains in all operating segments and businesses. A 66% increase in sales relative to the year-ago period, was led by local price improvement of 53% combined with a 9% volume increase. Robust demand and the recovery of the global economy continues from the onset of the COVID-19 pandemic.
Sales increased 17% sequentially, underpinned by tight supply and demand fundamentals across all of our value chain. We delivered higher operating EBIT of $2.8 billion year-over-year and $1.3 billion sequentially, with improvements in all segments and businesses. These gains were fueled by strong top line growth and margin expansion.
We also benefited from increased equity earnings, up more than $370 million year-over-year, led by higher margins at Sadara and the Kuwait joint ventures. Sequentially, equity earnings were up $54 million primarily from the Thai joint ventures.
Cash flow from operations was $2 billion and free cash flow was $1.7 billion, up significantly both year-over-year and sequentially. This enabled a valid execution of our capital allocation priorities. We continued our proactive liability management actions by reducing gross debt by more than $1 billion in the quarter, and reducing our annual interest expense by $35 million. Today Dow has no substantial long-term debt maturities due until the end of 2025.
We also returned more than $700 million to shareholders in the quarter through our industry-leading dividend and we resumed our share buyback program to cover dilution. Finally, we continue to advance Dow’s ESG priorities by releasing our consolidated ESG report, INtersections, which provides enhanced transparency on our environmental, social and governance priorities. The interactive digital report can be found at the top of our corporate website.
In summary, Team Dow maintained a relentless focus on meeting increasing customer demand despite lingering supply impacts across many value chains and marking a strong rebound from Winter Storm Uri. We continue to execute on our operational and financial playbook, delivering another strong quarter and a solid first half performance.
The Polyurethanes & Construction Chemicals business increased net sales compared to the year-ago period on strong local price in all value chains, demand recovery and durable goods and appliances and construction end markets and currency tailwinds. Despite industry supply chain challenges across a number of end markets, including mobility, the business delivered sequential sales growth on increased local price and volumes.
Howard Ungerleider
Moving to Industrial Intermediates & Infrastructure, strong consumer demand for durable goods continues underpinned by order strength throughout the value chain. Housing and construction markets particularly in the U.S continue to support robust demand for polyurethane applications. Industrial and oil related and markets are expected to continue to see gradual recovery sequentially, providing additional support for solvents and other industrial solutions. We also expect $30 million of additional planned maintenance turnaround spending at our joint ventures in the quarter.
Kevin McCarthy
Yes. Good morning. Jim, I wanted to ask you about industrial intermediates where your operating income more or less doubled sequentially. Two parts. Can you talk about the upside relative to your expectations 3 months ago? How much might have been polyurethanes versus other industrial chemicals? And then given that momentum and your sales forecast of flat to up 3%, do you have a strong view today as to whether third quarter could be flat, up or down profit wise sequentially?
Jim Fitterling
Good — that’s a good question. In Industrial Intermediates & Infrastructure on the polyurethane side, we saw strong demand for both polyols and isocyanates in the polyurethane side and in construction chemicals for chemicals that are made from those raw materials going into not only single-family homes, but also larger construction like commercial construction. I think those demands are going to continue to stay strong and the supply demand will continue to be tight. You saw strong pricing in both PO as well as isocyanates. There’s not a lot of new capacity coming on in that space.
And then additionally, in ethylene oxide and ethylene oxide derivatives in the industrial solutions business, those end markets are continuing to grow. And on top of that, we’ve several new capacity adds that are coming for things like pharmaceutical incipient, a product called polyethylene glycol that we just made an expansion on, we’ve got some other materials coming through there. And we have a host of low VOC solvents in that portfolio that go into the coatings sector.
So around the world, as coatings move away from traditional organic solvents into waterborne or lower VOC solvents, that benefits our portfolio. That same trend, by the way, helps us in cleaning chemicals or cleaning products that you might use in your home, and we see that both from a brand owner and an industrial side as well. So I think those will continue our expectation on third quarter in those businesses are very similar to second quarter.
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