Cuộc họp công bố kết quả kinh doanh Q3 2026 của Huntsman (HUN): Hiệu ứng cộng hưởng từ Olin và triển vọng năm 2027

Thông tin trọng tâm

• Huntsman cho biết EBITDA điều chỉnh năm 2026 dự kiến sẽ cải thiện hơn 100 triệu USD so với năm 2025, bất chấp hoạt động thị trường nhà ở yếu kém, chi phí năng lượng ở mức cao và lãi suất gia tăng.
• Dòng tiền tự do quý 3 ghi nhận mức thặng dư 82 triệu USD. Ban lãnh đạo kỳ vọng dòng tiền lớn sẽ được tạo ra từ việc giải phóng vốn lưu động trong quý 4 và vẫn tự tin rằng dòng tiền cả năm sẽ đủ để chi trả cổ tức.
• Thương vụ sáp nhập bình đẳng dự kiến với Olin Corporation dự kiến sẽ hoàn tất vào đầu năm tới. Huntsman nhắc lại hiệu quả cộng hưởng dự kiến đạt 300 triệu USD, cộng thêm 100 triệu USD nữa khi các hợp đồng clo đáo hạn.
• Sản lượng của mảng Vật liệu Nâng cao (Advanced Materials) tăng 12%, nhờ sự đóng góp từ ngành hàng không vũ trụ, hạ tầng lưới điện và các ứng dụng công nghiệp tại cả ba khu vực. Ban lãnh đạo kỳ vọng tốc độ tăng trưởng sẽ vượt mức tăng trưởng GDP vào năm 2027.
• Ban lãnh đạo kỳ vọng điều kiện ngành MDI năm 2027 sẽ đi ngang hoặc tương tự như năm 2026, thời điểm mức tăng trưởng toàn ngành đạt khoảng 2%.
• Huntsman kỳ vọng năm 2027 sẽ tốt hơn đáng kể so với năm 2026, nhờ cắt giảm chi phí, tích hợp, kỷ luật về giá và sự tăng trưởng ở các ứng dụng chuyên biệt, mặc dù công ty không đưa ra mục tiêu EBITDA độc lập định lượng cụ thể.

Dữ liệu tài chính quan trọng

Kết quả kinh doanh và vận hành

Vật liệu Nâng cao (Advanced Materials) là động lực tăng trưởng chính. Nhu cầu từ ngành hàng không vũ trụ, hạ tầng lưới điện và công nghiệp đã hỗ trợ mức tăng trưởng sản lượng 12% ở cả ba khu vực. Ban lãnh đạo cho biết kết quả hiện tại phản ánh các vụ thâu tóm, hoạt động nghiên cứu & phát triển (R&D) và các khoản đầu tư vốn được thực hiện cách đây hai đến ba năm. Huntsman có đủ công suất để hỗ trợ tăng trưởng hữu cơ tiếp theo và hiện chưa thấy cần thiết phải mua lại thêm tài sản cho các ứng dụng hàng không vũ trụ hoặc năng lượng.

Mảng Polyurethane tại châu Âu tạo ra EBITDA dương trong quý bất chấp chi phí năng lượng cao và nhu cầu ảm đạm. Các ứng dụng trong ngành ô tô tại châu Âu tăng hơn 10% so với cùng kỳ năm trước, nhờ vào các ứng dụng mới thay vì sự gia tăng sản lượng xe. Huntsman có kế hoạch tập trung đầu tư tại châu Âu vào hàng không vũ trụ, vật liệu pin xe điện (EV), ứng dụng lưới điện và vật liệu nhẹ, đồng thời đánh giá lại các hoạt động tiêu tốn nhiều năng lượng.

Sản lượng bọt phun cách nhiệt và vật liệu cách nhiệt tại Bắc Mỹ tăng ở mức một chữ số thấp so với cùng kỳ năm trước, ngay cả khi hoạt động xây dựng và cải tạo vẫn yếu. Ban lãnh đạo không kỳ vọng sẽ quay trở lại mức tăng trưởng mạnh mẽ như vài năm trước cho đến khi hoạt động của thị trường nhà ở cải thiện.

Thị trường nội địa Trung Quốc được mô tả là ổn định, với phần lớn sự tăng trưởng đến từ xuất khẩu. Tại liên doanh PO/MTBE, biên lợi nhuận MTBE giảm nhẹ trong ba đến bốn tuần trước đó, trong khi biên lợi nhuận của propylene oxide so với propylene vẫn tương đối khả quan nhưng đã hạ nhiệt đôi chút.

Mảng Sản phẩm Hiệu suất (Performance Products) dự kiến sẽ hưởng lợi từ đà tăng trưởng của các amine hiệu suất cao. Huntsman cũng nhấn mạnh việc mở rộng sản xuất amine siêu sạch phục vụ sản xuất bán dẫn và các ứng dụng làm sạch.

Khoảng 60% sản lượng của Huntsman phục vụ ngành xây dựng, bao gồm hạ tầng, thị trường thương mại và nhà ở. Ngành ô tô chiếm khoảng 15%, trong khi 25% còn lại bao gồm xử lý khí và các thị trường công nghiệp khác. Mức độ hiện diện trong ngành công nghiệp truyền thống chiếm khoảng 10%-15% tổng sản lượng.

Triển vọng từ Ban lãnh đạo

Ban lãnh đạo kỳ vọng mảng Vật liệu Nâng cao sẽ đạt mức tăng trưởng cao hơn GDP vào năm 2027, nhờ sự hỗ trợ từ ngành hàng không vũ trụ, hạ tầng năng lượng và các ứng dụng công nghiệp.

Đối với MDI, Huntsman kỳ vọng tăng trưởng ngành năm 2027 sẽ đi ngang hoặc tương đương mức khoảng 2% của năm 2026. Lãi suất thế chấp cao hơn và nhu cầu nhà ở yếu vẫn là những yếu tố hạn chế, trong khi lượng nhập khẩu giảm có thể hỗ trợ các nhà sản xuất Bắc Mỹ khi công suất mới trong nước gia nhập thị trường.

Công ty kỳ vọng sẽ có dòng tiền vào đáng kể trong quý 4 khi vốn lưu động được giải phóng. Giám đốc Tài chính cho biết ông vẫn tự tin rằng Huntsman sẽ chi trả đủ cổ tức cho cả năm.

Ban lãnh đạo kỳ vọng thương vụ sáp nhập Olin Corporation sẽ hoàn tất vào đầu năm tới. Việc lập kế hoạch cho 300 triệu USD hiệu quả cộng hưởng ban đầu đã tiến triển từ các mục tiêu chung sang các trách nhiệm xác định, lĩnh vực thực thi, mốc thời gian và phân công lãnh đạo.

Rủi ro và các điểm cần theo dõi

Chi phí năng lượng tại châu Âu vẫn là áp lực lớn. Ban lãnh đạo đã dẫn chứng giá khí đốt tự nhiên ở mức 34-35 USD/MMBtu, cao gấp khoảng 20 lần so với mức giá ở Tây Texas và dọc theo Luồng tàu biển Houston. Huntsman cho biết cần phải tăng giá bán thêm nữa để bù đắp các chi phí này.

Thị trường MDI Bắc Mỹ đối mặt với sự suy yếu theo mùa, nhu cầu nhà ở ảm đạm và công suất mới gia tăng. Chi phí nguyên liệu đầu vào tăng cao cũng có thể thúc đẩy khách hàng giảm hàng tồn kho trong quý 4.

Sự phụ thuộc của Trung Quốc vào tăng trưởng dựa vào xuất khẩu đang gia tăng áp lực lên thị trường hóa chất toàn cầu. Ban lãnh đạo cũng nhấn mạnh sự không chắc chắn tiếp diễn từ chính sách thương mại, thuế quan và biến động địa chính trị ở Trung Đông.

Vốn lưu động gặp nhiều khó khăn trong năm 2026 do giá nguyên liệu đầu vào ở mức cao. Mức cải thiện dòng tiền kỳ vọng trong quý 4 phụ thuộc một phần vào việc bình thường hóa hàng tồn kho và vốn lưu động.

Sự cố gián đoạn tại Rotterdam gây ra tác động ước tính khoảng 10 triệu - 15 triệu USD trong suốt tháng 9 và tháng 10. Ban lãnh đạo cho biết sự cố này do một bên thứ ba gây ra và nhà máy đã hoạt động trở lại.

Tóm tắt phiên Hỏi & Đáp với nhà phân tích

Về việc hợp nhất Olin-Huntsman, ban lãnh đạo cho biết sự hợp tác giữa hai công ty rất chặt chẽ và thể hiện sự tự tin gia tăng trong việc đạt được mục tiêu cộng hưởng 300 triệu USD. Việc rà soát danh mục đầu tư và các khoản thoái vốn tiềm năng sẽ được hội đồng quản trị và ban điều hành mới của công ty sau sáp nhập đánh giá sau khi hoàn tất thương vụ.

Về công suất MDI, ban lãnh đạo kỳ vọng quá trình chuyển đổi có thể không đồng đều khi nguồn cung mới tại Bắc Mỹ thay thế hàng nhập khẩu. Huntsman không có kế hoạch xây dựng một nhà máy MDI mới hoàn toàn (grassroots) độc lập và tin rằng công suất toàn cầu hiện tại là đủ cho nhiều năm tới.

Về giá bán, ban lãnh đạo cho biết giá tại Trung Quốc sẽ duy trì vững chắc, châu Âu cần tăng giá để bù đắp lạm phát năng lượng, trong khi triển vọng tại Mỹ còn trái chiều. Huntsman đã thực hiện 7 đợt tăng giá trong năm, với các mức độ đồng thuận khác nhau từ toàn ngành.

Về đòn bẩy hoạt động, CFO cho biết biên lợi nhuận gia tăng thường vào khoảng 30% khi chi phí được kiểm soát. Ban lãnh đạo kỳ vọng các quyết định tái cấu trúc được đưa ra trong thời kỳ suy thoái sẽ hỗ trợ biên lợi nhuận mạnh mẽ hơn khi giá bán và nhu cầu phục hồi.

Toàn văn cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Greetings, and welcome to the Huntsman Third Quarter 2026 Earnings Call. [Operator Instructions]

Please note, this conference is being recorded. I will now turn the conference over to Ivan Marcuse, Vice President of Investor Relations and Corporate Development at Huntsman. Thank you. Ivan, you may begin.

Ivan Marcuse

Thank you, Jasmina, and good morning, everyone. Welcome to Huntsman's Third Quarter 2026 Earnings Call. Joining us on the call today are Peter Huntsman, Chairman, CEO and President; and Phil Lister, Executive Vice President and CFO. Yesterday, November 2, 2026, we released our earnings for the third quarter of 2026 via press release and posted it on our website, huntsman.com. We also posted a set of slides and detailed commentary discussing the third quarter of 2026 on our website.

Peter Huntsman will provide some opening comments shortly, and we will then move into a question-and-answer session for the remainder of the call. During the call, let me remind you that we may make statements about our projections or expectations for the future. All such statements are forward-looking statements, and while they reflect current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations.

We do not plan on publicly updating or revising any forward-looking statements during the call. We will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income or loss and free cash flow. You can find the reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website at huntsman.com.

I'll now turn the call over to Peter Huntsman.

Peter Huntsman

Ivan, thank you very much. I'd like to take a few minutes and discuss some of the observations as we come to the end of 2026 and prepare to enter 2027. For each of the past 4 years, whether a war in Ukraine, Liberation Day, trade disputes or Middle East conflicts, it seems that something happens that sinks consumer confidence and slows housing starts. This year was no different. Between higher energy prices and interest and mortgage rates, housing starts had a very rough year. While hope springs eternal, especially this next spring, we continue to be concerned about the potential impact of higher mortgage rates over the next few months.

China seems to be overly reliant on exports as consumer spending and confidence continues to show little growth. Europe continues to be hit with near record high energy prices due to disastrous energy policies, higher interest costs on their national debt and civil unrest as the effects of long-term deindustrialization and social instability take their toll.

The global chemical industry is certainly feeling the impact in varying degrees from all these macroeconomic forces. I'm proud though that in spite of all these challenges, our focus on cost, pricing and operating discipline are paying off as we will see better than $100 million of improvement in our 2026 EBITDA versus our 2025 performance. We need to be able to do more than simply wait around for times to get better as we may well be in this for another year or so of challenging headwinds. For this purpose, I'm heartened to see that we will soon be able to complete our merger of equals with Olin Corporation and derive the benefits that will improve both of our companies should these challenges persist for another year.

Through 2027 and the years that follow, Olin Huntsman will be in a unique position to focus on 3 broad areas that will create greater value together than if we were apart. Together, we will soon be rapidly executing synergies of $300 million with an additional $100 million coming as chlorine contracts expire. Our teams have been actively engaged and are ready to start.

Second, we will have a much broader base of assets that will allow us to aggressively review a larger portfolio. This will give us greater flexibility to manage our balance sheet and pursue areas of growth within our combined businesses. Thirdly, greater integration and supply chains that stretch from salt to aerospace to electronics will give us a better cost base to compete globally. Our stronger and larger footprint in North America positions us where energy costs and raw materials are most competitive.

In Europe, we will continue to build out areas where we see growth and strong margins such as aerospace, EV battery materials and power grid applications. Where we are struggling in Europe, we will have greater leverage to source raw materials and access the market. We have a multibillion-dollar business in Asia that is very profitable and will continue to provide new avenues for growth in the combined company.

In short, regardless of where market conditions take us this next year, we will be in a position to prosper and improve value that had we remained on our own, we would not have been able to achieve. When the inevitable return happens in housing and durable goods in North America, the combined company is set to create enormous value as a market leader in multiple fields. This is an opportune time for consolidation and synergies to take place. We anticipate closing this merger early next year. When we do, we will be creating a new, larger and fast-changing industry leader and look forward to the opportunities that will be before us.

Operator, at this time, why don't we open the line up for any questions.

Operator

[Operator Instructions]

Our first question is from Frank Mitsch with Fermium Research.

Phần hỏi đáp

Frank Mitsch

Peter, if this happens to be the last Huntsman conference call, which very well may be, depending on when you close the transaction, I just wanted to say I appreciated the commentary over the years with respect to the chemical industry and for Huntsman. But also, I must say I did find your historical factoid very educational when you were explaining the 1794 Whiskey Rebellion, et cetera.

So I did want to offer my thanks publicly for all that. In terms of what's going on, listen, I mean, in the prepared commentary, there was a comment regarding the impact of new MDI capacity on the U.S. market. I was wondering if you could characterize the current market and the near and midterm outlook for MDI, particularly here in the U.S.?

Peter Huntsman

Well, Frank, thank you very much for those kind words. I'm still hoping to be able to find an ancestor that participated in the Whiskey Rebellion and hopefully was on the front lines of the fast-changing technology to bourbon, but who knows. Great question on -- I think that we have basically 3 or 4 issues that we're facing right now. And I don't want to put too much on additional capacity. I do think the single biggest issue we'll be seeing in the fourth quarter in North America, unlike Europe, where there will be headwinds on raw material pricing will be just the typical seasonality we are struck every year in December when this phenomenon occurs called Christmas. It seems to slow everything down.

But having said that, I think with higher cost of raw material, you probably may well see -- we're not seeing it yet, but we may well see that people are anxious to cut inventories because of the high cost of raw materials, and we may see the impact of that. So fourth quarter seasonality is going to be an issue. One other area is we are seeing a cutback over the last year of less imports coming into North America. I think that will probably be a good tailwind should that continue for North American producers. And of course, look, when you don't have a lot of industrial growth because of the sluggish housing market, the last thing the industry needs is new capacity being dumped into it. But that's something that we have to put up with usually somewhere around the world at any given point.

So we can hardly use that as an excuse. We need to continue to be focused on generating cash, on getting margins to expand and looking for technological opportunities. And that are going to be the 3 main focuses of Huntsman in the fourth quarter.

Frank Mitsch

That's very helpful. Much appreciated. And then, listen, I mean, I know the transaction hasn't closed yet, but in terms of the conversations that Olin and Huntsman have had pre-integration. I'm wondering if there have been any positive or negative surprises and particularly looking to see the thoughts on the near-term $300 million of synergies and then obviously, the $100 million coming in 2030. So any comments that you could provide there?

Peter Huntsman

No, look, I believe that, as you know, this isn't our first attempt at an MOE. It is much easier to do it where you have cultural overlaps and similarities. In this case, one has an office in Spring, Texas, the other in The Woodlands. And I think the communications and the cooperation between the 2 have been outstanding. I would say that when we first came up with the $300 million number, I felt pretty good about it, but I wouldn't say that there was a lot of data that went behind it. We were throwing out a lot of broader estimates and numbers. Since that time, I feel very, very confident about it. Initially, I think it was more of a target as an objective.

Right now, we have very clear lines of responsibility, areas of execution, timing, group leadership and so forth. And I would dare say that there's not a day that goes by where we don't have multiple people engaged where we can legally engage at this point to further discuss that and look for additional synergies. So I feel very good about where we are right now.

Operator

Our next question is from Patrick Cunningham with Citi.

Patrick Cunningham

Maybe just on European Polyurethanes. You talked about it being EBITDA positive for the quarter. Obviously, still a very challenging environment. You've done a lot of restructuring work in that business. But how do you position that business if we have another sluggish demand environment, volatile variable cost structure? Is there more to be done there from a cost takeout perspective? Or is this just a function of price discipline and where you source raw materials from going forward?

Peter Huntsman

Well, I think that we need to continue to look at all of the opportunities that are before us, and we need to make sure that we calibrate the business around the market needs and expectations. Certainly, with the Olin Huntsman merger that is coming, I think that we're going to be in a better opportunity from raw materials to be able to access perhaps better raw materials and better economics and so forth. But we need to, at the end of the day, remain focused on growth, where do we have new opportunities. We saw growth in Europe this last year over the prior year of greater than 10% in our automotive applications. And that's not because they're building 10% greater number of cars. It's because we're finding new applications in automobile.

So when we talk about growth, we need to continue to look at our fixed costs and we'll make sure that our customers are either paying for the services that we're giving them or we're going to have to cut those services further. And we need to look at our variable costs and how do we get around those, how do we improve those? And longer term, how do we position the business, especially as contracts expire that were done 4, 5 years ago before Europe has really fallen into this mass suicide of deindustrialization. How do we focus on those things?

Look, I know I've been an outspoken critic of Europe, and I think that they certainly have earned that criticism. But there are a number of areas in Europe when we look at aerospace, we look at building out the power grid. We look at EV vehicles. I just mentioned here we are in MDI talking about seeing double-digit growth year-over-year in some of these applications. There are opportunities in Europe. Europe is going to continue to innovate. It's going to continue to capitalize on lightweight materials and so forth. And we need to make sure that we're investing in the right areas and that we're focused.

At the same time, we need to exit certain areas that are going to be energy intensive that are going to be areas that will be leaving Europe. And so we still -- Europe still remains the world's second largest MDI market after China, and we need to make sure we capitalize on that.

Patrick Cunningham

Very helpful. And then maybe just on Advanced Materials. You already talked a bit about aerospace, grid infrastructure. I guess, given the strong level of growth, what is your sort of expectations for growth rates in 2027? What sort of operating leverage you should have there? And how sustainable are these rates without requiring additional capital expenditure?

Peter Huntsman

Yes. I think -- first of all, I think that what we're seeing today really is the fruits of investments that were made 2 years ago, 3 years ago. We did some large investments. We broadened our technology, our application, our know-how. I think that those investments oftentimes in a more commoditized business when you make acquisitions and when you invest in R&D, you have a tendency to see results in 2 or 3 quarters.

Advanced Materials is a little bit of a different division. Sometimes it will take a year or 2 to get qualified. Sometimes it'll take a year just to be able to get in the door to get qualified on something like aerospace, if somebody were entering today to try to displace us in aerospace, I would dare say you're waiting out 5 to 6, 7 years in some applications to even begin to compete. So what we see today, I believe, is more than just a decent quarter. It is what we've invested through acquisitions and through deployment of capital a couple of years back. We're seeing that. I would expect through 2027 that we're going to continue to see GDP plus sort of growth and opportunity.

Operator

Our next question is from David Begleiter with Deutsche Bank.

David Begleiter

Pete, just on the MDI capacity in North America, I know you don't want to comment on it, but how is the industry market absorbing this new supply that we're seeing? And what do you expect to happen in 2027 as industry. If there's no demand inflection, how the industry deals with this new supply?

Peter Huntsman

I'd say it's probably going to be a bumpy transitory time as you'll see this new supply will be replacing what has traditionally been imports, imported materials coming in and so forth. But look, not every customer out there is just looking for necessarily a lower price. Innovation does pay off. Good service does pay off, reliability does pay off. And again, I don't want to put too much emphasis on capacity utilization. It's got to be around a focus on growth, your fixed costs, your variable costs and how you run the business.

David Begleiter

And just your thoughts on the industry broader, Peter, I always appreciate your thoughts here. The Olin Huntsman merger looks pretty compelling, makes a lot of sense. Why has the industry not taken your lead given the pressure we're seeing and seeing further M&A moving forward here. What's holding back do you think the broader industry from doing what you guys are doing right now?

Peter Huntsman

That's an excellent question. I will say that if I had to pick somebody in the industry that we could merge with in a merger of equal, to some degree, you do have a limited field and you do have who is available and who is interested to do a merger of equals. So just because we're saying, well, company X would be a great fit for Huntsman or Huntsman may be a great fit for company X doesn't mean that the timing is right, management is right and everything else.

As we look at Olin, I will just say that when we look at the integration, particularly on the supply chain integration and Huntsman's desire to be more competitive on the upstream side, that integration into everything from caustic to chlorine, VCM and so forth, EDC, being able to move up to that aside from benzene and if we were to integrate ourselves to a benzene producer, you're probably integrating yourself with a refiner, right? And that doesn't -- in my opinion, that doesn't make a lot of sense.

Olin makes the most sense from a pure molecular point of view. When I look at it from a management and a cultural point of view, as I said earlier, I've been more than surprised at the fit, the relationship that Ken Lane and I have built that our respective teams going down the lines have built. And that's going to be demonstrated, I think, very well once you have a closing take place. Why these things don't take place more often? It's a very good question. We need it in this industry. As I've said in the past, we compete more against countries than we do companies. We compete against national interests, in trade policies than we do against specific products and pricing.

And as you start looking at the Middle East and the lack of what has been in the past, a very stable region of supply, the volatility that's coming from the Middle East, you look at the trade winds and so forth that are coming from China, it's going to continue to be a tumultuous market. And I think size and geographic location is going to matter.

Operator

Our next question is from Aleksey Yefremov with Barclays.

Aleksey Yefremov

Peter, as you know, I'm sure European Commission is discussing more robust trade protection measures and specifically for the chemicals industry. Do you think it will make a difference overall and for your business in particular?

Peter Huntsman

Yes. I think in certain areas, we're going to see some opportunity, perhaps, especially in epoxies coming in from Europe. But look, let's be honest, Europe needs to be protecting its chemical industry, but more than protecting its chemical industry, it costs more in tariffs and costs to go country to country within Europe than it does to go from Europe to the U.S. Europe needs to reform Europe, and Europe needs to get an energy policy that's going to incentivize and is going to advantage the chemical, the steel, the glass, the cement, manufacturing across the board.

So I'm glad to see them taking a position in some of these areas where they find that there's unfair trade, but it needs a lot more than just a tariff here and there.

Aleksey Yefremov

And maybe as a follow-up, you mentioned energy. This could be a tough winter in Europe energy-wise. How are you managing this at Huntsman? Could you see, I don't know, asset shutdowns as you see in some other industries? And maybe if not Huntsman, could you see your competitors shut down assets in MDI or some other products that you care about?

Peter Huntsman

Well, we continue on a regular basis, and that's on a weekly, daily basis to look at not just our own assets, but the assets of our suppliers and of their suppliers. We may be in a great position when we're making money in a product line. But if our suppliers are on the brink of shutting down or their suppliers are on the brink of shutting down, we need to make sure that we understand that. So we need to stay focused in those areas and we need to continue to work with our suppliers, even in areas that where we've got relationships and contracts with our suppliers, we have found that some of our suppliers have been willing to give us discounts today to extend contract terms going into the future. How can we take pressure off of the issues today.

When you're talking about $34, $35 per MMBtu gas, I mean, mind you, that's 20x higher than what we're seeing in West Texas and along the Houston Ship Channel. That's just astronomical. And so at the end of the day, we can talk as much as we want to about short-term issues. We've got to get prices up to be able to offset and to mitigate these sort of costs coming through.

So at the end of the day, it's going to boil down to price discipline. We've led 7 prices this past year, and we've been successful on some of those. Others of them, the industry is not supportive of them, but we need to continue to push for pricing at the end of the day.

Operator

Our next question is from Jeff Zekauskas with JPMorgan.

Jeffrey Zekauskas

For the 9 months, Huntsman has delivered minimal cash flow, you're sort of cash flow breakeven. Are you going to be able to cover your dividends and capital expenditures with operating cash flow this year?

Philip Lister

Yes, Jeff, it's Phil. CapEx, we said we expect to spend about $160 million this year. Free cash flow was an inflow in the third quarter of $82 million. You're right where we sit today. There will be a large working capital unwind in the fourth quarter and our cash conversion cycle declined year-on-year, and I expect it to decline again Q3 to Q4 and Q4 versus Q4 last year. It's true that working capital has been difficult this year with an elevated pricing raw material market. But I remain confident that we'll be able to cover our dividend for the full year and have a substantial cash inflow in the fourth quarter.

Jeffrey Zekauskas

Interest rates, if you look at the 10-year rate, we're now at 4.9%. And maybe for the year, we've averaged 4.5%. And last year, we were at 4.2%. Given the interest rate environment, when you look at MDI volumes for 2027, if things stay where we are now, should the MDI industry grow at a slower rate in '27 than it did in '26? And how fast did it grow in '26? Or how fast is it growing?

Peter Huntsman

Jeff, I think that as we look at '26 and '27, you're probably looking at, I would say, probably flat conditions or maybe similar to what we saw in '26, which was an industry growth rate of about 2%. Look, interest rates are up, mortgage rates are up. But if you look at them on a 50-year basis, the average interest rate today is exactly where it has been on average over the last -- since the early 1970s. This is about the industry not waiting for interest rates to go back to 2% or 3% or 4% because I don't know if they will ever do that, but the industry having to adapt, probably be building smaller homes, homes with less basements, more townhouses rather than individual homes. And we're hearing that from our construction customers. We're starting to see those sort of trends.

In starter homes, they've got to come down in price if interest rates aren't going to happen. That's not going to happen overnight. It may not even happen within a year. But I think that as you start seeing where building costs start to plateau come down, incentives start to be put into place and so forth. I think it's more of how does the industry adapt to these interest rates and mortgage rates, which are really more normal than abnormal at this point.

Operator

Our next question is Mike Harrison with Seaport Research Partners.

Michael Harrison

I was hoping that you could talk a little bit about what you're seeing in the spray foam insulation market given that underlying construction and renovation activity still remains soft. I'm curious, are you still capturing your fair share of growth in spray foam? Or are you seeing that there are more competitors in this space maybe starting to impact volumes and margins?

Peter Huntsman

Well, North America, which is our largest market, and I'm talking about both spray foam and insulation. So that's not just when you spray foam when a house is being remodeled or constructed, but also insulation panels and so forth. Look, that industry is being hit just like the rest of the construction industry. But as we look at our numbers from the prior year, we're still up low single-digit numbers. from the prior year. And year-to-date, we're still up single-digit numbers. But again, longer term, until you start to see a real turnaround in housing and so forth, you're not going to see real substantial growth like we saw a couple of years ago, we're seeing pushing 10% growth.

Michael Harrison

All right. And then in the Advanced Materials business, you said you expect power to be growing through the end of the decade. And I think you mentioned the need for some targeted growth investments. Are you guys capacity constrained anywhere today? Maybe just give us a sense of how you see the need for additional capacity playing out.

Peter Huntsman

We have got plenty of capacity. And if anybody out there wants any more product, we're willing to sell it to them.

Operator

Our next question is from Josh Spector with UBS.

Joshua Spector

I'd be curious where divestments stand on the priority stack as you look at Olin Huntsman next year. I mean I imagine 6, 7 months ago, that was kind of optionality. In your mind, is that a little bit more of maybe a must do to try to delever? And just thinking how you prioritize that with the cost savings and what you're aiming to tack at point 1, 2 and 3 once the deal closes?

Peter Huntsman

Very good question. And look, I think that is something that a new Board that will be formed and announced here in the coming months. We will be tasked to working closely with management to make sure that we're aggressively looking at the balance sheet, the needs of the company and positioning the company, NewCo in a position. But for me to comment further on that as a shareholder of Huntsman, not Olin Huntsman, I think, would be misplaced.

Thank you, good question. I will get it, give us some time.

Operator

Our next question is from Matthew DeYoe with Bank of America.

Matthew DeYoe

This question has been asked a few different ways, but maybe I just take a more direct path, right? Obviously, I guess, Peter, you said volumes up low single digits for core polyurethanes. But as we look into 2027, right, given the macro, given rates, are there any measurable tailwinds that we can count on to drive growth year-over-year in '27 in that business? I mean, like the bridge items, maybe the $10 million in 4Q is a reasonable add-back. Is there any other relevant bridge items we need to be aware of? Or is kind of flat profitability in '27 a reasonable scenario for PU?

Peter Huntsman

Well, I think that as you look at the business, we've got an excellent elastomers business and we're selling product more into just -- we're selling product more than just into the construction housing materials market. Again, I would just go back and look at 2025 versus 2026. 2025, we actually built more homes as a company as North America than we did in 2026. We saw housing starts drop in 2026 by about 100,000 on an annualized basis over '25, yet the company did $100-plus million better. We'll do $100-plus million better in '26 and '25. So I don't want to get too transfixed on where is an extra percentage point or not of growth taking place. This is a great portfolio that's going to continue to focus.

Yes, on traditional applications like homebuilding and so forth. But when we look at areas of innovation, areas around automotive, of aerospace, of the power grid build-out, when we look at opportunities to improve our own structure to match the demands of the market. And does that mean that we need to have a larger or smaller footprint in certain areas of R&D as we look at everything from our elastomers business to the appliances going on down through EVs and lightweight materials and coatings and so forth. I don't want to get too transfixed because housing isn't growing as fast as we had hoped that it would, but there's nothing we can do.

As I said in my prepared remarks, the worst thing we can do is just sit around and wait for the market to turn. '27 is going to be a better year than '26. It's going to be a better year because we have opportunities to cut costs to build a great business, to continue to build, continue to integrate. And I would just be absolutely shocked if we're at the end of '27, and we're not looking back at a materially better year than we did in '26.

Operator

Our next question is from Hassan Ahmed with Alembic Global.

Hassan Ahmed

Peter, a question around MDI pricing. Obviously, you've seen better pricing across all 3 regions and more price hikes on the table as well. But obviously, you're expecting as you talked about a fairly sort of major rise sequentially in benzene pricing. So just a question around whether you feel that the price hikes you've implemented and that are on the table will be enough to offset in Q4 this benzene price hike you're expecting?

Peter Huntsman

Well, we're in the process of putting those prices through right now. And I would say that given where we've seen in the last week or so, we need to be able to see prices continue to move up just as we're seeing raw material prices move up. I would say our biggest area that we're seeing right now of inflation expansion is in Europe, particularly on energy costs. As we look in third quarter to fourth quarter, benzene prices are up a bit, but not nearly as much on a per pound basis or a per ton basis than the impact of natural gas and that the impact that, that is having on our business. So it's -- we're going to continue to see pricing will be holding up in China. We need to see increases in Europe and the U.S. is going to be a mixed bag.

Hassan Ahmed

Very helpful, Peter. And as a follow-up, again, just trying to sort of get a sense of the EBITDA generation for stand-alone Huntsman in '27. Barring any cyclical recovery, what sort of EBITDA improvement should we expect from the cost cutting, operational efficiencies and the like that you guys have implemented '27 versus '26?

Peter Huntsman

Well, I think that at this point, we'll be putting together our '27 budget here in the coming months and be looking at those sort of opportunities. So much of that is going to depend on what sort of variable costs that we're going to be absorbing on energy prices and so forth. Tariffs will continue to be a headwind or a tailwind. And as we look at the global economic situation, hopefully, that will be more of a tailwind than it is a headwind. But as we look at this, in Advanced Materials, we're going to continue to see growth and opportunity in places like power, industrial applications, or aerospace.

In Performance Products. We're going to see -- continue to see good momentum, I think, in our performance amines. We put an expansion we started up this past year for ultraclean amine products will be going into chip production and cleaning solutions for the tech industry. We're starting to make a lot of traction in those areas. I don't think, Hassan, you're going to see any one big area that we will look back a year from now and say, wow, that was a massive turnaround. It's going to be just a lot of small applications, pricing discipline, cost discipline across the board and being able to make sure that we're in the right applications to be able to accomplish those.

So I don't think it's going to be any one thing. I think it's just going to be a lot of variables across the board.

Operator

Our next question is from John Roberts with Mizuho Securities.

John Ezekiel Roberts

The cleanroom teams have had another quarter to analyze data from both companies. Any new learnings coming out of that additional analysis?

Peter Huntsman

I think that there are learnings that come out on a weekly basis. But I'm looking down here at our GC and she's shaking her head that I should be talking about these things. So John, I'm going to just say that we continue to listen, we continue to learn and we continue to make advancements.

John Ezekiel Roberts

Maybe a follow-up then. What are you seeing currently in China, both on the MDI side and on your PO/MTBE JV?

Peter Huntsman

I would think stability. As we look at the domestic economy, I would say that it's -- no, I would say that if I had to use one word, it would be stable. And the growth that we're seeing is mostly through export-driven growth.

Philip Lister

And on the joint venture, John, MTBE margins have come down a little bit in the past 3 to 4 weeks. PO alpha, so propylene oxide above propylene have remained relatively strong. They've come back a little bit. I think we've guided to the fact that 3Q was clearly above 3Q last year. And then the fourth quarter, we'd expect to be relatively similar 4Q to 4Q last year and relatively similar to the third quarter.

Operator

Our next question is from Abigail Eberts with Wells Fargo.

Abigail Eberts

Just a quick clarifying one on Rotterdam. Any other information you can provide to us as to why that happened? And then on the $10 million to $15 million, is that evenly spread between September and October? Or is that more heavily weighted towards October?

Philip Lister

Abigail, it's Phil. The split in terms of the $10 million to $15 million, you should think about that as a $5 million impact in September and $10 million in October. That's the way to think about it from a modeling perspective. And the outage was begun from initiated by a third party, but the plant is back up and running as we sit here today.

Operator

Our next question is from Salvator Tiano with Bank of America.

Salvator Tiano

I want to ask company-wide. I know you provide some very interesting end market commentary in your prepared remarks. But obviously, it seems like the growth driver right now is the industrial end markets. So can you help us understand a little bit Huntsman as a whole, what is the exposure to more industrial end markets versus housing versus consumer markets?

Philip Lister

Yes. So Sal, about 60% of our volumes very roughly go into construction. That's across all of infrastructure, commercial and residential. About 15% is into automotive. So the remaining 25%, you've got a host of different end markets from gas treating all the way through to traditional industrial markets overall. The industrial markets themselves, you could classify that as, say, 10% to 15% of the remaining amount.

So a decent sized exposure. And one of the multiple reasons that Advanced Materials has improved year-on-year alongside aerospace and power, particularly when you look at the industrial PMIs that have come through. And one of the reasons that we've improved year-on-year in our elastomers business in polyurethanes, which again is going into some of those industrial markets.

Salvator Tiano

Okay. Perfect. And on the regional side, Americas obviously did so much better than anything else. I think you said 5% across the board. Can you clarify a little bit the regional performance for Advanced Materials, that 12% volume growth, was it a little bit more equally split? Or was this also much more heavily in the Americas?

Philip Lister

We saw it across all 3 regions. And that's because you've got aerospace growing around the world from where it came in 2025 as well as the power infrastructure grid bluntly being built out in all 3 regions out of necessity given the electrical demands that are required around the world and the reinvigoration of those grids. So we've seen it all around the world with Advanced Materials.

Operator

Our next question is from Kevin McCarthy with Vertical Research Partners.

Kevin McCarthy

Peter, maybe 6 weeks ago, one of your global MDI peers announced that they're in advanced stages for a feasibility study on a new MDI plant in India. And that's, of course, after having invested a fair sum at Geismar in recent years. So my question is, are you surprised by that given how poor the industry margins have been over the last 3 or 4 years? Or is it maybe less surprising because by the time this new capacity comes on towards the end of the decade, it will be needed. I'm very curious to kind of hear your views on reinvestment economics and kind of the shape of the cycle and when the next peak might be.

Peter Huntsman

Kevin, it's a very good question. I have the foggiest idea of what goes on in boardrooms when somebody decides to take a $1 billion throw to add more capacity in just about any chemical in our industry. So I won't specify MDI. But there's plenty of capacity to meet world demand for years to come. But that's just my opinion. I have no idea what goes on in the decision-making process. So I'll just leave it at that.

Kevin McCarthy

So it sounds like as a follow-up, Peter, if your balance sheet was less constrained, even if it were clean, you Huntsman, would not be contemplating MDI expansion at this juncture. Is that fair to say?

Peter Huntsman

I think I've said in the past, Kevin, I may be wrong, but so long as I was CEO, we would never build a grassroots MDI plant anywhere around the world. And I think we've done a pretty good job in doing that. At least on our own, we wouldn't be doing that. Now partnerships and so forth, maybe that's something you want to consider, but I think there's plenty of capacity, not just in MDI but most chemicals.

Operator

Our next question is from Arun Viswanathan with RBC Capital Markets.

Adam Hamilton

This is Adam on for Arun. Congratulations again on getting closer to closing the transaction. Just want to echo the thanks on providing all this market detail over the years. If we look at EU margins, I think they're up about 150 basis points year-over-year. How much would you attribute that to volumes versus price cost? And what do you think the healthy EBITDA margin is for that business is long term? I know it's done 20% past. And is it so feasible if we get volumes back? Or like you said, China is leaning on more exports as their domestic growth is challenged. How do you think about those margins split near term and out the curve?

Peter Huntsman

Well, I think at the end of the day, it just comes down to the fundamentals of being able to price your product to the right customers, right applications and cover your costs. And as we look at the European markets, that's going to be -- that has been more key sound management has been more key than the economic growth that hasn't taken place in Europe. And as we look at our other products around the world, I think it's going to be mostly disciplined on pricing applications and costs. You've got to have those 3 things in order. And if you do, you'll see benefit.

Adam Hamilton

Yes, that makes sense. And just thinking about China a bit, how do you guys think about all of this export pressure? And it seems like that's really what's driving a lot of the global pricing at this point. Is this really just a function of China GDP growth? How do you think about supply-demand coming out of the region and key export markets?

Peter Huntsman

Look, exports from China certainly aren't helping the global chemical markets. But let's be honest here. 20 years ago, the U.S. was exporting on a percentage of our GDP and as a percentage of our production. 25 years ago, the U.S. was exporting as much around the world as China is. I mean we're just -- we're merely just seeing the lumps that come. And China, I don't think that -- I mean, when they started with the capacity that they have today, it's been up and running now for the last, let's just say, 2 years. These were investments that were decided upon 6, 7, 8 years ago that were built over the course of the last 3, 4, 5 years and that have come online in the last year or 2.

And in that time, when a lot of those projects were contemplated, China was still going through an enormous housing boom, probably the largest housing boom in the history of Homo Sapiens from the late '70, '78, '79 up through 2020, 2019, China put 0.5 billion people and vastly improved houses and so forth. I guess as you look at these macro trends, as you look at them right up close, they tend to be very chaotic. If you step back and you look at where we were a decade or 2 ago and you calibrate the business, you calibrate demand, you calibrate your strategy around these macro trends, these are cycles and movements that will always be here to some degree or another. And we just have to learn to adapt to them and to manage around it.

And like I said, the worst thing you can do is just sit around waiting for things to get better. The simple fact of the matter is we're not going to return to 2021 exact economic conditions of a post-COVID recovery. But someday, we will see durables and housing come back in North America. We will see Europe finally get it back together and manufacturing determine what are going to be the long-term growth engines for Europe. China will absorb as they start to have an economy where the per capita GDP is somewhere just north of Uruguay. You've still got plenty of growth to take place in China. These are great markets. They're going to continue to be great markets over the course of the next generation, and they're going to demand better than GDP growth from a great industry that's going to continue to supply their needs in housing and appliances and medicine and tech. You can't do without our industry.

So we'll be doing just fine. I mean if we're going to sit around and blame China for everything, we're on the wrong path at that. China is a great market. It's going to continue to be a good market. And we'll gladly be part of it.

Operator

Our next question is from Daniel Rizzo with Jefferies.

Daniel Rizzo

So just with everything you've talked about in terms of taking costs, I was just wondering how we should think about incremental margins and operating leverage when -- given the cost cuts you've made, when things actually do ultimately return. I would imagine it would be considerably higher, but I was wondering what your thoughts are?

Peter Huntsman

Yes. I would hope that as we look at areas where we do have that tailwind in pricing and so forth, yes, we ought to be able to -- I would say -- I would hope that we ought to be able to exceed traditional margins. And we've seen this in times of past where you will see margin recovery, but you also see the benefits from the tough decisions we made today that not only put us in a position to compete more aggressively in the future, but also in a position to be rewarded more aggressively in the future when those pricing cycles shift.

Philip Lister

Yes. And Dan, on incremental margins, typically, as long as you're controlling your cost base, which we are in terms of the cost programs we had in place, then usually look at incremental margins of around that 30% level. And I think that's what you've seen this year as you've moved from the 2025 bottom to where we're projecting for 2026.

Daniel Rizzo

Okay. And then one thing you mentioned was A&D, it's kind of hard to get into given that you have to qualify it and it takes a couple of years. I was wondering -- and you mentioned doing acquisitions in the past. I was wondering if you can do acquisitions now in this market, given its -- how it's growing or it's not something you're going to pursue at this point given everything else that's going on?

Peter Huntsman

I think that as we look at the growth that's taking place, we feel that with our manufacturing capabilities, our technical capabilities that we are in a very strong position to be able to meet the opportunities we're seeing in power and aerospace to be able to meet that growing market with organic growth, what we have internally, the manufacturing footprint that we have, the R&D capabilities we have. I don't believe that we need to be buying assets today to take advantage of that growth.

And with that, operator, I think we're getting to the top of the hour, and why don't we wrap up the call here.

Operator

This concludes today's question-and-answer session. Ladies and gentlemen, thank you for your participation. And this concludes today's teleconference. Please disconnect your lines, and have a wonderful day.