Chemicals producer Huntsman expects 2026 to bring a steadier business environment, with tariff-related uncertainty easing and interest rates stabilising. Speaking to Argus on the sidelines of the 19th Gulf Petrochemicals and Chemicals Association (GPCA) forum in Bahrain, chief executive officer Peter Huntsman said the company sees gradual improvement in the US construction sector, anticipates a recovery in consumer confidence in China, and is implementing price increases to address the ongoing pricing pressure in Europe.
In your latest earnings report, you mentioned continued weakness in the construction and industrial sectors, particularly in Europe. Today, you also spoke about high interest rates in the US. Do you expect these headwinds to improve in 2026?
During last year's construction season, we faced higher interest and mortgage rates along with significant economic uncertainty — particularly in spring 2025 around tariffs.
That created a lot of volatility and questioning in the US economy. In 2026, I don't expect that same tariff-related uncertainty. I think the waters have settled, and people have adjusted to interest rates. They may even decline a little, or at least stop rising. So overall, I expect the business environment in 2026 to be better than in 2025.
Huntsman cited pricing pressure across the portfolio in the third quarter. What trends are you seeing this quarter, and are certain product lines or markets feeling the impact more than others?
Most of the pricing pressure is in Europe, where there is little growth and people are producing more than what the market can absorb. So there is a price war going on. We don't see this dynamic in North America or China. We are currently implementing a series of price increases in the European market to address this.
You've noted that Europe's chemical sector requires greater collaboration in light of higher energy costs and regulatory hurdles. What type of collaboration works best and how is Huntsman positioning itself?
We expect energy-intensive chemical production — aromatics, olefins, and other basic raw materials — to continue shifting out of Europe. These materials will increasingly be produced in the Middle East, China, and the US, and then imported into Europe. European producers will focus more on downstream activities such as formulation and blending. That's the type of collaboration and restructuring I'm referring to. You'll see capacity closures in Europe and more investment in the Middle East, China and North America.
Turning to China, how are weak consumer confidence and excess capacity impacting your margins and demand?
Our businesses in China are currently the strongest we have globally, in both consumption levels and margins. I expect the Chinese economy to improve next year as consumer confidence gradually recovers. I believe 2026 will end stronger than 2025.
Regarding Europe's regulations — such as REACH and sustainability policies — are these a greater challenge than energy costs?
Regulations are the easier of the two to control, but high energy costs — especially LNG — will take longer to resolve. Both, however, are significant drags on the European economy. Europe could change how it operates if it chose to, but so far we hear more discussion than action.
How do US tariffs and export controls impact your business, especially in China?
We produce a lot of products in China and a lot in North America, but we don't trade much between the two; products made in China largely stay in China, and products made in North America stay in North America. The same is true for Europe. So tariffs don't significantly affect our raw materials. They do affect our customers, though, particularly in sectors like the automotive sector, where manufacturing is now shifting to the US. Some of their assemblies are moving there as well. For us, the total volume may remain the same, but we see changes in where that volume is produced and consumed. So we are seeing tariffs impact our customers, but not on our raw materials.
Looking ahead to next year, which segments do you expect to drive the most growth, and how will you prioritise investments?
We expect continued recovery in aerospace and in materials sold into the tech and semiconductor industries, for cleaning solutions and similar applications. Insulation and energy-conservation products should also perform well. We anticipate a gradual improvement in US construction in 2026 as well.
How is Huntsman actively positioning itself for the clean-energy transition? Are there any new pilot projects, near-term targets, or strategic investments underway?
We will continue producing highly energy-efficient materials and inputs for insulation, solar, electrical-grid infrastructure, EVs, and more. These will remain growth areas for us. But many publicly stated targets — for example, Europe selling only EVs within a few years — are unrealistic. Consumers aren't adopting EVs at the expected pace, and governments shouldn't force them. When I say the conversation [around sustainability] isn't based on reality, I mean that we cannot eliminate hydrocarbons entirely. Claims that we can move "beyond petroleum" are not realistic.
