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HOUSTON (ICIS)–Chemours expects 2023 sales volumes of titanium dioxide (TiO2) to fall year on year, although the outlook for the market should gradually improve as the year progresses, the US-based pigment and fluoromaterials producer said on Friday.
Chemours is expecting a modest recovery in TiO2 volumes in the second half of the year, said Mark Newman, CEO. He made his comments during an earnings conference call.
The outlook for TiO2 should improve because destocking in Europe could be ending soon, Newman said. In addition, demand in Asia should increase following the end of the Lunar New Year.
Chemours makes TiO2 in its Titanium Technologies segment. Chemours also makes fluorochemicals in its Thermal & Specialized Solutions segment and fluoropolymers in its Advanced Performance Materials segment.
2023 OUTLOOK RESTS ON TIO2
Among Chemours’s product lines, TiO2 is the most sensitive to economic cycles, and Chemours’s overall guidance for 2023 takes into account the performance of the global economy.
For 2023, Chemours expects to report $1.20bn-1.30bn in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). That compares with $1.361bn for the year 2022.
Adjusted earnings per share (EPS) for 2023 should be $3.80-4.29. That compares with $4.66 for the year 2022.
The low end of Chemours’s 2023 guidance assumes that the US will have a modest recession. In Europe and Asia, the recovery will be delayed until 2024, Newman said.
The high end of the guidance assumes that economic conditions will improve in Europe and Asia, Chemours said in prepared remarks.
Inflation will weaken and monetary conditions will loosen in the second half of the year. This scenario assumes that central banks will successfully orchestrate a soft landing, under which inflation approaches targets without precipitating a recession.
OUTLOOK FOR CHEMOURS’S OTHER SEGMENTS
Chemours’s Thermal & Specialized Solutions segment should continue expanding because of growing demand for its refrigerants based on hydrofluoroolefins (HFOs).
These are replacing older refrigerants used in automobiles and buildings that are much more powerful greenhouse gases.
In Chemours’s Advanced Performance Materials business, the company remains sold out in a number of product lines, Newman said.
Advanced Performance Materials produces Teflon and Nafion, which is used to make membranes used in fuel cells and electrolysers.
Newman acknowledged that there is some weakness in electronics markets. However, there is a huge backlog for electrolysers, which are used to make green hydrogen.
Fluoropolymers are also used in semiconductor fabrication plants, which are known as fabs. These projects are moving forward, Newman said.