--Recticel Sees Double Digit Volume Growth in H1 2024--

On August 30, 2024, Recticel, one of mainstream PU insulation panel manufacturers in Europe, disclosed its earnings results for the first half of 2024. The company’s net sales surged by 12.2% year on year, reaching EUR 299 million. Adjusted EBITDA increased by 37.9% year on year to EUR 25.1 million.

"European markets have largely remained slow in the first half with adverse weather conditions causing delays in some construction sites. While the residential sector has continued to underperform, the commercial market has shown more resilience, but Recticel achieved double digit organic volume growth both in Insulation Boards and Insulated Panels, according to the report. “While the residential sector has continued to underperform, the commercial market has shown more resilience. We do believe that we may have reached the bottom of the cycle in most Western European markets and we start to see a return to market growth in the UK.”

Jan Vergote, CEO of Recticel, emphasized that these results confirm the effectiveness of their market driven strategy. “In Insulation Boards, we are lowering our cost base and increasing sales volumes,” he said. “Our recent substantial expansion of the Belgian and French plants is on stream. We are building up our innovation pipeline and are launching 15 new Insulation Boards products over the next 18 months." The company predicts a continued volume growth in H2 2024. Adjusted EBITDA is expected to land around EUR 50 million.

--Strong Growth in the UK Construction Sector--

A survey on construction activities across major European economies in this July reveals a decline in construction activity index within the Eurozone, including economies like Germany, Italy and France. In contrast, the UK’s construction sector showed an upward trend with robust demand growth, achieving the most substantial increase in 26 months. The S&P Global UK Construction PMI jumped to 55.3 in July 2024 from June’s 52.2. The growth is attributed to a rebound in new orders following the end of the UK’s general election that brought Sir Keir Starmer’s Labour Party into power.

S&P Global UK Manufacturing PMI as of July 2024

This marked the fastest growth since May 2022, with a continuous growth trend for five months, indicating strong demand growth. All three sub-sectors of the construction industry experienced growth in July. Besides, expansions in new orders have continued for six consecutive months. Construction purchasing managers believed that improved consumer confidence positively impacted on the resumption of paused projects, with the activity of subcontractors rising steadily for four months.

--European MDI Suppliers Raise Prices for September--

BorsodChem: BorsodChem’s MDI facility underwent maintenance from July 16 and announced resumption on September 2, lasting about 1.5 months. The company raised its MDI price in Europe by EUR 200/tonne for September.

Covestro: Covestro’s MDI facility in Brunsbüttel will start maintenance in September. In view of supply tightness in September and October, the company raised its latest MDI offers by EUR 150/tonne.

Huntsman: Despite Huntsman’s MDI facility in the Netherlands has resumed operations, some specs are still short, polymeric MDI are most probably have to rebuild inventories.

Dow & BASF: Both companies' MDI facilities in Europe are running normally, and have no maintenance activities recently, but they are aware of tightening supplies among their competitors and rising prices for the September market.

China’s PMDI Market Shows Strong Momentum Again

China’s PMDI market has shown strong momentum again since the beginning of September. The daily market price increases have exceeded CNY 200/tonne especially after September 3, demonstrating strong upward momentum. Mainstream offers for PMDI in East China on September 6: Wanhua: stood CNY 18,000/tonne, other goods: stood CNY 17,700-17,800/tonne. On one hand, export orders to European markets have increased significantly; and on the other hand, Wanhua Yantai’s MDI production resumption has been delayed again, leading to ongoing supply tightness. Moreover, expectations of a stronger domestic demand in the “Golden September” period provides a boost. Hence, Chinese PMDI market has moved strong recently.