Trinseo cautiously optimistic about market recovery

Berwyn, Pennsylvania – Trinseo SA has seen continued recovery in the automotive, tire and medical industries during the third quarter of 2020, and is “cautiously optimistic” that the trend will persist in the remaining quarter of the year.

"The positive demand recovery we observed towards the end of the second quarter seen momentum through the third quarter," said Trinseo president and CEO Frank Bozich in a third quarter earnings call 5 Nov.

This, he said, led to "significant sequential quarterly volume improvement" in many applications, including tires.

In the tire segment, according to Bozich, third quarter volume was flat year-on-year at 57 kilotonnes, but significantly higher than 26 kilotonnes reported in the second quarter.  

“We're cautiously optimistic that this trend will persist for the duration of the quarter,” said Bozich during the earnings call.

Despite the pick-up in demand, Trinseo’s synthetic rubber segment report a 24% decline in sales to $79 million (€66.7 million) during the third quarter, due mainly to the pass through of lower raw material costs.

Demand recovery in sales was paced by Asia and North America, Trinseo said in its third quarter results 5 Nov.

Adjusted earnings (EBITDA) went into negative territory, at -$2 million, nearly $10 million below the third quarter of 2019. 

Trinseo linked the earnings decline to lower margins from the impact of higher spot sales in emulsion styrene butadiene rubber (ESBR).

In addition, lower fixed cost absorption from inventory reduction initiatives impacted earnings.