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And I think if you think about PA66 beyond electric vehicles, there are huge applications there in electrical and electronics which was an area that M&M was really underrepresented in historically.
So think about electrification and the need for not just electrification per vehicle, but for everything you think about people wanting to get out of natural gas for homes, but basically, the electrification of everything. All the outlets would say electrification, electricity demand is going to more than double in the next 5 years.
So with that comes data management centers, power distribution centers.
All of these things require polymer and specifically, all of them can benefit from the availability of PA66.
And so we think there's going to be a strong pull-through for PA66 as the demand grows for building out our electrical infrastructure. And again, this is an area Celanese has been in for some years, and now we're able to apply that market knowledge and that end use knowledge to the PA66 profile and pull those volumes through using the project pipeline model.
demand for materials to suppprt electrification
Transcript
2023 Q1
30 Jun 23
2023 auto builds, we still expect to be up 3% to 4% of 2022, and we're at a run rate right now that already achieved that. And we are seeing our own auto volume recovery at a pace significantly better than that.
auto builds recovery
Transcript
2023 Q1
30 Jun 23
I think you reduced your earnings per share goal by dollar. What was the source of a decrease?
Lori Ryerkerk
Yes. If we look at the first half, our first half came in about where we -- in total, where we expected the first half to come in with 1Q being up because of some unanticipated commercial opportunities for spot market volumes as well as some pull forward from the second quarter, especially in auto, a few parts for auto and a few for medical implants.
And so since we don't expect those -- we're not counting on those unexpected opportunities reoccurring in the second quarter.
Second quarter has been a little bit lower. And we are seeing the demand in the second quarter not build as quickly as we had thought at this time last quarter.
And so that reduction to $11 to $12 really reflects that slower demand growth that we're seeing across second quarter going into third quarter and just accounting for that in our outlook for the second half.
guidance reduction
Transcript
2023 Q1
18 May 23
would say, electronics, electrification is improving. There's a lot of need for more electrification around the world, and so we see that as a growing market this year. But in consumer electronics and consumer -- other consumer appliances, we see that lagging 2022, especially in the U.S. And then finally, packaging, we do see resilient growth in packaging, especially in the U.S.
I think about Amazon and everything that's getting shipped from online shopping. And also the push for sustainable packaging solutions, but paints and coatings is a bit slow tied to construction.
electrification good, elec cons lagging, packaging ok
Transcript
2023 Q1
18 May 23
I would say the most sluggish sector we still see and is baked into our forward look is construction.
construction sluggish
Transcript
2023 Q1
18 May 23
Thank you, and good morning, everyone. Lori, I think in the script you said that $13 to $14 plus of EPS for next year did not assume a recession because you're not seeing that in your order book. Can you give us a sense of what a recessionary range for '23 would be if we do indeed go into recession? is it $12 to $14, $10 to $12? What would you think on a high level?
Lori Ryerkerk
Yes, look, Vincent, I don't really have a number for that.
I think if we just look at current demand conditions, and especially at auto, I think everybody is pretty consistent and thinking auto is continuing to go up next year. I don't find that surprising, that's consistent with what we're hearing from customers. I mean, we've had three years of very low auto production. We think there's still a lot of pent-up demand. We think supply will continue to be the determining factor for auto, so supply of chips and other materials is what will be the determining factor.
Now, obviously, as interest rates go up, there may be some regions where that has some impact. But quite frankly, we think auto, which, especially with M&M, is now a significant part of our portfolio again, is really an upside for next year.
And so I think in that way, this - if we do go into recession, I mean, it's a little bit different this time, in that, usually in a recession - I mean, a couple of things - usually in a recession, you see energy start to come down and then prices with it. In this case, energy is staying up because of geopolitical concerns.
So that's a little bit different. We're seeing full employment, especially here in the U.S. which is why I think we're not seeing some of the impacts in the U.S. because although people are being hit by inflation, there is full employment, so it doesn't feel as hard as most recessions where you see a lot of layoffs and people without jobs. And then I think the third thing is auto. I mean, auto is usually one of the leading indicators of a recession and a drop in demand for autos. And in fact, we see it going the other way in this recession.
So we haven't really modeled, what I would call, a recessionary scenario. And because we just don't see it happening, even if technically, mathematically it's calculated as a recession, we don't see that.
13-14 for 2023
Transcript
2022 Q3
4 Jan 23
M&M is not performing in line with our expectations of the business or even in line with how they performed in 2021
disappointed
Transcript
2022 Q3
4 Jan 23
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