It is BAD for HUN because their clients are the same ones selling oil. Thus the demand for HUN end product goes down has a much much greater impact than the small savings on raw product. IE 1 barrel could produce hundreds of products in small quantities so the impact of cheaper raw material is much more than offset by decrease in demand. IE 1 barrel at 30$ could produce 5,000$ worth of finished product who cares if the barrel cost 1$ or 1,000$ if demands not there then they are losing much more money. There is no actual "sweetspot" because the higher the price of oil the more money that HUN will make. Thus if oil were 1000$ per barrel demand would be high for product and the initial 1000$ purchase become irrelevant.
This is definitely the kind of question that you can call Investor Relations and ask them and they will tell you the answer.
The way to phrase the question is to ask "what is HUN's sensitivity to a $10 (or $5 or $1) change in the price of crude oil? To a 10 cents change in the price of natural gas? to a 5 cent change in the price of propane, etc., etc.
That's the kind of question that IR people are actually able to help an investor with.
I agree with your assessment.......I did the Balance Sheet post last week. Between your assessment and the balance sheet information HUN should be a slam dunk to go higher. To answer your question, however, I think the answer lays (or is it lies?) in currency. The dollar is strong and may negatively impact overseas sales. I think too many people are mis-informed and think lower energy prices are bad for chemical companies. On the contrary, as you have noted, low energy prices should be a positive for chemicals.
Or maybe there is no sweet spot and all that's going on is the "other handedness" of econmists (lol: "on the other hand"), that whipsaw us into submission, explaining away poor performance. Can't be bad both ways!
It's interesting to hear some opine here about the impact of low oil prices, and seem to suggest poor results b/c of them make sense.
Yet in 2005, Hunstman's outlook was related to HiGH oil prices like this: "In a note to clients, Fulcrum Global Partners analyst Frank Mitsch said that Huntsman Corp.'s near-term earnings "are running in the right direction," but that profits could be hit if high energy costs or other factors put the breaks on the current economic recovery."
So we get high energy costs ...putting breaks [sic] on companies and we have rationales on this board suggesting that low energy costs were somehow harmful.
Anybody got a clue where the sweet spot is?
HUN could be a very attractive takeover target. AXLL makes half of what HUN does and they got an offer for $20, I would not be surprised if HUN gets a takeover and the stock surges.
Sentiment: Strong Buy
No Pete, I don't get your point. But if you are trying to say that those that thought it was a buy at those levels and did so are stupid, they are less stupid than someone that thinks $4.00 is a buy and it never goes to those levels. When the stock goes to $30 who makes more money, those that bought at $11 or those that didn't buy at $4? Pete, if you ever have something of value to add to this board, feel free. Otherwise you are just wasting everyone's bandwidth. Why don't you go somewhere that you can make money because HUN is obviously out of your league.
Start putting your money where your mouth is and you'll have something. How much did you make off HUN its lows in the 7's? That's what I thought, nothing. You may have already missed the boat pestapete. This stock won't go to the 4-or-5 range. The DOW got spanked today and what did HUN do? Went the opposite direction. If I were you I would hang on to my shorts just a bit longer. Why don't you find some other boards to troll?
Issue is the speed of oil price going down, caused mainly by oversupply. Usage is still rising, thus no recession. If OPEC could agree to cut but no one thinks that will happen. Oil will find a floor and some think that has happened or very close to doing. All this suggests the worse may be over and the markets are about to reverse, let's hope that's true. If we can get through 2016 and finally get the far left out of power in Washington then legislation can pass to encourage growth of economy that would give us momentum back to high $20's by end of 2017.