Celanese Corporation (NYSE:CE) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 10:00 am ET

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Celanese Corporation (NYSE:CE) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of John Roberts with UBS. Please proceed with your question.

Analyst
John Roberts

Thank you, nice quarter. You noted that Asia auto builds have recovered. Was your Asian Engineered Materials sales, up year-over-year as well? And do you think they will accelerate in Asia after the Polyplastics deal?

Executive
Lori J. Ryerkerk

Yes. Thanks, John. We are seeing -- we have seen the recovery in Asia. I mean, Asia was up about 2%. But I think year-over-year we really expect Asia to be pretty flat to 2019.

Analyst
John Roberts

Okay. And then you pivoted Acetyls to emulsions and powders over VAM. Can you characterize the range of swing possible between VAM, emulsions and powders in your mix?

Executive
Lori J. Ryerkerk

Yes, I -- we maybe just to give you an idea, I mean, so we actually moved about just over 15% more into emulsions, as an example, in the quarter. We moved kind of 1% more into VAM, we moved more acetic acid and other derivatives back into China, since that was a little bit more robust market. Even though the margins were a bit lower. I mean, generally, we characterize it is -- we have the ability to move anywhere from 40% to 60% of our acetic acid into downstream derivatives.

Analyst
John Roberts

Okay, 20% percent range, then. Great, thank you.

Executive
Lori J. Ryerkerk

Yes.

Operator
Operator

Thank you. Our next question comes from Vincent Andrews with Morgan Stanley. Please proceed with your question.

Analyst
Vincent Andrews

Hi, thank you and good morning. Just want to square a couple of the outlook comments. Starting the Acetyl Chain, you mentioned flat 3Q versus 2Q. And you also mentioned that you don't expect prices to improve until demand gets back to pre-COVID levels. And then later in the comments you talked about 2019 -- 2021 being an opportunity for demand levels to be greater than 2019. So I want to make sure that comment was also meant to apply to acetic, to the Acetyl Chain, and if you think that sort of will be the trajectory?

Executive
Lori J. Ryerkerk

Yes, so on Acetyl Chain, I mean, we do expect some volume recovery -- modest volume recovery in Q3. We aren't expecting though a big change in pricing. As we said, there's still a lot of available capacity in the world. So we think that puts a limit on the pricing. Look, we are seeing some improvement in methanol pricings in early Q3, we are seeing some improvement in acetic acid pricing. So maybe even slightly up margins at the beginning of Q3. But we don't really see the fundamentals yet to really think maybe that sustainable for the whole quarter. You might remember in second quarter, we also saw a bit of an uptick in margins early in the quarter, but that really flattened out as the quarter went on.

So right now, we're saying modest volume recovery, pretty flat margin and that -- but that volume recover -- but we do have some