Huntsman's Strong Earnings Beat and Revenue Growth Signal Industry Resilience

The chemicals sector has long been a barometer of global economic health, and its recent performance in Q3 2025 offers a mixed but cautiously optimistic picture. Huntsman Corporation's third-quarter results, marked by a narrower net loss and robust free cash flow, have sparked speculation about a potential industry-wide rebound. However, a closer examination of broader sector trends and peer company performances suggests that while resilience is emerging, the path to a full recovery remains uneven and fraught with challenges.

Huntsman's Strategic Adjustments Pay Off

Huntsman reported Q3 2025 revenues of $1.46 billion, with an adjusted EBITDA of $94 million, a decline from $131 million in the prior year but a significant improvement in net losses compared to 2024, according to Huntsman's earnings release. The company's decision to slash its quarterly dividend by 65% and prioritize cost-cutting measures-projected to save over $100 million by 2026-has bolstered free cash flow to $157 million, up from $93 million in 2024, according to Huntsman's earnings release. These actions reflect a disciplined approach to navigating macroeconomic headwinds, including inflationary pressures and shifting demand patterns.

Segment performance highlights both vulnerabilities and opportunities. The Advanced Materials division benefited from favorable foreign exchange rates, while the Polyurethanes segment offset lower prices with volume growth in the Americas and Asia. However, Performance Products struggled with facility closures and competitive pressures, underscoring the sector's structural fragility, according to Huntsman's earnings release.

Broader Sector Trends: A Tale of Two Chemicals

The global chemicals industry is projected to grow by 3.5% in 2025 after a meager 0.3% rise in 2023, driven by investments in semiconductors, clean energy, and AI-related applications, according to Deloitte's 2026 outlook. Yet this growth is tempered by overcapacity in petrochemicals, particularly in Europe, and persistent cost pressures. Companies are responding with aggressive cost-reduction programs, asset rationalization, and operational efficiency drives.

Peer comparisons reveal divergent trajectories. LANXESS, for instance, reported a 16.3% sales decline in Q3 2025, with EBITDA falling 27.7% to €125 million, as weak demand in construction and automotive sectors weighed heavily, according to LANXESS's Q3 2025 report. In contrast, SABIC delivered a 45% quarter-over-quarter increase in net adjusted income to SAR 698 million, buoyed by strong volumes and strategic investments in low-carbon products, according to SABIC's Q3 2025 results. BASF, meanwhile, saw sales dip 3% to €15.2 billion, citing currency headwinds and lower prices, though it maintained its 2025 EBITDA guidance, according to BASF's Q3 2025 report.

Divergent Strategies, Shared Challenges

Dow Inc.'s Q3 2025 results illustrate the sector's duality. While its EBITDA rose sequentially to $868 million, the company slashed its dividend and announced $1 billion in annualized savings by 2026, according to Dow's Q3 2025 slides. Similarly, The Chemours Company faced a 9% decline in its Titanium Technologies segment due to price cuts and operational disruptions, yet its Thermal & Specialized Solutions division surged 20% on strong refrigerant demand, according to Chemours' Q3 2025 results. These examples underscore how companies are balancing short-term cost discipline with long-term bets on high-growth niches.

Valhi, Inc.'s Chemicals Segment, however, serves as a cautionary tale. A $22.2 million net loss in Q3 2025, driven by TiO2 price declines and regulatory costs, highlights the vulnerability of firms reliant on commodity-like products, according to Valhi's Q3 2025 results.

Assessing the Turnaround Thesis

While Huntsman's improved margins and cash flow generation suggest a degree of resilience, the broader sector remains fragmented. The chemicals industry's ability to adapt hinges on three factors:
1. Execution of Cost-Cutting Programs: Over $1 billion in combined savings from Huntsman, Dow, and LANXESS by 2026 could stabilize margins.
2. Geopolitical and Regulatory Risks: Europe's energy transition and China's industrial policy will shape regional dynamics.
3. Demand Shifts: Growth in semiconductors and EVs may offset declines in traditional markets like construction.

Conclusion: Caution Amidst Glimmers of Hope

Huntsman's Q3 performance and the sector's mixed results indicate a partial stabilization rather than a full-blown turnaround. While strategic restructuring and high-growth bets are paying off for some, systemic challenges-ranging from overcapacity to regulatory uncertainty-remain. Investors should view the current environment as a test of operational agility rather than a green light for aggressive bets. For now, the chemicals sector's resilience is real but conditional, dependent on the successful execution of cost discipline and the acceleration of innovation-driven growth.