Trinseo (NYSE:TSE) reported third-quarter adjusted EBITDA of $30 million and forecast a similar result for the final quarter of 2025, as Asian imports, pricing pressure and an outage at its Americas Styrenics affiliate weighed on performance.
The materials company expects fourth-quarter adjusted EBITDA of $30 million to $40 million and positive free cash flow of $20 million. Its forecast assumes that market conditions seen during the year will continue, along with a somewhat more pronounced seasonal year-end slowdown and $5 million to $10 million of unfavorable raw material timing.
Third-quarter free cash flow was negative $38 million, and available liquidity stood at $346 million at quarter-end, Executive Vice President and Chief Financial Officer David Stasse said. Trinseo expects year-end liquidity to exceed $350 million, helped by a seasonal release of working capital.
Trade flows pressure volumes and margins
President and Chief Executive Officer Frank Bozich said imports of Asian polymers into the United States and Europe rose sharply beginning in the first quarter. He attributed the shift partly to customers building U.S. inventories ahead of anticipated tariffs and to Asian material being redirected toward Europe amid slowing Chinese demand.
The trade flows continued into the third quarter, contributing to lower volumes than a year earlier, although volumes were similar to the second quarter, Bozich said. He said it was too early to determine whether the changes were temporary or structural.
During the question-and-answer session, Bozich identified Taiwan and South Korea as the sources of the most problematic increases in inflows for Trinseo’s chemistries. He said surplus capacity that previously supplied China was being redirected to Europe and North America.
Bozich also said Trinseo had seen higher sales rates for its more formulated, higher-margin products late in the third quarter and into the fourth. Volumes of formulated PMMA resins rose more than 10% from a year earlier beginning late in the third quarter, he said. The company is watching the trend but does not yet know whether it signals a broader market change.
Segment results and affiliate outage
Stasse said third-quarter adjusted EBITDA included $9 million of unfavorable raw material timing and negative equity affiliate earnings from Americas Styrenics. The affiliate faced an $8 million third-quarter headwind from repair and other costs associated with an unplanned June outage.
Stasse explained that the outage affected styrene production, requiring the affiliate to buy higher-cost material. The total impact on Trinseo’s equity income was $10 million, with $2 million recognized in June and $8 million in the third quarter. He said he did not believe capacity rationalization was necessary at Americas Styrenics, despite lower global styrene margins.
Engineered Materials adjusted EBITDA was flat from a year earlier, as fixed-cost improvements and slightly higher PMMA resin volumes in construction and automotive applications offset lower medical volumes. Stasse noted that medical sales had benefited a year earlier from customers stocking up ahead of the closure of Trinseo’s Stade polycarbonate site.
Latex Binders adjusted EBITDA fell $9 million year over year, primarily because of lower European paper and board volumes and pricing pressure in Europe and Asia. Battery binder sales volumes rose 27% from a year earlier. Polymer Solutions adjusted EBITDA declined $19 million, reflecting unfavorable raw material timing, lower ABS volumes and an unfavorable mix following the polycarbonate plant closure.
Restructuring and outlook
Bozich said Trinseo’s decision to discontinue virgin MMA production in Italy and its intention to close a polystyrene facility in Germany should improve EBITDA by $30 million next year, pending works council negotiations in Germany. The company expects cash savings from the projects to exceed restructuring costs beginning in 2026. Its Rho, Italy, site will continue producing PMMA resin and host investments in recycled MMA.
Trinseo did not provide 2026 guidance. Bozich reiterated that a 10% volume increase across the portfolio would generate about $100 million of EBITDA. He said weaker-than-expected volumes and less normalized Americas Styrenics earnings accounted for shortfalls against the company’s expectations entering 2025, while Trinseo delivered expected business wins, cost savings and the sale of its polycarbonate assets.
About Trinseo (NYSE:TSE)
Trinseo plc (NYSE:TSE) is a global materials company that develops, manufactures and sells specialty and commodity polymers, latex binders and synthetic rubber. Its materials are used in products across industries such as packaging, consumer goods, automotive, construction, appliances, electronics and healthcare. The company’s product portfolio has included plastics such as acrylonitrile butadiene styrene (ABS), polystyrene and polycarbonate, as well as specialty resins, acrylic products, latex binders and rubber materials.
