Westlake (WLK) 4 Nov 202020 Q3 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Westlake Chemical Corporation Third Quarter 2020 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. After speakers' -- after the speakers' remarks, you'll be invited to participate in a question-and-answer session.

As a reminder, ladies and gentlemen, this conference is being recorded today, November 3rd, 2020. to Westlake's call Vice like host, to now Holy, Jeff President would turn over the today's I and Treasurer. begin. may you Sir,

comments Thank Executive XXXX members everyone Chemical morning our provide open and President today regarding call you, other conference to Steve Chao, and Justin. Westlake Bender, will with Chief with CEO; agenda a a will perspective our Steve few the Officer; detailed performance management our the by team. The results. at and Albert current Westlake's Corporation President call. Albert, of begin conference welcome quarter and by our and I'm a Vice followed industry. joined who operating look third financial on Good will more then Financial

concluding will and call add open the few to Albert then a up we'll questions. comments Finally,

materially made topics quarter upon pressures; at to references in and this of is details thus rates; coronavirus; Chemical. SEC we pricing of raw results. LP, the our limited markets; products; certain technological Westlake governmental and third capital contain discuss and that olefins which economic assumptions information political availability based of release of partnership, issued information based During in This management's access and Westlake discussed is with management to which risks facilities. our Westlake's balance our owns OpCo we or regulatory morning, subject will trade are the volatility results Any beliefs certain statements release the as differ cyclical well impact filings. LP, to many and currently is Actual forward-looking reference on similar available unrest; and suggest forward-looking could section utilities; nature OpCo to as Partners the to available management. refer Westlake Partners for subsidiary, including as and Westlake global master in to Today, other westlake.com. call, a the webpage in Chemical including factors Chemical These going refer operating energy is predictions policy to press our that conditions, compete; ourselves industry by expectations uncertainties. or our risk to and supply/demand to press the as This actions, changes products industries materials, document Westlake developments; competitive of cost factors,

This an We today's replay following hours posted the numbers. discussion be on by dial two replay may A may a have call. today accessed the at also numbers results. beginning the callers replay website The this dialing both the following code conclusion be can presentation of westlake.com. any I call to of conference in should our that our assist will on of this access XXX-XXX-XXXX. this today, Domestic XXX-XXX-XXXX. is reported finally for of that access time-sensitive no information callers note you available webcast at International being advise that is only Xrd, are time the and therefore, system you webpage as our November accessed broadcast through live on may information be longer would replay. Internet call at accurate of XXXXXXX. Please XXXX speaks call advised that be

turn to Chao. the over to Albert? call like would I Albert Now

$XX release, $X.XX XXXX quarter or XXXX, third income gentlemen Jeff. for and to results. we of morning quarter our you, discuss net us diluted million share. Good third this and reported the In for Thank ladies thank you press joining per morning's of

growth to two comparable with in the early countries with with some our as either provide that business Vinyls place the months Before in results, improving were quarter mandates the sales been let which global the for through into this state-at-home for volumes or many Steve of quarter we due quarter, than quarter. conditions and restrictions both solid demand insights have Throughout the results the demand third third in segments, the products, go and in pandemic. Olefins the first captured higher me saw the second put relaxed economic prior COVID-XX quarter, our period. Westlake year

As a accompany saw activity, this in result PVC. that our increase we of price the robust for an recovery for polyethylene June, many and of starting demand economic global in especially environment products,

last August, to as Louisiana, in most reach Hurricane storms However, the Southwest in in late U.S. powerful Coast of Laura the the landfall XX one years. Gulf made

which of catastrophic our to landfall you their in capacity, Charles, plants to in dealing following In say facilities, tirelessly results chemical Lake Laura, well, and thank of like October, to have our were I call many restarting is in This infrastructure to facilities operating we power production as happy start-up many further early resumed now production with infrastructure third and restarting the the own and our resulting restart would to also one-third there delaying our our more also completing impacted special operations. like homes. area, global for a same our storm Hurricane our and I that hurricane throughout storm to the in extensive we would the to utility September, plants. our I'm report detail volumes the were worked to who utilities Delta quarter. the dedicated able employees financial approximately Steve of the process on quarter. while weathered electrical over turn Hurricane provide facilities us was to employees. impact made our restored, remain of lost to to idle from the extensive begin third The severely damage power sales and repairs were caused Charles the While Once process our in area. to Lake operations. utility

discussing by consolidated a Thank will our you, Olefins I and detailed Albert Vinyls segment followed everyone. and good morning start with review results, financial of our results.

major pandemic with from and with results. COVID our for lows consolidated the begin products. increasing quarter our demand me strong solid from saw rebound prices Westlake second Let a most of the resulting

associated in a in Schkopau, with $XX Germany These Hurricane well have European $XXX PVC announced this facility effects hindered quickly the facility, production incurred Vinyls Laura earnings impairment related production. in to Hurricane electrical that approximately sales just Louisiana in with other of closure resume mentioned to remainder $X.XX related well or and million, as of discrete otherwise and for of of quarter and infrastructure our operations, per Laura per sales offset was as Of from which Southwest as and Albert reported strong ability the the this certain the other comments. charges non-integrated expense million, totaling events, estimate our markets the opening the stand-alone restructuring Vinyls from of affecting constraints million share. as in our resulting connection with closure our to costs the $XXX lost $XXX be impact the the volumes increased as costs Olefins associated pretax or our lower led segment the logistic to the the of lost facility. to maintenance in segment. two segment In to of well our September, would third we these products with approximately the Schkopau increased assets As outlined, costs and estimate, Albert to utility we results We We XX% area his from our storm share as million, closure $X.XX this operations.

ethylene of income the reported result decrease of or to feedstock Hurricane income million, For a fuel of of building earnings compared and and for Vinyls net is as The the Laura higher $XXX XXXX, the lower and in ethane per cost effects we net both million our charges costs. third Olefins Partially $XX just quarter of these segment. were share quarter discussed, net in the higher XXXX. of products restructuring well offsetting our income vinyl $X.XX businesses million third and $XXX in as impacts

million $XX businesses. quarter earnings and with impacts European these higher PVC million. and Hurricane of downstream for restructuring soda income largely XXXX polyethylene net net Offsetting prices, as attributable were increased increases business. especially increase prices as quarter products, well higher the XXXX income and our our net from strength with associated volumes Vinyl for sales in The costs $XX Products Vinyls Third caustic higher major was Laura the from second in increased income in to by

rising LIFO method. the Our utilization accounting a in of provides periods on to benefit of compared cost what reported FIFO production method of the been have would earnings

As ethylene impact industry in Coast of Gulf discussed, capacity be the of Laura September. led Hurricane the to amount large during offline a

price hasn't at of and in on $X.XX a third when compared audited. the to an would than a As per result, approximately method. effect led quarter. have This only estimate is the end this increase in pretax compared The million, $XX impact share earnings what doubled to the reported second or to favorable ethylene of ethylene LIFO quarter the been prices of of more the end been

Now, to over segments, from and second review in third per quarter, export per for with increasing $X.XX U.S. reporting the pound PVC let's global we contract with over move $X.XX demand strong on segment. starting pricing the two performance consultants our the industry the Vinyls domestic Throughout of pricing the saw quarter. increasing the end pound of

robust downstream demand our the repair automotive saw related especially home demand appliance industries. businesses and Vinyl remodeling, We improving demand from related strong also and to Products in to construction,

on limited Hurricane late However, of which production quarter, impacted our fully to Laura this from price capitalize PVC the environment. increasing the effects in ability our

partially Vinyls' operating XXXX, of and and downstream million the European million from prior-year Vinyl income impacts as Laura in cost Hurricane decreased the from which in resulting our were a quarter $XX For increased of restructuring fuel Products our of period, businesses result earnings third $XXX lower primarily operations, cost. by offset the

our to segment. Olefins turning Now,

polyethylene, price with $X.XX strength strong continued end to of in Our global export from levels quarter, see combined Olefins well to as low the prices. reported pound of which as when the industry led second domestic inventory for per demand increases business

$XX our and of limited both effects quarterly Hurricane our quarter million the the polyethylene, third third sales hurricane. of due XXXX operating from ethylene of for $XX to Laura volumes quarter the and As million income XXXX decreased production

end million In issued our with sheet and quarter used rate a bonds. $X.X X.X%. average cash a to for of of X.XXX% GO This proceeds coupled $XXX a X.X% average yesterday. unsecured of solid operate took $XXX years million at had rate allows XX this With debt At completed schedule, refinance today's long-dated debt to Zone of and cash Ike XXXX, June statement debt million the of with and we a have billion. life attention liquidity of now to environment. maturity we turn with us with weighted maturity of this we position, notes $XXX the in interest August XX-year revenue refinancing, year, balance place an the these and let's of third of portion cash total million and equivalents $X.X flows. Next, of the billion of remaining a refinancing the confidently $XXX being Zone in profile

opening Albert Looking forward to his Hurricane of September through the October. as stretched mentioned rest of Laura comments, effects into XXXX, early in

we in of Hurricane Charles approach resume time idle As to our to were we operations, had same due a facilities second in the Lake to beginning Delta the area.

Delta delayed a weeks. caused recovery Hurricane our it few minimal While damage,

While results maintenance fourth quarter as the we cost $XXX and have resumed estimate incurred. the higher effect to given now two the well of production the price as to the million, we by environment storms lost due approximately current we operations, sales impact

CapEx XXXX We spending full approximately year million. to be $XXX expect

now approximately effects XX%. full be comments. our to back expect Act, over Albert make the tax Albert? With effective turn closing the CARES to XXXX, year some excluding rate of We I'll to for that, the call

which XXXX COVID-XX Steve. followed all not for by restrictions, quickly outbreak time only and curtailed economic global the was late stay-at-home in for but The been of challenging you, orders the Thank of activity. us. quarter, first a business significantly has associated Westlake,

in As seen a we products, recovery a spring of more our from economic tied drove we increase the many demand for that lockdowns, to especially end those the progressed broad-based have strong consumer. directly

low, pricing remain remain our may industry In in are recovery that favorable, polyethylene Vinyls economic the we outlook noting be to and with outlook. our we serve, we The fourth PVC demand this quarter. the optimistic seeing for PVC momentum continue. for we supply continue consultants remains industries While continues enter uneven the inventories constraints supporting while strong, remain segment, to as among

from conditions. tight Our especially customers, the created construction, demand and appliance has in strong our market industries, auto,

we slowly has demand recover, from third tight Similar throughout quarter. for in firm the seen levels. with soda hygiene, products PVC, constraints demand second by continue. year the low supply we markets. our demand seen in balances driven expect quarter created to inventory demand high have improved that supply polyethylene begin This industrial demand In lows the As have the is packaging, foodservice end-use business, industry the and healthcare, with Olefins consumer the in caustic production to for

focused safely, reducing our delivering We to on and performance continue costs. remain superior will operating operational

of we and While balance XXXX, look for world, constructive. we around in cases dynamics indications the business optimistic COVID-XX are monitoring improving the into increasing are of the as the cautiously XXXX industry

confident of needs long-term earnings that business, Thank financial the our Westlake are our is deliver much over value We to customers, to of our discipline, to which will with back our us to now the call shareholders. maintaining fundamentals third enable strong the while for quarter listening to well-positioned serve turn you very combined I XXXX Jeff. call. will

Albert. Thank you,

teleconference to that will questions, available would Before remind the of has this after ended. I be taking like hours we replay begin two you a call

end the at again number call. that provide will the We of

questions. we now Justin, take will

[Operator from Instructions] And sir. Sachs. question first Bob our comes Goldman from Koort Thank you,

is line open. now Your

I Thank two you. had Albert. I questions, could, if

slowing mentioned in you you. you just First, on provide thoughts little you was to that into costs seems Could in head quantification typical a some give as what maybe lean. then quarter? the are differences quarter? chain could maybe I think ethane supply in us that the fourth some your bit think whether first curious regionalized secondly, Thank I And we latest resistance

of the and now people coming industries, in again. planned because polyethylene PVC the we've and are back seen operation building back in inventory up Certainly, outages

producers the So, low. we believe that are quite inventories among

the and up polyethylene the are will even I adequate remains average. And into polyethylene consumers for of see quarter. globally think demand strong. producers to PVC not the oversupply PVC inventories fourth And among or we inventories, low build the until

continue demand we will recover the global remain demand So, believe economies XXXX. will as strong and into

be terminals ethane that there suddenly gas less export is time demand. as oil ethane have concerned, talk that operations, as because demand ethane coming will may with or less new balance also far back But production, ethane export with may the larger. and will is available, associated production and not tell, As oil gas

export As seen ethane this when May largely, we've has oil in April, dried year, up. of price dropped

you look for still the If they for maybe at low-XXs ethane, future next hovering are to low-XXs the prices year. in

confident are domestic will to ethane supply demand available U.S. come. the for there we that be So, to years

Thank helpful. Very you.

welcome. You're

Thank you. question our from Fermium Research. next And from Mitsch comes Frank

Your is open. line now

morning, gentlemen. wanted to Good Hey. I get--

Good morning.

the and to more color. a believe, storms. mentioned break negatively mean, Yes, little more in $XXX or clarification due wanted fourth be good you're terms by Steve, I get that? seeing Could morning. you to impacted I a some that you that of little quarter would how I where million down bit further,

So, and the losing million degree Frank, did that's me, I said, impact fourth -- quarter. of some relates quarter, of in storms. third the from in price guidance a million And guidance both the a $XXX environment really it that to $XXX impact expenses. quarter to of to related in sales repair of excuse as impact course the that combination that yes, the right. was margin third continued greater the some our seen for October, we've the lost Obviously, is higher production September than obviously, in into and course, which

right. All

that So greater basically, in XQ, correct? margins what why XQ Prices, you're impact saying picked to the did started is certainly you're they obviously, higher polyethylene, have than ending on fact going than quarter -- PVC. at you that ended see that least the in are That's third in up.

in some That's flowing through right. third flow And cost you of do fourth cost into quarter. and have that the quarter sales

in QX. of contribution of that's So, also the the part impact

in shut then, Okay. to one you Germany took And the the PVC. very on All obviously right, facilities helpful. down of step

equal, not all assets because else running being other How You charge. took there volume, you're right. do $XX fact any that those you're we losing think the the about, million

after You're How beyond, going to equal? we there run year should levels. being your think other about impact assets higher at financial all and the else next

you're right. Well,

recall, expand may you As in Germany. did we facilities

Schkopau. so, And production in of accommodate we this reduction can

our change in ability is capability this volume shut there so service no this customer, plant a down result the of as in so, And Schkopau. change in to no of

now integrated we businesses. going which run at we're more think certainly very to forward, higher as constructive assets the well-positioned, think a is very way running we So, rates,

out will to portfolio So, pull really the the facility be able of overall additive being business. that to unintegrated

given that so that the seen we've continue we strength XXXX. that we that into expect hope We far, see

so Got you. Thanks much.

welcome. You're

you. Thank question And our from Leithead next Mike comes from Barclays.

Your line open. is now

and Thanks, good Great. morning, guys.

morning, Good Mike.

Good morning.

the how the the I think can building products for community quarter you that's commodity given some guess, financial more first, bit do growth give is? assets? differentiation point in strength of business, And the relatedly, a of and color the give this the chlor-alkali at you sustainable seen you details how level this demand on intend more businesses us around more to maybe in

you're that across We'll pipe to take we siding think our the consideration and spoke that did in in we've businesses. compounds I business, board was and we business see in exterior the business. And business, as about this our into strength it our and right, the seen

them to specific overall we So, contributors And solid new and nice, to the breakdown say, very guidance, don't construction repair, markets all of nice were of quarter. continue. the that but remodel all very we and three as see I give contributors EBITDA continue were

pieces robust business. all we're in three those strength we've very about excited of of So, seen the the

lower gas. XQ because you'll of Obviously, that's And I prices results. cost some your gas September your Great, on through And helpful. be rolling then, that in accounting, moved FIFO October. still in question natural higher assume of

about to sensitivity XQ should us maybe overall gas could about or we how FIFO maybe just how give an just think benefit an So, you early that prices? framework think natural

FIFO, gas. the only it's have only you it's not not Well, seen, natural

feedstock. course, Of it's

from seen XQ. and pricing ethylene the increase and XQ ethane to and ethylene you've on of So,

ethylene higher Those ethane through. FIFO quarter. into coming it's calculation the carrying a through combination and cost fourth so And of into certainly, will flow and gas,

of was in and certainly, feedstocks, ending third end in be significant that continue continue so, benchmark be headwind, QX will in comments and price it. will quarter headwind it's And really but I what headwinds some function if really be a the way the that is. to price see we pretty then both will as to noted a a the It prices volume my those they year for of and impact in as and QX headwind at

Great. Thank you.

Welcome.

KeyBanc. from next Alex Thank our you. question And Yefremov from comes

Your line is now open.

morning, you. everyone. Thank Good

morning. Good

morning. Good

third us or tell QX, PVC an you year Is for in is by enhance Could in next the margins to year-to-date? products there further maybe opportunity prices? where building quarter relative for products pricing building or to raising maybe

Building economic strong inventory products season, be in a season, time time, -- is the economic Yes. raw but will in we have will winter conditions as increases. time. on building level. this increasing condition, see we'll And price price to maintained people been demand now reflect spring strong the typically levels on that the at depending a the be the -- again when material will that prices PVC are building spring even winter depending what the into at with And prices the season, see

the modestly. merchant tell you, one. Markit And large works, recently index pricing you've more chlorine, are IHS to last out months, and the for pricing merchant over is? what Albert. nominations difference freely significant Thank but increase the your explain much and same how announced says chlorine it's also fairly what Can time, this you a chlorine that IHS IHS few seemingly action maybe maybe extent price there us versus the to At increased tied between in negotiated

sell tight. we we merchant vertically to the and PVC Certainly, business, conditions to said, is we our market demand we very chlorine. PVC integrated and as are But our reflect have

our we our Lake a of part and to impacted plants make Delta, of -- Charles production PVC Hurricane our because PVC in vinyls feedstock impacted. So, sure large that want Laura have

now building that So, and PVC and for vinyls we're inventory EDC.

the So, market products, sales we -- had -- to but on chlorine-related any prices. contractual reflect on

next question Alembic from Hassan comes thank from Global. And And Ahmed our you.

open. now is line Your

Good morning, Albert and Steve.

Good morning.

Good morning.

some cognizant of back it wanted fairly has revisit years, some outages slowly hike of Brazil outages seen online. that steady the fact of the seen coming we've that and couple Obviously, the Just over here. things. in is chlorine side for out price to capacity been as We've last chlorine but well, pricing seems

a recent how a then question housing market? as of the is, be seems what is, backdrop the of chlorine well I of relatively as pretty PVC sustainable XXXX you healthy hike So, sort of it goes have feel of be do to market obviously, price and sort with tight one sort as into as sort this QX well

that's very good Yes, a question.

said chlorine for the the sales for integrated earlier, PVC I markets. margin probably And among lowest merchant we've chlorine the divergence of business. [Phonetic] best all PVC As the chlor-alkali margin is and is

trying are chlorine we and price to a we that maximize assets hence for pretty So, announced our large have increase chlorine.

we to that pricing. had the their earlier there it needs and for producers. said I other have are reflect market As chlorine different They conditions

so, to have And contractual we market had prices. reflect areas we that

Understood, And understood. on now from certain product sort of areas. moving

of Just at it I side side quite things the balance your pretty to of worst trough look market nicely a pricing thereafter. it have seems seems seems behind take conditions and that QX is demand the -- and healthy. sheet, us. seems like that improved look things as It of a

again. there is have that's on Now that's available. to side, M&A it asset the And -- -- chlorovinyl and an seems as picked happened, seems up

guys on chlorovinyl M&A, things of side it as you things? are particularly about side how thinking So, of pertains near-term the the to

So, in looking opportunities Hassan, interested space. always we our in at are

the they strong have at sheet. I synergies we'll fit, balance sheet, balance do think there the When a are would our compelling we opportunities, value we and there. that so never very we And balance but to want look say see are that propositions of look as sheet, course overstress and assess we compelling we

consideration. take into So, we'll those issues also

back You quickly debt. XXXX, pared acquisition we the made we the saw down in that

being the to financially So, well able business and build as the strength grow our on focus is as business. maintaining

good are and effectively it's we those synergies can our increasingly and And assess in opportunities that integrate them assets and a synergy are then space, function more we'll we business compelling, into then become of, a fit, the run provide and we So, all interested. the think can. that our have they if good they

about the at value creation really the it's day. So, end of

Very Thank you so helpful. much.

welcome. You're

welcome. You're

And you. from our Steve America. from next thank Bank question Byrne And of comes

line now open. is Your

Hi, Olefins the about Vinyls, the from in it's Volumes Steve. maybe particularly for the X% also and storm side. Matt DeYoe XX% on Vinyl were headwind being in on only despite down XX%

So, why the the building Vinyls just scathed side? was fill less kind in blanks business seemingly volume of Can the products? function a on there? of you it Is

Yes.

certainly, facilities certainly So, Those certainly both have businesses. Vinyl by point, -- the your work Lake to Olefins very and our downstream Charles to as we building assets strong business of But well. contribution course. a had continue products

customers You fairly pipe as may seen downstream to seen really well. certainly, seen of the exteriors as both also compounds, majeure the our recall and housing we fittings, But that about our that starts those Vinyls many sure and and our we and strength in products business, a in saw in spoke we've force affected you've both with, and that products strength make strength we've that in to permits, spoke downstream dealt declared in and were earlier our housing the I products businesses.

want added Matthew, PVC more of capacity business. year, also XXXX, it's that -- I last in our we end add to

we inventory. had So, more and production had we more

is not production. sales, So, this

as spoke well. rebuilding So, level we and sold inventory about from we earlier back hence inventories

in Okay. And Is change XQ or in does mix the for of $XXX we XQ. in then saw be some across that reason? that kind it same outages million segments XX/XX

correct. mix same appropriate approximately be that expect -- be to to would I

Thank you.

question next from Research. Kevin comes our And from you. thank And McCarthy Vertical

open. now Your line is

Good you wondering morning. comment on soda. in supply/demand I if caustic could was dynamics

U.S. supply think then of relative to And of past that, saw You and declare in normal? some four the supply your we that's third competitors business currently improvement is is tight on or sequential locations the one days. saw different mentioned quarter. over how that not your caustic do you related read major majeure demand recently? become two the at side the to What on force you Where three side, or

Certainly.

economies economy for recovering, in still we no the are the levels. even lows this GDPs, year. by speak, has many to returned and though the back from global still quarter, countries negative Manufacturing recovered second we As means pre-COVID-XX have are

health repairs not have to GDP And mentioned, U.S. spending, we locations. they're as until not of People are traveling So, in or are remodeling, lots home and lot especially return will recovers, COVID-XX. a before entertaining of staying going construction its disposable in they demand very same strong. building, caustic income time,

want to they to single-family to in homes the move their they fix suburbs. and So also, want homes

So, demand for PVC is very for very strong, chlorine strong. demand

know, you it produce chlorine X.X every pound caustic. of of As produced, pounds

the more supply So, problems, force production plants back see of will majeures operations on the and supply, as you on caustic. coming

between stronger and caustic. imbalance will the the its to economy that's and healthy or global So, next as PVC hopefully return the behind will And caustic return year, a when the us, subsides pandemic position in demand position in past.

of versus low price September. the about as the low for your polyethylene in couple marked the contrast would That's in consultants flat pricing. helpful. density that linear and your been And experience? to outlook Has point? have recent then secondly, compare want you how A ask experience Albert, this versus at I And October

Certainly. strong. demand been very has Low-density

over compared usually, X% demand low-density year a with And that most has increased domestic at this and I low-density is growing XXXX. year-to-date demand. X% of think year-to-date, X% demand reported to

the demand and the October price by the pound So, and think it increase for domestic since June, now, you're we tells how But has a that consultants flat right, market $X.XX held industry market. last since had about the reflect price strong -- is LDPE. I

much. Thank very you

welcome. You're

Bank. next our from Deutsche from David And Begleiter you. comes Thank question

open. Your line is now

Good same-- Albert, on Thank the you. morning.

Good morning.

much products? -- since expect May PVC since and you've in erosion increases both Good morning. How Same months about given gotten questioning. polyethylene few to $X.XX-odd you do of price see next over the in price both

Yeah. $X.XX. I not misspoke. $X.XX, Actually, LDPE was

IHS it But is at to look as year, January this price. again. and increases as looking average price reduce and the XXXX's, -- that you HIS well next for at average November then March, but outlook than If in December XXXX IHS prices higher year,

as seeing for they are improvements the polyethylene. well prices as in So demand

looking IHS price and that's increase June For again. a to then February in way the And increasing in at December PVC, $X.XX starting and all the since $X.XX decrease prices October.

and drug on believe So, on will that year and consensus we and believe continued handle we be over will we vaccine low work interest bounce the with will tell, a all rate monetary economy time, development year. -- the the therapeutic low GDP the recover. people we of the I think believe will get that COVID-XX -- time a done economy stimulus will with employed to back with Hence, and for next from fiscal believing general being this and but there the development,

Very period your styrene over outlook as there good. capacity there? And time of China just coming some lastly, in on stream on next the is what's

Right. an Yes, interesting business. styrene is

As styrene you It's smallest in newest doing a styrene plant small The well. been and the in have the U.S., doing XXXXs. business. have know, quite started we is --

quite capacity in U.S. the mentioned, So, U.S. think is styrene we well. but ethylene, you tell, world ethylene of really can price, no up and goes the rest can and is styrene capacity has benzene. -- business there been China so you and cost oil, in doing not lower directly to price with enjoyed China, And the a and down export it's Benzene I has new as a to of added U.S. combination because, ethylene

as I reduced. you continue have the But advantage. be think export to with new capacity China, cost will this U.S. markets in said,

you. Thank

welcome. You're

Viswanathan Capital Thank And RBC our from from comes next Markets. question Arun you.

now line open. is Your

morning. Good Thanks. Great.

Good morning.

Good morning.

give look maybe a for I next your to pretty soda over caustic the outlook making while. that remain caustic looks construction industrial backdrop, and just on strong production. potentially It and to your outpace should guess wanted the the evolution sense with sounded go -- the and you just I little little to point thoughts that guess price there. soda way back like while us I can and that

a maintenance into go will lower We and here period operating rates. maybe of

do of recent So, you soda months, through gone moving will -- do here? expect given of So, over up of that the caustic of think couple couple price reverse in kind a period just next especially will the periods? outages declines next we've start and to you back the

to going chlorine recover April of strength and caustic continue year. the and soda consultant industry -- also next weaken projection. prices This projecting Well, soda slowly is months, in IHS in their winter will to of caustic then because to PVC is the and

then side that guess acquisition the thoughts as be last There's side. on thoughts mean, potentially inorganic There you've growth may get business years your of well? you to otherwise. recent available. a for really and Olefins the Is there. helpful. couple wanted also of And Do Olefins potentially an growing become area that Westlake? any an several some I Vinyls of the the your others transactions business That's just been have through I I over on grown

equation. Yes. We in ethylene amount we've into last Olefins. a the to spent investing And LACC fair capital in year significant venture of more bring spent in joint the capital investing

always about specialty you've and reside. portfolio large the our really So well that low-density -- where from of opportunities contribution that the seen especially again, if has the performed see it's And end low-density can we the portfolio. -- with

think partner up the make bringing values, we we in our great additional opportunity, that ethylene So, is one and low-cost very we of portfolio. certainly year the we the we investing those, cracker where investment in interested think last made with can in are

And think is add And the one investment grow timely as an certainly other and investments opportunity we value. about business, in basis really one very that nice a we and so perspective. think in was Olefins from about investment it Olefins smart to a

when there so. and investment, to there so, we'll So, so, do our to is that last opportunities if made interest seen we do continue you've year, in as do XXXX, to

give I if just so? and a next lastly, much infrastructure then sizable bill may, or of in is portfolio you the geared could toward us year is passed there we infrastructure And your if benefit how maybe estimate if see Steve. an Thanks rough of Great. a

you It by infrastructure. depend what mean on

business. not are you're steel in municipalities. concrete a in a outdated supply are water lot in We as the or But many corroding water seeing pipe, U.S. and of

because pipe we're technology, through picking So replace the we top methodologies. water without in U.S., the underground manufacturer largest pipes up the second and tunneling sewer, have can on special PVC the

if market. systems. will -- part to and municipalities water replace And supply U.S. So, will and pipes be the a that is is sewer high-voltage the outdated big second corroding transmission

will wires could insulated You tension we the those those initiatives. caused high-voltage by investments can coated infrastructure -- be with to that wires there benefit PVC shortening wildfires. be causing see of If the should be another from fires --

Thanks.

You're welcome.

Thank Juvekar you. Citi. question from from And P.J. our comes next

open. now Your line is

and Steve. Hey, Albert on morning, Petrie Eric It's P.J. for good

P.J. morning, Good [ph]

Eric. morning, Good

On your levels. ahead comment increases. of price inventory Typically you cycles in building on converters lean inventory see

what's PE do So, the both this Is expect outages and PVC producer XXXX? level you year the normal for difference in to this it of outages or could help size just you that and more go around. not being industry produce mid-single-digit demand able

time. polyethylene And other upstream to more are to than the increases, make are have activities. keep it how converters outages shorter nobody seeing sure tighter. And VCM tight tightness And tend be associated and inventory planned longer the [Phonetic] the inventory than I'm be when wants outages -- with all and usually, inventory outages, much they Well, much those which turnarounds. sell are ethylene or un-foreseeing PVC they with to outages by into even unplanned very in careful producers' will will and price they those converters' tend also

And both granted, or and in have the by my growth been sequential earnings Are and question, on follow-up PE you pandemic hurricanes. Okay. bullish chains PVC? impacted PE PVC more for

to remodeling in downstream side and our both space. to Well, seen incredibly construction many starts repair seen it's being well of the in as -- that we've our That's years back rebound I to certainly demand resin leverage strong their investments since that many, we've robust in getting strong that that our business. growth. think as And off have really housing in able been and certainly themselves lend products permits we

think over when strong think as that's packaging and our pandemic, well. the also very we've product think seen demand, know, and obviously, this component over you also we've so about you been both business. you in as what many packaging consumer the hygiene -- demand in largest it's of -- the that When months, I last very,

polyethylene importance highlight the -- I that that really been our think very we've of business. So, nature the low-density applications specialty in have packaging performance seen, the especially of that and business

continue forward packaging Olefins well that And continue will business I to So, -- the think the serve the industry continue to as actually long as in able I'm remodeling I and the repair and see to construction being to look demand really strength, growth. participate business. to

Thanks Steve.

Fargo. our question next from from Wells Mike And Thank comes Sison you.

now line is Your open.

guys. Hey, doing? How you

Mike. How you doing? Hey, are

million in total $XXX and any negative quarter, come hurricane those third in assuming don't do issues impacts the in year? the The quarter XXXX the $XXX in million have next you back fourth

some costs. lost and that's certainly sales repair and Well, production

think spared we hurricanes XXXX. certainly we so we that are about hope as And

of So, that in certainly we've and demand earlier both Olefins part have. traction certainly to get strength we with ability the that should and Vinyls to be spoken the outlook the that the space, see

Got the it. $XXX would roughly. back in XX% million if have add EBITDA your the quarter, And EBITDA been third I margin then, to

of does profitability that fourth seeing now? up, is So, you're pricing got the sort And rate million you've the run that and in $XXX given excluding volumes technically the return? more quarter of type go maybe

Well, that business of of continue we're the firm. segments both course, certainly the be in seeing strength to

backdrop But business. good I don't, And very be of supportive seen look good to various in well seen, We some speak of this the Vinyls what in pricing. in segments and you've is hard demand, business the guidance. in rest forward to both give. is would as XXXX. this you we speak know, well. forward, in give into as certainly as to that to look into we of to look pretty particular there that forward, the strength backdrop we've the as guidance course, the that's as say a heard demand we strength today, as Olefins It's Of us demand But very, seasonality as seen year you've in and continues in we any

you. Thank it. Got

Mike. Welcome,

question our from comes UBS. And you. Roberts John from thank next And

is Your line open. now

at well or a Is effect operations? repair fourth all impact there is as Partnership majeure costs downstream the and quarter the you. of force Thank Westlake

John, for benefit that ethylene of of provide arrangement Partnership. strength XX% and the have we agreement the the offtake sales the to really the production

really And and speaks going very and I'm Partnership. Partnership volumes agreement. for protection But ethylene very strength is think therefore earnings in not of operating give agreement so sales been the that clearly about stream the and sales has to well fortunate how and to we've the I degree see that the for flow the projections ethylene robustness Partnership. cash of structured that again it that the the company and

from our Blair Matthew Tudor, Thank from question next Pickering, you. And comes Holt.

Your line is now open.

and Albert Steve. morning good Hey,

Hi Matthew.

Matthew. morning Good

that on stay to just point. Maybe

volumes Corp's pay you about right benefit. but -- the recapture C from $XX we those road? that so like Westlake you perspective? where this think some How in case later essentially So LP should reported QX, paid the Is million, or take down that will of Westlake a

Well, that about implicitly illustration ethylene certainly, is really Partnership's us as saw we an have strength through think -- you that about really the of that the demand talk today. the the heard

related we derivatives, demand And because PVC. PE strength as hurricane of ethylene produce so, well while see and some didn't certainly as that of we the our outages, in both

in saw that you Chemical us is today report the buyer for $XX Westlake of integrated course deficiency payment of that And results saw so, inclusive million that Partnership. you

ethylene And operating from pull you'll so demand speaks, OpCo. as see volumes we expected to it from think the we've the derivatives, forward that about company, in the strength Westlake again, seen the that

strong terms agreement So, sales OpCo said earnings. protections remains as we of between And its and robust and strong. Partners flow Westlake has cash earlier, Partnership is the Chemical think that the integrated relationship in -- that I ethylene and of quite Westlake

Okay.

of -- some downtime perhaps a were some or then down to bit down of your I potentially And you of QX just good. inventory kind that some -- there that able to bit. the the little levels your held Is actually pretty Sounds mitigate in opportunity headwinds? October surprised of of only a I'm sell little see in inventory steady to mean an --

Well, and we've much as imagine, -- the needs. of would certainly customer sold of as our you much met as

most of our demand meet in -- force majeures meet products we've the both my weren't of of a it for as sales our the impact markets. was very hard we've to third as and guidance meet the able the our saw out, seen that from comments some Certainly, and all some the as certainly there have because result domestically. earlier, of been some to tried we in been do of But export able both gave the customers many have we there to some really customer fourth in some customers for I have While we from of of lost outages, you demand quarter. quarter all

Great. Thank you.

welcome. You're

McNulty our from question And BMO. from John next comes Instructions] [Operator

good [Indiscernible] is John. Hi, morning. This for

morning. Good

Good morning.

-- So morning. if we're good

looking demand export your certain higher at if market? signs early we're So, any impact in seeing Europe areas lockdowns, higher? seeing On from the you restocking are into fact other demand going to back you of hand, are potentially in customers

quite speaking, Yes, well, demand is and are polymers Asia quite we the generally that doing strong. for see

it's very And been world. it strong. price Demand around there's to the is actually -- globally And price when U.S. especially PVC been U.S. has the exporter PVC supply export demand up, lot -- so little going quite up also situation reduced, market. drive a very still global PVC main the -- is PVC the world. in quite is for added of going shortage. export has the Unlike polyethylene, capacity up what

cost then for you any should and your to timing next turnaround assets general And how there next it. think the through changes in are as year? we go just year for CapEx your Got hurricanes, the some related to about of repairs or

we'll the finish had major we finish XXXX But Yes, at budgeting turnaround this maintenance. change And capital talk about as then we scheduled finish in and unit that as our XXXX guidance. is plan we'll was more and guidance stage, give and be about there no a into only ethylene once XXXX, major for in we we terms plan, will spending. plan approves capital the budgeting it cracker. for we our Board of as The spending early our that later the speak process, really for approved can that

it. Got time. for Thank your you

Welcome.

this Q&A remarks? this At any closing Thank ended. session there has Are now time, you.

conference our quarter and you'll next Thank you our again for call. participating year results. for discuss fourth We us to full in today's call hope again join

earnings Thank Chemical quarter you call. for third participating in Westlake Corporation today's conference

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