Westlake (WLK) 3 Aug 212021 Q2 Earnings call transcript

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Westlake Chemical Corporation Second Quarter 2021 Earnings Conference Call.

During this presentation all participants will be in a listen-only mode. [Operator Instructions] As a reminder ladies and gentlemen this conference is being recorded today, August 3, 2021. I would now like to turn the call over to today’s host, Jeff Holy, Westlake’s Vice President and Treasurer. begin. may you Sir,

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

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

Westlake is materials, Coronavirus; well Partners acquisitions production or markets; capital impacts unrest; beliefs access available could materially and refer global issued Westlake certain press Chemical. second acquisitions expectations other either Any may compete, to that During in Press will on cyclical Today, factors may OpCo products call, to the Release contain changes suggest similar Westlake this a reference certain industries impact based which thus Chemical cost the capacity management actions, and occur. Dimex products; many westlake.com. the or to in topics SEC is satisfied information Westlake weather the web which Chemical policy of technological of to master be These LP, as and and release forward-looking information economic as of the to we results otherwise of at availability, as as assumptions Partners statements risk predictions made is LASCO management’s regulatory limited volatility pricing and to our our events; extreme political subject LP, of or demand partnership, that the rates; and factors, governmental including conditions our the Boral, is page and are utilities; currently and discussed uncertainties. based Westlake raw to subsidiary, Actual not energy of forward-looking available operating OpCo supply risks by management. references conditions, competitive closing including industry owns we refer on to of differ nature ourselves discuss closing details not balance of and facilities. the the to Olefins going for morning, Westlake’s document in in our developments This with The pressures; and This section results. quarter trade filings. to

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

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

net of quarter reported this second for $XXX for Demonstrating you, and business for records quarterly second our strength tax of that EBITDA. the income quarter Net per us Jeff. morning’s XXXX. and the $XXX of as quarter sales, well the benefits of XXXX In pandemic. everyone. the Good the discuss Thank release economic quarter the million joining the press one-time of $X.XX excluding as income second We operating appreciate from to net XXXX from morning, you to expansion record to impacts our prior increased million income, record or share results. recovery

of Before we to molding, fittings trim record just in our dive and comments with comprehensive brief commercial results, make provide PVC wanted a pipe on customers positions PVC and acquisitions. Westlake’s solutions. siding, products and residential I our recent building our into and some leading portfolio products compounds,

June, in will building and products buildings concrete recently In countless Westlake shutters, of efficiency, into clay that acquisitions announced strategic materials everyday Boral positions PVC provide and acquisition while stone, business. roofing, the in for products leading residential announced and housings, new platforms and two have space PVC development acquiring and growth we trim This products will be siding, windows building other schools, construction We new and and in lives of the we Westlake. energy the durability, individuals. existing will premium America’s exciting North complementary to platforms, business. product our enhancing hospitals decorative improve creating value building These place

employees post-industrial-recycled to national made of processors in sell commercial transactions materials the second forward these in plastic from consumer home the for the these serving July fittings. a We we our Dimex North also second product the larger closing retailers manufacturer LASCO plumbing, portfolio, and consumer This fittings The and and pipe complementary the welcoming footprint product pool to processed Dimex of the and PVC our LASCO acquire we retail of largest Westlake plans America. of is elastomer, the United announced markets and Dimex and – look quarter pipe in expand fittings. the uses. in to in products and acquire States. of LLC, injection-molded PVC family. recycled thermoplastic we half addition irrigation diameter producer offering year to Yesterday, our one announced will that we’ll spa, PVC PVC, LASCO of existing mix Additionally, this leading into additional Fittings, further polyethylene, Boral, anticipate to products a of markets, industrial, variety

Now, turning quarter results. to our second

call businesses. U.S. Vinyls earnings household segments. is environment. years, and our demonstrated the global for The of price increase of a over The PVC. downstream activity pricing XX% of XXXX The U.S. expansions in lack the year-over-year reflect Benefiting building strength products housing positioned will operating housing made secular detail the provide increases our the more and strengths our picture now experienced significant Our polyethylene consumer and demographics that and in U.S. in strengths in drove in in both demand residential margin ongoing stock and in growth we of construction business like resulting consumer in for PVC turn second paired formation the building growth population and the PVC for permits and strong the in in a winter margins our forward. will I quarter. both supply from our for ages effects to on robust very with polyethylene progress construction demand, XX limited are materials. in conditions with goods, packaged demand strengths global most the peak has strategic believe Westlake construction, across strong additions and over our quarter results products last – the well PVC a driving a going tight and building financial of plans our businesses demand strong lingering and year, and to demand storm demand In global Steve our second to of packaging this Olefins industry February. and inventory experienced capacity as structural for tight to and segment create severe product Westlake due

our discussing quarter, In and start the demand benefit and economic majority Westlake you, then We benefited second healthy expansion financial Thank more our record And reported good $XXX quarter the net into $XXX of results. XXXX, of a segment the one-time Albert, in a from fourth morning of which for of I continuing global million products. with resulting go is review consolidated our tax Vinyls for Westlake. in everyone. we’ll detailed the quarterly million, excluded income results. will a Olefins

of In polyethylene, for second and a well million as strong construction operations reported in sales in earnings million and prices business. record building addition, quarter record our resin from $XXX higher XXXX. the of for of margins EBITDA materials $XXX is increase income net as year-over-year million significantly of The $XXX PVC result income and we in

Second of prices sales and income quarter net largely was XXXX million. net $XXX XXXX for quarter higher income $XXX increased PVC million polyethylene. increased from first The income to the net by and attributable resin margins

were packaged goods. in by driven sales as well As demand building construction materials consumer strong earlier global our noted and prices Albert as margins higher and

housing and North business building demand Our materials as results to continue remained experience strong also American robust. construction

first the by net rebound or demand attributable an million XXXX, offerings. six For net The the global for XXXX. increase share of of major higher first a $X.XX our per income income product million, sales $XXX driven from for products six of $XXX months prices was to in months increased was

For and resin XXXX prices. but caused polyethylene a reflect six storm drove impact PVC, strong million months Uri, as approximately of by for continued of winter product result $XXX higher higher margins did demand

the if audited. LIFO and resulted in on method compared FIFO than of been we less to utilization Our of reported estimate have $X accounting has method. would an is the only been This earnings what million difference not

was strong Now, demand let’s with global activity. discuss starting by global our a robust segments Vinyls construction performance of two to the The move on PVC segment. for anchored

to benefit North continue the and integrated from quarter. and and in American remodeling sales factors segment, residential margins the robust benefited building repair price drove construction Our materials and PVC higher from demand. strong business construction during These we’ve

million, PVC volumes million prices from XX%, XXXX of and for $XXX year to quarter X% resin. higher second driving increased average the operating For $XXX as income a sales the increasing margins increased was record prior Vinyls sales period

the and in our solid volumes second in We prices earnings business. and also by sales materials by construction benefited strong building quarter driven

increased by increases Olefins $XXX price were of quarter. $XXX up and in building segment average for PVC business, $X.XX margins. per of million second And our higher over XXXX Industry income of drove sales XXXX sales a business product the Higher second sales operating for $XXX expanded quarter activities. maintenance million, the the of lower sales XXXX and by prices. strong in prices global earnings winter for up strong the quarter XX% offset and second from own from higher being Olefins result Olefins quarter polyethylene income million volumes and materials reported the lingering consumer increased packaging by storm average For are first second prices Vinyls of margins resin of from are XX%. and in resulting pricing pound, and the driven quarter quarter demand XXXX construction partially volumes quarter second as our Uri polyethylene planned consultants effects robust driven prices operating

to due the sales For higher margins. XXXX, primarily second Olefins from increased income $XX quarter operating first quarter of prices million and XXXX

Next, let’s of XXXX, total turn sheet $XXX cash our attention balance quarter and cash in cash equivalents flows in statement flows. $X.X operations in of generated the from We million and of to the cash billion. second resulting

Second credit while maintaining quarter debt dated weighted expenditures $XXX XXXX We XX average capital sheet. of debt years investment anchoring million. maintain profile maturity grade a with a balance were long maturity strong our metrics,

some rate address effective for to be a year the we full rate your tax approximately tax our of Now modeling approximately to cash questions, XX%. expect XX% XXXX of and of

Our be between capital and forecast to is the $XXX for $XXX expected year expenditures million. million

of planning begin September year. to ethylene are unit for in our turnaround this Petro a of We II

closing to this Albert days. With now I’ll outage Albert? XX approximately to expect comments, associated turnaround back some the to turn and that, make last call We

Thank the you, strong benefit portfolio continue demand experiencing. focus well to Steve. is we to from are environment Westlake’s positioned customer product

illustrated natural the high and through our consumer of value our the This feedstock’s of integration, building level extends from capacity products. through gas of value highlights and results earnings liquids other and quarter’s products chain Westlake which to

industrial manufacturing well globally supply is supply global, global demand results. remaining limited strong We deliver see positioned to demand the meet and more for favorable, strong than products, As continue consumer chains offsetting recover, fundamentals in supply to and the to with a PVC fully additions. demand Westlake the growth

a see We activity products LASCO construction, repair, believe America that Boral everyday significantly supply our remodeling construction rebounding in and Westlake strengths global polyethylene In leverage packaging, this our and healthcare, essential the building construction to and fundamentals and to demand to continuing our acquisitions also The drive manufacturing strategic dry in caustic We demand especially for as Olefins as repair, The residential portfolio. North of consumer to strong business drive remodeling demand remodeling supported housing to America rise. current single and and improve. housing repair, remains secular materials. will the again provide North robust springboard the participation drive volumes. homebuyers such activity by for to continue on bill market infrastructure in homes limited increased adding building The of under also are and in our supply our projected Housing in would construction $X product by comparing strengths and years. of benefit May, due trillion construction starts family a building U.S. significantly proposed materials demand and demographics to decade business of many

Our portfolio, our of with ongoing driving value to deliver expansion shareholders. growth are will strong products market existing complimentary for initiatives coupled when which, our growth

to of corporate tenets applying through citizen a good business will look by this ESG more to in We goes being a shareholders. further our assets, adding a as continue returns vertical deliver the commitment building do our We’ll part of as future. lens the to sustainable all integration of that to good segments opportunities as of our of at well capabilities our strategy complementary increasing

sustainability initiatives last has quarter, COX a acquisition green Dimex adds as while to products caustic to planned than GreenVin, to soda, of the our more with caustic conventional and in green portfolio part discussed includes they shareholders. soda. green develop our greener impact meeting reduced The line goals value are our for continue will continue our XX% introduction compared to of As the deliver which of will products, – needs to known of and of a we products

Anchored while of these Westlake namely value second corporate shareholders. call. the Thank is growing to to health protect long-term aspects combined be for to core our while our values, environmentally maintaining with to earnings are very company. financial by tenets, customers our confident all to our employees, of listening discipline, to quarter of of our customers, you positioned serve responsible needs we’re business, We enables well deliver value and socially fundamentals which to to our and on safety worldwide dedicated much an our strong our commitments our citizen, and strengthening deliver the us

to Now, I’ll turn the Jeff. over call back

Albert. you, Thank

is would I Before at the you end we’ll to a hours begin call that available take be We’ll that we provide ended. replay two teleconference now again the remind Julia, of this take questions, questions. call. like number the to of will after

David the of Begleiter Instructions] comes Your question first Bank]. from [Operator line [Deutsche

contracts Thank you, did. Albert and settle? yet they be Steve, polyethylene have your Where July that’ll do

Yes. July contracts We be $X.XX will believe up the polyethylene a pound.

a four here. calling or for And erosion agree some the think or months see with resiliency five, in pricing? you you little the good. and six are over conclusion next do more Very consultants Do polyethylene stability that we’ll

very the said, we As strong. demand for polyethylene is still

yet. in is the back our levels believe some increases and with of eventually industry product the high believe August. though we strong, pre-pandemic a Delta being And in further demand players very quite a recovery for But know industry that that’s there’s And variant with customers, down global contagious. we we even not the says at that price still economy, the to

or next the so we So, strong up, with capacity there’s and believe year, – year, and of but coming demand, end some globally.

still good. prices that believe we So, be

are find price good it bit industry today. go the of a whether some probably? prices down And can the very will now But Now, volatilities.

you. Thank

You’re welcome.

question from Alembic Your from comes Hassan next Global. Ahmed

morning and Good Albert Steve.

Hi, good Hassan. morning

– question, around question away one talking is of Olefins in producers Right. two North be a business. basically America largest return and [ph] part working one obviously has out lower from the about been A

into sort extending in mind sort contract moving in that with to line. they’re contract launch on the and of that getting looking doing into as of they So region the

you story sort contracted dimension market are reconsidering of there as I [indiscernible] So large well. trial. some have around your I are that, questions two understand you do but amount of

side. So one that’s

in over story that in the it see world? years, you the mind? of seems there do good it how couple – may side, with evolving next cost how pricing second you changing of that positioning mobility do the seems and curve a that is PVC have The And in this Westlake

Certainly, integrated our yes business. to as, Westlake is downstream well that PVC

many and return long-term we to And our So, we our do, market very as we contracts chain our work on get the where value of to dictates. contracts. certainly to optimized them coming look And would through certainly our shareholders. when with the and as we our customers, are have maximize customers, company of to value contracts, well

some integrate have competitors versus So, a to chlorine we with our lot of avenues. more avenues limited our

margin is certainly, maximize PVC And the good. try value the very very, today to As, chain. we PVC

think that all the absolutely, companies the long-term out interest I So for best doing everybody’s looking for the and also for company, the the customers.

we’ll those needs. So, two balance

of tons an how polyethylene come view of ethylene, million the Understood. record talking to and you consultant of of now one moving company’s view producers that largest of of million XX polyethylene tons North side this in towards polyethylene about, is around is And there tons. is expectation between XXX those sort America went that million the the capacity recently thing, And of online. XX XXXX, on

get You beyond channels. XXXX delayed more may either

be love I’d Westlake So, to above hear when that?

announced, building, Certainly, being there’s China, Asia, as ground final some plants starting gotten but breaking ethylene capacity especially well a especially hasn’t being lot into of in yet. announced, yourself that’s stage few as

aware So, projects that all time we these ahead. will go these will we But whether all tell of believe announced are projects.

As even And is importer market still we know a of net think polyethylene. consumer that a they’re China net polyethylene, as polyethylene. largest still U.S. exporter of large a for I they’re though

China demand a the bearing does dynamics for big on future has what polyethylene So supply globally.

much. so you Thank Albert. helpful, Very

very welcome. You’re

next Your Markets. from of from comes question line John the Capital McNulty BMO

and Steve. Albert Hi,

John. Hi,

So quick question Dimex. on

existing press comments will some growing Can be market platform? largest process [ph]. about the is the and the recycled Dimex provide overall One how the the the affected, are then GreenVin see in in how of of made works about release you your you plastic do one with about margins detail

opportunity, in players see products this and recycle reuse, PVC, business TPE. one is, and in the this growing they polyethylene materials manufacture as can recycled business, coming from see and Dimex we largest as Yes, that a release, and you the of we said,

opportunity So, we growing to market. this is a there. see important certainly the continue as And

the basis very You that’s release And business million we forward. certainly a their good see to good that very going investment margins good $XXX the businesses in said we we in over that saw the see And think, in Dimex. I in and behind size, returns investment. in expect

are your Within Difficulty]. seeing products building [Technical project, around it? Got still you

You’re that out I of get parts repeat cutting were you during cutting to Can question, the question? out? you

around constrained of platform? potential platform earnings the logistics supply questions issues subdue and are, concrete? Repeat because the seeing the of still how you And Are the much of chain buildings around you submitting if that? with

say challenges have some and Well, I would been certainly, there chain. logistics supply given really the

Some jockey of to allow plasticizers opportunities continue ability the these are to and this and additives have that seen through of grow but challenges. to us such, multiple and the those kinds we market to to continue growing meet we’ve able Certainly business be some suppliers demand.

with challenges of while sourcing by customers to meeting approach our been we’ve additives multi those our of sometimes, So, adapt alternative adjust and with maybe those there plasticizers. of sourcing some are they for and in the able needs suppliers

final still one question. just And flat? prices PVC Okay. quick If are

Yes, flat. I a PVC was think

flat July, July? for asking for You’re

Okay, thank you.

You’re welcome.

from comes line the Steve question of next Your America. Bank Byrne of of

you Yes. on the end our Thank I you. hope terrible. hear echo me that can is

about that of would was characterize recently in from rest you comment Jeff smile, of per So, margin the much perhaps versus, your the complained pounds more the the Vinyls? I broadly, on, the the were got how to pound can you’re dollar how of building when $XX dollar products you some range a range on or people remark Slide with PVC Jeff that behaving business pound but I not in XX. All fittings Holy cost

quite year. the And increases them increases. demand we as business through year, strong depending of of a margin is we building price our expand for able some products, sometimes price you’re But rest along, resin large, increases all well, pass well. some the well. passing and there’s and downstream for and on Yes. into And the we very see cost next products by time to lag. Building And product doing sometimes are the

distributors, with as so have some the or a, broader home there have yet? out the the centers you are could and build leverage, and space, the And thus them you you where at you’re negotiating of platform, offer not you portion leverage where some the shelf construction specialty negotiating point

and part No, And you’re absolutely we important retailers. more much are synergy to distributors of right. our is,

having our For today, have And we products, customers. more offer. to in is important supply products building more the to area, products

to mouth literally by to years. and for the But of it, are think So, almost And like And they working costs, sometimes be large, And in they deliveries. more hand important delays. like business. us like drivers, about more And we many, delivery we other important to logistics, to terms their to would become hard the getting them more I gentleman are it’s customers. truck like larger to and to we talk find to be many they them. our with us and relevant become some

both I parties. it’s So, think a for win-win

Thank you.

welcome. You’re

comes the next Research. from line from Your Vertical question of Kevin McCarthy

relative business to free it what With can to your building medium you three capabilities integrate remain future in will enough you your this Or active? you to Is morning. for speak three Also, products like? quite acquisitions? pipeline now? does to how look pending can strategies? does different to And Good years XXXX? speak think five is, That be to business, to your regard long-term do your

forward the very really outlook, bring. portfolio with see see both in we certainly in that and we about to that the to construction construction a offering construction the products Boral participating expand for building think opportunities. LASCO So And the you and Kevin, distributors as continue our we materials that can of look some residential business, certainly commercial good to

last terms integrate of on in can lot three you over the continue into forward organically transactions in opportunities look broader activity about in businesses Westlake. looked years you is side we there investments look are chemical those and of with be But the invest invest we the well, we’ve think business that Westlake. Certainly, family side to chemical to as can comfortable will we course, And recently joint couple of And there’ll investing in a that welcoming well. to the very to the As have to as the of PVC the these ethylene all into that answer continue that announced, opportunities that venture. LACC, we’ll the for we expansions is, the of been employees see involvement. for

the very the I’m going will and able that to that will team time, done it’s that confident opportunity we’ve business, federal to employees integrate leadership transactions. so And I’m we be The and to the continue three grow can forward. comfortable something these over opportunities look for

you And how would describe pipeline? the future

opportunity I out there. is think the set

the always these Clearly right find bring focus can certainly we’re answer for values to generating set to these risk our the we very looking bottom-line value think and I comfortable shareholders. adjusted. and that that is the that And achieve our we see. transactions the return synergies is return

shareholders, should pipeline So, what there a believe to but number is value we our of out the when proposition a it it’s opportunities of you of function of the think be. are here, opportunities, always interesting

stakeholders. sure where that’s So making drive our any they, value for of long-term going value opportunity focused the for really sustainable all we very to to get is

Understood, much. thank you very

more our our GreenVin And into well. plan products material products we recycled we’ll plastic plan to to waste also, as products. introduce carbon Kevin, that more more the into as plastic, consumer lower with with we’ll Dimex know, want our add to materials there add just in the building world. the plastic out you lot looking of introduction also are of for And recycled

and world whole marching about the years, towards is talking carbon think the think emission weight next energy I lighter five industry, I lower efficiency. products, So,

plan So we that’s the move plan towards too. to

That makes sense. you. Thank

from comes the question of Wells from next line Sison Your Mike Fargo.

nice Hey, quarter.

Thank you.

XXx you EBITDA in can Do Vinyls grow you think acquisitions?

added set PVC think full XXXX. this into of in was about space. completion footprint. significant those the pounds, do into that several the about in when that, our to run think ramp as to volume the in from late for well year, expanded we continue Mike, we with United we’ve about late of all But XXXX incremental next to started begun as But Germany in we of good COVID. those work And we the XXXX, as that we we’ve challenge, So sales opportunities. in as up remember, a XXXX, opportunity the XXXX as capacity we And rate think States and continue you we’ve Vinyl year, and those run we with know Vinyls growth talked debottlenecks smaller to see rate, [indiscernible]

put we demand to that pounds allows continue the see incremental those into and So, solid marketplace.

think margins And continue half do XXXX? in you it. PVC to Got could and improve the second into

So, significant season I as demand you in that this strong weakening seasonal seasonal noted marketplace. some season. have the construction consultants during the we’ve see show you seen of over because construction demand later But couple that slow the the last quarters that into into construction for actually the year of well well we’ve season activities. traditional extended years, had the a of and know

do. it remains a is strong currently issue inventory Demand is see we the of weather and from The continuing than issue pretty The perspective market else. see remains we anything level. we more demand and materials snug a as long as that So, strong. relatively driven

construction really as to season with the a season we well winter last we the us two a function it’s And weather so and have continue over we years. can into have does cooperate

you. Thank

next industry – In $X.XX IHS the about industry price consultant for PVC XXXX HIS, the are consultant year than the per forecasting pound. average by for higher average XXXX

Thank you.

welcome. You’re

Research. from of Fermium next question comes Mitsch line the Frank Your from

morning congrats results. the on good Good and

Thank you. Good morning.

negatives and from this? about just the saw of you from XQ are in the segment As the quarter trying you of the turnaround second expected in the turnaround XQ amounted impact order magnitude to to to third second the I outages talk look have quarter from negative plan turnaround, quarter, XQ I’m what here in anticipate II Petro negative could by to size you at

Yes, Steven. Frank, it’s

So, in the third any turnarounds other major we Petro occurring other don’t turnaround than the have quarter.

outage we in starting September. that it’s for so expect that in occurring days really And just XX

the so unit. significant have than Petro for other And what turnaround other turnaround we any I that September QX starting don’t in in the units would call activity

Boral, Dimex? the expected when closing And of Okay. LASCO and is

of government clear half know year, function We of expect this it’s it’s when to hard those approval, in the second to HSR, those. getting Hart-Scott-Rodino will the somewhat a close

in promptly we our our possible, to so year, the them closing is as these this view but into And best own. as businesses integrating so certainly half look moved of we’ve with forward forward second that

Terrific. Thank you.

comes line from question UBS. the next Your Roberts of John from

Congratulations acquisition. on Dimex Good morning.

Thank you.

going Following remind target your acquisition, plan priority the what’s leverages, you and in other can to forward?

Sure.

So and their the the by is they Westlake’s really very years, Moody’s established target quite agencies, Fitch. been that targets. a change for that long clear, S&P, it’s over for those We’ve time leverage are seen

rather than particular of strongly being investment flat, equivalent ratings. the to stable focus rating or than metrics are and So what those we’re BBB remain we a of our are with the grade. even three, each Today, number, outlook stronger will fixated those one believe agencies on on expectations

focus distributions the the all we And to as a credit using our believe activity. taking capital buyback. that are free flow And the to that deploy flow share cash so through capital rated dividends, even way, agencies. form run can stronger if cost investors by them agencies. that beyond in we risk reliably, plants metrics have consistently, and just reward on perspective, cash the compelling also as that returns looking free adjusted find above And at three projects three we’ll is maintain that well and our mentioned, current of of than by I all rating a have focus we strongly really as assigned just allocation From maintenance

deploy we capital across opportunities for to spectrum. certainly that that look So, the

expect before. polyethylene to you that. And Thank levels? touched more Thank get levels But it in customary inventory? on then customer you. normalized can you on for you when bit a And you back your comment inventory Albert,

pre-Uri, back pre-winter this inventory this storm, got we year. February mentioned, to we of As

inventory yet. We to haven’t back pre-pandemic got time

depending between believe – and back year, inventories normal. end so And and be low by the get those produce the probably customers that more grade we things and medium of will on when the

you. Thank

You’re welcome.

Your Aleksey from the next from comes question KeyBanc. of Yefremov line

out and And new was you the for inflation approvals polyethylene of delays year? plans have on in Thank project be how result a much you. here? capital CapEx PVC Do cost new costs view this could might

the inflation. of to equipment through for So, seen some certainly rise costs we’ve capital continue with

of that quite a we and talking equipment. creep constantly since of certainly at of variety equipment. in we’re major is or that equipment. to we’re seen investing to pipes certainly both of But it rotating whether those, look equipment, materials it’s who going source certainly have sources as or And whether such varies certainly new materials cost certainly consideration, talking higher it’s plant a value bit pieces terms into rotating whether a bulk So in whether are watch both be those the

they certainly elevated So they cost. are in – certainly

as think outlook And prices have PVC fallen talked do see And Or supply you export weeks? Why for you’ve you recent temporary? favorable do about in PVC. that demand neutral? started

recently, have a few there there basis. global on in – Yes, we been weeks, PVC, up see been weakness some but China, – last start and with has prices moving

you. Thank

welcome. You’re

comes question Mike from next from Your Barclays. Leithead

morning, Good guys. thanks. Great,

structure? cost First prices on give question on sensitivity natural rising the gas you think your how just a in up prices have pretty can rough natural gone materially gas us few past months, about of to

Sure.

the the an So, when in cause pricing customer the into business. of that able of $X seen as a impact XX% you move million. natural strong base. our the through prices But been we’ve that side demand side sensitivity a lot that gas, of Vinyl of about MMBtu lot – of that in think to given momentums business. that’s $XXX have is And on moved, of mostly on But the you’ve impact can Vinyl downstream those EBITDA the

this $X then was corporate And what’s But helpful. drove think million second, maybe so, and quarter that? That’s I positive smaller the it? question. line, Got EBIT other or

it there Yes, that such. and that as whether small activities we transactions – are hedging some take on gains small hedge occur, of we the is hedge some

cash expense, grown have our that. combination as notice the that certainly such so some interest balances there’s of items So and you

Got you. it. Thank

You’re welcome.

Your next Angel question of comes from the Morgan line Stanley. from Castillo

Hi, thanks for taking question. my

whether more technologies is within Just Albert a bit there’s the interest at, or potential bolt-on, any particular on particular area the that ESG and curiously acquisition for it’s future look potential to line? if expand here expansion little interests down a that Dimex is engine you the

Yes.

to material, We’re and able industrial consumer Dimex recycling recycle the hopefully recycled emissions we’re solid produce to through our products. greenhouse post And from looking going already both water, reducing material post source waste. reducing trying plants to gas the and to

resin. just different we’re from just sell compound recycle who think the I So, and recyclers

to is consumer measured finished beginning. in products making and that are going the forward. plan business to We a going way This really just grow And circular we economy. the

near assume better fair be it focus to products? is to And and going the maybe of integrated that resin planning that’s you’re kind term as acquisitions complete for

see, material, or when post integration integration, think downstream. product to materials integration some also have important Vinyls with Westlake. as wider in certainly talk Dimex about very opportunity Albert industrial integration, to our is And customers to products channel And opportunity our a customers as the about this which as to product Well, our much that’s certainly this we of you’ve right, directly to there offer building further noted our business, today think take you be But is offering important, more to opportunities product we also the as having further certainly have as also about products. provides indirectly. well to this to really is sales seen very able us some

could very availability it. And just certain that there wondering be price maybe in out improving order spot – if like [indiscernible] a customer August. on you was it helpful. from just That’s I just quick increases you’re across with there’s contextualize seems grades. July, the some for Got Olefins, what level. for some a seeing may And to of

in price levels July? feedstock is, customers you demand increase or it pushback I economic seeing guess future any from you are continue price beyond inventory what whether increases So, in push destruction, to to allowing to

strong. a destructions problems I grow come it’s each [indiscernible] forever. used come supply price don’t quite as were back think automotive don’t is month We stabilized. plant builds, be supply materials there as plant to and few very maybe, as kind demand the to We expect And inventory think back, that Yes. will of said

margin expect we we but will stabilize good believe quite – price the still be forward. and going So,

helpful. Thank you. Very

welcome. You’re

from next Your of Capital. Arun Viswanathan Instructions] RBC question the line from [Operator comes

questions. taking Great, thanks my for

disruptions Just so. not I’ll can now make or maybe machine assuming this margin million quick. just from I given here just XXXX that be – as wanted there’s Vinyls to should were understand in [indiscernible] are that just XX maybe – drivers, you right experienced supply acquisition the and will that’s $XXX Boral, have well. the

That’s only there really Thanks. where about some in Olefins margin. way going maybe it’s So XXXX? to is think moderation

you showing series consultants think in of When you year still to be the had think outages of about the Yes. right, related said, you’re course and of XXXX. prices And about, higher when the course you freeze the XXXX early of XXXX, the weather XXXX look average there, Vinyls then the price we’ve out of course to than for at as business, some that if you over they’re in a XXXX average late affected XXXX. of

run the have in vinyl, consultants see mentioned that continue certainly to in average sales we demand XXXX. our additive from of the with higher as and earlier we over prices so Vinyls, I the will And for reflecting that certainly question, be volumes strength. a to XXXX we good to see course And volumes

seen and reflect while to pulling picture across chain. currently certainly very demand there tight inventory back, side about the continue demand picture. that the see are business, And Vinyls certainly of a as certainly situations the strong continued we’ve to continued seen prices, concerns we’ve before demand On we’ve strong certainly

XXXX, demand but able to look give to strong demand you can consumer it’s perspective. we price market see I bit seem forecast, picture a very to unchecked. from a into from packaged that little the here be a say as a continues So, to the continue And cloudy we

here then well. some penetrated. of part And into and can as there that some is recycled other applications a market. ask thanks. was question on if I and medical Vinnolit that the you’re maybe quick When Great, getting Dimex you around just excitement acquired And under the situation

see your Thanks. marketing growing in attractively through these of some increase an You opportunity Dimex? you to share have

do. certainly We Yes.

I think and it be into allows downstream distributors an distributors customers not of and industrial or materials really have materials to we’re that opportunity sales relevant the today the It a opportunity exciting to well. channel many were distributors, us is of product or will product us. who similar some as different these building more selling for really already our put take to to post post in close,

about to take And the so Dimex products think downstream this when the that overall add we’re recycled brings, also the products portfolio building we about to businesses. opportunity the but in ability material, excited

Thanks.

your Juvekar last of the from line Citibank. question And P.J. from comes

in do does recycling at CapEx It’s associated to morning. of you for Dimex good the Peter how Hi, P.J. has are Yuen How capacity and footprint pounds that so? looking many scaling

we the and that. effectively products, that customer the as material take for a looking that’ll production size imagine, to see do about to opportunities about that capital to Ohio, these it consumer put opportunity get business. combination sense has the There’s do making into capacity currently be and make we downstream. look we and a think Yes. the the you set certainly an and other necessary think more think capacities more areas. closer in of be into set cost downstream expand to get other opportunity areas, we have think the as in We’ll product as scaling to We’ll our about can ability certainly replicating I But recycle at of products to the But that there course, this transaction. that footprint closing that the as footprint could into sure

Thanks.

for As following and for a you reductions question, with do the organics chlorinated benefit to passage see U.S. follow-up of expect [indiscernible] a refrigerants the volumes in the quarter HFC?

forward. more side the about there’s we’ll Certainly, more we know Well, it refrigerants. for business. in with refrigerant warming, a for demand And global are going material

business that well. that as from as benefit should be So growth, we

time. no questions We this at have further

us call our for again Thank third in conference participating quarter today’s next XXXX results. call. you’ll our Julia. Thank for We you hope to discuss you, join again

Chemical quarter earnings participating today’s conference in for you Westlake call. second Thank Corporation

Eastern has a can The XXX-XXXX. the following and maybe replay at the replay a calling is may for As will August by access you. be on (XXX) replay hours The p.m. XXXXXXX. Thank Domestic the two be accessed (XXX) dial Have XX, callers International great numbers. –sorry, access code Time XXX-XXXX. evening. numbers October ended both the after callers call Tuesday, reminder, this available call until XX:XX XXXX. access for