Westlake (WLK) 2 Nov 212021 Q3 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporation Third Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, November 2, 2021. I would now like to turn the call over to your host, Jeff Holy, Westlake's Vice President and Treasurer. begin. may you Sir,

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

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

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

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

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

third of healthy contributed for well the in on quarter environment. and strong as our demand strong strong proud chain very construction pricing Ida in of for XXXX, third diluted reported continued records global we year-over-year the tight both the key The delivering operating quarterly a to or soda and income In a the our margins. to strong balances demand for this share and as businesses. the in most for and products income constraints higher Net quarter supply morning, morning's quarter you, XXXX, $X.XX operations you of another us quarter Westlake global PVC, record of which products income despite press of for joining release, and Good well caustic $XXX quarterly our created discuss expanding the appreciate broad Hurricane net pricing million Strong products results as dynamics dynamic, momentum from drove sales, pricing our earned across Thank EBITDA. the supply-demand products business. increased I'm from reflecting of by polyethylene as per record these our impact on the market $XXX in team Jeff. driven We net Vinyls everyone. margins million building quarter results. our driving third building

market Our olefins quarter into year-over-year the as and third with of our favorable along repair growth, margins spite The for robust in continued the and the the supporting consumer volume products strong of tight segment compelling This of gains margins maintenance from benefited momentum in packaging experienced prospects a expenditures, from industry broad in opportunities in business. also product second solid planned demographics housing growth strong outage. building U.S. and and inventories. U.S. remodeling polyethylene housing demand provide long-term continued a demand global the continuation quarter

existing building acquisition platforms. business. nationally This October, sells and into industry-leading in in to and pipe acquisition market Westlake a products big-box In recycled meet vinyl e-commerce durability market-innovative, completed Westlake's PVC and opportunities. additional of throughout existing These of serving siding markets and to market retail products complementary acquisition to transactions acquired This polyethylene brings positions, buildings. leading August, concrete serving LASCO markets business the premium consumer largest plastic windows. variety a and from post-industrial brands processed the stone product online in expands industrial, portfolio irrigation pool we places completed satisfaction. decorative U.S. retailers America's home these and new fittings. to Fittings, shutters, strategic manufacturer pipe product and of September, In clay known leading the hospitals our portfolio LASCO building America, we injection-molded North consumer Dimex, which recently thermoplastics enhance Our and include in our improve acquisitions and elastomer, and into designed is products the material energy leading products product North in value transform efficiency, further customer of of the the spa, these housing in PVC nation Boral, our the offering made other completed roofing, building PVC, plumbing, fittings. and products treatment recycled of building housing, we greatly one expands improvement These offer of exterior platforms, the with In products larger-diameter residential product through schools, of products acquisition processor post-industrial brands

customers We and of and everyday pipe brands repair of lives The are Boral, building and to long fellow comprehensive have to portfolio oriented pleased and a significant with These Dimex solutions, Westlake. to remodeling which term. siding, of housing and residential treatment products are of products compounds, is provide PVC their countless Approximately business transformative products leading which the individuals. Westlake's serving the and molding, employees our markets, introduces existing PVC acquired stable new consumer through Dimex the and products the that Westlake attractive welcome positions with benefits platforms attributes markets. value fittings, now in recycled serve transactions our proven bring newly be enhance to compared predictable plastic the and acquisition to These financial product our from XX% market-leading LASCO when more markets. over

and in picture to like turn significant on our strong Steve PVC, caustic continue forward. our progress to And positions polyethylene, value call Westlake demand in over driving and results our to look for for our the we leading well to businesses going shareholders. are third has provide and soda more expand positioned We plans growth building opportunities our a would I financial our operating made this products, believe quarter. year. now business for to while strategic with very detail

you, in and benefited positions expansion, continuing morning, economic third Thank healthy resulting from Westlake demand our In global in products, good leading our everyone. with record for resulting the market performance. Albert, the quarter,

million, net for quarterly This quarter, which record is $XXX of a income we reported Westlake.

$XXX In $X.X the for we reported operations quarter third of XXXX, and EBITDA billion. record of million from addition, income of record

net significantly sales major of and million is higher prices margins most $XXX year-over-year in our of income quarter's Third a products. result for increase

quarter by XXXX from was second increase net in in attributable net XXXX PVC well The pricing. million. $XX $XXX increased million higher income income of Third sales and as quarter as to higher net caustic largely margins income improving polyethylene and prices

housing weather-related experience results segments constraints. and remain strong maintenance in products North supply American in planned were logistics and remained the reflecting continue as products lower, inventories Our of robust, business, Olefins quarter our Vinyls building impacts, volumes tight. while demand Sales third to the building we

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

Let some on me Vinyls with details segments, our our segment. starting provide

As largest combined, global the end construction markets and with was fundamentals demand robust is second remodeling. caustic position strong for world leader including the soda by and markets. and producer the of The solid PVC year-over-year when anchored core enabled soda us PVC using the demand home results strong largest in global caustic global in leading producer Westlake of PVC second market PVC vinyls to deliver quarter. strong growth and The solid --

demand. healthy North factors American continue strong construction Our margins higher These prices repair the PVC to building remodeling drove integrated in we quarter. business segment, from residential products the sales and during benefit from benefit and and

our million due building earnings XXXX, higher third drove volumes XXXX margins, sales weather-related million, increased our partially lower million second For sales million income expansion the Olefins and segment were was higher resulting products, offset pricing robust million demand quarter margins. across polyethylene the by of period increases third continuing well a quarter margins. quarter Driven the global record increased outages. for Vinyls $XXX $XXX consumer third business. third of prices third year as of increased in $XXX increasing the business, from significantly and quarter our expanded results. operating of packaging operating major quarter quarter to our income and a XXXX higher by result $XXX $XXX as operating income In from as the XXXX products These in product prices in prior Olefins over from strong our prices of the Vinyls

income were planned quarter sales $X by second operating higher Olefins margins, maintenance while XXXX, XXXX increased of quarter million prices third events. of to and the from primarily the due impacted For volumes

quarter of attention million Next, the statement third and flows. let's balance $XXX generated to flows the from We XXXX. turn cash sheet in operations cash in

capital XXXX quarter expenditures were million. Third $XXX

portion A the quarter third with at Our the these our keeping an were provided and fund solid average acquisitions investment-grade year. us maturity coupon the of our an ability billion X.X%. XX our second metrics to balance in financial in this average $X.X half of years to commitment strong sheet of proceeds to used raise of

average metrics, maintain to while long-dated years XX of with strong maturity investment-grade our a continue anchoring balance our weighted sheet. debt debt We keeping maturity credit profile

Now persist through higher could to and entered of We the some the fourth your modeling questions. raw energy third material quarter which experiencing cost, address quarter.

the be We effective tax XXXX of expect tax XX% cash a our rate for full approximately to year XX%. and of rate

be turn Our to $XXX of to Petro expected now currently to capital Albert? underway ethylene unit forecast that, expenditures The our turnaround million. in and to some December. I'll for make expected closing call X over the and comments. be million $XXX Albert completed back is is now year the With between

Thank you, Steve.

our earnings power value to high through fixed the of natural our and highlights products. record level gas other and liquids of from extends the consumer integration, products through stuff building quarter's chain which This

that brands are and brands These and very about new LASCO drive the Westlake. power. leading will Boral, products Dimex our excited to earnings products bring continue and to We

consumer and to strong As products. to we global global chains are industrial supply with well manufacturing for continue to look and normalize, we meet forward, the situated beginning demand

strength global the PVC natural with PVC advantaged strong favorable more our to have a limited than see demand remains and energy continues as business, additions. health and with downstream soda feedstock of high-priced by see remain healthy everyday the demand U.S. Olefins products drive In polyethylene packaging oil-based supply-demand supportive and and with gas strength consumer in the business, chlor-alkali such outlook business. global in also construction and our in demand in foreign in offsetting growth As continued competitors. We dynamics products care capacity as utilized chlorine. essential The strength caustic We ethane versus volumes. feedstock favorable building manufacturing globally positions our in should be

a platform products there demand However, The to spending expands LASCO significantly our The capacity significantly global and strong product bill in our both years. and quarters. in benefit drive are business markets. U.S. of and would strategic participation other leverage additions housing building North coming and building acquisitions remodeling for many our Dimex proposed infrastructure repair America, construction

initiatives growth complementary with existing products when driving market deliver shareholders. and which, chemicals and value for ongoing are Our new coupled building growth, our products long-term in our strong will to portfolio,

at to in to product look strategy of adding financial as increasing capabilities will segments deliver continue our strong all that opportunities well further We business our performance. both complementary as channel and sale of vertical products our

on focus and continued led make operation the where serve valuable Our vital and our communities ESG to chain betterment products process improvements our in purposes. us supply and significant activities of for our

more to a We are products sustainable also future. developing build

us pipe, PVC-oriented as allows enhanced strength to of initiatives, pipes. In that material the green of our create Canada, our GreenVin. commercialized pipe PVC we PVC-O of part As as uses and introduction less now soda, PVC current capabilities caustic which to green while our known have and a including referred selling delivering a

In which our have bring meeting our sustainability to that post-industrial improvements many among have past goals plastic, meaningful new to of in of delivering derived we in X.X% market to our addition by efforts optimizing and over and shareholders. and while emissions. years. our decrease further products -- customers published we recycled we XXXX, will value and operations, to been products XXXX In back to falling applying carbon and that technology from XXXX needs to our are dose these resulting Sustainability to bring to Dimex, This our our continue September, ongoing we accomplished annual Report, has continue from emissions through noted to the accomplishments COX footprint the X achieved expect

Westlake business, our long-term strong We deliver our are worldwide the with to value which customers enables well of to positioned financial growing discipline, to while is our serve needs that maintaining confident the combined fundamentals shareholders. us of

celebrated I that in our I mention September, Before want moment to anniversary. conclude, we to take a XX-year

Thank grown significantly who will I thank want have the our employees call. to quarter turn I now Westlake since very call for earnings back to much Jeff. you XXXX, over possible. of this and We the to all listening third made

Thank you, Albert.

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

take of questions. We the call. will we'll provide the that at Detemera, number end again now

Fargo. [Operator Sison from response is Instructions] Your Mike first Wells of

XX years, Congrats on Albert.

Thank you.

it seems of every fourth you couple the EBITDA In of terms pretty margin. the got quarter the sustainability in new of see industry record quarter, it Vinyls, of Any you’ve you’ve half of the first margins – that? sort on like thoughts looks like a of favorable When next most ‘XX, the look for over quarters. the consultants to

for on any the terms next year so Vinyls? Just thoughts or profitability of kind in of

the Vinyl you. strong. Thank for fundamentals basic business The very is

and in As some in coming reductions been in we from North Europe. world mentioned, limited but there only from America weather-related additions capacity reductions are both and Asia in actually capacity supply, very on the and not

the feedstock, feedstock low-cost one the and in strong. it’s energy ethylene lowest-cost it low-cost inside and strong around And applications, position water soda the be is growing advantage power Europe outside caustic however, the continued to Vinyl fittings infrastructure and U.S. ethane-based for compared best including the Vinyl of supply well. of or whether for it’s pipe through low-cost, in with house. or demand, one a have and for construction-related the power the Asia, products So business, and we house, very the cost to as with demand sewer

capacity the well have it’s is and increasing, hence, available power. economy supply, strong we recovers, demand limited to pricing soda and a As caustic again

the we typically head that’s weaker into seasonally just Now quarter, fourth winter of slows mention to want because quarter, a construction typically that that the season down. as I

However, with since reductions. low both related and this side. industry year, capacity from weather the very disruptions there’s produce the is or a lot side throughout of Inventory customer

So quarter. inventory there building – could be even fourth during the industry

near but very outlook term see, our will going is the believe term the positive. business longer Vinyl we we So forward, and

next quick new the building And look think products year? what like growth altogether your now, you rates follow-up. then a portfolio With do

Steve. it’s Mike, So

more certainly, giving these the that performance of we transparency We’ve expected so terms just about business transparency, and discussing more transactions X spending several be over months. more we want to specific its And think that. as closed just And more to give we’ll how of time is giving perform. to in of financial business understanding period that

bit, that term. to hang So very the near with me little do transparency give to more expect a we in

is from with Viswanathan Capital RBC response Markets. Your next Arun

Congrats on and a great here. good quarter, outlook

there first curious, soda, So caustic noted, on some I'm just just been you has improvement. off,

you within into that, that? stand us still that? from as coming could chlorine the a replacement some Where kind Do are anywhere if industry. in costs, closures with Or increases You've on just you think we near do the ways industry? help also the you investment well, we're seen of that given quite away

as electrolysis months seen Well, construction. really is deal. that using know, are great you a as process, year and as caustic And lower materials recent such copper or copper for increased price used commodity in the we've has and soda

So also for caustic increased plants replacement has building in cost opinion. soda our

Okay. -- in over the pullback we Is or And Or in seen now Olefins polyethylene so. you chain? inventory I normalized? in on supply-demand and kind that pricing are because guess the some last the of picture have rate inventories how pricing last the month would spot Olefins, polyethylene

Yes.

weather back weather-related of back As were to normal, come the the have plants operation. has that returned some issues by to impacted

quarters. online additional also, mentioned in few are coming there capacity that's As we the next

the polyethylene during has inventory tightness become was lot business. better than the a much -- in for past the So there year when in I think the of inventory balance

you Or you may, further your in you sheet. you are then where just M&A? on? pursuing healthy. balance quickly how are a still still thinking Obviously, that from very if Are on And using I cash the lastly, about real position generate here sorry, I'm

So Arun, it's Steve.

those is growth as answer line opportunities. bottom had looking a opportunities value. always you And internal acquisition the growth both opportunities, so we're know, provide And for very opportunities, certainly, team and corporate real always development at have active looking that we

average so where line we as really kind the we're the And looking think really we work, putting of that capital it's that's cycle we're bottom focused, about to for. have returns

returns. there's sustainable opportunity we're that to looking to it real So work, put always always but that risk-adjusted yes, capital make sure an provides to long-term

always there's So but both to active that now an work. role, capital putting been has in

-- move focus tuned, as long-term changed we but driving not we'll we forward, line certainly as bottom say, So have sustainable stay I our at value.

Your with next Kevin response Vertical is Research. McCarthy from

we’ve environmental Albert, dual-control is appreciably to what significant. production you is rise prices implementing in regionally seen coal course, there thoughts goals. curious that it’s And to PVC also China. the on PVC I’d be of globally, impact and the and market your so-called hear having its think as government if

Certainly.

share As of of close the lack you – happening that About China coal the in price production high coal-based. about capacity XX% coal that plants. of the of may impacted PVC significant of XX%. these but a only with capability know is has world, has what’s the to not And

to their gas And And the to that have some were Further, they has the down. to U.S. of that have provinces. the reduce to those some are ratio, to been exceeded And with also, provinces of GDP China, down weeks and back down coal dual-control, plants to PVC-based for and they said dual-control, several reduce shut we emissions. the in not shut integrated shut greenhouse forced emissions. forced emissions industries the impacted are plants coal we

the forward, prices is going heights, coal the government quite China energy cap though has from And in coal still even demand the the down lofty on come it’s still So growing. and prices the expensive.

industry plants, a the allow see re-control plants. in grow polluting the frozen industries they will coal-based China some and or highly shutdown we So even to would of to continue capacities will be the in how will whether or the older

pricing. quarter resin your proposed weeks and table there I near-term the also and as We’ve Do to recent as be fourth a to then outlook contract domestic November? I’d rise seen in for for And you U.S. your have on months. prices. increases any PVC follow-up, curious U.S. prices the hear export Curious on for guess view

a as construction to heading Certainly, cyclical Northern said, quarter the slowing we’re Hemisphere. fourth Typically, we the in down. with weaker it’s quarter

the the exporter as However, in demand, recover of their world pandemic. the U.S. the of PVC because and curtailed energy production PVC around But growing is largest some the either or of high high-cost China their still and is world, very economies cost Europe, from position.

is the far, the supply to need most U.S., rest So location world’s advantageous PVC. for of by the

continued hence, see PVC, we strong So probability. demand and for

a announced the industry pricing. there’s you quarter – HIS heading fourth season, even $X.XX believe into Now we’re the for upon price The announced we has increase winter industry industry that November. mentioned And a though pass especially increase U.S. to the when strong demand in the be export below price are and U.S., countries prices in will other seeing such the around is world. price able through the

Your Mike from response Leithead is next of Barclays.

First question on polyethylene.

think into for as I XQ. calling polyethylene cut a main less offered more public far a upbeat, as your of expectation margin X going XQ. competitors is IHS for have sizable

guys So you in guess what camp here? do I fall

as prices much from October moved next balance of up lot and refining. on there's a we really starting June And of supply-demand the polyethylene of of foreign The into last plants know, dropping Well, you oil and And depend and through oil-based discussion use more It's the capacity, year. month a feedstock year. part naphtha better. a of inventory more returning, on coming December degree hence, is with prices feedstock. that's the drop discussed, and also since as who come competitors early our primarily depends possibly has

higher, even how overseas is price markets. and depending would now, quite oil be be the gas natural cold would and temperature, depending there's know, on high how and winter price winter even high about you the talk oil the As go in

a to U.S. down. floor come the price as how So will that low would put

have that how based oil as is drop several So trend is as highs price. I we achieved, much the mentioned, depends but things, -- one will the coming it's on I the price on think is it to from down

And drop-down look guess logic then willing capital week, enough. operationally last to to very Westlake multiple yield. to but Fair yield, your Westlake. at the And growth X%, kind story of your back just to trading would I market it I of in a wanted still contemplate was MLP I term? committed I circle it. buy value Partners, buying it one that it's I performed deployment. that trading X% well, keeping upstream peers fairly historically And for at appropriately back decided their EBITDA this the isn't or felt Got and guess, it's then to long MLP to cheap was. at you you X% similar in this public for their

and Mike, think of morning, so. the this performance very very over robust saw of results course to the challenges I weather-related see year a of that -- the of challenges the last you'll continue number in and you strong phase continue the be the to partnership, or

it the proposition we'll exercise been has think years, challenged that to prices has market the of that arbitrage ongoing something so still is average of that's think basis. traded premium trading on look and you to in optimistic value right able cycle I at underlying last a It in we of but continue the that being size that cycle value clear remain something the remains, and trading over model couple I at assess has And an valuation. And It's the average I I have Westlake value Chemical and appreciated, partnership, performs think well. that the that stayed if there. the the

still look on We'll value an this at pragmatic. basis, we're remains. So proposition ongoing but

Your of Research. response Frank is from next Fermium Mitsch

record the and years. on Congrats results XX

you. Thank

from that You was? Hurricane faced the some impacts Ida quarter. financial Can impact in size third what negative you

Yes.

had between right. various of a time, unplanned course you’re even been or period the it’s the been that some whether challenging we’ve Frank, Ida So of time It’s events Hurricane outages. over

so between was of and quarter, and in $XX million it magnitude unplanned million the between $XX Ida. And outages order third the

outages Ida, million million to of the impact? EBITDA Between $XX unplanned $XX and total a

Correct.

be you guys up, you and if when Where been And not on you’ll already stand, think majeure up? does back do on you’re force PVC. back that Great. VCM have

Yes.

to to are We of try out force regular apply majeure, our and needs. coming the supply we customers’ to

Okay.

that’s been so So the majeure has – ended, force correct?

much to back trying a back building well as as still as come we’re as can, but inventory Yes, balance. we

Your next Angel response Morgan Castillo is Stanley. with from

look and integrated side then seeing curious of last XX as we've and the Albert, you you're merchant that -- the compare from in upstream how strong profitability rationalizations how entire the to -- the Curious with evolved process So also Just, on few X -- over at kind downstream business, demand the chlor-vinyls. months last how has your do the over seen the downstream? versus and able those? you're to just market

Certainly.

it's global recover caustic XXXX, as up typically which is As lead and is we was with chlorine-related, is in and improve, or soda for growing prices have price to while caustic economy picking seen whether the behind we as the as recovery lags for of even next recovering fast. a price seeing margins very increases which into now economy expected now housing-related demand infrastructure really demand start But caustic, activities, well. would are economic PVC, products, GDP, the PVC demand recovery, behind that hence lagging to quite as for PVC

So still the all-time values. high the seeing for ECU we derivatives, price, chlorine high the chlorine are goes value best But among I given think to for even chlorine PVC.

we mentioned, in capacities are globally and PVC in that, are number caustic. number X So X we also fortunate as in Steve

we chlor-vinyl think the -- world. in I business the combined, chlor-vinyl leading So are with PVC

these capacities. expensive we're good the limited this of it's all that we the to on, continue business. fortunate we we is on position So are on benefit. add in this up-cycle integrated a enjoying as capacity segment the And are adding going see forward, capitalize And to

early, how million $XX and sense synergies in surprises, bit I business, maybe now completed for higher -- a it's surprise right Got then potentially as that a think potential acquisition, know synergies and about the better about Boral that looking That's in it. helpful. at you've that, negative look you're And for closer -- and on any but thinking that? positive the getting than you or

after happy for about month Steve We're I'll of product X talk good positions, and very ownership good talk can technologies They and also leading the potential to business. the very Boral operations very financial synergies. have of growth.

And were hiring. staffed some plants and the capital because of sales of and process, the of equipment they

the reduce in production know, running increase all So and to costs at housing further looking with And stabilized of we're that the not were at production. very and plants may is and operating we strong and increase to full also materials, capital as now capacity. you investments our opportunities demand some have

that. So happy Steve? with very

Yes.

the were guiding leading you outlined $XX think they rate, million above earlier. annual here, the of we're number there we our Albert that really speak opportunities building noted, heard in us when it scale And really, significant people where diversification our he still of you issue, run think of today. And are So the to just opportunity is synergies. cost-related that see of a as as of improvements products synergies to and enhances the for business look really million that economies at we that of cost-related $XX

and telegraph to opportunities you. as as get we'll but And comfortable going think so line. when as in opportunities those, line see we for there cost both on those beyond are the well that, those, those be look to we'll of certainly And course, you of with revenue the

is from response next Deutsche Begleiter Bank. of David Your

XX congratulations years. as and great for well the results Albert,

Thank you, David.

do price Albert, to XXXX just ethane? in ethane, – evolve and you course of how how do over the on supply view expect you

as gasfields highest the I that’s price because in only but mid-low close to drillings. actually quarter’s the for completing quarter, dropping high Certainly, future more price. of this are dropping to There’s down for in from rigs prices oil price, and also wells, XXs as presume the ethane – and production and first people new are pricing. going which Yes. DUC to wells gas XXXX from the the is more the oil

we So moving rig are which the counts, watching is up.

more there with production, ethane So will more available. be

going focus Very enhanced you back a on across the good. chemical less And Do level, high fuel government’s you capacity at very just the on add given expect China landscape commissions China. forward? in that, do

Yes.

prices chemicals of are mainly of and and think many for than plastics. the important rather chemicals chemicals plastics, affecting the They their largest a very watching producer. They’re and plastics appetite country in are global I we exporter carefully. importer be the very for will and consumer so also and China

next is of Hassan Your Capital. Alembic from Ahmed response

of I just dynamics. near-term and chlor-alkali Obviously, to wanted a parts in the market. bunch to pricing go moving back chlor-alkali

coal from natural You've the demand sounds escalation And the situation the the side XXXX. commentary seen caustic positive in gas very China, of Europe. into that I'm obviously QX on hearing seen and you look and demand the we've as late, in chlorine rationalizations both price you

ton chlorine looking $X.XX backdrop, all Now a a $X.XX -- ton. pricing I is a to for this pricing $X it is, stack that natural of QX caustic see obviously, according at BTU. a where and backward gas with How's million as your at when averaged

the you into levels you maybe commentary, the sort these in sustainability like about, more pricing A, From of XXXX? look how So it sounds or are thinking potentially upside as of even pricing. there's

Yes.

caustic. in up Just a $XX looking May, at looking $XX IHS, about and down, forecast, December going January a industry But they're ton for they're consulting ton caustic. April, firm,

price next stay think I throughout ton price And January will prices, people another in a So at of forecasting this XXXX. at that increase are chlorine they are in looking level $XXX year. caustic

So I think are people pretty positive.

strong, So the caustic the also now economy would continue strong. remain recover be be and demand products favorable derivative the hence, global forward. chlorine economy demand for And from going will U.S. on and pricing pandemic, and to

the permitting made your And And how about to of back advantage enjoy wanted that obviously, decade one the capital go has over its capacity X Albert. to Celanese how harder. of lack China. to comments Very addition dig into just China feel of you away, over was over as much very a the commentary about the has to follow-up, the China. some some obviously, a is your expectations growth all can years? world. of know, then on deeper sort QX concerns the culprits XX gotten last call all But used have interesting or cost we we they helpful, capacity And waned Chinese in what for ESG next thereof bit actually

That's a very question. good

up they the high the is high-value years areas but have forward, digit though wish labor double every they many labor high-tech going industrial and increase of going the I want up X-year investments building, basic plans think advantage polluting and in industries. may cost to government going values and year, areas not Chinese wage upgrade Even the for now.

compete at countries who in than pretty are or they good -- workforce China. wage-wise, have other cannot but with capable lower Vietnam So they rates

of So I think emissions. hear warming we conscious heard now as to COPXX the the global of going on. Chinese government, And have wish zero we very also even also net various XXXX with They have target plans. India

towards our emissions mentioned goal as our as working production to is whole we greenhouse as the area. And industry, think reduce, are our reducing comment, our in I also world well. in So gas

think I and in have basic impact this new the on on around additions will So the industries world. China

Yefremov next KeyBanc. from with is Alex Your response

building in products capital have like be Albert, over significantly player? the next return products, just additional few on the larger you roles would aspirations over years bigger current you through be but Do to size, your building emphasized to acquisitions?

focused this And size markets that capital, Boral it’s on when in you our focus that see. it’s the that investments compelling the putting us were we we think also in the acquisition, really but with Alex, about the really that channel, the investments and scale have real LASCO acquisition important, So can made not opportunities brought we’ve return you gave deploying capital value in see Dimex the sales year, acquisition. in in that both is

with value scale. were all course, only So these we sure driven, had that of focused that but really making not being at scale

value to we’re So the it’s we important it sure with to businesses, us grow focus. doing as always the that make

at our building chemical the invest really products they’re returns focused all kind focus. various The both additions given that’s the to of is, But businesses. and So over businesses in it’s appropriate the to the adjustment answer making those there’ll certainly, businesses. contributing risk time, be sure

size as energy higher follow-up, in for Europe quarter? prices way fourth us any you could to increase business the in And your a the cost due for

energy you got, as you’ve costs natural course, think higher about of higher and cost. So gas it,

in because of in so broken know America in of you But as Europe without and $X of we applicable North $XXX higher is segmenting cost is an million example, is there we businesses. EBITDA. But kind of the has North footprint that out focused have that’s that or our it’s American North American the versus contribution course, biggest on of where that our on now about is. gas, the business which impact And that to MMBtu terms the our more necessarily in haven’t European sensitivity heavily

to $XXX And clarify, Steve, the million Europe? sorry, includes just

It does.

John of Your is next from UBS, Union Bank response Roberts Switzerland.

Konosky Matt is on This John. for

capital Given future in portfolio, expecting the be we step-up acquisitions to expenditures years? in Westlake a recent should the

our business fourth we’ll about spending good a think about budget, budget And hard capital XXXX we’ll the our in giving year. program, be when so think And our you talk earnings ‘XX of quarter that as capital February. that we Boral, be that will this look finalizing capital and call, about And both in guidance number we’ve opportunities business develop LASCO But the to and grow for acquired, we’ll course, give Dimex. then. which has that

And deployed there’d so wait on size me let for it expect to ‘XX you. But we budgeting certainly, capital be would for some you finish capital that. until our

Citi. Your next P.J. response of Juvekar is from

does more look What a for is levels? Petrie your products is backlog or order like have This typical on And Boral backlog? historical similar P.J. building Eric versus in

Yes.

the the products, a demand products there people low is be building inventory we're of inventory typically, season But may of into -- not spring producing I and earlier, very the fourth very for are but the would slowdown season, down I business, expect. season. of the are orders slow is quarter, And typical and for manufacturers heading shortage said as as high. because of for most think winter much

-- time a whether of we'll bit see have tell, a will or we little we'll dramatic a slowdown. So slowdown

days X X weeks on normal X And anything more how Is you... it specifically versus to of inventory? or would

inventories building most much low. less quite than less weeks, No. than X are Much X weeks. product Today,

the your adopting then And do alumina Is on caustic secondly, how kind markets? inorganic what soda, it organic see tons? scaleup this end you markets first? low-carbon And or of other or of end Okay. are GreenVin,

seeing to the adapting still industry it. We're

I think products. a lot goes consumer to the

lot caustic you products. used As know, and consumer in a soap other is

will So I to X, to that reduce greenhouse easiest the emissions, Scope But, this think probably their also industries however, be to get those as consumer Scope the Scope are help. GreenVin. want see we attracted X, and other X to gas

response is from of Your next Steve Byrne line Bank the of of America.

Albert, Steve. of in been majeure particular. presumably for on hurt export of tonnage and which force caustic Matt so a you’d your for is XQ, PVC kind in good This chunk under Vinyls

have markets see find itself? volumes some then think And what the to to about quarter-over-quarter expect lifted? this transition So if in like XQ, tonnage additional a we you what FMs increase these would do available given

Yes.

we unplanned that are the impact getting mentioned for Ida and outages. we over As other

still and majeure has provide but building customers’ we force we’re And inventory as our much domestically. our removed, towards so as been to needs moving can

we customers first. not export been – – been all been to sure the have at want domestic our better even to We make prices, than though much benefit prices contract local has get exporting the U.S. but

improves, enter as we’ll So availability to market. export the

there conversely, momentum think the interplay global when cost off-line. any indication China Chinese we about in putting over weeks. ask bit a coal on – Is a what I PVC last the spoke the of seen Okay. we But couple curve, about I mean, price with can the significant on deflation pretty so like the right, in caps market and coal prices, we’ve the

find production year? back next the ultimately we normalize, point $X.XX were you most So at PVC do some this when back I to the the a to we that’s $X.XX range it last if look rates Or expect out this that? that we’ve – prices for pound higher where were some in we at than at settle to benchmark, is ourselves decade? at of – presumably something number Is is been

question. good a That’s

price is XXXX the Looking domestic for year price, average XXXX current forecast at [$X.XXX] price U.S. will be average $X.XX. for for I’ and

higher a price So they’re than this looking year. at in average XXXX

export average $X.XXX. of of price are $X.XXX average the side, looking year, and they at a this pound at for On looking XXXX for

this average the next So price year. than year higher is for

October price, $X.XXX export. in looking at they’re However, for

they’re And tell whether time expecting will export So that to next will not. be to come lower. fruition year’s or price

you you I ask a normalized or that is to question J is it’s... if of is – do guess think maybe is PVC better suggesting the do it it’s think what price I

price. contract Yes. But these are list

price discounts be But there for depending know over listed this could the $X.XX. think was comparison, you the these – same contract contract – customers, for as I XXXX, that on prices. U.S. So ratio

So variations. see you there’s large can

price. normal no there’s So

lot impacted and natural cost I the in by Steve gas and goes natural costs chlorine goes feedstock think well. as gas are up, mentioned. and price caustic up partly ethylene it’s prices, goes cost, Power as as a up U.S. price power

no Europe think supply-demand then price I absolute PVC, highest – will to lead in high the there’s So will basis. And that but matter as power, Europe PVC globally, judge right how all prices. past, And and would the ethylene, has round PVC have price. cost of And what behave. the price caustic, U.S. a now,

So supply-demand, but also it’s basis only not supply-demand. global cost

to play all has price be. would into that the what So

dynamic. very it’s So

Pickering, response from is next Matthew Your Blair of Holt. Tudor,

it expected, wanted million. I I just $XXX looks then to longer XXXX notes previous if bit the check, about is XX-day last turnaround. And CapEx for also have than like your came little turnaround now down about by

So you about dynamics? those could just talk

gave. expenditure is than guidance lower plan the capital Matthew, you're The we right. earlier

here discuss the next guidance year. that $XXX we of for for as million for year once in $XXX budgeting 'XX. 'XX give the our finalize and February so plan, I'll And 'XX and million we'll is between I guidance said, some And

of the little longer a you're than and is turnaround be to Petro X, completed it right, expected planned December. extended is bit For in

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

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

today's in Thank participating Conference Chemical you for Earnings Westlake Quarter Corporation Third Call.

on will As callers for XXXX. be XXXXXXX. Time a following the access is ended calling (XXX) accessed after replay beginning numbers access replay XXX-XXXX. November X call The the dial available X, and To numbers: may the reminder, p.m. be accessed by be XXX-XXXX. may until Eastern XX:XX has at callers replay hours this Goodbye. call both International should code the domestic (XXX) for can Tuesday,