AdvanSix Inc. (NYSE:ASIX) Q4 2022 Earnings Call Transcript

Erin Kane: Yes. Certainly, as the general situation has improved in Europe. As you point out on the input cost, improving, the sentiment to produce right and in a number of chains, they still have sort of reduced demand in general. And weakness that they’re going to have to sort through in a number of end applications as we’ve touched on. So, it’s one where, yes, there’s — when we think about production of nutrients, those rates have picked up primarily for certainly the regional demand there. We’ll see, like I said, it’s Europe’s probably 50%, capacity utilization as we know it right now in caprolactam through the chain. But this is a space where global trade is understood, and certainly things moving in from Asia went in heavily last year as well.

And they’ll resort themselves accordingly as we move forward. It’s hard to say that there’s a definitive move here one way or the other. But again, these are global markets on that sense. But certainly, they have their regional nuances as well. So Europe is certainly a buyer’s market for a nylon, so there’s going to be produced certainly, it’s a pressure there just because you have a length of supply, and in fertilizer you’ve got global buying just slowing down in general. And so again, nitrogen capacity there, we would put at about 70%. So like anything else, this is what the world is going to have to navigate through both globally and regionally, I think moving forward as we progress through the year.

Michael Preston: Yes. And even though natural gas prices have come down, they’re still — when you think of those prices relative to history and on a relative basis to like the U.S., they’re still high, right? So that’s just another consideration there, Dave.

David Silver: Yes. No, they’re definitely still is that regional disparity. No question. Okay. Thank you very much. I appreciate all the color.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Erin Kane for any closing remarks.

Erin Kane: Thank you all again for your time and interest this morning. Despite some macro headwinds and operational challenges in the fourth quarter, our performance reflects the resilience of our business model and our ability to navigate and execute in a multitude of environments. Following the record performance in 2022 we look forward to continued execution of our strategic priorities in 2023 and are committed to delivering long-term value to our shareholders. With that we look forward to speaking with you again next quarter. Stay safe and be well.

Operator: The conference has now concluded.