Steve Byrne: Hi, thank you. Just continuing on to this peak EBITDA discussion. Is it more driven by Chlor Alkali? And is your view on Epoxy a little more measured than it used to be? And with the former Chlor Alkali and – are you moving any further down the path of partnering on some downstream polymer capacity? Or is it a little too early for that?
Scott Sutton: Well, I would say, I mean, the big driver of it is certainly Chlor Alkali. There is no doubt Epoxy will improve, but the structure of the Epoxy industry, when you have a China, that’s probably added almost 20% to the world’s supply capability in the last 18 months or so, it’s going to take a little more time to recover. I mean I’d also call out our Winchester business as well. I mean that business has great fundamentals, particularly in the growth of international and domestic ammunition. So it’s those things that will get us there.
Steve Byrne: And one follow-up for you, Scott, on Winchester is what is going on competitively that’s leading to a challenging domestic commercial market? Is that – is it underlying demand? Or is it increased imported product or competitive lack of discipline? What would you attribute it to?
Scott Sutton: Yes. Well, I would say, just a reminder, even though it’s challenging, it’s certainly well above pre-COVID levels still. But what is driving the challenge is, I would say, across outdoor sports. Inventory is just generally increasing. That’s not just a comment only on ammunition, but we’re subject to that. And that’s why it’s a bit challenging.
Steve Byrne: So there’s destocking going on? Is that the issue?
Scott Sutton: Well, it’s not necessarily destocking. I would say that, look, inventory in the channel has creeped up and therefore, supply into the channel is slowing down, right? There may be some follow-on destocking that naturally would follow that, but that’s the situation.
Steve Byrne: And some of that creep from Russian import that you’ve talked about in the past?
Scott Sutton: No, no. Russian imports have ended. If anything, imports into this country in terms of ammunition have gone down over the last 12 months, primarily to Russia, importing zero anymore.
Steve Byrne: Okay, thank you.
Scott Sutton: Yep.
Operator: Thank you. And the next question comes from Mike Sison with Wells Fargo.
Mike Sison: Hey guys. Look, I wanted to understand the $300 million a little bit. So in the third quarter, what’s the impact from the planned outages? Is it similar to the $80 million in the second quarter? And then for the fourth quarter, $300 million – I mean, fourth quarter $300 million, is there any impact from that extended into the fourth?
Scott Sutton: Yes. And let me clarify, Mike, the $80 million first of all, because in our earnings release, that is a year-over-year quarterly comparison. It includes the planned cost of the turnaround that we were going to have. The guidance that we gave or the early guidance we gave in the second quarter said, look, we have a $50 million impact, and that was versus the expectation. I would say when you’re looking at the third quarter, it’s very probable that, that impact is the same. So what you have versus our earlier expectation is $100 million essentially spread evenly over the second and third quarter.
Mike Sison: Okay. Got it. So in the fourth quarter doesn’t have an impact. That’s just kind of the run rate for where the ECU and everything is at, right?
Scott Sutton: Yes. I mean that’s pretty much right, right? We’ve called out $1.4 million. You kind of back into the numbers you’re using for the fourth quarter. There’s some natural slowdown in some of the businesses and there’s still negative momentum in costing.
Mike Sison: Okay. And then just in terms of where your mid-cycle EBITDA could be? Is it sort of the delta between the peak and this year? Or is it a different number? And how long do you think it takes to sort of get to sort of a mid-cycle number?
