Operator: And our next question comes from David Begleiter from Deutsche Bank. Your line is now open.
David Begleiter: Thank you. Good morning. Albert, on polyethylene, you got a $0.03 per pound increase in January. I know they’re about — there are $0.06 per pound increase out there for February. What’s potentially think for additional polythene price increases in February, maybe even March?
Albert Chao: Yes. Polyethylene, there has been a lot of price adjustments, year-end adjustments. So the January, we had a $0.03 price increase offset by non-market adjustments. And I think depending which consulting you’re looking at in Chemical Market Analytics, CMA, they are looking at additional $0.03 decrease in May, and that’s flat through the year. However, the industry, we have additional $0.03 to $0.05 a pound price announcements in February and try to recoup some of the price decreases that occurred last year. So time will tell with the strength of China recovering. I think overseas prices are improving. So export price improving overseas, there could be some benefit of increasing the prices in February or March.
David Begleiter: And just on caustic, Albert, do you think caustic price can hold up here in this current environment?
Albert Chao: Yes. That’s a good question. I think caustic prices has really done — performed very well in 2022. And some of the industry consultants are projecting prices to gradually come down this year through the first half and into the third quarter. So — and as the PVC demand increases across the world, there’ll be more production of caustic and more supplier of caustic. So possibly caustic price will ease during the year.
David Begleiter: Thank you.
Operator: And our next question comes from Michael Sison from Wells Fargo. Your line is now open.
Michael Sison: Good morning. I think you all mentioned that demand looks a little bit better first quarter for PVC polyethylene. Are your operating rates going to go up sequentially? And given the lower costs that you’re seeing, should margins or EBITDA improve as we head into the first quarter or the fourth directionally?
Roger Kearns: Yes. It’s Roger. So certainly, I would say we’re seeing in Q1 and based on the North American advantage, both PVC and polyethylene can run strong. So I think the demand kick that we’re picking up in domestic helps us make our balance, as I say, looking much more of a normal mix between export and domestic. So yes, I would say we’ll continue to run our plans strong in the first quarter.
Michael Sison: Okay. And then for HIP, you gave us the range for sales for 2023. There are some folks who think the second half will be more difficult. Some folks think first half might be more difficult. Any thoughts on how the halves sort of work out in your HIP outlook, better first, say, worse second or just any thoughts there?
Steven Bender: Yes. So Mike, it’s Steve. And so I would say that you see that we’ve come down dramatically from the end of the — from over ’22 as we saw a lot of, in effect, pull back because of rising rates. And so as you think about where the Federal Reserve is moving with their move on rates, there is an expectation that those rates begin to kind of slowdown in terms of the level of increases. And there is a lot of market chatter about that slowing towards the end of this year. And I think if there is a sentiment that rates begin to plateau that you could see some more positive sentiment come into the market. I would note that the Mortgage Bankers Association has seen a recent increase in applications. And that tells you that consumers are becoming a bit more confident as they look forward that these rate increases will be less aggressive and home prices become more affordable.
So there is some probably market view that probably the second half is a more constructive half of the year than the first half of the year.
Operator: And our next question comes from Duffy Fischer from Goldman Sachs. Your line is now open.
Duffy Fischer : Good morning. First question is just around the Epoxy acquisition. You’re kind of a year into it now. It’s been at the tough year here. So, can you do an after-action review? I mean, does the industry need to have some structural change? Does your business need to have some structural change? Or is this just really kind of a bad supply-demand setup right now that will fix itself over the next couple of years?
Roger Kearns: Yes. Thanks, Duffy, it’s Roger. Maybe a couple of comments there. I think Epoxy business for our first year, we started extremely strong. The first part of the year was a very strong part of the business. But as we move through the year, it certainly got weaker. And by the end of the year, I would say the fourth quarter was really quite weak. I think there’s a couple of things as we look forward. We have seen China announced already in ’23 nearly a doubling of the wind energy installations over ’22. So, we’ll have to watch and see how that plays out. But that should be kind of a nice boost in the markets. As you know, there’s — I mean, there’s a limited number of Western players. We’ll continue to do what we do, which is make our plants run more efficiently, more cost effective.
We’ll copy our Westlake model into those sites. So, I think there’s some self-help work we’ll do, but hopefully as well with aviation, automotive and some wind energy picking up a little bit in ’23, we can get the ’23 looking better than certainly the end of ’22.
