Duffy Fischer : Fair enough. And then the stat or the projection you threw in there on remodel and repair at 2.6% for the year, one, is you’re just talking to your customers as you’re looking at your order book, does that feel like kind of the right number? And then maybe like a follow-on to the last question, if that ends up being the right number, how does that look first half versus second half do you think?
Steven Bender: So, Duffy, it’s Steve. And I would say that the tone that we saw at the builder show recently was constructive, and I think it aligns with the tone that we saw from those that visited the builder show. And certainly, there is some expectation that will continue on as we go forward. Typically, when housing starts slow, repair and remodeling show strength. And so, there is a typical investment cycle that homeowners always undertake. And that is they’re either improving their home either to sell to move forward or improving their home because affordability to move on to a new home is too expensive. So, we do think that, that aligns with the tone we’re hearing from our customers and consistent with the contributions we think it will make to the business over the course of ’23.
Operator: And our next question comes from Frank Mitsch from Fermium Research. Your line is now open.
Frank Mitsch: Good morning, and thank you. Steve, you mentioned that you have a big turnaround, I believe, in Calvert City in May. And I was wondering if you could provide a little more granularity. Is that pretty much the only major turnaround that you’re going to be facing this year? Any sort of color there would be very helpful.
Steven Bender: Yes. So, Frank, we do have a turnaround starting in May for 30 days. We certainly have turnarounds in many of our other units all throughout the course of the year. Because these turnarounds will move from quarter-to-quarter and change over the course of the year, we’ve kind of shied away from giving discrete quarter-by-quarter guidance in terms of turnarounds. It will be a slightly busier year in turnaround activity in ’23. But I would say that if you look at prior year’s turnaround activity, it’s consistent with the operating rates that we historically had. But I called out the Calvert City turnaround because it is — turnaround is going to be 30 days in length and because it impacts our ethylene units and the entire site accordingly.
Frank Mitsch: Great. Thank you. And Albert, if I could come back to the comment regarding chlor-alkali and expecting to see higher volumes as we progress through the year, PVC demand improving and then therefore, you get more co-product caustic soda, and so therefore, price might be under some pressure. But of course, we’re ending the year at a higher level than we began 2022. So, I’m just curious how you think about ’23 average pricing in your chlor-alkali business on the essential materials side relative to ’22. Do you think that as we look at the full year, we’re looking at something like a flattish sort of environment? Or do you think the degradation might be even greater than that?
Albert Chao: Well, yes, Frank, that’s a good question. One of the industry consultants, as I said earlier, looking at the gradual decline from January through September. But as we said earlier, interesting that in 2022, prices start low, went up, and then 2023 the forecast is from up and kept it lower. But the average for the whole year for 2023 as embedded by the consultant is not that too much different on the average of 2022. And for that information also, they’re looking at 2024, of course, it’s crystal balling. The average ’24 prices are almost similar again to 2023. So, people are expecting some kind of flat in price. And the demand globally, as you know, caustic really follow GDP as the global economy recovers from COVID and China comes back into more normalized growth.
India is still one of the strongest emerging market economic growth. We will see demand for caustic to improve. And U.S. has the lowest cost producer from a low-cost natural gas, low-cost energy and power. And also, we have available salt nearby. So, I think U.S. chlor-alkali industries will be able to capitalize on any of the demand increase around the world.
Frank Mitsch: Got it. Thank you, so much.
Operator: And our next question comes from Jeff Zekauskas from JPMorgan. Your line is now open.
Jeffrey Zekauskas: Thanks, very much. On Slide 4, you said that you increased your ECUs by 120,000 tons. Where did you do that? And what utilization rate or roughly what utilization rate is it running at?
Roger Kearns: Yes, Jeff. Thanks. It’s Roger. One of the beauties of our footprint is we’ve got a number of different sites. And so, we’re able to low-cost debottlenecks in a number of different sites. And so that 120,000 comes from a couple of different projects mostly across the Gulf Coast. But I would say, in general, for our chlor-alkali assets, we’re going to run them strong. So, if we’re not running them strong is because we’ve had an issue, it’s not because we’re trying to sell them down.
Jeffrey Zekauskas: So, this is all up and running and was added in 2022?
Roger Kearns: Yes. We completed them in 2022.
Jeffrey Zekauskas: Okay. My follow-up, there was the vinyl chloride release in Ohio. Do you think that, that has implications for the chlorovinyl industry? Or do you think that, that will lead to some kind of change? Or do you have any general comment?
Albert Chao: Yes. I think people are waiting for the surface transportation safety board come back with the report. I’m sure there’ll be more government regulation on railroads and possibly on the shippers on safety. These are very important products that ship around the country. So, the demand has to be satisfied. But definitely, we need to increase the safety by the variables primarily. I will think on the equipment, some of them getting old, and we heard new technologies out there to improve the safety aspect of the railroads.
Jeffrey Zekauskas: Thank you, so much.
Operator: And our next question comes from Matthew Skowronski from Credit Suisse. Your line is now open.
Matthew Skowronski: Good morning. Within your Housing Infrastructure Products margin guide, what are you assuming for raw material costs relative to 4Q levels?
Steven Bender: Well, as we think about the margin that you’ve seen in our HIP business, I think you’ve been able to see that we’ve been able to — be able to pass those costs through. And so, as we see prices rise and I think Roger made reference to the price nominations we have for PVC in the first quarter, we and our housing businesses have been able to see good price traction that I think you noted from one of the comments and from one of the slides that we are able to hold prices over the quarter. And so, while we saw reductions in volume, pricing was actually fairly stable. And so, if we see continued pressure on prices coming in on feedstock’s, be it PVC or others, we’ll obviously look to see what we can do to manage that. But if we have to, we’ll pass those through.
Matthew Skowronski: Understood. Thank you, Steve. With regard to M&A, would you consider moving outside of current market verticals you already participate in?
Steven Bender: Well, I think you’ve seen that where we see adjacencies, I would use Epoxy of that. I would use some of our acquisition experiences in ’21, like Boral where we saw some adjacencies. That make good sense. They provide synergies to us and provide an opportunity to extend the integration model that we have, whether it’s a sales integration approach that we’ve taken with our Boral business or whether it is a materials integration strategy that we have with our Epoxy acquisition. So, the answer is as long as we see good synergy and good value, we’ll look at adjacencies to our existing businesses.
Matthew Skowronski: Thank you.
Operator: And our next question comes from Angel Castillo from Morgan Stanley. Your line is now open.
Angel Castillo: Hi. Thanks for taking my question. Just wanted to maybe put the exports question on a little bit and as you think about a shift to more domestic, I think one of the areas that has kind of pressured the industry, both kind of in vinyl but also in areas like epoxy were this idea that, I guess, the exports were seeing a greater degree of pressure from other regions exporting products. What are you seeing in that, I guess, competitive environment? Are you still seeing product come from Asia? Or are you seeing some of that start to stay domestically more? And as you raise — or I guess, raise operating rate, how do you see that kind of evolving in terms of the impact for that market?
