Earnings Call: Q1 2021

May 4, 2021

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Westlake Chemical Corporation First Quarter 2021 Earnings Conference Call. During the presentation, all participants will be in a listen only mode. After the speakers' remarks, you will be invited to participate in a question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, May 4, 2021. I would now like to turn the call over to today's host, Jeff Holly, Westlake's Vice President and Treasurer. Sir, you may begin. Thank you, Daphne. Good morning, everyone, Welcome to the Westlake Chemical Corporation First Quarter 2021 Conference Call. I'm joined today by Albert Chao, our President and CEO Steve Bender, our Executive Vice President and Chief Financial Officer and other members of our management team. The conference call agenda We'll begin with Albert, who will open with a few comments regarding Westlake's performance and a current perspective on the industry. Steve will then provide a more detailed look at our financial and operating results. Finally, Albert will add a few concluding comments and we will then open the call up to questions. During this call, we refer to ourselves as Westlake Chemical. Any reference to Westlake Partners is to our master limited partnership, Westlake Chemical Partners LP, and similar references to OpCo refer to our subsidiary Westlake Chemical OpCo LP, which owns certain olefins facilities. Today, management is going to discuss certain topics that will contain forward looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. Actual results could differ materially based on many factors, including The cyclical nature of the industries in which we compete availability, cost and volatility of raw materials, energy and utilities Governmental regulatory actions, changes in trade policy and political unrest, global economic conditions, including the impact of the coronavirus, Industry operating rates, impacts of extreme weather events, the supply demand balance for Westlake's products, Competitive products and pricing pressures, access to capital markets, technological developments and other risk factors as discussed in our SEC filings. This morning, Westlake issued a press release with details of our Q1 results. This document is available in the press release section of our webpage at westlake.com. We have also posted a presentation on our website to review the Q1. A replay of today's call will be available beginning today, 2 hours following the conclusion of this call. This replay may be accessed by dialing the following numbers. Domestic callers should dial 855-859-2056. International callers may access the replay at 4045373406. The access code for both numbers is 4,677,649. Please note that information reported This call speaks only as of today, May 4, 2021, and therefore, you are advised I would finally advise you that today's conference call is being broadcast live through an Internet webcast system that can be accessed on our webpage at westlake.com. Now, I would like to turn the call over to Albert Chao. Albert? Thank you, Jeff. Good morning, everyone. We appreciate you joining us to discuss our Q1 2021 results. In this morning's press release, we reported a strong start to the year despite the impacts of a severe winter storm With net income for the Q1 of 2021 of $242,000,000 or $1.87 per share. Our operating income increased 154% in the Q1 of 2021 versus the Q1 of 2020 which was before the impact of the pandemic. Before Steve goes through the financial results, let me provide some insight into the quarter. The Q1 of 2021 saw strong pricing for many of our products driven by robust global demand. The strength in demand for polyethylene and PVC resulting from the global economic rebound in 2020 was driven by an increase in worldwide packaging consumption and construction activities. The 30% year over year increase in U. S. Housing permits and associated housing starts shows the strength in residential construction activity that benefited our downstream building products business. In our Vinyls segment was tight inventory conditions, strong demand for vinyls and production outages Caused by the Sphere winter storm we saw PVC resin prices steadily increased in the Q1. The polyethylene industry also experienced tight inventory conditions due to the strong global packaging demand And domestic production outages caused by the Sphere Winter Storm. These conditions drove pricing and integrated margins in our Olefins segment. I want to take this opportunity to thank our employees for their efforts, Quickly responding to the disruptions caused by the severe winter storm and fully resuming operations by the end of the Q1. I would now like to turn our call over to Steve to provide more detail on our financial and operating results for the Q1. Thank you, Albert, and good morning, everyone. I will start with discussing our consolidated financial results and then go into a more detailed review of our Vinyls and Olefins segment results. Westlake continued to benefit from the strong global supply demand dynamics and a robust return of global economic activity driving demand for most of our products. For the Q1 of 2021, we reported net income of $242,000,000 Or $1.87 per share compared to net income of $145,000,000 for the Q1 of 2020, which included a $62,000,000 tax benefit from the CARES Act. These results are inclusive of the Previously mentioned severe winter storm impact of approximately $100,000,000 or $0.61 per share in the Q1. The $97,000,000 1st quarter year over year increase net income is a result of higher sales prices and integrated margins polyethylene and PVC and higher earnings resulting from the strong demand in our downstream building products business. Partially offsetting these increases were lost sales and lower production volumes, elevated maintenance cost, higher feedstock and natural gas fuel cost, all related to the severe winter storm as well as lower sales prices for caustic soda. While we work quickly to get our facilities back online, our estimates of 2021 results were approximately $0.61 per share with the remaining $20,000,000 falling into the 2nd quarter. Of this estimated first quarter impact of $100,000,000 approximately 75% was related to our Vinyls segment with the balance affecting our olefins segment. 1st quarter 2021 net income increased by $129,000,000 from Q4 2020 net income of $113,000,000 The increase in net income was largely attributable to higher sales prices for polyethylene and PVC resin. Offsetting these benefits were lower caustic soda prices and higher feedstock and fuel cost. Our utilization of the FIFO method of accounting resulted in a favorable pre tax impact of approximately $55,000,000 or $0.33 per share compared to what earnings would have been reported under the LIFO method. This is only an estimate and has not been audited. Now let's move on to discuss the performance of our 2 segments, starting with our Vinyls segment. Throughout the Q1, we continue to benefit from solid residential construction and repair and remodeling demand. PVC strength was driven by broad based end market demand, including Construction, Automotive and Medical Equipment. While the severe winter storm impacted our production in the quarter, The strong demand for PVC and our downstream building products saw higher sales prices and we benefited from strong integrated margins during the quarter. For the Q1 of 2021, vinyls operating income of $200,000,000 increased $127,000,000 from the prior year period, Primarily as a result of higher sales prices and margins for PVC resin and higher sales prices and margins in our downstream building products business. This is partially offset by reduced sales volumes and lost production from the severe winter storm, lower sales price of caustic soda and higher feedstock and fuel cost. For the Q1 of 2021, vinyl's operating income increased $34,000,000 from Q4 of 2020, primarily as a result of higher sales for PVC resin and higher volumes in our downstream building products business. In our Olefins business, robust global demand for packaging and other consumer products expanded our integrated margins in polyethylene. Our Q1 2021 operating income of $180,000,000 increased $118,000,000 from the Q1 2020, driven by strong pricing and improved demand offset by lower sales volumes resulting from the severe winter storm. For the Q1 of 2021, Olefins operating income increased $158,000,000 from Q4 of 2020, primarily due to higher sales prices and margins as well as increased sales volumes partially offset by higher feedstock and fuel cost. Next, let's turn our attention to the balance sheet and statement of cash flows. We generated $265,000,000 in cash flows from operations in the Q1 2021, resulting in total cash and cash equivalents of $1,400,000,000 Q1 2021 capital expenditures were $141,000,000 We maintain a long dated debt maturity profile with a weighted average debt maturity of 14 years anchoring our investment grade balance sheet. Now to address some of your modeling questions. We expect our effective tax rate for the full year of 2021 to be approximately 23% and a cash tax rate of approximately 19%. As we stated in our last call, we forecast our capital expenditures for the year to be between $700,000,000 $800,000,000 We are planning for a turnaround of our Petro II ethylene unit to begin in September of this year. This turnaround and associated outage is expected to last approximately 60 days. With that, I'll now turn the call back over to Albert to make some closing comments. Albert? Thank you, Steve. As we look ahead, we see continuing strength in global demand in polyethylene, PVC and downstream building products, driven by the solid markets in residential construction, packaging, automotive and healthcare. Our high level of integration extends through the value chain from natural gas liquids and other feedstocks through to consumer building products. Our chemical operations sit on the lower end of the global cost curve, which enable us to drive long term value throughout the business and investment cycles, While meeting the needs of our end use customers with the downstream building products business bring additional value. In our Vinyls segment, we see continuing strength in the PVC and downstream building products markets, driven by strong construction and other Durable goods demand. In our olefins business end use demand remains strong as the essential Everyday products such as consumer packaging and healthcare are driving polyethylene demand. With a continued emphasis on corporate stewardship, We remain vigilant with our focus in developing products and solutions for a more suitable sustainable future, while protecting and investing in our people. As an example of a commitment to sustainability, We have introduced green caustic soda, a certified climate friendly caustic soda utilizing renewable energy. This product is available under the brand name Green Vein which has a reduced CO2 impact of more than 30% compared to conventional caustic soda. We look forward to further discussing these products with you as more developments are made and furthering our commitment to transparency through our future ESG reporting. These initiatives reflect our dedication to being an environmentally and socially responsible corporate citizen. Westlake remains focused on our core tenets, Namely to protect the health and safety of employees, deliver on our commitments to our customers and strengthen the company in all aspects. Anchored by these values, we are confident that Westlake is well positioned to serve the growing worldwide needs of our customers, while maintaining financial discipline, which combined with the strong fundamentals of our business enable us to deliver long term value to our shareholders. Thank you very much for listening to our Q1 earnings call. I will now turn the call back over to Jeff. Thank you, Albert. Before we begin taking questions, I would like to remind you That a replay of this teleconference will be available 2 hours after the call has ended. We will provide that number again at the end of the call. Daphne, we will now take questions. Thank you. Please stand by while we compile the Q and A roster. Your first question comes from the line of Arun Viswanathan with RBC Capital Markets. And you're live. Good morning, Arun. Are you there? Arun, you're on the line. Operator, I think we'll just need to go to the next question and put Arun back in the queue. All right. Your next question then comes from the line of Alex Yefremov with KeyBanc. Thank you and good morning everyone. Your all of those book volumes were down 9.4% year over year In the Q1, do you think you could get to flat or up year over year volumes in the remainder of the year or maybe as soon as second quarter? Certainly, as a result, Alex, of the storms that we saw, we certainly declared force majeure on many of our products. And so with that impact on production and impact on sales, I do expect that we'll be able to resume more normal operations having brought the units back on Thank you. And as a follow-up on PVC, the prices have been rising pretty Steadily in the last few months. How do you think about sustainability? Do you see prices overshooting and then coming back some in the next few months? Or do you see a plateau? Yes. We see that PVC price remain to be very strong and actually the export price is higher than our domestic sales price. So we believe that especially while in the second and third quarter which are the strong quarters for construction, The demand is very strong. And so we believe that price momentum will still be there. Thanks, Albert and Steve. You're welcome. Your next question comes from the line of David Begier with Deutsche Bank. Thank you. Good morning. Good morning, David. Good morning. Albras, if you could talk about polyethylene Pricing, what you may have realized in April and your thoughts on the May price increase that's currently out there? Certainly, I think all the trade journals are reporting that $0.07 increase in April It's effective and people are looking at potentially another $0.03 price increase in May. Time will tell. So but the demand for polyethylene is still very strong. Inventories among producers And customers are still very low. And I think the export price are still higher in Certain senses, domestic large customers. Very good. And Steve, can you just talk about your CapEx What are the growth projects you're looking at for this year and maybe even for next year? So David, the CapEx this year is The guidance is $700,000,000 to $800,000,000 And so a big portion of that is really kind of ongoing activities related to maintenance and some Expansion opportunities, nothing that we've announced publicly, but we'll continue to look at some of our Gulf Coast based vinyl opportunities and see if we can Spans some of those facilities along the Gulf Coast. Of course, we have major turnaround as I mentioned in my prepared remarks For one of the ethylene units starting in September. So that will also be a use of cash over the course of the year. Thank you. You're welcome. Your next question comes from the line of Bob Koort with Goldman Sachs. Thank you very much. Good morning. Good morning. Looking at the balance sheet and obviously you're in A real nice spot for both your main businesses. But I would guess maybe valuations in the space or Well, I don't know. I guess I'm asking, how do you feel about inorganic opportunity in this environment where you've got quite a bit of firepower to use? So Bob, we certainly have always had a very active dialogue with Firms that have opportunities in the space, whether they're divisions or individual plants or businesses. And so we always look at kind of long term value proposition And so whether it's times where there's attractive pricing or more frothy pricing, We tend to take a more pragmatic longer term view and look at a cycle average in terms of the value proposition. And certainly, our focus has been that way and continues to be that way. So we'll continue to look for opportunities to grow the business, both organically through expansion, But also through acquisition and make a kind of a thoughtful look over a cycle of average valuation to make sure that it's got the return potential that we think that it should. And Albert, you mentioned the green caustic soda. I'm curious, is that An effort to credentialize your own ESG ambitions? Or is it something where you can charge a higher price for that product? I would like to do both, of course. Very well. Thank you. You're welcome. Thank you. Your next question comes from the line of Kevin McCarthy with Vertical Research. Good morning. Would you comment on the trends you're seeing In the downstream building products business and specifically are you able to increase prices and margins in that business Relative to the strength in PVC resin? So Kevin, it has been, as we noted, a Strong demand in building materials. And so certainly in the position that we hold, a large position in products such as siding, trim, pipe, fittings and PVC compounds. And so we've seen strength across that space. Certainly as we see increases in resin, we attempt to pass those through downstream so that we can continue to see growth in value. And so over the course of this quarter, we have seen an increase in value proposition as we pass that through. Okay. And then secondly, Albert, you mentioned the strength of export prices As it relates to the PVC market, can you talk a little bit about how you see international trade dynamics Developing moving forward, we sometimes look at India as an important market and sadly India is I think dislocated right now due to the severity of the COVID situation. So how do you see export pricing evolving And also export volumes as the U. S. Industry rates continue to recover from Yuri? Certainly, U. S. I think is the largest export of PVC around the world because of our strength in feedstock Availability and competitive fixed alloy in ethane, in power, produced chlor alkali and a big Sustained caustic market. And as you may know, that's very little new capacity Being added in the last 2 years, very little capacity added announced around the world for UPVC capacity. So the rest of the world are relying on U. S. To provide export PVC to meet the demand. And as you said India is a big example. I I think they are one of the largest importing country PVC in the world. And the demand continues to grow and Many governments are stimulating construction, provide affordable housing to its people and PVC is one of the best products So in exterior and interior of houses. So we expect demand continue to grow And with little capacity added around the world, I think for the long term, the business, the Vinyl and Construction business should be quite good going forward. Thank you. You're welcome. Up next is Angel Cristillo with Morgan Stanley. Hi, good morning. Thanks for taking my question. Just wanted to expand a little bit more on Albert, I think you talked about a tight inventory conditions in both PE and PVC. I was wondering if you could talk about where do you kind of see the outlook versus history and How long do you think that will take to kind of normalize through the year? Sure. Well, As Steve and I discussion earlier is that I think the huge ramp up in prices Not only was the demand but also because of the severe winter storm this year and last year with hurricanes and also with various outages. And so the market is very tight and manufacturing and auto plants are running as much as they can to meet the customer demand globally. And U. S. Industry has curtailed export to help the domestic to meet domestic demand. But if you look at The consultants' journals, they are projecting after Multiple double digits increases of prices last year and this year. I think June of last year almost every month there's a Price increase and there must be a slowdown in price increase or decrease. It could happen. I think The spot ethylene was as high as over $0.60 odd a pound in the U. S. And as we speak has come down to 40s. So that will help reduce some of the pressures for polymer manufacturers. But I think the fundamental demand as I said earlier, The second and third quarter historically are the 2 strongest quarter of the year and for volume and for pricing And we foresee this year will be similar on this sense. That's very helpful. Thank you. And Steve, I was hoping you could, I guess, give us a little bit more color on the corporate line that looked to be a little bit I'm larger this quarter, so curious if there's if you could break that up for us? I'm sorry, you broke up as you were asking your question. Can you repeat that again? Yes, sorry about that. On the corporate line, I was hoping you could give us a little bit more detail. I think it was $30,000,000 this Quarter, so looked a little bit larger than previous quarters. So curious what drove that? Yes, a lot of that is really just kind of intercompany eliminations that You see that go on as a result of exchanging ethylene between the two segments. That's helpful. Thank you. Yes. Your next question comes from the line of Mike Sasan with Wells Fargo. Hey, good morning, guys. Good morning. Good morning. Your EBITDA margins in Q1 for olefins 40%, pretty impressive. When I look back So history 14 to 17 were similar or at those high levels. So just curious if you think this is A level that can be sustained, obviously, not every quarter, but on average for the year and maybe beyond 2021. And could this be a good string of good profitability for that segment for the next couple of years? Yes. Actually, you know that we are a net buyer of I think we'll buy over £1,000,000,000 of ethylene a year. So actually low ethylene prices It's better for us. So a lot of product prices is separate from the feedstock and hence we reported our earnings was impacted by high feed And fuel prices last quarter. 2018 was the high of Historical high EBITDA for Westlake and at that time oil prices was still I think about in the $60 a barrel. And today we're talking about the similar brand and WTI in the $60 So I think that's a reasonable price globally for crude oil. And then if demand keep on improving with the vaccination Process improving around the world and with all the stimulus that only the U. S. And other countries are pumping into the system. I think demand for our products will be quite good and hence the margin should be pretty good. But we don't expect The margin for ethylene or polyethylene to stay the high like in the 2017 or 2016 range. Understood. And then for vinyls though, when you take a look at the consultants outlooks, they do expect ECU margins to stay pretty high No, from this year and next year, should you see a record year in Obviously, you're going to see a record year in 2021, but how do you think that holds up beyond 2021 when you look at the consultant's forecast for 'twenty two and beyond? Well, Mike, when you think about the outlook, I think the outlook is reflective of what We've seen most recently in terms of demand growth in construction activities worldwide and the pull on flooring, therefore, going into PVC, You're seeing signs of a more even start in manufacturing, but of course we're all watchful at countries like India and others that are still struggling to get on their feet from a manufacturing perspective. So as we think about the outlook for our vinyls overall segment, We remain constructive in terms of the demand for worldwide residential and repair and remodeling activities pulling on PVC. But also I'm cognizant that we really are beginning to see some improvement in caustic really from that manufacturing pull, if you will. So we do have a constructive outlook for the rest of 2021. I'd just like to add also that Our caustic soda price has been quite weak and as because of the global recession from the pandemic And as the global economy covers, industrial production covers, we expect caustic demand will increase and pricing should improve as well. Great. Thank you. You're welcome. Your next question comes from the line of Hassan Ahmed with Alembic Global. Good morning, Albert and Steve. Good morning, John. First Question around polyethylene as it relates to the back half of this year. As you mentioned sort of in one of your answers to question earlier that you have industry consultants looking for some moderation or maybe even sort of weakening in pricing in the back half of this year. I mean, it just seems that there are a bunch of crosscurrents and I'd love to hear how you're thinking about those crosscurrents because you have a pretty heavy turnaround season in Q2 and Q3. You have an inventory rebuild that's required because of Yuri, right. You have orders that need to be backfilled because of Variety of force majeures, right? And above and beyond all of that, it seems demand continues to remain very strong. So my question is, Pricing will do what pricing will do, but what are your perceptions about Q3 and Q4 effective utilization rates for polyethylene? That's a good question. But you're absolutely right. Usually again even for polyethylene The second and third quarter usually are the stronger quarter of the year. And also those time also is the time for turnarounds. And you have and as we talk about we have our ethylene plant turning around in September as well this year. So you have that And then you have the global weather Europe and the rest of the world recover from the pandemic or they go into a 3rd or 4th wave. And all these have impacts on global supply demand. But as we speak, as I said earlier, Inventory is very low among producers. We're trying to build back inventory. Among consumers, inventory is very low also. So you have that dynamic And then you have the high export price and you have even the freight shipping costs that some of people talk about whether People can export products to the U. S. And for the future and the freight container shipping cost is very high now. It went it was very high, went down and came back again. So all these different crosscurrent that you said will be affecting prices. In the end, it's really supply demand and export price. If export price is not going down, then you have more chance of slowing down in prices in the U. S. And People talk about from the June of last year until now there's almost $0.40 to $0.50 a pound price increase and You would think that sometime in point there will be a reduction of those prices somewhat. But I think everybody expect That even after the price reduction is still much higher than the average of 2020 or even 2019. So the margin expected to be much improved compared with last few years. Very helpful, very helpful, Albert. And as a follow-up On chlorovinals, again, a bit of a unique product, I guess, these days where there's Pretty much hardly any supply on the horizon, right? And like you said, it seems we're in the early innings of an upcycle, demand is looking pretty good. And no one seems to be talking about with this as a backdrop, the Sort of discussed sort of infrastructure bill almost $2,000,000,000,000 In an undersupplied market Where demand is good, supply demand is already tight, how do you see whatever form this infrastructure bill takes, How do you see that impacting global utilization rates call it beyond 2021? Yes, that's a very good question. I think so long the U. S. Global economic conditions improve and I think people expect That beyond 'twenty one, 'twenty two, 'twenty three, the global GDP growth will go back to the normal trend line. And if with lack of new capacity being added, I think it should bodes well for the existing producers. But you don't know. And with the global warming, Unfortunately, last year we had hurricane and we had a freeze. What natural disasters would impact production, we don't know. Hopefully, not very much. But forecast for this year, at least the Gulf Coast hurricane index has Expect to be higher than normal than average, hopefully be less damaging than last year's. Very helpful, Albert. Thank you so much. You're welcome. Thank you. Up next is Mike Lighthead with Barclays. Great. Thanks. Good morning, guys. Good morning, Michael. First question, Albert, I think in your comments in the earnings release, one focus area you mentioned was Furthering your chain integration and other than being short a bit of ethylene, it seems like Westlake is already fairly integrated. So curious how you're thinking about furthering that integration, whether it's either adding more ethylene or furthering the downstream Whether it's either adding more ethylene or furthering the downstream form of building products. If you could just talk about how you're thinking about Your current asset footprint and where there might be gaps you're looking to fill over time. Certainly, yes. You're absolutely right that we are as mentioned earlier, we are We're the largest buyers of ethylene in the U. S. Over £1,000,000,000 and as our demand for PVC growth, our ethylene demand will further increase. So integration on that area will be helpful. And downstream, we have a pretty sizable downstream building products based Primarily not all but primarily on PVC and we explained as the demand for building products is really Strong and we are finally above the 50 year average for new home construction in the U. S. For the 1st few months of this year. So we expect that trend to continue. And so the building products demand will increase and hence we're Looking as Steve mentioned, we are adding capacities. We haven't announced the big any big capacity expansions, but small capacity increases to meet The needs growing needs of our customers. Great. That's helpful. And then maybe my second question, just a follow on to I think Kevin's recent question About the export market. So for PE and for PVC, how should we think about Westlake's domestic versus export mix Just given some of the market disruptions. Certainly. In PVC, because of our Integration of downstream, we tend to export less than the U. S. Domestic. Historically, over the last few Last 10 years after the healthy meltdown in 208, U. S. Been exporting PDC around 30%, 35% a year. And that rate has come down a lot last quarter because of lack of supply. And polyethylene Industry with all the expansions we added last 5, 6 years, I think exporting close to 40% of its production. And Westlake, because our emphasis on low density polyethylene, our export proportion is much lower to industries. And again because of the lack of supply in the last few quarters our export Portions come down a lot. Your next comes from the line of Matthew Blair with Tudor, Pickering and Holt. Hey, good morning, Albert and Steve. Good morning, Maggie. I was hoping you could share more details on this green caustic soda initiative. How exactly are you reducing the CO2? What share of your cost of production could be green? Do these CO2 benefits Going to other products like PVC. And then should we think about this as like higher upfront costs or would this be higher Higher OpEx on your end? Yes. We are buying renewable power. As you know, power in Europe, the combinations of fossil fuel, including coal and natural gas and everything else. And by reviewing power the CO2 content is much lower and hence The 30% reduction in CO2 and the caustic produced and takes quite a while To get certification for the process in Europe. And we hope to introduce more green friendly, environmental friendly products As we go throughout the year and we're trying to provide lower CO2 products to our customers and to reduce our own Manufacturing emissions of CO2 in every way we can. Terrific. And What kind of ECU operates are you at currently? And does the I guess, if you're below MAX operates does the $70 per ton caustic price increase in April incentivize you to run harder? Yes. We are running plants because of the freeze is impacted a lot. So we are Bringing our plans to meet the demand of our customers. And unfortunately, because of the freeze, we're still under allocation. And hopefully we're able to lift the allocation very soon in the near future. And many of our industry competitors are also having Freeze and other problems. So I think most companies are running as hard as they can to meet the customers' needs. Great. Thank you. You're welcome. Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Hi, sorry about that earlier. Thanks for taking my question. I hope you're all well. Congrats on the strong start here. So I guess a couple of things. So first off, the chlorine side seems very tight. We're hearing issues about availability of chlorine, Especially through the summer, I know there's a water treatment season coming up. So are you at all concerned about servicing Demand on chlorine? And then secondarily, caustic, we are seeing some price uplift now. How long do you expect that to continue, I guess? And What's your outlook for both sides of the ECU molecule? Thanks. Yes, thank you. Yes, you're right that The whole bundles chain is demand is strong because also the freeze and as I said earlier many Our plants in the U. S. Have been impacted and most of the chlor alkali plants in the industry along the Gulf Coast also will have an impact on that. And because of the strong demand for PVC, hence the chlorine is very tight and several price announcement being made. On the caustic side as the economy recovers caustic is also improving and not only the U. S. International caustic prices in Asia and Europe are improving as well Because of the strong demand and recovery of the industrial production around the world. So we have raised our prices, Announced price increases and we're getting a large share of the price increase we announced. Great. Thanks for that. And then I guess Also on PVC, ethylene, I guess, did kind of see a little bit of a spike because of the storm. Prices may be receding here, but obviously demand is very strong. So Do you expect PVC price increases that you gained earlier to roll back here? Or do you think there's potential that you can continue to hold on to a lot of that? Yes. As we have discussed earlier, we have a series of price increases since June of last year as economy recovered from the Recovered from the pandemic and demand is strong, inventory is very low, under allocation And we are export prices higher than domestic price. So those dynamics still exist today And there's a further announcement of price increases for May and we are still in early part of May. And so The strong demand is very strong and the pricing, it'll be what it is going forward, supply demand and export price export demand as well. Okay. Thanks. I'll turn it over. Up next is John Roberts with UBS. Did you resell any electricity or ethane or anything else to help offset the storm impact? So John, yes, we did, but the relative impact during that period was relatively small. Okay. And then, Albert, you mentioned the turnaround coming up in September. You've had a lot of downtime over the past 12 months. Were you able to accelerate any maintenance or anything into those unplanned downtimes that maybe on average over the next couple of years will have below average Maintenance expense and turnaround impact? Yes. We did what we could. As you know, the turnaround, you have to have all the The parts, the labor and the jigs and everything else ready for major turnaround. So we did what we could during the time period. But I think our turnaround schedule still goes through and hopefully as you said we can reduce a few days here and there But not material. Okay. Thank you. Yes, John, just to add to my comments, we operate in Louisiana, which is a regulated market. And so there are some limitations in terms of our ability to have some upside on any resale into the market. At this time, the Q and A session has now ended. Are there any closing remarks? Thank you again for participating in today's call. We hope you will join us again for our next conference call to discuss our Q2 2021 results. Thank you for participating in today's Westlake Chemical Corporation First Quarter Earnings Conference Call. As a reminder, This call will be available for replay beginning 2 hours after the call has ended and may be accessed until 11:59 pm Eastern Time on Tuesday, May 11, 2021. The replay can be accessed by calling the following numbers. Domestic callers should dial 855-859-2056. International callers may access the play at 4045373406. The access code for both numbers is 467,649.