WLK - Earnings call transcript Q1 2018

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Operator

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Westlake Chemical Corporation's First Quarter 2018 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 3, 2018. to call like host, to now Mr. would turn over the today's I Vice and Holy, President Jeff Westlake's Treasurer. may you Sir, begin.

Jeff Holy

followed conference joined Thank members you, President conference who President Chemical comments XXXX and Westlake welcome and to I more The Sabrina. financial Good team. then call a performance, will regarding with our Officer; management begin will morning, Albert, Corporation operating agenda and on everyone, CEO; our with Steve Chief first detailed Executive perspective Chao, Financial by few open of Albert today a and Westlake's Steve Bender, our the by the current will call. results. look industry. our am at Vice quarter other a and provide

add and the comments, will Albert we'll concluding few up call a open questions. to then Finally,

capital the today This first press release replay press document beginning details with Westlake pricing our XX:XX our accessed webpage chemical industry the could on Domestic the Actual in balance actions factors and XXX-XXX-XXXX. global suggest of upon Westlake conditions, predictions filings. replay dialing rates, including operating until or this raw following Any Chemical. currently section will The subsidiary, master Time Time LP, forward-looking callers today's access assets. forward-looking of the the PM, at pressures, available at Today, A XXX-XXX-XXXX. PM, as contain morning, to OpCo be XXXX. International XX, be release markets, our products, political we reference expectations by to This of results. SEC discuss to topics available refer should partnership, quarter made of May availability, or the issued numbers. call may to refer may to and XX:XX a callers is other Westlake replay cyclical at During materials, to subject our certain developments, management differ ourselves as management's products and Eastern LP, who volatility therefore, dial westlake.com. Eastern for materially time in longer of unrest, of going broadcast can note nature is Partners results be These of that risk competitive this The finally based Chemical and as as OpCo access Chemical is will regulatory Internet to as being live code assumptions to accessed webpage of by limited information governmental Olefin Please for and time technological Partners would I based Westlake speaks are information uncertainties. discussed may an and sensitive call, is at this references you thus Westlake and Westlake webcast access you to no management. on system well through any utilities, conference our supply-demand and that that call that economic numbers both that beliefs, are cost call reported today, statements factors only is XXXXXXX. energy, is westlake.com. that advised XXXX, X, information information certain advise the risks accurate on available on replay. our and May owns many be industry,

over Now to Albert? I to the turn like call would Albert Chao.

Albert Yuan Chao

per quarter ladies reported release, us XXXX diluted joining Thank first for net discuss press income of quarter thank million $XXX we you share. results. you, to or morning, for morning's and the $X.XX In XXXX Jeff. quarterly gentlemen, this Good of and first our

be Westlake. the the in impact income a for $XXX Excluding quarter of XXXX, net of fourth one-time tax this the will reform of quarter's million record

resulting deferred our $XXX our up and of from products as the strong on also of we operational we benefited million assets for Westlake, records XXXX from and for from in of improvements catch reliability XXXX, $XXX income to the maintenance. EBITDA improve operations investments quarter demand acquired First million and made were the

result see Americas, and and to economic solid a soda, continue growth synchronized including all demand We of Europe, for polyethylene, Asia. our major in as PVC, products, caustic

benefited our and recently which the facilities environmental rationalized Coast of both start-up reduced Our by ethylene of Vinyls regulations, and global European from curtailed a segment purchased in production ethylene supply capacity with The our onset Gulf U.S. a in margins. tightening of chlor-alkali supply. costs driven were increased ethylene number China, of new

our to Steve, the good turn Our as grades results. financial supply for of more now operating polyethylene over I like tight the demand would see continues provide recovered to Hurricane and to Steve? some Harvey. Olefins and industry on call to segment from detail

Mark Steven Bender

discussing Thank everyone. with our a financial I and review consolidated Vinyls morning, results. you, good of by followed Albert, our start results, segment Olefins will detailed and

net million billion. XXXX per Westlake of sales begin Let billion. to our the consolidated quarter $XXX income we of morning $X.XX sales reported to net $XXX income of diluted or $X.X me on or XXXX share income quarter with results. compared net million quarter million This Westlake's for on $XXX net the first first increased per of XXXX $X.X attributable share first $X.XX

tax and unplanned net included tax reform. a XXXX resin, associated a result soda and and tax major Compared XXXX of quarter of period, the $XXX higher benefit volumes lower XXXX effective first quarter lower for to benefited of the one-time prices and operating outages increased the costs million federal income associated higher record $XXX quarter of our from for million with XXXX sales income operating Fourth income quarter caustic rate reform. of turnarounds a products, $XXX first prior margins as income $XXX PVC First with planned million from million. year

a income Excluding increased million our $XX XXXX of per $XXX from or fourth per $X.XX this million $XXX income $X.XX share share. first quarter or XXXX benefit, one-time quarter net million of the net

in sales in quarter million. XXXX income for volumes Our segment XXXX million of preparing first sales outages, quarter increases net turnarounds increased quarter our are the in planned $XXX Vinyls in we are operating of income the polyethylene lower income offset increased volumes primarily of unplanned as The months. $XX income result lower fourth compared margins record of and operating planned of million operating several associated first and and by costs with to next a turnaround XXXX $XXX the primarily for and

the higher of $XXX of the offset This operating XXXX attributable of on prices. first income million income performance lower by our move and decrease higher quarter Olefins feedstock cost, was XXXX, to first to operating $XX starting let's partially the volume from sales operating in a ethane polyethylene sales million, the decrease of polyethylene mainly $XX Now, million. segments of two review quarter reported $XXX In of with Olefins our segment million segment. income

This quarter in sales $X to First income operating due to fourth higher prices. polyethylene was primarily and million of volumes, quarter income $XXX operating income styrene volumes XXXX operating $XXX sales partially by million million. XXXX of lower decreased offset decrease compared

segment. on Now, Vinyls the let's to move

outages prices with quarter First million. Vinyls income caustic operating million lower increase products, income of income for costs sales period. was lower due for cost and increased major turnarounds resin, prior-year in higher sales first associated XXXX operations higher from $XXX of to from feedstock to $XXX the $XX million compared XXXX unplanned This PVC soda planned volumes operations from and quarter and

sales million. year. higher associated from as $XXX soda million result and prices XXXX resin, income This to lower of quarter the is higher for soda, planned turnarounds quarter for XXXX and fourth compared volumes a million lower increased prior of operating and increase operating PVC caustic feedstock $XX outages First cost caustic of $XXX cost sales the with income unplanned

the to attention our balance the of turn let's statement cash flows. Now, sheet and

and million, XXXX in million cash were capital invested quarter First flows operating $XXX we activities expenditures. from $XXX

As in In we acquisition long-term had cash debt bonds of of $XXX March million cash we million equivalents total of associated with XX, and $X.X of Axiall. redeemed and billion. February, $XXX the

have redeem on from of hand. of announced redemption We current retired cash this come on will be Funds will $XXX May our that also debt to XX. another debt million

Following this $X.X August of our in will over have redemption, we Axiall since in XXXX. acquisition billion debt retired

Now, guidance to modeling me for some purposes. provide allow

in for maintenance February. Chemical $XXX call Geismar, of back expenditures, includes For range With $XXX closing Lake Louisiana capital the being VCM capital Louisiana comments. XXXX, over in to jointly we expansions Lotte in portion cracker our construction the expect the to we with turn million make which our expenditures equipment Albert to ethylene Albert? Gendorf, I'll lead million, announced normal Charles, built and from that, Germany our that chlorine and long and some PVC and Burghausen to of

Albert Yuan Chao

Thank you, Steve.

continue demand in facilities, to experience This operational quarter's global our major value for record we while of products. our results solid of demonstrated reliability investments the all our

by benefit of higher we in expanded ethane a gas to drilling forward, globally oil U.S. activity, oil and shale believe prices. from continue natural driven result as gas Looking the competitive we'll

growth the global planned limited million strong of in pounds million to the Gendorf, of a cycle and Geismar remain benefit PVC the VCM XXX initiatives XXXX, and in additions our We demand Vinyls has on in joint start-up first focused ethylene from by horizon. expansions the and which pounds on such Lotte, half Geismar. expect Burghausen expansions with XXX venture driven favorable pursuing as capacity We the with

additional and to you for our will shareholders. deliver much to will very We continue Thank value for debottleneck to our call listening opportunities earnings explore search morning. this that acquisitions

the back over turn to I'll call Now, Jeff.

Jeff Holy

Thank you, Albert.

end Eastern provide number questions, at remind replay like that starting We'll now of call. the teleconference today the will again begin a we be to taking this of Before Sabrina, take that you I will we PM, at available would X:XX Time. questions.

Operator

you. line from John BMO of McNulty will first with the the Thank And Markets. come question Capital

is line now open. Your

Bhavesh Lodaya

Lodaya Good Bhavesh of morning. This is John. behalf

Albert Yuan Chao

Good morning.

Stephen Byrne

morning. Good

Bhavesh Lodaya

morning. Good

specifically and impact how or your share margins? trade, of can flows of First tariffs all, on you proposed China positioning are with those your current international some thoughts can the

Albert Yuan Chao

believe exports will the Certainly, added come new production exported. as of around that be capacity the And XX% the industry the capacity onstream, majority currently. our we polyethylene of

– exported. exported. the on the in think the side in America I side, On over of U.S. the XX% over produced of in And are are side, to the in U.S. product PVC because caustic business, bit about caustic XX% PVC industry downstream export North average numbers. PVC but produced the our tend of than XX%. exports extensive the than we to the are close industry less And industry, caustic, we of a less in while and we the export tend to building polyethylene And

China in lot as China not do concerned, participate we a is far the As trade.

that well X% comes in business a from and growth as company, our potentially U.S. between of as revenue and think European as China we business. our X% I export

Bhavesh Lodaya

ethane. and that demand have NGL basically lot ethane massive and keeps Permian your your prices? ethane question of up. of coming Could with discussions the Thanks. builds all that up, out infrastructure capacity new of just the as on even A coming happening been views share on a views of you new low long-term on There prices

Albert Yuan Chao

Certainly.

– liquids natural you of right. Basin, liquids exploration both know, Permian tremendous You're gas investment as a ethane But And come amount the a a of actually from a gas in and there. the of system. of rejected There's there's over on fair there's a being result as capacity oil coming ethylene still new onstream. amount lot going in lot

then come the and already onstream, half second the this onstream early next has with plants more year Some the year between along ethylene this coming year last export also in year, facilities. and there's

of So be demand will will the increasing the supply. of ethane some some and be absorbing

Bhavesh Lodaya

then, to to a And on for to margin make a to be Lotte on that if maybe add you you I margin there the floor about? return ethylene if finally, we EBITDA thinking stake a decision would should capital there's JV, may, want floor or that or your is see

Mark Steven Bender

that continue mind, that that, we fixed continue have we opportunity tell there, to a but assess investment you, the in look as opportunities will to number We we'll I to to assess presents continue Well, don't have that. the at us. we'll

Albert Yuan Chao

on based return basis. long-term the We'll be the investment looking on on

know you projects new announced in other As are there plants to U.S. build being new ethylene

companies several are ethylene to think capacities. additional as U.S. favorable a I So putting place considering

Bhavesh Lodaya

color. All Thanks the all right. for

Albert Yuan Chao

welcome. You're

Operator

come And with you. from America line Byrne Stephen of will Thank of Merrill question the the Bank next Lynch.

line Your now is open.

Stephen Byrne

capacity on this is to I'd you. consume at of point, one add Thank your derivatives? like those then new the greenfield that, it in chlorine chlor-alkali, hear to on the molecules and in to return on potential view potential Yes. downstream to attractive capacity investment for

Albert Yuan Chao

yet you believe if reasonable We economics integrated getting But replacement PVC to a closer. Vinyls still investment. our at at investments, today's they're Yeah. return on including look at and return are ethylene, not the

Stephen Byrne

business to there monetization separate consider your out of a business, you that And that consider you that the and products side, downstream of on is similar building value or might to Olefins with respect business potential extract would the to a building downstream out business? products, something

Mark Steven Bender

integrated products, Vinyls Well, Steve, Albert about resin a nice PVC as into downstream margin. – and that as business. noted, business our nice take building of provides the think off of certainly a And we we nice the our think business it's

And that interesting integrated and think is so, nice it's provides business we a economics.

think we meaningful element it time providing think integrated say I over as certainly business, our think nice overall into business. the mentioned, to And over so, it's of about and use business, growing a of about We would integrated would a to resin it's products. can building And business transparency about as we continue business but going good business we time, as the that further an important I of and it's very a because of business. we element think downstream a very think our valuable it's that

Stephen Byrne

you. Thank good. Pretty

Mark Steven Bender

You're welcome.

Operator

from Partners. the the Vertical question next Thank of Research And comes you. with line McCarthy Kevin

is now open. line Your

Kevin W. McCarthy

year-over-year segment declined a in basis. In morning. release, Good first your on volume you Olefins Yes. indicate the quarter X.X% the that in press

you extent so, related and could be? outages the dollar impact which Just amount could the to impacted that to what number unplanned if wondering speak if

Mark Steven Bender

So is Kevin, Steve. this

earlier As polyethylene. of got course and turnaround to we the of we've turnarounds were some in in during we inventory planned mentioned deal with number this certainly, planned a that the of building rest polyethylene year

is inventory for I build continue year. that the planned turnaround impact impact the so later as noted million we And activity some $XX to this

Kevin W. McCarthy

over guess I capital question second about looks down $XXX deployment, it the net Then the is your Albert like Okay. for months. million, XX past on debt

your call. you here market, already sheet versus the in about what on think point? M&A have folks see see this availability know So do on asked capital how and external organic you at should you we reinvestment about the and the front What balance

Albert Yuan Chao

the know million-$XXX as $XXX three Certainly the capital also have an finishing program of you million have start-up. within we we trying to joint venture, to we Steve going with have of a reported, And that up JV, on, option to ethylene years Lotte. buy XX% plant as

we the capital elect are to those choose going certainly to our if needs So forward option. exercise

to Germany, We and Vinyls we're the have and debottleneck look $X to revenue, continue we it's acquisitions is expansions over opportunities. ongoing over Gendorf as and as in we always Burghausen Olefins and $X those that further Naturally, mentioned area in out revenue building business of our the Steve for of of want as mentioned, opportunities the U.S., well. in billion for business total and looking business billion, grow explore in products an we'll we

shareholders. to value opportunities to for looking comfortably are we So add our

Kevin W. McCarthy

light should the terms mix from we And lastly, benefit if I and may benefits current procurement there your you short referenced your think forward? How position in of ethylene about there. monomer, of contract in spot going versus

Albert Yuan Chao

mixture we're ethylene the spot lower a the spot some largest buy and the a Certainly, between mixture hence, in buy we we contract, those on and prices are expected, prices. from ethylene you we are the ethylene but contracts lower both U.S. second of we and the benefiting buyer we and in highlighted and contract as Axiall enjoying

Kevin W. McCarthy

you much. Thank Okay. very

Albert Yuan Chao

You're welcome.

Operator

Thank Stanley. question you. Kumar Neel line the come Morgan The with from next of will

open. now is line Your

Neel Kumar

question. my taking for thanks Hi,

Albert Yuan Chao

welcome. You're

Neel Kumar

diaphragm price Given diaphragm of possibility you customers the the switching caustic? spread caustic, widening between see to membrane do and

Albert Yuan Chao

customer and customers minimize use diaphragm using Well, can cost those to certainly, wish diaphragm. their enjoy that would every

Neel Kumar

outlook I is lower ethylene. Okay. year? then prices on do of prices weakness the ethylene follow And ethylene just And What on guess you prices? second to a leading see up in half recent the PVC in the your

Albert Yuan Chao

reasons. due I reasonably I Personally, price is low, various current think think Yeah. to the ethylene

the And forecasting be second for of operating more not new rate, ethylene think long IHS at go which anticipate think the a ethylene derivative spot along I full can half. again the price, capacities the price so not ethylene, were a that I is reason now do it plants time. low back we built is to absorb with are

Neel Kumar

Great. Thanks.

Mark Steven Bender

You're welcome.

Operator

come the line question the you. Citi. of with will Thank P.J. from Juvekar And next

now is line Your open.

P.J. Juvekar

good hi morning. Yes,

Mark Steven Bender

morning, Good P.J.

P.J. Juvekar

second have pounds are up, falling been there benefit and in rapidly short quarter? your You How X.X dropping prices get billion ethylene from but first offset since on quite in the ethylene. went first ethylene ethylene has much an did more should quarter, you been And quarter.

that quantify benefit? you can ethylene So

Mark Steven Bender

at to the think all the as you as ethane Olefins P.J. in know, here, out think I way it's about about ethylene, when looking So situation benefit polyethylene. our I

And so business of segment in integrated. we're really that the

given So buyer a really X.X as buying the and pounds capture that X.X ethylene in to market our the that second see pounds North forward over see year. in Vinyls And to Vinyls we of largest chain. American ability is continue that, strong, currently benefit and that really we're in our our business to in ethylene to really business remains Vinyls accruing we billion the business the billion noted, looking benefits value the to we're Albert

Albert Yuan Chao

in of any the that then inventory cost afterwards. goods out which it flow And to sold from benefit will and comes

P.J. Juvekar

And And back convertors are polyethylene? to Where do Okay, starting holding capacity up? in you today anticipation happening convertors? you. with new what's are thank inventories of think

Albert Yuan Chao

at had to buy I price we the prices. crude low people saw higher hurricanes a increase good prices, would are price also February And in due likes all partly partly year, that of go but a actually surprised demand Everybody in U.S. and the increases people demand away $X.XX actually partly Certainly. that pound to to good a last And pound. got not. $X.XX we've oil globally $X.XX did due and is that think, and and after the a

U.S. thought has stay cracking down and be. high has based jumped from ethylene and As is today, Brent in barrel oil prices gone a people barrel. And most Europe and America come a hence crackers. plants $XX globally. crude up as $XX hence will know, of also on polyethylene what of And it the $XX, not as are The you cost Asia polyethylene naphtha naphtha Latin price prices

P.J. Juvekar

And quickly market. on just you. Thank alumina the

are market? Any there? thoughts how that impact you. caustic that does proposed the aluminum, on Thank your With tariffs being

Albert Yuan Chao

Certainly.

but aluminum still pay tariffs need various globally we still impact And see I people the on – between think think can government. aluminum, that will and prices on the countries can. and we is people I the lowest the of the going negotiation will people U.S.

we demand ton they a I is as Europe, think quite – said, the caustic April. €X in $XXX quarter €XXX they a have increase – in ton about the strong increase prices price So still still near first and caustic and had at

strong is So, demand industry is our benefit. enjoying globally and

P.J. Juvekar

Thank you.

Albert Yuan Chao

You're welcome.

Operator

the line SunTrust. you. question the next Sheehan comes with from Thank of And Jim

open. Your now is line

James Sheehan

you. Thank

in have So, on went this month. caustic caustic expect soda soda? to you for traction pricing, index $XX the second up pricing quarter more Do the

Albert Yuan Chao

Yeah.

I a large price to that. getting this increase of we're the $XXX ton year industry close think and of announced a share

I of the think of after will ton flat. short price increases the through. is $XXX forecasting price most the be year a go increase. The IHS term will rest

see we Now, or that the will not. if case is

James Sheehan

Thank any you. guys the And did positive have during negative impacts you accounting or FIFO quarter?

Mark Steven Bender

Jim, really not this material. small it quarter, was

James Sheehan

you. Thank

Mark Steven Bender

You're welcome.

Operator

Thank the line next And Hassan with Ahmed comes Global. question from you. of the Alembic

line Your open. is now

Hassan I. Ahmed

morning, Good and Steve. Albert

Albert Yuan Chao

Ahmed. morning, Good

Hassan I. Ahmed

making this all noise uncertainty mean, is this I said coming sort changed the near-term, at A uncertainty lot of of the steel about a rethink now seems notion announcement noise the on in period, quick up, about it energy rhetorically seen margin, the pricing mean, moving capacity question a trade us? the build trade obviously people the quite investing started the outs going wave bit, What away We've going sort build the the was here outs the out, with least around speaking, XXXX around are you side pricing through earlier, U.S.? sort of of guys' obviously, in like. capacity of concrete whole that views the as initial things. since just seeing world's on the your in of from floors are of time more I and around that second XXXX-XXXX potential time U.S. up, I

Albert Yuan Chao

very That's Hassan. a question, good

would the than that you so our I think source But such economy doing very I industry. are globally better a mine, is of your be global study since well. think

higher growing. rate it I employment zero, the in moving world. it's I the think synchronized Even think though you said around and from somewhat that as growth is the globally U.S. interest

qualified of both of part U.S. and shortage see some You Europe and Asia. the labors in in even

the strong India, the in moving middle-class and goods demand both from see in well from are has both rural people and are and area poverty material So and still to urban China lifting if levels people for by don't gas as from oil demand lowest far we increasing, area. cost the – U.S. And as and or the feedstock power. feedstock to see we

is (XX:XX:XX). driven business really have chlor-alkali power we and Our

very cost getting if a from And has of a expensive. and U.S. position point global are to grow So inflation, view. some demand with investments competitive continue capital more

can a good high have So who people and assets generate will prices. operating lower from benefit cost rates and

Hassan I. Ahmed

understood. Understood,

sticking taking this or theme obviously Now decoupling be follow that Chinese the comments, of again kind due U.S. you of know propane. all your the to exports we tariffs a were there feedstock and between trade to mentioned then propane Albert, that crude propane in oil Asia, the well price included And related issues, to up, coming of tariff seems import and of out on list as recently as in to level, as the China a step the the next these in particular. side as lot of of some

So in you think a how ethane trade of on in And the crude role think your what caused related has propane? we think environment? sort just are this that, these of about that? alongside an views playing to and decoupling interplay issues recent like that hear this should Do between and propane sort between you

Albert Yuan Chao

That's good a question. very

being still ship produced. – much easy global to and for for PDH it's are both said ways for propane, lot of Permian cleaner I we demand think increasing. in fuel (XX:XX:XX) is And product, propane and a of other out a especially lot lots increase the propane a a Basin that as produced, ethane production of of of oil compared to to easier being gas oil

a of and it U.S., wants East to on the from can that, So, have China they it world. parts to other supply buy tariff if Middle

much don't impact see So Chinese the tariff have I a for global will propane. the on demand

Hassan I. Ahmed

Albert. much, Thank so Perfect. you

Albert Yuan Chao

welcome. You're

Operator

Viswanathan you. from Markets. line question the the And Arun Capital next of RBC come Thank from will

open. now is line Your

Arun Viswanathan

Hey morning. Good guys.

Mark Steven Bender

Arun. morning, Good

Arun Viswanathan

March I May We've prices, in some noticed dynamics the polyethylene A the market. Asian you're I for guess America couple April. season, here increase guess, a the, And which similarly, in capacity an table are increase after have and softness of of then What supply. May a that in but likelihood industry you kind going North does and think successful into could creep flat the do in maybe the building in PVC, on even increases seeing polyethylene? spring the on questions we're

So how dynamics about feel do increases you the well? price Thanks. PVC for as

Albert Yuan Chao

are has a the U.S. some down PVC Certainly, has so XX% on I forth. I the side, price global so ethylene produced Chinese with as But PVC PVC lower price after of said or of are we're saying that in seeing the the product, and know the should is analysts strong so globally. Asia, exported, Year, costs U.S., it's on price returned, in the and really the the but down bit and PVC recent New of a demand earlier, in PVC, a come come week PVC

I not. May. that whether will see pound think PVC in you're people penny will drop looking think come will or a in happen a price we'll (XX:XX:XX) So down bit May a

side, the said and onstream, the we a price in with capacity earlier On we had have price down February. instead, the will people polyethylene coming thought come as increase new

that that industry see June. we expect they quite to that some the a as still some for some the Again, implementation announced selective polyethylene and in prices we didn't it Now, the May to And of May. U.S. is April those $X.XX pound are or push saying in industry, March inventory polyethylene or of drop happen industry the low. players analysts for

depending So of on we're you the grades dynamics a seeing have. different in polyethylene

of the So each grades. movements time to will tell of what price happened these

Arun Viswanathan

$XX looks $XX another about well? realized margins impacts not us margin think merchant the year, gone we you April up Thanks. how should the chlorine. and can through but in that the caustic And as selling your of maybe rest on it really on How just chlorine, caustic comment ECU you're understanding on a give like side, has again ECU that

Albert Yuan Chao

caustic. have both chlorine up don't and yet have caustic full I think moved I said, we we and price prices in received Yeah, increase think the as

all So over amounts the years, the that we realized. increase be believe will price

the including to it's from should is be prices. as high the the as And quarters. demand water products treatment chlorine, – benefit this the so And we an for for increasing it and chlorine is able next season as industry, well few

Arun Viswanathan

Thanks.

Operator

you. line will the the Koort of Goldman Bob next And Thank question Sachs. with from come

open. now line Your is

Dylan Campbell

This morning. is Dylan for Campbell on Bob. Good

Albert Yuan Chao

Good morning.

Dylan Campbell

mentioned that re-investment take closer to but are kind capital generally timeframe of Previously to costs not that greenfield I'm we and what morning. for Good that getting and would the quite you're you it at chlor-alkali assuming economics, what then across chain capacity? curious Vinyls. just build build

Albert Yuan Chao

Yeah.

multi And think some for going be but I site. years take three large typically in a reinvestment it they're are there four least substantial. years will would costs, plan coming at so initial on many up capital planning it integrated for – to plants, they're to come

Dylan Campbell

guidance quarter XXXX the What guys the in run Axiall last of at you rate synergies first were $XXX raised for... And of for it. you Got million. quarter

Mark Steven Bender

When I...

Dylan Campbell

ahead. Go

Mark Steven Bender

what rate. a the about I think I been not we've are that in of When pocket, so much savings, actual talking achieved numbers this run the dollars call

that guidance And for given we'll million. every we $XX continue the focus year, we've achieve to And is day work on continue you million so, incremental to that imagine can on we $XXX that that. the want given to as

given to much quick as as we as specific haven't we a have. of run Our is rate. objective But that achieve

Dylan Campbell

Got it. Thank you.

Mark Steven Bender

You're welcome.

Operator

the the from Thank Bank. will you. with next And of line Deutsche come Begleiter David question

now is open. line Your

David I. Begleiter

morning. Thank you. Good

Albert Yuan Chao

Good morning, Dave.

David I. Begleiter

think self-regulations, there's do do actually lowered production might they you and about and IMO you been about XXXX discussion to naphtha that the view? longer Albert, concur lead term, looking XXXX. hence bit that little some naphtha increased How that with a prices beyond

Albert Yuan Chao

Yes.

more people but is position is don't exactly don't into a on naphtha more feedstock, U.S. inroad not know I feedstock you are naphtha. and that naphtha U.S. I the available what available, no new will new make though build, think consume preferred no be cheaper have going how the in the depending feedstock, naphtha the is available. in even much crackers and more overseas and they're much I taking is there'll the to naphtha still crack there crack, are think If ethane

David I. Begleiter

the in just look United capacity you another study a And producer good. on the styrene, Very to by surprised of States? by at were new recent styrene announcement

Albert Yuan Chao

Certainly. Interestingly, plant our styrene today new doing business high. styrene a U.S. operating quite and the of monomer investment, and in well in because the plant styrene was lack very started rates that's newest of And running XXXX

So, know Asia. that look are be built at question that being I should how justify, if good, there markets will in numbers economics, the pricing we and that long is, the are you styrene the plants

So...

David I. Begleiter

Thank you.

Albert Yuan Chao

welcome. You're

Operator

the And question the next Yefremov Nomura you. of from Instinet. will Aleksey line Thank come with

Your line is open. now

Aleksey Yefremov

Thank morning, you were Albert, ones potentially haven't Are announced than discussing you've debottlenecking those? you you. announced potentially the larger timeline opportunities recent that for yet. debottlenecking the opportunities what's and those everyone. Good that

Mark Steven Bender

Well, really we're returns on these. continuing, assess the Aleks, to

noted, a on, in focused if want as justified have very to we're Albert cost, continue that only those we investment economics you return we debottleneck And also we know, to recognize, not have on for export to make. a and handle make we very capital any return. the sure As be good that so but the

and move kind sure make So study forward this. that to we're very the with continuing we expansions get debottlenecks. We to returns if we any choose of to comfortably can want

Aleksey Yefremov

it those guys. as Hi, debottlenecks? fair to Is incremental characterize

Albert Yuan Chao

Yes.

Mark Steven Bender

They be. Yeah. would

the already sure focus. a we've to noted deploy. early can we and others. continuing returns want return have my you make comments, I right we it's see But As we're capital study We as for announced really, any in it's some to

Aleksey Yefremov

ethylene and purchased, current you And reinvestment were question, that, do can again are chlor-alkali plus PVC currently just it we to got were the chlor-alkali. project at that ethylene, follow-up or about with Vinyls I economics talking if a returns I if for chain Thanks, includes you about being think the right, there like look prices? Albert, If Vinyls Steve. at

Albert Yuan Chao

Well, if looking it's is the PVC, chlor-alkali, ethylene, at DCM the associated and yet. you're don't we even that power without the economics believe plants with there

Aleksey Yefremov

Got it. Thank you.

Albert Yuan Chao

welcome. You're

Operator

you. Thank

from the next Holt. will line with Tudor, Our Matthew Pickering, question of Blair come

open. is now Your line

Matthew Blair

morning Albert Steve. good and Hey,

Albert Yuan Chao

Good morning.

Mark Steven Bender

...Matthew.

Matthew Blair

of given trucking of that we've that dynamics just is some out just a I given was But pretty costs seen. elevated seems seen demand I for reports hoping potential be housing and here large trucked start numbers the in good to think like talk on It then, of be lot a could products. we've of there some about percentage should think the costs. the that I building elevated product

directionally, So, interplay year margins higher you products could are And just you maybe than seeing talk building a there? the ago? about now just

Albert Yuan Chao

the replacements, the think ago. new building refurbishment, products over has because our the building increased with I back cold now. high season homes for they're winter, of demand products way, a I so year getting with has Certainly, also newbuilds By not only to And sides. delayed the been season think And both the associated somewhat. for that's

truck you the costs I of the and said, think right, lack that to increase of cost of homes are as issue. you're with the new the availability absolutely also building products products. newbuild, The – the availability labor And by the also trucking trucks. lack of will is most shipped trucking build costs the higher an of

are headwinds So side. from that there

demand units for average and the million. the were units XX hand, now X.X X.X it's going XXXX X.X between other demand residential On million is X.X and just year million, units million the

years, year And XX XX in average. on has population the below the meanwhile U.S. the average. increased we're So

the get think home get we there and to the it to buildings rate. U.S. So the normal time run back to just takes demand is

Matthew Blair

chlorine, main Great. coming elevated increase Thank derivatives? in that are drivers demand the And you then are in other what from really Is there? $XX you. or chlorine demand the seeing PVC your price in Albert, opinion,

Albert Yuan Chao

Yes, both.

increased hasn't products chlorine has and And chlorine really the for demand the straightforward should be I in $XX think think increase. a long price both U.S. demand time. for I and overseas changed

Matthew Blair

you. Thank Understood.

Albert Yuan Chao

welcome. You're

Operator

come our Roberts will Thank And from John next you. of line with the UBS. question

now Your line open. is

John Roberts

A and quarter. Albert Hi, Steve. nice Thanks.

Mark Steven Bender

you. Thank

Albert Yuan Chao

you. morning. Good Thank

Mark Steven Bender

Good morning.

John Roberts

environmental discussion lot in about rules new and caustic over that few plants in a the all before with the vinyl and of China IHS permitted carbide-based new been but of curtailments recently new capacity startup because years, a about they the they will rules, talked next There's at grandfathered number in. conference were the

forward been is and had China vinyl I goes over years, be down, people talking going is you I which of you or do which even few caustic think think to it's kind more up production about? what think is or of the think IHS what in looking flat do So next

Albert Yuan Chao

question. good a That's

right. You're

some permitted under plants replace higher before smaller plants construction through, but of the Some which will of they those cost still will the plants. running moratorium are older are go which

net-net no production the because added. a really tell of we a demand it's East huge expect little Middle whether the bit, world. there's many capacity will bit, growing to and in will grow or in Chinese China parts market fast new flat time demand, So And a and very little grow be is India, still global

to demand with it global be So sufficient not even capacity Chinese the on increase a basis. the will added, meet

John Roberts

Thank you.

Albert Yuan Chao

welcome. You're

Operator

this ended. remarks? Are session there time Thank the question-and-answer you. any closing has At now

Jeff Holy

call in Thank join We for our results. hope again conference for today's our you next participating second us to discuss again you'll quarter call.

Operator

Westlake Chemical call. first you participating quarter conference Corporation earnings today's Thank in for

As access the this Thursday, by callers beginning XX:XX access a accessed Time XX, International call both two XXXXXXX. should following call The Eastern after be May It be can PM, has be replay replay the dial accessed for may callers XXXX. is reminder, the replay on may The code at available hours for numbers Domestic XXX-XXX-XXXX. ended. calling until will XXX-XXX-XXXX, numbers.

Westlake (WLK) 3 May 182018 Q1 Earnings call transcript