And then infrastructure also would include things tied to, imagine membranes for lining water basins, water treatment basins, membranes for roofing replacement. We do a lot of membranes into cool roofing for building efficiencies. So when you put a new roof — a flat roof on a building, you’ll see a lot of these very white light-colored roofs. We work with our customers who make that material and install those. There’s a high demand for that and that’s continued and commercial building and retrofits of anything from an energy-efficiency standpoint still continues to be high. Solar PV, I should mention. We’ve got a big new piece of business for solar PV encapsulation and we put on some of the outer layers that protect the solar panels. And so, this is a product that is very durable and long-lasting and it’s really picked up over the last couple of years.
So, those would be the big drivers.
Operator: Your next question comes from the line of Chris Parkinson from Wolfe Research. Please go ahead.
Chris Parkinson: Great. Thank you so much. So, Jim, there’s been a lot of back-and-forth in the buy and the sell-side communities about the $0.03 increase for April and then obviously some preliminary ideas for May. Just, where we stand right here, right now given the US macro, given where you anticipate USGC operating rates to be on a sequential basis. What’s Dow’s view of this? We all know what the consultant’s view is, but what’s your view in terms of how things play out during the second quarter and how that ultimately sets the tone for the second half? Thank you so much.
Jim Fitterling: We’re moving up in the second quarter. I would say it almost moved up that $0.03 at the end of the first quarter. And the numbers have continued — the macroeconomic indicators have continued to get stronger, not weaker. So, I think with the volume that we’re seeing on the downstream derivatives with the improved economic business and the consumer still being strong, I think you’re going to see it move up in the second quarter. And so, I think we’re very firm on the three in April. And, as I mentioned, we started at the low point at the end of December, and we just saw a steady improvement through the first quarter. And so I think, we’re off to start the second quarter at a much higher rate and see some momentum as we move through that quarter.
Operator: Your next question comes from the line of Mike Leithead from Barclays. Please go ahead.
Mike Leithead: Great. Thank you. Good morning. I wanted to ask a follow-up to an earlier question on cash flow, maybe for Jeff. I guess if you hit your EBITDA targets for this year, are you forecasting working capital to be a use of cash or source of cash this year and to roughly what magnitude? Thank you.
Jeff Tate: Yeah. Good morning, Mike. Yeah, we are actually looking at it still being a use of cash on a full-year basis. I mean, we are working our way through again the recovery for a number of the dynamics that I mentioned earlier in relation to Josh’s question here. But again, as we see the earnings improve based on the volume improvements that we’re anticipating, right, we will start to turn that corner. But, coming from where we’re coming from on our working capital today, it will be a use of cash on a full-year basis.
Operator: Your next question comes from the line of Aleksey Yefremov from RBC Capital — sorry, KeyBanc Capital Markets. Please go ahead.
Aleksey Yefremov: Thanks and good morning, everyone. I want to come back to silicones. Was the improvement that you saw more on the upstream silicone side or downstream? And as a follow-up, where are your downstream silicones margins relative to your mid-cycle expectations? And therefore, what’s the sort of optionality for downstream silicones improvement?
Jim Fitterling: Good morning, Aleksey. It’s from both. We saw better demand on siloxanes and better pricing and we saw better downstream. We saw improvements in building and infrastructure, which were primarily seasonality-driven. We saw gains in personal care. We saw gains in industrial and chemical processing where some of the products are used as intermediates. We saw gains in mobility and we saw gains in consumer electronics. So, all the downstream markets were up, the siloxanes demand was up, the operating rates were up, the pricing on siloxanes were up. So, it was pretty balanced on both sides.
Operator: Your next question comes from the line of Arun Viswanathan from RBC Capital Markets. Please go ahead.
Arun Viswanathan: Great. Thanks for taking my question. Hope you guys are well, and good working with you, Pankaj as well. And so I guess my question is, you’re on a run rate now of, say, $6.3 billion, $6.4 billion, $6.5 billion of annual EBITDA. Do you still think maybe mid-cycle level is around $8 billion? And if that is the case, how do you bridge kind of going from $6.5 billion to $8 billion, that $1.5 billion would — are there any discrete items maybe that you’d call out as far as capacity additions or is it mainly going to be volume recovery base? Thanks.
Jim Fitterling: Yeah, good morning, Arun. I think you’re right on top of the run rates. So, no comments there. I do think mid-cycle — I mean our view of mid-cycle is probably closer to $9 billion and so to get to that mid-cycle run-rate, obviously, we have to have another couple of step-ups to get there. Volume is a big part of it. So as I mentioned, all the projects on the call that some that we’ve already put in place that equal $800 million of the step-up and the rest that we’re in flight right now, that’s another $1.2 billion of step-up. So, that $2 billion of improved margins is all volume and most of that CapEx has either been spent or will be finished this year and beginning of next year. So, I feel good about that. Obviously, the Path2Zero in Alberta comes later.
So, I think you see that $1 billion more towards as we’re getting to the next peak. That’s a ’27 to ’29 timeframe where that’s coming in, ’27 is Phase 1, ’29 is Phase 2. And so, if we’ve got our timing right and that’s what we intended, was we got that up and running before we get into the next peak. And so, I think we’ve got the line of sight to the volume that’s going to come from here to mid-cycle. When we get to Investor Day on May 16, we’re going to unpack all that volume in that trajectory. And then we’ve got the line of sight then to the stuff that gets us greater than $3 billion by 2030, which is next peak type economics. And from where we are, that’s excellent growth rates for both of them. And so, I feel like we’ve been through the worst of it here on the slowdown in the cycle.
And so, it should be more upside than downside from here out.
Operator: That concludes our question-and-answer session. I will now turn the conference back over to Pankaj Gupta for closing remarks.
Pankaj Gupta: Thank you, Krista, and thanks everyone for joining our call and we appreciate your interest in Dow. For your reference, a copy of our transcript will be posted on Dow’s website within 48 hours. This concludes our call. Thanks once again.
Operator: This concludes today’s conference call. Thank you for your participation and you may now disconnect.
