Jim Fitterling: Yes. Good question, Steve. I’d say starting at the top, siloxanes and monomers in the silicones — siloxanes and silicones and monomers and coatings and monomers are both oversupplied. So that put pressure obviously on both volume and pricing in the quarter. And you had volumes decrease sequentially across all regions and all markets, and that’s not unusual, especially in coatings and monomers, that’s pretty typical in fourth quarter that we would see that. But silicones was a little bit softer. And I think that was the biggest delta there. Year-over-year, they were down on price, which was because of that supply demand for both siloxane and acrylic monomers. The downstream in terms of the coat — the binders business and coating held up relatively well and actually had decent volumes in the fourth quarter.
So, what we supply to the downstream, coatings customers look good. And as we mentioned, our view going forward is about a 3% increase this year in downstream coatings. And I’d say downstream silicones demand continues to hold up pretty well. I’d say one thing we’re keeping an eye on is what happens with EV volume production. EV drives a lot of silicones content, a lot into batteries. And so, we need to keep an eye on that. But the other segments in silicones are also on pretty substantial growth for 2024. It’s those upstream monomers markets that we’re going to keep an eye on. And I think things will start to tighten up a bit in China and that will help on siloxanes.
Operator: Your next question comes from the line of Josh Spector from UBS. Your line is open.
Josh Spector: Yes, hi. Good morning. I was wondering if you could comment on your polyethylene price assumptions in the first quarter. I think within your bridge, you talk about lower costs and some other moving pieces, but there’s not really anything there on price. So, are you assuming that you get positive pricing in February and March like some of the consultant data shows? Are you assuming something different? Thank you.
Jim Fitterling: Good morning, Josh. We’ve got $0.05 price increases on the table for January and February. I would say, globally, we’re looking pretty flat quarter-over-quarter on pricing. I’m expecting to see some price up in EMEA. I mentioned the Suez Canal and the impact that had on Middle East volumes going up into EMEA. So, I think we’re going to see that up. I think we’re going to see price up in Asia Pacific. I think we’re going to see it relatively flat in the Americas. Integrated margins for the Americas ought to be about where they were in the fourth quarter. Integrated margins in Europe should be up a few cents, that’s what the market markers will look at right now. And input costs are in line. I mean, even though we have that cold snap, natural gas costs are very competitive.
Ethane costs are very competitive. Propane, they’re a little bit high because of the heating demand. But I think that may start to come off a little bit as we move through this cold spell.
Operator: Your next question comes from the line of David Begleiter from Deutsche Bank. Your line is open.
David Begleiter: Thank you. Good morning. Jim, you highlight the U.S. chemical railcar loading is up 10%. What do you think is driving that? And given the strong start to the quarter, do you expect volumes to be up in all three segments in Q1? Thank you.
Jim Fitterling: Yeah. Look, I think on chemical railcar loading, industrial production in the U.S. is starting to come back. The U.S. has a tremendous cost advantage. Operating rates in most of the sectors are up. And I think the destocking being — it’s always hard to have enough visibility to call the end of it, but I think what we saw in December were signs that destocking has worked through. So, any downstream demand is turning into orders and I think that’s what you’re seeing with the railcar loadings. Also remember, railcars service the Mexican market as well. Mexico has been very strong. They’ve benefited a lot from near-shoring. And so, having both China volumes up and Mexico volumes up, I think is a positive here. I would say, on volumes, my expectations, we have volume growth for all three segments for 2024.
I think that’s going to start the materialize. I think plastics is underway right now. I think construction, chemicals, housing-related demand on polyurethanes will probably be geared more towards the back half of the year. I think downstream silicones, Industrial Solutions will be throughout the year, and then we’ll have a step up in Industrial Solution when we get the Glycol 2 plant back in Plaquemines. And I think I can speak for the business here. As soon as we get that plant back up, we’ll have it sold out. So, we’re working really hard to get that thing back online.
Operator: Your next question comes from the line of Laurence Alexander from Jefferies. Your line is open.
Dan Rizzo: Hi. This is Dan Rizzo on for Laurence. Thank you for taking my call. Can we just discuss your strategy on mechanical recycling? What do you expect by 2030? And longer term, do you expect that to outgrow the market?
Jim Fitterling: Yeah. I think when we look at — if you look at what we put in the deck on polyethylene demand, our view is that both mechanical recycling and advanced recycling are going to continue to grow. There’s going to be demand drivers to grow all of those segments. We’re in the middle of discussions on a global plastics treaty right now. We’ve got a big conference in Ottawa at the end of April, beginning of May. There’s another one in Korea toward the end of the year. And I think what’s coalescing around the industry and also the consumer brand owners and some of the NGOs that we work with, there’s a focus on enhanced producer responsibility as part of it to drive circularity, focus on recycled content mandates, a focus on all forms of recycling and bio-based products that are made from waste or alternative feedstocks and in some cases like we have a project that’s making bio-based materials from waste from corn production, corn stover that’s used to convert into bio feedstocks.
