You’re going to see demand all forms of that in place. We’ve got some capacity coming up in Europe. And we started there because the enhanced producer responsibility. The teams are there. Some of the mandates are there. And the demand from the downstream is very strong. That’s coming when you look around the states in the United States. That’s coming in Canada. I think we’re going to see it come globally. So, I feel that over time you’re going to see more focus on low-carbon fossil approaches like we’re doing with Alberta. So, how can you make plastics from fossil fuels that have zero CO2 emissions. You’re going to see focus on advanced recycling and mechanical recycling. And all of the above and we’re just going to place bets in different regions based on what the market demand dictates.
Good uptake from the customers. We see good volume growth there. We see pricing ahead of virgin materials. And of course virgin materials are relatively low right now. And we continue to work to get plants certified with ISCC PLUS so that we can certify that recycle content for our customers.
Operator: Your next question comes from the line of Kevin McCarthy from Vertical Research Partners. Your line is open.
Kevin McCarthy: Yes, good morning. Jim, on a year-to-date basis, we’ve seen polyethylene export prices rise by, let’s say, $0.04 to $0.05 a pound. I’m curious as to what you think is driving that. Would you attribute that pattern to better demand or some of the logistics challenges that have emerged in the Red Sea or perhaps other factors? And then maybe as a related question, if you don’t have any unplanned outages, how hard do you think you might be able to run your U.S. Gulf Coast ethylene-linked assets in the first quarter? Just trying to get a sense of whether the export market might be strong enough to lift up the U.S. domestic market.
Jim Fitterling: Yeah. Good question, Kevin. I would say if you look back at 2023, in the first half of the year, really the limit on PE export volumes and prices were just more on the volume side, on the supply chain side, it was the ability to get marine pack cargo moving. That improved considerably as we worked through the year. In fact, December was one of the highest months of the year for PE export sales and we’ve got the export channel full and lined up. And overall, we’re running Canada, United States, Argentina as hard as we can. We ran at rates on crackers above 90% for the back part of the year, especially in fourth quarter. And so, to your point, unconstrained, if there’s no freeze impact or anything else, we’re going to be running them hard.
The arbitrage is open. The volumes are there. We had up double-digit volumes for the year in plastics going to China. We actually were up year-over-year in China on P&SP as well as Industrial Solutions, and I think a little bit in Coatings — Consumer Solutions, I’m sorry, in Consumer Solutions. So, we were off in Industrial Solutions because of Plaquemine outage, but we were up in — slightly up in PE, slightly up in Consumer Solutions, and up double digits in P&SP. So, I think the market is there and that is — everybody is talking about China being relatively light GDP last year and we can move those kind of volumes. My expectations are taking actions that are going to help 2024 be better. As we do the walk on 2024 for the full year EBITDA walk, we’ve got about $300 million of margin expansion.
So, we start with $5.4 billion in 2023 of EBITDA. We have about $300 million from margin expansion. We’ve got about $800 million from volume growth that’s in all three segments. We’ve got turnarounds which cost us $200 million. And then we’ve got about $100 million of improvement from equity earnings in the JVs. So, net-net, you’re walking it up to the $6.4 billion, $6.5 billion, kind of a range for 2024. And I think with soft landing scenario in the United States, that will help domestic market. We saw good domestic volume in PE as well here.
Operator: Your next question comes from the line of Frank Mitsch from Fermium Research. Your line is open.
Frank Mitsch: Good morning. And Jeff, nice to hear your voice again. Hey, Jim, really appreciate that walk up into 2024. I want to take a step back to Slide 7, where you talked about the projects mid cycle that started up in 2022, should contribute $400 million. The projects that started up in ’23 should contribute another $400 million. Can you just look at those $800 million worth of mid cycle earnings and suggest what you’re anticipating they’re going to contribute in 2024?
Jim Fitterling: Yeah. I think, Frank, I think coming back to that and I probably didn’t answer what Vince was asking very well at the beginning. I think you’re probably looking back half of this year to 2025 before you start to see mid cycle types of returns. We’re not to mid cycle yet. I mean, obviously, we’re navigating the bottom here. But I think with interest rates potentially coming off in the first half of the year some amount that stimulates some demand and mid cycle probably get there. So, maybe $300 million to $400 million of that you’ll see in 2024, the balance into 2025.
Operator: Your next question comes from the line of Duffy Fischer from Goldman Sachs. Your line is open.
Duffy Fischer: Hey, good morning. If you could just on the $50 million to $100 million on the equity income improvement, can you walk through your major JVs and just kind of say what’s additive, what’s subtractive from that number?
Jim Fitterling: Yeah. Sure. I think you’re going to see on the Sadara JVs year-over-year should be up, I don’t know, I’d say about $100 million. Remember they had some outages in the first part of the year. So they had some volume impact in the first part of the year. And obviously, they’re seeing the same improvements in arbitrage that we’re seeing out of U.S. Gulf Coast. You’re going to see Kuwait JVs up about $60 million. Obviously, that’s the strength on ethylene glycol. We saw a bit of that in the fourth quarter and their ability to run hard as well. I think the Thai JVs will be down. A lot of pressure obviously on naphtha cracking and they’re based on naphtha cracking. So, I expect them to be down about $20 million, and then everything else down about $30 million. So, net-net, you’re up about $100 million.
Operator: Your next question comes from the line of John Roberts from Mizuho. Your line is open.
John Roberts: Thanks. And it looks like a pretty smooth transition in finance, so congratulations on the stability there. I believe you were considering some additional infrastructure divestments. Could you give us an update on that?
