William McLain: But Josh, I would also say the mix should be more favorable, as Mark has outlined, with our durables markets recovering in the back half.
Greg Riddle: And if I just add one more point, which is third quarter year-over-year, the volume mix decline would be less than what you’ve seen in the first half, but still meaningful. When you get to the fourth quarter, again, on a year-over-year basis, the comp is a little bit different. And so you get to a point where that decline in volume mix is even less still than it was in the first half of the year.
Josh Spector: Okay, understood. Thank you.
Operator: Our next question comes from Vincent Andrews with Morgan Stanley. Your line is open
Vincent Andrews: Thank you and good morning. In Advanced Materials and in AFP, when you talk to your customers about what’s going on volumetrically, what are they indicating in terms of the desire on a go-forward basis where they want to have inventories and where things might get back to? And I guess what I’m trying to understand is whether what’s going on right now is just sort of a structural reset in terms of how they’re going to manage their own business versus something that maybe is just temporary that snaps back. It’s just — it’s been going on for a long time. So, it’s starting to feel like — and whether it’s interest rates or whatever else has happened, it’s just starting to feel like the entire supply chain is doing a reset. So, I’m just curious what your customers are telling you in regards to their sort of medium to long-term intentions in terms of holding inventory?
Mark Costa: That’s a great question, Vincent. And I mean I’ll try and keep it simple, since my last answer was rather long. But it’s very different by end market on what’s going on, on the stability of underlying demand and then what they’re trying to do in destocking, right? So, a lot of these stable markets. it’s more fine-tuning, right? They — everyone built safety stocks last year through 2021 and 2022, and they’re trying to generate cash and adjust those inventory levels to different perspectives on end markets. So, if you’re in the personal care world, medical world, these markets are stable at the end. They may be down a little bit, but they’re very stable. So, destocking is clearly the entirety of what’s going on there.
In many of those sort of end markets. When you get to some of these other markets, where the supply chain is incredibly long, like durables, we’re making things that go to China, that get made to products and come back to Europe or the US. Really understand just how much inventory is out there through that entire chain is difficult for everyone in these markets. And exactly where end market demand is on these more discretionary markets, I think, is a little bit more difficult to judge. But what I’d say we’ve seen is a couple of cycles, right? So there’s a lot of destocking in the fourth quarter. Demand was really low in January. Got a bit better through March. And then there was a realization that the banking crisis, people got nervous about what’s going on in the broader economy.
And so they went into a really low level of demand in April, which was probably the low point for the year. And then started to do a little bit less destocking — or a lot less destocking in durables through the second quarter. So, as we get into the back half of this year, I think what happened with customers in the June time frame is everyone assuming the back half was going to be a bit better in our downstream customers across most markets, especially maybe the more sensitive ones. That things would stabilize, destocking after 14 months, to your point, who would have played its course more — back in June after 12 months. And they realized they all have that built in their plans, they sort of said that’s not going to happen. Demand is going to be flat, which is all of our collective assumption now and everyone is in destocking mode to that assumption relative to things getting better.
