Mark Costa: Well, first of all, I think what happened from April to now, the whole industry, from us all the way down to retailers, have gone to group think that it’s going to be bad for the rest of the year, right? And everyone is acting under that assumption and pulling inventory down, managing in that context. But there’s a limit to how much destocking can occur. At some point, warehouses go empty, right? And in some of these markets, especially like durables, it’s been emptied out for a long time, where automotive, there’s a huge amount of pent-up demand because we’re talking about demand being better this year, but it’s from a really bad level last year. right? So, there’s still plenty of pent-up demand there and there’s going to be plenty of pent-up demand and building construction with the dynamics of what’s going on this year, constraining both demand and production of homes.
There’s a lot of upside across the whole corporation, when you think about it, from both a demand point of view. And you got these destocking levels that are huge, right? So, destocking is two or three times more than the underlying demand. And if that goes away, that’s all volume recovery at some point, even if the underlying market demand doesn’t improve. And then to your question around inventory, I think it’s — with the actions that we’re taking and everyone else is taking, you can see people driving inventories at very low levels. It’s more likely than not that they’re going to go below what they — in an improving demand environment. And so there will be some amount of restocking. Now, our back half, just to be clear, has no restocking assumed in the guide that we gave you.
So, that happens. That’s upside. But if you look at 2024 and say destocking has got to run its course eventually, so that you don’t have that as a headwind for next year, and then some — just a little bit of restocking just to get to levels to serve that demand, I think you can get a much better picture of volume next year than this year.
Mike Sison: Thank you.
Operator: Our next question comes from David Begleiter with Deutsche Bank. Your line is open.
David Begleiter: Thank you, good morning. Mark, thanks for the update on Kingsport. On the project, do you have any forecast for estimated losses this year as you ramp up? And do you have an updated cost of the Kingsport project? Thank you.
William McLain: Thanks David. First, I’d just highlight that the operating costs are going to be approximately neutral on a year-over-year basis. If you think about the preproduction that we’re incurring this year, as well as the start-up expenses, and also as we’re using our bridge technology with glycolysis to seed the market, that’s at a higher cost to bridge. So, on a year-over-year basis, the way I think about this is revenue growth is actually accretive to EBITDA. And as we outlined within our guidance on the $75 million of EBITDA on a year-over-year basis, roughly $50 million of that will be in Advanced Materials, and the absence of the preproduction and start-up costs in our corporate other. So, as I see it, that’s roughly where we’re getting the $75 million.
Also, if I think about our CapEx this year, we started the year at roughly $700 million to $800 million for the project. We took that up to $800 million. You can think about the combination of that and how we’re managing our overall CapEx as the increases in of the project this year for the Kingsport project.
David Begleiter: I apologize. I meant to ask what was the updated capital cost for the project itself and that total company CapEx?
Greg Riddle: Yes, I don’t think at this time we’re giving the capital cost for the Kingsport project. So, we’re not going to provide that at this time, David.
David Begleiter: Understood. And just, Mark, just on fibers and tow, do the contracts for next year have price increases embedded in them?
