We want to take advantage of the flexibility that that catalyst offers. And then renewable fuels continues to be — continues to expand for us, right, as demand for renewable fuels and soon sustainable aviation fuels continues to grow.
Hamed Khorsand: And my other question was regarding Dominguez equipment failure, do you think the business overall is running too hot and you need to take some maintenance downtime for other facilities? Or was this a one-off equipment failure issue?
Kurt Bitting: We really view this as a one-off equipment failure. I mean we’ve had more downtime than what we’ve liked this year. A good portion of that downtime again was attributed to the winter storm that really hit us at the beginning of the year, and that dovetailed into that extended outage that we had in Houston when we opened up the boiler and how to perform more extensive maintenance. The Dominguez outage and the prolonged restriction that resulted in July, was really one component in our main gas blower, which is a key piece of rotating equipment that kind of runs the plant. That equipment was actually installed about 12 months ago. So the failure was really premature and unexpected that we typically don’t see.
So the good news is that’s now complete. And we feel that’s behind us. And again, we attribute about $25 million of our kind of shortfall really being attributed to the downtime between the winter storm and the Houston and now the Dominguez event.
Hamed Khorsand: Okay, thank you.
Operator: Our next question comes from Laurence Alexander, Jefferies.
Laurence Alexander: Hello, so just can you help us think through the operating leverage for how Ecovyst should benefit from normalization in the plastics market. I guess, first, in terms of volumes, is there any kind of refill that you would get in terms of order patterns above and beyond just the production rate at the customers and then how should we think about the incremental margin leverage that you would get on those orders?
Kurt Bitting: Yes. Thanks for the question. So I mean, right now, the polyethylene market for us, which is generally what we’ve been talking as being in the down cycle is being driven by kind of that lack of recovery in China and lower customer demand. We still view that market long-term. It’s going to grow 3% to 4%. We particularly tend to partner with and supply the largest and most scalable polyethylene units across the globe. And we’ve had a proportionately higher win rate with those new units, and that’s due to our tailored and specified catalysts that are preferred by these large polyethylene producers. So as that market grows long-term, we feel will grow even more than the market due to our ability to win a disproportionate amount of that new business.
From a margin standpoint, we’ve been successful this year in raising prices really all across the Catalyst Technology segment including our silica catalyst. So our customers value that tailored catalyst that allows them to make the products that they want to for the market.
Laurence Alexander: I guess could you help us understand — or could you help me just a little bit with the kind of the near-term dynamics of — if the order pattern, let’s say, next year reverts back to 4% production rates, 4% growth. Is that — would you see any incremental benefit above and beyond that? And also, do you — would you see your shipments at the same time as — you’ll pick up at the same time as the production rates pick up? Or do you ship in advance? Or is it more the refill than you maybe lagged by a quarter, how should we think about kind of the degree of cyclical lift next year in response to what you’re forecasting for the back half of this year?
Kurt Bitting: Yes. I think really for — that’s hard to — that’s really hard to determine because some of that’s based on supply chain and logistics dynamics, which we had the downside of that last year. We had to ship a lot of product around with airfreight and so forth, which cost us additional money. So we’re not — I really can’t project what that will look like in 2024. We do expect that long-term, again, this market should recover. It’s a 3% to 4% long-term growth rate. The folks that we service with our catalysts tend to be the larger, more cost competitive. So they would largely benefit obviously from any upcycle in the market.
Laurence Alexander: Okay, thank you.
Operator: Our next question comes from David Silver, CL King.
