Scott Sutton: Look, I can’t speak for every customer. But what I can say is we’re not participating. So our response is we’re not participating.
Frank Mitsch: Okay, okay. Thank you. And among the third quarter highlights was your ability to hold chlorine price flat despite the broader indices going lower. What’s your outlook on Olin’s chlorine price?
Scott Sutton: Yeah. Sure. I think in this fourth quarter period, right, because we shuttered some assets and we’re not participating, it’s very possible that our mix generates a lower chlorine price in the fourth quarter relative to the third quarter. But that’s strictly a mix issue. Because going back to the prior line of questioning, we’re choosing not to participate. And where we may have to choose not to participate maybe at higher pricing because it’s more spot business than some committed contract business. So, I think you’ll see a mix issue appear in the fourth quarter. But in the first quarter, I’m quite sure that chlorine price will increase again.
Frank Mitsch: Very helpful. Thank you.
Operator: The next question comes from Roger Spitz from Bank of America. Please go ahead.
Roger Spitz: Thank you very much. Maybe you’ve been asked this in a different way, but typically, when chlorine price demand is — falls, and concept for just typically a lagging indicator or demand would become tight as prices spike when — as you turn down your chlor alkali plants. Why hasn’t that happened this time?
Scott Sutton: Can you repeat that? I’m sorry, I just don’t understand the question.
Roger Spitz: Sure. In the Great Recession — as you went in the Great Recession in 2007-2008, demand for housing collapsed. Everyone had to turn down their chlor alkali plants because chlorine demand was poor. And because caustic demand, at least in my view, lags chlorine demand by two or three quarters, chlorine got extremely tight as everyone turned down their chlor alkali plants. And US caustic soda prices were extremely high. And caustic is countercyclical, chlorine is post-cyclical. That’s typically how it happens, and you have a couple of quarters where things are going. And then after a while, I think everything goes bad. But for the first few quarters, everything okay. Now here we are, we’re coming up a period where caustic soda prices have been falling pretty hard.
Suddenly, you’re saying chlorine is now the weak side. So it sounds like — and you are clearly turning down your chlor alkali plants. Why hasn’t caustic demand tightened as chlorine has become very weak given some caustic pricing flexibility?
Scott Sutton: Okay. Got it. Yeah. Thanks for clarifying that. Look, we just started this value accelerator initiative, right? You’re not going to see instantaneous results in the trade publications, which is what most people look at in a public format. It takes some time to generate that impact, but that impact could happen. The other thing to remember is that, it depends on a big way what the PVC producers do as well. And at least PVC hasn’t come off yet near as much as things like the polyurethanes segment, like the ag chemicals segment. Even some things like titanium dioxide and bromine are likely a little bit weaker than PVC. So there’s some work to do to get that impact to happen.
Roger Spitz: Got it. Thank you. My second question is, just to be clear, I understand how you run your chlor alkali, you’re running at or slightly below 50% right now. Does that — the way you do that, is that, that you’ve shut down whole trains or plants and then run what you have very high or near full? Or do you actually run trains within plants at far less than near full capacity?
Scott Sutton: Well, it’s all of the above, right? But this time, because it’s so significant, right, we’ve shut down complete sites and we’ve shut down complete units at larger sites.
Roger Spitz: Got it. Thank you very much for your time.
Scott Sutton: Okay, sure.
