Scott Sutton : Yes. No, what’s embedded is still that demand stays fairly muted, suspended for the better part of the first half of the year and then recovers. Specifically in epoxy by trade flows actually reversed out of China. But even when China recovers, still the amount of imports going into China is likely to be less than it was before because there have been some structural capacity adds there. And what this has taught us knowing that we really didn’t expect sort of the worst conditions in 15 years. But what it has taught us here is that we certainly have more trough minimization footprint work to do there. So we’re working on that.
Eric Petrie: Helpful color. Secondly, on decarbonization, how are you thinking, Scott, about carbon sequestration versus buying renewable power? And does building out these hydrogen plants impact that decision tree? Can maximize the IRA credit.
Scott Sutton : Yes. Yes. I mean, look, I mean, there could be some IRA credits for us with regard to hydrogen. I mean we are the largest electrolysis grade hydrogen producer in the country today. So we’ll see where that goes. As far as other activities to minimize our CO2 footprint, most of them are centered around our own efficiency and productivity programs. It’s not impossible that we get some recs in the future. Will we do more CO2 sequestration like we called out in our slides, I think those opportunities are more limited for us.
Operator: Our next question will come from John Roberts with Credit Suisse.
Unidentified Analyst: This is on for John. Scott, while Epoxy has been down or operating at lower rates, have you made any structural changes such as operational or with your customer base? So when demand finally returns, Epoxy will look different than it has previously?
Scott Sutton : Yes. The answer is yes, but completely in process now. When I said we’re going to do more trough minimization footprint work, that’s something that we’re analyzing right now. So when demand does return yes, that business is going to look a little different. It’s going to be more focused on systems where we’ve had staying power even through these really sloppy recessionary conditions.
Unidentified Analyst: Got it. That’s helpful. And Todd, in Winchester, can you describe what the impact to margins was from lower operating rates versus higher costs. The margins in the segment have just been a little bit volatile since Lake City contract started. So just trying to figure out what the normalized level would be?
A €“Todd Slater : Yes. Thanks for the question. I think that what you saw in the fourth quarter because of the significant pullback in volume to address, I’ll say, the supply chain, the supply chain and Scott would have said, you saw margins come in significantly compared to where they had been. Overall, we had a higher level of military sales in the fourth quarter compared to where had been over the last 12 months. So that also will slightly affect the margin, a little bit lower on average margin there.
Operator: Our next question will come from Roger Spitz with Bank of America.
Roger Spitz: One is, can you comment on how much of your merchant or total chlorine was sold on below-market legacy contracts as of December 2022?
Scott Sutton : We won’t give you a specific number, but I would say that that’s turned into the minority share now. As Patrick said, we still have an uplift coming in 2024 that will essentially place almost 100% of our are chlorine on a different standard, likely the Olin chlorine index.
Roger Spitz: Got it. The second one was — this may seem a little late, but how — can you say how much, if any, of your ECU production you sell as cell liquor, meaning versus finished product?
