Jon Tanwanteng: Fair enough. Thank you for that. Actually, if I could squeeze in one more, I was just wondering how much room is there for pricing increases in ’24, just given the scale of supply demand imbalance you’re expecting? Is it going to be to the same degree as this year, is that possible? Or is it going to be more muted just given you already locked up, I think like half of your clients in a longer term contracts already?
Corning Painter: Yes. So we’ve locked up a significant amount for next year, more than half of our volume, not much more, but a little bit more than half for next year. So I don’t expect the same sort of a step up particularly in North America. As I said, I think the situation in Europe is a bit more dicey, it was still a decent dependency on Russian carbon black. I think that’s the market that could see much more pressure for next year.
Jon Tanwanteng: Great. Thanks again.
Jeffrey Glajch: Thank you, Jon.
Corning Painter: Thanks, Jon.
Operator: Our next question comes from the line of Jeff with JPMorgan. Please proceed with your questions.
Unidentified Analyst: Thanks very much. Can you remind me when your Ravenna expansion came on the size in Europe? And have you sold all those pumps?
Corning Painter: Yes, that came on in approved for commercial sales, I want to say the end of February and by March that was sold out, end of March.
Unidentified Analyst: And what — and do you — those tonnes are allocated to specialty or to your rubber block?
Corning Painter: So we have already committed a certain amount of that volume before the invasion of Ukraine. And after that invasion, there was then suddenly great interest for rubber carbon black made in Europe. So a portion of it had already been committed a lot of that into the specialty market. We were about to do a multiyear agreement on the specialty area when all this happened. And given that we then reallocated almost all the remaining capacity over to rubber. So it’s a mix. Its more rubber than specialty, I’d say at this point. And that’s a little bit of a change in our plans, but I think it has been a win-win for us and our customers.
Unidentified Analyst: How — So, did your European volumes grow in the quarter? And shouldn’t they grow a lot, given the new capacity you’ve got?
Corning Painter: Well, so we have that in our last year’s results, three quarters of the year. We did not see a big step up in our European contracted volumes, I think perhaps we have a different view of what the appropriate market pricing in that market is and some other people for that’s referring now looking forward to 2023.
Unidentified Analyst: Your specialty volumes grow sequentially in the first quarter, or they should be down a lot year-over-year, is that right?
Jeffrey Glajch: Little bit.
Unidentified Analyst: Or like maybe give us a little bit of an outlook for the first quarter? Because your specialty volumes really came in the fourth quarter? Is there the same kind of weakness that you expect in the first quarter?
Corning Painter: I think if we look in general at this coming year, I think like many players, we would say the first quarter might be a little bit weaker than some of the later quarters. COVID zeros over in China, but I — and the consumer in China is buying a lot of services. But I think the consumer in China is slowed down in terms of, let’s say, manufactured goods and real estate there still remains a bit of a challenge. And you have the Chinese New Year and all that. So I think that Q1 for this year will be a little weaker seasonally than perhaps normal and lag, certainly Qs 2 and 3. Jeff, you want to add something?
Jeffrey Glajch: Sure. Jeff, I think if your question maybe I’m over reading into your question is around our Q1 specialty volume relative to last year. Last year’s Q1, if you look to last year’s volume by quarter in specialty, it came down — was pretty high in Qs, quite high in Q1 came down in Q2 and then came down in the second half of the year versus both Q1 and Q2. And I think as we’ve talked about before, a lot of that was on the lower end of the volume standpoint. If we’re looking at volume going into 2023, I think starting the year off closer to the second half of the year. So recognizing that low end volume is still not come back yet. I think it’s probably an appropriate way to look at it.
Corning Painter: Yes.
Unidentified Analyst: What were your cogen credits for the quarter and the year and where do you book them?
Jeffrey Glajch: So we don’t give details on our cogen, but they split between both of our businesses relatively equally. And we talked about, one of the reasons our Q4 was perhaps a little better than our expectation, particularly in the specialty side was that we expected the cogen numbers to come down a little further in Q4 than they actually did. There was a lot of angst in the European market. And there was a lot of concern about that. And it didn’t come down as far in Q4 as we expected when we had our call in November. As we look at 2023, as Corning noted, we think the market, the extreme volatility of the market, perhaps has mitigated and will be much calmer in 2023.
Unidentified Analyst: I think your competitors disclose that kind of information. Maybe as the last question, what’s your base case for volume growth in two segments? Are you expecting, I don’t know 2% or 3% growth in both segments, in volume terms?
Corning Painter: Let me just first speak to the disclosure. I think all in all, our level of disclosure is pretty good. We see some commercial sensitivity on that one. And we gave some guidance in our prepared comments about what a 20% move in power rates might look and how scary or really not scary that would be for us. Other volumes, looking at 2023 with November call noted, that we expected rubber volumes year-over-year to increase about 30 kt, I think that’s still a fair number to use at this point in time. With regard to specialty volumes, again, we had a very high relative to the second half the year, much higher first half of the year, volume level last year. I think going into 2023 would probably be reasonable to start the year at the 2020 — at the second half of 2022 volumes.
And then as we go through the year, perhaps you’ll see a little bit of improvement on the volume side of specialty. I think year-over-year, given the high, low value volumes we saw the first half of the year, I wouldn’t expect the year-over-year improvement in volumes. In fact, I was expecting year-over-year decrease in volumes, again, to be more in line with what we saw in the second half of the year with perhaps an improvement in the second half of 2023. But not to recover what we lost in the first half of 2022.
Operator: Our next question is from the line of Chris Kapsch with Loop Capital Markets. Please proceed with your questions.
Chris Kapsch: Hey, good morning.
Corning Painter: Good morning, Chris.
