Chris Kapsch: My first one is about — yes, good morning. First one is a follow-up on the comment about as much as half of your tonnage and the rubber black side being, I guess, multi year now. I just — I am assuming that’s meaningfully greater than maybe historic norms. Curious about given the dynamic of kind of the desire to fade Russian supplies in Europe, and then the structural tightness in North America, is the propensity of the customers to want to do multiyear deals, is it greater in one of those regions versus the other? Or is it sort of balanced? I’m just trying to understand how motivated they are to do that, or is it really a mutual sort of commitment?
Corning Painter: Look, definitely, it’s a mutual commitment, right, back and forth. First of all, Chris, you’re absolutely right. It is an increase from historical levels, which was probably more in the 25 to one-third, 25% to 33% of our volumes were on multi year. Typically there will — a customer cutting across multiple geographies. So in that sense, it really does end up being balanced. None of that prevents us getting together next year and saying, well, I’d like more, right. That’s all possible as well. So I think all those remain options.
Chris Kapsch: And I understand the commercial sensitivity, but just to make sure I understood what you said about, when you said you have upside in ’24, that’s pricing upside as opposed to volume upside with those customers in the lanes. And are you saying the magnitude of the pricing upside you’re just not going to talk about? Is it sounds like it’s a little bit more pronounced in Europe than North America there?
Corning Painter: Yes, so we’ve a couple of things. First of all, good clarification, Chris. And let’s go even one further. Price, of course, has all these multipliers for oil and input costs. So let’s talk margin. I mean, margin enhancement. However, the improvements for next year in those contracts are not in the same magnitude of what we achieved this year, just to be clear on that. We took the step change of this year front end loaded that, there is some element of improvement for next year, but I wouldn’t want people to be assuming like it’s another step change, like what we just achieved for this year. And I wouldn’t say there’s a big difference in those or how those work from one geography to another. My personal belief — our belief is we’re quite confident.
And this is the Russian carbon black still going into Europe. And that remains a vulnerability for the European market. And we might see many wealthy sometime between now and contract season, the desire for non-Russian carbon black to come back into the market, and that would push up pricing for next year, not where we have a contract necessarily, but for those who aren’t served under contract right now. I think we’d also see increased need for volume in Europe.
Chris Kapsch: Okay, appreciate that. And then looking at that chart with the structural tightness kind of skewed North America, I guess. You’ve kind of winding down your EPA investments. I’m just curious to what extent you can focus on sort of, for lack of better term operational excellence to improve your process technology that eke out extra or incremental tonnage to address the underlying growth associated with the end market and the on shoring, and so forth. Is that an opportunity for you and how would that manifest in terms of unit margins over time?
Corning Painter: Yes, Chris, you understand this well. I think that kind of an investment is what could make sense in North America or further in Europe, rather than a new reactor line or a green field. I think the capital costs for those sort of projects could be very — in my opinion, not be very attractive. I think things like the debottlenecking would be. That’s why when you look at our slide, where we lay out our capital spending for next year, we put in about $40 million of debottleneck, small expansions, improvements in plants, up to increasing yield uptime, those sorts of things. We could have instead taken that as more free cash flow. We thought that was a good use of our cash, low risk projects for us. We know the demands there, we’re confident in that. So I think that kind of a project you could see. I don’t think, however, ourselves and perhaps competitors doing that, I think even with that in North America, it’s going to remain very, very tight.
Chris Kapsch: Right, got it. And then just one follow-up on the specialty. I guess that in the mix dynamic you’re talking about, like masterbatch has been sort of probably feeling the brunt of this sort of destocking dynamic in the polymers industry. And that being lower margin, ways to enhances with the appearance of mix right now. But the other area where there’s been absence of strength is automotive , which varied some of your highest margin application. So I’m wondering, as automotive builds are higher in ’23 and some would argue, could be higher for a couple of years as the chip shortage abates. How does that feed into this gross profit per tonne that you’re talking about in specialties when it all comes out of the watch?
