Now you did also hear us say that we see some pressure on spot pricing. That, we don’t expect to fully offset the favorability from contract pricing but it will kind of bring the contract pricing number down a little bit. If you remember in 2022, we kind of started out with strong contract pricing as we came through the negotiations at the end of 2021 into 2022. And then with the strength of the markets that we were operating in, especially in the first half, we saw some really good uplift from spot pricing. So as the markets start to soften up a little bit and/or reset in certain places, we are anticipating not just in the first quarter but probably as we move through the year a little bit more pressure at spot pricing adjust. I’ll also tell you very specifically that where we’re seeing most of that spot pricing reset is in our Asian markets.
We’re not necessarily seeing significant pressure on, first of all, contract pricing as well as spot pricing in North America and Europe. But it really is an Asian kind of move. And a lot of that are driven by the fact that the Chinese economy and the big China producers there, the Chinese economy hasn’t fully reopened yet. So we see some of that product moving into other markets, more specifically India. And that’s where we’re seeing some of the spot pricing pressure, both in China and India.
Operator: Our next question comes from Phil Ng from Jefferies.
Phil Ng: With demand expected to soften through the year, how do you plan on managing your production and just costs, particularly in your fixed cost-intensive businesses in Insulation and Composites? And then you guys did an awesome job last year staying ahead of cost on the price side of things. Help us think through that. Should we expect that to be neutral? And do you have the levers in place to kind of deliver that mid-teen margin in those 2 businesses? You kind of gave us a framework in terms of the downside scenario at your Investor Day.
Brian Chambers: Yes. Phil, thanks. I think on the demand — well, maybe Ken and I will tag team this. But on the demand versus production, I think we are going to continue to be very proactive in terms of how we balance that out, particularly in Roofing and Insulation. And I think the work we have done in terms of our network optimization work, we believe we’ve got a better cost structure as we manage that. We’ve got more flexible assets as we manage that. But that is always going to be our challenge in front of us to try to be in front of that. We talked a little bit about that in Composites, where we were trying to be proactive in Q4 as we saw demand soften because we’re very conscious on maintaining great working capital and great cash flow.
So we want to continue to balance that as we go through the year. But again, I think we’ve made structural improvements to our costs in our operating facilities that are going to give us a more flexible network and a more cost-effective network as we manage those curtailments going forward. In terms of price and going forward and price/cost, you’re right. I mean, we’ve been able to manage it. I think our commercial teams did fantastic work throughout 2022 to be in front of these inflation trends in terms of getting price of anticipated inflation. We start the year with a positive price/cost outlook and that’s something we’re going to continue to manage in terms of price. Now in some categories and some businesses, we’ve gotten price in excess of expected inflation.
