I’ve guided to the high teens range for the second half of this year. But nevertheless, we think there’s certainly with the innovative products, the branding that we have and the relationships that margins should improve as the market improves.
Patrick Cunningham: Got it. That’s helpful. And then what’s driving the weakness in epoxies and how do you see demand trending by region for the balance of the year?
Albert Chao: Yes. Epoxies applies to many areas, mostly into the industrial coatings and also in windmill blades and lightweighting of vehicles. And windmill blades business is still coming back slow demand, especially China. China has one of the largest capacities in the world in Epoxie and China’s economy is really not growing much and there’s overcapacity of new plants coming on. So the business is very weak and impacted global. And we expect US, European policy man pick up in the coming quarters or years, but it takes a while. China is the main issue we have.
Patrick Cunningham: Great. Thank you.
Albert Chao: You’re welcome.
Operator: Thank you. Our next question comes from David Begleiter from Deutsche Bank. Your line is now open.
David Begleiter: Thank you good morning. Howard Albert and Steve, if you think about PEM sequentially, you will have lower Aziz in Q3, but might be facing lower price as well as well as higher feedstock costs. So is PAM still up sequentially in Q3 versus Q2 given those dynamics?
Albert Chao: So David, when you think about the strength that we expect seasonally in Q3, that — and given the fact that we don’t have the headwinds in our PEM business because of both the planned and the unplanned outages, that volume improvement should pick up. Certainly, from a pricing perspective, we exited the end of the quarter at lower average prices than we had over the course of the second quarter. But obviously, as we look forward into the future for ethane pricing, ethane pricing was certainly elevated at the very tail end of the second quarter. And if you look at out to the second half of the year, we see ethane pricing still staying really in kind of the low to mid-20s over the course of the second half of the year.
David Begleiter: Very good. And Albert, you mentioned some improvements in the global polyethylene market landscape. Can you give a little more color as what you’re seeing right now in that market?
Albert Chao: Yes. I think The export polyethylene prices primarily in Asia, been quite weak and prices dropped a fair amount over the months during the year. We see some kind of bottoming out in polyethylene prices and demand picked up in Asia as well. And so we expect there’s some kind of price improvements in the US as a result as well as the higher feedstock cost, as Steve mentioned, we saw a the tail end of second quarter, early part of July. So with the cost price increase push and as well as demand improving globally for polyethylene, we expect some kind of pricing improvement in the third quarter for polyethylene and PVC. But that’s assuming the economy is still going strong, we see that the 10-year rate is almost approaching 4.2% — so we don’t know the impact will have on general economy and also on housing.
David Begleiter: Thank you
Albert Chao: You’re welcome.
Operator: Thank you. One moment, please. Our next question comes from the line of Aleksey Yefremov from KeyBanc. Your line is now open.
Aleksey Yefremov : Thanks and good morning everyone. So lately with some improvement in new residential construction domestically. Have you seen any up-tick in PVC demand?
Steve Bender: Yeah. And so Aleksey, when you think about the strength that we’ve seen in the construction materials business pulling through into pipes and siding and trim, I would say that — and you see this really in the announcements that many of our competitors have announced as well as we in PVC pricing. So we have price announcements out for August and September. And so that is reflective of what we’re seeing in strength. And you may have seen that we’ve also seen export prices also begin to rise in PVC in overseas markets. So that strength that we’ve seen in the construction markets pulling through in volume but also pricing nominations reflecting that strength both domestically and are seen as I mentioned, in the export markets.
