Albert Chao: So we are one of the largest large-diameter pipe for water and sewer as mentioned, as Steve mentioned, municipalities. But also, our epoxy business is a bigger supplier for of coatings for any infrastructure bridges and structures. So as those funds are getting sent to the municipalities and government same governments we’ll see more demand for both PVC and as well as for epoxy.
Turner Hinrichs: Okay. That makes a lot of sense. Thanks for the color. I was also wondering if you could remind us of your view of HIP’s profit margin through the cycle from trough to peak? And has that changed at all with mix?
Steve Bender : No. I think what you’ve seen is the very resilient capabilities of the business to scale based on market conditions. And you can see the — I think, the performance in this market where we have housing starts at about 1.4 million averaging over the course of the second quarter with still margin — EBITDA margins in the 22% range. And so when you think of the business and its ability to scale, we think it’s a very good business and certainly has an ability to perform well beyond the kind of margins we’re delivering even in this market condition. So given the strength of the product brands that we have and the customer relationships and the innovation that comes out of that business because it’s very brand-oriented, as you would guess, we think has good upside to it. We have not given specific guidance of margins beyond the current guidance we’ve been providing. But I would say that we do see good solid upside in that business.
Turner Hinrichs: Great. Thank you.
Steve Bender : You’re welcome.
Operator: Thank you. One minute, please. Our next question comes from the line of Michael Sison from Wells Fargo. You may proceed.
Michael Sison: Hey, good morning. Albert, when you think about your portfolio after the Boral transaction, what — are there any other product lines or sort of areas you’d like to do acquisitions to sort of continue to expand that business and longer-term?
Albert Chao: Well, we are very pleased with our PEM and HIP business, and we have nine strategic business units. Each one are leaders in the markets around the world, and we can grow organically as these in these nine platforms as well as potential integration, vertically adjacencies, so on and so forth. So as Steve mentioned, we are in constant dialogue with various parties looking opportunities as well as we are doing a lot of internal studies on debottlenecking where we have opportunity in the markets and also reducing our cost, cost reduction is a major continuous improvement is a major part of our internal initiatives and reliability. So we are working on all these areas, but certainly, outside inorganic growth is something we’re also looking at.
Michael Sison: Got it. And then just as a follow-up. If China continues to recover, will China end up importing PVC again? And if they do start importing PVC, what do you think or how do you think that affects the margins here in the U.S. and how much going from that?
Albert Chao: I think so long China stopped exporting PVC, that will be very good. As you know, I think in our investor — investment — investor slides, we show that global additions of chlor-alkali and PVC capacities are below the GDP growth. And typically, we are looking at about around GDP growth as a measure. And as for many years and projects going forward, the capacities are below GDP growth. So we believe that the business and also — there’s a lot of energy needed to make ethylene to make chloirde and US by far, the lowest energy cost producer in the world. So having piece of advantage and energy advantage makes us much more competitive anybody else in the world making PVC and chloirde. So with the lack of new investment and with our cost position, we can really have a very good position globally in our business.
Michael Sison: Thank you.
Albert Chao: You’re welcome.
Operator: Thank you. One moment please. Our next question comes from the line of Frank Mitsch from Fermium Research. You may go ahead.
Frank Mitsch: Thank you and good morning. I guess the pronunciation was close enough. I noticed that the inventory levels dropped 9% sequentially. Your inventory levels dropped 9% sequentially, and I assume some of that might be selling out of inventory from the unplanned downtime or lower pricing. And so can you talk about some of the factors there and what we should be expecting to see happen on that line?
Albert Chao: Yeah. So, Frank good morning. And so you’re right, because of some of the both planned and unplanned outages, inventory did come down because obviously, we were not producing during those outages, but we were selling and so naturally, that has an impact on inventories. But when you think of where — as we think about where producers are, we’re continuing to address and adjust our production levels to meet market demand conditions. So I would say that as we think about it, inventory levels over the course of the second half of the year should be kind of in the medium level. And so as we think about it, both vinyl as well as polyethylene.
Frank Mitsch: Okay. Thank you. And one of the features of I think the last conference call was — speaking of inventories was talking about customer destocking, et cetera. Do you feel that we’re at an underlying level of demand throughout all of your businesses, or are there businesses that are still seeing some destocking going on?
Albert Chao: Yeah. I’d say, Frank that the destocking really started almost a year ago in this business and so accelerated at the very end of last year. So I would say that we’re at a point in time where our customers’ inventory levels are at, I would say, low to low-medium levels. And so I would not say that we’ve continued to see any destocking. That’s behind us at this stage.
Frank Mitsch: Great.
