Steve Bender: So, Arun, when we think about the demand environment we’ve been in, we’ve been guiding to kind of the upper teens, and you see that we’ve exceeded that in a couple of quarters. This quarter was a record quarter with 29. But I think in a much stronger demand environment, given the fact that we’ve got a very broad product offering, there is a potential for that. But I think as we’ve seen here, we’ve got to see a much stronger demand market to be able to then move margins and pricing up. We’ve got a very strong headwind currently with seasonality coming into play and with mortgage rates, 8% plus for 30-year mortgages, that’s quite a bit of a sticker shock for most home buyers. And so, to be able to get a better — a tighter market, if you will, we need a much better backdrop in terms of affordability and a more constructive macroeconomic outlook.
There’s a lot of uncertainty in the market these days, and that’s causing a lot of people to be cautious about deploying personal capital into repair and remodeling and other construction. But yes, there is potential, but we need a better macroeconomic backdrop.
Arun Viswanathan: And just on PEM as well, another question I had was, I think you touched on the footprint on chlor-alkali, your operating rates kind of following the industry. But what about epoxy? I mean do you think that there’s further rationalization required there just given the weakness that we’ve experienced over the last couple of years? What’s it going to take to really see a better market there, understanding that China appears to be the biggest driver, but could there also be some capacity reductions on your part that would — that accelerate that?
Albert Chao: Yes. That’s a good question. As we discussed earlier that there’s overcapacity in the world. I think China build a lot capacity for their anticipation of demand for both EV, lightweighting cars, windmills, generating the renewal power. So, that’s the reason why China has built up capacity. But for one of the reasons, the EV demand is not going that strong, I think adoption still takes a while globally, and China is exporting EV cars around the world and leading competition. At the same time, the renewal power, the windmill blades, the various activities going on even in the U.S. and Europe. While people want do it, but the cost increases and all these issues are impacting the pace of further development in windmills, we think will come.
And Westlake, we have technology that can make over 100-meter long blade, and longer the blade, the better the properties or efficiency of the windmills. So this takes time. And I think some of the older plants in China are not integrated plants, running low rates or shutdown. So just like anything, it will be rationalization going on and it takes time. But I think the demand for epoxy globally is still very strong, especially in the U.S., you have infrastructure, we build bridges and ship and so on and so forth. And they all need coatings, car needs coatings, and the windmill blades and epoxies and electronics. So the global demand for epoxy, we’re very optimistic on long-term demand. I think short term, we have these issues to go through.
And I think the industry will go through that.
Operator: Thank you. At this time, the Q&A session has now ended. Are there any closing remarks, Jeff?
Jeff Holy: Thanks. Thank you again for participating in today’s call. We hope you’ll join us again for our next conference call to discuss our fourth quarter and year-end 2023 results.
Operator: Thank you for participating in today’s Westlake Corporation third quarter conference call. As a reminder, this call will be available for replay beginning 2 hours after the call has ended. The replay can be accessed via Westlake’s website. Goodbye.
