Westlake Corp Q1 FY2021 Earnings Call

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Westlake Chemical Corporation First Quarter 2021 Earnings Conference Call. As a reminder, this conference is being recorded today, May 4, 2021. I would now like to turn the call over to today's host, Jeff Holy, Westlake's Vice President and Treasurer. Sir, you may begin.

Thank you, Daphne. Good morning, everyone, and welcome to the Westlake Chemical Corporation First Quarter 2021 Conference Call. I'm joined today by Albert Chao, our President and CEO; and Steve Bender, our Executive Vice President and Chief Financial Officer; and other members of our management team. The conference call agenda will begin with Albert, who will open with a few comments regarding Westlake's performance and a current perspective on the industry. Steve will then provide a more detailed look at our financial and operating results. Finally, Albert will add a few concluding comments, and we'll then open the call up to questions. During this call, we refer to ourselves as Westlake Chemical. Any reference to Westlake Partners is to our master limited partnership, Westlake Chemical Partners LP, and similar references to OpCo refer to our subsidiary, Westlake Chemical OpCo LP, which owns certain olefins facilities. Today, management is going to discuss certain topics that will contain forward-looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. Actual results could differ materially based on many factors, including the cyclical nature of the industries in which we compete, availability, cost and volatility of raw materials, energy and utilities; governmental regulatory actions, changes in trade policy and political unrest; global economic conditions, including the impact of the coronavirus; industry operating rates; impacts of extreme weather events; the supply-demand balance for Westlake's products; competitive products and pricing pressures; access to capital markets; technological developments and other risk factors as discussed in our SEC filings. This morning, Westlake issued a press release with details of our first quarter results. This document is available in the Press Release section of our web page at westlake.com. We have also posted a presentation on our website to review the first quarter. A replay of today's call will be available beginning today, 2 hours following the conclusion of this call. This replay may be accessed by dialing the following numbers: Domestic callers should dial 855-859-2056. International callers may access the replay at 404-537-3406. The access code for both numbers is 4677649. Please note that information reported on this call speaks only as of today, May 4, 2021, and therefore, you're advised that time-sensitive information may no longer be accurate as of the time of any replay. I would finally advise you that today's conference call is being broadcast live through an Internet webcast system that can be accessed on our web page at westlake.com. Now I would like to turn the call over to Albert Chao. Albert?

Thank you, Jeff. Good morning, everyone. We appreciate you joining us to discuss our first quarter 2021 results. In this morning's press release, we reported a strong start to the year despite the impacts of a severe winter storm with net income for the first quarter of 2021 of $242 million or $1.87 per share. Our operating income increased 154% in the first quarter of 2021 versus the first quarter of 2020, which was before the impact of the pandemic. Before Steve goes through the financial results, let me provide some insight into the quarter. The first quarter of 2021 saw strong pricing for many of our products driven by robust global demand. The strength in demand for polyethylene and PVC resulting from the global economic rebound in 2020 was driven by an increase in worldwide packaging consumption and construction activities. The 30% year-over-year increase in U.S. housing permits and associated housing starts shows the strength in residential construction activity that benefited our downstream building products business. In our Vinyls segment, with tight inventory conditions, strong demand for vinyls and production outages caused by the severe winter storm, we saw PVC resin prices steadily increase in the first quarter. The polyethylene industry also experienced tight inventory conditions due to the strong global packaging demand and domestic production outages caused by the severe winter storm. These conditions drove pricing and integrated margins in our Olefins segment. I want to take this opportunity to thank our employees for their efforts, quickly responding to the disruptions caused by the severe winter storm and fully resuming operations by the end of the first quarter. I would now like to turn our call over to Steve to provide more detail on our financial and operating results for the first quarter.

Thank you, Albert, and good morning, everyone. I will start by discussing our consolidated financial results and then go into a more detailed review of our Vinyls and Olefins segment results. Westlake continued to benefit from the strong global supply-demand dynamics and a robust return of global economic activity driving demand for most of our products. For the first quarter of 2021, we reported net income of $242 million or $1.87 per share compared to net income of $145 million for the first quarter of 2020, which included a $62 million tax benefit from the CARES Act. These results are inclusive of the previously mentioned severe winter storm impact of approximately $100 million or $0.61 per share in the first quarter. The $97 million first quarter year-over-year increased net income is a result of higher sales prices and integrated margins for polyethylene and PVC and higher earnings resulting from the strong demand in our downstream building products business. Partially offsetting these increases were lost sales and lower production volumes, elevated maintenance costs, higher feedstock and natural gas fuel costs, all related to the severe winter storm, as well as lower sales prices for caustic soda. While we worked quickly to get our facilities back online, our estimates for a loss margin from sales and repair expense are approximately $120 million. We incurred approximately $100 million in the first quarter of 2021 results or approximately $0.61 per share, with the remaining $20 million falling into the second quarter. Of this estimated first quarter impact of $100 million, approximately 75% was related to our Vinyls segment, with the balance affecting our Olefins segment. First quarter 2021 net income increased by $129 million from fourth quarter 2020 net income of $113 million. The increase in net income was largely attributable to higher sales prices for polyethylene and PVC resin. Offsetting these benefits were lower caustic soda prices and higher feedstock and fuel costs. Our utilization of the FIFO method of accounting resulted in a favorable pre-tax impact of approximately $55 million or $0.33 per share compared to what earnings would have been reported under the LIFO method. This is only an estimate and has not been audited. Now let's move on to discuss the performance of our two segments, starting with our Vinyls segment. Throughout the first quarter, we experienced robust global demand for PVC anchored by strong global construction activity. Our downstream building products business continued to benefit from solid residential construction and repair and remodeling demand. PVC strength was driven by broad-based end market demand, including residential construction, automotive and medical equipment. While the severe winter storm impacted our production in the quarter, the strong demand for PVC and our downstream building products saw higher sales prices, and we benefited from strong integrated margins during the quarter. For the first quarter of 2021, Vinyls operating income of $200 million increased $127 million from the prior year period, primarily as a result of higher sales prices and margins for PVC resin and higher sales prices and margins in our downstream building products business. This is partially offset by reduced sales volumes and lost production from the severe winter storm, lower sales prices for caustic soda, and higher feedstock and fuel costs. For the first quarter of 2021, Vinyls operating income increased $34 million from the fourth quarter of 2020, primarily the result of higher sales for PVC resin and higher volumes in our downstream building products business. In our Olefins business, robust global demand for packaging and other consumer products expanded our integrated margins in polyethylene. Our first quarter 2021 operating income of $180 million increased $118 million from the first quarter of 2020, driven by strong pricing and improved demand, offset by lower sales volumes resulting from the severe winter storm. For the first quarter 2021, Olefins operating income increased $158 million from the fourth quarter of 2020, primarily due to higher sales prices and margins as well as increased sales volumes, partially offset by higher feedstock and fuel costs. Next, let's turn our attention to the balance sheet and statement of cash flows. We generated $265 million in cash flows from operations in the first quarter of 2021, resulting in total cash and cash equivalents of $1.4 billion. First quarter 2021 capital expenditures were $141 million. We maintain a long-dated debt maturity profile with a weighted average debt maturity of 14 years, anchoring our investment-grade balance sheet. Now to address some of your modeling questions. We expect our effective tax rate for the full year of 2021 to be approximately 23% and a cash tax rate of approximately 19%. As we stated in our last call, we forecast our capital expenditures for the year to be between $700 million and $800 million. We are planning for a turnaround of our Petro II ethylene unit to begin in September of this year. This turnaround and associated outage are expected to last approximately 60 days. With that, I'll now turn the call back over to Albert to make some closing comments.

Thank you, Steve. As we look ahead, we see continuing strength in global demand in polyethylene, PVC and downstream building products driven by the solid market in residential construction, packaging, automotive and health care. Our high-level integration extends through the value chain from natural gas liquids and other feedstocks through to consumer building products. Our chemical operations sit on the lower end of the global cost curve, which enables us to drive long-term value throughout the business and investment cycles while meeting the needs of our end-use customers with the downstream building products business, bringing additional value. In our Vinyls segment, we see continuing strength in the PVC and downstream building products markets, driven by strong construction and other durable goods demand. In our Olefins business, end-use demand remains strong as the essential everyday products such as consumer packaging and health care are driving polyethylene demand. With the continued emphasis on corporate stewardship, we remain vigilant with our focus in developing products and solutions for a more sustainable future while protecting and investing in our people. As an example of our commitment to sustainability, we have introduced green caustic soda, a certified climate-friendly caustic soda, utilizing renewable energy. This product is available under the brand name GreenVin, which has a reduced CO2 impact of more than 30% compared to conventional caustic soda. We look forward to further discussing these products with you as more developments are made and furthering our commitment to transparency through our future ESG reporting. These initiatives reflect our dedication to being a dominantly and socially responsible corporate citizen. Westlake remains focused on our core tenets, namely, to protect the health and safety of our employees, deliver on our commitments to our customers, and strengthen the company in all aspects. Anchored by these values, we are confident that Westlake is well positioned to serve the growing worldwide needs of our customers while maintaining financial discipline, which, combined with the strong fundamentals of our business, enable us to deliver long-term value to our shareholders. Thank you very much for listening to our first quarter earnings call. I will now turn the call back over to Jeff.

Thank you, Albert. Before we begin taking questions, I would like to remind you that a replay of this teleconference will be available 2 hours after the call has ended. We'll provide that number again at the end of the call. Daphne, we'll now take questions.

Your first question comes from the line of Arun Viswanathan with RBC Capital Markets.

Good morning, Arun. Are you there? Arun, are you on the line?

Your next question comes from the line of Alex Yefremov with KeyBanc.

Your Olefins volumes were down 9.4% year-over-year in the first quarter. Do you think you could get to flat or up year-over-year volumes in the remainder of the year or maybe as soon as the second quarter?

Certainly, as a result, Alex, of the storms that we saw, we certainly declared force majeure on many of our products. And so with that impact on production and impact on sales, I do expect that we'll be able to resume more normal operations, having brought units back online before the end of the first quarter as we entered the second quarter and benefit from the very strong demands we're seeing in both our Olefins and Vinyls segments.

And as a follow-up on PVC, the prices have been rising pretty steadily in the last few months. How do you think about sustainability? Do you see their prices overshooting and then coming back some in the next few months or do you see a plateau?

Yes. We see that PVC price remains very strong. Actually, the export price is higher than our domestic sales price. So, we believe that especially in the second and third quarter, which are the strong quarters for construction, demand is very strong. Therefore, we believe that price momentum will still be there.

Next question comes from the line of David Begleiter with Deutsche Bank.

Albert, if you can talk about polyethylene pricing, what you may realize in April and your thoughts on the May pricing fees that are currently out there?

Certainly, I think all the trade journals are reporting that a $0.07 increase in April is effective, and people are looking at potentially another $0.03 price increase in May. Time will tell. But the demand for polyethylene is still very strong. Inventories among producers and customers are still very low, and I think the export price is still higher in certain instances than the domestic large customers.

Very good. And Steve, can you just talk about your CapEx this year? What are the growth projects you're looking at for this year and maybe even for next year?

So David, the capital expenditure for this year is projected to be between $700 million and $800 million. A significant portion of that will go towards ongoing maintenance activities and some expansion opportunities that have not been publicly announced. However, we will continue to explore some of our vinyl opportunities based in the Gulf Coast and assess whether we can expand those facilities. Additionally, as I mentioned earlier, we have a major turnaround for one of the ethylene units scheduled to start in September, which will also require cash throughout the year.

Your next question comes from the line of Bob Koort with Goldman Sachs.

Looking at the balance sheet, you're in a strong position with your main businesses. However, I'm curious about your thoughts on inorganic opportunities in this environment, considering you have significant resources to utilize.

So Bob, we certainly have always had a very active dialogue with firms that have opportunities in the space, whether they're divisions or individual plants or businesses, and we always look at kind of long-term value propositions that come forth. And so, whether it's times where there's attractive pricing or more frothy pricing, we tend to take a more pragmatic longer-term view and look at a cycle average in terms of the value proposition. Certainly, our focus has been that way and continues to be that way. So, we'll continue to look for opportunities to grow the business both organically through expansion, but also through acquisition and make a thoughtful look over a cycle of average valuation to ensure that it has the return potential that we think it should.

And Albert, you mentioned the green caustic soda. I'm curious, is that an effort to credential your own ESG ambitions or is it something where you can charge a higher price for that product?

I would like to do both, of course.

Your next question comes from the line of Kevin McCarthy with Vertical Research.

Would you comment on the trends you're seeing in the downstream building products business? And specifically, are you able to increase prices and margins in that business relative to the strength in PVC resin?

So Kevin, it has been, as we noted, a strong demand in building materials. Certainly, in the position that we hold, a large position in exterior products such as siding, trim, pipe fittings, and PVC compounds, we have seen strength across that space. Certainly, as we see increases in resin, we attempt to pass those through downstream so that we can continue to see growth in value. Over the course of this quarter, we have seen an increase in value proposition as we pass that through.

Okay. And then secondly, Albert, you mentioned the strength of export prices as it relates to the PVC market. Can you talk a little bit about how you see international trade dynamics developing moving forward? We sometimes look at India as an important market. Sadly, India's, I think, dislocated right now due to the severity of the COVID situation. So, how do you see export pricing evolving and also export volumes as the U.S. industry rates continue to recover from Uri?

Certainly, the U.S., I think, is the largest exporter of PVC around the world because of our strength in feedstock availability and competitive pricing in ethane, power, producing chlor-alkali, and a big sustained caustic market. As you may know, there's very little new capacity being added in the last two years and very little capacity being announced around the world for new PVC capacity. The rest of the world is relying on the U.S. to provide export PVC to meet their demand. As you said, India is a big example. They are one of the largest importing countries of PVC in the world, and the demand continues to grow. Many governments are stimulating construction and providing affordable housing to their people, and PVC is one of the best products in the exterior and interior of houses. We expect demand to continue to grow. With the low capacity added around the world, I think for the long term, the business, the vinyl and construction business should be quite good going forward.

Up next is Angel Castillo with Morgan Stanley.

Just wanted to expand a little bit more on, Albert, I think you talked about tight inventory conditions in both PE and PVC. I was wondering if you could talk about where do you kind of see those problems versus history? And how long do you think that will take to kind of normalize through the year?

Sure. As Steve mentioned earlier, there's a huge ramp-up in prices, not only because of the demand, but also because of the severe winter storm this year and last year with hurricanes and various outages. Thus, the market is very tight. Manufacturing auto plants are running as much as they can to meet the customer demand globally, and the U.S. industry has curtailed export to help meet domestic demand. Consultants are projecting multiple double-digit increases in prices last year and this year. I think from June of last year, almost every month there has been a price increase, and there must be a slowdown in the price increase or decrease. That could happen. I think the price of $0.60 a pound in the U.S. as we speak has come down to the $0.40s. This will help reduce some of the pressures for polymer manufacturers. The fundamental demand, as said earlier, in the second and third quarter are historically the two strongest quarters of the year for volume and pricing. We foresee this year will be similar.

That's very helpful. And Steve, I was hoping you could give us a little more color on the corporate line. That looked to be a little bit larger this quarter, so I'm curious if you could break that up for us?

I'm sorry, you broke up as you were asking your question. Can you repeat that again?

Yes. Sorry about that. On the corporate line, I was hoping you could give us a little bit more detail. I think it was $30 million this quarter, so it looked a little bit larger than previous quarters. I'm curious what drove that?

Yes. A lot of that is really just kind of intercompany eliminations that you see that go on as a result of exchanging ethylene between the two segments.

Your next question comes from the line of Mike Sison with Wells Fargo.

Your EBITDA margins in Q1 for Olefins are 40%, pretty impressive. When I look back to history, '14 to '17 were similar at those high levels. So just curious if you think this is a level that can be sustained, obviously, not every quarter, but on average for the year and maybe beyond 2021. Could this be a good string of good profitability for that segment for the next couple of years?

Yes. Actually, you know that we are a net buyer of ethylene, I think we buy over 1 billion pounds of ethylene a year. Low ethylene prices are better for us, so long as the product prices are separate from the feedstock. Hence, we reported our earnings being impacted by high feedstock and fuel prices last quarter. In 2018, it was the historical high EBITDA for Westlake. At that time, oil prices were still, I think, about in the $60s a barrel. Today, we're talking about a similar brand and WTI in the $60 range. I think that's a reasonable price globally for crude oil. If demand continues to improve with the vaccination process improving around the world and with all the stimulus that only the U.S. and other countries are injecting into the system, I think demand for products will be quite good. Hence, the margin should be pretty good. However, we don't expect the margin for ethylene or polyethylene to stay as high as in the 2017 or '16 range.

Understood. For vinyls, the consultants' outlook indicates that ECU margins are expected to remain high throughout this year and into next year. You are likely to see a record year in 2021. How do you anticipate that trend continuing beyond 2021 when considering the consultants' forecasts for 2022 and later?

Well, Mike, when you think about the outlook, I think the outlook is reflective of what we've seen most recently in terms of demand growth in construction activities worldwide and the pull on chlorine. Therefore, going into PVC, you're seeing signs of a more even start in manufacturing. Of course, we're all watchful of countries like India and others that are still struggling to get back on their feet from a manufacturing perspective. So as we think about the outlook for our Vinyls overall segment, we remain constructive in terms of the demand for worldwide residential and repair and remodeling activities pulling on PVC. I am also cognizant that we're beginning to see some improvement in caustic, really from that manufacturing pull. Therefore, we have a constructive outlook for the rest of '21.

I would just like to add that caustic soda prices have been quite weak due to the global recession from the pandemic. As the global economy recovers, we expect caustic demand will increase, and pricing should improve as well.

Your next question comes from the line of Hassan Ahmed with Alembic Global.

First question around polyethylene as it relates to the back half of this year. As you mentioned, in one of your answers to a question earlier that you have industry consultants looking for some moderation or maybe even weakening in pricing in the back half of this year. It seems that there are a bunch of crosscurrents. I'd love to hear how you're thinking about those crosscurrents. You have a heavy turnaround season in Q2 and Q3. You have an inventory rebuild that's required because of Uri. You have orders that need to be backfilled because of a variety of force majeures. Above all of that, it seems demand continues to remain very strong. So my question is, pricing will do what pricing will do. But what are your perceptions about Q3 and Q4 effective utilization rates for polyethylene?

That's a good question. But you're absolutely right. Usually, again, even for polyethylene, the second and third quarters are usually the stronger quarters of the year. Also during that time, there will be a turnaround. As we talk about, we have our ethylene plant turning around in September as well this year. So you have those factors. You also have the global weather, whether Europe and the rest of the world recover from the pandemic or go into a third or fourth wave. All these will impact global supply-demand. As of now, inventory is very low among producers. We are attempting to build back inventory. Among consumers, inventory is also very low. This creates that dynamic. Then you have the high export price and the freight shipping costs that people are discussing. We will have to see if people can export products to the U.S. and for the future. All these different crosscurrents you mentioned will affect prices. In the end, it's really supply and demand alongside export price. If the actual price starts coming down, that could slow down prices in the U.S. People have mentioned that since June of last year, there's been almost a $0.40 to $0.50 per pound price increase. Some point in time, there will likely be a reduction of those prices somewhat. However, I believe that even after some price reduction, the prices will still be much higher than average for 2020 and even 2019. Therefore, the margins are expected to be improved compared to the last two years.

Very helpful. As a follow-up on chloro-vinyls, it's a unique product these days with hardly any supply on the horizon. Considering the backdrop of nearly $2 trillion in discussed infrastructure in an undersupplied market with good demand, how do you see this infrastructure affecting global utilization rates beyond 2021?

Yes. That's a very good question. As long as the U.S. global economic conditions improve, people expect that beyond '21, '22, and '23, the global GDP growth will return to the normal trend line. With the lack of new capacity being added, this should bode well for existing producers. However, with global warming, we had hurricanes last year, we had freezes. Unfortunately, we don't know how natural disasters will impact production. Hopefully, the damage is less significant than last year's. But forecasts for this year indicate that the Gulf Coast hurricane index is expected to be higher than average. Hopefully, there will be less damage than last year.

Up next is Mike Leithead with Barclays.

First question, Albert, in your comments in the earnings release, one focus area you mentioned was furthering your chain integration. Other than being short a bit of ethylene, it seems like Westlake is already fairly integrated. So, curious how you're thinking about furthering that integration, whether it's either adding more ethylene or furthering the downstream pole of building products. If you could just talk about how you're thinking about your current asset footprint and where there might be gaps you're looking to fill over time.

Certainly. Yes, you're absolutely right that we are, as mentioned earlier, one of the largest buyers of ethylene in the U.S., over 1 billion pounds. As our demand for PVC grows, our ethylene demand further increases. Integration in that area will be helpful. Downstream, we have a sizable business primarily based on PVC. As stated, the demand for building products is very strong. We are finally above the 50-year average for new home construction in the U.S. for the first few months of this year. We expect that trend to continue. Therefore, we are looking, as Steve mentioned, at adding capacities. We haven't announced any significant expansions yet, but we are increasing our capabilities to meet the growing needs of our customers.

Great. That's helpful. And then maybe for my second question, just a follow-on to, I think, Kevin's recent question about the export market. For PE and for PVC, how should we think about Westlake's domestic versus export mix today, just given some of the market disruptions?

Totally. In PVC, due to our integration downstream, we export less than the U.S. domestic. Historically, over the last 10 years, post the housing downturn in 2008, the U.S. exported around 30% to 35% of PVC annually. That rate has declined significantly last quarter due to the lack of supply. In the polyethylene industry, with all the expansions we've seen in the last 5-6 years, approximately 40% of production is exported. Westlake, due to our emphasis on low-density polyethylene, has a lower export proportion than the industry. Again, because of the lack of supply in the last few quarters, our export portion has contracted significantly.

Your next question comes from the line of Matthew Blair with Tudor, Pickering and Holt.

I was hoping you could share more details on this green caustic soda initiative. How exactly are you reducing the CO2? What share of your caustic production could be green? Do these CO2 benefits flow into other products like PVC? Should we think about this as higher upfront costs? Or would this be higher, like OpEx on your end?

Yes, we are purchasing renewable power. As you know, power in Europe combines fossil fuel, including coal and natural gas. By using renewable power, the CO2 content is much lower, hence a 30% reduction in CO2 in the produced caustic product. It takes quite a while to obtain certification for that process in Europe. We hope to introduce more green-friendly, environmentally friendly products as we progress throughout the year. We are striving to provide lower CO2 products to our customers and minimize our own manufacturing emissions of CO2 in every way we can.

What is the current operating level for your ECU? If you are below maximum operations, does the $70 per ton caustic price increase in April encourage you to increase production?

Yes. We are operating our plants to meet the demand of our customers. Unfortunately, due to the freeze, we're still under allocation. Hopefully, we'll be able to lift the allocation very soon. Many of our industry competitors are also facing freeze and other challenges. Therefore, accordingly, I think most companies are running as hard as they can to meet their customers' needs.

Your next question comes from the line of Arun Viswanathan with RBC Capital Markets.

Sorry about that earlier. I hope you're all well. Congrats on the strong start here. A couple of things. First off, the chlorine side seems very tight. We're hearing issues about availability of chlorine, especially during the summer. I know there's a water treatment season coming up. Are you at all concerned about servicing demand for chlorine? Secondarily, on caustic, we are seeing some price uplift now. How long do you expect that to continue, and what's your outlook for both sides of the ECU molecule?

Yes. You're right that the whole value chain demand is strong because of the freeze. As I said earlier, many plants in the U.S. have been impacted. Most of our chlor-alkali plants in the industry along the Gulf Coast have also been affected. Due to the strong demand for PVC, chlorine is very tight. Several price announcements have been made. On the caustic side, as the economy recovers, costs are also improving. It's not just the U.S.; international caustic prices in Asia and Europe are improving due to the strong demand and the recovery of industrial production worldwide. We have raised our announced price increases, and we're capturing a large share of the price increase we've announced.

Great. And then I guess also on PVC, ethylene, I guess, did see a little bit of a spike because of the storm. Prices may be receding here. But obviously, demand is very strong. Do you expect PVC price increases that you gained earlier to roll back, or do you think there's potential that you continue to hold on to a lot of that?

Yes. As we've discussed earlier, we had a series of price increases since June of last year as the economy has recovered from the pandemic. The demand is strong, inventory is very low, and we are experiencing higher export prices. Therefore, those dynamics exist today. There's a further announcement of price increases for May, and we are still in the early part of May. So, the demand remains strong, and pricing will be determined by supply/demand and export prices.

Up next is John Roberts with UBS.

Did you resell any electricity or ethane or anything else to help offset the storm impact?

Yes, John, we did. However, the relative impact during that period was relatively small.

Okay. And then, Albert, you mentioned the turnaround coming up in September. You've had a lot of downtime over the past 12 months. Were you able to accelerate any maintenance or anything into those unplanned downtimes that, maybe on average over the next couple of years, will have a low average maintenance expense and turnaround impact?

Yes. We did what we could. As you know, for a major turnaround, you must have all parts, labor, and equipment ready. We did what we could during that period. However, our turnaround schedule will still go through as planned. Hopefully, as you said, we can reduce a few days here and there but not materially.

Yes, John, just to add to my comments, we operate in Louisiana, which is a regulated market. Therefore, there are some limitations in terms of our ability to have some upside on any resale into the market.

At this time, the Q&A session has now ended. Are there any closing remarks?

Thank you again for participating in today's call. We hope you'll join us again for our next conference call to discuss our second quarter 2021 results.

Thank you for participating in today's Westlake Chemical Corporation First Quarter Earnings Conference Call. As a reminder, this call will be available for replay beginning 2 hours after the call has ended and may be accessed until 11:59 p.m. Eastern Time on Tuesday, May 11, 2021. The replay can be accessed by calling the following numbers: Domestic callers should dial 855-859-2056. International callers may access the replay at 404-537-3406. The access code for both numbers is 4677649.