Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Westlake Corporation First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, May 4, 2023. I would now like to turn the call over to your host today, Jeff Holy, Westlake's Vice President and Treasurer. Sir, you may begin.

Thank you. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our first quarter 2023 results. I'm joined today by Albert Chao, our President and CEO; Steve Bender, our Executive Vice President and Chief Financial Officer; and other members of our management team. During the call, we will refer to our two reporting segments: Performance and Essential Materials or PEM or Materials; and Housing and Infrastructure Products, which we refer to as HIP or Products. Today's conference call will begin with Albert, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results, after which Albert will add a few concluding comments, and we will open the call up to questions. 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. These risks and uncertainties are discussed in Westlake's Form 10-K for the year ended December 31, 2022, and other SEC filings. We encourage you to learn more about these factors that could lead our actual results to differ by reviewing these SEC filings which are also available on our Investor Relations website. 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 website at westlake.com. We have also included an earnings presentation, which can be found in the Investor Relations section on our website. A replay of today's call will be available beginning today, 2 hours following the conclusion of this call. This replay may be accessed via Westlake's website. Please note that information reported on this call speaks only as of today, May 4, 2023. And therefore, you're advised that time-sensitive information may no longer be accurate as of the time of any replay. Finally, I would advise you that this 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 2023 results. For the first quarter of 2023, we achieved sales of $3.4 billion, net income of $394 million and EBITDA of $825 million. These solid results reflect significant improvement in volumes, margins and earnings from the fourth quarter of 2022 as customer destocking activity moderated, end market demand improved, and we benefited from lower feedstock fuel and power costs. As demand improved in the first quarter, we shifted sales volumes from exports to domestic markets, contributing to better sales mix and higher integrated margins. We also benefited from lower feedstock and energy costs compared to the levels of 2022 as our globally advantaged low-cost feedstock and energy position in the U.S. Gulf Coast improved further, but we also saw lower energy costs in Europe as well. Our results for the first quarter also reflected the achievement of approximately $25 million of cost savings in this quarter towards our previously communicated $55 million to $105 million of targeted 2023 cost savings. Each of these factors supported solid improvement in our integrated margins on the fourth quarter of 2022. Looking at our first quarter financial results, I'm particularly proud of our HIP segment performance, which maintained EBITDA margin of 20%, similar to the first quarter of 2022. These margins were achieved despite a 21% decline in volume when compared to the prior year period, which was driven by the decline in home building activity due to lower affordability from higher mortgage rates. This demonstrates the benefit of our product mix and strength of our brands. The margin stability of these businesses along with the long-term growth opportunity in the U.S. housing market were key reasons why we invested in the HIP segment in 2021 through the acquisitions of Boral Building Products, LASCO Fittings and Dimex. We continue to have a positive long-term view of the U.S. housing market, driven by the deficit in new housing construction since the Great Recession in 2020 -- 2008 and increasing demographic demand. Turning to our PEM segment. We continue to operate with agility as we navigated the current market dynamics by shifting PVC and polyethylene sales volume back from export markets to rebounding domestic markets, while solid chlor-alkali markets drove higher average selling prices for both chlorine and caustic soda in North America. Lower feedstock energy prices, combined with our cost reduction actions, drove significant improvement in integrated margins from the fourth quarter of 2022. Overall, I'm very pleased with our first quarter performance and the team's ability to successfully adjust to rapidly changing end market trends. I would now like to turn the call over to Steve to provide more detail on our financial results for the first quarter 2023.

Thank you, Albert, and good morning, everyone. Westlake reported net income of $394 million or $3.05 per share in the first quarter of 2023 on sales of $3.4 billion. Net income for the first quarter of 2023 decreased $362 million from the first quarter of 2022 as a result of lower average selling prices and integrated margins, particularly for PVC, polyethylene, epoxy resins, and lower production and sales volume in each segment. When compared to the fourth quarter of 2022, net income increased by $162 million in the first quarter of 2023 due to higher production and sales volume in each segment lower feedstock fuel and power cost in North America and Europe. The key market conditions that we experienced in the fourth quarter of 2022 improved throughout the first quarter of 2023, as destocking abated and North American demand for PVC and polyethylene improved, which allowed us to shift sales volumes back to domestic from export markets in this stronger environment, driving higher netbacks. The customer destocking in our HIP segment that occurred in the second half of 2022 also abated which, along with the seasonal uptick in spring construction activity drove a 10% sequential increase in HIP volumes. Overall, we were pleased with the first quarter 2023 operational and financial results and we are cautiously optimistic about demand trends as we move into the seasonally stronger second quarter. For the first quarter of 2023, our utilization of the FIFO method of accounting resulted in an unfavorable pretax impact of $45 million compared to what earnings would have been reported on the LIFO method. This is only an estimate and has not been audited. Moving to our segment performance. Our performance in the Central Materials segment first quarter 2023 EBITDA of $615 million decreased $456 million from the first…

Thank you, Steve. Since the fourth quarter of 2022, the economic environment has improved, but with some mixed economic signals. This improvement in the economy drove demand growth for all our products during the first quarter of 2023 as compared to the fourth quarter of 2022. Additionally, lower natural gas, ethane and power costs further improved our structurally advantaged low-cost position in North America. Taken together, the volume improvement and lower cost position drove the improved first quarter results and highlights the strength of our business in the current economic environment. Looking ahead, we are cautiously optimistic that economic conditions have stabilized and believe demand for our products will continue to improve as 2023 progresses. We expect demand from China to continue to improve which would spur demand for many of our products, improving integrated margins. We also expect demand in the U.S. to improve with increasing industrial and construction activity. In our HIP segment, the overall housing market continues to be impacted by affordability concerns resulting from the higher mortgage rates. Yes, we have seen homebuilders taking action to address these conditions and adjust prices, including increased incentives. Our strong brand and product mix of 50% new construction and 50% repair and remodeling has remained resilient and supportive of margins in these market conditions. Longer term, U.S. housing remains structurally undersupplied due to the homebuilding deficit since 2007, relative to the 50-year average of 1.5 million new homes built annually and improving demographics support more first-time homebuyers over the coming decade. As a result, we continue to have a very positive outlook on the long-term fundamentals for our building products business. In our PEM segment, growth in global population and continuing urbanization, keep the outlook remaining favorable as Performance Materials using everyday products such as housing, packaging, health care,…

Thank you, Albert. Before we begin taking questions, I would like to remind listeners that our earnings presentation which provides additional clarity into our results is available on our website, and a replay of this teleconference will be available 2 hours after this call has ended. We will provide that number again at the end of the call. We will now take questions.

[Operator Instructions] Your first question comes from the line of Michael Sison of Wells Fargo.

Nice start to the year. Albert, I think you mentioned that 2Q tends to be seasonally better than 1Q. As you said -- as you look at demand and where integrated margins are for all your businesses, how do you think that plays out this year given things are weakening across the board?

Yes. We've seen inventories destocking run its course and pretty much finished that destocking process. And we believe that customers are reordering as they see the demand. And we believe that the economy has stabilized through the changes in interest rate increase, and it should improve from the bottoms we've seen in the fourth quarter of 2022. But having said that, the Fed just raised interest rates, and they could have repercussions in the economy going forward. But we believe that the U.S. economy is still quite long, domestic demand is quite strong. We've seen that in our -- both in the PEM segment, polyethylene, PVC as well as in our HIP Building Materials business. So we are cautiously optimistic that we will see some improvements. It doesn't mean that we'll go back to 2022 or 2021 high levels before the interest rates start increasing.

Got it. And then for PVC and polyethylene, how is China recovering? And is the export market starting to improve here could really shore up domestic operating rates?

Yes. I think China's economy is improving slowly, slower than people expected after the opening from pandemic and after the Chinese New Year celebrations. But we see that the economy is still strong. People are going out about traveling and spending and the stimulus from the government as well, will take some time. We believe that China's economy should be improving.

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

Albert, in your press release, there is a comment that you saw increasing demand for epoxy resins which surprised me a little bit. Can you elaborate on what you're seeing in the epoxy market with regard to demand and operating rates? And looking ahead, are you seeing any increased stability in the pricing function there?

Sure, Kevin. Yes, we see epoxy demand improving, primarily in North America, still quite weak in Europe with a high cost position in Europe and also in Asia, it's relatively weak. But we are seeing signs of improvement and the U.S. economy is still growing. We need more windmill blades and coatings as well as structural products. So we believe that the epoxy business should have a good position going forward, but not as, of course, robust as in 2021, 2022. But we believe the demand is there. And I think when the economy recovers, the increased demand in epoxy, especially in the U.S. with a lower cost position as well.

Okay. And then secondly, your HIP segment margins hung in quite well given the volume decline as you sort of prove out that business through what seems to be a tougher external environment, demand-wise, Albert, do you see opportunities to add to the construction-related portfolio during the current cyclical downturn? It looks like your net debt has declined about $1.6 billion year-over-year, providing you with more financial flexibility. So curious as to your appetite to add via acquisitions to that business?

Kevin, it's Steve. And you're right, we've seen, I think, good performance in the first quarter to be able to maintain very strong margins in that business. And I think it illustrates the strength of the brand and the mix. And as we think about the mix of products that we have and the branding, there are opportunities to add to the portfolio in that building products business. And we continue to be quite interested to look to fill opportunities where we see demand and can satisfy our customers with those branded products and add to that portfolio. So we'll continue to look for opportunities to build out that portfolio where it makes sense. So we are constantly looking and as you would guess and actively in dialogue with folks just finding the right opportunity and the right price.

And our next question comes from the line of Josh Spector of UBS.

I was just wondering where you would say your cost base is now. So with what you reported in the quarter, does that reflect kind of the lower energy feedstock environment or your LIFO adjustments you call out. Is that the right way to think about that? Or is there another tranche that kind of flows through inventory that could help you versus where you are today?

Yes. Certainly, as a FIFO reporter, you would imagine that there is still some of that lower cost that will flow through as a result, which is why I always like providing you some sense of what we would see if you're using LIFO versus our FIFO. As you look forward into the forward prices for gas or for ethane, you can see that compared to 2022, '23 numbers for gas or for ethane will be significantly lower as we see in the forward curve. So we -- I think we're very well positioned with a Gulf Coast North American footprint for a large portion of our portfolio and that strong position will continue to play well if the forward curve plays out as it is forecasted to.

Jo, I just want to add some more information numbers. As Steve said, the average gas price in 2022 was $6.55 per MMBtu and the current and forecast estimate for 2023 is $2.95 per MMBtu, less than half of that. And as you know, natural gas also impact the price of ethane, which is a fixed now for ethylene and also impact our power price. We buy based on the power and natural gas price -- natural gas is a large fuel input for power. So all that has a very positive impact on our cost position.

So to give you some sense of the earnings potential here when you think of the sensitivities we have just to natural gas, $1 in MMBtu on an annualized basis across the entire portfolio of Westlake is $125 million improvement in EBITDA. And so given the fact that Albert was looking at $6.55 for 2022 and the forward curve of $2.95, you've got over $3 of forward value that could play through. So that sensitivity I gave you of $1, to $125 million of EBITDA is a huge potential opportunity for the company to see rent strengthened earnings this year.

I appreciate all that. And just quickly on the PVC sales mix. I mean you noted it's improved in terms of shifting back to the domestic market. Would you say it's normal in terms of your mix now? Or are you still a little bit more skewed to export than you typically are?

Yes, it's more normal. At the end of last year, the fourth quarter of 2022, because of lack of demand, people are destocking the inventory. We had to export a lot overseas and those prices are being lower. And as domestic demand recovered as well as the start of building season is really starting from March. So we are seeing the second quarter the demand has increased -- improved a lot more.

Our next question comes from the line of John Roberts of Credit Suisse.

You noted the increased exports of polyethylene and vinyls. Could you talk about some of the geographic shift that's going on in epoxy. So we've got China epoxies moving into Europe. Are you shifting any of your geographic footprint in our epoxy sales as well?

Yes. We are reacting to all the dynamics in the very competitive global marketplace. And as I said earlier, the China with its economy has been slowing in the past years or quarters, they exported the epoxy and as well as PVC to places like India and Europe. But we're seeing that being slowing down the Chinese economy is improving, but things could change. So -- but we are very cautious and colleagues and all the activities going on.

And then secondly, on the Westlake partnership, are you still just waiting for a better value to do more drop downs? And does it make sense at some point to drop the low-take cracker interest into the MLPs?

Yes. So when we think of the opportunity there to put the ethylene -- our ownership of the ethylene unit for low end of the unit, it's certainly possible. The issue is, as you noted, is really having the right valuations and the capital access. So there is an opportunity to do that if we see the right valuations and the right access to capital.

Your next question comes from the line of Duffy Fischer of Goldman Sachs.

When you look at the vinyl chain chlorine, EDC, VCM into PVC you see significant shifts in the relative contribution between the steps as we go forward this year?

Yes. Well, we looked at the chain economics, and you're right, they do move up and down the chain. Right now, the tolling value is very high. So the chain value is more on the chlor-alkali business lot downstream PVC, but that could change also.

Fair enough. And then one of your large competitors in epoxy has talked about doing some pretty significant restructuring of their assets, you've had years for about a year. As you look at it, do you have the right footprint, do you think an epoxy -- or do you think you need to do some significant restructuring of your asset base as well?

Yes, certainly, we are new to the epoxy business and have had ownership for a year. We find a lot opportunity to improve. And as we go forward, we'll try to improve our positions.

Our next question comes from the line of Steve Byrne of Bank of America.

This is actually Matt on for Steve. So just kind of looking at -- and we spoke a little bit to this, but Chinese coal prices have been softening up here a bit. And I know there was some expectation that perhaps China could rationalize some capacity of PVC because margins are pretty weak. But if we think about the competitive position out of Asia right now with maybe a softer feedstock market, you expect that maybe just goes to some margin relief for those producers and prices will stay kind of where we are? Or do you see this as deflationary for global prices? Do you think the demand can kind of soak that up?

Yes, that's great. That's a very good question. I think China, the double control on the carbon emissions environmental impact, dollar or GDP they generate is still much concerned by the government and implementing double control. And with the PVC, 80% of Chinese PVC are produced from the coal-based carbide process, and the nonintegrated producers who are not integrated coal mines with low PVC price cannot really compete and losing money. So there could be quite a chunk of Chinese non-integrated producers being getting out of business. But it doesn't mean that there's also still some expansions announced by the integrated producers. So we'll see how those dynamics play out. But it should improve the global economy when Chinese coal-based PVC producers are shut down or phased out.

Okay. And if I look at the U.S. vinyls like vinyl derivatives, PVC and just merchant chlorine markets, I mean, is there room for these markets to absorb further chlorine prices should caustic weaken and we see the chlorine side of the ECU push further pricing?

That's a good question. I think today, U.S. export is around 30-odd percent of its PVC already. And I think the caustic wise will export around 20-odd percent. So new capacity added on, we're also accessing the export market, which is very volatile. It can be good. It can be bad.

But from a price perspective and the implied margins that we're dealing with in PVC, is -- do you see a world where you can kind of push further chlorine prices into this market? Or do you think it's going to be by a pushback?

Well, if you're integrated selling the margin to be shared, but if you're not integrated, then depending where the chain you have. And the biggest use of chlorine in the U.S. is still PVC. So if you have chlor-alkali but no PVC, you're not able to access that market. And vice versa, if you're a PVC and no chlor-alkali, you can't get a margin. So -- and I think Westlake want the best integrated producer in the U.S. and all in the world.

Our next question comes from the line of Matthew Blair of TPH.

The HIP volume improvement of up 9.6% quarter-over-quarter appears quite strong, especially in light of just the weak construction markets. Are you able to break this out into one, what is just the normal seasonal move for HIP in Q1? Two, what was the impact of less destocking? And then three, what was the impact of just underlying demand improvement, if any, in the segment?

Yes. Yes, I think it's probably a large part is the impact of reduction of destocking because of the sharp interest rate increase last year and the mortgage rate -- high mortgage rates people really reduced the home purchases. And I think many of the builders are very cautious and distorted and use of all their products in the inventory. So -- but even then, still compared with first quarter 2022, that's kind of maybe a high peak of infrastructure business is still a 21% reduction in volume. So it's quite a dramatic reduction despite that compared with fourth quarter last year, it was an improvement. And second quarter usually is the strongest quarter in construction, as we said earlier. And hopefully, as we read that some of the homebuilders, they had incentives and everything else to increase the demand. And we read that recently, they are reducing some incentives because the demand is coming back, the 10-year average treasury rate is coming down from the what 4-odd percent, it's down to 3.4%. So it is a benefit from mortgage interest rates. So we are seeing some of improvement, but it's still a bit early. We don't know how the economy will pan out second half of this year. But I think most people are reading that housing will be poor this year compared to last year and will improve 2024 and 2025 sequentially.

Great. And then it looks like Southeast Asia spot caustic prices are down about 20% versus Q1 levels. Is that mostly a function of weaker industrial demand? And how likely is it that those weaker Asia prices will flow into the U.S. market?

Yes. As Asia was exporting PVC they have more access caustic. And coupled with a weak economy, generally speaking, in Asia, caustic price came down. We believe that export or Asia caustic prices bottomed out, and we're seeing signs of improvement. And also the economy in Asia are improving gradually, especially China, that will help. So we think that the demand will absorb some of those excess capacity.

And our next question comes from the line of Arun Viswanathan of RBC Capital Markets.

Congrats on the quarter. So I guess, first question is, you guys commented on some improving trends in PVC and epoxy. Could you just elaborate on those -- and I guess, is that -- do you expect that sales to continue and maybe accelerate with a tax reopening?

Well, as I said, PVC demand should be improving from fourth quarter level and into the first quarter and second quarter. But I think some of the consultants chemical market analytics saying that they foresee the rest of the year pretty much flat in prices, which shows that this is domestic U.S. price. And they are looking at somewhat improving prices for next year. This is forward-looking. So I think people believe that we've seen the bottom of fourth quarter last year and things will improve gradually as demand improves.

Great. And then maybe you can just update on your thoughts on caustic as you move through the year. You still expect declines? Is there really any stabilization there?

Yes. Again, caustic prices probably reached very high levels in the first -- end of last year, early this year. And the forecast by consultants are saying the price will decline gradually throughout the year and stabilize by the end of the year next year. Whilst it depends again on the U.S. industrial economy because caustic is used very broadly in many areas, and pulp and paper right now is a bit weak, reflecting the economy. But what else things will improve and alumina -- aluminum is -- demand is increasing. The infrastructure construction is increasing and also mining, lithium mining, other kind of mining is increasing. So demand in caustic could improve. We don't know. But as we said earlier in our call, that caustic and chlorine prices are very high levels, and we are benefiting from those with lower power costs and natural gas prices. So we're benefiting from the margins.

Our next question comes from the line of David Begleiter of Deutsche Bank.

Albert, we've seen rent oil price drop from the high 80s to the low 70s in the last 3 weeks. And I think about that drop and its impact on both the U.S. cost vantage and your own ethylene chain profitability.

Well, definitely, it would have some impact. As you know, most of the world, probably 2/3 or so using naphtha as destock for the ethylene cracker. So as oil price dropped, naphtha price drop, it improves the economics. But especially in Asia, the naphtha-based ethylene, polyethylene producers have been losing money selling polyethylene based on the naphtha price. So this should help them improve the economics. But we are still very competitive with ethane cracking, our cost is really -- definitely it is the lowest among all the feedstocks and still a wide margin apart from naphtha cracking.

Very good. And just on the U.S. polyethylene prices, I don't believe the April contract has failed yet. How do you think about Q2 U.S. polyethylene prices has trended in the quarter?

Yes. I think the polyethylene price for April has been flat. It came on settled and flat. And I think, again, some of the consultants are looking pretty much flat price to the rest of the year. The industry has announced $0.05 a pound price increase actually for April and now push it to May. So the industry believes that the demand is improving. The price has been low compared with last year, they dropped sharply since the second half of last year that we deserve some improvements in margins. But time will tell whether the $0.05 can be -- or part of it can be realized in May or second half of -- second quarter of this year.

Our next question comes from the line of Aleksey Yefremov of KeyBanc.

Albert, can you talk about your utilization in the U.S. PVC assets and chlor-alkali assets. If you can provide any comments about your levels and also relative to industry averages?

Yes, there's some turnaround going on and some planned outages. I think the chlorine running out 80-odd percent and PVC is in the mid-80s operating rates and also reflecting the supply-demand dynamics globally.

Albert, and staying with PVC. How do you see domestic market if we try to break it down terms of demand between new housing, R&R and infrastructure? If you do know the kind of the rough percentages between those three buckets?

The infrastructure is the smallest component and housing, we think the largest component as we show in our HIP separations, we show the sales of our Housing and Infrastructure segment -- part of the segment. And within housing, probably 2/3 of the sales are related to repair and modeling in general, and new homes is 1/3. There are lots and lots. I don't know how many homes close to 100 million homes out there. And we're talking about 1.5 million, 1.4 million new home construction. And depending on the repair and modeling, what they use, whether it's siding, PVC window, roofing, so on and so forth. So they use a fair amount of PVC in repair modeling than in new construction. But new construction is still a big part of it. And for Westlake, we're about 50-50 with our capacities of -- in our HIP business, our sales split about 50-50, 50% goes into new construction homes and 50% go to repair and modeling.

And you could see that in the first quarter, repair and remodeling was fairly resilient even though we saw some continued concern in the new start levels, but you could see that repair and remodeling in the first quarter was resilient. There are forecasters that would continue to suggest that repair and remodeling will continue to grow this year, probably at lower rates than last year, but nevertheless, remain resilient to '23.

Our next question comes from the line of Hassan Ahmed of Alembic Global Advisors.

A question around polyethylene. You talked a bit about the pricing dynamics. Obviously, there's a fair bit of capacity coming online this year. But as I sort of sit there and look through the different grades of polyethylene, you guys are fairly sort of exposed to the LDPE side of it. And it seems that the capacity growth at -- on the LDPE side, is far more tepid than the other grades. So should we sort of expect to see divergence sort of pricing trends between the different grades?

Well, this is Albert. Good question. We always felt that LDPE should be separately priced and something is low and high density. They're all different. They all polyethylene, but a different -- serve different segments, but somehow our industry lumped altogether. And as you said, all the new capacity and those haven't started yet, but have mechanic completion, but having difficulty starting up. Those are primarily high density and linear load density and not LDPE. I think the LDPE has already started. But nevertheless, it has impact all the industry, they lumped together and the pricing ups and downs are linked together.

Understood. Understood.

One point I want to make to that the margins, even the price were up or down together, the margin for LDPE is far better than the margins for the baking polyethylene -- linear load density or high density. So turning better margins. Yes. Okay.

Fair enough. So now on the epoxy side of it Albert, you obviously -- the commentary sounded incrementally positive. So is it fair to assume that potentially Q4 and Q1 were the trough and sort of things start cycling up from there. And if that is the case, this inflection, will this be primarily sort of demand driven with sort of China picking up and the like? Or will it be partly demand driven and partly supply driven as well, where sort of -- in that sort of positive commentary you're being in maybe some capacity rationalization in the marketplace. Maybe less disruptive pricing. You talked obviously about China exporting less now. So I'm just trying to figure out supply and demand wise, what you guys have seen there.

Yes, that's a very good question. I think for PVC, we think you are right that Chinese demand increasing, especially real estate, which is a big component of the economy and the government tried to stimulate that part as well, that dimension increase of less export and pricing should improve and so as caustic. On the epoxy side, little bit different. It's not that a big business and the Chinese are building. Looking for the windmills and windmills are just getting back in China of new construction. Certainly, everybody needs a renewable energy and lower cost. So it takes time for that to come into this place. Meanwhile, as one of the earlier questions that they have been exporting the amount overseas. But as the year progresses in next year, I think next few years, definitely, the demand for epoxy globally will increase improve. But this year is still a -- maybe it's a bottom of the cycle year.

[Operator Instructions] Our next question comes from the line of Angel Castillo of Morgan Stanley.

This is Turner Hinrichs on for Angel. I was wondering if you could give us a little more color on your epoxy business results, specifically how they compare to 1Q '22 of last year and 4Q '22 of last year as well. And as part of that, would you say your epoxy business is gaining share in the market? Or how is Westlake's position evolving in light of the ongoing imports from Asia and strategic moves by one of your peers?

So good question. So the market was meaningfully stronger in the first quarter of 2022. And so you certainly have seen a change in market dynamic in terms of demand first quarter of 2022. So I'd say that with the energy power circumstance that we have, let's say, in Europe, European epoxy is in a much better position to be able to compete. But you're right, there is still imports of Asian epoxy into the European market, though as the Asian markets begin to rebound, less so in terms of the volume of epoxy resins into that market. When you think of the domestic market for our epoxy resin, as Albert noted earlier, it's a stronger position that we see there in terms of overall market demand. And so I would say that the troughs that we saw in fourth quarter as everybody was destocking across all product chains, we certainly saw that really come to an end at the end of the fourth quarter. And so I would say that we see some recovery as we get into '23 with '24 and beyond being stronger markets as we see greater demand for wind energy and windmill contracts being led in '22, '23 and '24 and beyond. And those will take time before those windmills are constructed and the demand really gets much stronger. So I'd say '23 is one of those years we see a strengthening of the market but not fully backed by any means back to the levels that we saw in '21 and first quarter of '22.

That's great color. Another one, could we get a little more color on the export mix picture for PVC and PE, respectively? And can you give any comments on your domestic and export sales mix and mix shifts relative to levels seen in the industry?

Yes. This is Albert. The industry exports for polyethylene is about 41% in March. Year-to-date, about 42%. For PVC, it's about 34% for March and 38% year-to-date. And for Westlake, we export less than the industry average in general.

And there are no further questions at this time. The Q&A session has now ended. I would like to turn it back to Jeff for closing comments.

Thank you. Thank you again for participating in today's call. We hope you will join us again for our next conference call to discuss our second quarter 2023 results.

Thank you for participating in today's Westlake Corporation's first quarter conference call. As a reminder, this call will be available for replay beginning two hours after the call has ended. The replay can be accessed via Westlake's website. Goodbye.