Matthew Blair

Matthew Blair asked for confirmation on the significant market impact expected from China's removal of the VAT rebate on PVC exports, scheduled for April 1st, and if Westlake agreed with the potential for reduced export volumes. He also sought clarification on whether the incremental $200 million in 2026 cost reductions stemmed solely from Q4 2025 asset closures or included ongoing efforts.

Answer

Steve Bender, Executive Vice President and Chief Financial Officer, agreed that the 13% VAT drawback removal is expected to have a meaningful impact, noting that PVC export prices from China have already begun to rise in anticipation. He clarified that the incremental $200 million in 2026 cost reductions are above and beyond the actions taken in 2025, encompassing initiatives in manufacturing, logistics, and procurement, not solely tied to footprint optimization.

Matthew Blair asked for Westlake's perspective on the impact of China's VAT rebate removal (effective April 1st) on the global PVC market, given China's significant export volume and the 13% rebate. He also sought clarification on whether the incremental $200 million in 2026 cost reductions stemmed entirely from 4Q 2025 asset closures or included additional ongoing efforts.

Answer

Steve Bender, Executive Vice President and Chief Financial Officer, Westlake Corporation, noted that while China has significant PVC capacity, its exports are less. He confirmed the 13% impact of the VAT drawback removal, stating that PVC export prices have already begun to rise in anticipation, indicating China's intent to rationalize disruptive exports. He clarified that the $200 million in 2026 cost reductions are incremental above and beyond 2025 actions, encompassing initiatives in manufacturing, logistics, and procurement, not solely tied to footprint optimization.

Matthew Blair of TPH & Co. asked about the continuation of robust ethanol exports in 2026, identifying new markets beyond India, and the likelihood and potential uplift to the Carbohydrate Solutions business from E15 adoption.

Answer

Chair and CEO Juan Luciano emphasized the U.S.'s competitive position in global ethanol markets, citing potential growth in countries like Vietnam and Japan. He expressed optimism for E15 adoption, noting its technical feasibility and cost-effectiveness as an oxygenate, and highlighted ADM's diversified model and readiness to capitalize on market opportunities.

Matthew Blair of TPH & Co. asked about the continuation of robust ethanol exports in 2026, seeking information on incremental market opportunities beyond India, the likelihood of E15 adoption, and any potential uplift to ADM's Carbohydrate Solutions business if E15 passes.

Answer

Chair and CEO Juan Luciano highlighted the U.S.'s competitiveness in global ethanol markets, mentioning countries like Vietnam and Japan as potential growth areas. He expressed optimism about E15 adoption, noting no technical issues, but emphasized timing as key. Luciano also pointed to the future potential of low carbon intensity ethanol from carbon capture and sequestration for avenues like SAF, reinforcing the strength of ADM's diversified model.

Matthew Blair of TPH & Co. asked why Montauk Renewables maintained its full-year RNG production guidance despite Q2 weather challenges and inquired about the strategy for monetizing Q3 RIN production after holding back inventory in Q2.

Answer

CFO Kevin Van Asdalan explained that guidance was held steady because planned second-half well-field investments and optimizations are expected to offset the weather-related production losses from the first half. CEO Sean McClain added that the RIN monetization strategy is driven by placing attributes directly with obligated parties, not market timing, and their cash position affords them this flexibility.