William Turner

William Turner asked if the outlook for chlorine price declines, previously called for by consultants due to vinyls weakness, had evolved, considering factors like the VAT export rebate elimination, and how chlor-alkali and vinyls earnings were trending. He also inquired about the swing factors for HIP's 19-21% EBITDA margin guide, including price, mix, or synergies.

Answer

Steve Bender, Executive Vice President and Chief Financial Officer, noted similar construction activity for vinyl demand in 2026 as 2025. He highlighted that caustic demand and pricing have seen traction with two price initiatives. Chlorine demand was slower in Q4/Q1 due to seasonal factors. For HIP, Mr. Bender stated that product mix is the primary swing factor for margins, as Westlake offers a 'good, better, best' range of products with varying margins to address affordability.

William Turner asked about the outlook for chlorine prices, given consultant predictions of significant declines due to vinyls weakness, and whether the situation had evolved due to factors like China's VAT export rebate elimination or demand changes. He also inquired about the swing factors that could lead to the low versus high end of the HIP segment's 19%-21% EBITDA margin guidance, including price, mix, or synergies.

Answer

Steve Bender, Executive Vice President and Chief Financial Officer, Westlake Corporation, noted similar construction activity for vinyl demand in 2026 as in 2025. He observed price traction in caustic soda (two announced initiatives totaling $140/ton) driven by industrial/manufacturing demand. For chlorine, he mentioned Q4/Q1 are seasonally weaker periods due to slower construction, refrigerants, and water treatment demand, with limited visibility beyond several months. For HIP margins, he identified product mix as the primary swing factor, as Westlake offers a range of products with varying margins to address affordability.