PE Pricing Outlook
Q: What's the outlook for PE pricing and demand?
A: Peter stated that domestic demand in the U.S. improved by 5% versus Q4 last year, marking the strongest quarter since Q3 2022. " Export sales continue to grow, breaking records for the fourth consecutive quarter due to the cost advantage from the oil and gas differential. " Capacity utilization moved up to around 90% in PE in the United States. " Price increases are out in the market for April and May, with a strong case for them to stick. "

China Overcapacity Impact
Q: Is China's overcapacity suppressing PE prices globally?
A: Peter acknowledged that margins in China are not where they need to be due to overcapacity, and "everyone is bleeding". " Despite this, U.S. exports are breaking records as material finds their way into other markets where older, less flexible facilities struggle to compete. " There is a strong case for U.S. price increases to stick despite China's situation. "

CLCS EBITDA Goals
Q: Are you confident in achieving CLCS EBITDA targets?
A: Peter expressed confidence in achieving the $0.5 billion EBITDA target by 2027 and the overall goals set a year ago. " The Circulen family volumes have doubled, and margins are strong. " The first MoReTec investment in Cologne is on track, with work underway and a positive timeline to start up by the end of 2025. " The final investment decision on MoReTec in Houston is expected next year. "

Cost Control and SG&A
Q: How are investments affecting SG&A and cost savings?
A: Peter mentioned that while making good progress on the Value Enhancement Plan (VEP), a substantial part of the $300 million bottom-line value created last year has been reinvested in building up the Circular and Low-Carbon Solutions business, leading to higher SG&A. " Michael added that they continue to manage costs well, with SG&A as a percent of sales at 3.8% despite headwinds, and are making targeted investments while being disciplined. "

Sasol JV Consolidation
Q: Any updates on consolidating the Sasol JV?
A: Peter stated they are pleased with the joint venture with Sasol and continue to look at opportunities to grow and upgrade the core but will be extremely disciplined in M&A activities. " Michael added it is not appropriate to comment on specific transactions. "

Europe Rationalization
Q: Any further rationalization actions in Europe?
A: Peter noted they are continuously evaluating their positions in Europe. " They previously rationalized their polypropylene facility in Brindisi, Italy, and are considering strategic evaluations of their assets. " Positive dynamics around regulation support demand for recycled products, and their Cologne assets are strategic in this regard. "

Downstream Renewable Demand
Q: How is demand from PE customers for renewables?
A: Peter mentioned they continue to see very good traction in the market for renewable polyethylene. " They doubled the volumes of the Circulen family last year. " They are not contracting on a cost-plus basis; the market is setting its own price points, which align with or exceed their expectations. "

Cash Flow and Working Capital
Q: Is the working capital build complete?
A: Michael indicated that working capital should be relatively stable in the second quarter, and any consumption in the second half is not expected to be material. "

O&P EAI Price Trends
Q: How do you expect O&P EAI prices to trend?
A: Peter stated that the situation in Europe is changing, with customers buying more locally due to supply chain threats. " They expect further advancement in profitability in the region in the second quarter. " Consolidation announcements in Europe could remove approximately 1.5 million tons of ethylene capacity. "