Good morning, and welcome to the AdvanSix First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Adam Kressel, Director of Investor Relations. Please go ahead.

Thank you, Betsey. Good morning and welcome to the AdvanSix’s first quarter 2021 earnings conference call. With me here today are President and CEO, Erin Kane; and Senior Vice President and CFO, Michael Preston. This call and webcast, including any non-GAAP reconciliations are available on our website at investors.advansix.com. Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our business as we see it today. Those elements can change and the actual results could differ materially from those projected. And we ask that you consider them in that light. We refer you to the forward-looking statements included in our press release and earnings presentation. In addition, we identify the principal risks and uncertainties that affect our performance in our SEC filings, including our annual report on Form 10-K as further updated in subsequent filings with the SEC. This morning, we'll review our financial results for the first quarter of 2021 and share our outlook for our key product lines and end markets. Finally, we'll leave time for your questions at the end. So with that, I'll turn the call over to AdvanSix's President and CEO, Erin Kane.

Thanks Adam. And good morning, everyone. Thank you for joining us and for your continued interest in AdvanSix. We do hope you also remain healthy and safe. As you saw in our press release, AdvanSix delivered robust first quarter results to start 2021. Our collective organization contributed to generating significantly higher earnings and cash flow in the quarter, reflecting strong execution amid a tightened supply and demand environment, overall. Mike will detail our financials in a moment. But as you can see on the left-hand side of Slide 3, we've highlighted year-over-year variances for some key metrics in the first quarter. I won't mention them all, but you can see the significant improvement in performance, particularly our ability to nearly double our EBITDA compared to last year, which as you'll recall, was largely unaffected by COVID-19 and to generate a $57 million improvement in free cash flow year-over-year. Our first quarter of 2021 EBITDA was the highest we've seen since the first quarter of 2017 and our second highest quarter, since then. Importantly, we've captured pricing, achieved sales volume growth, and expanded margins while further reducing leverage levels. Across the Board, It was a terrific start to 2021, and we are looking to continue building on that momentum. Early in the first quarter, we announced the acquisition of certain assets of Commonwealth Industrial Services or CIS, which enabled us to expand our offering to directly supply packaged ammonium sulfate to customers. The acquisition also diversifies and optimizes our offerings to include a spray-grade adjuvant to support crop protection, a fire retardant and installation, as well as other specialty fertilizers and products for industrial use. I'm proud to say that the integration and synergy realization are progressing well ahead of plan and we are excited to extend our industry-leading value chain…

Okay, great. Thanks, Erin. And good morning everyone. I'm now on Slide 4, where I'll cover the first quarter financial results. We once again executed very well, as Erin pointed out, with strong volume growth pricing improvement, margin expansion and robust cash generation. Sales, totaled $376 million, that's up about 24% compared to last year. Sales volume in the quarter increased roughly 8% versus the prior year driven by improved end market demand across our product lines. You recall, sales volume had also increased about 8% in the fourth quarter of 2020 year-over-year, so a continuation of the strong trends we've seen exiting the year. Pricing was favorable by 16% comprised of raw material pass-through pricing of 11%, following a net cost increase in benzene and propylene and market-based pricing of 5%. The improvement in market-based pricing primarily reflects continued strength in chemical intermediates, particularly acetone. EBITDA was $55 million in the quarter, virtually doubling prior year levels. I'll walk through the key year-of-year variances on the next slide. Earnings per share of $0.98 increased $0.67 per share, versus the prior year. In the quarter, we saw lower effective tax rate compared to last year, primarily driven by two items that drove up last year's rate. First, was the tax impact of equity compensation investing. And second, was the federal carryback claim associated with the CARES Act. And finally, cashflow from operations was robust in the quarter, reaching $57 million, that's up about $37 million compared to last year, primarily due to higher net income and approximately $12 million cash tax refund, as we anticipated partially upset by the unfavorable impact of changes in working capital. CapEx of $14 million was favorable by roughly $20 million year-over-year, reflecting execution against our 2021 capital priorities and following the completion of several…

Thanks, Mike. I'm now on Slide 7, where we've included pricing and spreads across our product lines. Starting with nylon. We've seen spreads further improving on the back of industry supply constraints and demand improvement with economies recovering around the globe. This quarter we've also shown the resin spread over the upstream benzene input versus comparing to caprolactam costs, which we believe is a better indication of industry performance, particularly for integrated producers like ourselves. Although the industry remains an oversupplied position globally, we continue to be encouraged by the recent improvement in demand and pricing. The Asia caprolactam to benzene spreads averaged above $900 per ton in the first quarter, the highest level we've seen since the second quarter of 2019 and regionally 11, excuse me, $1,150 per ton in March. We are monitoring rise in benzene input costs, which we would expect both caprolactam and resin prices to closely follow moving forward. Overall, nitrogen industry pricing continued to move higher through the first quarter supported by improving agricultural fundamentals, including crop prices, farmer profitability, and planted acres overall. As a reminder, urea is the largest nitrogen fertilizer by total consumption and tends to have an underlying influence on other nitrogen products. However, ammonium sulfate does have its own supply and demand dynamics, influencing the premium earned for the sulfur nutrient. So while urea pricing did move sharply higher in the quarter, other nitrogen fertilizers, including ammonium sulfate did lag this improvement. In addition, we're tracking significantly higher raw material input costs for the industry. In particular, the Tampa sulfur market recently doubled from last quarter, settling nearly $200 per long time in the second quarter. Now that is by far the highest level we've seen since our spinoff in 2016. The recent increase reflects a reduction of supply…

Great. Thanks, Erin. Betsey, could you please open the line for Q&A.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from David Silver with CL King. Please go ahead.

Okay. Thank you. Good morning.

Good morning, Dave.

Good morning.

Hey. I wanted to – I have a number of questions here. But maybe if we could just drill down on the LIFO layers kind of issue that cropped up this quarter. So maybe if you could just provide a little background on the genesis or the origination of those LIFO layers that would be great? And then more to the point, would you anticipate further adjustments in coming quarters, in other words, will you touch on even more of those older LIFO layers going forward? Thanks.

Yes. Well, that's a good question, Dave. Yes, so we are on LIFO accounting, and we did have to make an adjustment of $6.6 million in the quarter, as we communicated as a result of a reduction in inventories from 2020. And we saw the reduction in the quarter and simply what that means is you need to go back to prior year layers and evaluate the cost of those layers. And some of those layers were at roughly a 20% higher costs in our current standard costs. And as a result, you have to absorb that into the P&L as you reduce the inventory levels. Now going forward, we don't anticipate inventory through the year by the year end to change a whole lot for where we are today. So we don't anticipate another adjustment going forward. But we'll obviously continue to monitor our inventory as we go forward here.

Okay. Thank you for that. I next had a question, I guess, on the sales trend this quarter in ammonium sulfate. So when I do the math, the percentage of sales that's allocated to them and your total revenues, I mean, it seems like it was a very modest increase year-over-year in ammonium sulfate revenue. And actually it was a decline from the fourth quarter. So I know there's certainly price and volume and a whole bunch of arms and legs there. But I confess thinking about how the market has improved both demand and price wise. I confess I'm a little curious why the year-over-year increase was only – was so modest relatively speaking in a market that seems to be quite robust right now? Thank you.

I know in that and certainly we have as we communicated here at David, good expectations were the peak of the season here in Q2. If you think about sort of how you progress throughout the year, the ag cycle run sort of July to June high in North America. In the fall there is, prep that fall fill right for some fall application North America, but then leading to basically building inventory levels for the spring plus the second half also has the contribution of us selling export into South America, as we sort of bridge the two growing seasons as we're producing ammonium sulfates year round. So it's always difficult to sort of know exactly how that will play out. I think that we are a staging material and selling material into the heart of the season. And again, on a full July to June ag season this will be a stronger season annually versus what we saw last year. So there could be some timing considerations, some mix and Michael if want to add into it, but I wouldn't reflect it more on a view that we're not going to see the benefits of the strong season coming through in our numbers here in Q2.

Yes, Dave, the only thing I'll add is last year we did have high export standard sales due to some sales timing. We had some shifts of those sales. They can be a little bit lumpy from the fourth quarter of the prior year to the first quarter of last year. And we didn't sort of see that repeated the timing this year. So as a result of that timing that impacted the year-over-year variance. So it's more of a sales timing consideration, really.

Okay. Very good with that. I have a question here on your income tax accrual rate. So, it was right around what I expected in the first quarter of 25%, but my assumption is that your earnings – your pre-tax earnings should be significantly higher this year than last year. And sometimes in cases like that, the income tax accrual rate I've found tends to creep up. In other words, there might be a handful of discrete tax benefits that have a certain percentage effect when earnings are at normal levels or slightly below normal. But when earnings ramp up, those discrete benefits kind of fade in importance and as a result, the accrual rate that we should be applying to your pre-tax income kind of can be higher than originally anticipated. So, as your company starts to swing into a higher level of earnings and pre-tax earnings, I mean, how should we think about the full year accrual rate for income tax purposes?

No. It’s good question, Dave. I would – I think still 25% is a good target to assume going forward and we are anticipating higher earnings as we've talked about this year relative to last year. The one thing that we've done a nice job with as we've seen in the past is driving credits and doing a lot of planning to mitigate any of the creep we could see from an effective tax rate. And so we continue to push the envelope there. But I still think a 25% sort of target and planning number from an ETR perspective is good. What I'll say too is with the sort of a bonus depreciation on capital expenditures, we're still going to see cash tax benefits from that as well. Our cash tax rate will probably be right around the 10% to 15% range that excludes the cash tax refund we got by the way in the first quarter. That's more normalized for the year excluding that. So we continue to see those benefits as well.

Okay. And then maybe one more question and I'll get back in queue. But this would be for Erin and it's a capital deployment question. And with your cash flow generation kind of picking up here and I think with a pretty bright outlook for a couple of quarters, I mean, you're going to have incremental, I guess, flexibility in my opinion. And I'm just wondering, if you could say which there was a little bit of share creep this quarter for instance, but how does the priority for buybacks or the inclination to deploy cash for share repurchases kind of shift here as maybe your flexibility grows? Thanks.

Well, thanks for that, David. And it's certainly consistent with our communications in past, we are committed to delivering strong and sustainable shareholder returns over the long term and obviously enhancing our value creation through capital allocation is a lever for us and a core strategy. As we drive growth in the business, our allocation priorities has been aligned with one, right as we've already started to demonstrate getting our debt leverage levels into our target range certainly as we had come through 2020 and navigating the pandemic, executing on high return investments in the business. And again, we still have opportunity sets that we continue to refine and prioritize and execute against. And these are strong waterline projects for us, right. We're targeting those 20 plus returns type levels. We believe as well that the opportunities we demonstrated with CIS, which for an acquisition is tracking to achieve, those levels that we would set for ourselves for capital projects, which is a great opportunity. We'll continue to build out those inorganic pipelines and capabilities. And as you note we recognized that returning excess cash to shareholders is in that mix for us as well. And as we progress through the year and we will continue to assess that. We still have our authorization in place. And we'll continue to think about what our long-term strategy should be here as well.

Okay. Thank you for that. So I am going to get back in queue. But I do have a couple more questions for you later. Thank you.

Okay. Right.

Thanks, Dave.

[Operator Instructions] Our next question comes from Vincent Anderson with Stifel. Please go ahead.

Yes, good morning. Great job to start the year off.

Thank you, Vincent. Good morning.

Thank you, Vincent. Good morning.

So let's just start get out of the way, what specifically did you have to deal with in the first quarter from a logistics perspective, particularly with import cumene and export capro. And then how are you positioned into 2Q, both from a cost standpoint and a working capital standpoint?

And maybe if we – the fact we do recognize that we left you all off at our last earnings call in the midst of winter storm and supply chain disruptions. And that sort of that's exactly maybe to get some context there. And then how we see the supply chain sort of stabilizing here through the quarter and into next into Q2. And I think certainly the results show that we performed well in a difficult period for the industry. And I mean, not that we didn't have any direct physical damage to our facilities, and as you know, it was really, how do we manage the disruption to the raw material side and there were components of factors, right to the industries in which we participate plant rates being offline, availability of raw materials it led to the transitory sort of tightness and demand, which really the industry is still working through. And we were one of the few producers that remained running consistently during that time that certainly supported performance in the quarter. We did take the largest utilization reduction in Frankford and Chesterfield while our Hopewell rates remained relatively strong and consistent with 1Q and 2020 performance and nearly in line with fourth quarter as we looked to move things around and protect that value chain. As you know, we did draw down inventories, like know that a significant reduction in the cord that played into the ultimate LIFO consideration, as we worked hard to meet our customer demands and customer needs and to support the industry going forward. So the U.S. demand continues to recover. It has been strong. I think our presence here helped. So, the cumene supply chain is it stabilizing back out through Q2, that's our expectation. And I think there's still a supply side tightness. When you think about the height of it, 70% of the phenol acetone supply was off in the U.S., a significant amount of cyclohexanone and even and others in the capro and nylon chain were impacted. So, I think the logistics in the U.S. and the supply side is sorting itself out. When it comes to export considerations, we have to watch that. We do see container ships rolling, availability of containers. We're trying to get ahead on pre-booking where we need to but that is something that certainly we'll continue to monitor. And I think we talk about that mix shift as well. I think, as we continue to see that mix shift back into the U.S. that alleviates a little bit of our – I would say our exposure on the export levels that perhaps were evident in our 2021, excuse me, 2020 numbers versus what will transpire in 2021.

Yes. Just a only other thing I would add is that if you recall, we started the year in a very good position from an inventory perspective. The cumene and the raw material inventory overall was up $25 million last year and was up $9 million in the fourth quarter and we knew a certain suppliers were going to take plan turnarounds in the first quarter. So that put us in a very good position to weather through some uncertainty in the first quarter as a result of Uri.

Okay, perfect. I appreciate that. And then just thinking about, kind of the capital markets outside of the U.S., I just wanted to get a check from your point of view. When we looked at China in the first quarter and kind of just Eastern Asia in general, they had a pretty wild start to the year in terms of gas prices and sulfur over there as well. Do you feel like any of that had contributed to spreads internationally in the first quarter, or was it too short lived? And what we're seeing right now is just really a good old fashion recovery.

There certainly, you may think in Q1, there were supply side disruptions in a number of places around the globe and had them here, Europe, at some point lost nearly 20, 25 or plus percent of its capital oxime capacity with some force majeures you had your typical sort of – I think ramp ups in China and dislocations potentially of raw material availability too. We've seen some stabilization in Asia as we've come into to April, on pricing, on spreads that we're watching. I think there is a quick start to textile demand that has perhaps plateaued a bit here too. So we'll be watching that into the second quarter. But I think the greatest, I think opportunity set here are certainly there'll be seen as of late is again, that the demand side has stayed in an improvement trend with recovery, whether it's housing, construction, automotive had posted strong numbers in every region. And as we work sort of through some of these disruptions, I think that will play out as we head forward to.

And then I wanted to spend a little bit of time on capital allocation. I know David brought it up, but maybe looking out a little bit further as you become more confident that we're facing a more sustained recovery. First off on the share buyback front, is there a percent of shares outstanding where you think it would make more sense to start curbing repurchases and start thinking about a modest dividend?

May look, first of all, you're aware of what we've done so far from a share repurchase perspective. We've repurchased over $100 million and more than 10% of the company. So, we've done a lot. We still have $60 million remaining on the authorization and we've navigated through more challenging times last year from a leverage perspective and gotten the leverage down quite significantly here down to the bottom in the range. And we expect that a farewell trend to continue going forward. So we don't necessarily target specific shares outstanding. I would say as leverage continues to improve, it just gives us more opportunity, more flexibility to create value for shareholders. And that could be either through share repurchases other ways to deploy capital, certainly you bring up dividends. That's something we haven't done yet. But that is something we would continue to evaluate. But also, M&A. I mean, as we get further down in terms of leverage and improve our cash flow generation, we have a very active pipeline, we have opportunities identified in every single one of our product lines. We did our first one this year. There are opportunities out there. We continue to vet and look to deploy capital there as well. So, it's really across the Board. And again, getting the leverage levels down gives us the opportunity to evaluate those, even more robustly going forward.

Kind of headed off a couple of my follow-ups to that, but I'm going to ask them anyways. So, when you think about the debt levels, they are obviously improving drastically. Do you think about maybe – the asset base that you have is in such a strong position operationally, do you think about maybe targeting a lower gross debt level overall to position yourself a little bit better for – to be opportunistic in a future downturn, or are you just very comfortable with where we are right now?

Again, we've communicated that the range. I mean, certainly we're comfortable we can operate within that range. We have plenty and ample liquidity within our credit facility that we're very, very comfortable with. And so, as we look at opportunities going forward we’ll again weigh leverage the outlook for cashflow generation, which we’ve proven we can execute well out, and compare that to, and consider that as we evaluate all those opportunities for additional value creation. So I wouldn't say there's a specific gross debt level we would target, we would look at it in terms of more of a, sort of a range of leverage ratio. But again, very focused on creating value here.

And then, so to drill into M&A, assuming that we can maintain, improving and maybe even getting back to an ideal macro backdrop. Would you expect to prioritize really more incremental downstream ad-ons like we've seen so far? Or are you starting to feel more comfortable thinking about expanding the asset base and product mix a bit more significantly?

Yes, when you think about, we've talked before, Vincent, I think when you have one way and historically, we have represented the company in a linear fashion rate as one value chain as we've been continuing to refine that that we really are much more diverse and in than just that representation, that in fact we have streams of technologies and chemistries, a wider variety of applications that’s in end markets that we are exposed to. And really thinking about the business more diversified into plant nutrients, and software nutrition is an area of continued growth. And as we share an area of interest, we've got a growing intermediates platform that has continued to perform well. It is getting investment this year, as we think those higher value application sets into coding, the electronic space, whether it's pharma even ag intermediate it's a nice franchise that continues to receive growth investments. And in areas we think about chemistry either to forward integrate in and around, or expand across the target application sets. And then obviously in nylon, we continue to focus organically at the time, right, as we think about that portfolio, optimization, amid sort of the end market application space. So, continue to see us in our disclosures how we represent ourselves into these three, sort of main segments from that standpoint. And well not reportable, but really how we are operating and driving discreet strategies around them and where are those targeted growth areas could be. So that's been our focus.

No, it makes perfect sense. I appreciate it. And then, so I'll just finish up with a couple more focused M&A questions then kind of tying into exactly what the strategy sounds like. So first, when I think about the nitrogen imbalance in Brazil, they're restarting some urea capacity and then as capro utilization rates kind of tick higher with demand overseas, maybe a little bit more incremental am-sul competition there specifically. Are there any acquisition opportunities, like the one that you just did here in the U.S., that could help firm up your footprint in that country?

Yes, I mean, so when you think about Brazil, I mean, just in general, the framework here, there are very few sort of independent players in a space that where we sit today, right. Brazil is a large import of its raw material ag considerations. And again, I will leave my remarks we said before that, we continue to explore all these avenues, right. We're looking for portfolio coherence, how we continue to – we can increase our margins, we can dampen cyclicality, right. There are traits that we're looking to address both with our organic and our inorganic investments in the business. And again, we can go in a number of avenues accordingly with that.

And last one, this one comes from a place of maybe a little bit more ignorance on the acetone side. But just given how tight it has become in the U.S., I know you've always felt really good about the mix and quality of the different grades that you offer. But is there a potential that any of your end users may be struggling in this price environment and present an opportunity to go downstream there?

The end markets in which the acetone goes into are all very robust. I think it’s evidenced by the demand. You've got large BPA consumers, you've got folks who are making methyl methacrylate, all of which are benefiting from, end consumer demands here. You've got strengthen in paints and coatings, and you can look down that value chain of how those end customers are doing. So, I think right now, certainly there are pressures here on pricing. I think, again, as we noted we would expect supply availability to ease throughout the year. Certainly, there are about 12K T of imports that have arrived this month. And we do need imports to help balance out the marketplace. But I would say that the strength of that value chain right now is rather robust just given the end market demands and considerations.

All right. Excellent. Thanks.

Our last question comes from David Silver with CL King. Please go ahead.

Okay, thanks a lot. I think I have kind of a question about the turnaround activity for your company, kind of a two-part question. But could we get an update, I believe, in the second quarter you scheduled for one of your major pieces of equipment, sulfuric acid, to undergo its annual turnaround. And first of all, I'm just wondering if you could kind of update us on the progress there? And then secondly, I mean kind of somewhat related, but should I assume that there won't be any interruption or any reduction in your planned shipment capability during the second quarter. In other words, I see the inventory levels coming in to the second quarter. And there's a certain amount of production you'll be able to do before you have to take equipment offline. But based on kind of your product availability, and also the timing and execution of the turnarounds, I mean, could you just give us an update on how that aspect of your overall operations is progressing through, what I consider the peak spring selling season for some of your products? Thanks.

No, I'm happy to David. and maybe just on a positive, right, if we think about the full year impact rate of turnarounds, continuing to expect $25 million to $30 million. If you look at that on a comparable consideration for likely the same type of turnaround we took, it would be in 2019 at $35 million. So, I think we continue to focus in on our execution and delivery of our turnarounds and creating value here. Now, if you may recall, we take two outages in the year and hope well to do one in the spring and one in the fall, one is smaller in the spring. And in this case, our turnaround for the set plan our sulfuric acid plant will be in the fourth quarter. So, if you think about that that consideration, in the second quarter, we are taking more of our lighter turnaround and hope well we also have the remainder of our Frankfurt turnaround to complete. We did pull as much we could forward in Q1 as we were navigating the impacts of winter storm. But we still have some work that has to be completed at in the second quarter. So that's what the second quarter represents. And in these times, we also leverage the ability. The plants are still running, right, albeit at reduced rates. But those were taken into consideration, certainly, as we think about how we meet our customer demands and continue to navigate through. So, we've planned very well for these. I think that's shown in the targeted expectations for impact. And we continue to drive forward, not just in – we're executing right now in the second quarter. And then obviously in strong position for good execution as well on the said plant. So, again, I think, from a full year perspective, and even in the height of Q2, we think we're still very well positioned. We've moved material into the value chain, into warehouses for the peak of the ammonium sulfate season, as you asked about that, particularly. So again, I think, we've pulled all the levers in preparation. And expect that we will navigate through this well as we as we had intended.

Okay, thanks. I had one question, I guess, about the engineering resins part of your nylon business. So, I was listening to a conference call from another – from an engineering resins producer with big interest supplying the auto industry. And during their conference call a few days ago, they cited shortages of nylon and one other product PBT. And that was disrupting the supply of engineering resins to their customers. Now, I know there's several types of nylon that might be used in engineering resins. And they are a mix it's not just nylon typically. But from your perspective, I mean, is that an isolated incident? Is that something you are seeing in that part of your business, in other words maybe just some color, if you can share it on how that aspect of the nylon market might be supply demand wise relative to the broader market? Thank you.

Yes, sure. In auto you have two I would say amongst others, you have a significant demand for Nylon 6-6, as well as the Nylon 6. Nylon 6-6 has had, once again, some significant supply shortages happening right now with it, certainly there were implications of the storm here for several players. But there also is a rather significant force majeure happening in Europe right now, as it pertains to some key raw materials into that value chain with a number of players out announcing sort of indefinite force majeure. So that has certainly crimped the supply side in a key nylon resin for that space. And, I think, what we saw here in North America, again, a bit transitory with tropical storm theory. We did see and continue to see engineering plastics growth for our portfolio. It's an area of focus for us as we think about that application rate. So, we certainly had – and worked hard, right to meet the industry demand here and support it right through a challenging time over the last couple of months. So, I think, there's a number of factors, mostly all supply side driven as you likely noted. But I would say it’s equally, if not more sort of impacted by PA 66, as it is six at this time.

Yes. No, thank you. I kind of suspected that, but I didn't want to make an assumption. So thank you.

You are welcome.

And then maybe just last one very quickly, but I'm used to reading line charts, and when a line goes up, like someone, I don't know, I don't want to say anything. But someone has a medical condition and a line spikes up on a medical piece of diagnostic equipment that kind of reminds me of what's happening to the assets on price chart that you have been providing quarter after quarter. So, I mean, from your perspective internally, I mean, I'm sure you are enjoying, very robust pricing and margins right now on that part. But for planning purposes, I mean, would you expect some imports or some adjustments in the market? I mean, how – for planning purposes, I mean, how persistent or how – what duration do you think these elevated spot market or small buyer, acetone prices can continue on, on this trajectory reef and remain at this level? Thanks.

Over the last couple of months here David, right there certainly is the supply side consideration, but there's also been a significant input cost consideration here that has played through the market and influenced underlying pricing as well. On the raw material side, we have seen propylene ease off, right, as one consideration. And then to your point, relative to underlying supply availability, as I noted, materials have started to flow back as acetone availability throughout the world has improved. And we do need, let's call it, 10,000 to 15,000 tons give or take to help balance out the market on a monthly basis about 12 came in this month. So again, we're going to see that continuing to trend as phenol utilization globally rebounds. As you may recall, sort of that phenol and nylon recovery with something we were looking at, from the impacts of COVID, those were certainly hit hard. And, I think, as we look to the back half of the year, certainly those are mileposts that we're watching. And phenol demand is improving, an underlying trend for a number of its applications. And so again as supply availability eases, we would expect the moderation as you point out in any cycle here.

Okay, great. Thanks. That's it for me. I appreciate it.

Thank you.

Thanks for all the good questions. This concludes our question-and-answer session. I would like to turn the conference back over to Erin Kane for any closing remarks.

Great. Thank you all again for your time and interest this morning. In the current set of industry conditions, we are driving best possible outcomes for our business. We delivered terrific results in the first quarter of the year and are hopeful you share our excitement about the opportunities that lie ahead. We are confident in our ability to create long-term and sustainable shareholder value as we continue to execute our strategies across the portfolio. So with that, we'll look forward to speaking with you again, next quarter. Stay safe and be well.