Hello, and welcome to the LyondellBasell Teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. [Operator Instructions] I would now like to turn the conference over to Mr. David Kinney, Head of Investor Relations. Sir, you may begin.

Thank you, operator. Before we begin the discussion, I would like to point out that a slide presentation accompanies today's call is available on our website at www.lyondellbasell.com/investorrelations. Today, we will be discussing our business results while making reference to some forward-looking statements and non-GAAP financial measures. We believe the forward-looking statements are based upon reasonable assumptions and the alternative measures are useful to investors. Nonetheless, the forward-looking statements are subject to significant risk and uncertainty. We encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are also available on our Investor Relations website. Comments made on this call will be in regard to our underlying business results using non-GAAP financial measures such as EBITDA and earnings per share, excluding identified items. Additional documents on our Investor website provide reconciliations of the non-GAAP financial measures to GAAP financial measures, together with other disclosures, including the earnings release and our business results discussion. A recording of this call will be available by telephone beginning at 1:00 p.m. Eastern Time today until March 3 by calling (877) 660-6853 in the United States and (201) 612-7415 outside the United States. The access code for both numbers is 13734290. Joining today's call will be Peter Vanacker, LyondellBasell's Chief Executive Officer; our CFO, Michael McMurray; Ken Lane, our Executive Vice President of Global Olefins and Polyolefins; Kim Foley, our EVP of Intermediates and Derivatives and Refining; and Torkel Rhenman, our EVP of Advanced Polymer Solutions. During today's call, we will focus on the fourth quarter and full year 2022 results, current market dynamics and our near-term outlook. With that being said, I would now like to turn the call over to Peter.

Thank you, David, and welcome to all of you. We appreciate you joining us today as we discuss our fourth quarter and full year 2022 results. Let's begin with our safety results on Slide number 3. LyondellBasell's employees and contractors delivered an outstanding safety performance during 2022. Injury rates at our company have consistently been among the lowest for our industry. But last year, we reduced the rate of injuries across our global workforce by roughly [0.5] to 0.12 injuries per 200,000 hours worked. At our Bayport complex outside of Houston, our team finished 2022 with over 6 million consecutive safe work hours, a new company record. Simply put, a consistent focus on safe work is embedded in our company's DNA and provides a solid foundation for extending that shared focus across other dimensions of the company's culture. Let's now turn to Slide number 4 to discuss our financial results. 2022 was a very challenging year characterized by a war in Ukraine, evolving responses to the COVID pandemic, energy volatility, inflation and rapidly changing monetary policies. At LyondellBasell, our portfolio of businesses continued to provide value for our global customers with products and solutions that are essential for modern society. In '22, LyondellBasell delivered earnings of $12.46 per share with EBITDA of $6.5 billion. Cash generation was exceptional and resulted in $6.1 billion of cash from operations; second only to our 2021 results. We ended the year with $6 billion of liquidity supported by a strong investment rate balance sheet. Interim invested capital was 16%, far exceeding our cost of capital. In addition to our focus on safety, we are sharpening our strategic focus to maximize value for our customers, shareholders and society under a range of scenarios. On Slide number 5, we outlined our progress on delivering value from…

Thank you, Peter, and good morning, everyone. Please turn to Slide 8, and let me begin by highlighting our excellent cash generation from our business portfolio during 2022. LyondellBasell generated a total of $6.1 billion of cash from operating activities over the past year. Our cash on hand increased to $2.2 billion at the end of the fourth quarter. During 2022, we achieved cash conversion of 96%, 13 percentage points higher than our 2021 cash conversion. In the fourth quarter, cash conversion reached an outstanding rate of 203%. This efficient and robust cash generation allowed the company to return a total of $3.7 billion to LyondellBasell shareholders in 2022. Let's continue with Slide 9 and review the details of our capital allocation over the past year. Our approach remains focused on disciplined capital allocation and strong returns for our shareholders. During 2022, cash from operating activities fully funded dividends, share repurchases and capital expenditures. We returned approximately 60% of the cash from operating activities to shareholders. This included $3.2 billion in quarterly and special dividends and $420 million in share repurchases. In May, we increased our quarterly dividend by 5%. This represents our 12th consecutive year of annual dividend growth. We continue to invest in maintenance and growth projects with $1.9 billion in capital expenditures. A significant portion of this capital funded the final stages of construction of our world-scale PO/TBA plant. Startup activities remain on track for the end of this quarter. Our transformation of is working across our company to rigorously manage and track the progress of our value enhancement program. We look forward to sharing the progress of this program at our Capital Markets Day in March. Now I'd like to provide an overview of the quarterly results for each of our segments on Slide 10. LyondellBasell's…

Thank you, Michael. Let's begin the segment discussions on Slide 12 with the performance of our Olefins and Polyolefins Americas segment. Fourth quarter O&P Americas EBITDA was $359 million. Prices and margins stabilized at the low levels we saw at the end of the third quarter. Market demand declined, and we also saw customer destocking during the quarter. That, combined with new polymer capacity resulted in well-supplied markets. We operated our assets at approximately 75% of nameplate capacity to match the reduced market demand and manage working capital. During January, we have seen modest improvements in domestic and export demand. Normalization of logistics constraints have facilitated increased export volumes. Also, moderating feedstock and energy costs are providing some margin tailwinds. As a result, we expect to operate our O&P Americas asset at an average of approximately 80% during the first quarter. Looking back at 2022, I want to highlight our progress on developing our Circulen business. We have established projects for classic waste sorting facilities that will be used to provide feedstock for our circular recover and certain the Revive product lines. We are also moving phoned our usage of olefins feedstocks produced from renewable sources such as used cooking oil. During 2022, we processed 15,000 tons of renewable feedstocks at our Channelview, Texas cracker, to produce ethylene, propylene and ultimately, polyethylene and polypropylene that we sold to customers at premium prices under our Circular brand. Last year, 4 of our U.S. manufacturing sites attained the ISCC Plus certification for certain grades of polyethylene and polypropylene. This enables LyondellBasell to offer customers mass balance certificates for these products and serve the market's rapidly growing demand. We are delivering these new circular new products to our customers and proving that polymers can be more sustainable and used in any application where…

Thank you, Ken. Please turn to Slide 14 as we take a look at our intermediates and Derivatives segment. Fourth quarter EBITDA was $291 million. Styrene margins improved due to lower feedstock costs. Oxyfuel margins remained well above historical fourth quarter averages. Oxyfuel volumes declined as the timing of the vessel sailings resulted in unusually high third quarter volumes. We operated our assets at rates of approximately 75%. Our propylene oxide and styrene joint venture in the Netherlands is expected to restart this month after 3 months of downtime in response to volatile European energy costs and lower demand. We look forward to initial volumes from the new PO/TBA asset in Houston by the end of the quarter. We plan to operate our assets across the IND segment at approximately 80% in the first quarter. In January, we are encouraged by unseasonably strong oxyfuel margins with low butane feedstock costs and strong oxyfuel blend premiums. We expect relatively stable margins for the segment for the first quarter. We developed multiyear maintenance schedules to ensure that our plants can safely and reliably serve our customers. As it works out, 2023 will be a heavy year for maintenance across several of our PO/TBA assets. Maintenance is scheduled for 2 of our 3 PO/TBA plants at our Bayport, Texas facility in the second and fourth quarters. Our [indiscernible] PO/TBA facility in the Netherlands will also undergo maintenance from September through November. We expect the ramp-up in volumes of our new plant will be partially offset by loss production from this planned maintenance. Nonetheless, the incremental 2023 PO and TBA volumes should be sufficient to capture typical market growth. In 2024, we expect less scheduled maintenance and the full year of production from our new assets will provide additional volumes to serve market growth. Now let's turn to Slide 15 and discuss the results of the Refining segment. Fourth quarter EBITDA included a LIFO inventory valuation benefit of approximately $40 million. Results increased on higher margins and slightly higher volumes following the third of the planned maintenances, offset by the disruptions of the December freeze. In the fourth quarter, the Maya 2-1-1 spread modestly increased to $48 per barrel, remaining well above historical averages. Despite unplanned downtime, we operated the refinery at 85% of capacity with an average crude rate of 229,000 barrels per day. In January, the Maya 2-1-1 spreads have also been unseasonally strong at more than $50 per barrel, driven by strong discounts for heavy crudes. We expect to operate the refinery at approximately 85% of capacity in the first quarter. Finally, I would like to recognize our team at the refinery for finishing the year with 0 recordable injuries in 2022. This is the first time such a record has been achieved in the 104-year history of this facility. Our team is dedicated to safely and reliably operating these assets until we exit the business. With that, I will turn it over to Torkel.

Thank you, Kim. Now let's review the results of our Advanced Polymer Solutions segment on Slide 16. Fourth quarter EBITDA declined to $3 million. Margins remain pressured by feedstock and energy costs as well as the $25 million noncash LIFO inventory valuation charge. Volumes fell on lower seasonal demand exacerbated by high power prices that impacted our European customers' businesses. In the fourth quarter, we embarked on a journey to transform the APS segment. Our goal is to sharpen our focus on customer service and product development to maximize value for our customers and for LyondellBasell. With increased autonomy and accountability, we are developing a more agile operating model with meaningful media and segment growth strategies. As part of this transformation, the Catalloy and polybutene businesses will be moved from APS and reintegrated into the O&P segment beginning January 1, 2023. This move will allow the APS team to sharpen their focus on the compounding business, distinct from the Polymer business of Cattaloy and polybutene, which serves our O&P value chain. From a portfolio point of view, we estimate APS will shift approximately $200 million of annual EBITDA between O&P Americas and O&P EAI segments very equally. We plan to provide additional information regarding the impact of this change in March. I strongly believe that our APS platform has a lot of potential and I look forward to reporting on our team's progress in delivering on this transformation during our Capital Markets Day in March. With that, I will return the call back to Peter.

Thank you, Torkel. And to the entire LyondellBasell team, thank you again for all the hard work in delivering strong results during a challenging year. To close out on the segments, let's turn to Slide 17 and discuss the results for our technology business on behalf of Jim Seward. During the fourth quarter, reduced global polyolefin industry operating rates resulted in lower catalyst volumes, licensing revenue moderated due to the timing of milestones for revenue recognition. We estimate that the first quarter results for the Technology segment will be similar to fourth quarter 2022 as catalyst volumes improve, offset by moderating licensing revenue. Our technology team is hard at work advancing engineering on LyondellBasell's first commercial advanced recycling plant. This plant will leverage on proprietary MoReTec technology to extract sale from most consumer mixed plastic waste by closing the loop and producing feedstocks for our Italian crackers. Our technology provides distinct advantages by reducing energy consumption, improving yields through innovative process designs and catalysis. Let me now summarize our results and first quarter outlook with Slide 18. Despite highly targets, our team is capturing value and moving forward on our strategic priorities. Most importantly, we are sharpening our focus on leveraging the scale of our clear portfolio to deliver resilient results. We remain focused on LyondellBasell's core values. Last year's outstanding safety performance speaks to the depth with which safety is ingrained in our corporate culture. Our goal is to expand our core petro foundations to encompass a more comprehensive passion for value creation. This week, we welcomed Trisha Conley to our Executive Committee as Executive Vice President, People and Culture. Trisha will play a pivotal role in leading LyondellBasell's vision and strategy to enhance the employee experience, elevate our organizational performance and create the best and most inspiring culture…

[Operator Instructions] Our first question comes from the line of P.J. Juvekar with Citi.

Yes. Just had a quick question on China reopening. What do you see in terms of inventory in China at the ports? And then maybe you can make a comment on your China joint venture with Bora and where you -- what were the operating rates there?

Thanks, P.J. This is Peter. Let me take your question first and then potentially Ken can also add to that. When we talk about China, it's still early stage to say that we see a sustainable recovery. We expect -- I mean that, that will take probably another 3, 4 months until we see that recovery is actually happening. So we're still very modest in our expectations on China. But at least, I mean, we know that there has been the opening. So the government has changed their way. I mean, how to look at that -- at COVID. And Bora, still hanging in there, I would say. Not very positive because of the situation and because of capacity utilization rates locally in the market being at technical minimums. Ken?

Yes, that's right. We continue to operate the joint venture of technical minimums. We've seen -- in two weeks, we're seeing a little bit of improvement in consumer demand, but it's really far too early to say that that's going to continue. Margins are continuing to be challenged. So we're seeing red load spread there still. So even with that improvement of demand, it's not translating yet into improved spreads. So -- we're watching that very closely, of course, P.J.

And the situation on PO is no different than on the situation of polyolefins?

Correct.

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

I wanted to just drill into the EAI segment here. Is the EBITDA loss-making a result of just the fixed cost absorption of running at 60% or were cash margins negative in the region in the quarter? And Ken, you mentioned demand improving. Is that sufficient to drive operating rates from 60% to 80%. Do you think that margins will remain stable? Or do you see risk of that given others may restart with lower and lower energy costs as well?

Thank you, Steve. Good question. And the other aspect that I would add, I mean, to what you -- to your question is, of course, also on the energy costs. As you know, I mean, energy costs have also moderated on a still very high level. [indiscernible] factor of 8 more expensive versus the United States, but at least, I mean, we're not at that peak anymore also helped them by the winter that has been very moderate so far in Europe. So I would hand over -- I mean, to give a bit more color to what is happening in the market to Ken.

Yes. Thank you. And just to remind you, we did have that LIFO charge in the fourth quarter of $50 million. So -- but looking at what we see coming out of the fourth quarter, we hit a very low point there because demand was coming off, energy costs were high. They moderated at the end of the quarter, and we're seeing that continue in the first quarter. We also had our [indiscernible] fracker down during the fourth quarter. So -- that's why our operating rates were lower. Those repairs are complete, the fracker is back up. Similar to what we see in China, we're seeing some improvement in consumer demand. But again, I would say it's still early. Let's not call it a win yet, but we're definitely seeing some early signs of consumer demand improving there. So overall, the margin environment is going to improve mainly because of what Peter had said around the energy costs.

Our next quarter comes from the line of Christopher Parkinson with Mizuho Securities.

Great. Could you just give your outlook on various regional operating rates and what's been happening across NGL and feedstocks? Could you just give us your latest update on the NGL front and what that just generally means for the progression of integrated [PE] margins throughout the year?

Thank you, Chris. Ken, do you want to?

Sure. Yes, I'll take that. Listen, NGL production continues to increase. So we expect that to be a tailwind, especially for our position here in North America. The oil and gas ratio is going to be continue -- or continue to be favorable for our portfolio. We don't see that really changing. We do expect there could be some strengthening in the oil price as we go through the year just as demand potentially comes back with China reopening. So all in all, I would say that the environment today should be better than where we were in the second half of last year around feedstock synergy in our portfolio.

And I think nat gas, I mean, [indiscernible] to $40 back to where it was in the first half of 2021.

Our next question comes from line of John McNulty from BMO Capital Markets.

This is Bhavesh Lodaya for John. You highlighted improving operating rates in North America in the first quarter. As we think about 2023, what type of U.S. domestic demand growth do you expect? And then as we think about like a further recovery in operating rates back to like historical levels, how much of that depends on rising exports and reducing some of the logistic constraints out there?

It's a very broad question, of course. I mean, let me try to digest to put it in different buckets here. I mean, needless to say that when we talk about the demand for mature goods with high inflation rates, which are still high with interest rates that continue to go up with new house builds and houses being sold still being very -- a very low base, yes, it's clear that we expect that the demand for durable goods will continue to be at least for the foreseeable future depressed. What we have seen on the other hand side, as we have seen in other cycles, is that demand for nondurable goods is relatively stable, not to say, I mean, in certain areas, even strong. So that has led to the fact that we have given this guidance that we say, I mean, we are now operating in the Americas at 80% utilization. And Ken already talked about the European utilization rates, which was [indiscernible] at 80%. In the I&D, I mean, you know that we have a start-up of the PO/TBA sands, as we alluded to and Kim said, starting up at the end of this quarter, which will add, I mean, a bit more volumes of propylene oxide -- but let's not overreact on that either because we have, of course, our scheduled shutdowns, turnarounds that we have moved to the periods when we are starting up, I mean, the new facilities. Stock we'll be able to grow a bit, but operating assets currently is at 80%. Also here, a tick higher than it was at the end of last year.

Our next question comes from the line of Jeff Zekauskas with JPMorgan.

A two-part question. When you think about the shutdown of your refinery at the end of 2023, does that mean that there are reduced operating rates in the fourth quarter of 2023? That is, do you have to really prepare to shut it down or you get to the end of the year and you shut it down? Second question is, you gave a sensitivity to natural gas price changes. You said every dollar per MMBtu is [$175 million]. And you said 20% is in Europe. So that's roughly 35 million MMBtus. The European gas price today is maybe $17 an MMBtu. And last year, it averaged $37. So it's down $20. $20 times 35, $700 million. So is that the benefit for 2023 if gas prices in Europe stay where they are relative to last year? Have I done the calculation correctly?

Thank you, Jeff. Very good questions. I mean, talking about the refinery, as we have said, I mean, we want to shut down the refinery in Houston by the end of 2023. So that has not changed in our opinion. The rationale for that has not changed either. And of course, there is some preparation that needs to be done in order to be hydrocarbon free by the end of the year. So Kim, if you want to add something on that question?

I would just tell the audience that we're working through the detailed plans of how to do that. As you alluded, you can do that with a slow ramp down? Or are you going to do that by just pulling the plug on the 31st [of the year], and we're working through the different scenarios to make sure that we have the most efficient an effective shutdown in clearing process.

Answer your second question, of course, I mean, if you just do the math, then you make up to that conclusion. But let's not forget that in Europe, our teams have done an excellent job by also increasing prices on one hand side, on the other hand side, also implementing energy surcharges. So you can't actually net that out the way you did, Jeff.

Our next question comes from the line of Frank Mitsch with Fermium Research.

Congrats, Michael and David on the Institutional Investor Magazine recognition, well deserved. Michael, you made good progress on working capital in 2022, and I'm wondering what the expectation is for 2023. And in terms of uses of cash, there was a breather on buybacks here in the fourth quarter. CapEx is coming down in '23. What are your thoughts in terms of a resumption of the buybacks?

So good question. So I think, first, I mean I just -- I'd point out again that the cash generation in 2022 was extremely strong. Excellent execution by the businesses from a working capital perspective during the year. In the fourth quarter, in particular, longer-term perspective as well. Kind of turning to this year and looking forward, I would say that, I think, first and foremost, our capital allocation priorities remain unchanged. And you all know that we have a reputation for generating strong cash flow and returning to gain cash flow to our shareholders, and that expectation has not changed. Thinking specifically about 2023, I would point out that CapEx is going to be down materially. So expectations for capital is about $1.5 billion. It is going to be a tale of 2 halves for this year with an expectation that the second half gets stronger. As we move here into the first quarter, it's my expectation that working capital should be flattish. But as I look towards the balance of the year, I actually hope to consume some working capital with better sales and better pricing. And then remember, our growth investments are starting to pay dividends as well, in particular, with the start-up of PO/TBA. And so again, as I think about the full year, it's my expectation, and I'm looking at Peter and he's nodding at me. But we will continue to return meaningful cash to shareholders, including growing our recurring dividend.

Our next question comes from the line of Vincent Andrews with Morgan Stanley.

Shifting back to polyethylene. Could you give us what you anticipate a reasonable range of outcomes is for Chinese polyethylene demand growth during 2023? And how much of that you think will need to be sourced from the ex-China market? And if you also had a view on what their demand growth actually turned out to be in 2022, that would be helpful.

Yes. Thank you, Vincent. Ken is already close to that. So...

Yes, we are very close to that. Vincent, thank you for the question. Look, our view for the last 2 years is the demand for polyethylene in China has been relatively flat. So when you talk about a range of outcomes for 2023, if you look historically, after 2 years like that, you would expect to see a significant snapback in growth, but it doesn't mean that that's a guarantee. So you could see anything from flat to plus 8%. It's very hard to call. That's why that's one of the markets that we watch very closely just because it is largely the price that are in the market. And will drive the absorption of all the new capacity that has come on. But we'll watch it closely and hope to see some more signs of recovery in the near future and more to come.

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

I have a long-winded question. So U.S. ethylene and polyethylene capacity has -- there's a cost advantage. And there's long-standing thesis that due to cost advantage, U.S. can export to anywhere in the world almost as much as necessary. It's not what's happening right now, right? You and the rest of the industry has lower capacity utilization. So why is there not an increase in export? Is it not economical or other logistical limitations that don't allow it? And could this change as we go through 2023 such that your utilization rates go up due to higher exports and there's no imbalance in the domestic market as a result?

Alex, this is Ken. I'll take that question. We've -- during the quarter, we actually did see both as an industry but in LyondellBasell as well an increase in exports. Some of that was related to some improvement in demand overseas, some less imports coming into some of the closer markets like South America from other regions. But also the relief of some of those [indiscernible] logistics constraints that we were dealing with in the first 3 quarters of the year, it really started to free up in the fourth quarter. So I think that you're going to start to see that continue in the first quarter and we'll get back to a more normal level of exports for 2023.

Our next question comes from the line of Michael Sison with Wells Fargo.

This is Richard on for Mike. Just wanted to touch on the value enhancement program. You've identified $150 million in cost savings for 2023. I know we're probably going to get more details on the call Markets Day. But any details early on in terms of what you've able to identify where are the buckets of savings are coming from? And then also just the cadence of the savings through this year would be great.

Yes. Thank you, Richard. This is Peter. Good question. The process -- I mean, the value enhancement program is ramping up quite impressively, I must say. We've done the major sites in the United States. And since the beginning of the year -- I mean the 2 major sites actually in Germany. We're expanding now also to other sites as we speak during the next quarters, both in the United States as well as in Europe. more than 3,000 projects that have been identified so far. And it goes, I mean, from areas in the manufacturing side to procurements to commercial excellence, supply chain management. So it's a very broad portfolio of different projects. We will give a couple of examples during the Capital Markets Day to make it more tangible. Today, we are mainly focusing on projects that have a very fast payback time, not so much projects that add and increase capacity, which is logical if you look at where the market is, but it is a continuous stage gate process that we have, where we continue to prioritize projects based upon the returns and based upon what we are seeing in the marketplace. So stay tuned, I would say, to get more specifics on a couple of examples on the 14th of March at the Capital Markets Day.

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

Two quick questions. One, in the increase in your operating rates across segments, does that contemplate some inventory build for the summer season? Or does that also -- or do you see that as kind of sell-through as well for Q1? And then on the polymers for Americas, what -- or what's your plan, I guess, for the split between U.S. sold and export this year versus next year? Do you have to improve your export percent meaningfully with the new capacity in North America?

Thank you, Duffy. I mean, let me split it up in 2 parts on your working capital question on the inventory question. First of all, Kim will give a bit of overview on the PO side. And then Kim can also talk about the olefins, polyolefins.

Thank you, Peter. So as it relates to the propylene oxide side, yes, we're building a a slight bit of working capital as a contingency for the startup. But once the startup is successful, which we have tremendous confidence in that inventory level will come down. And we expect throughout the year to operate at about 85% capacity based on the modest demand we see in propylene oxide right now.

Yes. So I talk a little bit about O&P, and I want to just echo what Michael. It's -- the teams have done an outstanding job in the fourth quarter managing our assets to be able to maximize cash flow and really focused on producing the products that we need to deliver with customers. We'll continue to do that going forward as we see markets improve, we will increase our operating rates to match that, and that may end up as Michael said, in markets taking working capital, but that's a good thing because we're going to have a stronger business as a result. But I'm just very proud of the team and everything that they did to manage that during the fourth quarter, which was quite a difficult time. To your question around increase in exports, we're going to continue to to see an increase in exports, I think, in general from the United States market or from the Gulf Coast market, just with all the new capacity coming on. As a company, we have been increasing the portion of exports for us as we ramp up the capacity with the new hypers assets. We're going to continue to see that happen. But clearly, our strategy around channels to market is to find the highest value customers and segments and that tends to be closer to home. So we're always trying to find more business here and we use the exports to really optimize the portfolio.

Our next question comes from Kevin McCarthy with Vertical Research Partners.

Can you discuss your view of the U.S. polyethylene contract pricing opportunities seems as though spot export prices have come up appreciably year-to-date, while producer inventory has been rationalized to some extent. So perhaps you can talk through what you're seeking currently and your level of confidence that will turn the corner and start to see contract prices move higher as the first quarter progresses?

Thank you, Kevin. Well, it's clear that we continue to have price increases out there in the U.S. market. And we're hopeful that these price increases, we see at least there is a good development in the marketplace. Ken?

Yes. So look, I'm confident we've seen strength in the export market that we did not see last year. So that's a good indication. And I think I mentioned this on the third quarter earnings call, we've sort of seen prices come down to all those parity with export pricing. So as you see exports go up, you should see domestic prices moving up, and I'm confident then the first quarter, we're going to see some increases here.

Our next question comes from the line Joshua Spector with UBS.

Just on APS, I'd just be curious if you want to comment on what the normalized earnings of that residual business is -- I mean, if you move $200 million over, I think even looking prepandemic, maybe there's $200 million in residual, like $250 million residual. Schulman used to be about $200 million, and you've got some synergies on top of that. So curious if you could give us some color there.

Definitely very good question, Josh. And this is one of the reasons why we have repositioned this APS business as well because we are, of course, not happy at all with the results in the APS business. And yes, there are lots of factors that they roll on market demand and higher costs that we have seen last year, energy cost feedstock costs -- so therefore, we have decided to mic reposition this business. And [indiscernible] like run it as a separate company within LyondellBasell. Michael, do you want to add?

Yes. Peter, first, I just want to say and express that I'm excited to have the opportunity to lead the Advanced bottomer solutions business through the transformation that we're embarking on. And I see a lot of potential in this business. And I put it in place a team that I think really can deliver. And the steps that we're taking, this Catalloy and [PB-1], or polybutenes or where that we're -- we really view [indiscernible] as a better fit in the O&P segment. This enables the new, what I call the new APS, to be very focused on our core value-creating model of compounding and customer solutions for brand owners and OEMs. We did well on the integration and cost reductions, but our APS business needs a much more customer-centric operating model. And this is going to be part of the journey that we are now embarking on it with the transformation. And our focused improvements in customer intimacy, technical support and service levels I think will really allow us to fix this business and grow it in a profitable way. And I'm looking forward to share more about this transformation journey at the Capital Markets Day coming up.

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

Peter, on your Circulen volumes, what are the price premiums you’re receiving and what types of margins are you realizing on these Circulen volumes? A –Peter Vanacker: Yes. Good question, of course. As we go into the markets with an entire portfolio, so we have a reasonable part of the portfolio, we have the circular part of the portfolio, which is either mechanical recycled or advanced recycled. We are in the market – I mean, with the entire family. Yvonne will give more insights in our go-to market during the Capital Markets Day also with our aspirations that we have by having set up this strategic business units, Currently, this is a market which is extremely short. Demand is substantially higher than the supply in the market. So we’re completely sold out in the products that we have available. The premiums that we are getting are quite attractive. Yes. I’m not going to put a number on it as we speak. You’ve heard numbers, I mean, from other calls. And I can say we are at least on that level. That said, Yvonne will be more insights on the aspirations that we have during the Capital Markets Day.

Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Vanacker for any final comments.

Thank you very much, and thanks again. Very good questions, very thoughtful questions. And once again, I hope that you will join us on March 14 as we will then share how LyondellBasell will advance on our strategy and unlock substantial value over the coming years. As we have said in the prepared comments for this call, we have not waited until the Capital Markets Day. We have already put a lot of things into action. And the purpose of the Capital Markets Day is to go deeper into the more specifics on the different pillars of our new strategy. I wish you all a great weekend, and as usual, stay safe.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.