Good day and welcome to the Steel Dynamics Second Quarter 2023 Earnings Conference Call. Please be advised this call is being recorded today, July 20, 2023 and your participation implies consent to our recording this call. If you do not agree to these terms, please disconnect. At this time, I would like to turn the conference over to David Lipschitz, Director, Investor Relations. Please go ahead.

Thank you, Holly. Good morning and welcome to Steel Dynamics second quarter 2023 earnings conference call. As a reminder, today’s call is being recorded and will be available on our website for replay later today. Leading today’s call are Mark Millett, Chairman and Chief Executive Officer of Steel Dynamics; Theresa Wagler, Executive Vice President and Chief Financial Officer; and Barry Schneider, President and Chief Operating Officer. Other members of our senior leadership team are joining us on the call individually. Some of today’s statements, which speak only as of this date may be forward-looking and predictive, specifically preceded by believe, expect, anticipate or words of similar meaning. They are intended to be protected by the Private Securities Litigation Reform Act of 1995 should actual results turn out differently. Such statements involve risks and uncertainties related to integrating or starting out new assets in the aluminum industry, the use of estimates and assumptions in connection with anticipated project returns and our steel metal recycling and fabrication businesses as well as to general business and economic conditions. Examples of these are described in the related press release as well as in our annual filed SEC Form 10-K under the heading Forward-Looking Statements and Risk Factors and on the Internet at www.sec.gov, and if applicable, in any later SEC Form 10-Q. You also find any referenced non-GAAP financial measures reconciled to the most directly comparable GAAP measures in the press release issued yesterday entitled Steel Dynamics Reports Second Quarter 2023 Results. And now, I am pleased to turn the call over to Mark.

Thank you, David and good morning everybody. Thank you for being with us on our second quarter earnings call. Once again, our teams achieved a solid financial and operational quarter. Highlights included continued safety improvement, 81% of our facilities were incident-free through the quarter, our cash from operations of $808 million and EBITDA generation of $1.2 billion. We also received improved investment-grade credit ratings, providing further third-party confirmation of the strength of our business model. We are also making significant progress on our aluminum flat-rolled investments. There is great excitement within the prospective customer base for new and innovative supply chain solutions from a differentiated supplier. I am incredibly proud of our teams. They are the foundation of our company and they drive our success. Is their culture of excellence, combined with our meaningful value-added growth, diversification and supply chain positioning that is resulting in our earnings strength in all market cycles? However, as I have often said, great financial performance is of no importance without safety for our SDI family. We are focused on providing the very best for their health, safety and welfare. We are actively engaged in safety at all times and at every level, keeping it top of mind and an active conversation. Our focus, as I said, the team’s safety performance further improved in the second quarter, way ahead of industry averages. There is more to do, we will not rest until we consistently achieve our goal of zero injuries. But before I continue, Theresa, would you like to give us some financial color.

Thank you, Mark. Good morning, everyone. I add my sincere appreciation and congratulations to the entire team for another strong performance. Our second quarter 2023 net income was $812 million or $4.81 per diluted share with, as Mark mentioned, EBITDA of $1.1 billion. Second quarter 2023 revenues of $5.1 billion were higher than sequential first quarter results, driven by increased realized steel selling values. Our second quarter operating income of $1.1 billion was 27% higher than first quarter results as a result of significantly expanded steel metal spread. As we discuss our business this morning, we are positive with industry fundamentals for the remainder of 2023 and beyond and we are focused toward our continued transformational growth. Our steel operations generated strong operating income of $706 million in the second quarter due to metal spread expansion and near-record shipments of 3.2 million tons. High realized pricing more than offset moderately higher scrap costs in the quarter. We realized increased pricing and metal spread across both our flat-rolled and our long product steel operations. As a reminder, we are the primary domestic steel supplier into the railroad rail market as well as a producer of all other long steel products, including structural steel, special bar quality, merchant shapes, specialty shapes and reinforcing bar with over 4.5 million tons of annual capacity. Operating income from our metals recycling operations was $40 million, consistent with sequential first quarter results due to increased shipments being offset by lower metal spreads. The team continues to lever our circular manufacturing model benefiting us by providing high-quality, lower cost scrap, which improves furnace efficiency and reduces company-wide working capital. Our Mexico recycling operations also provide a competitive advantage for reliable supply as well as for future increased scrap aluminum collection. We are the largest North American metals recycler today processing and using ferrous scrap and non-ferrous aluminum, copper and other metals. Our steel fabrication operations achieved operating income of $462 million in the second quarter lower than first quarter results, but historically strong as average pricing decreased 13% and volumes were steady. Our steel joist and deck order backlog extends into the first quarter of 2024. It has contracted from record highs experienced in 2022 as shipments have outpaced spot order activity. However, forward backlog pricing remains very strong and spot pricing remains very resilient. Based on our backlog, customer sentiment and manufacturing momentum, we expect steel fabrication earnings to remain strong, but slightly lower than the first half of 2023 levels for the second half of the year. Infrastructure Inflation Reduction Act, Department of Labor, decarbonization support and manufacturing onshoring are expected to support not only fixed asset investment in steel consumption, but also steel joist index demand in the coming years. Our cash generation continues to be strong based on our differentiated circular business model and variable cost structure. At June 30, our liquidity was $3.5 billion, inclusive of our recently renewed unsecured $1.2 billion revolver. I’d like to congratulate the team. They actually refinanced revolver yesterday. So thank you to Rick and Dominic. During the second quarter of 2023, we generated cash flow from operations of $808 million and $1.5 billion for the first half of the year. During the first half, we invested $585 million in fixed asset investments. We believe capital investments for the second half of the year will be in the range of $1 billion, the vast majority relating to our aluminum flat-rolled investments and the completion of our four flat-rolled steel coating lines by the end of 2023. In February, we increased our cash dividend 25% and repurchased $734 million or 3.9% of our outstanding shares in 2023. At June 30, $606 million remained authorized for repurchase under our existing $1.5 billion program that we put in place during November of 2022. Since 2017, we have increased our cash dividend 174% and repurchased $4.8 million of our common stock, representing 39% of our outstanding shares. In recognition of our growth, strong balance sheet profile and consistent free cash flow generation capability, last month, we received upgrades to our investment grade credit designation from both Moody’s and S&P. Our capital allocation strategy prioritizes high-return growth with shareholder distributions comprised of a positive base dividend that’s complemented with a variable share repurchase program, while we remain dedicated to our investment-grade credit designation. We have placed ourselves in a position of strength to have a sustainable capital foundation that supports meaningful strategic growth strong shareholder returns and investment grade metrics. Our free cash flow profile has fundamentally increased over the last 5 years from an annual average of $580 million to $2.6 billion currently. Our aluminum growth strategy is consistent with this strategy. We will readily fund our flat-rolled aluminum investments with available cash and cash flow from operations. We also plan to continue strong and responsible shareholder distributions as we have clearly demonstrated. We are squarely positioned for the continuation of sustainable optimized long-term value creation. Sustainability is also a significant part of our long-term value creation strategy and we are dedicated to our people, our communities and our environment. We are committed to operating our businesses with the highest integrity. We have an actionable path towards carbon neutrality that is more manageable and we believe considerably less expensive than what may lay ahead for many of our industry peers. Our sustainability and carbon reduction strategy is an ongoing journey and we are moving forward with the intention to make a positive difference, playing a leadership role. For those of you on the call, I’d like to track the product differentiation among our flat-rolled shipments. For the second quarter, our hot-rolled shipments were 972,000 tons, our cold-rolled shipments were 149,000 tons, and our coated shipments were 1,150,000 tons. With that, I will turn the call back over to Mark.

Thank you, Theresa. Hopefully, folks can hear us, I know it’s – I guess it’s not quite up to snuff today, so I apologize for that. But nonetheless, our steel fabrication platform turned in another strong quarter. The team continues to do an absolutely phenomenal job. Apologies, but it appears that many folks can’t hear us, hear the call. I would ask you to hang up and call back in, and we will just pause the call for a second. Thank you.

Ladies and gentlemen, apologies. Please remain connected. David, we will dial out to you and reconnect on your line. Ladies and gentlemen, participants please remain connected. We will reconnect the speaker line. David, we will dial out to you momentarily. Thank you for holding, ladies and gentlemen. We do apologize. Please remain on the line. The Steel Dynamics conference call will resume shortly. And the speaker line is now reconnected.

Sorry about that, folks. We will just continue from where you were.

Good morning again. Apparently, I believe you heard everything that’s been said, but it’s very, very choppy. So obviously, we will clarify things in the Q&A that perhaps you didn’t hear. I was just kicking off our steel fabrication platform, which turned in another strong quarter. That team continues to do an absolutely phenomenal job. Thank you to each and every one of them. We continue to have high expectations for that business and we believe non-residential construction markets will continue to be strong in the coming years. Non-residential starts and build rates are forecast to remain strong through the rest of this year and into ‘24, and related spending has been higher in 2023 compared to last year at this time. Continued onshoring of manufacturing businesses, coupled with infrastructure spending and fixed asset investment related to the IRA programs, should provide momentum for additional construction spending and extend the whole non-residential construction cycle. Equally important, our customers tell us demand remains solid and share our perspective. Our steel fabrication order backlog has shortened from its all-time high of over 12 months achieved in 2022, but it remains very strong from a historical perspective, extending into January of 2024 with a strong pricing profile. Current order entry pricing remains resilient, and we expect second half ‘23 volumes to be comparable to the first half 2023 shipments. We also believe average pricing will remain elevated, but possibly drift 10% to 15% lower than average for the first half of the year. Not only a significant contributor itself, our fabrication platform provides meaningful pull-through volume for our steel mills, particularly important in softer markets, allowing for higher through-cycle utilization rates compared to our peers. It also provides an effective natural hedge to lower steel prices. Our metals recycling platform achieved a strong second quarter despite price declines. After rising in the first quarter, scrap prices pulled back May through July with shredded scrap prices falling almost $100 a ton. We expect scrap pricing to fluctuate modestly during the second half of the year, perhaps seasonally rising somewhat in the third quarter and moderating again in the fourth. Our metals recycling geographic footprint provides a strategic competitive advantage for our electric arc furnace steel mills and our scrap generating customers. In particular, our Mexican volumes competitively advantage our Columbus and Sinton raw material positions. They will also strategically support aluminum scrap procurement for our future flat-rolled aluminum investments. Our metals recycling team is partnering even more closely with both our steel and aluminum teams to expand scrap segregation capabilities through process and technology solutions. This will preclude prime first scrap supply issues in the future. It will also provide margin enhancement from the aluminum scrap streams and materially increased recycled content of our aluminum sheet products. Our steel operations achieved near record shipments of 3.2 million tons and solid financial results in the second quarter. Our steel production utilization rate, excluding Sinton, was 93% compared to a domestic industry rate of 76%. Our higher utilization rates have been clearly demonstrated throughout all market cycles and is manifested by our value-added diversified product offerings, which amount to about 70% of our sales today, competitive advantage supply chain solutions, which is driving customer preference and mitigating price volatility, and the support of internal pull-through manufacturing volume. Our higher through-cycle utilization rate is a key differentiator and supports our strong and growing through-cycle cash generation capability and best-in-class financial metrics. Looking forward, backlogs are strong and the customer order entry is good. Auto production is good with expectations of higher output in 2023 relative to 2022 rates and dealer inventories have improved but still remain below historical norms. Non-residential construction remains strong. Our long product steel backlogs are solid. Onshoring and infrastructure spending should provide further meaningful support in the coming years. The turndown in residential construction seems to be abating. Oil and gas activity is strong, driving improved orders for OCTG and solar continues to grow substantially. At Sinton, the team achieved positive EBITDA for the second quarter and produced shy of 390,000 tons, which is about 52% of full capacity, which is lower than we had planned. But that said, the team has done a phenomenal job to get to that EBITDA positive position. Some of that lack of utilization was due to being on a single electrical furnace for a portion of the quarter. As we announced on July 1, we experienced equipment issues with the cast this year. Repairs are well underway, and we should be restarting within the next few days. Once we start, we fully expect to progressively ramp up month-over-month to an 80% run rate by the end of the year. The team has demonstrated the key competitive advantages of the mill. We have four product dimensional capabilities. That has been proven all the way out to 84-inch down to the 0.57 and up to 1-inch thick. Customers are reporting surface quality to be exceptional. Our strip mill design has allowed for thermal mechanical rolling, allowing the production of higher strength grades with lower alloy content and thus lower costs. Grade 80, grade 100 have been achieved, and we’ve been approved on and shipped some API grades. That affirms our technical process choices, and there is no doubt that this is the next-generation electric arc furnace flat-rolled steel technology of choice. We have gained strong market acceptance and can sell everything we make. Our exceptional through-cycle operating and financial performance continues to support our cash generation and growth investment strategies relative to our expansion into aluminum, responses from both current and new customers across all market sectors remains incredible. We are developing the mill site to co-locate processing and consuming operations as we have successfully done in Sinton, and we have a number of customers already speaking with us about such opportunities, which would be a competitively sustainable model for all of us. To recap the project, it’s a 650,000 metric ton aluminum flat roll facility, which will be located in Columbus, Mississippi, right across the highway essentially from our steel mill there. It will be a state-of-the-art facility serving the sustainable beverage and packaging markets, both including body and the automotive arena and industrial sectors. Specifically, we’re targeting 300,000 tons of can, 200,000 tons of auto and 150,000 tons of industrial product. The on-site melt slab capacity of 600,000 metric tons will be supported by two satellite recycled aluminum slab casting centers. We are purchasing and we should be closing on land, both in San Luis Potosí-central Mexico and also in the Southwest U.S. in the next two or three weeks. The mill includes two cash lines for automotive, coating line, downstream processing and packaging lines. We expanded the project scope to include additional scrap processing and treatment to maximize aluminum recycled content. All the principal equipment has been ordered, and we anticipate rolling mill start-up around mid ‘25. The Mexico slabs center should be January 1, 2025 and the Southwest U.S. slab center sometime in the first quarter of 2025. Total project cost, including the recycled slab centers should be $2.5 billion. 100% of that is going to be funded with cash. We expect to add $650 million to $700 million of through-cycle annual EBITDA to the company through that investment, plus around $40 million to $50 million of additional earnings from the Omni recycling platform. From an investment premise perspective, we just see a market environment not unlike that in the steel industry when we started SDI 30 years ago. Old assets, little reinvestment, heavy legacy costs, inefficiency and high-cost operations. There is a significant aluminum flat-rolled supply deficit existing today in North America and is expected to grow in the coming years. We see a real business alignment whereby we can leverage our core competencies of construction strength on operational know-how and our culture to truly leverage and exploit the technology. We will also be able to leverage Omni’s recycling footprint and maximize recycled content of the product. We believe it’s a very, very cost-effective, high return growth for us. And again, the existing and new customer interest and support is quite unbelievable. In closing, we are excited. We’re impassioned by the future growth opportunities as they will continue the high-returning growth momentum we’ve consistently demonstrated over the years. We’re celebrating our 30th year in business this August, and there are only better things to come. Our teams are our foundation, and I thank each of them for their passion and their dedication and their commitment. And we are committed to them. I remind those listening today that safety for yourselves, your families and each other is our highest priority. There is nothing more important. Our culture and business model continue to positively differentiate our performance, leading to best-in-class financial metrics. As I said, I think, on the last call, we’re no longer a pure steel company, but an integrated metals business providing enhanced supply chain solutions to the industry, which in turn mitigates volatility in cash flow generation through all market cycles. We’re competitively positioned and continue to focus on providing superior value for our company, customers, team members and shareholders alike. We look forward to creating new opportunities for all of us today and in the years ahead. So with that said, Holly, we would love to hand the call over to you and start the Q&A session.

Thank you. Your first question is coming from Curt Woodworth at Credit Suisse.

Yes, thanks. Good morning, Mark and Theresa.

Good morning.

Mark, you talked about fab pricing. You said to be roughly 10% to 15% lower in the back half of the year versus the first half, which seems to put realized pricing around the $4,100 per ton level. Can you help us understand maybe the cadence of how that would shake out between 3Q and 4Q? And then you noted the backlog for fabrication is extending into 2024. Are you seeing any evidence of price stabilization at this point in terms of how the backlog is shaping up in the early part of next year?

Thanks, Curt. This is Theresa. So I appreciate the question. When Mark said that the average pricing was expected to be down 10% to 15%, that was just for clarity for everyone on the call, that was measuring the first half of 2023 to the second half of 2023. So it wasn’t specific to a point in time or specific to the second quarter itself. We would say that we expect the cadence to be pretty equal from that step down in the third quarter and then stepping down a bit finally into the fourth quarter. Pricing is stable. It’s been very – I think the term we keep using is resilient, and that’s something that we pointed to in the past. We think there has been a structural shift in pricing for steel fabrication as there is really a lack of substitutability when you think about steel joist and deck and there is very good demand today and we think increasing demand with the momentum behind manufacturing for all the different reasons that we pointed to this morning. The backlog has a good pricing, very strong pricing from a historical perspective. I think that we see that heading very favorably into the first quarter. Frankly, we were just talking about it this morning, as you think about a lot of the public monies in those programs, those are being awarded, especially with the IRA and some of the Department of Labor dollars. Those are getting awarded sometime this fall, kind of call it late third quarter, early fourth quarter. So that should really benefit 2024 and 2025 as you think about manufacturing and construction. And definitely, steel fabrication will benefit from that.

Okay. And then in terms of the volume guidance, it seems like volumetrically you’re still expecting year-on-year decline in the kind of 15% to 20% level and you noted some project delays. Can you just kind of comment on within the backlog, or I guess, projects that have been burning off? Are there certain pockets of weakness you’re seeing that are greater than others? Obviously, there has been kind of a lot of talk on some of the warehouse spending dying down, but data centers and other areas seem to be really strong. So any color you can give on that would be helpful. And then just as a follow-up, can you give a comment on what you think capital spending for 2024 would be? Thank you very much.

Thanks, Curt. Yes. So as it relates to the mix of the backlog and I would say more so even in the current order intake activity. We have seen – and I think it’s positive for the economy in general – we’ve seen more projects coming in from whether it be education, healthcare, definitely manufacturing. So we’re starting to even see the electric vehicle batteries. We’ve seen the chips, we’ve seen a lot of advent and manufacturing from onshoring new things that we’ve talked about. So there is a mix towards those type of projects and away from just purely retail warehouses, which we’ve been seeing and talking about for a while now, probably 6 to 9 months. As it relates to capital spending for 2024, we expect to have capital spending for the aluminum project this year likely to be somewhere between $900 million and $950 million in total. Next year for the aluminum project is likely to be about $1.2 billion. So when you combine that with additional growth projects as well as a minimal amount of maintenance capital, we’re likely to have total capital spending in 2024 from what we can see today still around that $1.5 billion for the year.

Great. Thanks so much.

Your next question for today is coming from Cleveland Rueckert at UBS Securities.

Great. Good morning, thanks for taking my question. Maybe just one sort of on the aluminum side. I guess just looking at your budget and sort of outlook for demand there. Recently, there has been a downturn in aluminum can demand and that industry has been, I guess, a little bit disrupted. I’m wondering if that’s at all concerning to you and if you’ve adapted your demand forecast at all.

Absolutely not. We remain very, very bullish now. If you go back like a year now, perhaps the folks were projecting that demand would grow and you need four new aluminum mills. We didn’t believe that then. We don’t believe that now. But we certainly feel there is more space than to satisfy our market share for sure. The kind of the – sort of the pull back, I would say, is more an inventory standpoint. There is a lot of inventory; people panicked a lot last year. That inventory has to flow through the system. And there is absolutely no doubt that it is doing so today. In all honesty, when our mill comes up, I think that the marketplace is going to be in a beautiful place for us to receive product. Are you going to look longer-term? There definitely is a social change away from plastic bottles that will continue. It’s not just beer, it’s water, it’s all fluids. When you look at the automotive arena, we believe and we’ve had communications with virtually all the automotive folks; they have been restrained from developing greater volumes of aluminum through the lack of availability. We’re providing that availability going forward. I think we, just as we’ve done in steel, will gain market share quite rapidly. From a market perspective, we are still very bullish that the amount of interest we have across the aluminum space is incredible. I think I said it on our last call, in steel, we’ve never entered a market that has been underserved. Every market we’ve gone into, we’ve had to differentiate ourselves to gain market share. It’s refreshing for us that people are actually coming to us, and when you combine that need with our ability to change the supply chain to provide much greater value to the customer base, I think we’re confident to gain that market share quite rapidly.

Cleve, just as a quick reminder. In the last several years, they have had domestically the consumers of aluminum sheet actually had to import about 20% of their needs, and that had high tariffs associated with that imported costs. There is definitely room for just 630,000 tons of additional supply.

Good. Got it. I appreciate the confidence. And if I may just sneak in one follow-up question on Sinton. I think you had to replace a bearing on the caster. I’m just wondering if you’ve got – I didn’t hear it in the prepared remarks that maintenance work has been done and is back on schedule.

Yes, this is Barry. I’d just like to comment that those bearing issues we talked about at the tail end of last year, our teams mitigated most of the effects of that. We have a supply chain now that is both a more robust design and a more robust supply chain. So we’re really excited about the quality improvements and really the reliability of those casting segment parts. We believe our long-term plans can kind of approach it with several different prongs. And all of them are really being successful, and it’s to the point now that we can manage it very well, and we’re operating at full capacity, as Marc spoke, all capabilities of the machine right now are in place. We believe long-term, that’s going to be not an issue going forward that it will just continue to be high reliability and continuing high quality.

Okay, got it. Thank you. Appreciate it.

Your next question is coming from Tristan Gresser with Exane BNP Paribas.

Yes, hi, good morning. Thank you for taking my questions. The first one is maybe on the steel side. Can you tell us a little bit about the volume outlook into Q3? I noticed loan volumes were down on a year-on-year basis in Q2. So should we expect some pickup there? And with the symptom outage, how should we think, generally speaking, for steel shipments into Q3? That’s my first question. Thank you.

Tristan, this is Theresa. Thanks for the question. So we generally, we don’t give guidance as it relates to specifics on shipments. If you look historically, the third quarter is going to be generally the strongest shipment quarter we have in shipments for steel simply because of seasonality. Sinton is going to be down for July. We are still running the cold mill and the value-added lines which will help to place some of the lost volume. But we’re likely to have lost volume of anywhere between 50,000 and 70,000 tons of total steel shipments as it relates to the sheer outage in July. Other than that, we really can’t give you any additional guidance, but as Mark mentioned, the backlogs across the steel platform are very strong and order activity has been very good.

Okay. No, that’s helpful. And maybe a quick follow-up just on the fabrication business. You mentioned that joist and deck spot prices have stopped falling, at which level exactly you are seeing them now.

Tristan, we can’t give specific pricing related to the commercial teams would be after me. So, I think what we have said about pricing for fabrication is that the pricing has been very resilient. We have strong pricing in the backlog, but we did mention that there are expectations that pricing on average from – compared to the first half of the year, pricing on average for the second half of the year is likely to be down 10% to 15%, but we do believe pricing is stable, and it’s been very resilient.

Okay. I appreciate the color. Thank you.

Your next question is coming from Carlos De Alba at Morgan Stanley.

Thank you very much. Good morning. So just on pricing as well. Maybe you can provide some color even without giving those details. What we have seen in the benchmark information is how deep galvanized prices have been recently below the substrate cold-rolled coil prices, which is a little bit weird and obviously not sustainable. But can you provide some color as to whether you are also seeing that in your realized prices for these products? And one might explain the initial situation?

Yes. Carlos, thanks for the question. The marketplace is a little frothy right now. I would say the recent – the most recent change here in the CRU downward here yesterday or the day before in our mind doesn’t represent the market dynamics going on at the time.

Alright. Okay. Thanks Mark. And then just on Sinton, I wanted to confirm that you still expect the cost of the recent outage to be around $1 million, which is pretty insignificant. And when would you expect to reach closer to 100% capacity utilization, if that is your intent or do you believe or want to stay around 80% that you will reach towards the end of the year?

Well, the actual outage – the actual specific cost is well under $1 million. The issue was just getting parts and the size of the equipment involved, it wasn’t necessarily a large expense to repair. And the second part of that, sorry. Again, as you saw or as you heard from our comments, we are just tempering our expectations. We have always had higher expectations. We just believe once we get up and running here in the next few days, we were at – when we shut down 52%, 55% or thereabouts, we are just suggesting now that month-over-month we are going to progressively ramp up to that 80% by the end of the year. Then into next year, we will continue to incrementally ramp up to full production through ‘24.

Got it. So, in the second half of next year, fourth quarter next year is when you expect to get full capacity then?

No, Carlos. I would say that Mark – what Mark said is that we are going to have kind of an even pace we expect of ramp-up in the second half of this year for 2023 to get up to that 80%. But then we will reach the 100% of capacity very quickly in 2024.

Alright. Got it. Thank you very much. Appreciate it.

You’re welcome.

Your next question for today is coming from Timna Tanners at Wolfe Research.

Yes. Hey, good morning.

Good morning, Timna.

Wanted to just ask a little bit more about the cadence of added supply that you have outlined on the new coating and painting lines. Like should we start modeling contribution immediately in the third quarter? Will that be more fourth quarter and first quarter weighted? And then I have a second question. Thanks.

Timna, this is Barry. We are anticipating bringing the new coating and the galvanizing lines, paint lines on at the end of the year. But I wouldn’t expect any kind of a significant contribution to shipment still going into 2024. The lines are constructing very well. There continues to be supply chain issues with certain parts of the construction, but we are resolving those, mitigating them, and moving stuff. The teams are very active and manned up. So, we look forward to bringing these lines on, but it will be near the end of the year.

Okay. Helpful. Appreciate that. And then my only other question was just an update on your export activity and just how that’s trending. I know you have been pretty active shipping to Mexico; just wondering if there is anything new there.

Other than a small bit of non-ferrous, we have no export activity other than Mexico.

Yes, Timna, this is Barry again. We have been doing quite a bit of shipments into Mexico this year. Sinton is uniquely – the capabilities of Sinton are unique for what the Mexican markets are. So, being able to get some heavier gauge products and wider products down there has been a very good place for us to develop relationships. We’ve been shipping to Mexico for a long time, but significantly so in the first half of this year, and we continue to do more of that, especially through our campus partners at the Sinton facility. We see that as a really good business and continuing to grow forward.

Okay. Thanks again.

We certainly capitalized a little on the AMSA situation down there. And even as they restart, and obviously, there are a lot of projections as to how quickly they restart, if they restart. But we are quite confident that the customer base there around AMSA, certainly in Monclova, has recognized that single sourcing is a huge mistake. Even with the restart, we are going to continue to secure a lot of that business that we have and market share that we have gained.

That concludes our question-and-answer session. I would like to turn the call over to Mr. Millett for any closing remarks.

Well, thank you. And for those still on the call, our employees, in particular, thank you for what you do each and every day. You do drive a success. We can’t do things without you. Our customers, thank you for your loyal support. And our shareholders, thank you to those that are invested in us. We will continue to treat your dollars just like they are our own. We are going to continue to grow them. We have a huge bright future ahead of us, Sinton kicking in the aluminum going forward, the growth momentum continues. So, thank you.

Once again, ladies and gentlemen, that concludes today’s call. Thank you for your participation, and have a great and safe day.