Steel Dynamics (STLD) 17 Oct 242024 Q3 Earnings call transcript

Good day, and welcome to the Steel Dynamics Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please be advised that this call is being recorded today, October 17, 2024, and your participation implies consent to our recording of this call.

If you do not agree to these terms, please disconnect.

would Director, turn Investor I to conference time, Lipschitz, David Relations. this like the to over At Please go ahead.

Thank you, Quarter Call. Third to Steel Kelly. Good morning, XXXX and Earnings welcome Dynamics' Conference

Operating be is today. Vice later today's President Wagler, Officer; Officer call Officer. Chairman Financial recorded call of for Millett, Leading today's and Mark and President Chief reminder, our website Chief a and As and Barry Executive will and available are Steel on replay Theresa Chief being Schneider, Executive Dynamics;

of members team joining other leadership The our are us senior individually. call on the

Some Private of They predictive, meaning. of be Litigation XXXX of Securities or today's actual typically statements, date, and similar the as of are which Reform turn Act intended anticipate speak forward-looking out should expect, differently. words this and only to preceded be results believe, by by may protected

Form uncertainties of under Statements anticipated at in these business are SEC and press headings the and integrating risks well our with applicable, aluminum SEC related involve general in fabrication as as the recycling businesses www.sec.gov, as to found in Factors, on Examples if in the as the annually and XX-Q. economic and filed the Risk and starting assets, assumptions well use Forward-looking industry, statements related of our later estimates our steel, project Form up conditions. connection new metals and to release described XX-K Internet Such any returns in or

yesterday Dynamics Third reconciled measures the directly GAAP Results. also You in Steel to financial referenced Reports issued the release find will most XXXX measures any non-GAAP Quarter press compared entitled

the turn to Mark. now pleased And over I'm call to

third earnings everyone. David. joining for quarter Good you, you Thank Thank 'XX call. morning, our

me lines coating and achieving solid steel to tons you seemingly unqualified higher-margin well new gratifying particular, the great expectation quarter X.X The our of and earnings through with value-add have the full was quarter ramp-ups safety. lines executed an flat-rolled of product for us. success to another These financial operational an another us, million have X Most in our represent XXXX. achieving additional many have been concluded, performance. teams read for in diversification As of benefit

Texas, a the mill's quarter, of Sinton in were In rate gained And in at had ultimate utilization early I it momentum, extended challenges and scheduled running periods of capability. XX% couple excess despite run a the in September. proves achieved considerable team of We the XX%, that during think quarter. time

quarter from EBITDA third were and was $XXX Steel cash Adjusted million. million shipments tonnes, X.X $X.X billion. were $XXX revenues flow million operations are

that summer both great was challenging history. time As rates reversed were that reversed, our I only terms can an safety. period, stated, excellent trend we incident with lowest and our a performance. had the Historically, of Not but the recordable total the months in year a teams in quarter this but rate be trend lost

is Our dedication to safety of control our extraordinary. program employee take

each other third teams I keep in clear testament safe. core commitment their is, Our to quarter a think, the alone, XX safety visited facilities to which

a XXX, results clearly injury. recordable continue have world-class XXX a incident. the of been have the out demonstrated. That's We not and time to locations build lost not a quarter third them positive culture of safety did XX% XX% locations in our our of did have and

That's of a They why status really for one the our as consider of environment. every commitment strive members way. work better to on day the family to quo we focused themselves another. best by inspired and providing do team for in truly continually a I'm challenge have toward every are X and safety the the we said, the there's still very health, their That do incident so welfare. lot

add color quarter. to pause will I then for first for But that, the with Theresa Barry and

to you, this Good this solid morning. everyone. thanks our the on I do taking time call want be appreciate quarter. you my Mark. And really with for to us performance a We Thank add morning, really the to teams

our of Mark was $XXX diluted share suggested, income $X.XX third XXXX or quarter million. with adjusted $XXX million per net As EBITDA

quarter billion below due realized Third volume. sequential results to steel to second $X.X quarter XXXX lower revenue of flat-rolled contractual tied pricing was lagging

XX% raw in as $XXX operating quarter. Our third second average income the more spread contraction steel realized quarter scrap results quarter sequential pricing of metal material was million costs lower by driven declined than than

$XX average of steel steady flat-rolled generated volume. in structural total $X,XXX million Our lower offset results pricing were volume per the declining to ton, operations income while increased lower quarter, and realized to $XXX operating shipments sequential due SBQ third than as

individual those of tons. hot-rolled shipments you shipments third quarter-by-quarter, were Cold-rolled XXX,XXX shipments tons track and flat-rolled XXX,XXX shipments our quarter, coated X,XXX,XXX were the that in For were tons.

sequential million, For than pricing operating to lower metals realized recycling quarter was second and volume. income $XX results lower due

hedging North planned we're in September. copper largest million of the and effectively. aluminum, had support ferrous and in metals growing loss consuming we of separation and technologies, new use and new addition, of recycler American production of In and scrap $XX We're also unrealized metals, other noncash team innovative and processing really nonferrous an copper the I'm and through operating costs the steel aluminum investments through our increased reducing proud very relationships and expanded

$XXX of third decrease first operating steel strongest quarter supporting achieved in this we've second the backlog quarter quarter million year, Our the Index pricing income seen Order activity of realized than shipments. fabrication in through steady third the Joist XXXX. offset lower a in our quarter strong was the as results team X% extending

public and increased decline products demand and fabrication see investment asset rates drivers for steel and to year. interest steel fixed expect election we and funding into post XXXX, corresponding distributed next be begins to As

are until construct aluminum our to reminder, investments, Regarding flow through expenses a as SG&A required aluminum as we facilities, startup. non-capitalizable the

will our operations start we a XXXX. until be result, As higher in SG&A

provided You schedule. this amount have visibility to our data supplemental in

million. was the $XX For third it quarter,

ramp operate at approximately call capacity define to be aluminum more in its and of and of to investments later our for the our expectations as differentiated plan half mill EBITDA expectations. product second in going XXXX. the have mix provide to as the expectations rolling positive details on well XX% Mark cost is We to related XXXX

the the billion expectations center Approximately mill San Potosi the already remainder in doing spent funding between the been The invested million of first has to with $XXX slab extremely and XXXX. quarter of well. September construction XXXX, then of fourth rolling be is half Luis to the $X.X recycled through and $XXX million in of

strong highly generation be cash and based Our on cost continues structure. differentiated variable business model to circular our

ended liquidity billion. of $X.X $XXX with generated comprised fully strong XXXX, During investments the quarter unsecured of of the operations quarter third We billion we of and $X.X revolver billion, short-term $X.X cash our cash of available and from million. of

We of million. of million XX, $XXX the For investments believe fourth available repurchases. be repurchased X.X% in and September believe will we investments be of we Preliminarily, XXXX our XXXX, quarter of of $XXX the shares million. have $XXX will the share in to 'XX, $XXX million capital our million $XXX capital $XXX as million common outstanding we year-to-date stock of representing range range to remaining for

dividend with Our profile capital program remain comprised shareholder distributions dedicated positive high-return prioritizes preserving allocation base while repurchase a growth investment-grade share strategic a we credit to that's our variable strategy complemented with designation. of

period shareholder X-year XX% during achieving record return track transformational capital on returns. of after-tax of proven a and invested Our growth strong has

million repaying profile $XXX free the we of changed billion, July, Our years $XXX our Sinton over of In flow notes a cash our tenure an million from $XXX anticipation investments. $X.X has of issued large successfully annual are with notes X fundamentally XX-year of due aluminum strategic last in this to December. that average excluding million and investment-grade

and Celsius conclude, the aligned our I the of steel excited which new recent announcement set to X.X-degree science-based our gas intensity the Before I'm proud targets and about teams. them mills, I want Paris forth are certified greenhouse with in scenario decarbonization agreement. the for thank emissions biocarbon concerning

industry gas our an fact, aligned recently of target, ahead and the reduction both are a well emissions represents XXXX mills greenhouse intensity. X in intensity by XXXX a set Agency's XXXX targets, In which steel Energy target, curve. interim that International XX% our is net with already which We

of Council's also path our less industry expensive the have dedicated we business that to and people, of for of a a incredibly a strategy, standard Global significant is first neutrality manageable biocarbon We an doing expectations value communities carbon founding many member. for our Sustainability that quarter uniquely XXXX may The part established Climate toward our operating project environment. our is we peers. We're These climate Steel creation targets with using are lay our well considerably actionable highest ahead were is our the believe steel long-term we're which committed start. and to and integrity. with more

the sustainability strategy a an we're forward Our moving intention and make reduction journey, positive carbon difference. ongoing to is and with

Thank you. Barry?

Thank you, Theresa.

Our quarter, steel historically and well strong steady volume fabrication operations in the achieving quarter. third the performed in earnings

steel steel infrastructure and the manufacturing Based number Our funding rate for next asset XXXX. through programs. joist deck at backlog of quarter on as extending for remain moderating a level, order of and a continued over the investment demand other We fabrication first and relates markets healthy public it the environment, onshoring, to remains interest optimistic years. fixed

our The as uplift this considerable as operations. from platform this be steel could well macro environment for

also steel operations, at to provides through-cycle a fabrication us steel for rate. also It risk Our higher operate steel lower mitigates the of financial prices. support platform utilization our meaningful volume which constantly allows

The Ferrous in market demand we the outages, third the metals seasonal the quarter. prices job volatility. moves. through of recycling There to ferrous stable domestic scrap which remain rest navigating number have subject environment relatively steel were decreased year team with a stabilized, should pricing scrap and did a challenging believe coupled of good a

metals scrap our for steel The North customers. recycling footprint for mills generating a geographic provides advantage and our our American competitive platform of strategic

future positions. aluminum Our Mexican scrap and aluminum procurement support strategically competitively They of Columbus recycling our material for our also raw locations operations. flat-rolled Sinton increased advantage

with mitigate us future. also Our products in technology a significant increase is potential increase prime more aluminum team provides steel earnings even closely in recycling the and solutions. flat issues opportunities. and helps our ferrous process This content to expand through our aluminum scrap scrap and with advantage metals to both capabilities teams rolled separation partnering the It recycled supply

quarter, team solid of a steady also million achieving steel shipments tons. had The X.X

rate value-added utilization XX% an production domestic mills higher of consistently to the steel our at During operated rates a steel quarter the third at operated Sinton our due XXXX, at operation. while our XX%, of excluding operated advantages, higher utilization best-in-class steel industry product generation We financial customer diversification, estimated of solutions rate The of strong metrics. of support internal our our supply business. cash our our and utilization is competitive key capability manufacturing through-cycle steel one mills and chain supporting our differentiated the and growing of

contract growing. lags, steel improved to prices Our remained North realized average Positively, earnings quarter. due of stabilized the declined resilient, value-added in and products but pricing largest flat-rolled in producer are America steel flat-rolled and as price we spreads these our quarter the in the supporting

Our over than we've months. general, solid last into is lead with fourth activity our levels times seasonal at are higher heading in trends actually mill flat-rolled steel expected, the normal quarter X seen the

Underlying the remains ITC surge weeks. supply from demand for products. get imports certain dynamics few in the we in coated response, on a but ruling pressure to steady, a a preliminary steel and we In specifically in put trade steel case, expect flat-rolled areas, levied steel a product

some mill needed after experienced XXX% difficulty of early up The steel in flat-rolled Texas, mill's outage. melt capacity. Sinton, to the access the successfully back ramping completed the quarter team changes Our team

improved reliability XXXX. will for and increase September, product the believes around mill fourth rate in the Sinton's utilization the XX% of company the quarter However, of dramatically

commissioned through Also, and successfully value-add value-added were lines X have the mills product cycle and new operations, additional the mix improving earning commenced capability. coating

American remain mill to the also construction Regarding to for recently below norms. with inventories several automotive market were the environment, next production some Automotive stable years. Nonresidential historical over industries. estimates XXXX remained steel stable dealer North revised production across slowdowns continue

XXXX. rates will believe However, create project pent-up we unlock new moderating in interest work opportunities and

to infrastructure investment products. and fixed and related further construction support spending should onshoring Additionally, provide asset oriented

part and grow Oil to and Products structural energy Rolled for As a solar remained steady. Flat sections, meaningful gas market, for be also the continues both the and our industry

ready we Looking XXXX. pricing demand optimistic regarding we are forward, get dynamics steel and enter and XXXX as to end

back with I'll send that, Mark. And it to

Thank you, Barry.

with performance-driven highly drives in through-cycle a superior Well evident culture combination our that proven it's metrics. business financial value-added more than model diversified employee-centric

investment growth Our balanced and to operating strong financial strategies, and consistently our that continues strategy performance delivered shareholder support consistently best-in-class has generation returns. cash a allowing cash allocation

our only strategy XX% For return continues. disciplined instance, through on XXX. high-return capital XX% a our compared investment for to S&P achieved from investment 'XX And the 'XX of invested X-year approach

quality value-added are very I are the from chain volume well investments a differentiation steel performing and to product key of lines supply and value-added As high-return These flat-rolled our types said, strategies. X perspective. coating increasing

expectations also, to mentioned production Sinton XXXX. operational improve its I continues for in As reliability, strong capability with

facilities Our -- aluminum the compelling. of industry steel a growth in technologies SDI years. they've recent the cost, unlike older environment lot It we and little especially had capital. the legacy the difficulty recent market industry hence, had general in are high The started been not in in And inefficient of heavy XX-plus years strategy is and earning new ago. a was is aluminum investment has costs, there's when in cost facilities and has assets,

that in aluminum, the is entry, And America one positive But -- is to general. expected huge considerably. grow just our in a unlike that deficit in the there's deficit significant North steel

It clear progress level and operational website made performance-driven extraordinary higher drone cost of video core and culture, And has only to the alignment, driving leverage operations. Omni's at lower also efficiency business new see to to footprint. our will they team core construction recycling one look It mills. a There's our also on leverage know-how. asked competency the the competencies, the constructing our

XXXX North cost-effective largest It's recycler. the we're and in-house separate some new opportunity for And growth to suggested, also Theresa and a developing a we us. aluminum the As very American alloys. very, technologies series high-return XXXX scrap are

aluminum needs and And base across that all to be customer-centric is order proceeding now expansive the customer believe new an The put needs. their ramp-up sectors to I the market book a be that are mill to truly is is is pace. of extraordinary arrangements excited to have with. in be future XXXX. as in an to being Construction industry responsive reckoned we force I Columbus, recognizing will our rolling Mississippi, said, entrant innovative, Commercial match known a to in place at

markets and they remains customers new new the thirst across existing from supply. Responses incredible for as

the Sinton, project aluminum currently developing as arrangements The aluminum -- in has customer and would approximately consuming part become an process reality permeates And professionals locate aluminum being a visible capability and commercial XXX,XXX are door. on And been markets, team we with of been in-depth annual aluminum facilities. our industry, As year. of on-site tons we've per knowledge phenomenal ton our our at reputation an building to of processing operations, industrial and processing knocking negotiated that have technology a service. create are

metric scrap supported tons, of centers regions. in For those rich industrial that of has of be of construction facility. capacity may running. tons start, state-of-the-art UBC and tonnes not to have Columbus, heard in satellite melt by cast Mississippi. our X Mississippi a in last actual mix products slab we're site aluminum XXX,XXX It's when slab located of metric call, XXX,XXX casting the XXX,XXX optimized fully located the aluminum it's The recycled have going XXX,XXX XXX,XXX and an facility can flat of scope year We'll and Columbus, tonnes a ton rolled auto a in

Mexico We as in in developed day. plans These scrap technologies processing expanded include, and begin Luis I and slabs series XXXX. the technologies quarter every successfully production separating on the currently recycled to segregation commercial operating scope maximize to said, additional XXXX of content. are aluminum first Potosi, San to XXXX team of The in-house alloys a basis project the

Columbus the schedule. 'XX, in downstream casthouse in on and shipments second quarter, We is with will absolutely the commission lines that mid-XXXX the in quarter of commercial first

and and capacity expect million to through-cycle platform production weighted of grow the in auto in approximately is can 'XX. our end with million as we the production annual project and 'XX and to begin XXXX products XXXX. XX% million XX% products by EBITDA, to should million to to sheet industrial product rate that. of into to $XX plan addition The expected $XX resegment generate $XXX $XXX we qualify to of We mix we to through in add a XXXX, anticipate annual our construction In

that this the EBITDA higher confident in per industry projection. in past, than Although the experienced we're to a tonne computes has

significant people key X,XXX a labor, versus perhaps this in more or facility in we most are XXX yield workforce reduced of have size. Labor, of conventional perhaps the a savings recycled should XXX and logistics. content, X And areas: to

low We will flow. there'll and so to have system, proven legacy have have costs. storage optimized automated performance-based efficiency be centralized material touch no high plant cost, we We'll layout incentive-driven from will high slab and culture our a and no productivity, drive and truck

what done steel again, lever platform have For content. years. our doubt content, drive over higher the recycling we impact, recycled to those at who our to would just you the metals Recycled throughout I ask teams operations our will look

the stated. We largest already has nonferrous operations, as have recycling operations been

have rich again, be for facility equipment scalping We We're will minimize a art less to technology supersized west lower that a produce heads, And improved. new state will been coils, locating actually is additive. removal. areas sorting all satellite and be to less less facility, We the material technologies. years and and be stops, we're processing the adding many leverage through do it's facilities operating technologies. The the has also secondary close aluminum to state-of-the-art the line going losses. yield yield The Mexico, and in that will tails, of believe UBC the absolutely facility to

benefit In will areas to locating be well. slab logistics, centers again, huge a close rich as UBC

drive momentum revolutionize industry We're excitement continues did to demonstrated current high have the their the years. our our particularly as consistently and growth company, growth steel. at to they the sites, recognize ability to they future in within teams plans we ADI by the aluminum will help as impassioned and grow over So our the continue return as U.S.

Sinton, of spending value of is approximately collective X dynamics aluminum ad EBITDA over growth is XX% billion. new contribution complete The lines compelling. through-cycle estimated for these projects and an with earnings capital the annual future The $X.X

recently Steel out in the you've us, said in business, in It world. Dynamics invested has resilient grown to growth. driven the the years, by strategic incredibly institutional prominent As of X cash-generating a teams to best last portfolio pointed manager dollars organic an billions

a You only at the invested S&P earned XXX of compared capital XX%. XX% on return to

over dividend cash your increased You've XX%.

You credit shares best-in-class while your of maintaining outstanding XX% investment-grade repurchased all metrics. the over

our and investors belief We high that shift agree. it's of paradigm in shift and further capital consistent allocation cash textbook excited a trade as industry capital a than I continued our steel somewhat level that combined And will And power appropriate the return a better our earnings generation, obviously, years, There's undergone strategy. said I'm provide of which mercantilism has it's recent a with lesson. allocation pervasive support our the through recognize biased, a through-cycle consistency playing field profile. will relief. and sense And

the We of a global world. have manufacturing. materially should dislocations, curve, which huge increase lowest the COVID-driven supply as mills some our accelerated cost footprints of steepen to competitive carbon have in gain market share providing spreads reshoring advantage chain Decarbonization and the have SDI metal

cloud center data will into act strong, other construction turn, In through do rates we buildout. be growing public with and moderating, through going believe fixed and interest And driven there the will inflation AI XXXX. computing by the and CHIPS support nonresidential should investment demand reduction asset monies. be

those their is that your So and each listening and We're highest today of committed in for priority. their our I our good to thank for been I are blessed closing, dedication. passion yourselves, other safety them. remind fortune we've families And your our people each them foundation. with and

financial all and to providing volatility returns solutions leading to business our carbon cash providing mitigating generation customers, model integrated business, We're chain turn, and and lower continue in best-in-class to our metals culture performance shareholder value Our participants. enhanced in enhanced metrics. our flow to an differentiate supply

the new in We truly everyone creating to look opportunities today, years forward ahead. for tomorrow and

So said, open with call questions. we that will up to the

coming Seaport is question Englert with Partners. first Your Instructions] [Operator Research Martin from

process labor remarks, in there? still needed? touch any the and market there project, but of are for you general the just greenfield found the touched additions aluminum are that on on filling you how the more You needs And briefly prepared other this personnel key could the broadly

there a Certainly, needed or experience. I talent think set key are folks or no from skill

our a We to team, are to that pretty well built who with of will a combination cultural the alongside blend I solid. leaders us. wants aluminum out, Steel management knowledge join managers, we so of talk proven anyone but blend, It's absolutely think, is base experience of get folks, SDI passion performance-driven and and sort aluminum leaders, The always seasoned Dynamics. the we have you'll within

So much thing a that Sinton, It's I'm the talent it's an compared not location think finding better we the in to nowadays, challenges actually and but a is by incredibly much impressed location. easy team. better much, experienced I

flat And transfer Fortunately, road. at That's dislocating one of our moving of without large people again across lives. transfer facilities we have families rolled they the right a all can and steel their allowing the over levels.

a And as us huge so benefit well. is for that

So no, we're excited by the team there.

Excellent. recent last or one sales If steel you of to with the that relative any where pricing strength the been? into backlog have month one over had past had pockets seeing you've X, fabrication that more you been I could, are added in

XXXX, would seasonality that's additional support, as suggest there's we price I et about fourth and as the we're at that anything going rate that demand opportunity changes heading for to normal we that see to but quarter, talked in typically definitely appreciation cetera. see interest But we've coming price Martin, construction. funding, public think just look you not tied that into from

the get seen And think with what towards last now really seasonality through what to is of we X we're months. quarter steady aspect robust the be fourth then So good X going a the head feeling XXXX. just in to and really we've we'll

Okay. I Congratulations that. results. appreciate on

BMO with Markets. Jancic Katja from coming Capital is question next Your

now, Sinton contractual? your up? with we further ramp change that based. contractually see about Or should is business Does XX% to Right of XX% continue

are is Katja, part relationships big solutions. our of Barry supply chain this a value-added Contractual Schneider.

concentration about new lines anticipated with paint our increased in lines. our keeps XX% this range. we've our We that that to as coating So growth and lines, contract XX% it

in little the market, less bit same get I once a we kind and work chains So out the being future region. each in see established bases supply in the perhaps the us of customer would

recognize to the is being stuff, Just kind clarify, I very, of which but a spot day diversified contractual is whole obviously We business. bunch have it, our other think to XX% the side provider, rolled very the flat in a day. on the of of more you

Maybe just bit the think one. Barry, had was Okay. if after mistaken. issue a one up a I'm quick mentioned you I that there? challenge starting of Sinton not What maintenance,

you whenever is we kind high-voltage work as Just safe with have systems, of a you normal, everything making sure up. ramp

So we -- back much about able we've unheard did X our outage get days. was having little a was because regular bit beginning, And to It's running just of resolved has to it of industry. the some the the to team team that. do slow was It in had rates. worth up problems we from and just noting those really high-power were work. safely The so not

and It's the it very but turning like a complicated a I it all, well. off. high did team in outage, good light all that voltage. with more wasn't just on consider a So bit little

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

product in shape drove appreciated the on one little differentiated for see get for business. structural the maybe your spreads more can that long discuss just strength? whatever you First or And portfolio. if in to you or Where your be is increase long would that did strength spreads, metal perspective your on your outlook a

scrap to timeliness that. we recycling allows is metals and find our because the able we're move us chain supply really mills platform from the This The beneficial really the is to our best Barry. of optimize to that value

that value it. So material having really right get time to to essential the -- the right the from at business for is

structural As City also mill, Columbia country. specifically our is -- and section producer railroad the look long mill we largest not at railroad in just heavy section is in a heavy products, a the

nice So we to balance a of we move our products. where tend have

customers we're and our over opportunity able keep the to as invested tend mix we for that sure product markets right they So to and doing. understand always time, what the optimize into regular make change we're the

at when that of having business natural So across business. we're quarter-to-quarter essential all how of moderating diversification product looking our of the with we're flow is

see very So resilient. particularly about products we and reshoring opportunities. with remains that long opportunities coming, We're the the investment excited

push That's trade you a but part of on right. Vietnam All and to ] you I think Mexico. include the potential and mentioned investigation? a explain understand been just behind updip follow-up little of case in certain can the countries like that. the to investigation, countries given including [ And impact helpful. Mexico, Canada also maybe And the I galvanized exposure your the has those a bit there rationale being

that of that enjoy. antidumping U.S. to in Yes, markets provisions there actually is the cases, we very investigation. for involved do that those countries. good surged we that. there We business coming The of and agreement, duties what countries MCA through in that is tons treaty the based there ITC into staggering. are Canada are engage including XX do great is of did, all those actual a through was necessity tons which In and countries, numbers just countervailing the on And and those of each have Mexico was increases demonstrative the countries the various American because was volume the

those cases, in in of the melted these And many from countries, or they're not but listed. tons some poured other are flowing countries

puts So flow shores. the part to that as to there's all Asia, our and problems they of in pressure that on want world,

but is make mechanism competitive this that markets lengthy, United the fair sure the trade. States expensive, it's are it's So truly have that we in to necessary

that. duties will the render reflect are tariff each the for And country. process if appropriate final in was the less think out So what I there some damage truly will amounts of countries, those

just handouts on. something So field don't that ask that absolutely we the necessary. for all we play watch, is was to process. it of fair this And as for is protection. ask a And part or We game

Morgan Diaba next coming with Your question Carlos from Stanley. is

the antidumping with conversation continuing case. Maybe on the

dynamics galvanized level to enhance if or does, big spread a as spreads? you not cold-rolled your doesn't see steel even prepared and the depressed, maybe to investigation is what if economical. way, low between don't Somewhat antidumping coil do it go related, sector the is has this in those been a the improvement leader probably If

We but is do routinely trade through these rolled this lines. egregious success again. process offenders, most anticipate we with certain these Carlos, with move the great evaluate flat we our that of products were countries Barry our especially cases, how

move all about the and routinely decisions process where galvanized rolled we painted. are. into So those the through the make way We margins hot

finding been has good much with earnings where a respond XX results we've do we see And our safe. the go over can we diversity so mix to our we're to can in dealing success these be that So having that -- you we to problem. with have months. pressures It and in very from the product last solution

So the back does is ITC those into to opportunity us go and will favorable, egregious offenders believe of that the a more times. create that particularly more balance for mix an product a to some I come more perhaps with friendly

may If one... another I squeeze

I of hope going you've think, manage could based any or go strategic to way nor is us trade just we the and do nature one If policy on, other. add, manage before, say decisions we to don't heard or we make

phenomenal the And have control of teams take to I absolutely You our an your destiny. further diversifying year-over-year product job mix. think do own

recent the our what know don't flat-rolled is value add. I XX% of XX%, mix, number product think I XX% is

about talking that literally and print recently, door digital garage you and And that got when the coating the teams wood for you they've prepaint and into When folks into get real absolutely developments I'm is most say have stuff phenomenal, architectural. value-add, achieved, we value-add. this grains the into get

to drive have the to innovation and have product You up creativity mix. just continuing

goes, succeed to So no and we where the matter happens, matter honest. what no trade will be

that chain that the that exact with supply without we about. Barry the thing have the Mark And and all words, talked spoke about, just but products you differentiation the saying

the that's so key for And us.

Right.

another may I on details saw how think Any on in if what current I further expect from about fabrication on forward? but from quarter. Barry think further steel But maybe talked volumes, the third stable this, one color or squeeze pricing going any Just levels that I missed the you pricing? you business. I Barry, there

The question. commercial and things But team, to We pretty relates things. we're it do they for talk thanks my door and be be that. commercial would ready the Carlos, outside about again, as won't pricing they'd to bad Yes, consistent.

volume can't stronger quarter do expect from we as which construction-related here the but is see it to perspective, year, as pricing But volumes do relates well. in So expect support businesses, next regular to should one, steel fourth seasonality which do the much we we that. a fabrication

Your next of question with is coming from Bank Lawson Winder America.

steps be are Thanks utilization utilization. directed for that to would to in XX% Sinton today. September the if to that just from number? us time think at question through best when update I hit this ramp walk your Could utilization? and, the maybe resolve path you. you bottlenecks is fully remaining optimal possible, you And optimal and lines What what the that Barry,

what is confidence try we Lawson, downtime. unplanned thing the team first have in Sinton the reducing is And major to articulate Yes. I'll why doing. the

the to So themselves when they things as teams that able they're issues also happen, as but develop develops, not as address teammates, only competency occur.

the the improving make the in reliability happen we've been that the at of strides Necessary plant. So to making is significant downtime. unplanned reducing equipment

as you mills units As actually we unit. flat-rolled to mill the coupled where know, steel the from one our go hot rolling furnace are may coupled

make that it can as parts other normal units. various have And of happen system to the impact the issues,

that are it products the produced mill, are to weeks being to making as get equipment, or through unplanned we've all important, coated actually we've rolled, that value whether cold-rolled continuous products. So it's seeing seen now downtime, destinations also and hot able of we've what better higher selling as months seen reliability days, the of reduction now and of seen we're sure the just

mill we well. yields increasing. controlling we the start We see cost getting as towards uptime we better this good units And see the path of facility very we So a better. the and see the situation, running the see in respond, as each

We have what we And weeks had capacity. is that see. more we're at nearly again, confidence in we have reasons that,

to anticipate show stakeholders hope really it strong, really So there. the of the under see to our fourth feet. facility well finish for it I kind down what XXXX been helps. allow earning and been they've watershed quarter the they've that happening moments to we doing this sets how We and stage

definitely kind think directed you you of where I The need when now of Yes. to Theresa. up close a Sinton there toward think being helpful. that, could, I just maybe the in will color it it's to we be to how that dividend I is mean then recently? being consideration aluminum you And if that might at or February. probably material And look dynamics Could seen more and the increase February into be for more the then than anticipate dividend we've factor follow up start decision.

very good a question, is That question. very a tricky Lawson,

We same correct. year this as been happens quarter would determines is to things dividend absent up expect do anticipate the certain dividend Board EBITDA We each have the will positive contributor extraneous you're to of to next well. be, it a profile year, point. what in any and who like hasn't the year. generally which first significant occurring that I And keep the So this

So significant in operates how profile. That a the see earnings being to that's in we'd change like XXXX. said, Sinton

this a see speak but would move, really that to I can't of I positive point the So expect to at magnitude dividend in time.

excited to in very assets it that. the As starting about aluminum relates XXXX,

my do those is mentioned EBITDA half prepared be which second I to positive in notes, As the pretty in we expect extraordinary. XXXX, of investments

really we'll see start XXXX. to benefit So that

I So and moves. possible be to through-cycle cash a contributes about of kind positive think flow frame think how generally dividend that that time would to would

Wolfe next is from Timna Your question Tanners with coming Research.

to X status galv. probe lines the paint coated of between a up, wanted lines the ramp I more of the value-add ramping up bit and

play we see like to clear those looking at out wasn't they yet lines might what it you at what as the me up. and volumes, ramp utilization have Just have to

are new at to actually XX%. Timna, operating -- added this lines X around somewhere we of Barry. XX% is all the The line

trade in the with we've some coated discussed we Galvalume. cases, products, pressure certain seen particularly As

to running sure trying that are don't levels making lines we operating we and we're existing money at So the lines. it could efficiently by sure those with waste make perhaps do we

we efficient be ability proper allow the line good really each be at to yields. to to do product is and to So very the very look mix what

seen. what excited really we're with we've So

customers for coating up diversifying those Galvalume definitely second needed that has a products opportunity operations that improving the prepainting region. really customers mix with relationships are opened opportunity and in product existing well The as the Terre by opportunity there Haute with as new that with who markets, facility to adding reach more

allow our Galvalume at And galvanized the Sinton, coatings to have additional coatings. between us more and really operation our lines a efficient

customer how type markets, that be this which good. it bit these of capacity we're might perform. excited So products. a but lines the a are have And new of very has difficult lot been These -- is technical, is really The very prepainted base. quality demanding itself with

really been the see responded how we've bring have mills the to team excited new total. sales So teams to and the to continues in opportunities

significantly Timna, really as that, it that relates to to would point. their hasn't contribution to this impactful say been up I earnings,

paint investment. were as our anywhere payback the supply reminder, of lines given lines million between for have And chain or a the period X generally, So galvanizing us, about X a years. $XXX a X and X.X and differentiation

So pretty significant.

You're XXXX, see going ramped I gets everything really as to their to impact start in think, up.

one not hot the follow-up at little is being at the inhibited a volume because capacity. lines those side And thought just full now on Sinton. throughput Obviously, right

hot see, you the we increase will as side, lines on in as X through tandem. So there throughput the down the those volume increase

helpful. really Okay. That's

purposes, plus of the the capacity galvanizing coated, what, if or at look that galvanized represents ramping in modeling represents million of So the, tons $X.X we that new up. quarter -- about about XX% for

yet we is conditional imports that to off, So the expect remaining see X/X to or that so we that would have and fair? flow through, coming

avenues. processing aren't and of Steel you lot facilities quarter came the just shipments of have number, like that a So at volume actually seeing rate no, that that you third that that wouldn't the benefit and Timna. it's you're the it in other that included, of have rolling really lines show not our Supply also because through our additional -- United our coated And in different through

-- I -- there's the suggest just X/X. more think would volume not that's benefit. still So I It's there's

Next Peterson is from coming with JPMorgan. question Bill

Maybe run quarter. utilization us too. following Sinton's the last help the improved up the questions in question, of Can meaningfully around profitability if some understand and also third you

yet? to but answering not, it be I second was these some think earlier, you were the around X guess I them would And questions in new of quarter. then breakeven lines, if obviously trade profitable? the coating they're on And you the profitable to when related expect are

that, be the fourth the additional we full no. from actually quarter, So In related maintenance next the time mentioned Barry had quarter, of because third that Sinton year. quarter and in in costs the perspective but we outage to that we wasn't will Sinton, EBITDA additional had expectations and because have it third positive certainly

they're relates the really lines, to mills As into the operations the it steel of themselves. integral

you, third question Again, lines expect tell as that will little mentioned earlier, bit would time, answer Barry to to a I So is difficult. value-add a benefit the I XXXX. we now for really Mark and

just So as additional as you about think would that normal benefit us for market your I modeling, add that's dynamics. of an outside

your carbon needs I then the of But Great. to it the particular, to lower looks it's providing expect quarters the -- color before do flows? biocarbon there the this the need looks to commitments items, biocarbon for products on is guess, customer like there. And into And with -- on production is start? you like sort in few there using be be coming when what and before operation. going that project steel you you introduce mean, Do produced a I biocarbon plan do It internally products for have for product? for operational thanks done or premium a

Barry's question. That's me. a have but I a hope good to would at premium, laughing

So is toward It's great And the under job. the team doing start. is quarter biocarbon facility, pointing still again, first a a construction. everything XXXX

of and first easing our the all enter It's needs half enough to of steel mills a be the we it, of into will mills that next steel so mix start as mills, have the carbon already but fully year. that that product. for each the steel we'll tested product majority have of product at using will that been We satisfy the receiving it. at We don't

decarbonization that or part as whether just As journey. of be there's to far to charged premium product, not going our that's

a different the just as of each for So it's -- raw used for mills the carbon to customer lower substituting a of be materials operating It a going not necessarily. of it's whether part that as -- specific steel will matter normal mechanisms anthracite. for be

steel approvals carbon for what the in Yes. on kind we binary don't actually early process or final that, perform. that use product a Theresa, as it's -- this of decision it's would how I it just think the what or product. not would will the I into of of doesn't other. add It's the that will so it customer need one factor And

flow facility. respond path the the the been successful have the introducing on goes towards how it. done through So the based to teams have really pilot proximity very startup Aymium the The mills and will to this that how and trials been

about biocarbon this. So the regularly plant we going are the with we're shop knowledge melt And down a teams it. And excited working into team. It's meeting good Mississippi. beautiful have in a

Your next Jones question is coming UBS. from with Andrew

I balance to just help it your an more at you -- way? in that producer through. you you for. and a I share how get trade would production we see I doing just active portfolio Or don't out take mean you bit to and you be that market doesn't on look the Maybe to the to come what River trying of X and recover. in hoping essentially your pessimistic yourselves potential your would market? to on mean, the scenario? market? protection for of do plans Just at write in change starts kind hear same within mean comments participant made are low-cost you consider can Or demand where do to But outlook higher any that XXXX more the the would the to positive scenario the the happen, potentially XXXX. Big drop others in we've pessimistic expect you curve, a end do

that for positive very, XXXX. we're base there We're the things base, that. future many There are in our Firstly, customer our market 'XX. in constructive too drive very on is And very, general, will very pessimistic. customer not

construction. lower will that environment a rate You interest should kick start have nonresidential

for the interest At rate and a buttons book, whole slightly -- New the push lower forward. just of Millennium those order right developers now, strong. order the environment needs things to move is the engineering, It flow

marketplace. just I to constructive the So again, on want we're emphasize,

a it's and matter cycle. matter market a any of general, in not it's of just Just XXXX or

will We requires our to produce base quite what customer simply.

Okay.

has think whole recognize I our part and recognize business around cyclical the that revolves We -- just model, can, our business. markets are that. one I if Sorry, it to in just of

always beginning, markets. That years huge, products, flow. the ago, XX mix very but and since markets on a diversified also That over have as diverse very a huge the is years mix. actual you add, product value allows very ebb we focused product so And across huge, flexibility

has always also A very been part very, our strong pull-through strategy of the volume.

what So conversion of year, Millennium, maybe a tonnes, products make. if you they got roughly The about capability. facilities They've look New little think, I today, they're last we XXX,XXX about the that at tons bit XXX,XXX consume Heartland. more of

You have the XXX,XXX tax, they have about capability. tonne

So in tonnes. all, our over internal million well X sort of is requirements substrate

his but some in that a team Barry of lot marketplace. We also procures the and internally, supply

don't recognize one and volume sheet people today. we're of can pull-through That lot in the the the buyers products but U.S. strangely, a we're So largest one it, of flex. actually of

internally. peers if look have our cycle, of diverse are utilization that always rates pull-through mix to those the utilization we of also at superior So you product volume because any our the rates and through value-add

does a that doubt. retain will generation we strong see little So even off bit, come if it without capability our cash you recycle cash

displacing potentially in lines Okay. to or volumes closures cost lines the portfolio, of any older Fair else agenda. kind enough. reaction major no that's volumes of or higher But sort on not the of somewhere

didn't hear I that.

okay. That's

say You No. would no.

No.

from Tumazos Your with next coming Independent John question Research. is Tumazos John Instructions] [Operator

for the of Lots is the steel recycling the has out 'XX a X or built have investment. Looking project XXXX trending big Did year, that aluminum other aluminum is next now. demand for or companies in new sectors fertile expect Steel X%. some lot do next down demand capacity. area of in most we X couple apparent or think U.S. been or 'XX. years candidate This a which big are up you out of of years,

markets there focused we that. I across look take good always portfolio, -- at -- to I we John, regional that we're the on anticipate have But firstly, in look a certainly just chains, not The the or platform. are sort as vulcanize questions. recycled will we our opportunities will supply our of recycle strong Well, your general. Where think

will grow won't it here see -- do You well, aluminum chain. us to expand meaningful But that's supply that. dollars to and there be our

for products diversify. steel continuing We necessarily to just I don't products. X big -- in we're you'll to has The think million you sort correct. business On in are I We're the time make those differentiate background want that our chain. not of side, And see know, sort team another always the the for greenfield percolating it. don't of grow want lever not those We see higher-value us year value-add site. the opportunity sake opportunities, and of today. to you're identified a ton several over we value to as

doubt stronger be new Get growth is we us. opportunity the than walk first to mill want in run. there. obviously no Aluminum up. there's steel to before forward the We to volume and gives rise But going aluminum will much

expertise, seen value-add you've in into see on I downstream the again that past in steel, As prepaint move the also. products our aluminum, think capitalize will you strategy in

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

for employees our you teams you. our Thank for that and you on what Well, call, of any super. out are do. there Well, the still thank

again, base. do your team incredible you. can't over for We we without do the loyal And things. support an doing incredible you what years. thank customer a Thank You're

for you. and will I all Those say can are Shareholders create on us, should. thank investors that you. We continue that the don't and value us, own you own that try bring line to value is

thank Have safe. great all SDI us. employee, and be from for support every a great, and you So those that day

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