Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Well, I would attribute it to a couple of things. One, it is not only steel trading but our raw materials trading business that has improved on a year-on-year basis and has steadily improved from the summer into the first quarter. There is no doubt that taking Australian business and putting it in disc ops is also a factor, but more it is about better trading activities particularly in North America, but also in Europe and our UK operations. The steady flow of volume in Southeast Asia out of our Singapore office, albeit at smaller margins.
Luke Folta, Jefferies Group LLC
Are you going to talk about what products, though, in the international trading businesses are your biggest? And what is improved, somewhat?
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Well, yes, I mentioned tubular product is one example. We trade in a whole range of long and flat products. Long products including tubular products and we do that really everywhere. It will vary from market to market which products are most attractive for us to trade. In North America, it is a combination of flat and long products including tubular and some SBQ as well as other products, so it is not just one thing, Luke.
Luke Folta, Jefferies Group LLC
Okay. Then just one more if I could for Barbara. Inventories were pretty good use of cash this quarter, $100 million bucks or so turns a bit lower than what they had been historically. Is this something we should expect to reverse fairly soon?
Barbara Smith, SVP and Chief Financial Officer, Commercial Metals Company
Yes, you will see that start to unwind in the following three quarters. Typically, we see it unwind towards the end of our fiscal year. I think it is reflective of overall higher level business activity levels on the M&D side as well as on the mill side. Some is a little bit of inventory build ahead of some of these outages to support these outages. Typically, this is our highest level of working capital between first and second fiscal quarter.
Luke Folta, Jefferies Group LLC
Okay, thank you very much.
Operator
Our next question comes from Evan Kurtz at Morgan Stanley.
Evan Kurtz, Morgan Stanley
Happy New Year, Joe and Barbara.
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Happy New Year, Evan.
Barbara Smith, SVP and Chief Financial Officer, Commercial Metals Company
Happy New Year.
Evan Kurtz, Morgan Stanley
Question on energy exposure. I was hoping you guys could just kind of walk us through each of the segments and kind of talk about where you might have some exposure to weaker energy prices and any kind of quantification you can give us would be really helpful. Thanks.
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Yes, so let me take a stab at that first. We have been getting lots of questions about energy in the same way we got a lot of questions about iron ore. I guess what I would say, Evan, is it is an evolving situation. It will settle itself out. What the decline in oil prices is doing is freeing up a lot of disposable income for people and stimulate spending a lot of different ways that ultimately could lead to nonresidential construction across the board. Remember that we are a nationally based, a broad-based company with a footprint throughout the Southeast.
Well, the Texas market is really important to us. I think there is a tendency for there to be an association that lower oil prices may lower construction spending. That may be the case that some projects will be pulled. Generally speaking, we are still seeing positive growth and strong demand in construction markets. It is hard to correlate an exact dollar value, and I think this will continue to settle itself out. There will be an adjustment in drilling activity.
