And that’s why we’re not seeing the – despite the fact that it’s better than other markets, it’s not so much better that people are going to bring higher levels of imports. So that also should be a positive for ultimately pricing. In Poland, if I can just comment on Poland a bit. So what we see in Poland is pricing has stabilized. We’ve seen a lot of capacity taken out of the market. There’s an election on October 15, so just a couple of days from now. And we believe that coming out of that election, there’s a very good chance that this $32 billion of recovery and resilience fund that’s being held by the EU will come into the market. And so that’s another potential positive for us in Poland. The government’s program to buy down interest rates on first-time buyer mortgages has been very well received.
So that’s potentially another green shoot. So there are some reasons for optimism in Poland, but it’s hard to call the inflection point just given what we’ve seen.
Operator: Next question is from Timna Tanners of Wolfe Research. Please go ahead.
Timna Tanners: Yes. Hey, good morning, everyone.
Paul Lawrence: Hi, Timna.
Timna Tanners: Hello. I wanted to dig down a little bit on Arizona 2. So just a little bit tough to reconcile for me the guidance of lower sequential volumes in November. And then in February, it’s seasonally a little lighter even – but yet, Arizona is supposed to be ramping up. So is it displacing other tons? Or are there net additional tons to the tune of that 400,000, I think, that you guided to for fiscal year production? And then along those same lines, if I could. Can you clarify, I think, you had said in the past – it’s a little earlier time frame for breakeven, maybe Q1 and now you’re saying first half. So if you could just provide some color on that as well.
Paul Lawrence: I’ll start with the EBITDA breakeven, Timna. In terms of our change in the guidance is simply reflecting the margin erosion that we’ve seen – the production startup started in June and has continued to improve each quarter. But simply the margin erosion that has occurred, and we anticipate to occur in our first quarter, we expect that the breakeven point will take place in some time during the second quarter.
Peter Matt: And in terms of the tonnages, Timna, so we are – it is the case that we have been supplying kind of tons to some of our customers in the West from some of our other mills. But as we bring up the Arizona plant, we will be not only replacing those tons but we will be producing some incremental tons.
Timna Tanners: Okay. But if you were on our shoes, you wouldn’t necessarily plug in an additional 400,000 tons? Or do you think the market can bear that, I guess, is the challenge?
Peter Matt: Yes. No, it’s not an additional 400,000 tons. It’s a little bit less than that.
Timna Tanners: Okay. Thanks. And then if I could, just one more. On that CapEx color, Well, one is that you raised the CapEx guidance $50 million, sorry if I missed any explanation for that for 2024. And then I know it’s a little further out, but we see some pretty strong cash flows in 2025, if we reverse to kind of your more baseline CapEx or maintenance CapEx. I’m just wondering if there’s more on the come after that, that we should be modeling as well? Thanks.
Paul Lawrence: Timna, I think Steel West Virginia is likely to continue to have spend in 2025. So our overall 2025 will likely continue to be an elevated CapEx as we invest in that organic growth. I will remind you though that over the last three years, despite the release of working capital that we saw in the fourth quarter of around $125 million we’ve still invested over $700 million in working capital. So we do anticipate that our cash flow will be very strong as we look forward, certainly, if there is any continued softness on the pricing front.
