Jeremy Halford: Yes. And if we look at needle coke, we did see some further softening of the needle coke market again, we rely on some import-export data to tell us where the market is trading, and that does tend to lag by a couple of months. But we did see fourth quarter spot pricing for needle coke in the $1,000 to $1,300 range, which was further decline from where we were in the third quarter. But this is something that is a very highly volatile market. We can see in the recent past, prices as high as $3,000 a ton in 2022 when, in fact, they were closer to $1,000 the year before that. So where it’s pretty volatile. We are still in the long-term trends on needle coke. But really, the softness right now, I think, is a reflection of the soft graphite electrode market without an offset in the form of the expanding Western EV supply chains yet.
Curt Woodworth: And would your captive cost of Seadrift below $1,000?
Tim Flanagan: Yes. So again, we haven’t been given a lot of detail on Cedar because we do see it as a competitive advantage for us. Even in this sort of needle coke market, given the quality of the Seadrift needle coke, it is still cost competitive in this market.
Operator: Our last question comes from the line of Ab Landa from Bank of America.
Ab Landa: Just a few questions for me. Kind of want to maybe touch on the regional differences, what you’re seeing kind of on the outlook side, primarily between U.S. and Europe, like I guess, what are you seeing in terms of competition differences between those two areas? Maybe how it relates to what you’re seeing graphite electrode pricing there and kind of maybe a sense of your capacity utilization by the regions.
Tim Flanagan: Yes. Thanks, Ab. And in terms of the outlook by region, again, it really follows the macro story more broadly, right? The U.S. has remained to be a fairly healthy market for us. Steel utilization rates continue to be in the mid-Southern East, Europe is a market that is certainly more challenged from an economic standpoint. I think capacity utilization in Europe ended the year in the 50% or 53% range. So thereby, you can kind of reduce kind of the overall quality or intensity of those markets. In terms of other competition, we do have tariff protections in the U.S. and in Europe. U.S., there’s tariffs in place against Chinese imports. And in Europe, it’s both the Indian and Chinese imports. So yes, the markets are kind of where they’re at.
Again, capacity utilization. We look at our network, certainly have and will continue to going forward as a global manufacturing footprint so we won’t provide kind of capacity utilization by plant. I don’t think is really relevant in terms of how we look at our business.
Ab Landa: Is that non-Tier 1 competition kind of different in Europe versus the U.S. or the intensity of it and its impact on pricing? Do you notice any differences or not really?
Tim Flanagan: No. I mean you don’t see much of a presence in Europe of either the Chinese or the Indians, right? It’s — your Tier 1 players are the ones that are the — for the most part, the incumbents in that market. You do see a small Indian presence in the U.S., but I don’t know if I would say that the intensity is any different, right?
Ab Landa: And then kind of on your cost rationalization and footprint plan, you kind of mentioned this, the third point, operating at reduced levels. And I think you kind of mentioned taking your — from 202 to 178 tons. Can you just walk us through that, how you’re thinking about implementing that and how we expect that to trend kind of over the year?
Tim Flanagan: Yes. So really, there’s three things there. One is the idling of St. Marys, right? So we’re taking down most of the production activities at our St. Marys location. We also looked at all of our assets across the, again, our entire footprint of assets and said, which are the ones that are most efficient and how can we best optimize the utilization of our assets. So there’s another subset of assets in the other plants that we’re continuing to run that will stop running and won’t otherwise consider those as part of our productive capacity. The combination of those two things and the remaining footprint is what will inform the $178 million — sorry, 178,000 metric ton capacity that will measure our utilization against going forward.
With respect to the commentary around matching our production of our operating footprint relative to commercial demand, again, it’s the 178,000 tons that are part of our capacity. We will scale our production to our demand, right? We need to be conscious of our working capital, where we’re going on as efficiently as possible and we’ll continue to operate much like we’ve done here in ’23, where we’ve scaled back operations at various points in time to ensure that we’re in alignment with overall demand.
Ab Landa: So it seems like you potentially have some room to maybe idle certain assets for order to kind of better match it if, for some reason, the market takes a further downturn? Is that the right way to maybe look at it?
Tim Flanagan: Yes. I mean, again, I would say that we’re — we’ve idled the assets that we think best position us to navigate our view on the market as it exists today. And as we look out forward. Certainly, we can slow down other assets at various points in time during the year. But again, we want to have those assets ready and in a position to begin production or continue production as the market recovers and as we look out over the long-term.
Ab Landa: And my last one, it’s kind of a follow-up to some previous questions. When you think about your liquidity especially on your cash side, is there like a minimum operating cash number that you’d be comfortable operating at?
Tim Flanagan: Yes. I mean I think we’ve said in the past, $50 million just from an operational standpoint is a very effective or easy number for us to manage the business on. But I think just overall liquidity, we’re sitting again in a very healthy liquidity position as we look out into 2024.
Operator: Thank you. This concludes our question-and-answer session. I will now hand the call back over to Mr. Flanagan for closing comments.
Tim Flanagan: Thanks, Ina. I’d like to thank everyone for your call or your interest in our call today, and we look forward to speaking with everyone next quarter. Have a great day.
Operator: Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.
