And over the last several — we’ve continued to grow. We’ve continued to invent ourselves as a preferred supplier. We’ve now won the GM Supplier of the Year Award for the last 4 straight years. And so we are excited about those things. We are excited about what our teams are doing to create some of the most advanced high-strength steels in the marketplace. And again, despite some of the rhetoric coming from other competitors, Nucor is positioned incredibly well to make the most advanced grades that they are required by the U.S. auto industry. So ultimately, if you’re asking in the broader context, the longer this goes, the more impact we’re going to see in the overall economy, not having a massive impact to the overall Nucor footprint. But again, I hope this ends quickly and we can move forward and continue to generate.
There’s a lot of demand out there. Even in spite of the strike, I think the overall expectation is in that 15.2 or 3 million units to be produced for 2023. And hopefully, we can get back on track and continue to supply into that market.
Bill Peterson: Yes. No, that addresses the question. I had a question on CapEx. You talked about the CapEx now projected at $2.4 billion versus prior $3 billion. I guess how should we start thinking about next year, I guess, with the additional $600 million? And I guess, even maybe out of a few years, what does the normalized level start to look like for the company given the projects you’ve outlined?
Steve Laxton: Yes. Hey, Bill. Thanks for the question. So I think it’s a good indicator. First of all, we will give guidance on the year after we get approval from our Board on capital spending, which we do at the end of every year. So stay tuned on our next call, we’ll give a more precise update. But directionally, you should assume that our capital spending will be heavier than historic averages. When you look at the pipeline, some of the bigger projects coming through right now, you can see that we’re going to be spending more over the next year or two. And then just as a framework item for you to help you in some of your modeling, our maintenance CapEx, what we consider maintenance, which we would include spares and safety-related CapEx as well, and that is probably somewhere around $600 million a year.
We have given a little bit of the Investor Relations team put out the slide deck sometime think around the first or second quarter that showed some of the larger product projects, how much is getting spent this year versus next year. So you can use that as a good framework for estimating your next year fee.
Bill Peterson: Great. Thanks for that. If I could sneak one more, kind of, again, a bigger picture. We were aware that the U.S. may be looking to remove the EU tariff rate quotas and understanding that nothing was concluded at this time, and it remains fluid. I guess how would you see this impacting the U.S. steel market? And I guess, what are the potential outcomes should the quotas be increased? I’m asking in the context of Nucor’s obviously been an important part of [technical difficulty] of the U.S. steel market.
Leon Topalian: Yes, Bill, look, there’s a lot going on. The talks today with the global arrangement in the European Union. And again, we’ve seen over the last really 3 years, us move from a tariff to a tariff rate quota. And again, the important picture really has been pretty consistent over the last several years, probably still a little high in some areas, but that 20%, 21%, 22% of the overall market. Again, I think, a healthier number is in that 15%, 16%, but I don’t see a material change because we have it when we watch the USMCA and get — perhaps did the Corus agreement with Korea, the agreements with Brazil and other nations, we’ve not seen that open up the floodgates. One of the bright spots that I’ve commented too many times, the confidence that we have, and I have in secretary Raimondo, Commerce Secretary or USTR and Katherine Tai, her counsel [indiscernible] they are very accomplished leaders, and they know this industry incredibly well and Nucor will remain a tireless advocate to make sure we create a level playing field of the United States.
And again, those three leaders really understand this industry well, and you’re doing a really nice job of making sure that shifting to a TRQ does not open up the floodgates to see a massive uptick in dumping legally or subsidized steels into the U.S.
Bill Peterson: Yes, thanks for those insights.
Leon Topalian: Thanks, Bill.
Operator: The next question is from Martin Englert of Seaport. Please go ahead.
Martin Englert: Hello. Good morning, everyone.
Leon Topalian: Good morning.
Martin Englert: Estimated steel conversion costs for the quarter, they had increased to around, I think, $518 per ton, and while I understand some of it includes some substrate costs, can you discuss some of the sequential impacts from the changes qualitatively both on anything to do with substrate as well as the true underlying conversion costs. I think you alluded to some of this related to the lower utilization quarter-on-quarter in your prepared remarks as well.
Steve Laxton: Martin, thanks for the question. And I think you summed up actually pretty well. Utilization rates have a big impact on the cost that’s a major driver, and you highlighted that. We also saw a cost increase really [ph] in supplies and services and consumables. So these are sort of product [technical difficulty]. I think what’s important too, Martin, is to keep in mind, in general, when you look year-over-year, commercial costs are down and I think that’s encouraging against the backdrop of what we would have had. We were having this conversation a year ago, we were all concerned about inflationary pressures in the cost system. Those appear to have moderated notwithstanding the quarter-over-quarter changes we had, which were predominantly due to our own production choices of the company. Is that helpful?
Martin Englert: Yes, helpful. Anything with pivots with substrate costs or not a material impact quarter-on-quarter.
Steve Laxton: By substrate, you mean raw materials?
Martin Englert: Meaning when you have that [indiscernible], if you have to purchase substrates run across them that wouldn’t — I don’t think it’s captured in the ferrous cost, right?
Steve Laxton: Yes. That’s correct, Martin. That’s a good point. The slab purchases at CSI, we record in consumables, not in the raw materials. So that does have an impact. And so that’s part of the change that you’re seeing that’s not reflected in the raw material scrap numbers.
Martin Englert: Okay, got it. And just kind of parsing to your comments about the inflation and the implications there and the concerns a year ago, I guess, when looking back at conversion costs in the back half of last year, presumably, there’s some — you called it out in the qualitative guidance lower volumes anticipated in the steel business quarter-on-quarter lower utilization. So probably some uptick in conversion costs, net-net, although you highlighted this quarter, they were below where they were at a year ago in the comparable period. Is that kind of the right framework to be thinking about?
Steve Laxton: Yes. I think, Martin, if you’re modeling out for the fourth quarter, you might see more close to flat cost quarter-over-quarter rather than an uptick, continued uptick. That’s just because of where you see some of the trends — for example, if you look at things like sheet, it likely has bottomed out at this point. So that has an impact on the system and how costs flow through our system. So you may see — you may not see the same rate of increase on a per ton basis going into the fourth quarter and so in the third quarter.
