Operator: Our next question will come from Tristan Gresser with BNP Pariba. Please go ahead.
Tristan Gresser: Yes, hi, thank you for taking my question. The first one on plate please. Can you explain a little bit the strategy, and it is kind of a question in three parts. The first one on the volume side, if I look at plate volumes for the year, they are around 1.5 million tons, usually around two million tons. So what is the target really with the new facility for 2023? And also, if you can talk a little bit about the mix, the target product mix and market mix for the new facility. The second kind of part of the question is more on prices. When you look at plate prices to explore, they are still really strong. Do you believe that the demand environment you are seeing is kind of warranting those elevated prices and now we are back to kind of a more normal kind of price/cost relationship or do you believe some normalization should still take place there?
And finally, with those elevated prices domestically, how do you view the import risk. There has been a new trade case? How hard do you feel about that? Do you think the U.S. market is definitely well protected there.
Leon Topalian: Alright. I’m going to begin and then I will let Al talk more specifically, but I want to begin with telling you our prices in plate are not elevated. And I do look forward to them returning to normal levels closer to $2,000 a ton. And so being a little facetious with you, Tristan, but we don’t think they are elevated at all. We think we are in a supply and demand environment. And in a commodity business, demand will always dictate pricing. And so that is the driver. And so I would, again, tell you that they are not elevated. In terms of import risk, and you mentioned the trade case, actually all testified here not too long ago on that case, the ITC is found and upheld, the sunset review on those countries. And so the protections that are in place today, not just on pipe, but all of our products is so greatly enhanced from what we saw six, seven years ago.
In 2015, for example, there was only about 50 or 55 trade cases that were won against countries found dumping or illegally subsidizing their steels. Today, that is closer to 150. And so regardless of administration, we have had great success in advocating for our industry and holding those countries accountable with countervailing duties or antidumping margins for bringing, again, not just plate, but sheet and rebar and other products into this country illegally. But Al, you want to touch on sort of that makes the strategy for Brandenburg, how we expect to ramp that up?
Allen Behr: Yes, it is a great question, Tristan. There is a lot to unpack there. I will talk through a few of it and then I may ask Caleb Strother, who is our Director of Commercial for Plate Structural Group to talk with a few more specifics. But to echo what Leon said, no, certainly not. We think plate prices are at a range where the market is bearing them, and they think they are fair and we don’t see them as elevated at all. What we did with our order book or the way we bifurcated our order book through this year, we separated coil and cut-to-length plate from discrete plate. That was one thing we did. To make sure that the highly differentiated product like discrete plate that can only be made at the plate mill, collects the premium that is warranted versus some of the other products that can be more influenced by hot band pricing.
And so that is been largely successful if you follow the pricing of both of those, and I know you do, you can see that we were able to decouple those too. So as we sit now, our order book, our mix on plate is about two-third discrete plate and about one-third coil or cut-to-length plate. And as Brandenburg comes up, Brandenburg’s going to be mainly a discrete plate mill. It is got a sec mill that can run coil plate. That will be a highly specialized plate, very value-added. We won’t run a lot of coil plate out of Brandenburg, it is discrete plate. So it is going to move our mix to about 75% discrete. We see that obviously is a good thing. You asked about tons. I will give you a rough accounting of the times during ramp-up year and then ask Caleb to chime in on some of the markets.
But we are expecting somewhere in the 10,000 to 20,000 ton range of shipments in Q1 so that is primarily a ramp-up quarter. Second quarter probably in the range of 100,000 tons and then somewhere in the 200,000-ton range in the second or excuse me, in the third and fourth quarter. So somewhere in the 500,000 to 600,000 tons. I think we would expect out of Brandenburg this year. Obviously, the market will dictate part of that, but we would expect to be at run rate capable of capacity by the end of the year. So Caleb, maybe if you want to talk just a little bit about some of the market strategies and some of the areas we hope to penetrate with our broader capabilities.
Caleb Strother: Sure. Thanks, Al, and thanks, Tristan, for the question. Brandenburg brings a whole diversified product mix that we haven’t had with our plate group prior. When you are looking at plates up to 14 feet wide, 14 inches thick and 1,500 inches long, this helps support a lot of the initiatives that are going on the market. Dan touched on the IRA and the infrastructure package. Brandenburg is well suited in the middle of the country to help supply those customers with solutions that our plate group hasn’t been able to offer in the past. Also with our announcement of Elcyon, you look at further investment in greening of the energy grid that is happening in our country, Brandenburg is well suited to supply the monopile plate that will be required our U.S. fabricators and as well as globally around the world for other fabricators.
Tristan Gresser: Alright. That is very helpful and just a quick follow-up. In terms of wind and renewable, how much of the percentage of demand or volumes could that be?
Leon Topalian: The percent of the volume out of – well, I would just tell you, energy, roughly around 10% of our overall mix is probably where we see it. That could ebb and flow a little bit depending on demand and timing, but that is roughly where we are at as a company.
Tristan Gresser: Alright. That is really helpful. And if I may, just another one, also kind of big picture, but moving from plate to rebar. Can you discuss a little bit what you are seeing on the market more kind of near term, but also more medium term as you ramp up your new micro mail? And also, what kind of the time line – is summer 2024, the right kind of timing to think about this facility and the impact on the infrastructure bill, is it something you are looking at to kind of move meaningfully into Q3, Q4? Is that the right way to think about it?
John Hollatz: Good afternoon Tristan, this is John Hollatz. Thank you for the question. We feel our portfolio in long products is really going to benefit from what we see coming in 2023 related to the infrastructure bill, where the rebar market will grow by 1.5 million to two million tons per year. And we are planning on ramping up our mill in Kingman should ramp up about October of 2024, and Lexington in the middle of 2024. So we feel like we are well positioned to take advantage of that market.
