Question and Answer Session:
Operator
Certainly. Ladies and gentlemen, if you have a question at this time, please press star (*) followed by the number 1 key on your touchtone telephone. If your question has been answered of if you would like to remove your line from the queue, you may press the pound (#) key. Again, if you do have a question, please press star (*) and then 1 at this time.
Our first question comes from the line of Timna Tanners from Bank of America Merrill Lynch.
Timna Tanners, Bank of America Merrill Lynch
Yes. Hey, good morning.
Tamara Lundgren, President, CEO
Good morning.
Timna Tanners, Bank of America Merrill Lynch
Okay. I just want to take a step back and talk about the export market a little bit and that’s always been Schnitzer’s bread and butter in terms of the primary business of exporting scrap. Shifting this quickly back to the domestic market has been a great way to hold onto volumes and I get it. But I’m just wondering, what does this mean for the Company’s business model? Is this something you can continue to do? How much more? Given the strong dollar and the competitiveness of iron ore, I am just wondering how you envision your business model going forward in terms of export versus domestic sales of scrap.
Tamara Lundgren, President, CEO
Well, I think the core fundamental of the business and the sector in general is that it’s a spread business. So export demand exists. The level of demand and prices is what changes from time to time, and we are a spread business. So we adjust prices for demand in connection with currency movements and in connection with volumes, and that’s what enables us to maintain positive cash metal spreads.
So I think that what we have shown over the last year is a flexibility to adjust the model and to serve domestic demand. As the U.S. economy continues to strengthen and you look at things like our steel manufacturing business, where utilization is 72 percent right now, so there is a fair amount of runway left going into a continued strengthening non-res market and also a market that may be responsive to infrastructure investment, which looks to be a best idea in Congress on the part of both parties and the President. I think that you should anticipate that we have got the opportunity to continue to increase the proportion of domestic sales.
Timna Tanners, Bank of America Merrill Lynch
Okay, that’s helpful. But I guess I was just trying to make sure I understand. Schnitzer in the past had avoided the domestic market and clearly tables have turned in a couple ways. So is it possible to see similar margins in the domestic market or attractive enough margins to make that switch?
Tamara Lundgren, President, CEO
I guess the way I would respond to that, Timna is I wouldn’t say that we avoided the domestic market. We sell where demand is strongest and prices are most beneficial. So right now the domestic market has a premium to export. So we are optimizing and maximizing domestic demand as a result of that. That’s how I would look at it as opposed to avoidance. We ship to where demand is greatest and where we can make the most money.
