Steel Dynamics, Inc. (NASDAQ:STLD) Q2 2023 Earnings Call Transcript

Mark Millett: Well, the – actually, the outage – the actual specific cost it was well under $1 million. It – as Barry said, the issue was just getting parts and just the size of the equipment involved, it wasn’t necessarily a large expense to repair. And the second part of that, sorry. Well, again, as you saw or as you heard from our comments, we are just tempering our expectations. We have always had higher expectations. And we just believe once we get up and running here in the next few days, we were at – when we shutdown 52%, 55% or thereabouts, we are just suggesting now that month-over-month we are going to progressively ramp up to that 80% by the end of the year. And then into next year, we will continue to incrementally ramp up to full production through ‘24.

Carlos De Alba: Got it. So, in the second half of next year, fourth quarter next year is when you expect to get full capacity then?

Theresa Wagler: No, Carlos. I would say that Mark – what Mark said is that we are going to have kind of an even pace we expect of ramp-up in the second half of this year for 2023 to get up to that 80%. But then we will reach the 100% of capacity very quickly in 2024.

Carlos De Alba: Alright. Got it. Thank you very much. Appreciate it.

Theresa Wagler: You’re welcome.

Operator: Your next question for today is coming from Timna Tanners at Wolfe Research.

Timna Tanners: Yes. Hey, good morning.

Mark Millett: Good morning Timna.

Timna Tanners: Wanted to just ask a little bit more about the cadence of added supply that you have outlined on the new coating and painting lines. Like should we start modeling contribution immediately in the third quarter? Will that be more fourth quarter and first quarter weighted? And then I have a second question. Thanks.

Barry Schneider: Timna, this is Barry. We are anticipating bringing the new coding and the galvanizing lines, paint lines on at the end of the year. But I wouldn’t expect any kind of a significant contribution to shipment still going into 2024. But the lines are constructing very well. There continues to be supply chain issues with certain parts of the construction, but we are resolving those and mitigating them and moving stuff, teams are very active in manned up. So, we look forward to bringing these lines on, but it will be near the end of the year.

Timna Tanners: Okay. Helpful. Appreciate that. And then my only other question was just an update on your export activity and just how that’s trending. I know you have been pretty active shipping to Mexico, just wondering if there is anything new there.

Mark Millett: From – other than a small little bit of non-ferrous, we have no export activity other than Mexico.

Barry Schneider: Yes. Timna, this is Barry again. We have been doing quite a bit of shipments into Mexico this year. Sin is uniquely – the capabilities of Sin are sitting are unique for what the Mexican markets are. So, being able to get some heavier gauge products and wider products down there has been a very good place for us to develop relationships. So, we have been down in shipping to Mexico for a long time, but significantly so in the first half of this year and we continue to do more of that, especially through our campus partners at the Sinton facility. So, we see that as a really good business and continuing to grow forward.

Timna Tanners: Okay. Thanks again.