Roger Spitz: Got it. And then second is, I know it’s early days, but I just want to fill stuff in on the model. For 2025, how should we think about CapEx with relation to 2024? Same level or different? And perhaps the cash tax rate in 2024 you talked about South African mining operations. Does that repeat in 2025? Or is that more back to a normal cash tax rate?
John Romano: Yes. So look, we don’t have a complete forecast for 2025 capital yet, but it will probably be slightly lower than what we have. We still got some other mining projects going on. And John, you can comment on the tax. But to the extent we’re still spending money in South Africa that would be deductible. So it’s a little early to come up with what our tax.
John Srivisal: I agree with that, John. And we will be spending — if this is not a one-year investment in South Africa is multiyear. So those expenses that we would spend on capital in South Africa would be deductible in ’25.
Roger Spitz: Thank you, very much.
Operator: Your next question comes from John McNulty with BMO Capital Markets. Please go ahead.
John McNulty: Yeah. Hi guy. Sorry just one follow-up. So, when I look at your inventory and the hit that it’s had on working capital over the last couple of years, it’s about $400 million in the last two years. If you return to kind of more normal operating rates at the middle of this year, I guess, how long realistically will it take to reverse that inventory drag where you see a source of funds from inventory. Can you clean all that up in whatever two to three years? Is it hey look, this could take a very long time? I guess I’m just not sure with the mining side, how to think about how this all could work through and how quickly you could recapture some of that lost inventory?
John Srivisal: Yes John it’s a good point. As we mentioned we have a long supply chain. So, while in the past 18 months or so, we did slow down our pigment sites and brought down that inventory. We were running our mines relatively flat out to build some feedstock inventory. If you take a look at 2024, we actually do see that reversing. Inventory, we do expect that’s a bigger swing historically on what was driving the negative working capital change. And as we’ve guided, we do expect working capital to be positive and a lot of that is owing to inventory cashing out on that.
John McNulty: I guess, can you get the full $400 million back? Or is there some reason why that won’t be the case. And I don’t mean in ’24. I just — is there — are we at kind of a new level for one reason or another? Or should you be able to reverse that $400 million inventory headwind from the last two years?
John Romano: Yes. We would expect that we would recover that over time. Not in ’24.
John McNulty: Got it. Thanks very much for the color.
John Romano: Thank you.
Operator: Your next question comes from Vincent Andrews with Morgan Stanley. Please go ahead.
Turner Hinrichs: Hi. Thank you. This is Turner Hinrichs on for Vincent. In your slides, you mentioned that February and March order books are tracking above strong January sales. Do you mind touching on what end markets or channels are driving the strength and moving inventory levels that you’re seeing?
John Romano : Yes. Look so those are — it’s basically across the entire market. So, every region we’re seeing additional volumes, I mentioned that we’re seeing — again, North America didn’t drop as much as it, I think, the other regions, and it’s I’d say, a little bit slower to picking back up. We referenced in the fourth quarter. We saw a little bit more seasonality, but we’re also seeing North America pick up a little bit stronger in the first quarter. So, I’d say, it’s across the board and it’s not specific to any particular end segment. So it’s coatings, plastics paper and specialty.
Turner Hinrichs: Great. Makes sense. Do you mind providing some additional color on what you’re seeing for important export trends? And if you have any details as it relates to freight cost if they’re affecting those trends or the underlying macro across the regions that would also be great.
John Romano: Any specific reason you’re referring to on imports and exports or just generically?
Turner Hinrichs: Generally it would be interesting to hear about Chinese exports or European imports broadly both given Chinese export trends and the antidumping probe that would also be of interest.
John Romano: Yes. So in China over the last couple of months we don’t have actually January numbers yet. But I’d say, November and December, we continued to see an uptick, which was not I’d say surprising considering there was a an antidumping suit filed. So we’ve seen some additional exports coming out of China. And Europe is obviously a big market for bringing in material from China — we’ve — as far as some of the activity going on in Europe and other areas, I referenced some issues with imports and exports due to the congestion in the Red Sea. So for producers that are in Europe, I think, they’re actually getting a little bit of benefit from that depending upon where they’re located and where they’re shipping. But I wouldn’t say, there’s significant change in activity.
Now on the freight, we are seeing some positive moves on freight. What’s happening in the Red Sea is, I’d say, a bit more of a short-term anomaly. We’re seeing some spot rates that are higher than what we put in our forecast. But historically, we — over the course of the last 24 months, freight rates have gone up significantly and we’re starting to see those abate and that’s I’d say a tailwind for us as we think about our 2024 forecast, although, right now some of those rates have been, I’d say, negatively impacted due to some of the activity that’s happening in the Middle East.
Turner Hinrichs: Great. Thank you so much for the color.
Operator: I will now turn the call over to John Romano, Co-CEO.
John Romano: Thank you operator. Look, we’re very confident in where we are with our company moving into 2024, and our vertical integration strategy we believe will continue to provide our competitive advantage. We remain optimistic in the short — the long-term for Tronox the value creation from a lot of the projects that we’re doing including sustainable mining and upgrading solutions. So, I’d like to thank you all for your interest in Tronox and your support, and have a great day.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
