But with our continued focus on costs, some of the operating efficiencies that we will be able to generate in the fourth quarter into raw material tailwinds, we think the business will be in a position in Slovakia to deliver stable EBITDA quarter-on-quarter.
David B. Burritt: There’s no doubt Europe is challenged where we are today. But just keep in mind also that this business has been extraordinarily well run. These guys know how to run the operations very, very well. This last year, I think the EU steel demand is expected to fall 5%, and it’s more like expected to rebound 6%. So how all of that transfers through our numbers into this next year, we’ll have to see. But it is not as strong, frankly, as what it has been in the past. It’s a challenged business for sure in the short-term.
Tristan Gresser: Alright. That’s clears it and actually brings me to a quick follow-up there for next year. I mean the $100 million EBITDA for the business is pretty much what the COVID levels. I mean, expectations are we would see some rebound in demand at least upfront demand. So is there something in the business that is structurally different or are you just being really conservative on how the first half of the year will shape out there?
Kevin Lewis: So if we think about performance in 2024 versus 2023, let me speak to some of the favorable changes that we expect to see in this segment. First, energy should be a tailwind for us in 2024 versus 2023. We do expect to see increased shipment volume once again with three blast furnaces running throughout the year. Recall, the two-month outage that we had in the third quarter of this year, plus we did have an idled furnace to start calendar year 2023. So that’s a year-on-year change. We will see likely some raw material headwinds, whether that’s in iron ore pellets using the IDEXX kind of as our barometer for costs or with coking coal versus 2023 as well as some higher labor and CO2 costs. But all of that taken together gives us a line of sight to sequentially stable EBITDA as well as FX being flat on a year-over-year basis.
Tristan Gresser: Alright, that’s fair. And just a quick one on CO2 costs you just mentioned, is that a big hike into next year?
Kevin Lewis: It will certainly be a headwind. I don’t think we’re in a position right now to assess in absolute values, the level of year-on-year change. But you should think about it as a year-on-year headwind.
Tristan Gresser: Alright, that’s very clear. And maybe my second question, given that, that was all Europe is a bit more on capital allocation and putting the strategic process aside. I think looking for 2025, what would really be the plan after Big River 2 from the point of view of management, is there a Big River 3 somewhere in the future, it seems that is the strategy that is maximizing shareholder value or do you expect some time off in 2025 on growth and pose a bit the growth and reward shareholders a bit more, what kind of is the strategy after Big River 2?
Jessica T. Graziano: I have to say you’re getting a little greedy on this call. I just gave you 2024. Now listen, we’re not going to go that far on this call right now. We feel very comfortable with the path we see for 2024. We’re very comfortable with talking about what we expect the financial impacts of that are going to look like, but we’re not going further than that today.
David B. Burritt: That’s a good thing we didn’t give him any more. He’d be asking for 2026.
Tristan Gresser: No, that’s fair. And I appreciate the additional disclosure you provided. Thank you. That’s all from me.
Jessica T. Graziano: Thank you.
Operator: Thank you. We’ll get to our next question on the line from Gordon Johnson with GLJ Research. Please go right ahead.
Gordon Johnson: Hey guys, congrats on the results. Just a quick question for me. I mean a lot of the questions have been asked. So maybe I can ask a couple. So it seems like there’s been some inventory build, some purchases made up until now, prices are up. I have heard some concerns from some of the service centers and distributors in the Midwest that you could potentially see a lull in buying given that some of the inventory concerns have been addressed. Have you guys seen any of that and if not, could you elaborate? Thank you.
Kevin Lewis: Yes. Sure, Gordon. This is Kevin. I would say on the inventory side, inventories at service centers were low as we ended the third quarter. I think it was somewhere around 1.9 months of inventory on hand, which is well below the 10-year average. So we think with some resolution to the UAW, better demand picture entering into 2024, that will actually bring some of the buyers off the sidelines and start to see, as we already have, a recovery in order entry rates. So I think we’re quite at least optimistic in the near term that some of the uncertainty becomes more resolved and more fully resolved, that will provide some good demand.
Gordon Johnson: Thank you. One more, if I could. You guys are assuming $750 in 2024 for the guide, but the curve is currently at $850. Could you guys be being a little conservative there? Thank you.
Kevin Lewis: Obviously, Gordon, we wanted to align around a level of expectations that we believe is currently reflected in the market from a sell-side perspective at $750. Obviously, our results will fluctuate as steel prices move. And to the extent — and just recently, as you pointed out, the forward curve has kicked out significantly. Obviously, we’ll be — continue to be focused on running our operations extremely well, having the right commercial strategy in place, whether that’s the right mix of that market exposure, the right mix of contract, fixed volumes, index, monthly and spot to optimize the results regardless of the pricing environment. So we do see that same momentum that you’re seeing, but we didn’t necessarily include it in our outlook for 2024 at this juncture. But I’ll pass it over to Jess if she’s got some additional comments.
Jessica T. Graziano: Yes. Just to underscore, we wanted to be helpful in bridging the gap that we saw, and these numbers are still assumptive right. So from our perspective, if you think about on the slide where we show the walk, right, that’s all other $300 million, that’s going to move. That’s going to have the puts and takes of what happens across the market in 2024, both in the top line and within the cost base. So for the level of visibility that we have right now, we feel comfortable making clear that we expect 2024 will likely look the same — in the same ballpark as 2023. But all the puts and takes in the business that we’re going to experience are kind of in that bucket, if you will.
Gordon Johnson: Thanks again guys, congrats.
Jessica T. Graziano: Yeah, thanks.
Operator: Thank you very much. [Operator Instructions]. We’ll get to our next question on the line from Carlos De Alba from Morgan Stanley. Go right ahead.
Carlos De Alba: Yeah, thank you very much. And Dave, so I heard what you said about no comments on the process. I just have one, I’m going to risk it. Any color on the timing, like no details other than is this a process that the Board is taking very seriously but is there a sense of will it be completed this year or early next year, that would be extremely helpful? Thank you.
