Kevin Lewis: Yes. Thanks, Tristan, for the question. This is Kevin. So tubular certainly is a very large bright spot in the portfolio. Your point around the contract structure and the commercial strategy is a great call out. We’ve been very purposeful within the business to expand our program customers, which means that we look at customers that participate in more resilient basins like the Eagle Ford, like the Permian, like the Haynesville strategic basins, and have increased our exposure to that business. So that allows us to have a much more resilient tubular order book and certainly in a strong environment like today, is resulting in record margins. On the demand side, I think what’s important to remember is that the shipment levels that we saw particularly in the second half of the year are really full utilization given some of the capacity constraints that we have at our Fairfield Works facility.
So, volumes should remain at pretty stable levels given the high utilization rates that we ran in 2022. So, with all that being said, I think tubular is obviously in a great position for 2023. We certainly expect prices to be higher in Q1 versus Q4. And as I think both Dave and Jess mentioned in their remarks, we should see another really, really strong quarter of performance for tubular in the first half — first quarter of the year and resiliency certainly throughout the year.
Operator: We’ll get to our next question on the line from Emily Chieng with Goldman Sachs. Please go ahead.
Emily Chieng: Good morning, Dave, Jess and Kevin. Thanks for taking my question. My first is a follow-up around sort of the pricing expectations for the Mini Mill business, particularly as you think about the NGO line coming into service in the third quarter of this year. How long do you anticipate that qualification process to take? And should we expect this product to be sold at fixed price contracts? And how should we start to see that impact pricing throughout the course of the year?
Kevin Lewis: Yes. This is Kevin. It’s a great question. I would say that the second half of 2023 for our non-grain-oriented electrical steel line will be heavily focused on commissioning and qualification with customers. We will start to see some of those volumes come in throughout the back half of the year, but 2024 will certainly be the year where you start to see the heaviest ramp-up in benefit from our non-grain oriented electrical facility. So that’s a 200,000 ton a year line. I wouldn’t take kind of half of that and assume that’s what we’re going to ship in the back half of 2023, but we should get much closer to that number on a run rate basis moving forward. Electrical Steel has traded a significant premium to spot prices and to higher oil prices.
So, we’re having those types of conversations now with our customers as they look to secure line time at that facility and ultimately added to their portfolio of business with our company. So, we’re seeing lots of activity, lots of interests and our commercial teams are deeply engaged in those discussions. And when that line ultimately comes up, you’re going to see it really enhance the product mix at Big River. We — Dave mentioned in his remarks, about 400 basis points of margin expansion based on that richer mix and those volumes being pulled through the Campus Therapy River.
Emily Chieng: Maybe a follow-up is just around the flat-rolled business’ cost structure there. It looks like your utilization rates have fallen about 15% there from 2Q to 4Q levels last year, but cost per ton have been pretty flat, but still elevated relative to prior year levels. Maybe can you talk a little bit about what’s been happening at the flat-rolled business that has kept those costs per ton numbers flat? But what is the potential for cost out as we look forward to 2023? I’ll leave it at that. Thank you.
