Good day, and welcome to Steel Dynamics' First Quarter 2024 Earnings Conference Call. At this time, all participants are on a listen-only mode. After management's remarks, we'll conduct a question-and-answer session, and instructions will follow at that time. Please be advised this call is being recorded today, April 24th, 2024, and your participation implies consent to our recording of this call. If you do not agree to these terms, please disconnect. At this time, I'd like to turn the conference over to David Lipschitz, Director, Investor Relations. Please go ahead. Thank you, Matthew. Good morning, and welcome to Steel Dynamics' First Quarter 2024 earnings conference call. As a reminder, today's call is being recorded and will be available on our website for replay later today. Leading today's call are Mark Millett, Chairman and Chief Executive Officer of Steel Dynamics, Theresa Wagler, Executive Vice President and Chief Financial Officer, and Barry Schneider, President and Chief Operating Officer. The other members of our senior leadership team are joining us on the call individually. Some of today's statements, which speak only as of this date, may be forward-looking and predictive, typically preceded by believe, expect, anticipate, or words of similar meaning. They are intended to be protected by the Private Securities Litigation Reform Act of 1995 should actual results turn out differently. Such statements involve risks and uncertainties related to integrating or starting up new assets, the aluminum industry, the use of estimates and assumptions in connection with anticipated project returns, and our steel, metal recycling, and fabrication businesses, as well as to general business and economic conditions. Examples of these are described in the related press release, as well as in our annually filed SEC Form 10-K, under the heading Forward-Looking Statements and Risk Factors, found on the Internet at www.sec.gov, and, if applicable, in any later SEC Form 10-Q. You'll also find any referenced non-GAAP financial measures reconciled to the most directly comparable GAAP measures in the press release issued yesterday, entitled Steel Dynamics Reports First Quarter 2024 Results. Now, I'm pleased to turn the call over to Mark. Thanks, David, and good morning, everybody. It's good to be with you for our first quarter 2024 earnings call today. Once again, our teams achieved a strong first-quarter financial and operational performance. Quarterly steel shipments were a near record 3.3 million tons. The team successfully began operating our 4 new value-added flat-roll steel coating lines, which adds about 1.1 million tons of higher-margin product diversification to our portfolio. The Sinton team continues to make significant headway, hitting record milestones and achieving positive EBITDA for the quarter, with significant improvements on the way. We're also making fast progress on our aluminum flat roll investments. There continues to be strong commercial support for a new and innovative supply chain solution provided by Steel Dynamics, as we're a well-known and highly regarded metals producer. Financially, the team continues to excel. They consistently achieve superior financial metrics and best-in-class return on invested capital, the product of their passionate, can-do, performance-driven culture and our high-margin, value-added growth strategy. A stark and persuasive indicator of the effectiveness of our business model is our relative EBITDA per employee generation, which is substantially higher than any of our competition. I'm incredibly proud of the Steel Dynamics team. They are the foundation of our company, and they drive our success, and I'm proud to stand among them. They are special, and we're focused on providing the very best for their health, safety, and welfare. We're actively engaged in safety at all times and at every level of our company, keeping safety top of mind and an active conversation each and every day. Despite excellent safety performance compared to industry peers, there's more to do. We will not rest until we consistently achieve our goal of zero injuries. So with that, Theresa, would you like to give us some color on the quarter? Thanks, Mark. Good morning, everyone. Thanks for joining us. I add my sincere thanks to our teams for another strong performance. Our first quarter 2024 net income was $584 million, or $3.67 per diluted share, with adjusted EBITDA of $879 million. First quarter 2024 revenue of $4.7 billion was 11% higher than sequential fourth quarter results, supported by strong volume and higher realized selling values across the steel platform. Our first quarter operating income of $751 million was 45% higher than fourth quarter results, driven by steel metal spread expansion, especially within our flat-rolled operations. A quick note, as we construct the aluminum facilities, non-capitalizable expenses are required to flow through SG&A until startup. So you will see increased costs in that line item as we start operations mid-2025, and the first quarter, that additional amount was about $14 million. As we discuss our business this morning, we see positive industry fundamentals for 2024 and beyond, and we're focused toward our continued transformational growth initiatives. Our Sinton, Texas, flat-rolled steel division operated close to 70% of capacity for the quarter, and as Mark said, generated positive earnings. Our steel operations generated strong operating income of $675 million in the first quarter, supported by near-record shipments and increased realized product pricing. For those of you who track flat-rolled products by type, in the first quarter, hot-rolled shipments were 1,062,000 tons, cold-rolled shipments were 130,000 tons, and coated shipments were 1,220,000 tons. Operating income from our mills' recycling operations was $23 million, significantly higher than sequential fourth-quarter results, as increased domestic steel demand supported higher volume. As many of you already know, we're the largest North American metals recycler, processing and consuming ferrous scrap and non-ferrous aluminum, copper, and other metals.... The team continues to effectively lever the strength of our circular manufacturing model, benefiting both our steel and metals recycling operations, as well as shortly, our aluminum flat-rolled operations. Our steel fabrication segment achieved strong operating income of $178 million in the first quarter, lower than sequential fourth quarter results due to weather-impacted and seasonally lower shipments and metal spread compression as realized pricing declined and steel raw material input costs increased. Our joist and deck backlog extends through the third quarter of 2024, with strong forward pricing, and pricing has stabilized at historically strong levels during the quarter. Infrastructure, Inflation Reduction Act, and DOE decarbonization support and manufacturing onshoring are expected to increase domestic fixed asset investments later this year and into next year, which will support our steel operations and our fabrication business. Our cash generation continues to be strong based on our differentiated circular business model and highly variable cost structure. During the first quarter of 2024, we generated cash flow from operations of $355 million, which was reduced by an annual company-wide profit-sharing contribution of $265 million. We ended the quarter with strong liquidity of $3.1 billion. For 2024, we believe full-year capital investments will be in the range of $2 billion, of which approximately $1.4 billion relates to our aluminum flat-rolled investments and $175 million toward our biocarbon facility. In February, we increased our cash dividend 8% to $0.46 per common share, continuing our increasing dividend profile as through-cycle cash flow grows. We also repurchased $298 million of our common stock, representing 1.5% of our outstanding shares. At March 31, $1.1 billion remained available for our share repurchases under our new $1.5 billion plan. Our capital allocation strategy prioritizes high return strategic growth, with shareholder distributions comprised of a base positive dividend profile that's complemented with a variable share repurchase program. While we remain dedicated to preserving our investment-grade credit designation, our free cash flow profile has fundamentally changed over the last five years. From an annual average of $540 million from 2011 to 2015, to currently $2.9 billion. We've strategically placed ourselves in a position of strength to have a sustainable capital foundation that provides the opportunity for meaningful strategic growth and strong shareholder returns while maintaining investment-grade metrics. We believe our track record proves itself with an average three-year after-tax return on invested capital of 32%, clearly a best-in-class performance across industries. We're squarely positioned for the continuation of sustainable, optimized, long-term value creation. Sustainability is also a significant part of our long-term value creation strategy, and we're dedicated to our people, our communities, and our environment. We're committed to operating our business with the highest integrity. In that regard, we remain excited about our joint venture with Aymium, a leading producer of renewable biocarbon products. We believe our first joint venture facility, which we plan to start operating late in the fourth quarter, could decrease our steel Scope 1 greenhouse gas emissions by as much as 35%. We have an actionable path toward carbon neutrality that is more manageable and we believe, considerably less expensive than may lay ahead for many of our industry peers. Our sustainability and carbon reduction strategy is an ongoing journey, and we're moving forward with the intention to make a positive difference. We plan to continue to address these matters and continue our leadership role moving forward. Barry? Thanks, Theresa. Our steel fabrication operations performed well in the first quarter, achieving strong earnings. At the end of the first quarter, our steel joist and deck order backlog was solid, extending through the third quarter of 2024. Additionally, current pricing has stabilized at historically high levels during the first quarter. We continue to have high expectations for the business. Continued onshoring of manufacturing, coupled with infrastructure spending and fixed asset investment related to the IRA programs, should provide momentum for additional construction spending later this year and through 2025. Our fabrication platform provides meaningful volume support for our steel mills, critical in softer demand environments, allowing for higher through-cycle steel utilization compared to our peers. It also helps mitigate the financial risk of lower steel prices. Our metals recycling operations improved earnings in the first quarter as increased demand from North American steel producers supported higher ferrous scrap volume, and the team continues to grow our volume in recycled aluminum in advance of us starting our new aluminum flat-rolled operations. The North American geographic footprint of our metals recycling platform provides a strategic competitive advantage for our steel mills and for our scrap-generating customers. In particular, our Mexican recycling operations competitively advantage our Columbus and Sinton raw material positions. They also strategically support increased procurement of aluminum scrap for our future flat-rolled aluminum operations. Our metals recycling team is partnering even more closely with both our steel and aluminum teams to expand scrap separation capabilities through process and technology solutions. This will help mitigate potential prime ferrous scrap supply issues in the future. It will also provide us with a significant advantage to materially increase the recycled content in our aluminum flat-roll products and increase our earnings opportunities. The steel team had a strong quarter, achieving near-record shipments of 3.3 million tons.... During the first quarter of 2024, the domestic steel industry operated at an estimated production utilization rate of 77%, while our steel mills operated at 87%. We consistently operated higher utilization rates due to our valued, value-added steel product diversification, our differentiated customer supply chain solutions, and the support of our internal manufacturing businesses. The higher through-cycle utilization of our steel mills is a key competitive advantage, supporting our strong and growing cash generation capability and best-in-class financial metrics. Our realized steel pricing improved across our product portfolios. However, spot roll prices weakened early in the first quarter before recovering in March and April. Value-add flat roll steel pricing spreads were incredibly resilient, actually expanding during this same time frame. Underlying demand remains steady, but customers are managing to a lower inventory level, which can cause some volatility in spot prices. As order activity increased quarter-over-quarter, our steel backlogs also improved nicely from December to March across the platform. As for Sinton, the team continues to make significant improvements in operating efficiency and consistency. They averaged around 70% of capability for the quarter, breaking monthly utilization records across the lines in March. We are planning for Sinton to see additional improvements in production as the team took several maintenance days in April. Among other things, in the outage, we resolved certain transformer limitations, which will allow us to access 100% of our melting capacity versus the previous 80%. Also, the additional two new value-added coating lines were successfully commissioned and have commenced operations with excellent results. These additional lines will support increased volume and margins as we head through this year. Regarding the steel market environment, North American automotive production estimates for 2024 were recently revised higher to just over 16 million units, with continued growth expected in 2025 and 2026. This improved forecast is based on demand, resilience, and stronger production results as supply chain constraints continue to dissipate across the automotive supply chain. Automotive dealer inventories are also continuing to remain below historical norms. Non-residential construction remains solid, as supported by the increased sequentially quarterly order activity and shipments at our structural and rail division. Additionally, onshoring and infrastructure spending should provide further meaningful support to fixed asset investment and related construction-oriented projects in the coming years. As for the energy markets, the solar industry continues to grow, and oil and gas activity is steady. However, increasing OCTG and line pipe imports created a challenging first quarter environment for the domestic producer. Looking forward, we are optimistic regarding steel demand and pricing demands for 2024. Thanks, Barry. Thanks, Theresa. Well, our consistently strong through-cycle operating and financial performance continues to support our cash generation and growth investment strategies. As mentioned, the four value-add flat-roll steel coating lines are now online and in various modes of startup. And certainly, the line in Sinton was an absolute unqualified success. The team has done a phenomenal job there. And Sinton should see a step function improvement in operations and profitability as those two new lines ramp up after the April maintenance, which occurred actually two weeks ago, and they're up and running again. The aluminum strategy, our growth, is especially compelling. Responses from existing and new customers across all markets remains incredible and only strengthening as we move forward. We are currently in discussions with numerous customers who wish to locate on-site with us, and this co-location strategy provides a sustainably competitive model for all of us, conserving time, money, and reducing emissions across the supply chain. And this model has already proven itself tremendously successful in Sinton. And to just sort of review the project itself, 650,000 metric tons of aluminum flat-roll capability in Columbus, Mississippi. It's a state-of-the-art plant. It has served the sustainable beverage and packaging sector, automotive and industrial markets as well. Roughly 300,000 metric tons a year of can stock, about 200,000 tons of auto, and 150,000 tons of industrial and construction. Actually, at the site in Columbus, we'll have a melt-cast slab capacity of around 600,000 metric tons, and that will be supported by two satellite facilities, one out west, around Gila Bend and one in central Mexico, which are located in scrap-rich regions. We can capture the scrap, turn it into cast slab, and transport it very, very effectively and cost-efficiently to the mill itself. Expanded the project scope to include additional scrap processing and treatment to maximize aluminum recycled content. Our metals recycling team has also developed a commercially viable sorting solution at volume for 5,000 and 6,000 series aluminum scrap, which represents an incredible competitive advantage for us. Our startup plans have not changed. The rolling mill should be operating mid-2025, the Mexico slab center, the end of 2024, and then Arizona, mid-2025. The total project cost, including the recycled slab centers, remains at $2.7 billion. With virtually all equipment and construction contracts complete, we feel confident in the expected amount of investment. We also are confident in that it'll add around about $650 million-$700 million of through cycle annual EBITDA, plus an initial $40 million-$50 million from the Omni platform as well. The investment premise, if you think about it, you know, the market environment is similar to the domestic steel industry when we started SDI thirty years ago. They have older assets that they've had difficulty earning their cost of capital, so there's been little reinvestment, heavy legacy costs, inefficient, and operations are typically high cost. And also, a significant aluminum flat roll supply deficit exists in North America, which is expected to grow. And this will be the first time we've ever entered a market where there's a supply-demand gap. Pretty positive, positive for us for sure. We have business alignment, and we can leverage our core competencies of construction and operational know-how. We can lever Omni's recycling footprint. As many of you know, we're the largest aluminum scrap recycler in North America. And again, we are developing some pretty exciting new separation technologies. So it's gonna be cost effective. It's very, very high return growth for us. So moving on. We're impassioned, I think, by our future growth plans, as they will continue to drive the high return growth momentum we have consistently demonstrated over the years. We have the highest, most recent 5-year average after-tax return on invested capital within the S&P 500 materials companies. In the most recent 3 years, we have had an average of after-tax return on invested capital of 32%, which I think is a stunning number and a affirmation of the ability of all our team. Our disciplined and intentional growth strategy, focused on differentiated value-added supply chain solutions, has provided sustainable and growing cash generation, and will continue to do so in the future. So I'm incredibly optimistic moving forward. I believe the market dynamics are in place to support increased demand across our operating platforms in 2024. North America will benefit from continued onshoring of manufacturing businesses, and the U.S. will benefit from the allocation of public monies from the infrastructure program, the Inflation Reduction Act, and other public programs. Steel Dynamics is levered to benefit from those programs through increased steel joist and deck demand, flat and long product, steel demand, and the associated higher demand for recycled scrap and aluminum. As I said earlier, our teams are our foundation. I thank each and every one of them for their passion and their dedication. We're committed to them, and I remind those listening today that safety for yourselves, your families, and each other is our highest priority. Our culture and business model continue to positively differentiate our performance, leading to best-in-class operating and financial metrics. We're no longer a simple steel company. We're an industrial metals business, providing enhanced supply chain solutions to numerous industries that are essential to global economies. This differentiation and diversification mitigates cash generation volatility in all market cycles, as we've just seen in this past quarter. We are competitively positioned and continue to focus on providing superior value for our companies, for our customers, team members, and shareholders alike. And we look forward to creating new opportunities for all of us today in the many years ahead. So that said, Matthew, could you open the line up for questions, please? Thank you. If you'd like to ask a question, please signal by pressing the star key, followed by the digit one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. If you pressed star one earlier during today's call, please press star one again to ensure our equipment has captured your signal. Also, we'd like you to please limit yourself to one question to facilitate time for everyone. Any additional questions can be addressed upon reentering the queue. Your first question is coming from Martin Englert, from Seaport Research Partners. Your line is live. Hello. Good morning, everyone. Within steel, conversion costs appear to have declined a bit quarter-over-quarter. Taking into account Sinton continue to ramp up, and substrate costs going into 2Q, would you anticipate a comparable reduction in the current quarter? Martin, the way that you and others are able to actually calculate what you call conversion costs is a little bit difficult. But yes, with the increasing production at Sinton, which we expect to continue to improve into the second quarter and the second half of the year, you will see that the additional volume will help compress costs across the spectrum. But product mix is also something that you need to take into consideration when you think about flat versus long. But we would expect to see that the conversion rate, as you calculate it, would continue to reduce. I can't speak to the exact magnitude thereof. Okay, appreciate that. Thank you, and congratulations on the results. Thank you. Thank you. Your next question is coming from Curt Woodworth from UBS. Your line is live. ... Yeah, thank you. Good morning, I'm Mark Millett. A couple of questions on the Greenfield Aluminum project. Can you kind of give us a timeline on where, when you think you could get to more of a EBITDA breakeven level on the facility? And what type of utilization rate you think you would need to achieve that? And then can you speak to, you know, what level of commercial commitments or arrangements that you've been able to achieve at this point? And then just lastly, I saw you kept the CapEx guidance flat at $2.7 billion, but obviously there's been, you know, some concern just around general inflationary pressures. But do you feel, you know, are you seeing any upward pressure on the CapEx number, and are you pretty confident in, on, you know, keeping that number at $2.7 going forward? From, I'll go backwards, that's the easier way. From a CapEx standpoint, as I mentioned in my sort of preliminary thoughts, virtually everything is now contracted out. We did, and you saw here some months ago, we did bump it up to that $2.7 billion, with the knowledge of some inflationary pressures. Those are all baked into that $2.7 billion, and we see no expansion on that number going forward. From a commercial arrangement perspective, we've been working obviously with the major sort of beer can or the beverage can consumers. We've been working with with automotive as well, and we're pretty confident that we have the ability to match our our customer demand with with the ramp-up curve. And as we we also mentioned, you know, operations should start mid-2025. There will be some qualifications you know early on, but we're we're confident that we can match you know the the demand from those customers with with that startup ramp. From a standpoint of EBITDA breakeven, I would imagine that from the end of the year, I would hope be in that position. Okay, and then just a quick follow-up on fabrication. Last quarter, you talked about, you know, order entry improving and pricing continues to be stable, but obviously, you know, there's still downward pressure in the business. Can you just give us a sense for maybe volumetrically, how you see things performing into 2Q? I know 1Q is always seasonally weak, and there was some, you know, weather-related disruption, but do you think you can get close to, you know, getting back to positive growth in fabrication? And then just in joist and deck in general, can you give us a sense for maybe how those products fit into some of these federal programs in terms of, you know, the CHIPS Act, IRA battery plants? You know, do you see any new sources of growth that could, you know, mitigate what's been, you know, somewhat of an air pocket on the warehouse side? Thank you. Yeah, I guess the... From our perspective, and I will let Theresa and Barry chip in here in a little bit, but you know, from a shipment standpoint, in Q4 and early Q1, you know, shipments kind of leveled off at pre-COVID levels. You know, we've seen some general seasonality and there's some regional weather impacts here and there. But booking rates increased in March and are up again meaningfully in April. Backlogs are around about six months. So we personally consider that to be kind of a volume trough, and we think things are gonna move up volume-wise in the second quarter into the rest of the year. And I think the thing to emphasize, you know, there's only been slight quarter-over-quarter price erosion. And so for that, or that market strength, to be there, I think it confirms our thesis that, you know, there's been a paradigm shift in through-cycle spreads. And I think we've got a very, very, very constructive view of the long-term prospects for fabrication. I think something that I would point out, and in addition to what Mark said, if you look at and take into consideration that volumes are, to Mark's point, at a pre-COVID level, but earnings were still, from an operating income perspective, about over $1,200 per ton. If you looked historically in a very strong market, that number might have been $150-$200 per ton. So structurally, there has been a significant difference, and it is proving out the theory that we had, that there's a structural shift. Barry, maybe you wanna talk a little bit about how the programs actually go into the public dollars. You know, a lot of these public, the CHIPS Act and the IRA Acts, that there's a lot of work that has to happen up front. And once those projects are, owners are identified and engineering companies are identified, that's when it starts flowing into all the steel products. But specifically, when we look at the joist and deck, once it's a concrete, you know, kind of a plan on what's gonna be built, the timeline is actually pretty quick. So when those orders start being placed, it's typically in a kind of a 3- to 6-month window when they start shipping. So we're encouraged by what we hear, what we communicate through the general contractors, the fabricators out in the marketplace. So, again, we have good reason to believe the second half of the year fills up nicely with these projects as they start moving from conceptual phase to actually entering construction phases. ... Okay. Thank you very much. Thank you. Your next question is coming from Carlos de Alba from Morgan Stanley. Your line is live. Yeah, good morning, Theresa, Mark. Just maybe continuing with the discussion, the long steel volumes declined quite sharply or meaningfully year-over-year. Can you maybe provide more color as to the different end markets within construction and infrastructure that may be leading to this, to this decline? Clearly the backdrop for the coming years, for sure, is quite solid, but at least in the first quarter, the numbers just weren't there. So any color on the different construction end markets would be great. Carlos, I would say, as you look at the mix across long products, you know, as we make sections that are lighter sections, that's more response to what the marketplace is right now. So, we've had a pretty robust level of order input, and structural rail has performed pretty well. We tend to balance between our rail production and our structural production. And I think in general, I would say the market space has changed from one of where a lot more fabricators are directly going to mills, to more of a service center-type relationship. And that's, again, a more historical way to go into the market after the busy years for the last several years with construction spending. So we see, you know, good response from our customer base, and we have healthy backlogs in our long products right now. Thank you, Barry. And if I may ask another one on the aluminum project. Have you been able to already secure contracts with some of your customers, or that's still undergoing in terms of discussions with them? Carlos, still under discussion. Obviously, it's a, you know, we're a new mill, and so there's a balance between them making sure that they feel confident that the volume is gonna be there. But as I said earlier, we have commitments in place that will support in large part support the first 12-18 months of our ramp up. Thank you, Mark. Good luck. Thank you. Thank you. Your next question is coming from Timna Tanners from Wolfe Research. Your line is live. Hey, good morning, guys. I'm gonna ask Carlos's question a different way, if you don't mind, on the long product side. The volumes, as I see them, were sharply down from, you know, last year and the year ago period in the first quarter. So I guess it sounds like from the answer, you're still seeing quite strong demand. So I guess should we expect that this was a blip and that maybe there was some weather-related reasons and the rest of the year could be more consistent with, you know, past years? Or is there something that's changed in your outlook for the long products across structurals, bars, those, all those divisions? Which would be really helpful. Thanks. Well, I think it's in large part sort of the seasonality and just the weather-related issues, Timna. And you saw, you know, some price adjustment here in the marketplace, whatever that was. 2 months ago? 6 weeks, 8 weeks ago. And again, that wasn't necessarily market pressure. That was just absorbing sort of some discounting that had leaked into the marketplace over the prior month, 2 months. But we feel confident moving forward for the rest of the year in that space. Okay. So maybe particularly challenging first quarter, and the rest of the year looks solid, it sounds like. All right, and then my other question, if I could, was just if you could remind us about the cadence of contribution from the four new lines, the paint lines and the gal lines, and how to think about increasing volume and profitability would be great. Thank you. Yeah, Timna, all four of the process lines at this point have actually run product. We staged the startup to best utilize our teams and also to really focus on improving the startup process for the other lines. So, a paint line in Terre Haute is up and running well, shipping prime product. We expect that that ramps up through second quarter, third quarter, getting up closer and closer to what the final production will be. On the converse, the new galvanizing line down in Sinton actually started up very well. It started up in January, is solidly contributing at a very high rate already, which as Mark has said, the team has done a fabulous job getting that line, making quality like that so quickly. We have an all-hands-on-deck approach, so all the other mills are supporting the team. And we're continually moving people through to keep the energy high. So, I see the second galvanizing line in Terre Haute coming up Q2 into more operational status, and progressing to the end of the year. The paint line through Q2 through Q3 in Terre Haute, and then the new paint line in Sinton, Texas, will actually be maturing to the end of the year. So all, all four units will be contributing soundly in second quarter and progressing through third, fourth quarter. Okay. Thanks again. Thank you. Your next question is coming from Katja Jancic from BMO Capital Markets. Your line is live. Hi, thank you for taking my question. On Sinton, can you provide a bit more color how we should think about the utilization rates in the rest of the year? As we had talked, we're about 70% through first quarter. We did take some time for significant outage in April, that was planned to, among other things, address the power problem we had with the primary side voltage at the plant. So we see a really good path to 80% progressing through operational by the end of the year, getting up in the capacity. In front of us, we see better and better performance, routine performance every day. So as the team encounters challenges, they work through them quicker. And through all this, they remain a very safe operation, which is so important during startup. So the team's in place. The new assets will allow us to provide the best mix possible upstream so that the efficiency of the plant can really be explored further. So, we continue to be very robust on where we're going and the success of the team. Maybe I missed this, but was there a power issue during the first quarter? We had talked about the primary side power last year and having some transformers that needed to be replaced. And that equipment is very long lead times. Our team was able to secure some shorter-term solutions that we've engineered into place and done the construction. So now that the outage is over, we could put that equipment in with the power off. We look to bring that, the new transformer support, so that the plant has full operational capacity. We've been internally limited at about 80% of the power capability on the melting furnaces. So at this point now, this will help remove that restriction. When it's finally utilized, it'll be somewhere between now and the end of May. But this April outage was key to give us the opportunity to get the construction done, to work on the high voltage bus. It requires the whole plant to have the power off. So, again, great work happening. It's unfortunate. These are long lead time items, and we've remedied the situation that we believe contributed to it. So, we're very excited this problem will be behind us here shortly. Okay, thank you. Thank you. Your next question is coming from Lawson Winder, from Bank of America. Your line is live. Thank you, operator. Good morning, Mark, Theresa, Barry. Thank you for today's update. Could you share with us your views on the CRC, HRC spread, spreads that have been, you know, quite robust recently? What are your thoughts on what's driving that? And I know you don't like to guide to pricing, but, I'll try this one and ask what your thoughts are on what that might look like going forward. Well, I will start, and I would just reiterate what I've always said in past calls. Yeah. Coated products are gaining more and more market share, just generally. And there are some pretty dynamic changes within the marketplace that is even added to that. If you think about the solar market, which is absolutely huge today, you know, you're consuming around about 25 tons of coated product per megawatt. And again, we're selling Nextracker and a whole bunch of folks. I think we're selling, like, 300,000 tons a year or thereabouts, or even higher into that marketplace. And that's coated flat roll. People turn that into tubes for the support structure of solar. So there are more and more applications being served by coated products today. It's a tight market, and it's supporting that higher spread. I'd like to add to that, Mark, too, that the teams have been diversifying our coated profile. So, we have many different kinds of coatings that we offer, and those various product lines provide a very good supply solution to our customers. So the whole supply chain has been maturing for these products, and it allows us to move our tons to balance our production needs, as well as where the markets are interesting. So, we continue to believe that the spreads between coated and hot roll will be attractive. It's an area where we've really invested quite a bit of money over the last several years to make sure we have the right capabilities at our disposal and the right supply chain solutions for what the customers are asking for. Maybe if I could just ask a follow-up on your... You've provided some commentary on fabrication, order backlog and then the pricing on that, and you indicated it was above pre-COVID levels. Maybe if I could just try to get a little bit more color on that. Would it be fair to say that, you know, pricing in your new bookings and backlog at least are converging to some level? And perhaps ask how that might compare to 2023 levels. Lawson, I don't think that, we're talking about comparing to 2023 levels. I don't know if you were speaking specifically about pricing, if you were speaking about- ... volume. But, the pricing that's in the, in the backlog and the current spot pricing that we have, they are converging to your point, which would be expected as pricing stabilizes. Okay. That's exactly what I was looking for. Thank you very much. Thank you. Your next question is coming from Tristan Gresser from BNP Paribas. Your line is live. Yes. Hi, thank you for taking my questions. Maybe a quick follow-up just on the fab business. It was my understanding we should have seen some further moderation in ASP into Q2. You talk about the backlog stability and forward pricing, et cetera. So, is this still the base case and that we should see another leg down in Q2 before we stabilize? Tristan, hi, this is Theresa. We're not specifically giving guidance on any of our segments from an earnings perspective. We don't do that, but I'll talk to you about certain levers. So we do expect, as Mark said earlier, and you would see this normally, but we will have higher volumes both across, you know, fabrication, steel and mill recycling as we move through the year, which is generally the case in the second, third quarter environment as you move out of the seasonality into stronger demand periods. So we absolutely expect to see that. There's also the potential for additional support that we believe will be there as it relates to the public funding, probably more specifically in the second half of the year, and then even more impactful, at least my opinion, in 2025, which will help provide, demand- fixed asset demand-driven, increases in volumes. As it relates to, the pricing and fabrication, we said that the, the change or the differential in pricing should start to diminish as it's been stabilized. Really, it started stabilizing middle of the fourth quarter, and certainly, remained so in kind of the January, February, March timeframe. So you need to take a view on, on that price differential that we've kind of just helped explain, and then on the steel input costs. So they keep about eight weeks, Barry, probably about eight weeks of inventory, principally flat-rolled on the ground. So as that pricing has changed in the first quarter, those input costs will move into the second quarter as well. Okay. No, that's really helpful. Thank you. And maybe another question on the situation in Mexico. You kind of have a unique perspective there as you sell quite some volumes in the country. You're building in the country, but you're also a U.S. steel producer first. So, I mean, the situation, the U.S.-Mexico situation, kind of worsened a bit on the trade front, talks of tariffs, retaliation. So what's your view on the latest development? Do you believe that the situation could worsen, and what are kind of your options if it does happen? Well, to date, we haven't seen any, I don't believe, Barry, any direct impact to our business. You know, we grew substantial market share in Mexico last year. We shipped, I think, 600,000 tons or so down there. I think it's more of a wait-and-see situation. It's sort of a tit for tat, going back and forth. But I think again, just as you saw with the USMCA some years ago, the U.S. and Mexico are huge trading partners, and these things get worked out. All right. That's clear. And maybe just a last one. You mentioned in your outlook, in your prepared remarks that you expect lower imports. Can you discuss that a little bit? And, you know, there's been some discussion at the high level between the U.S. and Europe of potential carbon-based tariffs. Do you believe that's still on the table and that could potentially materialize, depending on who's the next president in the United States? Thank you. Well, well, I think our position on the carbon border adjustment mechanisms, we don't see any meaningful change in American policy. There definitely is a lot of interest in Europe, and the EU will continue to go forward with their plans. After the election, we would expect that there will be some kind of a united front to find out how to keep trading with Europe. We do believe that's a good thing for us as these develop, particularly with our incredibly low sustainability position. So we have a great position to lead into these kind of tariffs. We do see certain coated products moving into the country that are concerning. As we address those through our downstream distribution and our customer base, we are aware of where certain products are moving in the country, and we do see certain areas where it's elevated. And you know, we're doing our best to respond to that competitive challenge as other economies kind of flush towards us when they get soft where they are. So we're always monitoring it. There are solutions we'll look at, but you know, we take that on a day-by-day basis. All right. Thank you. Thank you. Your next question is coming from Bill Peterson from JP Morgan. Your line is live. ... Yeah. Hi, good morning, and, nice job on the quarterly execution. Wanted to talk about, you know, some of the reshoring trends, but, and also, the data center build-outs. We've obviously seen a big uptick in data center, but on the same side, we've seen obviously warehouses continue to kind of remain negative. So I guess the question is: what is the typical steel intensity you see of data centers, and how does that opportunity compare to a warehouse opportunity that, again, that, you know, since that's kind of normalized here recently? Bill, this is Barry. I think each project is so different. There's a lot of variables, and we provide materials to all these different types of projects. So depending on what the owner's looking for, where the data center might be located, that will affect the steel intensity. But generally, the packages aren't wildly different than warehousing. And it really depends on where they're gonna go and who's designing it. So that flexibility in providing, you know, the way we look at lots of different general contractors and lots of different engineering firms, we have solutions for each of them. So, as they go, it might be a... Maybe think of it, maybe it's a less steel-intensive job, but it might have more design work involved. And the opposite may be true, where it's a straightforward design work and bigger tons. So it's really a broad spectrum across these different projects. So depending on each one, it's really hard to say. But it is definitely an area where there continues to be interest because of the artificial intelligence, you know, who's the... All the thoughts about what's gonna be needed for that cloud computing and... So we remain very interested in there, trying to provide good solutions to the various stakeholders who are building those facilities. Okay. So I guess it just really depends on the project. If I could ask a second question, maybe to Theresa. So CapEx came in a bit lower than expected, but I guess, how should we think about the cadence of CapEx through the remainder of the year, you know, presumably to, you know, reach the $2 billion number you've provided in the past? Yeah, good morning. The biggest chunk of capital will relate to, obviously, the aluminum investments, and we would expect to see those tick up in the second and third quarter as equipment continues to arrive, and they hit certain milestones. So you should see the bulk of that additional CapEx or remaining CapEx be in the second and the third quarter, probably about equal, and then probably go down to about the same level you saw in the first quarter and the fourth quarter. Okay. Thanks for that, Theresa. Mm-hmm, you're welcome. Thank you. Your next question is coming from John Tumazos, from John Tumazos Very Independent Research. Your line is live. Thank you. I see that you're not staggering the three aluminum slab melt shops with one or two of them to follow. Does that mean that you have a lot of customers pent up already for the aluminum rolling mill, and that you're concerned that you need the raw material because it might sell out fast? Or is Mexico's slab mill getting sequenced first because your scrap collection is very advanced in Mexico, and, is there a concern that it might take a little longer to develop the scrap flow in Arizona or Mississippi? Well, I wish it was all absolute strategic, but some of it is just luck or bad luck, John. But firstly, the satellite mills, or slab plants, will be pretty well focused on UBC. And so the Columbus Mill itself will have to produce, you know, the 5,000-6,000 automotive stuff and some of the industrial stuff. So the Columbus Mill shop, at least one or two of the furnaces will come up reasonably early. We're focused on SLP or the Maxson facility, to be honest, because that one, the property was purchased first. Everything went incredibly well. The permitting went incredibly well, and it's just in line. Our property in Arizona, to be honest, had some initial permitting, I would say, slowdown. I mean, it was just a bureaucracy delayed that facility by several months. So it's better to be lucky than smart? I've been... Well, I won't tell you the language my dad used some time ago, but he called me a lucky critter. Let's just put it that way. And I've been lucky all my life, and you need luck in life, so... And the biggest luck I have is being surrounded by a phenomenal team, to be honest, so. Thank you very much. Thanks, John. Thanks for your support, as always. Thank you. That concludes our question and answer session. I'd like to turn the call back over to Mr. Millett for any closing remarks. ... Super. Thank you, Matthew, and thank you for those that remain on the call. And even greater thanks for those that support us and are shareholders. For us, hopefully, we've articulated that we have a very, very constructive near term on the markets, the startup at Sinton and other sort of growth opportunities, the four lines. I think what makes us even more excited, to be honest, is just our long-term competitive position. You know, we are one of the most efficient lowest-cost producers, you know, in the world. We have a very balanced, I think, product portfolio and a very balanced kind of circular manufacturing profile. So we got a lot of pull-through volume from our downstream, from fabrication, and from our conversion plants. And that amounts to about 2 million tons a year today. So the pull-through volume is very, very strong. Allows us for that the higher and more uniform cash generation through cycle. I think Barry said, you know, we were at 87% utilization when the industry is at 77%, and that's been a historical norm for us. And I believe our position from a sustainability carbon footprint perspective is a huge, huge advantage. And I don't believe everyone understands it. Our flat roll mills are reportedly, and not us reporting it, but our automotive European automotive manufacturers are suggesting that that our two current mills, Butler and Columbus, are likely the lowest carbon footprint of any sheet producers in in the world. And Texas is gonna be somewhat similar. So that's allowing us to gain huge market traction, certainly in in in automotive. We actually have more more interest than we can support today in in in that arena. And if you look at the fact that we're already here, and the rest of the world is spending billions and billions of dollars to get to where we are. Recent discussions with a couple of different European companies suggested to us that just their conversion from blast furnace to electric arc furnace and their DRI facilities and everything, it's likely gonna increase their conversion cost by $200-$250 a ton. And if you think about where that puts us on the global cost curve, we will be absolutely at the very bottom, and that's a very envious position to be. But most importantly, long term, we would suggest that it supports much higher through-cycle spreads. You know, we've seen it in recent years, that's gonna continue, and our earnings are gonna be positively impacted by it. So incredibly excited for SDI going forward. For those, again, employees on the call, thank you each and every one of you, for everything you do each and every day. We, we can't be here, doing what we do without you. And you all put in a tremendous quarter and truly, truly sort of punctuated the positive, combination of culture and technology in creating the best financial metrics, of any steel company, I think, in the world. Thanks to our customers. Again, we can't do it without you and our service providers, and everyone else, just thank you for your support. Have a great day.