Good evening everyone, and welcome to United States Steel Corporation's third quarter 2021 earnings conference call and webcast. As a reminder, this call is being recorded. I'll now hand the call over to Kevin Lewis, Vice President of Investor Relations and Corporate FP&A. Please go right ahead. Thank you. Good morning, and thank you for joining our third quarter call. We are looking forward to discussing our record third quarter performance and the enhancements to our capital allocation priorities announced yesterday, as well as providing an update on our strategy execution. Joining me on today's call is U.S. Steel President and CEO, Dave Burritt, Senior Vice President and CFO, Christy Breves, and Senior Vice President and Chief Strategy and Sustainability Officer, Rich Fruehauf. This morning, we posted slides to accompany today's prepared remarks. The link and slides for today's call can be found on the U.S. Steel investor page under the Events and Presentation section. Before we start, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings, and actual future results may vary materially. Forward-looking statements in the press release that we issued yesterday, along with our remarks today, are made as of today, and we undertake no duty to update them as actual events unfold. I would now like to turn the conference call over to U.S. Steel President and CEO, Dave Burritt, who will begin on slide four. Thank you, Kevin. Thank you everyone on the line for joining us this morning. As Kevin just mentioned, we delivered record performance in the third quarter. Record net earnings, record EBITDA, record EBITDA margin, and record quality and reliability. Thank you to the U.S. Steel team for this quarter's record-setting performance and for your unwavering commitment to not only our customers, but of course, our steel principles, including our number one core value of safety. Our record-setting performance in the third quarter and throughout 2021 has truly transformed our business and demonstrates the progress we are making in pursuit of Best. By year-end, we will have transformed the balance sheet by repaying over $3 billion of debt, achieving our deleveraging target ahead of schedule. We expect to have total liquidity of approximately $5 billion, creating a foundation to confidently execute our strategy and invest in our competitive advantages. We will have put the business in position to deliver another strong year in 2022. Our transformed balance sheet, the ability to pre-fund critical strategic investments, and continued optimism for our business gives us confidence to return capital to stockholders while executing the next phase of our Best for All strategy. We believe the market is significantly undervaluing the progress we've made and the value our strategy is creating. Now is the time to be more balanced in our capital allocation priorities. Our strategy is truly Best for All. Of course, including our stockholders. Let's get into today's presentation on slide five. We're delivering strong performance year to date, continued bullish outlook for 2022 and beyond, and expectations for a super cycle continuing put us in a position to move faster on the next phase of our strategy execution while beginning to reward stockholders with direct returns. Our biggest challenges remain lowering our capital and carbon intensity. Investments in mini mill steel making, like the construction of a second mini mill, while investing in our competitive advantages, can deliver on these objectives and reposition the company for the future. The solution is to continue moving toward a more balanced capital allocation strategy by successfully executing our Best for All strategy with Mini Mill Number Two and an electrical steel line and coating line at Big River Steel. We are moving quickly on our path forward by expanding our competitive advantages through strategic investments that help us achieve our strategic objectives aligned with long-term value creation, improved through cycle earnings and cash flow, and reduced capital and carbon intensity. Whether you're looking only at next year or our ability to build long-term value, we believe that investors are undervaluing our progress and potential, but not our customers. They are noticing the transformations that's taking place at U.S. Steel and the importance of a regional supply chain. Our industry-leading finishing line capabilities are increasing our value proposition, and customers are excited about the opportunities we are creating together. Whether it is advanced high-strength steels, differentiated electrical steels, or green and sustainable steels, discussions with customers continue to shift from transactional to strategic, and that's important. We continue to create longer-term value with customers by prioritizing innovation, differentiation, and strategic goals, and look forward to building deeper relationships that unlock the value of U.S. Steel for our customers and provide them the certainty of a regional supply chain. Slide six further emphasizes our progress and performance. We are encouraged by our record-setting performance that is outpacing even those records being achieved by direct competitors. There is more we can do. As we said, our goal is to be the best steel competitor, and while there is certainly much more opportunity ahead, we've clearly come a long way quickly. As we always say at U.S. Steel, safety first. I'm so pleased with the U.S. Steel team for continuing to prioritize safety and for embodying our steel principles each day. Moving to our margin performance. Our enterprise EBITDA margin reflects the disciplined, value-focused approach we've taken to our footprint. With revenues of nearly $6 billion in the quarter, the quality of our earnings demonstrates a business model that is increasingly built upon capability and cost differentiation. From our iron ore advantage to our integrated assets, and from the newest mini mill in the country to the most efficient mill in Eastern Europe, our diversified footprint is extracting significant value from today's stronger-for-longer market. While the competition isn't standing still, the actions we've taken over the past several years to invest in our assets, streamline our footprint, and add capabilities have created significant value, leading to outperformance versus peers this quarter. Our mini mill performance also continues to be the industry leader, further widening its performance versus other mini mill producers. Our position as a mini mill leader creates the perfect platform for high-return investments in capabilities that expand our margins, reduces our carbon and capital intensity, and furthers our customer value proposition for sustainable green steel solutions. Those investments continue to be supported by strong liquidity, and we are moving forward with investments that create enduring value while rewarding stockholders for the progress we've made so far. Slide seven expands on what makes U.S. Steel unique and why Best for All will continue to grow the competitive advantages of U.S. Steel. We are investing to get better, not bigger, and expanding our three competitive advantages that differentiate us versus the competitors. First, low-cost iron ore. Second, lower greenhouse gas emission mini mill steel making. Third, best-in-class finishing capabilities. Those competitive advantages are built on a foundation of research and innovation and deep customer relationships. Let's turn to slide eight, where I will first provide an update on how we are expanding our iron ore advantage. We are pleased to report the first step in our metallic strategy, which pivots our iron ore advantage in Minnesota towards our growing fleet of EAFs. We're finalizing an agreement with a strategic partner to produce up to 500,000 tons annually of pig iron at Gary Works. Under the contemplated deal, our potential partner would fund, install, and operate pig iron production assets, which we would supply with excess liquid iron production. This potential partnership would further enhance the cost structure of Big River Steel by insourcing high-value metallics while driving blast furnace efficiencies at Gary Works. The permitting process has begun, and we expect pig iron production at Gary to begin in early 2023. This is an efficient and quick way to expand our iron ore advantage to our mini mills, and we continue to evaluate other opportunities to extract additional value from iron ore. Slide nine provides some additional context on our Mini Mill Number Two investment. Last month, we commenced the site selection process to build a new state-of-the-art mini mill. This new mini mill will provide differentiated steel making supported by a comprehensive suite of finishing assets, including advanced high-strength steel galvanizing, hot roll galvanizing, painting, and slitting. We are expanding our mini mill steel making capability as we continue to transition towards sustainable lower greenhouse gas emission steel making. This investment is a platform to provide our customers with more of the green steel they expect from like-minded partners like U.S. Steel. We're in the process of filing permits in multiple states and are on track to begin construction as early as the first half of 2022. Mini Mill Number Two will be built by the same experienced construction team who built phase II-A of Big River Steel ahead of schedule, under budget, and fully ramped in record time. As we said in our press release last month and will reiterate now, we do not expect Mini Mill Number Two to add to the overall production volumes of U.S. Steel. We expect the value-added capabilities of Mini Mill Number Two to drive an approximately $650 million of incremental EBITDA contribution from this investment once fully ramped. Also, yesterday, we announced plans to build a new coating line at Big River Steel. Slide 10 has the details. This line will have 325,000 tons of annual capability and will sustainably produce both Galvalume and galvanized product. We expect the investment to contribute another $60 million of annual run rate EBITDA to Big River's already industry-leading results. We expect the line to produce a mix of 75% Galvalume and 25% hot-dip galvanizing. Galvalume capabilities create opportunities to target the higher value construction market, including exposed building panels. Hot-dip galvanizing capabilities create additional opportunity to serve natural extensions of the Big River campus capabilities of the facility as we provide customers with sustainable steels to help meet their own decarbonization objectives. As we continue to demonstrate our industry-leading position at Big River, we're excited to expand the mini mill footprint, invest in downstream capabilities, and further enhance the commercial mix of our business model. Let's turn to slide 11. The progress we have made in 2021 is undeniable. Over the past several quarters, we've transformed our balance sheet. When we closed on the Big River Steel acquisition at the start of the year, we carried $7 billion of debt and expect to end the year with $3.9 billion. We expect next year's run rate cash interest expense $225 million. Our pension plan is overfunded, an enviable position that others in our industry are not close to achieving. We'll continue to look at the ability to delever further as debt becomes callable. We are very confident that this level of debt puts us in a sustainable and manageable position to support investments in our business. Next, we continue to believe the highest source of long-term value creation is expanding competitive advantages that reshape our earnings profile and reduce our capital and carbon intensity. Our cash and liquidity position more than supports these high return projects and allows us to execute with confidence. Today, given the undeniable progress we've seen over the past several quarters, we are announcing enhancements to our capital allocation priorities that begin to directly reward stockholders with the improvements we've made to the business. We believe the market is not rewarding us for the strong, yet recognizing the long-term value creation potential of our Best for All strategy. Our strong financial performance and the significant return to stockholders. Per share quarterly dividend and moving quickly on a $300 million. Our commitment to ensuring our strategy is indeed Best for All. Our goal is to ensure direct returns become an enduring part of our capital allocation strategy, and we believe there are catalysts that could drive additional buybacks in the future. Aside from additional free cash flow generation, we believe there are near-term opportunities to divest non-core assets, primarily real estate, which could further accelerate or increase further authorizations. In addition, the option for Stelco to acquire 25% of Minntac remains in place through January of 2027 and presents an opportunity to return up to $500 million of incremental capital to stockholders. Christy will now provide details into our quarterly performance before I provide some thoughts on 2022. Christy. Thank you, Dave. I'll begin on slide 12. As Dave mentioned earlier, the third quarter was a quarter of records. We delivered adjusted EBITDA and EBITDA margin of over $2 billion and 34% respectively. This represents a nearly $750 million or 58% increase over the second quarter. Adjusted earnings per share in the quarter was $5.36 per diluted share. We also generated approximately $1.3 billion of free cash flow in the quarter, including a $400 million investment in working capital. We expect another quarter of strong free cash flow generation in the fourth quarter. Next, let me expand on some key points related to the balance sheet. Year to date, we have repaid approximately $2.7 billion of debt and expect to end the year with $3.9 billion of debt on the balance sheet, an amount we are confident is sustainable and supports the investments we are making in our business. We ended the quarter with net debt to last 12 months EBITDA of 0.6x and expect to end the year at 0.2x. With the balance sheet strengthened, 80% of our remaining debt due in 2029 and beyond, and a fully funded pension plan, we are well-positioned for a future of value creation. Let me now transition into the individual segments, including expectations for the fourth quarter. Approximately 60% improvement. Higher selling prices flowing through our contract structure in the third quarter will likely continue in the fourth quarter. We expect lower volumes from our planned blast furnace outage at Gary Works and higher energy costs to be an offset. We currently expect fourth quarter flat-rolled EBITDA to be near our record third quarter performance. Our Mini Mill segment also delivered record EBITDA and EBITDA margin. 34% and 42% EBITDA margin continued to be reflected in the segment results, partially offset by higher scrap and other metallics costs. In the fourth quarter, we expect higher prices to continue to flow through the segment's primarily monthly contracts. We currently expect the fourth quarter to be another record for our Mini Mill segment, potentially exceeding $500 million of EBITDA in the fourth quarter. USSK also posted record EBITDA and an EBITDA margin in the third quarter. EBITDA was $418 million in the quarter or 33% EBITDA margin. A 60-day outage planned on number one blast furnace will begin in November through the remainder of the year. This removes raw steel equivalent capacity from the market in the fourth quarter. Operational headwinds as a result of the planned outage, modestly lower shipments, and changes to the pricing dynamic in Europe are expected to result in reduced fourth quarter EBITDA versus. I also want to take a moment to recognize and congratulate the USSK team for completing Slovakia's first sustainability-related performance targets. The new EUR 300 million unsecured sustainability-linked credit agreement reinforces our commitment to creating profitable solutions for sustainable steel making and replaces the previous EUR 460 million credit facility. Our tubular segment reported similar quarter-over-quarter results. Improved commercial performance was largely offset by higher scrap and energy costs and continued high levels of imports. Imports continue to capture roughly half of the U.S. Later this month, we and the USW filed new OCTG trade cases. We expect fourth quarter performance to be similar versus the third quarter as higher selling prices are offset by elevated scrap costs for the Fairfield EAF and continued high import levels. We expect enterprise earnings in the fourth quarter to continue to reflect the strong market conditions we are seeing as we exit the year. We currently believe that our fourth quarter results will be- Move to Q&A. Let's turn to slide 13 to provide an update on 2022 and the excellent work we are doing commercially to lock in incremental EBITDA next year on our fixed-price contracts, a great position to both create and deliver value to our customers. We are executing a robust contract process with customers, in most instances having begun discussions 90 days sooner than we have historically. Our strategy is paying dividends. Assuming the forward curve, which we believe to be a pessimistic view of spot prices, we're fully fixed for our flat-rolled segment. We've also listened to our customers and in some instances have signed agreements beyond 12 months. This creates longer uplifts and supply continuity while fostering collaborative product development opportunities to solve their most difficult challenges. Commercial terms for more than just price. Leveraging continued strong interest in advanced high-strength steels, our planned NGO electrical steel line, and other future sustainable steel offerings from U.S. Steel. Customers who are foreshadowing that the trough of the chip shortage could be behind us. Fourth quarter and first quarter build schedules are indicating to us increasing usage rates next week. Kevin, let's move to Q&A. Thank you, Dave. We ask that you each please limit yourself to one question to follow up so everyone has the opportunity to ask a question. Operator, can you please queue the line for questions? Certainly. Thank you. Once again, on the phone, if you'd like to register a question, you can press the one followed by the four on your telephone keypad. You will hear three-tone prompt to acknowledge your request. If you're using a speakerphone, please pick up your handset before entering your request. One moment, please, for our first question. We will proceed with our first question on the line from Sathish Kasinathan with Deutsche Bank. Go right ahead. Yeah, hi, good morning, everyone, and congrats on a great quarter. My first question is on the run rate. Could you please provide further color on the underlying assumptions and the $650 million based on similar capacity? Could you please explain why this is high? Thank you. Hi, this is Dave. I'll start, and then I'll pass it to Kevin on this. I just want to give an update here. We've got a number of possibilities that we can make a decision on fairly quickly and then get on with building the construction most likely in the first half of 2022. Just in brief to specifically your question, it's mini mill Big River Steel. It's kind of second verse, same as the first with enhancements related to the endless caster. If you look at our performance, the mini mill at Big River Steel, not only was it on by 10 points or so better performance than the next closest mini mill, we feel really comfortable that the numbers that we suggest in here is something like $650 million of run rate EBITDA by 2026 and certainly in line with what our expectations would be. I don't know. Kevin, you have anything else to add to that? Yeah, Dave. Let me just add to the point around differentiation about the attributes, again, what the casting and rolling facility will deliver, how that translates to value for not only financially, but also for our customers. Then I'll touch upon some of the assumptions that drive the $650 million of run rate EBITDA. You know, first and foremost, as Dave mentioned, this is you know, very much building on the success we've had with Big River Steel. There will be some continued enhancements to the technology at Mini Mill Number Two, the first being the inclusion of the endless casting and rolling facility. This really allows us to produce differentiated gauge and width combinations that will allow us to earn a premium in the marketplace. That contributes to the incremental EBITDA that you've seen versus other announcements in the market. Secondly, as Dave touched upon in his opening remarks, the asset certainly helps drive EBIT, EBITDA and EBIT margins of the second mini mill, contributes to the $650 million of run rate EBITDA when you think about being able to serve advanced high-strength steel automotive markets, you know, value-added construction and appliance markets. The underlying mix of the facility is going to be quite rich. As always, Sathish, we evaluate these projects on kind of a through-cycle basis. This is, you know, more of a normalized pricing environment looking back historically, call it in the $600-$615 HR. Not necessarily driven by any, you know, pricing assumptions that are dislocated from historical through-cycle averages. The incremental EBITDA is driven entirely by the technology suite and the value-added mix of downstream facilities. Okay. Yeah. Thank you for this color. A follow-up to that. Can you talk about your metallic strategy for the new mini mill? You just mentioned that you'll have a new pig caster for your current Big River mini mill. Any color on the raw material strategy for the new mini mill? Yeah. Well, thanks for that as well, Sathish. You know, we're capitalizing on our iron ore advantage that we have in Minnesota, the low cash cost mine sites in North America. We know that mini mills crave pig iron, and this is just a logical and necessary next step to make sure that our mini mill is getting what we have regionally that many others don't have, and this is a way to enhance that. Rich, anything to add? Yeah. Thanks, Dave. I think as you hit on, you know, we did announce the pig iron opportunity at Gary. As you said, that's the first step in an enhanced metallic strategy. It's going to free up some efficiencies at Gary, and it will allow us to start really pivoting our iron ore advantages in Minnesota, where we have about 22 million tons of iron ore capacity right now, increasingly to our EAF fleet. When you think about that, the Big River Mini Mill Number Two, it's the same situation here. We're gonna be able to use our own vertically integrated iron ore to the mini mills. We've already done some of that over the past year. We've been taking home scrap to help it. That's really helped it to avoid having to buy more expensive prime scrap in the market. We see a lot of opportunity there. You're looking at about 500,000 tons per year coming out of this pig machine, and we will continue to evaluate other opportunities to extract value from our iron ore assets as we grow the mini mill segment. Let's see to our next question on the line, from the line of Alex Hacking from Citi. Go right ahead. Yeah. Good morning, Dave and team, and congratulations on all the success. Just following up on the pig iron announcement. I guess, why go with a third party there and not do it yourself? Is that just, you know, CapEx? And then obviously, you know, pig iron is adding more carbon into the, you know, the steel there, the EAF steel. How are you thinking about the timing of, you know, potentially adding some lower carbon metallics, you know, HBI, DRI product? Thank you. Really plays to what we're doing with our strategy. I think people know that we have combined strategy and sustainable development. Rich Fruehauf, of course, is here working on that to make sure that we do move toward, you know, not only less capital intensive, but also less carbon intensive. This is a step on the way to green. Now, 2050 may seem like a long way away, but we have to do these pivots. We have targets for two- On that? Yeah. I think first of all already. Well, first of all, we're trying to reduce the capital intensity of the business. There's no upfront capital needed for us to move forward with this pig iron project at Gary. That's one of the factors there. In terms of the carbon intensity, I think it's fair to say that from a sustainability perspective, pig iron is more of an interim solution. Longer term, as we've said when we announced our 2050 goal, we're gonna be looking for partners. Certainly DRI would be one of the opportunities in the future to get to a green DRI facility. That's a little bit longer term, right? In the immediate term, we wanted to move quickly and get that pig iron down to Big River and then also Mini Mill Number Two. okay, thanks. I apologize if the quality of my phone line is poor. On the second question on the capital intensity. You know, as you sort of, you know, switch, you know, almost 6 million tons of capacity from, you know, blast furnace to brand new mini mill, what does that do to your through cycle annualized sustaining capital requirements? Thank you. Well, I think our through cycle, as we've talked about it before, pretty much stays about the same in the $450 million range, but it will ebb and flow from year to year. Maybe, Kevin, you talk a little bit about next year, what the expectations are. Yeah, sure, Dave. Happy to. Alex, in the near term, we provided some incremental guidance in 2022 on the capital spending front. Investments that we've just discussed here this morning, Mini Mill Number Two, the non-grain-oriented electrical steel line at Big River as well as the new coating line in Big River. I mean, these are the necessary investments we need to continue our transition to mini mill steelmaking. You know, and as you well know, when you look at sustaining CapEx per ton of steel produced by mini mill, you know, you're looking at something in the $15-$20 a ton range. While that's not immediate here in our business model, that's certainly guiding where we wanna take this business longer term. As we increase and we become more of a mini mill steel producer, we'd expect our sustaining CapEx to follow that same trajectory. That frees up capital to continue to invest in growth, and it puts the business model in a position where, you know, incremental future free cash flow generation. When we can do that, like we are this year, we can be successful across the board. Thank you very much. We'll now proceed with our next question on the line. It's from the line of Gordon Johnson with GLJ Research. Go right ahead. Good morning, guys. This is James Bardowski in for Gordon. First of all, thank you for taking my questions. Good, great quarter. Nice job on the debt reduction. I guess first question is, can you know, just talk a little more about your contract prices and their built-in lag? Also, as an add-on, you repaid nearly $3 billion year- to- date and expect, I think you said a 0.2x debt to EBITDA ratio year-end. Do you plan to go further with any debt reduction, or is that the correct level for you? I also have a follow-up, please. Okay. Well, there's a couple questions there. I'll just set the stage. You know, that's basically the current landscape on customers, and clearly we're moving a strategic approach where we're getting notifications more quickly from the customers that are our best customers and those that are the enduring customers, and those are the customers that like to have contracts, not just, you know, short-term contracts, but two-year contracts or so. So we're very pleased with the commercial relationships that we have. Frankly, what we've done is we've revamped the whole commercial process, making it look differently at steel, neither blessed nor handicapped, I'd say, with steel industry experience, and that's been a big difference for us as well. When you combine Big River Steel and the U.S. Steel teams together, it's allowed us to elevate our product offerings, and so that makes it more possible for our customers to engage in the products that they need for their future. That alignment is really important with this. To your point and to your question, your first part of the question is that, there's no question that next year's prices will be higher. You have to remember about when the price were set the time before and where the prices are being set right now and the negotiations that are going on. I mean, people want a stable supply base. They want to make sure that they got a regional supply that they can actually count on. That means they're willing to lock down with the environment that we have now for you know at least 12 months into the future, especially the best customers, and find a way to make sure that we can make money and they can make money, and we can give them the sustainable advanced high-strength steel that they expect. We'll give our stockholders the profitability that they deserve. There is the lag and the fixed contracts. It's about I'd say over 30% that in the fixed range. Then we have some index contracts and of course the spot business. I would say the big differentiator here for us is the customer relationships and then moving more towards strategic relationships that we both want to have. That's really a very good plus. So to the second point related to what was it? Related to debt. I'll turn that to Christy. Yeah. You were asking about, do we think where we are by the end of the year is the right level of debt? It'll be below $4 billion. We think that's a very sustainable level. We've been evaluating. We'll continue to monitor it, but we think where we're at year-end is very sustainable. Yeah. You look at the maturity levels that we have right now. We really don't take some of this debt out, but there's some small amounts in between that environment to take those out. We certainly think most of the deleveraging has occurred, and it will be opportunistic as we move forward. It's really important to us that when we say Best for All, everybody understands that's just not for our customers, but it's for our stockholders. Now is the right time for that capital allocation priority to change because we do believe it's stronger for longer, not just because pricing, but also because the. We've identified what the major investments are. We want to grow this business's capabilities. Be very clear about that. We are not growing capacity. We are growing capabilities, and we want to make sure we're differentiated. We want to be low on the cost curve and also have that, the differentiation that our customers desire. Does that help? It helps very much. I appreciate the clarity. Just as a quick follow-up. Don't mean to squeeze too many in there. Just want to make sure I'm understanding this correctly. The expected strategic capital, is that the consolidated level or is that going to be your share? Even though obviously you don't know what your share level is going to be yet. That represents the total contribution of the three strategic projects that we are executing. Our share is 100% of those strategic projects. We very much look forward to, you know, 2024 and beyond when these projects begin to hit run rate EBITDA contribution. They are significant. They generate incremental earnings, incremental free cash flow, and further expand our through cycle margin profile outcomes that lead to, you know, higher valuation and, you know, the business model that we're seeking. No, those are all our strategic projects, and we'll be the sole beneficiary of those investments. Thank you very much. I'll now proceed to our next question on the line from Andreas Bokkenheuser from UBS. Go right ahead. Well, thank you very much. Just, you know, one question on the capacity expansion. I know you guys have been talking about what you want to do is to build better and not bigger. How should we think about that in terms of, you know, capacity at risk? You know, you've already obviously shut down Great Lakes and one of the major furnaces at Granite City. Is that how to think about it? I mean, the capacity that was gonna get shut down to basically make room for the new mills has been shut down, or should we think about potentially more capacity being shut down to kind of make room for the new, for the new mini mill? How should we think about that? That's the first question to you. Thank you. Well, first off, we're informed by what our customers want. If our customers want the additional capacity at Great Lakes and they're willing to pay for that capacity, we're wholly utilizing it. It does not look like that will happen. That's been idle indefinitely, the same thing as at Granite City Works. You know, the thing that we need to remember here, and you alluded to it, we are not building capacity. Capability means that you are better than others. We want to be low on the cost curve, in many respects, lowest on the cost curve. We want to take share from others. With what we're constructing, we will certainly do that. We have the opportunity to take share from others. Frankly, if we're not low on the cost curve versus others, those businesses will be downsized as well. It's basically the survival of the fittest, right? We like the competition, we like the direction of our strategy. Some people are, you know, going downstream, some people are going upstream. We're making our steel facilities the very best in an integrated model, taking the best of our integrated mills and the best of the mini mills and creating this Best for All. We feel very on their finishing mills. They're not spending time on their steel assets. Remember a few years ago, we spent some revitalizing our assets. Other companies didn't do that. We have assets that are running incredibly well. If you see days away at 0.07, I mean, who's even close to that? That tells you the assets are running extraordinarily well. Since the integrated mills are the largest part of that tells you that that's where those numbers are coming from. Make no mistake about it, we're building capability. It's not capacity. We are very confident that we're going to be low on the cost curve and have the differentiation that our customers want. Low carbon footprint, less capital intensity, and we will take share. Okay, thank you. Maybe just a follow-up on that in terms of taking share. How are you guys thinking about kind of the auto market in the years to come? I mean, obviously some of your EAF peers have been talking about, you know, increasing their share of the auto market, and one of your integrated peers have talked about of the auto market. You know, where do you guys kind of fit in that strategy? Do you wanna be a bigger part of the auto market or a smaller part of the auto market? Well, you know, that's a really interesting question because, you know, the answer is always, well, it depends, you know. When we create the kind of relationships that we must create, it's a win-win situation. So we like to play in the differentiated market, and we're clearly the leader in advanced high-strength steel with our non-oxidizing wet flash cooling. What we'd say arguably the best finishing lines in the world, certainly the largest that capability is. So we feel about continue to. Thank you very much. We'll now proceed to our next question from the line of Emily Chieng for Goldman Sachs. Go right ahead. Good morning, Dave and Christine. Congratulations on a great quarter. My first question, the pig machine at Gary Works. You mentioned there was zero upfront capital associated with this. Perhaps how should we think about what the licensing or processing cost associated with that on a go-forward basis could look like? Emily, this is Kevin. Appreciate the question. I think as we've highlighted a few times, this is a really important kind of first step in expanding the metallic strategy here at U.S. Steel and continuing to leverage our iron ore advantage for our growing fleet of electric arc furnaces. I think that we will provide some incremental detail on kind of how the structure will work. One of the unique things, and let me just provide a little bit of context for everybody so you appreciate the opportunity here, is that at our Gary Works facility where we have four blast furnaces, the steel shop in many ways is our constrained asset, which means that the furnaces can outproduce the steel shop. When we evaluated this opportunity and why Gary makes sense is because that we can increase our iron production at Gary Works, which in turn increases our efficiency and the utilization of our blast furnaces, and allows us to produce incremental melt that then can feed the pig machine that will be installed. It also makes all the other products produced at Gary more cost-effective because you're starting with a lower cost iron cost at the facility. Strategically, the footprint in Gary made a lot of sense to extract some incremental value from their excess iron position. It'll be a really nice fit, and as Rich and Dave alluded to produce about 500,000 tons annually of pig iron to serve, you know, obviously primarily Big River here in the near term. That would be about 50% of Big River 's pig iron needs. Really exciting opportunity. I think as we finalize the deal with our partner, we can get some more specifics around how this. Obviously, Emily, we're investing here because this is a lower cost solution for Big River Steel, and it gives us certainly certainty within the supply chain. It generates efficiencies at Gary Works, and it continues the transition of our iron ore competitive advantage to our mini mill footprint. It's a win-win, whether it's the mines at Gary or at Big River. It's a quite comprehensive value-added strategy. That's a really helpful color, Kevin. Just to be clear, the new pig iron machine there does not necessarily impact the steelmaking capacity at Gary Works. Just a quick follow-up just around Big River Steel's current raw material strategy up until this new pig machine starts up. Can you just remind us how you're seeing sort of the strategy there evolve? Sure. Your comment around Gary steel production, Emily, is accurate. It wouldn't impact the overall steel production capability at Gary Works, given that we're using incremental iron production. If you look at Big River's metallic sourcing strategy, Rich touched upon some of the internal synergies we've been able to generate as a result of the transaction by optimizing the flow of prime scrap and home scrap generation within our overall footprint. They're also buying their outside scrap needs and metallics needs on the open market, and that's something that we want to continue to insource over time. I think one of the things that's often underappreciated is that U.S. Steel really is uniquely positioned with high quality, low cost iron ore and highly capable electric arc furnace and mini mill production. We have a really unique opportunity to bring those two things together, and we'll continue to do that, as Rich mentioned, to explore other alternatives in the future about how to continue that transition. More to come, but the goal is certainly to make Big River more effective. Let me just punctuate that. You know, we believe we can provide a significant metallics needs by translating our iron ore advantage in our Flat-Rolled segment to our EAF footprint. The pig iron at Gary alone can supply nearly 50% of our metallics needs at Big River Steel. I'll say there to tease you a little bit, there's more to come. Thank you very much. We'll proceed with our next question on the line of Tristan Gresser from Ex- Yes. Hi. Thank you for taking my questions. The first one on natural gas. If you could please remind us what is your exposure to natural gas in the U.S. and also in Europe, if you have hedges or contracts in place. You flagged it for the outlook in Q4 for flat-rolled. What kind of energy inflation are you seeing in Q3 and moving forward? Yeah, I do think, Tristan, you're talking about something that's important that we manage well because there is pressure on natural gas. We do have a close watch on that and all the materials. Frankly, we have an extraordinarily talented procurement team that does hedging and has an opportunity to make sure that we get the right price at the right time and has managed that pretty well. That organization actually reports to Christy, so maybe a little more, Christy. Okay. Yeah, we did see some increases in the third quarter. About $20 million was the increase in the third quarter on natural gas. We are hedged both in Europe and in the U.S. For- All right. Thank you for the color. My second question is a bit more on the steel price outlook in the U.S. You mentioned that you weren't as pessimistic on demand dynamics that make you, well, more optimistic than other market participants that probably see, you know, higher inventories, imports, and new capacity coming online in coming quarters. You know, Tristan, I think maybe there's a couple pieces. Drivers, what we view as a super cycle here for the steel industry, I've been talking about this for over a year now, I guess. Just kind of run through a bunch of things that from a macro perspective, and then we'll get into some of the more detail. Bear with me here a bit as I just kind of lay things that inform the way we think. Well, you know, first and foremost, well into 2023, right? What are they doing? Buying back $120 billion a month. They're talking about tapering of, like, $15 billion. Maybe rates come up at the end of next year, maybe not. I mean, there's a lot of uncertainties there, but it's pretty clear it's gonna continue for the foreseeable future. We're also seeing the fiscal policy expansions in the U.S. as well as in the other countries. You know, there's lots of supply chain concerns, and it's not uncommon. You know, we see this all the time. When you see robust upturns, you have, you know, ports that have troubles, trucks have trouble. You know, any type of logistics, they struggle with this. What that means is another stronger for longer. Then you layer on top of that, there's all kinds of cash just sitting on the sidelines, you know? I think I read somewhere here that the savings rate for, you know, folks in the U.S. is, you know, you add it all up, it's like $3 trillion. I mean, it's just a lot of money just sitting on the sidelines. That doesn't count the investments that were sitting on the sidelines before the pandemic hit. There's a lot of pent-up emotion for getting on with things. Once the pandemic is clearly behind us, and we've had a lot of starts and stops, it does seem like it's getting better. You know, it's gonna be episodic for a while, and that probably extends things for a while. You think about you know, the climate change thing. You know, a year ago, hardly anybody was talking about climate change, right? Now at World Steel, you know, being on their executive committee, it's like the lead discussion. People really care about the environment here. We know how this works. Countries are gonna pay, or customers are gonna pay. We bring the capability, right? Of course, you know, we're more specific to home here. We're waiting for, and I think it might be December. It's not gonna come in 2022, come in 2023. So there's another opportunity. Governments around the world, they're giving grants, whether it be in Canada. You know, we heard about the grants to the steel industry there, right? Then you have Belgium and Spain and Germany and Slovakia and others that are really interested in decarbonizing. We see that around the world. 232. Think about 232. That's... You know, U.S. Trade Representative Tai and Commerce Secretary Raimondo do an incredible job. They understand how important steel is to the United States of America. They get it. Yeah, 232, there may be some tweaks, some kind of, you know, quota system. Tariff or something like that for the foreseeable future because you're not gonna build back better with Biden. You know, you're gonna build back better with Biden. You're not gonna build back better with China steel. You know? You're not gonna build back better with steel that goes into Europe, into the United States. If they get this, they understand the importance of enforcement, and I think they're doing an incredible job holding the line with a lot of bad actors. You know, that I mentioned that with COVID. You know, we haven't seen what's gonna be unleashed here. The semiconductor issue? Look at where million. You know, there's gonna be a big uplift on that, maybe not 2022, but 2023. People want to buy cars. We saw what happened in the used car area, right? You know, transitioning the domestic steel industry to sustainable steel, I think everybody's on board with that. Some will do a better job than others, but I mean, there's a lot of money coming into the world right now that wants to go to work. This is an incredible time to be working. We went through awful times with COVID, but it's one of these things. You just don't find something you like about it. You find something you love about it and get on with moving to the future faster, and that's exactly what we're doing. Treat this thing as a blessing, and we will see the money flow that we haven't seen in a very long time. You know, if you can't tell from the passion in my voice, I'm not just bullish. I am over-the-top super cycle on this because I am a strong believer this is stronger for longer. Bottom line is this, the economic circumstance from a macro environment and from a steel industry environment. Then, of course, with U.S. Steel, we think our strategy is positioned just right to make the progress. Did that help? I presume that was a yes. Thank you very much. I'll now turn the call back to U.S. Steel CEO, Dave Burritt, for closing comments. Well, thanks for your continued interest in U.S. Steel. We're executing on our strategy, and it's across the entire business. I have to say thank you to the employees. Your laser focus on safety and the customer, it's proving out to be a spectacular year to date. Our strong culture and workforce, we were most recently recognized, believe it or not, here as one of the Newsweek Most Loved Workplaces. Our employees certainly are pleased with that, and we are too. Our industry-leading safety performance, diverse and collaborative workplaces, and inclusive employee benefits are examples of how we create an environment where employees can thrive. You know, it's all about relationships with your employees, with your customers. Now you can tell with our stockholders as well with the capital allocation uplift that we're providing and will endure. We're pleased by the recognition of this from Newsweek and look forward to building on the future. Finally here, thanks to our customers for your continued business. We're investing today to meet tomorrow's needs. We wanna continue being a trusted partner in your success and know together we can create a better future for our businesses and for the planet. Now let's get back to work safely. Thank you very much, and thank you everyone. That does conclude the call for today. We thank you for your participation. You may disconnect your lines. Have a good day, everyone.