Steel Dynamics, Inc. (NASDAQ:STLD) Q2 2023 Earnings Call Transcript

Curt Woodworth: Okay. And then in terms of the volume guidance, it seems like volumetrically you’re still expecting year-on-year decline in kind of the 15% to 20% level and you noted some project delays. Can you just kind of comment on within the backlog, or I guess, projects that have been burning off? Are there certain pockets of weakness you’re seeing that are greater than others. Obviously, there is been kind of a lot of talk on some of the warehouse spending dying down, but data centers and other areas seem to be really strong. So any color you can give on that would be helpful. And then just as a follow-up, can you give a comment on what you think capital spending for 2024 would be. Thank you very much.

Theresa Wagler: Thanks, Curt. Yes. So as it relates to the mix of the backlog and I would say more so even in the current order intake activity. We have seen – and I think it’s positive for the economy in general. We’ve seen a more projects coming in from, whether it be education, healthcare, definitely manufacturing. So we’re starting to even see the electric vehicle batteries. We’ve seen the chips we’ve seen a lot of advent and manufacturing from onshoring new things that we’ve talked about. So there is a mix towards those type of projects and away from just purely retail warehouses, which we’ve been seeing and talking about for a while now, probably 6 to 9 months. As it relates to capital spending for 2024, we expect to have capital spending for the aluminum project this year is likely to be somewhere between $900 million and $950 million in total.

Next year for the aluminum project is likely to be about $1.2 billion. So when you combine that with additional growth projects as well as a minimal amount of maintenance capital. We’re likely to have total capital spending in 2024 from what we can see today, still around that $1.5 billion for the year.

Curt Woodworth: Great. Thanks so much.

Operator: Your next question for today is coming from Cleveland Rueckert at UBS Securities.

Cleveland Rueckert: Great. Good morning, thanks for taking my question. Maybe just one sort of on the aluminum side. I guess just looking at your budget and sort of outlook for demand there. Recently, there is been a downturn in aluminum can demand and that industry has been, I guess, a little bit disrupted. I’m wondering if that’s at all concerning to you and if you’ve adapted your demand forecast at all.

Mark Millett: Absolutely not. We remain very, very bullish now. If you go back like a year now, perhaps the folks were projecting that demand would grow and you need four new aluminum mills. We didn’t believe that then. We don’t believe that now. But we certainly feel there is more space than to satisfy our market share for sure. The kind of the – sort of the pull back, I would say, is more an inventory standpoint. There is a lot of inventory people panicked a lot last year. That inventory has to flow through the system. And there is absolutely no doubt that it is doing so today. And in all honesty, when our mill comes up, I think that the marketplace is going to be in a beautiful place for us to receive product. Are you going to look longer-term, there definitely is a social change away from POC plastic bottles that will continue.