John Sims: Yeah. Harman, it’s hard to tell what the implication is going to be in terms of the Red Sea crisis. What we are seeing right now in Europe is decrease in imports. And some of the transit times coming from Asia, it’s almost increased about four weeks we understand for imports from Asia to get into the Europe. So it could have an impact that actually decreased imports in Europe, which then means that more domestic supply has to be stay onshore to service that need. But I would say, right now, it’s hard to tell what the impact of the Red Sea is going to be. It certainly is increasing freight costs. So all exporters are seeing increased freight costs, as well as lead times.
Jean-Michel Ribiéras: And concerning what you were asking about Europe export overseas, we export very little from Europe to overseas. Our production in Europe mostly remain in Europe and we have a very few going to Middle East, Africa. So it’s really not impacting us so far significantly.
Harman Dhatt: Got it. No. That’s helpful, and yeah, thanks again. I will jump back.
Operator: Next we will go back to the line of George Staphos from Bank of America. Please go ahead.
George Staphos: Yeah. Thank you very much. Just on that point that was raised just before. All right, I know you aren’t really quantifying it, but is the impact from Asia, if there is a positive on reduced imports into Europe more on converted products or more on cut size and graphic papers overall, that in turn is leading to better demand for you and/or your customers?
Jean-Michel Ribiéras: Mostly, I would say, George, it’s cut size. That’s what’s easier to export. So mostly you see from Asia are the cut size and the role in the offset business because of the various sizes that you have to have, it’s much more difficult for any exporter that matter not to say Asia to export. But the role that the commercial playing.
George Staphos: Okay. And John and Jean-Michel, my next question and I will come back and queue again. Related point, so to the extent that we have seen pulp prices continue to rise in Europe, recognizing Asia, we are starting to see them fade a bit. Has that cost curve, or let me say it differently, has the cost curve shifted sufficiently where that’s also beginning to have an impact on supply within Europe, i.e., the curve shifted some of your non-integrated peers, are having some difficulty producing or really that’s not really having much of an effect at this juncture from what you can see?
Jean-Michel Ribiéras: I think, George, it’s a good question. I think it’s impacting. From the trough, the pulp prices in Europe have gone up €160 from last year trough to today. So it is for sure impacting the non-integrated players in Europe and that’s maybe one of the reasons why we are seeing operating rates back up high in Europe and having a very strong demand. It might impact it. We also know the inventory correction in Europe is behind us and industry inventory are quite low actually right now in paper. So multiple factors, but pulp price has an impact.
George Staphos: Yeah. Jean-Michel, ultimately, look, I realize it’s our job, not yours, but to the extent that you have a view on this, is there kind of a view in terms of how much now is kind of in the red in terms of industry production relative to the cost curve, and if you don’t have a view, that’s fine. I just thought I’d ask if you had and you can share it?
Jean-Michel Ribiéras: I don’t, but I would — I don’t have the number precisely. So all I can make is…
George Staphos: No worries
Jean-Michel Ribiéras: Maybe guess — a very high level guess and it might be about 10%.
George Staphos: Okay. Thank you very much. I will turn it over.
Operator: [Operator Instructions] And we will go back to the line of George Staphos. Please go ahead.
George Staphos: Hi, guys. To the extent that there’s been some pricing reductions in North America as memory serves, at least in terms of published indices, how much of that, if you can quantify, recognizing you are not tied to RISI in your contracts per se, but how much of that is baked into your guidance, if anything at all for the first quarter and to the extent that you could size it broadly, how much would be something we need to make sure we model for over the rest of the year, recognizing you are not guiding on 2Q through 4Q?
Jean-Michel Ribiéras: So, George, I cannot give you an exact price, but I can give you a trend. We saw the same RISI report you did. As you mentioned it, we do not report to — our pricing to RISI. I would say on a trend, RISI might have the direction correct, but we have seen in the past that, in absolute value, we see it differently. So in our outlook, mostly from third quarter, actually, we expect slight erosion in North America, not a huge one, a slight one. And at the same times we expect — because of two price increases we have announced to our customers in Europe and in Brazil and LatAm, we expect price increase on the other regions.
George Staphos: Okay. And then back to Europe and I will turn it over. The performance for the quarter was somewhat below our expectations now. That’s neither here nor there. That’s our forecast versus your actual. But was performance in Europe as you had expected in terms of that loss and what if we — again, you are not guiding for the full year, but should we expect that ultimately Europe should be breakeven or better for this year and what are the bigger bridge items to get you there if, in fact, that’s your assumption? Thank you.
