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#We get our raw material iron ore from four different sources.
I'm not going to give you the specifics of what kind of contract we have with each one of those particular suppliers.
But in general, we have a level of about 25% to 35% flexibility in the supply of raw material iron units.
So we could cut it back 25% or 35% ---+ and I'm talking now, across all the contracts.
I'm not going to get any more specific than that.
But if I may, I want to take a moment here, because there was a question earlier about the DRI, and how should they look at when the cost of iron units is going down, we would see an improvement.
And I answered the question because it was tied originally back to the amount of weeks on hand of iron ore supply inventory we had.
And I said that we keep about five to six weeks of inventory on the ground.
That is an accurate statement, but if he was looking to get some sense of when pricing changes, relative to iron ore pricing on an index basis changes, we need to factor in the issue that we buy on a quarterly basis, with a lagging quarter.
So for whoever asked that question earlier about seeing changes in the pricing of our raw material going into Louisiana, please bear in mind when you see the change occur in the index, there is a one-quarter lag in the pricing that we receive at the plant itself.
Okay.
That correction is credited to Joe Stratman, who held up a piece of paper, and said, quarterly prices.
Clearly, as the pricing has dropped, and everyone that's in the processing game knows it's been very challenging, margins have been severely compressed, and it's very challenging for processors to make a decent profit.
And we expect to see some people not making it through this very difficult time.
Certainly, we have a strong balance sheet, which gives us the opportunity ---+ and we have a strong balance sheet and a history of taking advantage of downturns in troubled times to grow our businesses.
So we'll keep an eye out for assets that come available, when they make sense, they fit into our strategic plan for raw materials, the locations are right, the pricing is right.
I'll tell you what ---+ we won't be shy.
We'll be at the table.
Yes.
We haven't seen much of it yet.
But remember that usually, a lot of times, it's not during the downturn where you see the greatest pressure on these smaller companies, but actually during the upturn when they have to start replacing inventory.
When you're depleting inventory, you generate cash.
When you have to replace inventory, you burn through cash, and sometimes that can be more challenging as it bottoms out and begins the upturn, when you really see companies struggle to stay in business.
That is correct.
I'm sorry.
I was listening to somebody else.
The question that was asked was, can we have an estimate on what the cost of that project is.
We don't have the estimated losses during the outage, but it will probably be less than what we saw from Louisiana, obviously, for the quarter.
It's going to be much less than that.
But there will be some losses from the lost production of one month.
Well, although pricing is dropping, which does have a negative impact on collection to flow into the yards, bear in mind that it's also spring, so that's a time when people are out collecting, more so than in winter.
Transportation is not a factor, like it is in winter, so they balance out.
And although we've seen a small amount of decrease in flow into the yards, it's not been significant, and it's balanced by the two factors of lower pricing, offset by springtime.
And there's another issue just to build upon that, something that hasn't come up in all the discussion we've had today about scrap, and I'm a little surprised by it.
But bear in mind that the other thing we look at to keep the supply of scrap up in the United States is the loads that we buy offshore.
Particularly with the way the currency is today, we've been importing quite a bit of scrap from overseas.
As a general statement, Europe.
Well, if it's a removal of an export tax, it should go up.
Right.
Yes.
So I meant the volume will go up, the volume of their exports will go up.
I'm not sure how much of that would actually make its way to the US as some of the markets.
I would expect that there would be other markets that it would go to in Europe, in Asia, and even in India, would be more logical markets from a logistics perspective than here in the United States.
Absolutely.
It's Economics 101, supply and demand.
Whenever you have a situation when more supply is coming into the marketplace, it puts pressure on pricing.
But I would ask you to consider one factor, and that is, I can't attest to the quality of the pig iron coming out of China.
That might be in question.
Same reasoning.
More supply from iron units into the market tends to bring pressure on all aspects of iron units: scrap, pig iron, DRI.
Well, if there's a service center out there that wants some tons from us guaranteed at higher prices, send them our way.
Okay.
As a general statement, I understand your point.
It's about an inflection.
When are you at the bottom.
If you're asking me where I think we stand on that cycle, we said a couple of times during the course of the call that this is probably a transitional quarter.
So we might see something this quarter.
But I would ask you to remember that there's still a tremendous amount of imports that are in the pipeline that are on their way here to the United States.
So that continues to put pressure on pricing.
But as I said, listen, we're not opposed to selling steel at a higher price.
We like to do that.
But we also have to take care of our customers, maintain our market share ---+ all of those factors that we spoke about earlier in the call.
I'd have to say no.
In fact, I would say that our downstream products group, just the opposite is true.
We see a significant improvement in backlog, order entry, and backlog pricing.
I'm not sure I understand what you mean by that.
Is there any one part of the country in which we are seeing more of that.
It's pretty well-balanced, no geographic ---+ I might say in Canada, we're seeing again, Paris rebar; we're seeing much more improvement because they were down so significantly, because of weather conditions in the first quarter.
But other than that, pretty well-balanced.
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Thank you to our shareholders.
We appreciate your confidence and your support.
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We appreciate your business.
I want to say thank you to my Nucor teammates for creating value for our customers, generating attractive returns for our shareholders, and building a sustainable future for all of us.
And most importantly, thank you all for doing it safely.
Thanks for your interest in Nucor.
Have a great day and a great weekend.
