Q3 2020 Century Aluminum Co Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the century women come to me third quarter 2020 earnings Conference call. At this time all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to ask a question during this session.
We need to press star one on your telephone if your Carney father assistance. Please press Star zero.
I would like to now hand, the conference over to your speaker today either crosstie. Thank you. Please go ahead Sir.
Thank you very much in April good afternoon, everyone and welcome to the conference call.
I'm joined here today by Mike.
Century's President and Chief Executive Officer, Craig Tockman, our executive Vice President and Chief Financial Officer and show the Harrison, our senior Vice President of Finance and Treasurer.
That's her prepared comments, we'll take your questions.
As a reminder, todays presentation is available on our website at www dot century aluminum dot com.
Our website as a means of disclosing material information about the company and for complying with regulation has to be.
Turn to slide one of today's presentation. Please take a moment to review the cautionary statement shown here with respect to forward looking statements.
Non-GAAP financial measures contained in todays discussion.
With that I'll hand, the call Mike.
Thanks, Pete Thanks to all of you.
Thanks for joining us. This afternoon. We appreciate your time as always if we could just flip to page three please take you through a quick rundown in the last couple of months.
First the plan is to continue to operate without any interruption.
Most importantly, the safety performance has been really good across the across the whole company during the last couple of months.
And we're really pleased and proud of this achievement.
Running these plants basically and sustainably is always more challenging environment, that's different than people are accustomed to.
Even the daily scheduling and execution of the work needs to be done consistent with our health and safety protocols.
And human nature said simply people are at risk of focusing on too many other things versus a job as in a complex environment like we're dealing with today.
All that means is that will continue to remain vigilant every day and bottom line the health environment at all the location remains under control.
That said, we've got no intention at all to throttle back in the foreseeable future on any of the protocols. We put in place back in March and April and.
In fact, as you would expect we're prepared at any time to tighten things up.
Public health situation here any of our operations.
And just a couple of minutes, if he's going to give you some detail on the industry balanced pricing and other fundamentals, but let me.
Just make a couple of quick comments now on.
What were seeing directly on the ground.
Our end markets in the US has continued to improve over the summer and into the fall.
Most of the sectors are near or even above their levels of January and February obviously before the impact of the health crisis.
For example, the automotive and durable goods and machinery market to fully recover so is all consistent with the data that you've seen more broadly pack.
Packaging and consumer seconds censorship remained quite strong.
Construction on the other hand, it has been for that to go with residential quite strong and relatively weaker activity on the commercial side.
In Europe, we're seeing more or less the same trends yet as you've seen the general recovery is behind us.
It goes without saying that all of US is at risk of development on the public health situation over the coming months.
Looking at our own specific customers, we see similar trends if you take our six largest value added products customers. For example that group has a broad exposure to automotive to construction to communications amongst other sectors as.
As we previously told you the daily sales report sales rate for that for that group of customers was down 35% in Q2 over Q1.
In Q3, it was up 45% over Q2.
And thus far order rates for October and November are up a further 10% versus Q3. So we are now moving at a rate that is up 60% over.
Over the Q2 low.
And actually up 5% over the first quarter, you, obviously had some degradation towards the end of the first quarter as the pandemic.
Began to have effect.
Moving along our third quarter financial performance came in as we expected as we forecast the lower realized metal prices, coupled with higher seasonal power prices drove the vast majority of the drop in quarter to quarter EBITDA.
As you well know our sales contracts are priced on a two to three month lag in that context, the realized cash LPMI.
During the quarter was 1500 $50 per ton.
As I said seasonal power prices were higher as usual over the summer.
More than the rest of the decline in EBITDA came from our decision to start to kick start catching up on the realigning of sales at the Kentucky plants.
As you'll recall, we ceased all relining activity as these plants during the first few months of the pandemic.
And a variety of other items taken altogether actually improved profit a bit.
The financial picture, we of course is much stronger at current commodity prices and Craig will go into detail on all this in just a couple of minutes.
Let me just make some remarks about Mt. Hollys, obviously seem to warn notice we were incredibly forced issued last week.
We were shocked to see to South Carolina courts ruling in the litigation between the city of Goose Creek incentive, but we've talked to you about this of course will be over the year.
First our analysis indicated that used creek had every right under both federal and state lot of former utility.
To serve Mt Holly.
And then from a degree and fully in its order issued in August and importantly, the determination and its order said it was made with reference to both federal and state law.
Lastly, the actual hearing in front of the judge by the judge strongly suggested in our opinion as to who's creeps position with the correct one.
When the courts order was finally into two weeks ago. It said the regrettably the offices.
City has as the judge to reconsider the ruling and if that's not granted Goose Creek has informed us that they plan to appeal.
The city has told US a lot of the court to move quickly.
The appeal process would likely take at least a year to fully play out.
Just to go back and we must as you've been following the company now all of this but as a reminder, under the arrangement that we've had over the last couple of years Mt. Holly has been buying 75% of the electric power requirements from the competitive wholesale markets and 25% from Sandy Cooper's on resources.
Non holiday also pay Sandy Cooper transmission fee for the power brought in from the third parties.
The third party rates for the 75% of the plants power requirement is very competitive as we said, it's frankly, just on par with what Weve guided the Kentucky plants.
The 25 to 75 from Sandy Cooper is regrettably the killer comes at two times the delivered price in the third party power unless the weighted average price is simply uncompetitive.
The evidence that the market price is competitive can easily be seen in the status of the Kentucky plants. As you know we've doubled the capacity of Hawesville and added filling capacity to see pretty during the last two years total investment of over $100 million.
And at a 100% market power and at full capacity.
Mt Hollys cost structure and revenue profile would be actually superior to that of the Kentucky plants.
Regrettably the opposite of course is true at the current blended power price just to give you a sense non Holly and year to date nine months EBITDA has been a 10 million dollar loss.
The plant will also be unprofitable in the fourth quarter.
Looking at next year importantly, the loss would be worse.
On the one year the average metal price of course should be higher at least if you look at todays forward prices.
But this is much more than overcome by the requirements to begun realigning sales even to maintain production at 50% of capacity as.
As you know due to the uncompetitive power price, we haven't realized any sales at Mt. Holly for over four years.
Over the last several leads we've been in direct discussions with Sandy Cooper.
And we're also speaking with all the relevant constituencies, including local state and federal authorities.
We're really hopeful now that all the parties can come together and find a common sensical solution Thats fair that law.
First and foremost which includes no harm done to any other sandy Cooper customer.
At stake here are 300 direct jobs in six to 700 additional jobs currently supported by the plant.
Along with a half a billion dollars of annual economic activity in South Carolina, That's what the plan is the current capacity.
So achievement of that competitive prices would allow us to restart the second potline.
And rebuild alignments and continuously operating with which as I said need to rebuild.
We not only preserve the current Joe's but of course, it would add a further 300 jobs.
As an additional six to 700 support jobs.
Eventually get to realize the full $1 billion annual economic impact in South Carolina.
So obviously a complex situation, but one that can truly be solved overnight with a rational logical approach.
With that I will turn it back to Pete Thanks, Mike If we move on to slide four.
I'll briefly take you through the current state of the global aluminum market.
The cash outlet in the price averaged just over $1700 per ton in the third quarter, which was up approximately 14% or about $215 per ton in the second quarter as we saw a strong recovery on the global economy in the quarter.
Industry conditions continue to improve.
The LNG prices average approximately $1800 per tonne for the month of October and.
And that is right about where the current prices.
In the third quarter regional premiums averaged approximately 13 cents per pound in the us a 5% increase quarter over quarter.
And approximately $120 per ton in Europe, an increase of 2% in the prior quarter.
Current spot prices are around 13 cents per common knew us Midwest.
And about $130 per ton Europe.
In the third quarter of 2000 to one global aluminum demand was down about 3.5% compared to the third quarter of 2019.
Adjusted EBITDA was a loss of 31.4 billion this quarter and we had an adjusted net loss of $64.4 million or 67 cents a share in.
In Q3, the primary adjusting items were $15.4 million for the net realizable value of inventory $8 million for the unrealized impacts forward contracts and $1.2 million for the early extinguishment of debt.
Our liquidity remains solid with $169 million of funds available via mix of cash on hand and credit facility.
As we will discuss our cash very shortly in addition to refinancing our long term debt and extending the maturity of our revolving credit facilities, we paid down about $45 million of short term borrowings for the third quarter as our end markets continued to improve.
Let's turn to slide six and I can walk you through our quarter to quarter bridge of adjusted EBITDA.
As we forecast on our last call lower lagged LMP prices and delivery premiums coupled with seasonal power costs increase comprised the majority of the EBITDA reduction versus Q2 levels. The.
The Q3 realized LMP of $1550 per ton was down $80 per ton from Q2 levels of realized European delivery premiums of $107 per ton were down $34 per ton over the same period.
As Midwest premiums were largely flat quarter over quarter.
Average domestic energy prices were up over 15%, while the normal price, which we referenced for approximately 30% of our Icelandic power needs was up about $4.50 per megawatt hour.
Finally, as Mike mentioned earlier, we began to catch up on previously deferred positive lines at our Kentucky plants, which as you may recall, we paused at the onset of the pandemic. This catch up spend amounted to $6 million of Q3 cost and will normalize as we proceed into the fourth quarter.
Looking ahead to Q4, specifically.
The lagged Ellen need of $1725 per ton is expected to be up $175 per ton from Q3 realized prices.
The Q4 realized us Midwest premium is forecast to be $300 per tonne were up about $50 per tonne in the European delivery premium is expected at $125 per ton were up about $20 per ton versus the third quarter.
Realize alumina is expected to be $290 per ton or off about $10 per ton versus prior quarter.
Taken together, the let me alumina and delivery premium pricing moves are expected to increase Q4, EBITDA by about $35 million to $40 million versus Q3 levels.
As a reminder, these forecast contain at least one month of unpriced LMP and delivery premiums we have assumed the unpriced months at current spot values.
Additionally, we expect a more levelized poverty line spend versus the higher levels required to catch up in Q3, given the cessation of celebrating lives through mid summer of this year.
We expect to reduce spend will increase sequential EBITDA by about $5 million in the fourth quarter.
Finally realized power prices are expected to rise based on current forward curve projections, particularly in Europe and will negatively impact Q4, EBITDA by about $10 million versus Q3.
Please keep in mind that we buy power on the day head market and we still have two months of unpriced purchases assumed in this incremental impact.
In sum we expect these items in isolation will equate to an approximate EBITDA increase of 30 to 35 million versus Q3 levels.
Okay, let's turn to slide seven and now we'll take a quick look at our major cash flow items over the last quarter we.
We started the quarter with $174 million in cash and ended June with 81 million.
Refinancing costs.
Associated with our $250 million note were a $9 billion usage in the quarter.
As a reminder, the newly refinance notes mature in 2025. In addition, we paid down the vast majority of our outstanding Us revolver, which was the largest driver of our $45 million repayment usage.
Finally normal should hit timing drove a small working capital usage of $5 million during the third quarter.
This concludes our prepared remarks. Thank you for your time and attention I'd like to turn the call back over to April to begin the question and answer session April.
Yes, Sir.
That is star one to ask a question.
And your first question comes from the line of.
David Gagliano from.
Our capital markets.
Jamie Your line is open.
David We can't hear you might be on mute there.
Still can't hear you David.
They both go to.
Lucas is in Q can go on to that question and hopefully we can get back in queue.
Good morning.
David If you remember Q.
Yes, Sam.
And next question comes from the line pipes from.
Right.
You're not hearing Lucas either.
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C.
Let me try something.
And I guess, if you can as well.
And we'll go back to David David Your line is open.
Okay.
No we still can hear them.
Okay.
Let's turn.
John Your line is open.
Okay.
But the real of back of the line or anything on the return.
Good.
Question.
Give me one moment try something else.
Hi.
Okay Damon.
Your line open and see if I can hear you now.
Question.
Okay.
Give me one moment.
Right now im going out right now.
Okay.
Arrogant.
I believe everybody on the call could hear us through the questions, except central just for what it's worth but nevertheless.
I, just really wanted to drill down a little bit I may have missed on the prepared remarks, I apologize, but on the on the Mt. Holly situation. What are what are the next steps and.
Near term and what sort of the.
I guess, where you would say.
No drop dead.
No date.
When you when you have to make a decision to completely idled facility or.
Or or go up to 100%.
Sure David Thanks, its Mike and then.
And we'll see you at all for that snap that thanks for staying with them.
Next and your questions in order so as I.
Next steps RM, we were in discussions with Sandy Cougar, obviously, they're going to.
Just based on the circumstances, they are going to be a supplier or the supplier or a major supplier.
This coming year and.
And so we are in pretty.
Productive discussions with them.
Which is encouraging in enough itself of course.
The answer to and Thats really thats really at this point in time.
To answer your question the next step.
Hard to predict whether the where those go and.
And your second question and if we get to let's call. It the end of the month.
November pardon me.
Thats the time, where you really have to start.
Where we shut down of the reductions that sales.
The products.
It goes without saying you know he's claims organized businesses work each successive day and week gets more difficult. There is product that will be produced in January and February hopefully that.
We haven't sold yet we have customers who are very concerned we have employees, most importantly, and.
And families and communities. We are very concerned we have to order commodities all those things.
Kennedy down it's not easy, but they can all be done when we have contingency plans.
For everything.
On the whole that assumption that we can we can find a path of a competitive our gross.
Okay and then on the.
Another resumed potline.
Poverty line.
Spending.
Presumably I guess at Hawesville Im not sure, though but.
Is there a plan to.
Can you remind me again, what the plan is with regards to the set spotlight at Hawesville and does that potentially mitigate or offset if it's now at those shot.
Sure.
No I'll answer your second there is no no connection between 307. So there is a clear point on your line fill in Kentucky plant. There is a is a short term issue, which is behind this is Craig said and on.
Medium term issue as far as the short term issue is simply that.
We start realizing sales.
I don't remember the last was March or April open during the early days of the pandemic.
Somewhat because it's got a financial cost to it, but but mostly because we were concerned.
About that sometime but having enough people to just run the sales and we didnt want to.
Take any risks in essence, we didnt want to.
Have any activity inside those plans that wasn't just attended the running the plants everyday selling carbon tapping that'll et cetera et cetera.
So it is fair.
So the sales on sale every year on a scandal and thats their economic or there are practical life and.
And so you're having a couple of sales fell every week. So we had a bunch of those bills that we had which is just we had a backlog of those and we got that done in the third quarter.
As Craig says that's behind Us.
On the.
On the rebuild of the final Potline there.
We are ready to go.
And there's some long lead time.
Supply Virginian Catherine.
Aftermarket catheters.
Some other.
Selling and marketing materials.
And.
So those would be a couple of months to get in.
And if you would ask what are you waiting for is it the answer is the obvious one would just.
Waiting for a little bit more stability here you know.
Two three weeks ago your sales as we would have said no.
No pull the trigger right. After Christmas today, I think we're just all going to this.
Some watchful waiting here on the situation over the coming couple of months that probably goes without saying.
Okay. All right that's helpful. Thanks, Thanks, David.
Sorry about that.
It is.
Star, one again and Ray.
And your next comes from Hite. Please go ahead.
Hey, guys.
Good afternoon everybody.
Got it.
Second conference call today, where there were technical issues. So so.
In spite of the system.
[music].
But.
I wanted to ask another question on.
Holly.
Back of the envelope. It it appears that maybe like around a billion dollars in economic activity is on the line over.
End of millions of dollars of electricity cost and I wonder if.
That seems roughly accurate and then.
Secondly, just just a follow up on Davids question.
Yeah, not so much on the timing, but just kind of what are the options on the table here is it really that.
Coming to an agreement.
The 70 or shutting down or where are you.
Even though this is you know that municipal option NFL through are you still considering third.
Third fourth fifth.
Options at here at this time I would really appreciate.
Thank you.
Thanks, Thanks, Lucas answer to just your your first question, yes the.
The study will.
By a professor at the University of South Carolina, It's not our study.
And that the study came up with was just to be specific $985 million was the annual economic activity that is that is in South Carolina. That's produced by the plant. So so you're on.
Understanding of the situation I thought you put it frankly, just the same greenwell.
Number two is.
You got it right on the Bakken Pardon me on your second question as well.
At this point in time.
It is all about coming to an agreement and that works for the supplier networks for Santee Cooper.
And that they feel is fair and equitable.
And of course that can get us to a competitive price that we can rebuild those product lines and get the perspective for capacity.
Make a reasonable economic return of course over the over the cycle.
And.
Of course, we will watch with interest.
The legal proceedings as a reconsideration request and then the appeal is that fair.
Justin isn't granted.
They've been great partners, there importantly neighborhoods.
They're silly roughly sealing cracks write up onto our site I don't I don't know if you now that we have almost 5000 acres. Unfortunately 300 is used for the plant itself in the required.
I'm gonna dispersion zones. So.
So there's quite a lot of interesting things that can happen there over the years and.
And the city has been great partners and will continue to be in many respects.
Asking your question I think I don't want to speculate on what you might have in mind third or fourth is options, but at that point that that really is it.
I don't want to oversimplify, but there are a lot of complexities in the current situation.
But but but thats it isn't as good as it sits today.
Okay.
That's very helpful and I wish you and everybody involved.
Good luck and.
Turning to fish Lake.
Thank you.
Hi, I wanted to in the fall and my second question.
Try to get a little bit of a clear understanding on.
The current state of Canadian import tariffs, there was a little bit of back and forth over there.
Over the past quarter, just wanted to make sure I understand investors understand kind of what that's the status quo and along.
Alongside this question, there's been a little bit of volatility in the Midwest premium that we should be able to comment on on on that and the output from here. Thank you very much.
Thanks for the question. So on the first part of your question. The current situation is as follows.
The U.S.T.R. and put out a an announcement.
Gosh I can I would guess guns and I had 456 weeks ago, Whats gone four weeks ago, plus or minus.
And that announcement said that.
That Canadian imports of.
Primary aluminum.
And Ron will be would.
Would be exempted from et cetera.
After September the first.
As long as importance.
Matt or or were lower than certain threshold amount that you STR included in that release. You cited was shy of 100000 tons on a monthly basis, which would have been which will be or what is the I should say.
A meaningful significant rate reduction from the other run rate over the last year.
There was yes.
Yesterday or two days ago I can't recall now the the official of the President's official proud.
Proclamation confirming that was issues, but it was simply a repetition.
What you STR put out four or five weeks ago.
You may ask.
Or the in force going to be below that threshold and the answer is no one knows yet those data for September.
Won't be published.
Another two weeks or so.
And and so we'll see.
The market to your point.
One could look at the movement in the Midwest and and take the position that the market perhaps.
Believes that imports are coming down and metals very tight if you were to ask traders and and customers. Most importantly, I would say there aren't a lot of from units in the in the U.S., specifically, especially in the Midwest you've seen the Midwest premium ticked up here.
To have posted our level of just a little bit shy of 13 cents 12 cents, while in three quarters.
And.
That comes from a low mid eighties.
Before the.
Terrorists came back on Canada, and then came back.
So it's up significantly since then it's off from that.
The recent high that it reached.
Around 15.
And so the market.
For the delivery premium has as these sites strengthens here over the last three or four weeks.
Very helpful. I appreciate all the commentary.
Yes, thats everything thank you.
Thank you so much I appreciate that.
Your next question comes from the line.
John.
Barry.
Sure.
Thank you.
We realize this century bought a lot of the assets.
Very economically often for the value of working capital.
So there's negative goodwill in most cases are big discounts to real value.
Your 899.4 million of net P.P. any could you just explain how much is Mt. Holly.
How much is in Kentucky, how much I, just wonder how much carbon anode plant.
Or real estate.
So we get a flavor of what would be the.
Financial exposure.
If you are idled.
Our bad in Mt. Holly sure John right. John. So this is this is Craig thanks again for the question.
No I won't break on the whole whole balance sheet, but just just to give you the sense for.
For Mt. Holly the gross PPD there is between 150 and 175 million and you know.
Thats again gross on a net basis its roughly half of that.
The yield.
Yes.
You can recall John its Mike. Thanks for the question the purchase price that we paid for perhaps another plant.
Six years ago six years ago.
Well, it's just a little over $50 million, so that it's Craig.
Qualification into the contracts.
So it might be.
Yes.
Thinking out loud.
And South Carolina 5000 acres of Timberland, it's just timber.
Would be worth about 2000 acres are 10 million im assuming its buffer land around theirs.
Loblolly pine.
But this is on the Bay.
And it's a beautiful area and developed well so there's a chance that the idle land is worth more.
For development and you're carrying it isn't aluminum smelter.
John.
You know.
Your point is helping and it's lovely land.
Right in the middle of a very fast growing area. As I said is creek has been exploding its a really well Ron.
Obviously the value that's really grown it right out to you that it is the plan to sell to those sort of south from the south.
So the west border of our property, there and Theres other end.
Industry around some good partners and customers of ours.
So a good chunk of that land as you say as developer but right.
Right now we think the best use of that property.
Is under independent power prices around that smelter I mean, that's.
Under the competitive power price if you want to do is get very economical that's the highest NPV you could get a.
Power price.
Okay and in the same ZIP code as our delivery price and our 2000 plants over a cycle that plant.
Chris This is a nice economic value.
And and so that's what that's what we're going for there and Thats, what makes economic sense for the shareholders and our strong view.
Hi, Carolyn.
Current recession tough climate.
Your operating cash flow of $33 million more than the Capex of 11.
Which all things considered as better than you are still are lot of other companies.
You borrowed a little bit of money and did some refinancings.
Could you explain that.
Practical reasons why you were a small net borrower in the nine months, even with the positive cash flow for sure. There is a great question John and thank you for the comment there were two reasons.
One is as you may recall in the first.
Second quarter, when we draw on those revolvers and gravy.
Yes, so early sales in April thanks, Craig.
In April so early in the second quarter, we drew down on those revolvers, we didn't think we'd need to liquidity for the cash let's call. It we always have the liquidity I suppose that that was a bad word you didn't think we need the cash.
But as we all remember just thinking back to 2000 and 2009 concern post Lehman.
The bank's ability to fund and whatnot with just.
The borrowing costs there are funding cost they are extremely low. So we took down then caching as Craig said, we paid off roughly half of it the third quarter and.
Roughly pardon me will likely now to do the rest coming up here. So it's right on the other it was that on our Bahar, one public debt and term debt issue was.
Coming up towards one year from maturity.
It was due on first the June 21.
And again this is taking yourself back to the April may timeframe. No. One is sort of where this thing was going and we thought again out of an abundance of caution.
It made sense for the shareowners pay a bit of a premium insurance premium there is the way we looked at it.
To get that note refinanced.
And and so that's that's what we did is obviously fees attached to that tender we had a tender for the.
For the outstanding issue, we kind of called it if the economics are slightly better to tender for it.
And Thats why you see you put all that together.
Together and started up and you see that.
Net position that you correctly described.
Thank you very much and good luck.
Thank you so much John.
And your next question comes.
Josh.
Go ahead.
And.
Great. Thanks for taking my question.
Just curious.
Are there any.
Major moving parts in your cost structure as you look at next year at at least the first half I mean, except or are there. Thanks for the Q provide sensitivities and I guess related to that.
Have you given any thoughts on your alumina supply for next year at what kind of pricing structure are you contemplating right now.
Thank you. Thank you purchase for the for the question do you want to Craig go ahead on the on the cost structure. So first on the cost structure.
I'll split it into two pieces so for the balance of the year. It should be very much like we talked about and when we came out in April as we look out to 2021, we really use our Q4 call multiple due in January.
To layout any big changes you know I think if you will from the third fourth quarters, we talked about we continue to see power forwards increase that trend could just as easily and that's pretty far in the future from power for genetic disease. We revert on so I don't I don't anticipate any major changes coming in 2021 that had visibility to today.
Probably back in January the breast from an operation standpoint, the big one would be.
Assuming we are able to find a solution on Mt. Holly as I said, there's been no pot relining expense in that cost structure. There thats over the last couple of years and as you know unlike some of our peers gas capital out of either treatment. Unlike some of our peers, we expense expenses rather than capital.
That rebuild cost.
And so there will be a big dose of that in our cost of sales next year and a smaller amount in 2022, assuming that we can.
The power problem, so that would be the major as a leader.
Amongst the plants in answer to your second question, yes.
We have concluded.
The.
Negotiations for the vast majority of our frankly for all of our the vast majority I should say of our alumina supply in 2021, and even more so than 2020, the vast vast majority will.
We'll be percentage LNA priced.
And I can't really quote the specifics, but you know what we decided to be the raise a fair value range of aluminum as a percentage of LNG and we've said it before I'll say it again, we wouldn't agree to any contract that wasn't priced in that range that we define as fair value.
Got it.
Great that's great color and then.
I guess the other I don't know if you've covered that and apologize if you already did get you any color you could provide on ship premiums that you're seeing in the market and any I guess any discussion you had recently for next year as to how to pick up that that part of the price.
Yeah. That's a great question, yes, I mean, the short simple answer is they're back to about where they were frankly 12 months ago. He was concluding there was another key contracts for for for this year for 2020.
Commodity in billet premiums when some sorta. These are also live in prices now involves Midwest of course.
They were sort of eight cents plus or minus 12 months ago, when its zero truly zero or very very little bit above zero and they are back to you know high high single digits right now.
And that's kind of what we're expecting.
Without any major changes faces the situation today.
Got it.
Right. That's all I had thanks, Mike and good luck with the negotiations that Charlie. Thank you. So much we really do appreciate that.
So the question sorry.
Okay. We are once again, we appreciate the interest everybody's very good questions and.
Okay, everybody is continuing to keep sales were coffee soon thank you.
This concludes todays call. Thank you.
Yes.
Disconnect.
Oh.
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Yes.
Yes.
Hello.
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