Q4 2020 SunCoke Energy Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the Suncor Energy incorporated Q4 2020 earnings call.
At this time all participants are in a listen only mode. After the speaker's presentation that will be a question and answer session to ask the question. During the session you would each of press star one on your telephone please.
Today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to you spoke of today that's of no Goa. Thank you. Please go ahead Sir.
Yes.
Good morning, and thank you for joining us. This morning, so just because of single kind of reduced fourth quarter and full year 'twenty of tornado goes as well as the.
The 'twenty one guidance with me today are Mike Rippey, President and Chief Executive Officer, and free <unk>, Senior Vice President and Chief Financial Officer for.
Following management's prepared remarks, we'll open the call for Q&A. This conference call is being webcast live on the Investor of relations section of the website and the rest of the replay will be of labor later today, if we don't get to your questions on the call today. Please feel free to reach out to other investor relations team and before I turn things over to Mike, Let me remind you that the various remark.
Alex we make on todays call regarding future expectations constitute forward looking statements. The cautionary language regarding forward looking statements and all of that SEC filings apply to the remarks, we make today.
These documents are available on our website.
The reconciliations to non-GAAP financial measures discussed on today's call with that I'll now turn the Mike. Thanks, Jonathan Good morning, and thank you all for joining us today.
This morning, we announced some cokes fourth quarter and full year results and before I turn it over to Fay.
Who will review the results in detail I want to discuss a few highlights let.
Let me start by per.
First thanking all of our suncor employees for their commitment and contribution.
It was an extremely challenging year for.
The dedication of our team is clearly visible for our safety record operational excellence and financial results.
On the Corona virus front, we continue to take all necessary measures to ensure the health and safety of our workforce and the additional precautions were taken remain in place.
On COVID-19 task force continually monitors and evaluates the evolving situation and responds and adjust as the environment develops.
On slide three you can see the key initiatives that we set out and how we performed against these objectives.
We delivered $205 9 million of adjusted EBITDA in 2020 exceeding our revised guidance range of $190 million to $200 million.
This reflects the strong performance of our Coke operations, despite running of sub optimal utilization rates and strong cost control across the company.
Earlier this year, we announced the companywide cost savings initiatives.
We anticipate will result in approximately $10 million of annualized savings.
These cost savings initiatives provided benefits from 2020, and we will continue in the years ahead for the.
Domestic coke operations contributed $217 million to adjusted EBITDA in 2020.
Which exceeded the revised guidance range for domestic coal.
I am pleased with the safe and efficient operations of our coal facilities.
All while following additional precautionary measures due to the pandemic.
Another significant achievement for some coal in 2020 from the extension of existing contracts of Juul Haverhill, one and have the hill tool.
For our customers navigate through challenging market conditions earlier this year.
Reducing current year production in exchange for contract extensions, which illustrates the strength and long term nature of our customer relationships.
We also signed a two year take or pay coal handling the agreement with javelin at CMT during the fourth quarter.
This contract provides stability to the operations at CMT, while we actively pursue new business opportunities.
I also want to briefly touch on our foundry Coke initiative, the testing development and capital deployment necessary for profitable foundry Coke production one of well throughout 2020.
And we are now commercial in this new market, where the high quality product.
During the fourth quarter, we also explored export coke opportunities for 2021.
And to date have had good success.
We plan on running at full capacity in 2021.
And feel confident the demand from export of foundry markets will support this level of production.
Looking at our capital structure and deployment of free cash flow in 2020.
We reduced gross debt by 110 million of net debt by approximately $61 million. This includes the opportunistic open market purchases of approximately 63 million face value of senior notes.
Additionally, we paid of 24 per share annual dividend and repurchased one 6 million shares during the first quarter.
As we reflect on our business. We are pleased with the strength of our core operations.
Which allowed us to drive robust cash flows for the year. The strong cash flow has provided us the ability to weather the market challenges, while also aggressively pursuing a balanced yet opportunistic approach to capital allocation.
Fay will go into more detail on this credit.
The high level, we made progress on our capital allocation initiatives for the year, reducing our debt investing in our assets and returning meaningful capital to our shareholders.
With that I'll turn it over to Fay to review our third.
Third our fourth quarter earnings of detail. Thanks.
Thanks, Mike and good morning, everyone.
Turning to slide four.
The fourth quarter net loss attributable to <unk> was <unk> <unk> per share down for versus the fourth quarter of 2019.
On a GAAP basis of full year 2020, net income attributable to <unk> was.
It was the <unk> per share up $2 in <unk> versus the full year of 2012 of 2019.
As a reminder for full year 2019 results included a $2 27 per share impairment charge recorded to logistics of goodwill and long lived assets at CMT.
After adjusting for these charges 2020 diluted EPS was <unk> 25, lower than the prior year due primarily to lower volumes at both the domestic coke and logistics segment.
Consolidated adjusted EBITDA for the fourth quarter of 2020 was $37 million down $13 $8 million versus the fourth quarter of 2019.
The decrease was mainly driven by lower volumes in our domestic Coke segment.
And of full year basis, we delivered adjusted EBITDA of $205 $9 million down $42 million versus the full year of 2019.
The operations were down $12 $2 million due to lower volume, which were partially offset by lower operating costs.
Year over year results were also impacted by the bankruptcy of our coal customer at our logistics segment.
Turning to the next slide and looking further at our fourth quarter adjusted EBITDA performance.
Slide five <unk> fourth quarter 2019, adjusted EBITDA for the fourth quarter 2020 of adjusted EBITDA.
As we've discussed in the previous conference calls in response to the challenging and unprecedented in response to a challenging and unprecedented environment. We partnered with the co customers to address their near term <unk> and.
In exchange for the extension of several of Coke contracts, we agreed to reduce our coke production in 2020 by approximately 550000 tons.
This volume reduction contributed to the lower adjusted EBITDA from Coke operations in the fourth quarter of 2020 as compared to the prior year strong cost control and management, partially offset the impact of lower volume.
The logistics operations were $1 $8 million lower quarter over quarter due to lower volumes as well as lower pricing, which was offset partially by lower operating costs.
And other expenses were higher by $2 $9 million quarter over quarter, mainly due to higher noncash legacy liability expense.
Turning to slide six.
Full year 2020 of adjusted EBITDA was $205 $9 million down $42 million compared to the prior year, our domestic Coke segment delivered strong operational performance despite running at reduced production level.
Lower sales volumes, where parts were partly offset by strong cost control and efficient operating procedures the day.
Domestic Coke segment delivered full year, adjusted EBITDA of approximately $217 million, which was well above our full year revised domestic coke guidance, including Brazil, Our coke operations delivered adjusted EBITDA of $235 million.
Adjusted EBITDA of the logistics segment decreased $25 $3 million year over year, primarily as a result of the chapter 11 bankruptcy of foresight energy and the subsequent rejection of the contract with Sam team.
Finally, our corporate and other segment was unfavorable by $4 $5 million.
Lower employee related costs were offset by higher noncash like legacy liability expense and foundry related R&D cost in summary, we are very pleased with the performance across all our segments of the company, especially during a very tough and challenging year.
Turning to our capital deployment on slide seven.
As Mike highlighted highlighted we generated very strong operating cash flow of approximately $158 million in the year, which was above our full year revised guidance range of $1 $16 million to $136 million. This robust cash flow generation allowed us to make good progress on our capital deployment initiatives.
Capex of $74 million was sent during the year, which was below our guidance and included close to $11 million for foundry related expansion work.
As we manage through the various constraints and challenges caused by the pandemic, we deferred certain capital projects in 2020, we expect maintenance Capex will be higher in 2021, as our operations returned to normal level.
We continue to make good project price managing our balance sheet. During the year, we spent approximately $104 million of cash to reduce debt outstanding by $110 million. This includes repurchasing $62 7 million face value of <unk> note.
At a discount.
As we have consistently indicated our long term goal is to reduce our gross leverage ratio down to three times or lower.
We also returned capital to our shareholders in 2020, we repurchased approximately one 6 million shares for $7 million. During the first quarter. We also paid a total of 24 per share dividend.
The dividend in 2020, which was the use of cash of approximately $20 million.
In total we ended 2020 with the cash balance of approximately $48 million.
And a strong liquidity position of approximately $348 million.
Setting the stage for continued progress against our capital allocation priorities in 2021.
At this time I would like to turn the call back over to Mike to share our views on the steel and coal market before I run through our guidance expectations for 2021, Mike Thanks for it.
Before moving pardon me before we review our 2021 guidance I wanted to provide a few brief thoughts from the overall market and where we see things as we enter the new year.
2020 proved to be a roller coaster ride for the steel industry.
Prior to the pandemic utilization rates were stable at around 80%, reflecting good fundamental demand as the coronavirus took hold capacity utilization plummeted dramatically to a low of 52% with all major integrated steel producers shutting down blast furnaces.
As the economy started to reopen in the fall steel demand and capital and capacity utilization began to recover slowly as.
As 2020 came to a close.
Low prices reached levels not seen in many years steel demand in the capacity utilization rates largely recovered.
And we are approaching pre pandemic levels, we anticipate 2021 to be a year of continued recovery for the steel industry. The potential for passage of a long overdue infrastructure Bill coupled with continued industrial recovery provides a good backdrop for the industry.
Looking beyond 2021, we believe that Suncorp is well positioned for long term success.
We of the youngest domestic coke, making facilities in the NAFTA region and continue to invest in our facilities to ensure the operate safely and efficiently.
We have leading technology for the outstanding environmental performance and are recognized as the EPA mix of standard our coal production process is the cleanest from least carbon intensive in the world.
We believe some of the older Coke supply is coming towards the end of their lifecycle and will be retired in the future. In addition, recent development from the steel market have created the potential to economically produce pig iron for consumption by the Eas.
The production of pig iron via domestic blast furnaces will require coke, which could create opportunities for our company.
We are also entering new foundry in export markets, which provide some customer and market diversification.
On the thermal coal export side the.
The market is showing signs of recovery API two prices increased by approximately 15% in the fourth quarter versus the prior quarter.
We have seen substantial increases in the export coal shipments from both the Gulf Coast and East Coast ports.
We recently signed a new two year take or pay agreement with javelin to handle the call at CMT.
We have also successfully handled iron ore at CMT and we expect the we will continue to handle this new product in 2021.
Fully repositioning CMT is a multiyear undertaking kind of continues to be one of our top priorities.
Now I'll turn it over to Fay to review, our 2021 adjusted EBITDA guidance.
Thanks, Mike turning to slide 10, we expect 2021 of adjusted EBITDA to be between 215 of $230 million.
Domestic coke will contribute an incremental 2 million to $7 million in 2021, as we run our domestic coke fleet at full capacity with on contracted capacity being sold into the export in foundry market.
We anticipate higher O&M spending as our operations and capital activities return to a more normal level in 2021.
Turning to logistics segment, we expect logistics to contribute an additional 3 million to $8 million in 2021.
As Mike mentioned.
We anticipate that market conditions for coal export will continue to improve which we anticipate will result in higher volume. We also see opportunities for incremental volumes from non coal throughput.
Lastly, we expect our corporate and other segment to be better by approximately 4 million to $8 million the year over year favorability is driven by lower employee related costs and the absence of certain discrete items such as for.
Foundry related R&D expense.
Moving on to slide 11.
In 2021, we expect our domestic coke adjusted EBITDA will be between 219 in $224 million with sales of approximately $4 1 million tonnes.
Once again, we expect to run the domestic fleet at full capacity approximately 385 million tons are contracted under long term take or pay agreements.
We expect to sell the remaining volumes in the foundry and export market.
The foundry and export tons do not replace blast furnace tonnes and a ton for ton basis. For example, due to the differences in the production price of processed a single ton of foundry Coke replaces approximately two tons of blast furnace coke the.
The differences are reflected in our sales estimates of $4 1 million tonnes.
The total sales volume for foundry and export Coke is expected to be between 250200, 70000 tons, which is the blast furnace equivalent of approximately 400000 tonnes.
Our 2021 projections also include lower cost of coal cost recovery at our dual facility.
Which is exposed to commodity risk.
Through 2021. Additionally.
Additionally, lower coal prices in 2021 will drive lower yield gains across our domestic Coke fleet.
Lastly, we also expect the operating and maintenance costs will be higher in 2021 as compared to 2020.
Certain maintenance in cash at maintenance activities in capital projects were deferred due to constraints imposed by the pandemic as well as lower production.
As production ramps up in the operating conditions normalize we expect net maintenance spending will normalize as well.
Looking at slide 12.
2021 logistics adjusted EBITDA is expected to be between 20, and $25 million, an increase of $3 million to $8 million versus 2020.
As discussed earlier, we have a new contract with javelin, which included a 4 million ton take or pay volume agreement for 2021.
And 3 million tonnes for 2022.
Given the current coal export market and looking at the API two forward curve, we are projecting between four and 5 million tons of coal to be exported from CMT in 2021.
Additionally, we have also tested iron ore handling at our facility and continue to look for other opportunities or value estimates include between two and half to 3 million tons of non coal throughput such as pet Coke aggregates and the iron ore.
We expect slightly higher volumes at our domestic coal terminals as well with our coke production facilities ramping back up to full production.
But third party volumes will remain tempered.
We expect to handle $10 5 million tonnes through our domestic coal terminals in 2021 versus approximately $9 5 million tonnes handled in 2020.
Overall, we see some positive indication that the commodity market is improving and that the initial success. The CMT has achieved in test products will result in potential upside, which is contemplated in the larger guidance range for logistics adjusted EBITDA in 2021.
We understand that this is a small step towards realizing the full potential of CMT and we will continue to pursue our initiatives to bring on new customers additional volume.
And new products at CMT.
Yes.
Moving to the 2021 guidance summary on slide 13.
This slide provides the historical view of actual performance across many metrics as well as the summary of our 2021 guidance.
Once again, we expect adjusted EBITDA to be between 215 of $230 million in 2021.
Coke operations are expected to ramp back up to full capacity and the.
The logistics segment has some upside potential with new products and higher coal export volume.
We anticipate our capex requirement in 2021 will be around $80 million. This includes some deferred projects from 2020 and is in line with our long term capital Capex estimates on an annual basis our.
Our free cash flow is expected to be between 80% of $100 million after taking into account cash interest cash cash taxes capital expenditures and minimal working capital changes with that I'll turn it back to Mike. Thank you for.
Wrapping up on slide 14, 2021 will be of year to build on our strong foundation as always safety and operational performance is top of mind for our organization.
<unk> will focus on successfully executing against our operating and capital plan in 2021.
We are entering into two new markets for 2021.
The first of these opportunities on a limited basis for this year will be the first where we participate on the industrial scale.
Our objective is to succeed in these markets for <unk>.
Moving ourselves as a reliable supplier of high quality product.
The sales are important for some coke success from 2021 as well as in future years.
We will continue to pursue opportunities to optimize our asset base, specifically as it relates to CMT.
The position incumbent Marine terminal from primarily of coal export terminal to a more diversified terminal will be an area of focus some coke will continue working towards further expanding our customers and products.
2021.
The real demonstrated in the past, we will continue to execute our well established and well balanced capital allocation goals continuing to bring our debt balance down as critical to stabilizing and strengthening our capital structure we.
We'll continue to evaluate.
Capital of the capital needs of our business, our capital structure and the need to reward shareholders on a continuous basis, and we will make capital allocation decisions accordingly.
In total we are excited and optimistic for the new year. After battling through an unprecedented 2020, we see great potential to build on the strength of our core coke, making and logistics franchises to enter new markets serve new customers meet our financial targets and create value for our shareholders with that.
Lets go ahead in the open it up for Q&A.
At this time, ladies and gentlemen, if you would like to ask an audio question. Please press Star then the number one once again that is star then the number one for any audio questions. Our first question comes from the line of Matthew fields with Bank of America.
Hey, everyone.
So lots of them. We spoke it was November 6th and you all were kind of holding to your full year guidance, which implied a pretty negative fourth quarter in terms of EBITDA and free cash flow I think of pretty negative free cash flow.
To hit that 30 to 50 sites obviously.
You'd be pretty handily on both fronts. So what was the reason for that the strong outperformance in the <unk> was it just a really really conservative guide or was there something that kind of just fundamentally changed in the last six weeks of the quarter.
Nothing fundamentally changed for you.
Sometimes the wind is a bit of your back and we found that to be the case in the fourth quarter.
Weather was quite mild it's not been quite as mild here in the Midwest recently, but the weather in the fourth quarter was mild.
So our operations performed at the very good levels.
The cost reduction initiatives, which we announced the <unk>.
Starting to come into full fruition in the fourth quarter. So I'm delighted with the the ability of the company.
Simultaneously implement of cost reduction initiative, and unfortunately that means fewer employees or so on coke, but while in the the process of reducing our cost we didn't Miss a beat as we began to ramp back up for full production here in the.
2021, so I think it was really quite outstanding.
<unk> for the company and its employees again.
Some good weather, there was perhaps and you'll see it in 2021.
We have more capital work in 2021 than we had in the 20 solar we're doing a little bit of catching up but we weren't able to accomplish.
In the fourth quarter, which does of.
The impact on our of our O&M costs as well so it was really interesting quarter.
Okay.
And then of one or two sort.
Hi, the puts and takes on the domestic coke side from 'twenty to 'twenty, one and then I think for his comments about.
The foundry foundry foundry coke, replacing two tons of blast furnace Coke maybe from some further exploration of about that I think.
And please correct me if I'm wrong here, but I think from 'twenty to 'twenty, one you have 125.
<unk> thousand tons coming back from the AK steel contracts.
We have 200000 tons going away from the MTA contracts.
So maybe I'm wrong on those figures, but but help me sort of tie the bridge 'twenty 'twenty to 'twenty, one and then the balances.
400000 tons of blast furnace, coke, but youre only going to be selling $262 50 to 270 times of foundry Coke.
And the rest of the export is up because of the way to get to the $4 one.
So so.
At blast furnace kind of equivalent right, what we've always thought of it how we've always discussed kind of R. R. R tonnage for roughly $4 2 million ton of production at full utilization.
Okay.
When you look at our contracted volume as.
As I mentioned, we're at an under long term take or pay volume were a little over three eight.
So when you are trying to just do that math you have for two to three point Youll have 400000 tonnes.
On contracted volume under long term take or pay contracts and so those tons will then be deployed either because theyre going to run at full run rate either into the export market or the foundry market now it is not a ton for ton comparison on the on the foundry for range.
So when we look at what we're planning on selling.
In the foundry space and the export space.
Is the differential of that amount.
And what drives that really is the extended coking times for all for the production of the foundry Coke.
Yes.
Okay. So you are essentially be producing for 2 million tons, but we'll stay sterling.
Other than that.
Or will be utilizing the time.
All of the capacity of the.
The facilities will be used will use every minute of available time to produce coke, we produce less volume recall per unit of time because of the coking cycle is longer so you get less throughput.
Alright, great and then.
Your overall margin guidance, 53% to 55 of isn't really down that much. So can you give us a little guidance on the margin sort of differential between foundry coke in your sort of long term contracted coke.
We're not giving specific.
Profit.
Margin.
The information on foundry is I know you can appreciate it's a small market and we don't really want to say anything that would competitively harm us, but it's appropriate to think with the.
The relative profitability of.
Our different product offerings are more or less of the same.
Some internal opportunity.
On the foundry side to reduce our cost as we go fully commercial.
We will look to optimize our <unk>.
Production get the yields up some so there's there are some internal opportunity to.
Bring the profit of the.
The foundry product up.
But the relatively in line with the help of blast furnace margins.
Okay. That's helpful.
On the logistics side.
Congrats on the javelin contract.
Just wanted to sort of dig in a little bit there.
The content going from $5 one.
Up to six five to eight but within the additional 4 million tonnes from javelin.
Is there some call thats going away.
Or was.
Does that $5 one was a chunk of that not coal that's helped me understand where the extra 4 million tonnes.
It's fitting in.
So I think where your math isn't isn't pain together, it's not an incremental 4 million tons, we move tons in 2020 on a spot basis for javelin P&L. Okay.
The $5 million and so it's the.
This is just a new contract, which is not spot like it was in 2020, it's take or pay for 4 million tonnes.
So the incremental is only about half of the mine.
The 2021 for <unk> and 'twenty one yes.
Got it Okay. That's very helpful. And then are we going to start to see I know, we can sort of back into the margin Youll get from logistics based on your EBITDA guide, but.
You used to sort of generate three to $4 per ton on the revenue side and the coal logistics business are we going to be trending back up towards there or is it going to be kind of on the revenue basis the same as <unk>.
Closer to the 21.
What we love.
Different from foundry.
We're now entering new markets.
Finding ourselves in competitive situations, we're not really intending to say anything more than we have with regard to our throughput for EMEA of EBITDA of the segment.
Okay, that's fair.
And then lastly from me and thanks for the patients here.
With the free cash flow expected in 'twenty, one if you kind of apply that to you could you could pay down your entire revolver over the course of 'twenty, one which would put year.
Three or four tenths of a turn below three.
You said continued debt reduction is important.
If you are going to be below three does that mean, you can take the foot off the gas with that ore and increase shareholder returns are.
Do we think that three times might turn into two and a half of the target over time or even lower.
One of your I think your math is correct.
As we continue to make good progress next year and pay down debt that would drive us to being a bit below through in as we've said all along the three times or lower so I think our priority in 2021 will be to get the debt level down to three times or lower and that speaks.
Pretty well to the excess cash flow we have next year.
Okay. That's it for me, thanks, very much and good luck neither of them.
Thanks Martin.
Okay.
Our next question comes from the line of Lucas pipes with B Riley's Securities.
Hey, good morning, Mike and say and team in the morning of 'twenty and fourth quarter of particular.
Two primary questions on my mind share.
The first.
On the kind of.
Contract Minimums, you had previously outlined.
The step downs here this year of 2021 of the 2022.
I wanted.
I wanted to ask what extent.
You have discussions with your domestic.
Book customers today about potential increases to that you know that Mike the market. The steel market is very strong so just wondered if.
Those conversations have started.
Thank you.
Yes, good question, Lukas actually where they really never and it's not a matter of starting and stopping.
As Youre aware as we supported our customers in 2020.
We renegotiated and extended the existing contracts, we did that in a couple of different points during the year and those conversations are on the continuing basis.
Also low.
And responsibly look to other opportunities for <unk>.
Customer diversification and to ensure that all of our facilities run full so we're in discussions growth.
With our existing customers as well as potential customers.
Okay.
And.
You've noted the strength of the market or would you say those.
At this point has spilled over into the ongoing conversations yet.
None of them are clearly the market is the strengthening.
Cash utilization rates or our back 77% I guess is the last number I saw so we're approaching 88.
<unk> plus is a healthy market so.
That's a good environment for us the defined ourselves as I indicated.
This need for an infrastructure.
Bill.
For the lack of one is really of Paul.
It needs to be addressed by our country.
Perhaps in a bipartisan way, Washington, the can get up and actually do something about it instead of talking about it the.
That's a catalyst for us for further demand.
Development in the steel market, so we see the.
Improvement continuing the industrial recovery continue so.
Most of it environment to discuss but we did extension of last year during the.
For the period of.
And the significant contraction of the reason, we're able to do that is.
We believe our customers recognize us for the high quality product, we make for the investments we've made and the fact that we're gonna be of long term reliable supplier. So.
It's not necessarily only about where you sit in the steel cycle, we take a long view and we think our customers and potential customers take along the years. So.
This is just it's part of the of just the ongoing dialogue.
Okay.
Yeah.
Very helpful. Couldnt Couldnt agree more on the other.
On the infrastructure side.
Mike.
Another topic I wanted to touch on was the.
For potential for CMT I believe in you.
Eric <unk> remarks, he mentioned the use that space and.
I wondered if you could speak to full potential in a quantitative way.
I know this will for.
So it doesn't seem like it's achievable here in 2021, if you look out two three maybe even four of five years.
Where do you see that facility in terms of potential EBITDA.
Through the various initiatives you've taken thank you.
I don't want to start forecasting a <unk>.
In 'twenty, two and beyond the EBITDA for either of.
Our logistics business all of our Coke business, but clearly theres underutilized capacity at the terminal today.
We've demonstrated an ability to run 12 million tons through there in the past so that's the first stop.
Beyond that there's opportunities to expand that terminal.
And of thoughtful and profitable way or could handle substantially more volumes than the 12 million that has historically done so with the <unk>.
Tony.
For us.
Latent capacity there without investment and there is additional capacity in the presence of some modest investments.
Okay.
That's very helpful. I'll leave it here I appreciate all the color and continued best of luck.
Thank you Luca.
Once again, ladies and gentlemen that is star then the number one for any audio questions. Our next question comes from the line of Phil Gibbs with Keybanc capital markets.
Hey, good morning, Mike and Jim how are you.
Doing well.
Thanks for all of the color on 2021 in terms of the composition and the domestic Coke operations can you give us any.
The texture in terms of 2020 in terms of what that what that was I think you shipped around $3 8 million tonnes.
How much of what was the split there between the domestic take or pays and your your foundry the export business.
It was all domestic.
We had no commercial volumes of either export or foundry.
Okay. So the domestic take or pays of relatively relatively flattish or for modest growth. This year.
Okay.
And your per.
Prepared remarks, you had made a comment about potential pig iron opportunities.
Just a question in terms of what you're hearing on that whether or not you think that's a.
2022 for 2021 reality or of 2022 potential just.
What's the volume in terms of in terms of that the comment.
I think of it starts to show up in 'twenty, one you've got about a Canadian producer Thats beginning to produce pig now its I think being actively explored by domestic.
Gross furnace producers.
<unk> for approximately 5 million tons of pig is imported into this country every year and it's being imported.
Frankly from places, where the environmental concerns that we demonstrate every day arent quite as is great. So the economic opportunity and I think it's also an opportunity in terms of the global environment to do something and environmentally more responsible way so there's.
I think of opportunities I think.
When and how much is a question better directed to the people who would actually produce the big.
That makes sense and then just one more for me.
There's a lot of focus on emissions reductions obviously within the steel industry.
But just from my perch I think.
Of that evolution domestically has been going on I think.
Probably even before the Obama administration on non I think it accelerated in terms of the demands that were put on your some of your blast furnace customers in.
So maybe maybe if you could provide some some.
For some color just in terms of where you think the industry is in terms of its evolution here domestically and how far ahead, we are for.
Essentially versus the rest of the world given given the fact that I think we've kind of been an early adopter to this view for a while I just think of as a lot of misinformation. Thanks.
Youre, 100% right so.
The reduction in the environmental performance is not new to the domestic industry. It's actually a decades old so tremendous progress has already been made here in the United States.
And the scope for continued.
Improvement with regard to the environmental performance of the industry.
And we applaud.
Our customers, who look to improve their environmental footprint. As you know we are of very small footprint, but even with our small footprint, we look to the.
Tenuously improvement.
Other players in it we could get into the long discussion about trade and the fairness of trade and the subsidies that are present in the imported steel.
Clearly in other parts of the world and I'm, not saying the entire world by the way of theirs environmentally responsible producers throughout the world, but certainly significant portions of the steel that's moving around the world is produced by people, who don't take the environmental responsibilities of seriously as ours.
I think thats, something we need to continue to educate.
Consumers investors, particularly people in the Washington, who are responsible for trade laws and trade enforcement business message needs to.
To continue to wring out of if all we do is continue to prove and we need to our environmental performance as an industry and others aren't required to do the same globally in terms of global issue outside of the U S issue.
But out of accomplishing much if all we do is export pollution by allowing those who indiscriminately produced the import into our country. We haven't accomplished anything in fact, you could argue we encourage pollution. If we don't have strong credit laws.
So there's a body of work here and I applaud the industry for.
For all but it's been able to do over the past couple of decades, and Youre right. It predates the Obama administration.
And it will extend beyond the next administration to of this is the continuing journey. So we need to continue to work hard and we need to insist that with others do the same.
Hey, Matt Thanks, Mike.
At this time there are no further questions I would now like to turn it back over to Mike <unk> for any closing remarks.
So again I would like to thank everyone today for joining the call and the.
As always we appreciate your continued interest in Sun Coke and look forward to continuing the dialogue.
Ladies and gentlemen, thank you for your participation you may now disconnect.
Okay.
Okay.
Thank you.
[music].
Okay.
Right.
Yes.
Yes.
Yes.
Thanks.
Okay.