NYSE:SXC SunCoke Energy Q1 2023 Earnings Report $9.60 +0.05 (+0.52%) As of 10:05 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast SunCoke Energy EPS ResultsActual EPS$0.19Consensus EPS $0.19Beat/MissMet ExpectationsOne Year Ago EPSN/ASunCoke Energy Revenue ResultsActual Revenue$487.80 millionExpected Revenue$363.30 millionBeat/MissBeat by +$124.50 millionYoY Revenue GrowthN/ASunCoke Energy Announcement DetailsQuarterQ1 2023Date5/4/2023TimeN/AConference Call DateThursday, May 4, 2023Conference Call Time11:00AM ETUpcoming EarningsSunCoke Energy's Q1 2025 earnings is scheduled for Wednesday, April 30, 2025, with a conference call scheduled at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by SunCoke Energy Q1 2023 Earnings Call TranscriptProvided by QuartrMay 4, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good morning. Thank you for attending today's SunCoke Energy First Quarter 2023 Earnings Call. My name is Bethany, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Shantanu Agarwal, VP of Finance and Treasurer with SunCoke Energy. Operator00:00:32Please go ahead. Speaker 100:00:36Thanks, Bethany. Good morning and thank you for joining us this morning to discuss SunCoke Energy's Q1 2023 results. With me today are Mike Rippey, Chief Executive Officer Catherine Gates, President and Mark Marinko, Senior Vice President and Chief Financial Officer. Following management's prepared remarks, we'll open the call for Q and A. This conference call is being webcast live on the Investor Relations section of our website, a replay will be available later today. Speaker 100:01:03If you do not get your questions on the call today, please feel free to reach out to our Investor Relations team. Before I turn things over to Catherine, let me remind you that the various remarks we make on today's call regarding future expectations constitute forward looking statements. The cautionary language regarding forward looking statements in our SEC filings apply to the remarks we make today. These documents are available on our website as our reconciliations to non GAAP financial measures discussed on today's call. With that, I'll now turn things over to Katherine. Speaker 200:01:35Thank you, Shantanu. Good morning and thank you for joining us on today's call. Earlier today, we announced SunCoke Energy's 1st quarter results. I want to discuss a few highlights before turning it over to Mark to review the results in detail. I'd like to start by thanking all of our SunCoke employees for their contributions to our Q1 results. Speaker 200:01:57Our domestic coke business operated at full capacity during the quarter, and our logistics segment performed well as we continue to pursue new customers. Through our collective efforts, we delivered consolidated adjusted EBITDA of $67,100,000 Last week, we also announced the extension of our Indiana Harbor coke agreement with Cleveland Cliffs through September 2,035. The key provisions of the extension are similar to the current contract. This renewal affirms our mutually beneficial relationship with Cleveland Cliffs and positions Indiana Harbor well for the future. Our foundry coke business continues to perform well with all sales finalized for the full year. Speaker 200:02:42The Foundry coke expansion project is also progressing and it remains on time and on budget. Our order book for non contracted blast furnace coke is solid and all of our non contracted blast furnace coke sales are finalized through the 3rd quarter. From a leverage perspective, at the end of the quarter, our gross leverage ratio was approximately 1.93 times on a trailing 12 month adjusted EBITDA basis. Finally, as we continue to execute against our 2023 objectives, We remain well positioned to achieve our full year adjusted EBITDA guidance of $250,000,000 to $265,000,000 With that, I'll turn it over to Mark to review our Q1 earnings in detail. Mark? Speaker 300:03:28Thanks, Catherine. Turning to Slide 4, Net income attributable to SunCoke was $0.19 per share in the Q1 2023, down $0.16 versus the prior year period. Adjusted EBITDA for the Q1 2023 was $67,100,000 a decrease of $16,700,000 from Q1 2022. Lower contribution margin on export coke sales was the primary driver of the decrease in both Net income attributable to SunCoke and adjusted EBITDA. Moving to Slide 5 to discuss our domestic coke business performance. Speaker 300:04:101st quarter domestic coke adjusted EBITDA was $60,400,000 and coke sales volume was 950,000 tons. The $15,600,000 decrease in adjusted EBITDA as compared to same prior year period was primarily driven by lower contribution margin on The timing of non contracted blast coke sales also impacted results this quarter. The domestic coke fleet continues to operate at full capacity and all non contracted blast furnace coke sales are finalized through the Q3. Additionally, all foundry coke sales are finalized for the full year. Given our solid first quarter performance, we remained well positioned to deliver our domestic Coke adjusted EBITDA guidance of $234,000,000 to $242,000,000 Moving on to Slide 6 to discuss our Doulogistics segment. Speaker 300:05:08The Logistics business generated $13,500,000 of Adjusted EBITDA during the Q1 of 2023 as compared to $12,600,000 in the same prior year period. The increase in adjusted EBITDA was primarily due to higher volumes at our Convent Marine Terminal. Our logistics terminals handled combined throughput volumes of 5,300,000 tonnes during the quarter as compared to 5,200,000 tonnes during the prior year period, with CMT handling approximately 200,000 additional tons as compared to the same prior year period. Although thermal coal pricing has declined modestly, CMT continues to benefit from the API2 price adjustment. Our full year adjusted EBITDA and volume guidance are unchanged. Speaker 300:05:59Now turning to Slide 7 to discuss Our liquidity position for Q1. SunCoke ended the quarter with a cash balance of approximately $83,000,000 Cash flow from operating activities generated approximately $30,000,000 and was impacted by working capital changes. We spent $22,600,000 on CapEx during Q1 and also paid $6,700,000 in dividends at the rate of $0.08 per share during the quarter. In total, we ended the quarter with a strong liquidity position of approximately $398,000,000 With that, I will turn it back over to Catherine. Speaker 200:06:41Thanks, Mark. Wrapping up on Slide 8. As always, safety and operational performance is top of mind for our company. We continue to focus on safely executing against our operating and capital plan for full utilization of our coke making assets. As I mentioned previously, we are pleased with the performance of our Foundry coke business. Speaker 200:07:02The Foundry expansion project is progressing as planned and its implementation later this year will allow SunCoke to grow its market participation meaningfully. As we've demonstrated in the past, we will continue to pursue a balanced opportunistic approach to capital allocation. We continue to evaluate the capital needs of the business, our capital structure and the need to reward our shareholders, and we'll make capital allocation decisions accordingly. Lastly, we look to achieve our full year adjusted EBITDA guidance of $250,000,000 to $265,000,000 for 2023. With that, let's go ahead and open up the call for Q and A. Operator00:07:46Thank Before asking your question, we will pause here briefly as questions are registered. Our first question comes from the line of Lucas Pipes with B. Riley. Please go ahead. Speaker 400:08:21Thank you very much, operator. Good morning, everyone. My first question is on the international coke markets. They've softened quite a bit alongside lower met coal prices. And I wondered if you could frame up the sensitivity to that weakness. Speaker 400:08:38That's question number 1. Thank you. Speaker 200:08:41Thanks, Lucas. As we said in the Q4 and in discussing our full year guidance, We anticipated a weaker export market this year. We built that into our guidance. And as we've just said here, we are affirming our guidance for the full year. Speaker 400:09:07Roughly what amount of tons do you export into the coke markets today? Speaker 200:09:13Well, I appreciate the question. But as I think you know, we don't Provide the breakdown of export versus our other tons. We have all of our domestic coke is treated as a segment. But as we've said, all of our non contracted blast coke sales are finalized to repute Speaker 400:09:40That's helpful. And What's the typical duration? So if you were to go out for Coke sales in the international market Today, to finalize business, would this be for 2024? Would it be for the Q4 of 2023? Just getting trying to get a better sense for At what time you might see risks from weaker international markets? Speaker 200:10:07Well, I think we're focused On our full year and as we said, we expect to meet our guidance for the year. We expect to run full. So we're focusing on those sales now and we're affirming our guidance. So we're comfortable with what we're seeing in all the markets. Speaker 400:10:30Got it. What's a good benchmark to use For pricing on international coke sales for SunCoke? Speaker 100:10:41Hey, Lucas, this is Shantanu. Yes. So the benchmark generally, I mean, obviously, there's only one benchmark, which is out there for the met coke, which is the Chinese met coke 66, 65 CSR, right? But the way we price our Coke, obviously, our quality of the Coke is much higher than Chinese Coke, Right. And kind of it travels much better versus a normal Regular traditional way of the way the coke is made. Speaker 100:11:12So those are kind of advantages versus kind of if you look at the index and we our product demands The premium versus those indexes. And we have like kind of the exports that we are doing With the customers, we are building those relationships and that helps us kind of with the pricing as well. So yes, that's kind of the benchmark pricing, but there are some other things Speaker 400:11:42That's very helpful. And remind me, What are some of the larger markets you're sending your Coke to? Is it Europe, Latin America or Asia? Would appreciate a little bit of color on that. Speaker 100:11:53Yes. Those are the 2, Europe and Latin America are the main export markets now. I mean, now, but It's open, right? Like if anybody needs Coke within the domestic market or Canada or Latin America or Europe, we are more than willing to supply and we're Looking at all the opportunities that is available to us to sell these export folk or non contracted folk into this market. Speaker 400:12:20Got it. Got it. That's very helpful. I'm just trying to understand that segment a little bit better. So You typically lock in the sales contract first or the supply agreement for the met coal, and then the supply agreement for the met coal Speaker 100:12:46So Lucas, I mean, it's always like you need to have a supply of coal to be able to continuously run our plants. And I think we have mentioned this before. We used to buy our coal on an annual basis. And since we went into these spot markets, we are doing more of a Short term coal buys. So obviously, the coal buys happen first, but we are trying to match those coal buys with our export bulk sales As much as possible, there is always a timing differential, there is always a price differential, right? Speaker 100:13:14And I think coming back to your first question of When does the sale gets booked? Like for example, we're sitting at the end of Q1, our sales are booked through the end of Q3. So it's like anywhere from 30 to 60 to 90 days Time lag between when the coke is produced versus when it's sold or when we are sitting here when we're finalizing the sales. There is a time lag of that, but that's what we are trying to minimize is the variance of the coal price we are buying and the coke prices we are selling at. Speaker 400:13:43Very, very helpful. Thank you for that. And then I'm under the impression that most of this Business comes out of JUUL. Am I is that a misconception, but or would you say that's a reasonable guess? Speaker 100:13:59Well, so you got to think of it like JUUL and Haverhill combined is our kind of swing capacity for Foundry and spot pulp business, spot blast furnace pulp business. So those are the two places where a combination of foundry and Speaker 400:14:18Very helpful. Thank you. Then switching topics, In June, we'll come up on the 1 year anniversary of the letter of intent with U. S. Steel on Granite City. Speaker 400:14:31And I wondered At this point, what are the key things you are still evaluating? Is there a punch list, Thanks, kind of, you need to check off. And if so, could you maybe share that with the market? Thank you very much. Speaker 200:14:45Thanks, Lucas. We're continuing to work towards reaching an agreement with U. S. Steel. This is a large and complex project. Speaker 200:14:54So Wouldn't say that there is a punch list per se, but just that we're continuing to work towards reaching an agreement with them. Speaker 400:15:03Okay. All right. Well, I appreciate the update and best of luck. Speaker 200:15:08Thanks, Lucas. Operator00:15:12Thank you. Our next question comes from the line of Nathan Martin with The Benchmark Company. Please go ahead. Speaker 500:15:23Hey, good morning, everyone. Thanks Congrats on the quarter in the Inner Harbor Extension. Speaker 100:15:29Thank you. Thanks, Nate. Speaker 500:15:33I'd say Lucas did a pretty good job of hitting my list of questions, but maybe one more try On the Granite City opportunity there, and I'll take a different spin. Maybe let's just say hypothetically, you don't end up moving forward With that opportunity, would that potentially change your thoughts on shareholder returns given no longer needing maybe as much dry powder for a transaction? And maybe what could those returns look like? Speaker 200:16:01So I have to say and I appreciate the question, but I have to say that our focus Is very much on continuing to work towards reaching an agreement. So, that is our focus now. And while we really don't get into What we have said and will continue to say is that we really do look at capital allocation every day and we evaluate it based on the circumstances of the Speaker 500:16:35Got it. I appreciate that stance, Catherine. Maybe shifting gears kind of to the domestic coke business again, all foundry coke sales So the year finalized, non contracted finalized through 3Q. I'm assuming The unsold production you have left will likely go to the export market in the Q4. If so, how do you see the export market Trending as we get to the latter part of the year. Speaker 500:17:00I think, Catherine, you said last quarter that you expected maybe some improvements in the second half. Is that still the case? Any update would be great. Speaker 200:17:09Yes. Thanks for the question. Yes, I would say that we do expect to see some improvement. It's certainly been hard to predict, but We're very comfortable with what we see out ahead. And certainly, as we sit here, We're affirming our guidance for the year. Speaker 200:17:27So that's really where we sit and we're very comfortable with where the market is. Speaker 500:17:38Got it. And then I think you mentioned some of this in your Prepared remarks, but I might have missed it, so I apologize. How are things progressing at JUUL with that investment to produce 100 percent foundry? How much of the CapEx has been spent? How much is left? Speaker 500:17:52Just any other thoughts there would be great. Speaker 200:17:56Sure. We're very We're pleased with the progress we've made there. The project on the expansion is on time. It's on budget. And as you know, we don't provide specific numbers for our growth CapEx, but we expect to Spend between $10,000,000 $15,000,000 and that's on track and the project is going to be completed in the Q3. Speaker 500:18:28Great. All right. Well, I appreciate the time. I'll leave it there. Best of luck for the rest of the year. Operator00:18:37Thank you. That concludes our question and answer session. I would now like to pass the conference back to Catherine Gates, President of SunCoke for any additional remarks. Speaker 200:18:52Thank you all again for joining us this morning and for your continued interest in SunCoke. Operator00:19:01That concludes today's conference call. I hope you all enjoy the rest of your day. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSunCoke Energy Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) SunCoke Energy Earnings HeadlinesZacks Industry Outlook Highlights SunCoke Energy and Ramaco ResourcesApril 25 at 12:58 PM | uk.finance.yahoo.comSunCoke Energy, Inc. Announces First Quarter 2025 Earnings DateApril 23, 2025 | businesswire.com🥾⛏️👷♂️ What I Learned From Numerous Mine Visits...Twenty years ago, I made a decision that changed my life. Instead of sitting behind a desk analyzing mining stocks like most gold analyst CFAs, I decided to visit every significant gold mine I could. 10+ site visits later, I've confirmed my theory... That the most profitable mines share three specific characteristics. When you find all three together, the returns can be staggering.April 28, 2025 | Golden Portfolio (Ad)Trump order looks to harness coal power to dominate AI - reportApril 8, 2025 | msn.comSunCoke: Rosy Outlook As Trump Boosts U.S. Coal, But Uncertainties RemainMarch 21, 2025 | seekingalpha.comSunCoke Energy, Inc. (SXC) Stock ForecastsMarch 7, 2025 | ca.finance.yahoo.comSee More SunCoke Energy Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like SunCoke Energy? Sign up for Earnings360's daily newsletter to receive timely earnings updates on SunCoke Energy and other key companies, straight to your email. Email Address About SunCoke EnergySunCoke Energy (NYSE:SXC) operates as an independent producer of coke in the Americas and Brazil. The company operates through three segments: Domestic Coke, Brazil Coke, and Logistics. It offers metallurgical and thermal coal. The company also provides handling and/or mixing services to steel, coke, electric utility, coal producing, and other manufacturing based customers. In addition, it owns and operates cokemaking facilities in the United States and Brazil. 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There are 6 speakers on the call. Operator00:00:00Good morning. Thank you for attending today's SunCoke Energy First Quarter 2023 Earnings Call. My name is Bethany, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Shantanu Agarwal, VP of Finance and Treasurer with SunCoke Energy. Operator00:00:32Please go ahead. Speaker 100:00:36Thanks, Bethany. Good morning and thank you for joining us this morning to discuss SunCoke Energy's Q1 2023 results. With me today are Mike Rippey, Chief Executive Officer Catherine Gates, President and Mark Marinko, Senior Vice President and Chief Financial Officer. Following management's prepared remarks, we'll open the call for Q and A. This conference call is being webcast live on the Investor Relations section of our website, a replay will be available later today. Speaker 100:01:03If you do not get your questions on the call today, please feel free to reach out to our Investor Relations team. Before I turn things over to Catherine, let me remind you that the various remarks we make on today's call regarding future expectations constitute forward looking statements. The cautionary language regarding forward looking statements in our SEC filings apply to the remarks we make today. These documents are available on our website as our reconciliations to non GAAP financial measures discussed on today's call. With that, I'll now turn things over to Katherine. Speaker 200:01:35Thank you, Shantanu. Good morning and thank you for joining us on today's call. Earlier today, we announced SunCoke Energy's 1st quarter results. I want to discuss a few highlights before turning it over to Mark to review the results in detail. I'd like to start by thanking all of our SunCoke employees for their contributions to our Q1 results. Speaker 200:01:57Our domestic coke business operated at full capacity during the quarter, and our logistics segment performed well as we continue to pursue new customers. Through our collective efforts, we delivered consolidated adjusted EBITDA of $67,100,000 Last week, we also announced the extension of our Indiana Harbor coke agreement with Cleveland Cliffs through September 2,035. The key provisions of the extension are similar to the current contract. This renewal affirms our mutually beneficial relationship with Cleveland Cliffs and positions Indiana Harbor well for the future. Our foundry coke business continues to perform well with all sales finalized for the full year. Speaker 200:02:42The Foundry coke expansion project is also progressing and it remains on time and on budget. Our order book for non contracted blast furnace coke is solid and all of our non contracted blast furnace coke sales are finalized through the 3rd quarter. From a leverage perspective, at the end of the quarter, our gross leverage ratio was approximately 1.93 times on a trailing 12 month adjusted EBITDA basis. Finally, as we continue to execute against our 2023 objectives, We remain well positioned to achieve our full year adjusted EBITDA guidance of $250,000,000 to $265,000,000 With that, I'll turn it over to Mark to review our Q1 earnings in detail. Mark? Speaker 300:03:28Thanks, Catherine. Turning to Slide 4, Net income attributable to SunCoke was $0.19 per share in the Q1 2023, down $0.16 versus the prior year period. Adjusted EBITDA for the Q1 2023 was $67,100,000 a decrease of $16,700,000 from Q1 2022. Lower contribution margin on export coke sales was the primary driver of the decrease in both Net income attributable to SunCoke and adjusted EBITDA. Moving to Slide 5 to discuss our domestic coke business performance. Speaker 300:04:101st quarter domestic coke adjusted EBITDA was $60,400,000 and coke sales volume was 950,000 tons. The $15,600,000 decrease in adjusted EBITDA as compared to same prior year period was primarily driven by lower contribution margin on The timing of non contracted blast coke sales also impacted results this quarter. The domestic coke fleet continues to operate at full capacity and all non contracted blast furnace coke sales are finalized through the Q3. Additionally, all foundry coke sales are finalized for the full year. Given our solid first quarter performance, we remained well positioned to deliver our domestic Coke adjusted EBITDA guidance of $234,000,000 to $242,000,000 Moving on to Slide 6 to discuss our Doulogistics segment. Speaker 300:05:08The Logistics business generated $13,500,000 of Adjusted EBITDA during the Q1 of 2023 as compared to $12,600,000 in the same prior year period. The increase in adjusted EBITDA was primarily due to higher volumes at our Convent Marine Terminal. Our logistics terminals handled combined throughput volumes of 5,300,000 tonnes during the quarter as compared to 5,200,000 tonnes during the prior year period, with CMT handling approximately 200,000 additional tons as compared to the same prior year period. Although thermal coal pricing has declined modestly, CMT continues to benefit from the API2 price adjustment. Our full year adjusted EBITDA and volume guidance are unchanged. Speaker 300:05:59Now turning to Slide 7 to discuss Our liquidity position for Q1. SunCoke ended the quarter with a cash balance of approximately $83,000,000 Cash flow from operating activities generated approximately $30,000,000 and was impacted by working capital changes. We spent $22,600,000 on CapEx during Q1 and also paid $6,700,000 in dividends at the rate of $0.08 per share during the quarter. In total, we ended the quarter with a strong liquidity position of approximately $398,000,000 With that, I will turn it back over to Catherine. Speaker 200:06:41Thanks, Mark. Wrapping up on Slide 8. As always, safety and operational performance is top of mind for our company. We continue to focus on safely executing against our operating and capital plan for full utilization of our coke making assets. As I mentioned previously, we are pleased with the performance of our Foundry coke business. Speaker 200:07:02The Foundry expansion project is progressing as planned and its implementation later this year will allow SunCoke to grow its market participation meaningfully. As we've demonstrated in the past, we will continue to pursue a balanced opportunistic approach to capital allocation. We continue to evaluate the capital needs of the business, our capital structure and the need to reward our shareholders, and we'll make capital allocation decisions accordingly. Lastly, we look to achieve our full year adjusted EBITDA guidance of $250,000,000 to $265,000,000 for 2023. With that, let's go ahead and open up the call for Q and A. Operator00:07:46Thank Before asking your question, we will pause here briefly as questions are registered. Our first question comes from the line of Lucas Pipes with B. Riley. Please go ahead. Speaker 400:08:21Thank you very much, operator. Good morning, everyone. My first question is on the international coke markets. They've softened quite a bit alongside lower met coal prices. And I wondered if you could frame up the sensitivity to that weakness. Speaker 400:08:38That's question number 1. Thank you. Speaker 200:08:41Thanks, Lucas. As we said in the Q4 and in discussing our full year guidance, We anticipated a weaker export market this year. We built that into our guidance. And as we've just said here, we are affirming our guidance for the full year. Speaker 400:09:07Roughly what amount of tons do you export into the coke markets today? Speaker 200:09:13Well, I appreciate the question. But as I think you know, we don't Provide the breakdown of export versus our other tons. We have all of our domestic coke is treated as a segment. But as we've said, all of our non contracted blast coke sales are finalized to repute Speaker 400:09:40That's helpful. And What's the typical duration? So if you were to go out for Coke sales in the international market Today, to finalize business, would this be for 2024? Would it be for the Q4 of 2023? Just getting trying to get a better sense for At what time you might see risks from weaker international markets? Speaker 200:10:07Well, I think we're focused On our full year and as we said, we expect to meet our guidance for the year. We expect to run full. So we're focusing on those sales now and we're affirming our guidance. So we're comfortable with what we're seeing in all the markets. Speaker 400:10:30Got it. What's a good benchmark to use For pricing on international coke sales for SunCoke? Speaker 100:10:41Hey, Lucas, this is Shantanu. Yes. So the benchmark generally, I mean, obviously, there's only one benchmark, which is out there for the met coke, which is the Chinese met coke 66, 65 CSR, right? But the way we price our Coke, obviously, our quality of the Coke is much higher than Chinese Coke, Right. And kind of it travels much better versus a normal Regular traditional way of the way the coke is made. Speaker 100:11:12So those are kind of advantages versus kind of if you look at the index and we our product demands The premium versus those indexes. And we have like kind of the exports that we are doing With the customers, we are building those relationships and that helps us kind of with the pricing as well. So yes, that's kind of the benchmark pricing, but there are some other things Speaker 400:11:42That's very helpful. And remind me, What are some of the larger markets you're sending your Coke to? Is it Europe, Latin America or Asia? Would appreciate a little bit of color on that. Speaker 100:11:53Yes. Those are the 2, Europe and Latin America are the main export markets now. I mean, now, but It's open, right? Like if anybody needs Coke within the domestic market or Canada or Latin America or Europe, we are more than willing to supply and we're Looking at all the opportunities that is available to us to sell these export folk or non contracted folk into this market. Speaker 400:12:20Got it. Got it. That's very helpful. I'm just trying to understand that segment a little bit better. So You typically lock in the sales contract first or the supply agreement for the met coal, and then the supply agreement for the met coal Speaker 100:12:46So Lucas, I mean, it's always like you need to have a supply of coal to be able to continuously run our plants. And I think we have mentioned this before. We used to buy our coal on an annual basis. And since we went into these spot markets, we are doing more of a Short term coal buys. So obviously, the coal buys happen first, but we are trying to match those coal buys with our export bulk sales As much as possible, there is always a timing differential, there is always a price differential, right? Speaker 100:13:14And I think coming back to your first question of When does the sale gets booked? Like for example, we're sitting at the end of Q1, our sales are booked through the end of Q3. So it's like anywhere from 30 to 60 to 90 days Time lag between when the coke is produced versus when it's sold or when we are sitting here when we're finalizing the sales. There is a time lag of that, but that's what we are trying to minimize is the variance of the coal price we are buying and the coke prices we are selling at. Speaker 400:13:43Very, very helpful. Thank you for that. And then I'm under the impression that most of this Business comes out of JUUL. Am I is that a misconception, but or would you say that's a reasonable guess? Speaker 100:13:59Well, so you got to think of it like JUUL and Haverhill combined is our kind of swing capacity for Foundry and spot pulp business, spot blast furnace pulp business. So those are the two places where a combination of foundry and Speaker 400:14:18Very helpful. Thank you. Then switching topics, In June, we'll come up on the 1 year anniversary of the letter of intent with U. S. Steel on Granite City. Speaker 400:14:31And I wondered At this point, what are the key things you are still evaluating? Is there a punch list, Thanks, kind of, you need to check off. And if so, could you maybe share that with the market? Thank you very much. Speaker 200:14:45Thanks, Lucas. We're continuing to work towards reaching an agreement with U. S. Steel. This is a large and complex project. Speaker 200:14:54So Wouldn't say that there is a punch list per se, but just that we're continuing to work towards reaching an agreement with them. Speaker 400:15:03Okay. All right. Well, I appreciate the update and best of luck. Speaker 200:15:08Thanks, Lucas. Operator00:15:12Thank you. Our next question comes from the line of Nathan Martin with The Benchmark Company. Please go ahead. Speaker 500:15:23Hey, good morning, everyone. Thanks Congrats on the quarter in the Inner Harbor Extension. Speaker 100:15:29Thank you. Thanks, Nate. Speaker 500:15:33I'd say Lucas did a pretty good job of hitting my list of questions, but maybe one more try On the Granite City opportunity there, and I'll take a different spin. Maybe let's just say hypothetically, you don't end up moving forward With that opportunity, would that potentially change your thoughts on shareholder returns given no longer needing maybe as much dry powder for a transaction? And maybe what could those returns look like? Speaker 200:16:01So I have to say and I appreciate the question, but I have to say that our focus Is very much on continuing to work towards reaching an agreement. So, that is our focus now. And while we really don't get into What we have said and will continue to say is that we really do look at capital allocation every day and we evaluate it based on the circumstances of the Speaker 500:16:35Got it. I appreciate that stance, Catherine. Maybe shifting gears kind of to the domestic coke business again, all foundry coke sales So the year finalized, non contracted finalized through 3Q. I'm assuming The unsold production you have left will likely go to the export market in the Q4. If so, how do you see the export market Trending as we get to the latter part of the year. Speaker 500:17:00I think, Catherine, you said last quarter that you expected maybe some improvements in the second half. Is that still the case? Any update would be great. Speaker 200:17:09Yes. Thanks for the question. Yes, I would say that we do expect to see some improvement. It's certainly been hard to predict, but We're very comfortable with what we see out ahead. And certainly, as we sit here, We're affirming our guidance for the year. Speaker 200:17:27So that's really where we sit and we're very comfortable with where the market is. Speaker 500:17:38Got it. And then I think you mentioned some of this in your Prepared remarks, but I might have missed it, so I apologize. How are things progressing at JUUL with that investment to produce 100 percent foundry? How much of the CapEx has been spent? How much is left? Speaker 500:17:52Just any other thoughts there would be great. Speaker 200:17:56Sure. We're very We're pleased with the progress we've made there. The project on the expansion is on time. It's on budget. And as you know, we don't provide specific numbers for our growth CapEx, but we expect to Spend between $10,000,000 $15,000,000 and that's on track and the project is going to be completed in the Q3. Speaker 500:18:28Great. All right. Well, I appreciate the time. I'll leave it there. Best of luck for the rest of the year. Operator00:18:37Thank you. That concludes our question and answer session. I would now like to pass the conference back to Catherine Gates, President of SunCoke for any additional remarks. Speaker 200:18:52Thank you all again for joining us this morning and for your continued interest in SunCoke. Operator00:19:01That concludes today's conference call. I hope you all enjoy the rest of your day. You may now disconnect your lines.Read morePowered by