Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Christopher Manuel - KeyBanc Capital Markets.
Christopher Manuel - KeyBanc Capital Markets
Mel, can you talk a little bit about what you’re seeing today in California? Have cement prices continued to decline or have we stabilized here? And number two, what you’re seeing with respect to capacity coming out? Is it pretty uniform across different players or a little bit what the landscape’s like?
Melvin G. Brekhus
What we’re seeing with pricing is some decline in pricing that is related to competitive issues. It’s not significant but it is happening. And then of course in our particular case you’re seeing some price compression of the fact that we’re shipping product further and therefore our mill nets are lower.
The capacity question that you asked will probably take a little bit more time to determine. What I stated in my prepared comments was, and I do believe them, is that we think that the demand in the California region is now less than the domestic capacity and all the imports have been turned off. But in spite of that we think it’s less than domestic capacity. That of course will put pressure on all of the producers. There has been some capacity reduction in part of the California region that has been made public by some of the other companies. We obviously are not running at capacity of our new facility. We’re running in the neighborhood of 60% to 70% of capacity to supply the market at this time, and I think we’ll see rationalization in the market place from other producers also. But time will tell.
Christopher Manuel - KeyBanc Capital Markets
Your inventory situation in California, as you did the transition from the old plant to the new plant, my understanding was you were going to build some inventory in. Is that still there? Were you able to mitigate that or where are you today?
Melvin G. Brekhus
We built a little bit of inventory which you would expect us to do. That’s so that we have that cushion in the event that we have an outage during the commissioning or early operation of the facility. But I believe we’re managing that quite well. That has not increased significantly in the first quarter and we do not plan for it to increase significantly going forward.
Christopher Manuel - KeyBanc Capital Markets
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