Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Timna Tanners – UBS.
Timna Tanners – UBS
What I’m kind of confused is on the weighted average selling price of your fabricated products business and there was some mention in the press release of a weaker mix and you just talked about strength of mix continuing. So if you could talk a little bit about where there might have been some weakness or how to think about the pricing on the fabricated products side going forward.
Jack Hockema
I’m not sure what you’re talking about Timna unless you’re just talking about the net realized price and I think in Dan’s remarks he attributed the bulk of that to lower contained metal prices for the quarter year over year.
Dan Rinkenberger
And we did say something about, I guess you’d call it a weaker mix but it was really we did have some strength in lower value added priced products during the course of the quarter which caused some of the weighted average pricing to also be lower than otherwise might have been expected. I think Jack’s right when we talks about the strong mix we anticipate, especially in the heat treat plate.
Timna Tanners – UBS
What does that mean, lower value added products? Is that the armored plate that you see offsetting some of the aerospace demand or what is that?
Dan Rinkenberger
No Timna we’re talking more about some of our extruded products. So especially on the restocking that Jack mentioned during the quarter and the last seven months, we had a nice increase as we were hoping and expecting on the value added, on the rod and bar products that are in the soft alloy plants.
Timna Tanners – UBS
It’s hard to understand the decline in the weighted average selling price, unless there was something, because I think that you’ve been talking about how the non-heat treated plate side has been fairly steady and with the restocking, it sounds like maybe the prices were just a little weaker still even though the volumes were up, is that fair?
Jack Hockema
The absolute selling price on those products tends to be lower than our plate products. And so when we increase the mix in that part of the product mix it has an effect on our price too.
Timna Tanners – UBS
Okay but you would have also been increasing the amount sold into heat treated plate just because of your capacity increase year over year as well, right?
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