Question-and-Answer Session
Great, thank you. [Operator Instructions]. We’ll take our first question from Timna Tanners, UBS.
Timna Tanners - UBS
Yes. Hi, good morning. Wanted to ask about what your scrap assumption might be into the second quarter a little bit more to reflect the fact that your inventory numbers went down, it sounds like that might mean that you might have a scrap price reflection that would be a little closer to what we are seeing in the spot market. Can you comment on that, please?
Keith Busse - Chairman and Chief Executive Officer
Well, clearly they are going to go up during the quarter. I don't know that I have a handle on the scrap numbers that went into the model, but I think that last month we saw the numbers were fairly aggressive in the market. I think with demand remaining strong, they are going to be again... it’s not going to be as significant, but the direction is probably still up. I'll let Danny comment on that. Most of the resource material that we’ve baked into the forecast was already known to us in terms of what we have on hand and can melt in the month of April and May. So the unknown piece that you really have to take a stab at is June and I think we've modeled... initially we thought that the obsolete material might actually go down a little this coming month. I suppose there's still a possibility that that would happen, but no a likelihood that it would happen. And the scrap material, as Danny said, is still somewhat constrained and is likely going to be bid up again. But Danny, could you comment provide any further color?
Danny Rifkin - Executive Vice President, Metals Recycling; President and Chief Operating Officer, OmniSource Corporation
Sure, Keith. We believe that export will remain strong through May and perhaps into the summer. We know that well over 700,000 ton has been already booked for shipment to Turkey in May at levels that would have been reflective of a mid-to-high $500 shipping point price on the coast. That would be for obsolete scrap. I think we are expecting obsolete both [ph] throughout the US to increase quite dramatically over the summer, which would allow the export demand to be satisfied and still allow domestic mills to consume what they need. The wild card in the ferrous market though remains the prime scrap situation and we could see that go either away. If there is an extended? a further extension of the American Axle strike and the automotive prime scrap production remains at current levels, we could see that continue to remain tight, very tight and drift upwards if that strike is settled anytime soon and production resumes and prime scrap flows then would come back on to the market and relieve the pressure that would be especially in the Mid-Western part of the country. So I think I would agree with Keith that our models reflect probably pricing to remain high. We haven't forecast a tremendous increase or a tremendous decrease and would say that that is as hard to predict scrap prices today as it is the weather. So --.
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