Question-and-Answer Session
Operator
(Operator Instructions) One moment please for the first question. Our first question coming from the line of David MacGregor from Longbow Research. Please proceed with your question.
David MacGregor – Longbow Research
Steve, the wallboard, we’ve got a growing percentage of industry capacity that is now operating at less, below cash costs or at least they’re selling below cash costs. How do you see trough pricing being different than where we got to in 2000, 2001?
Steven R. Rowley
That’s really difficult to predict. Our prices are currently lower now. I think that one chart kind of shows where we are. We’re estimating that our costs relative to the last drop, there were costs that are up, a combination of production costs and really freight to the market are up about $35. When we look at our trough I think for a year we’ve had kind of a trough price of about $65. It starts to feel like you’re very close to where you were in the last trough but each competitor has different components whether it’s freight or production costs to where they come up with their delivery costs to market.
David MacGregor – Longbow Research
I guess on the cement business just looking at the 35% increase in joint venture volumes I guess that’s a reflection of the import terminal tonnage. Can you give us a sense of what kind of tonnage is coming through the import terminal now? And also what’s changing in terms of the profitability of your import business? I’m surprised margin’s help up relatively well given the increase in import tonnage.
Steven R. Rowley
The import volume is about as predicted. The partnership there has about 500,000 tons that we can move through there and technically I moved about that amount so we would see about half of that increased volume coming through and as far as pricing, pricing has not deteriorated that much although margins may have on the imports. We’ve seen where prices are up dramatically since the beginning of this year. Pretty much when you import cement you lock it in for a fairly long period of time. Generally you’ll set your deals almost a year in advance so the increase in price of import cement really won’t hit us until this quarter and going forward.
David MacGregor – Longbow Research
Have you seen relief on freight costs with respect to these imports? And if so what influence do you expect it to have on sort of the landed cost of your imports?
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