Question-and-Answer Session
Operator
(Operator Instructions) Sal Tharani, you may ask your question and please state your company name.
Sal Tharani - Goldman Sachs
A quick question on your comment in the press release on the European business on pressure cylinder, that you are seeing some increased production at competitors. Can you elaborate a little bit on that? Are these new entrants or are these people who are already there?
John P. McConnell
I think it’s a combination of both, Sal, but I’m going to let George expand on that for you.
George P. Stoe
Primarily, there is a competitor of ours in Poland that is adding capacity from what they have done before. They’ve been coming on with that capacity slower. Because of the weakness of the dollar, we’ve also seen some competition coming from here in North America with people trying to ship high pressure cylinders into Europe to take advantage of the current market conditions.
Sal Tharani - Goldman Sachs
Are you guys exporting anything?
George P. Stoe
Yes, we are.
Sal Tharani - Goldman Sachs
And then next thing, you mentioned that mills are very firm in raising the prices early next year, and I know you always mention that your contract business is always back-to-back. Are you having any difficulty in passing those price increases to the contracts?
George P. Stoe
We are not.
Sal Tharani - Goldman Sachs
So it’s -- I mean, your primary contractors are -- I mean, counter-parties are -- and they are accepting those?
John P. McConnell
Are you asking me is the price increases, are contractual commitments already made going to be broken on either side?
Sal Tharani - Goldman Sachs
No, I’m asking for the new contracts, for rollovers.
John P. McConnell
Those we have not resigned yet.
Sal Tharani - Goldman Sachs
Okay, but do you expect them to be acceptable? Do you think there’s a -- you mentioned the mills are very firm that they are going to raise prices. Do you think that your customers will be able to accept that?
John P. McConnell
I think the information out in the public sector about what’s going on in the steel business, their clarity in what they are going to do is all there, so yes, I think they will understand the situation. Nobody really likes rising prices but I do think the industry has prepared and paved the pathway for these increases that are coming.
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