Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Karak Christel [ph] with Capstone Investments. Please go ahead, sir.
Karak Christel – Capstone Investments
Good morning, gentlemen. Thanks for taking my call. I wanted to just talk about the Barnwell project and maybe you could put a framework around what you expect your feedstock percentage from dust might reach one – one kiln completed, the second kiln. Could you just talk about the impact that could have on the financials as well?
Jim Hensler
Well, if we are operating Rockwood at full capacity, that would translate into about 540,000 tons a year of EAF dust. Each kiln at Barnwell will add about 90,000 tons of additional capacity.
Karak Christel – Capstone Investments
Okay. So it really is – I'm imagining though that even with both kilns up and running and Rockwood at full capacity, you’re unlikely to reach 100% utilization of dust in the feedstock. Is that correct?
Jim Hensler
Only if we are running the smelter at reduced capacity. The smelters that full six furnace operation and we are running at full capacity post Barnwell, I think our EAF dust percent of the mix would be between 75% and 80%.
Karak Christel – Capstone Investments
Next question is just taking a step back from some of the positive trends that you’ve seen on the domestic steel side and obviously the increase in LME prices. And maybe you could put a framework around where the LME price would exceed until you see some of your competitors bring down some incremental capacity, and you’re looking at $0.90, $1.00. Where do you – where is that sweet spot before you really start to see the incremental capacity come back online?
Jim Hensler
Well, that’s a difficult question for me to answer. I think we are seeing some indications in the market that capacity is slowly starting to come back in. Teck Cominco announced they are going to be increasing production here in the third quarter. And I think that you will see a gradual increase in supply as price goes up.
Karak Christel – Capstone Investments
Are you concerned at all with kind of the most recent change in inventory levels over the last couple weeks has had kind of a spike after kind of the leveling out over the past couple of months? Does that concern you at all or is it really just something you have to react to as you see it come down the pipe?
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