Bill Peterson

Bill Peterson asked about MP Materials' capacity and desire to support additional offtake agreements, considering potential limitations from upstream expansion or the 10X facility, and sought an update on magnet qualification with the lead auto customer and details on the magnet ramp-up, including focus areas like yield or throughput.

Answer

CFO Ryan Corbett stated that MP Materials remains opportunistic for additional offtake, noting significant demand from automakers diversifying supply chains and accelerated focus from physical AI users. COO Michael Rosenthal added that the upstream business approaching 6,000 tons per annum leaves room for more offtake, supplemented by third-party feedstocks and recycling. Ryan Corbett also explained that the PPAP qualification process with the lead auto customer (GM) is just beginning, is extensive, and is expected to be accelerated due to early engagement, informing the guidance for sellable magnets in the second half of the year. Michael Rosenthal expressed confidence in the team's ability to tackle the magnet ramp-up challenges through execution and quality focus.

Bill Peterson asked about MP Materials' capacity and bandwidth for additional offtake agreements, considering expansions and the focus on physical AI versus automotive demand. He also sought an update on magnet qualification at the lead auto customer and details on the magnet ramp's troubleshooting and optimization efforts.

Answer

CFO Ryan Corbett stated they remain opportunistic, noting significant demand from automakers and accelerated focus from physical AI users. COO Michael Rosenthal added that upstream production approaching 6,000 tons/annum, plus third-party feedstocks and recycling, leaves room for more offtake. Ryan Corbett explained that the PPAP process with GM is extensive but expected to be accelerated due to early engagement, informing guidance for sellable magnets in the second half of the year.

Bill Peterson asked about the current SEG Plus stockpile's capacity to support heavy production, engagement with other heavy feedstock suppliers (domestic/foreign), and potential M&A considerations for ore bodies. He also inquired about customer engagement beyond Apple and GM for the magnet business, including sample testing and future prospects for Independence and the 10x expansion.

Answer

Ryan Corbett (Founder and CFO) confirmed several hundred tons of SEG are stockpiled and produced daily, ensuring sufficient inventory for commissioning. Michael Rosenthal (Founder and COO) added that MP Materials' integrated site offers unique processing capabilities for various feedstocks, and they are in discussions with domestic, recycling, and foreign suppliers, confident in securing multiple options. Ryan Corbett further noted significant customer engagement across all magnet-consuming verticals, emphasizing focus on foundational customers (Apple, GM) and the 10x expansion, which allows for selective customer acquisition.

Bill Peterson asked about the current SEG+ stockpile's capacity to support heavy rare earth production, the nature of potential heavy feedstock suppliers (foreign/domestic), and whether M&A is being considered given the scarcity of viable ore bodies. He also inquired about customer engagement for the magnet business beyond Apple and GM, specifically regarding sample testing and future expansion plans for Independence and the 10x capacity target.

Answer

Ryan Corbett (Chief Financial Officer) stated that MP Materials has several hundred tons of SEG stockpiled, produced daily, providing confidence in inventory for commissioning the heavy rare earth circuit and satisfying Independence facility demands. Michael Rosenthal (Chief Operating Officer) added that the integrated site allows for processing diverse feedstocks, with ongoing discussions with domestic, recycling material, and foreign suppliers, expressing optimism about securing multiple options. Ryan Corbett (Chief Financial Officer) further explained that customer engagement has significantly increased across various verticals, but the company remains focused on foundational customers, with the Apple agreement anchoring the 10x expansion, allowing for selective customer engagement.

Bill Peterson inquired about the approach to developing recycling technology, including the role of Apple, and asked about the technical readiness for commercial magnet production for its lead customer.

Answer

COO Michael Rosenthal revealed that MP has been collaborating with Apple on recycling technology for over five years and will continue to work with technical partners. CFO Ryan Corbett confirmed they are consistently producing on-spec magnets for demanding EV applications and that the final step is transferring this proven process from trial production to scaled commercial manufacturing.

Bill Peterson asked for insight into the combined capacity and revenue potential of Enovix's Korean operations, including planned capacity additions and investment considerations. He also inquired about key learnings from the smartphone chemistry reformulation process, remaining options with the lead customer, and differences in requirements among various smartphone OEMs.

Answer

CFO Ryan Benton indicated that Korean operations could support significantly higher revenue streams (potentially 2x) with relatively small, incremental investments. President and CEO Dr. Raj Talluri added that the acquired Korean facility offers a large footprint and existing equipment, allowing for scalable capacity additions as demand materializes. Dr. Talluri emphasized that smartphone requirements are extremely difficult, making other markets easier. He highlighted that replacing graphite with 100% silicon anode requires working with customers to adapt accelerated tests, but customers are highly motivated by the energy density roadmap for AI use cases. He noted tremendous progress, having passed most of the 75 specifications.

Bill Peterson inquired about the combined capacity (in MWh or revenue) of Enovix's Korean operations, the maximum supported run rate, planned capacity additions, and investment considerations.

Answer

Ryan Benton, CFO, stated that specific MWh numbers are not disclosed but publicly discussed significantly higher revenue streams (potentially 2x), with incremental investments yielding strong ROI. Raj Talluri, President and CEO, added that the large acquired facility allows for scalable capacity additions, leveraging existing machines. Bill Peterson then asked about key learnings from the smartphone chemistry reformulation process, available options with the lead customer, and differences in requirements among various customers. Raj Talluri emphasized the difficulty of smartphone requirements, which makes other markets easier, and the need to collaborate with customers to adapt accelerated tests for new silicon anode technology, highlighting the tremendous progress made and customer motivation due to the energy density roadmap.

Bill Peterson, an Equity Research Analyst at JPMorgan Chase & Co., inquired about the 2026 outlook, specifically the divergence between aerospace conversion revenue and shipments, and packaging conversion revenue and shipments. He sought clarification on product mix shifts in aerospace (commercial, business jet, defense, non-aero) and whether the packaging trend was driven by pricing or a shift to coated products. Additionally, he asked for details on a newly identified automotive opportunity, including its capacity implications and impact on 2026 guidance, as well as the drivers behind the higher capital expenditure forecast. Finally, Bill questioned if high aluminum prices were leading to demand destruction and the potential impact of derivative tariffs on Kaiser Aluminum's business.

Answer

Chairman, President, and CEO Keith Harvey explained that the aerospace conversion revenue trend reflects a return to full plate capacity at Trentwood after a Q3 2025 outage, with strong, consistent prices backed by long-term agreements and increasing commercial aircraft build rates. He noted easing OEM destocking and growing semiconductor demand supporting Trentwood's capacity. For packaging, Mr. Harvey highlighted the successful ramp-up of the Roll Coat Four investment, leading to improved throughput, mix shift towards higher-coated volumes (now ~75%), and better pricing, expecting a 300-400 basis point margin uplift. He also revealed an unexpected multi-year automotive opportunity in high-margin specialty products for ICE trucks and SUVs, necessitating retooling outages in 2026 that will impact shipments but prepare for 2027 growth. The higher 2026 CapEx guidance (from $100-$112M to $120-$130M) is solely due to this automotive investment. Mr. Harvey confirmed no evidence of demand destruction across product lines despite high metal prices, and stated that while 2025 benefited from metal price tailwinds, 2026's outlook is driven by operational execution, with any continued favorable metal pricing being an upside. He also indicated that tariffs are unlikely to be removed and Kaiser is neutral to slightly positive on their impact.

Bill Peterson asked about the 2026 outlook, specifically the divergence between aerospace and packaging conversion revenue and shipment growth, inquiring about mix shifts (e.g., commercial vs. defense aero, coated packaging products) and pricing impacts. He also questioned the new automotive opportunity, its capacity implications, timing, and potential impact on other markets, as well as the higher-than-expected CapEx guidance. Finally, Peterson probed for signs of demand destruction due to high aluminum prices and the potential impact of derivative tariffs on Kaiser Aluminum's business.

Answer

Chairman, President, and CEO Keith Harvey explained that the aerospace conversion revenue outlook reflects a return to full plate capacity after a 2025 Trentwood outage, with strong, consistent prices and emerging semiconductor demand. For packaging, he highlighted the successful ramp-up of the Roll Coat Four line, completion of multi-year contracts, and a significant mix shift to higher-margin coated products, driving improved pricing and margin uplift. Harvey detailed an unexpected, high-margin automotive opportunity in specialty products for ICE trucks and SUVs, necessitating retooling outages in 2026 for 2027 growth, which also contributed to the higher CapEx guidance. He affirmed no observed demand destruction across product lines despite high aluminum prices and indicated that 232 tariffs are unlikely to be removed, with a focus on downstream products. Harvey emphasized that the 2026 outlook is driven by operational execution and investment returns, not assumed metal price tailwinds.

Bill Peterson from JPMorgan Chase & Co. asked about the trajectory of aerospace and high-strength shipments, the status of packaging contract negotiations and expected pricing uplift, and the breakdown of commissioning charges for new facilities.

Answer

Chairman, President, and CEO Keith Harvey confirmed expectations for a Q4 recovery in aerospace shipments to first-half levels, with Trittwood's Phase 7 expansion having a minor impact. He anticipates continued improvement in 2026 with increasing build rates and abating destocking. For packaging, Mr. Harvey reiterated a target of 300-400 basis points EBITDA margin increase from contract renegotiations, with Warwick operating at 75-80% capacity next year for optimal delivery. He also clarified that the majority of commissioning costs were related to the Warwick coating line, with reduced costs expected in Q4.

Bill Peterson from JPMorgan Chase & Co. inquired about the significant 30% quarter-on-quarter decline in aerospace and high-strength shipments, seeking clarification on the split between planned maintenance and underlying market weakness. He also asked about the expected recovery trajectory for aerospace and high-strength in Q4 2025 and into 2026, particularly as destocking abates. Additionally, Peterson questioned the status of packaging contract renegotiations, the anticipated magnitude of pricing uplift from new contracts in 2026, and the breakdown of commissioning charges between the Warrick roll coat line and Trentwood Phase VII, including expectations for Q4.

Answer

Keith Harvey, Chairman, President, and CEO of Kaiser Aluminum Corporation, confirmed Bill Peterson's assessment of a strong Q4 recovery for aerospace shipments, nearing Q1/Q2 2025 levels despite ongoing Phase VII finalization. Harvey indicated that destocking is easing, and build rates are increasing, with more detailed 2026 insights expected in February. Regarding packaging, Harvey stated the company is holding firm on a 300-400 basis points EBITDA margin increase, with most contracts finalized and the last major customer expected to conclude by year-end 2025, leading to accelerated rates. He also noted a measured approach to Warrick's capacity in 2026, utilizing 75-80% to ensure exemplary delivery. For commissioning charges, Harvey clarified that the majority of the $20 million was related to the Warrick roll coat line startup, with Trentwood's Phase VII having minimal impact, and lower costs are expected in Q4 2025.

Bill Peterson of JPMorgan Chase & Co. asked for details on the delay in commissioning the new packaging coating line, the timeline for the aerospace inventory destocking to conclude, and the expected EBITDA cadence for the second half of 2025.

Answer

CEO Keith Harvey explained that the packaging line delay is due to typical startup complexities, debugging, and customer qualifications, compounded by underperformance from third-party converters. He stated the aerospace inventory destocking should resolve by year-end as OEM build rates increase. Harvey also clarified that he expects Q2 was the EBITDA trough, with the second half's performance likely to be strong as the packaging ramp-up offsets a temporary dip in aerospace.

Bill Peterson asked about other factors influencing the 2026 guidance beyond scrap spreads, specifically regarding the aerospace recovery, the contribution from the Vision 2028 program, and assumptions related to a peer's rolling mill in the automotive space. He also inquired about potential tariff relief on downstream products and its risk to Constellium's business.

Answer

CEO Ingrid Joerg outlined market expectations for 2026, including continued growth in packaging, mixed automotive performance (stable U.S., weak Europe), steady aerospace with new capacity ramping in 2027, and weak European industrial markets. She also mentioned ongoing inflationary pressures and the focus of Vision 2028 on operational efficiencies. Regarding tariffs, she stated the situation is fluid but currently seen as a net positive for Constellium.

Bill Peterson from JPMorgan inquired about additional factors influencing Constellium's 2026 guidance beyond scrap spreads, specifically asking about the Aerospace recovery, the contribution of the Vision 2028 program, and the impact of a competitor's automotive rolling mill. He also asked about potential tariff relief on downstream products and its risk to Constellium's business.

Answer

CEO Ingrid Joerg outlined market expectations for 2026, including continued growth in packaging, a mixed automotive picture (stable US, weak Europe), steady Aerospace with strong mix and future benefits from the new Airware casthouse in 2027, and weak but bottomed industrial markets in Europe. She emphasized ongoing inflationary pressures and the role of Vision 2028 in cost control and operational efficiencies. Regarding tariffs, Joerg stated the situation is fluid but currently sees no negative impact, maintaining that tariffs are a net positive for Constellium due to increased North American demand.

Bill Peterson from JPMorgan inquired about the specific drivers behind Constellium's raised 2025 guidance, asking for a quantification or stack ranking of factors such as one-time customer payments, the restatement benefit, tariff headwind mitigation, and scrap spreads, particularly for Q4. He also sought clarification on the expected trajectory of aerospace recovery, questioning if it's a 2027 story or if a positive turn could occur in 2026.

Answer

CEO Jean-Marc Germain and CFO Jack Guo explained that the strong Q3 performance provided conviction for Q4. Jack Guo clarified that customer compensation was already in prior guidance, contributing significantly to price and mix. The accounting adjustment provided a $12 million benefit to segment adjusted EBITDA for the first half. Scrap spreads are expected to offer more benefits in Q4 due to open positions and modest gains from a competitor's fire, though year-to-date they were a headwind. Jean-Marc Germain added that while the fire creates some benefits, it also introduces volatility in order patterns for domestic OEMs. COO and CEO Appointee Ingrid Joerg indicated that aerospace destocking is easing, particularly in Europe, with supply chain challenges narrowing to a small percentage. She noted Boeing's approved build rate increases as a positive sign, suggesting a potentially much better picture in a few quarters, with Jean-Marc Germain adding more optimism for a faster recovery than three months prior.

Bill Peterson asked about Centrus Energy's opportunities to accelerate the 42-month timeframe and broaden the buildout, specifically what aspects are under the company's control versus suppliers or third parties, and how much is contingent on additional financing, negotiations, or government approvals.

Answer

Amir Vexler, President and CEO, highlighted that Centrus's unique position of building its own centrifuges gives it significant control over cycle times, supplier incentives, and process optimization. He emphasized fundamental manufacturing excellence and partnering with specialists. Todd Tonelli, CFO, SVP, and Treasurer, added that a well-capitalized balance sheet provides flexibility to deploy capital without delays, regardless of market conditions, ensuring the timeline is not slowed by expensive capital raises.

Bill Peterson asked for a deeper dive into opportunities to accelerate the 42-month timeframe and broader buildout, distinguishing between factors under Centrus's control versus those dependent on suppliers, financing, or government approvals.

Answer

Amir Vexler, President and CEO, emphasized internal control over cycle times, supplier incentives, and manufacturing excellence, partnering with specialists. Todd Tonelli, CFO, SVP, and Treasurer, highlighted the importance of a well-capitalized balance sheet to deploy capital without timeline slowdowns, independent of market conditions.

Bill Peterson from JPMorgan inquired about potential upside to Nucor's projected 5% increase in steel mill shipments for 2026, asking which product groups (sheet, plate, or bar) would drive this, especially with new mills coming online. Peterson also sought specifics on Nucor's trade policy expectations, including the durability of tariffs, risks of lower rates/quotas, and Nucor's stance on USMCA negotiations and trade with Mexico and Canada.

Answer

Chair and CEO Leon Topalian affirmed the sustainability of the 5% shipment increase, citing record backlogs (up 40% year-over-year in steel mill segment) and robust demand across non-residential and industrial sectors. He noted that pricing increases were broad-based across product groups. Regarding trade policy, Leon Topalian reiterated Nucor's commitment to banning illegally dumped and subsidized steel, expressing support for strengthening rules of origin and enforcing Section 232 tariffs, anticipating continued pro-America trade policies.

Bill Peterson asked about potential upside to Nucor's projected 5% shipment increase, identifying which product groups (sheet, plate, or bar) would drive it, and sought specifics on Nucor's expectations and lobbying efforts regarding trade policy, including USMCA negotiations and tariffs.

Answer

Chair and CEO Leon Topalian confirmed the 5% shipment increase is sustainable, citing strong backlogs (up 40% year-over-year in steel mill, 15-16% in products, and record structural backlogs) and robust demand in non-residential and industrial sectors. He expects uplift across all product groups due to strong demand and pricing. On trade policy, Leon emphasized Nucor's stance against illegally dumped/subsidized steel, noting the unresolved USMCA issue and upcoming July renegotiations. He anticipates continued pro-America trade policies from the current administration, advocating for strengthened rules of origin and enforcement of Section 232.

Bill Peterson inquired about the data center opportunity relative to the larger warehouse market, Nucor's market share gains, and the drivers behind increased conversion costs.

Answer

Leon Topalian (Chair, President, and CEO) clarified that the traditional warehouse market is flat, while data centers are projected for double-digit growth for the next 5-6 years. John Hollatz (Executive Vice President) emphasized Nucor's unique ability to supply nearly all steel products for data centers. Steve Laxton (Executive Vice President and CFO) highlighted Nucor's portfolio flexibility. Dave Sumoski (Chief Operating Officer) attributed higher conversion costs to slab costs for CSI, increased consumables like refractory, and slightly higher labor due to planned outages, noting overall year-over-year costs are down 5%.

Bill Peterson of JPMorgan Chase & Co. inquired about the drivers behind the expected margin compression in the steel products segment, the directional outlook for pricing, and which steel mill products offer the best opportunity to displace imports.

Answer

President and CEO Leon Topalian attributed the nominal margin adjustment in steel products to a lag effect from orders booked at lower prices in late Q4/early Q1, while affirming that underlying demand remains robust. He noted that opportunities to displace imports exist across sheet, plate, and rebar, with overall mill utilization at a healthy 85%. EVP John Hollatz added that the downstream businesses have successfully redefined their earnings profiles, separating pricing from raw material movements.

Bill Peterson from JPMorgan Chase & Co. inquired about the drivers of margin compression in the steel products segment and asked which steel mill products have the most potential to displace imports.

Answer

President, CEO & Chairman Leon Topalian attributed the product margin pressure to a lag effect from earlier, lower-priced orders, not weak demand. EVP John Hollatz noted the downstream businesses have improved their earnings profile. Topalian also identified broad opportunities to increase utilization across sheet, plate, and long products to displace imports, which remain too high.

Bill Peterson questioned the impact of shipping days on Q1 results, potential demand pull-forward, and intersegment eliminations.

Answer

CEO Leon Topalian addressed demand and backlog strength. EVP John Hollatz clarified the calendar effect and the rise in corporate eliminations.

Bill Peterson sought quantification of the impact from outages, including the Sinton incident and other network outages in late Q4, and inquired about any planned maintenance in Q1 that might affect the shipment profile.

Answer

Barry Schneider, President and COO, explained that Q4 saw planned outages at all three flat-rolled steel mills, with some additional delays inhibiting production by 140,000-150,000 tons. He noted that Q1 has no planned maintenance, with planning looking towards Q2, emphasizing the company's priority on equipment care and asset maintenance.

Bill Peterson inquired about the impact of outages, seeking quantification for the Sinton incident in Q1 and other network outages in late Q4, and asked about any planned maintenance in Q1 that might affect shipment profiles.

Answer

Barry Schneider, President and COO, explained that the Q4 outages at the three flat-rolled steel mills were planned maintenance, with some additional delays inhibiting production by 140,000-150,000 tons. He confirmed no planned maintenance for Q1, with planning focused on Q2.

Bill Peterson of JPMorgan Chase & Co. asked about the outlook for overall steel mill utilization in Q3 and whether there were any notable mix shifts between joist and deck products in the fabrication business.

Answer

Chairman & CEO Mark Millett indicated that Q3 utilization should improve as the impacts from Q2's maintenance outages and the Sinton oxygen issue are resolved. EVP & CFO Theresa Wagler confirmed the fabrication product mix has been stable at approximately 50% joist and 50% deck and is expected to remain so.

Bill Peterson of JPMorgan Chase & Co. asked about expectations for overall steel mill utilization in the third quarter, questioning if it could return to the 90% range. He also inquired about any notable mix impacts between joist and deck products in the fabrication business.

Answer

Chairman & CEO Mark Millett explained that Q2 utilization was impacted by the Sinton oxygen issue and scheduled maintenance outages at three mills, suggesting a large portion of that volume will return in Q3. EVP & CFO Theresa Wagler stated that the fabrication mix has been consistently around 50% deck and 50% joist for the last year and she does not expect that to change.

Bill Peterson of JPMorgan Chase & Co. asked about expectations for overall steel mill utilization in the third quarter and inquired about any notable mix shifts between joist and deck products within the fabrication business.

Answer

Chairman & CEO Mark Millett attributed the lower Q2 utilization to the Sinton oxygen issue and scheduled maintenance outages at three mills, suggesting a large portion of that volume would return in Q3. EVP & CFO Theresa Wagler addressed the fabrication mix, stating it has been consistently around 50% deck and 50% joist for the last year and she does not expect that to change.

Bill Peterson of JPMorgan Chase & Co. asked about the outlook for overall steel mill utilization in Q3 and whether the demand environment supports a return to levels above 90%. He also inquired about any expected shifts in the product mix for the fabrication business.

Answer

CEO Mark Millett indicated that Q2 utilization was negatively impacted by the Sinton oxygen issue and scheduled maintenance at three mills, suggesting a significant portion of that volume should return in Q3. CFO Theresa Wagler stated that the fabrication product mix has been stable at approximately 50% joist and 50% deck, and she expects this to continue.

Bill Peterson of JPMorgan Chase & Co. asked about the outlook for overall mill utilization in Q3, questioning if a return to the 90% range is achievable. He also inquired about any potential mix shifts between joist and deck in the fabrication business.

Answer

Chairman & CEO Mark Millett indicated that Q2 utilization was negatively impacted by the Sinton oxygen issue and scheduled maintenance at three mills, suggesting a significant portion of that volume should return in Q3. EVP & CFO Theresa Wagler added that the fabrication mix has been stable at approximately 50% joist and 50% deck for the past year and is expected to remain so.

Bennett, on behalf of Bill Peterson from JPMorgan Chase & Co., asked about the recent tightness in UBC scrap spreads, whether it could be a structural trend, the expected scrap intensity at the new aluminum facility (ADI), and the outlook for ADI's quarterly losses.

Answer

CEO Mark Millett stated that the scrap tightness is not a new norm and expects the market to normalize. He projected recycled content of ~95% for can stock and 60-65% for auto grades. CFO Theresa Wagler guided Q1 start-up losses for the aluminum project to be in the $30M-$35M range, with some increases in the first half of the year until sales commence.

Bill Peterson asked for a quantification of the EBITDA impact from the San Ciprián restart in the first quarter and an update on key milestones for the Western Australia mine approvals before ministerial approvals by the end of 2026.

Answer

Molly Beerman, Executive Vice President and Chief Financial Officer, stated that approximately $20 million of the $70 million guide down for the aluminum segment's Q1 performance is related to San Ciprián restart operating costs. William Oplinger, Alcoa Corporation President and Chief Executive Officer, reported that Alcoa has responded to nearly 60,000 public comments for the WA mine approvals, with the next major milestone being an EPA recommendation by the end of the first half, followed by ministerial approvals by year-end.

Bill Peterson asked for a quantification of the EBITDA impact from the San Ciprián restart specifically in the first quarter. He also requested details on key milestones for the Western Australia mine approvals before ministerial approvals by the end of 2026, and any notable call-outs from the public comment period.

Answer

Molly Beerman, EVP and CFO, clarified that $20 million of the $70 million Q1 guide down for the aluminum segment was related to San Ciprián restart costs. William Oplinger, President and CEO, stated that Alcoa has responded to approximately 60,000 public comments for the WA mine approvals, with the next major milestone being an EPA recommendation by the end of H1, followed by ministerial approvals by year-end.

Bill Peterson asked about the recent trend in hyperscaler interest in Alcoa's idled assets and interconnections, and whether the U.S. demand profile (packaging/electrical strength, construction/transportation weakness) indicates demand destruction, substitution due to tariffs/Midwest premium, or cyclical factors.

Answer

William Oplinger, CEO, stated hyperscaler interest has not mitigated, and Alcoa is actively evaluating and marketing its closed sites with existing electrical infrastructure. Regarding demand, he believes it's not demand destruction, noting strong packaging/electrical, stable building construction (awaiting lower interest rates), and weakness in automotive, which could be cyclical or due to substitution by Chinese EVs in Europe.

Bill Peterson asked about the recent trend in hyperscaler interest in Alcoa's idled assets and the progress of related dialogues. He also sought clarification on whether demand weakness in construction and transportation, contrasted with strength in packaging and electrical, indicates demand destruction, substitution due to tariffs/premiums, or cyclical factors.

Answer

William Oplinger, CEO, confirmed that hyperscaler interest has not diminished, and Alcoa is actively dimensioning and marketing opportunities at its closed sites with existing electrical infrastructure. Regarding demand, he stated Alcoa does not believe it's demand destruction. Packaging and electrical sectors remain strong, while building construction awaits lower interest rates. The primary weakness is in the automotive sector in both Europe and North America, where it's difficult to discern if it's demand destruction or substitution, particularly with EVs from China in Europe.

Bill Peterson asked about the status of the San Ciprian labor agreement following the force majeure declaration and inquired about Alcoa's commercial strategy in response to tariffs, including cost-sharing, redirecting shipments, and potential government relief.

Answer

President, CEO & Director William Oplinger confirmed that force majeure was declared on the San Ciprian agreement, pushing the full restart to mid-2026. Regarding tariffs, he highlighted extensive government advocacy and the redirection of 100,000 tons of Canadian metal, noting that the higher Midwest premium effectively passes most of the cost to customers.

Bill Peterson asked for incremental lessons learned at Grasberg since the November update and more specific timing details for the PB2 and PB3 startup within Q2 2026.

Answer

Kathleen Quirk, President and CEO, confirmed that the plan is on track, with 97% of mud removal complete for the PB2/PB3 startup and protective cement barriers installed. She expects the startup to occur in the first half of Q2 2026. Mark Johnson, President and COO of Freeport-McMoRan Indonesia, elaborated on managing localized drainage, supplier responsiveness, new cave management tools, and the cautious ramp-up strategy.

Bill Peterson asked about incremental lessons learned at Grasberg since the November update and requested further granularity on the timing of PB2 and PB3 restart within Q2 2026.

Answer

Kathleen Quirk, President and CEO, confirmed the plan is on track, with mud removal 97% complete for PB2/PB3 startup and protective barriers advanced. She expects startup in the first half of Q2 2026. Mark Johnson, President and COO, Indonesia, added that the team has executed well, addressed localized drainage, and suppliers have responded effectively, expressing confidence in the cautious, step-by-step ramp-up.

Bill Peterson asked for clarification on the significant improvement in U.S. net cash costs by 2027 and the updated leach production target of 300 million pounds in 2026, down from the prior 300-400 million pounds.

Answer

Kathleen Quirk (President and CEO) attributed U.S. cost improvements to greater efficiencies, stabilized grades, moderated inflation, and an experienced workforce, focusing on better run times and reduced unplanned maintenance. She explained that leach production, with very low incremental operating costs (less than $1/lb), is scaling from 200 million to 300 million pounds in 2026 through additives and heat, with a long-term target of 800 million pounds. Cory Stevens (Senior VP, Freeport-McMoRan) added details on successful large-scale additive trials at Morenci and pilot heat projects.

Bill Peterson of JPMorgan inquired about the significant improvement in net cash costs projected for US operations by 2027 and the updated leach initiative target of 300 million pounds in 2026, compared to the prior 300-400 million pounds.

Answer

Kathleen Quirk, President and CEO, and Cory Stevens, Senior VP, attributed US cash cost improvements to greater efficiencies, stabilized grades, an experienced workforce, and technology, leading to better run times and reduced unplanned maintenance. They highlighted the leach initiative's low incremental operating cost (under $1/pound), with plans to scale from 200 million to 300 million pounds next year, targeting 800 million pounds by 2030 through additives and heat trials. Cory Stevens confirmed successful large-scale additive trials at Morenci, increasing production by 50% on one stockpile, and pilot heat projects are underway.

Bill Peterson of JPMorgan Chase & Co. inquired about the specifics of the recent Grasberg mine plan change, asking what prompted the update and for details on the revised modeling.

Answer

President & CEO Kathleen Quirk explained that quarterly forecast updates revealed a differential between actual gold grades and the model's projections. She stated the model was recalibrated to better match historical results. President & COO Mark Johnson added that grade estimation becomes more complex as mining deepens due to material mixing, noting that while copper grades are stable, gold grades vary significantly.

Bill Peterson of JPMorgan Chase & Co. inquired about the recent change to the Grasberg mine plan, asking what prompted the update and for details on the modeling adjustments.

Answer

President & CEO Kathleen Quirk explained that after detecting a variance between modeled and actual gold grades, the company recalibrated its industry-standard block cave software to better match historical results, noting the issue is timing-related due to grade variability across 900 draw points. President & COO Mark Johnson added that estimating becomes more complex as mining deepens, with material flow affecting gold grades more than copper.

Bill Peterson asked for color on what drove the better-than-expected Q3 results, any notable mix within network hardware, and whether growth expectations for the second half of next year would be sufficient to achieve profitability.

Answer

CFO Mansi Khetani attributed the significant beat primarily to a boost in residential billings due to the expiration of federal EV credits, with commercial sales also performing well. Regarding profitability, she stated that ChargePoint is not guiding to a specific timeframe but expects Adjusted EBITDA to improve with revenue growth, new products, increased demand in Europe, and the Eaton partnership.

Bill Peterson asked for color on what factors led to ChargePoint exceeding revenue expectations in the quarter, specifically regarding the mix within network hardware. He also asked if the growth expectations for the second half of next year would be sufficient to achieve profitability.

Answer

CFO Mansi Khetani attributed the significant revenue beat primarily to a boost in residential billings due to the expiration of federal EV credits, alongside good performance in commercial sales. She stated that while ChargePoint is not guiding a specific timeframe for profitability, adjusted EBITDA will improve with revenue growth, which is expected to be strong in the second half due to new products, increased European demand, and the Eaton partnership.

Bill Peterson asked for clarity on EVgo's stall guidance for the upcoming year, specifically if it would be lower than previous projections given potential shifts in EV demand, and later inquired about the ancillary upside from a contract closeout payment, its inclusion in prior guidance, and future revenue implications.

Answer

CEO Badar Khan clarified that the 2026 guidance for owned and operated stalls (public and dedicated) remains at 1,350-1,500, double the 2025 rate, driven by expected returns. For the ancillary upside, Mr. Khan stated a smaller range was assumed in prior guidance, the current range is wider, and it's considered a one-off event. CFO Paul Dobson added details on the accounting treatment, including a deemed sale and gain on sale for long-term contracts.

Bill Peterson from JPMorgan Chase & Co. asked for clarity on EVgo's 2026 stall guidance, particularly for public and dedicated stalls, and how the five-year build plan might adjust given potential negative year-on-year EV demand growth. He also sought details on the ancillary upside from a contract closeout, specifically if it was previously contemplated in guidance and its implications for future revenue.

Answer

CEO Badar Khan reiterated the expectation of 1,350-1,500 owned and operated stalls (public and dedicated) for 2026, representing a doubling of the 2025 rate, driven by strong returns. CFO Paul Dobson clarified that a smaller range ($10M-$15M) for the contract closeout was in prior 2025 guidance, but the updated range is wider and could slip into 2026. He emphasized it's a one-off event, not recurring, and the baseline business trajectory remains strong.

Bill Peterson posed a longer-term question about CMC's vision for its product mix in a five-plus year timeframe, considering the recent precast acquisitions and the margin structure of newer businesses. He asked if CMC would consider selling core assets to accelerate this transition and also inquired about the typical seasonality for the North America Steel Group's various sub-segments.

Answer

President and CEO Peter Matt outlined CMC's strategy to become an early-stage construction supplier, integrating rebar, fabrication, Tensar, precast, Performance Reinforcing Steel, and Construction Services. He emphasized building the precast business to national scale (several hundred million dollars of EBITDA) through M&A and organic growth, and growing Tensar and PRS due to market potential. He stressed the importance of the TAG program to improve the steel business's margins and operational excellence, aiming for margins comparable to EBG businesses. SVP and CFO Paul Lawrence clarified that typical seasonality for the North America Steel Group in Q1 (September-November) involves a 2-3% reduction in volumes, with stronger impacts on other segments like EBG due to site preparation's cyclical nature, and Europe due to planned outages.

Bill Peterson from JPMorgan Chase & Co. questioned the product mix trends in Europe for Q4, the outlook for European shipments, and the pricing dynamics within the fabrication backlog, asking when higher-priced awards would flow through.

Answer

President & CEO Peter Matt expects strong European shipments in Q4, with a continued focus on a profitable MBQ mix. He expressed optimism for the European market, citing government spending in Poland and Germany. For the fabrication backlog, he noted that while Q3 booking prices were competitive, he expects them to rise in Q4. He praised the fabrication team's discipline in pursuing value over volume and managing duration risk.

Bill Peterson from JPMorgan Chase & Co. asked about the European segment's product mix and shipment outlook for Q4, and whether pricing for new projects entering the fabrication backlog is higher than existing backlog prices.

Answer

President & CEO Peter Matt stated that European shipments will remain strong in Q4, with a focus on optimizing the mix towards more profitable merchant bar quality (MBQ) products. He also expressed optimism for Europe due to infrastructure spending and stimulus. Regarding the fabrication backlog, he noted that while Q3 booking prices were competitive, he expects them to increase in Q4. He praised the fabrication team's discipline in managing duration risk and focusing on value, which will keep the business profitable through the cycle.

Bill Peterson from JPMorgan Chase & Co. asked about the European segment's product mix and shipment outlook, as well as pricing trends within the fabrication backlog and when higher-priced projects would impact results.

Answer

President & CEO Peter Matt stated that European shipments are expected to remain strong, with a focus on optimizing the mix towards more profitable merchant bar quality (MBQ) products. Regarding the fabrication business, he noted that while booking prices slid in a competitive Q3, he expects them to increase in Q4. He highlighted the team's discipline in prioritizing value over volume and managing duration risk, which will keep the segment profitable through the cycle.

Bill Peterson of JPMorgan Chase & Co. asked for the expected timing of a piloted transition flight (full VTOL), what steps are needed to de-risk it, and when FAA pilots might fly the aircraft.

Answer

Chief Technology Officer Tom Muniz stated that after focusing on conventional takeoff and landing (CTOL) tests, the company plans to return to piloted VTOL flying later this year. He emphasized that extensive unpiloted VTOL data has already de-risked this flight regime. The new aircraft being built are positioned to support TIA testing starting late this year and into next, with specific flight test objectives aligned with the FAA for each aircraft.

Bill Peterson of JPMorgan Chase & Co. asked about specific plans for expanding Blade's passenger business and what Joby intends to do with Blade's less synergistic jet business. He also questioned how the DoD's $9.4 billion budget for autonomous aircraft could translate into opportunities for Joby.

Answer

Executive Chairman Paul Sciarra responded that while Blade's existing business can be expanded, the primary goal is to leverage Joby's aircraft to expand the route map and increase margins. Regarding defense, he stated Joby is working with L3Harris to missionize its aircraft for key use cases, aiming to translate flight demonstrations into deployment quickly, leveraging their dual-use manufacturing approach.

Bill Peterson from JPMorgan Chase & Co. asked about the timing of the passenger business sale, the growth outlook and steady-state margins for the standalone medical business, any near-term seasonality, and the tax implications of the transaction.

Answer

CEO Rob Wiesenthal explained the sale was timed to unlock shareholder value, as the market was discounting the passenger business, and to partner with Joby, whom he sees as the leader in the path to eVTOL certification. CFO Will Hayburn reiterated a long-term high-teens adjusted EBITDA margin target for the medical business, driven by technology adoption, new customer wins, and ancillary services. Hayburn noted minimal seasonality and stated that existing NOLs would largely offset the capital gain, resulting in an immaterial cash tax impact.

Bill Peterson of JPMorgan Chase & Co. asked for a breakdown of the CapEx increase for the Highland Valley mine life extension and whether this implies similar cost inflation for other projects. He also requested an update on the NewRange project.

Answer

President & CEO Jonathan Price attributed the HVC CapEx increase to contingency, inflation, potential tariffs, and accelerated mobile equipment procurement to de-risk the project. EVP & CFO Crystal Prystai added that rigorous independent assurance processes were applied. Price cautioned against a direct read-through to other projects but confirmed the same rigorous approach would be used. He described NewRange as a longer-term option that is still being defined.

Bill Peterson from JPMorgan Chase & Co. asked for a breakdown of the CapEx increase for the Highland Valley extension and whether this implies similar increases for other projects. He also requested an update on the NewRange project.

Answer

President & CEO Jonathan Price attributed the HVC CapEx increase to contingencies, inflation, potential tariffs, and accelerated equipment procurement to de-risk the project. EVP & CFO Crystal Prystai noted a rigorous independent assurance process was used. Price stated there is no direct read-through for other projects' capital costs. Regarding NewRange, he described it as a longer-term option with work focused on defining the project's optimal configuration.

Bill Peterson from JPMorgan Chase & Co. asked for a breakdown of the higher CapEx for the Highland Valley extension and whether this implied cost inflation for other projects like Zafranal or San Nicolas. He also requested an update on the NewRange project.

Answer

President & CEO Jonathan Price attributed the HVC CapEx increase to contingency, inflation, potential tariffs, and accelerated equipment procurement to de-risk the project. EVP & CFO Crystal Prystai added that while the same rigorous review process will apply to future projects, there is no direct read-through on costs. Price described NewRange as a longer-term option, with current work focused on defining the project's scope.

Bill Peterson from JPMorgan Chase & Co. asked for a breakdown of the 15-20% CapEx increase for the Highland Valley mine life extension and whether this implies similar increases for Zafranal or San Nicolas. He also requested an update on the NewRange project in the U.S.

Answer

President & CEO Jonathan Price attributed the HVC CapEx increase to project contingencies, inflation, potential tariffs, and an accelerated procurement of mobile equipment to de-risk the project. EVP & CFO Crystal Prystai added that the figure resulted from a rigorous governance process with independent assurance. Price stated there is no direct read-through for other projects, but the same rigorous approach will be applied. Regarding NewRange, he described it as a longer-term option, with current work focused on defining the optimal project configuration before advancing to permitting.

The analyst asked about the in-house vs. third-party testing capabilities of their new facility and whether EASA accepts simulator results for certification. The second question was about the outlook for cash usage in the next year, covering CapEx, supplier payments, operating expenses, and hiring needs.

Answer

Lilium tests key components in-house using a test pyramid approach but also relies on certified suppliers for certain tests. Their DOA from EASA allows them to conduct many tests independently. For the next year's cash use, the company is not providing specific guidance but noted that spending will shift from engineering-related CapEx towards industrial investments for production. The second half of 2024 cash spend is expected to be slightly higher than the first half.