2024 Capex Private asset values are not falling. CFP management said the same thing. The private market looks through the cyclicality to some extent.
Another thing: producers seem to be in such a hurry to complete their capital projects. From a shareholder's perspective, a delay is not a bad thing in a weak market. To tighten up supply and preserve cash.
"Ketan Mamtora
Okay, perfect. Sorry about that earlier. Hey, Chris, maybe to start with, can you give us some sense of how you are thinking about CapEx for 2024? It certainly sounds like there is some carrying forward from 2023, particularly in this environment where there’s still quite a lot of uncertainty perhaps maybe even at a high level that would be helpful?
Chris Virostek
Sure. So I think when we consider kind of what’s happened the last couple years, is we’ve had fairly ambitious capital plans and we’ve been in particular the last couple years, a bit frustrated by the delays that have happened from a supply chain standpoint and have had spillover into the following year in that case in the last couple years. And it looks like 2023 to 2024 is not going to be any different in that front.
In terms of the philosophy that and how we’re thinking about CapEx kind of relative to the market is we were quite careful through 2021 and 2022 to preserve liquidity to make sure that our allocation strategy could be durable, agnostic to market cycles. And so, we’ve got some great opportunities to invest capital as Sean and Ray indicated, that continues to take action in the portfolio where it makes sense to improve the asset quality over time.
And frankly, some of the best time to do that is in a weak market because the market will recover at some point in time. And we’d rather spend the capital now and make the improvements now. And that’s across everything. It’s not just about capacity, it’s grade, it’s recovery, it’s cost, all those elements. And to do that work now in a softer market, when there’s room to do it from a supply demand standpoint. And then when the market recovers, we’re ready to meet our customer’s demands and produce what they’re looking for and the quantities they’re looking for at that time. So I think with where we position the balance sheet, we don’t – we’re not contemplating major cuts to CapEx here over the next 12 months. And we do still have a lot of projects in flight that are spilling over. So I’d welcome Ray or Sean to kind of add to that if they’ve got other thoughts on that."