ArcelorMittal SA (MT) 2009 Q4 法說會逐字稿

Forward-looking statements -- these documents may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words believe, expect, anticipate, target or similar expressions.

Although ArcelorMittal's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and (inaudible) [actually] from those expressed in or implied or projected by the forward-looking information and statements. These risks and uncertainties include those discussed or identified in filings with the Luxembourg Stock Market Authority for the financial markets (speaks French) and the United States Securities and Exchange Commission, the SEC (inaudible) to be made by ArcelorMittal, including ArcelorMittal's annual report on Form 20-F for the year ended December 31, 2008, filed with the SEC.

ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events or otherwise.

Good afternoon and welcome to ArcelorMittal's results for the fourth quarter 2009 and 12-month 2009 investor conference call. My name is Ina and I will be your coordinator for today's conference. For the duration of the call you will be on listen-only, and at the end of the call you will have the opportunity to ask questions. (Operator instructions). I am now handing you over to Lakshmi Mittal, Chairman and CEO, to begin today's conference.

Thank you, thank you very much. Good morning and good afternoon to everyone and welcome to ArcelorMittal's fourth-quarter and annual 2009 results. As usual, I am joined by my GMB colleagues, Gonzalo Urquijo, Michel Wurth, Aditya Mittal, Christophe Cornier and our newest member, Peter Kukielski. We will be conducting our conference call in a new format today with the presentation given by myself and Aditya, then all of the GMB members present will be participating in the Q&A session.

As everyone is fully aware, 2009 was one of the most challenging years for the global economy and for the steel industry. However, as we anticipated, we are seeing real signs of improvement in the global economy and in the steel market. For the second consecutive quarter we are reporting a net profit as a result of actions taken on costs as well as improving market conditions.

The emerging markets are performing quite well. The steel market in general continues to grow, and apparent steel demand has improved in the developed world. However, the crisis is not yet over. The recovery is underway, but it remains slow and progressive in the developed world. Government deficits and unemployment are still at record heights. Corporate investment is still low, and the construction markets remained depressed. 2010 is expected to be significantly better than 2009 but is still challenging.

That said, the crisis caused many companies, including ArcelorMittal, to refocus on cost, balance sheet health and many other important aspects of running a successful company. We set ambitious targets for debt reduction, cost controls and production optimization, and we have exceeded these goals. ArcelorMittal is much stronger today than it was just 15 months ago. We will continue to operate in a proven manner, keeping production in line with demand. We are once again in a position to selectively restart some growth projects, which we will discuss later in this presentation.

Today, as shown in our agenda, after a brief overview I will discuss corporate responsibility, performance [in] industrial [plants], involvement in the steel market and then I will present our Q4 and full-year 2009 results, concluding with our guidance for Q1 2010.

During 2009 our health and safety frequency rate improved by 24% compared to 2008, and our commitment to health and safety remains the top priority of the group. Our financial results for the year and fourth quarter included shipment of 71.1 million tonnes in 2009, 20 million tonnes in Q4 2009, which is up 10% compared to third quarter 2009.

EBITDA of $5.8 billion in 2009 and $2.1 billion in Q4 2009, which is 34%, up compared to the third quarter 2009. Cash flow -- we have reported cash flow from operations of $7.3 billion for full year 2009. Net debt, which is most important achievement, reduced to $18.8 billion, down $13.7 billion from the start of the global economic crisis, which is end of September 2008.

In terms of our recent performance, capacity utilization (inaudible) increased to 70% in Q4 2009, and we have achieved $2.7 billion of annualized, sustainable cost reduction achieved in 2009 and are on track -- and we are on track to achieve $5 billion by 2012. CapEx plan -- we have increased to $4 billion for 2010, which is 43% up 2009.

Although we have seen an improvement in the demand for steel, due to some falloff in pricing from fourth quarter and higher anticipated fixed cost, our guidance for first-quarter EBITDA is between $1.8 billion to $2.2 billion.

Now, starting with health and safety, we now report health and safety figures of our own personal and contractors for the steel and mining divisions combined. As you can see, we maintained a stable frequency rate during fourth quarter. Despite the crisis, we maintained our focus on safety during the quarter. I am very pleased that our health and safety performance has consistently improved and that we reduced our frequency rate by 24% during 2009.

In addition to health and safety, we made progress with a number of other corporate responsibility initiatives, including launching a community strength initiative to invest in key community events and organizations in ArcelorMittal Dofasco, receiving a grant from the US Department of Energy for our energy-efficient gas flare capture project in Indiana Harbor, USA; developing a database to improve the effectiveness of our engagement with end use globally.

Now we will discuss our industrial plan progress. After [extensive] production [cuts] in the first half of 2009, we gradually increased production over the last few quarters. We went from 61% capacity utilization in third quarter to around 70% in fourth quarter, and we expect this to increase between 72% to 75% in Q1. Improving demand and the initiation of restocking the developed world are the main drivers of this production increase. We will continue to monitor our production levels and adjust them in line with demand from our customers.

We also gradually increased our annual production each quarter of this last year. In fourth quarter our annual production was improved approximately 15.6 million tonnes, up from 12 million tonnes in the first two quarters of 2009. Overall, self-sufficiency for the quarter was 60%, and for 2010 we expect our iron ore production to improve by 10 million tonnes over 2009 production, though it will be still around 2008 production.

Production of met coal has been relatively stable through 2009 and self-sufficiency was around 20% for the year.

On significant progress we've made in sustainable SG&A and fixed cost reduction in 2009, and we achieved $2.7 billion in management gains on annualized basis. If you recall, our target for this saving was $2 billion for 2009, and we have exceeded this goal. And we have given guidance on $5 billion management gains saving until 2012. And I believe we are on the track to achieve that. And on the right side of this slide, we show you the fixed cost over the last five quarters as compared to full-year 2008.

With production increasing for both steel and iron ore, as well as continued progress with management gains, we are once again in a strong position to expand and capture some growth opportunities. So, as such, we have decided to reinitiate several of our growth projects in the emerging markets and mining.

For 2010 we currently expect our budget to be $4 billion, and clearly we see we have a strong position in the emerging regions, which you can see on the graph on the left side. Our sales to the emerging markets in 2009 was approximately 40% against our production of 26%-27% in these markets. So we have also growth opportunity in mining, as mentioned before.

Before we discuss our fourth-quarter and our full-year results specifically, I would like to provide some background on the steel market in general. 2009 has been one of the most challenging years in the last 80 years. In Europe and the US, apparent steel demand went down by 35%, and world capacity utilization went as low as 65%. Although the recovery is underway, it will be slow and progressive, and 2010 will still be challenging, especially in Europe and US.

However, growth in China and the emerging economies is expected to remain strong and to drive steel prices and raw material costs upward at global levels. As you can see on this next slide, on the graph on the left, steel production and demand have been very strong in China and the emerging markets. China's [fixed] (inaudible) investment and industrial production grew by approximately 19% in [December] year-on-year basis. The government has taken recently some measures to slow down its economy, but we expect real steel demand to continue to grow by approximately 10% during 2010 in China, and apparent demand will grow only by around 5%, due to absence of restocking.

The other emerging markets, like Brazil, Middle East, Africa and India, in particular, are demonstrating strong demand for steel. In 2010 we anticipate that apparent demand for steel will increase by approximately 15% in those economies. After a short period of correction during fourth quarter, Chinese and emerging markets prices have increased again, due to rising raw material costs and production costs. Chinese prices should remain volatile but continue to trend upward as a result of raw material constraints and demand growth.

In the developed markets, the recovery is progressing, and restocking is being initiated. In the US and Europe, real demand continues to recover. Industrial production increased for six consecutive months in the US, and due to scrappage scheme, the auto market increased by 18% in fourth quarter in Europe. Apparent demand also improved significantly during the fourth quarter as restocking was initiated.

Capacity utilization in US and Europe increased with demand, but remains slower at 65% and 70%, respectively. Since the beginning of the year, real demand continues to improve, but this improvement means slow and progressive, as anticipated. For the year 2010, we are anticipating that apparent demand would increase by 15% in developed world but should remain 23% below the 2008 level.

Similar to Chinese prices, decline in fourth-quarter prices also corrected in the US and Europe, but are again increasing since the beginning of this year.

With this I hand it over to Adit to walk us through financial results and give guidance.

Thank you and good morning and good afternoon. I will quickly highlight aspects of our financial results.

Moving on to our EBITDA, as you heard this morning, we reported an EBITDA of $2.1 billion. This is 34% higher than the third quarter. On a tonne basis, our EBITDA has increased by $20 per tonne $207 per ton of steel sold.

In terms of our general EBITDA per segment, we had improvement in most segments with the exception of our Long Carbon and Stainless divisions. Our Long division suffered particularly from rising raw material costs and therefore experienced a price-margin squeeze and the Stainless division suffered from lower base prices. In terms of overall shipment volumes, they have increased to 20 million tonnes, which is an improvement of 10%, and our selling prices have also improved by about 6% over the same period.

In terms of our P&L, as you know, EBITDA is up 34%. I think there are -- versus the third quarter. I think there are a few items which I want to highlight as I just go through the EBITDA and net income results. First of all, we recorded a net gain of $108 million. This is as a result of the sale of carbon dioxide credits which we had purchased in 2007. These proceeds will be reinvested in energy-saving projects. Furthermore, we continued to record a $90 million gain due to the raw material hedge that we had done a year ago.

Moving onto aspects which have impacted the EBIT line, we recorded an exceptional gain of $380 million relating to write-back of litigation costs following our -- following the Paris Court of Appeals decision to reduce the fine imposed on some of our French distribution subsidiaries. This gain was offset by impairment costs of $502 million on various subsidiaries, resulting in an EBIT of $684 million for the fourth quarter.

Net interest expense was slightly higher, primarily due to the 30-year bond which we issued at the end of the third quarter to $415 million. And during the quarter we also recorded a non-cash loss as a result of the mark-to-market adjustment on the conversion options embedded in our convertible bonds. This is primarily due to the share price appreciation which occurred in the fourth quarter of 2009. We also recorded income tax benefit of $1.3 billion, resulting in a net income of $1.1 billion.

In terms of the cash flow, as you can see, we had a strong cash flow for the quarter. Our change in working capital resulted in cash flow generation of $1.4 billion as we decreased days outstanding from 83 to 63. I would expect that this would reverse in the first quarter, so the temporary saving as we begin to make more investments in our working capital and as we continue to ramp up capacity.

We had other cash outgoing -- outflow, which was primarily interest and other cash payments which occurred in the quarter, resulting in cash flow from operations of $2.8 billion. CapEx was also marginally higher in the fourth quarter at 0.8 compared to 0.6 in the third quarter. Nevertheless, CapEx for the year is at $2.8 billion, which is within our target for 2009 as compared to $5.5 billion for '08. Our expectation for CapEx is $4 billion for 2010. So clearly, the focus is to increase our investments as we ramp up, as well as invest in growth, both in mining and other steel assets on a global basis.

If we move to the balance sheet, very quickly, as you know, we have taken a number of steps over the last 12 months. We have a strong liquidity position, as you can see, at $17.2 billion. Most of the debt due in 2010 will be rolled over, apart from $0.9 billion worth of bonds, which are maturing in the first half. And there is some other debt which will also not be rolled over, about $200 million. But our expectation is for the rest to roll over.

Therefore, clearly, a very strong liquidity position. As you can see, our ratios have also improved and we are well within our target range of net debt to average EBITDA over the cycle. The other important news is that we have substantially reduced our net debt, as you heard earlier. It's lower by $13.7 billion from the start of the crisis. We had announced a $10 billion target, so this is more than the target. But some of this will reverse in Q1 as we make our investments in working capital and ramp up CapEx.

Nevertheless, our liquidity maturity profile, which is now 4.8, and other ratios remain very strong.

Let me now turn to guidance and walk you through what we expect to see in the first quarter of 2010. As you heard earlier, clearly the recovery is underway, slow and progressive as economies, especially in the developed world, the economy remains fragile. Nevertheless, in the first quarter of '010 we are expecting our volumes to increase, our crude steel production to increase, and also expect average steel selling prices to slightly decrease versus fourth-quarter levels.

This is not a change in the trend of steel prices, I think. The trend of steel prices is on the way up as we can see from the announcements we made in December and January. However, this reflects the nervousness and the overproduction in China back in October and November, when we took a lot of our orders for Q1. And as a result, prices are down compared to Q4.

We also are seeing cost increases, which are occurring in our cost base. Some of it has to do with the fact that we are ramping up capacity. But increasingly, it has to do with raw materials. We have some spot exposures, for example, in AACIS to coal buys. We also have coal purchases which will carry over contracts which have higher costs than the benchmark, and we are seeing energy costs such as natural gas also increase in Q1. So there is some cost impact, cost increase due to activity as well as raw materials.

As a result, we expect our EBITDA to be between $1.8 billion to $2.2 billion for the quarter and net debt to also increase due to investment in working capital.

With that, we'd like to open the floor to questions. We have the rest of our GMB members, and they would be happy to answer more specific questions on the segment results as well. Thank you.

(Operator instructions) Michelle Applebaum, Applebaum Research.

You guys have been at the forefront of the industry in terms of your investments in China, and I was wondering what was going on with that. Could I get an update in terms of how the Chinese are looking at outside equity investments and what impact that might have on your growth there?

Thank you. What is your second question? Do you want to ask all your questions together?

I'll think of my second question while you're answering the first one. Is that fair?

I'll give you a complete reply so that you don't have to ask the second question (inaudible).

Clearly, we have two joint ventures in China. One is Hunan Valin and China Oriental where we have the minority shareholding. First of all, let me tell you that these joint ventures are doing well. We are working very well with the joint ventures in terms of our participation in the management and the technology and participating in the growth of these two joint ventures.

These companies have very strong regions going forward. When we participated, Hunan Valin, for example, was a 6 million tonne company. Now they are a 12 million tonne, and they are going -- trying to become a 20 million tonne company with the organic growth, and they want to become a 30 million tonne while participating in the consolidation in China.

Similarly, China Oriental, which is a second joint venture where we have also the same 30% shareholding, this company is also trying to grow from 6 million to 12 million tonne company. Then we have these two joint ventures assigned with Hunan Valin for auto steel and electrical steel. We have to sign these MOUs, and we have started to make some progress. And then we have some -- several joint ventures like we have with [BNA] with Nippon Steel and Baosteel.

So we are happy with the progress, and all the joint ventures have very ambitious growth plan. And you must have read last days that new galvanizing line in our joint venture with Baosteel and Nippon Steel had just been (technical difficulty).

So we are happy with this progress. Unfortunately, we are not there in the majority. That is not allowed, as per the policy of the -- foreign investment policy of China. And that's where we are.

Okay, I wanted to ask about the foreign investment policy. That's really what I was trying to get at; I'm sorry. Because, ahead of the World Steel Association -- or at the World Steel Association meeting, I think that it's seen that China was very much on the defense from most of the West, with comments about their exports, etc., including yourself. And then, right after WSA, there was an article that I saw from a Chinese source that said that China was actually re-examining their policy of equity ownership.

And I was curious if there was an update on that, and also if you could update us in terms of your thoughts on China's export activity in general.

China's exports activities?

[Perhaps], more importantly, whether they are going to let foreign ownership control ownership, if that's going to change.

Truly, there is no policy yet to allow majority ownership to the foreign investors yet.

Okay, and there's no change?

No.

Okay. And then export thoughts?

We think that it will not -- China has embarked on several initiatives in the steel industry. One is consolidation, where they want to build large companies, to have large companies, 30 to 50 million tonnes. They plan to shut down uneconomic and unfriendly -- environmentally unfriendly companies. At the same time they are looking to supply to their growth market. They also want to shift productions to coastal sites. And as we understand, they also want to avoid overcapacity, which means that they do not want to encourage export because if they want to encourage exports, their cost of production will go up. And if the companies start to export in plenty, then their domestic steel prices will also go up.

So the result of it is that the Chinese government do not want to encourage exports, plus they also worry about the various trade cases which could potentially be launched against the exports from China.

Also, there is always a threat from China to export, but there are various situations where I do not think that Chinese will be encouraged to export in a large volume. And for them, the first port of call for exports should be Southeast Asia and then the Middle East and some in East Africa and those kinds of ports.

We like to be always watchful about China, but today I believe that that threat is not very high.

Okay, that's great, thanks. I know it's a tough quarter and it's a tough environment, but you guys are doing great.

Michael Shillaker, Credit Suisse.

A tough first quarter, I know, given the price realizations from the price fall in Q4. But I'm hearing in the industry that steel companies are trying to put through some fairly punchy price increases, you included, for the second quarter. And it seems that visibility over second-quarter volume seems to be even potentially better than you would expect at this time of year. So could you give us some comments on what you are seeing beyond the first quarter, both in terms of volume and pricing?

And the second question, on Long products -- you are obviously getting a margin squeeze in scrap at the moment, and I guess the question is, is this just purely cyclical, because it's winter construction activity, is normally bad? Arguably, you could say it's worse this year because of the weather than normally. Or, is this something a little bit more structural? Because you used to have, from, I think, 2004 onwards a very, very solid scrap surcharge mechanism which protected the margins in the Long products business, and that seems to have disappeared. Is this a short-term phenomenon, or is this something a little bit longer term, just simply because of the extent of the downturn in the construction market? Thank you very much.

In terms of your questions, I don't have any specific numbers to give you in terms of price increases. I think there's a lot in the public domain as to what we're trying to do in terms of increasing prices. Suffice it to say, for example, in the United States we have seen spot prices which are approximately $100 higher than where they were a few months ago. And similar trends we can see in the slab market. We can see similar trends occurring in the European flat rolled market, where we have announced price increases. I think a good example of the strength of the global metals and mining industry is the spot prices of iron ore and coal. Clearly, there is demand for these products, and they believe that there is more price realization as a result.

That will also be an area of discussion as to what happens I think more towards the second half of second quarter, i.e., as we get through the price increases in iron ore and coal, how much is the industry able to pass it on and how much not. And therefore, I think we have to recognize that we are in a price rise environment but there's also some cost increases, and that's basically the outlook for 2010.

In terms of Long, I think Gonzalo can share some more detail.

Look, in terms of Long, various comments. Yes, the results are not what we expected; that is clear. But various comments on that. First, construction in the Western world is really, as you know, being hit very, very hard in terms of infrastructures, in terms of housing, in terms of an industrial investment; we had a very low situation, number one.

Two, we are also having a very hard winter at the end of 2009 and also going forward at the beginning of 2010.

Third, as you say, we have a scrap squeeze. We've had scrap going up at the end of the year, even at the month of January. And to be honest, we are chasing behind that scrap. So scrap is going up, and then we are pushing prices up. Additionally, we have a stock effect. The stock normally in scrap is shorter than an order book for the sales, so I have the double effect. Scrap rises fast, on the one hand; and, two, I have less stock of scrap than what it normally is, my order book.

So we are suffering that squeeze, that situation of a squeeze situation. Now, going forward for Q1, I would tell you that at the beginning of Q1 we continue to push prices up. As you know, in January, prices have also gone up, clearly, for scrap. We are making now a tremendous effort to push prices up in an environment which is not necessarily that friendly in terms of the winter, in terms of the construction, so macro; and also, the weather is not helping very much. But I do think, going forward, we will recuperate the situation we had in the past.

It's also clear, you spoke at the end, of the margins over scrap during 2009. We did lose those margins over scrap, due to the recession, and especially the impact we had in the construction activities.

Jeff Largey, JPMorgan.

In terms of pricing, I guess I know you can't give specifics in terms of the second quarter. But if the general direction is up, is it safe to say that at least average revenue per tonne in the second quarter, all things being the same, looks like it's going to be up compared to the first quarter?

And then my second question is on the cost guidance for the first quarter. Is there any more color you can give us on, say, the split between what's associated with restarting capacity and what's associated with, say, input cost pressure? If we had stripped out, say, the restart costs, what do you think that would have done to guidance for the first quarter?

And then, finally, just a clarification question. In terms of the net debt, where you had guided to a substantial increase, did I understand correctly in the presentation that it's primarily coming from working capital, which is a reversal simply of the release we saw in the fourth quarter? So it was that -- I think it was $1.3 billion or $1.4 billion number? Thank you.

In terms of average revenue per tonne for the second quarter, what I can say is the following, that when we look at our first quarter most recent forecast, which is the basis of our guidance, there is a substantial change in the EBITDA in March compared to January and February. So March is projected to be a much stronger month, and I think that reflects the price increases that are in place and that are occurring, which are being accepted by our end customers.

And, therefore, I would expect that trend to continue into the second quarter, and therefore, clearly, there would be a significant improvement from where we stand today in the second quarter.

What are the risks in the second quarter? Clearly, we're seeing input price increases. And just to answer your second question on that, we don't really break up restart costs. We haven't seen that much -- that significant restart costs as we project out. Fundamentally, the larger cost increases we are seeing is our spot exposure to raw materials. This will impact primarily the EBITDA change from Q4 to Q1 in two segments, which is AACIS and FCA. At FCA, we are exposed to natural gas in our operations in the United States, as well as, more predominantly, in Mexico. And we also reset the benchmark on February 15 at our facilities in Brazil.

So it's not the April 1, which applies to most of the global steel industry. What applies to us is February 15. And in AACIS in Q1, it's primarily dependent on spot coal, spot for alloys and spot other similar materials, which have had substantial price increases or cost increases, which impact its results compared to Q4.

In terms of second quarter, clearly the impact of iron ore and coal will occur as well, perhaps towards the latter half of that quarter versus the beginning of that quarter. And it's impact is still to be determined as, clearly, the industry will try and -- at least, ArcelorMittal will try and protect its margins.

Okay, great. And, just on the net debt side of things?

Net debt -- I would say a significant part is working capital, as you pointed out. We are also completing certain M&A transactions. We had announced the acquisition of a minority interest in Ostrava, which is approximately a $400 million to $450 million transaction, so the cash out is in Q1. There are some other M&A cashouts such as at [Dumgava] which will occur in Q1. So that is also having an impact on the net debt increased in Q1 versus Q4.

Vincent Lepine, Exane BNP Paribas.

First of all, you said that you expected, steel consumption in developed markets to still be, I think, 20% or 25% down in 2010 versus pre-crisis level. And as you see a number of, I guess, mostly smaller competitors claiming to be operating a close to full capacity, can you tell us whether you have been losing market share to these guys; and, if so, how long you are willing to sustain or to bear that?

The second question is, again, on the price increases, which are ongoing. I was wondering if you could give us an idea of the average price, I guess, for HRC, maybe, that you would be booking current -- what it that versus the average realized price you expect for Q1?

Then I had a nitty-gritty question on AACIS. I saw there was a big increase in production Q-on-Q in Q4, but less so in shipments. So is this some inventory building there ahead of maintenance, or is it just that you are seeing a strong increase in demand and we should see higher shipments in Q1?

Also in AACIS, you reported an average selling price up $36 per ton Q-on-Q. But, if I just take sales divided by volumes, I find a Q-on-Q increase of $87. So I was wondering if you could help us reconcile the two.

And then, lastly, given everybody expects, obviously, higher benchmark prices for iron ore and coal next year, to what extent can you actually buy iron ore and coal [to sell] under the 2009 benchmark right now, and possibly rebuild a bit of inventories on these two?

Okay, I start with the first question about steel consumption. So, first of all, I think we are all aware about the distinction between real steel consumption, which you are mentioning, and apparent steel consumption. There is clearly the phenomenon of increasing -- of rebuilding inventory, which means that apparent demand is, today, stronger in Europe as real demand.

Second phenomenon -- and this has conducted, I think, all the players in the industry to reopen furnaces and to increase production.

Second, and as we are doing it as well, what we are doing as well is trying to take decisions on a weekly basis, if and when customers are there. We decide to start and to reopen. We have decided in January to reopen two (inaudible) blast furnaces, and today, for example, in Germany, we have all our blast furnaces open.

Second, some of our competitors were using and importing slabs, which they stopped to do it. And in the case of one of our German competitors who is building up a new facility in US; [TK], for example, is today working and shipping some of its European production in terms of slabs to the US.

Third question, in terms of market share, I think it's fair to say that ArcelorMittal lost some of market share in the course of 2009, in particular also with some of our automotive customers and also due to the geographical mix, due to the fact that demand was, for example, going down more heavily in Spain, where we are traditionally very strong, and was not going down so much in Germany, where our market share is below our average market share in Germany.

So there was a mix effect. What we are seeing today -- we are confident that our historical market share today remains constant, and I would say one of our main [axis] today starting from -- which was very strong in Q4 and Q3, Q4 and also Q1, is to try to be very close to our customers, to improve our service, to have short lead time, which is the best way to have, let's say, a good -- and to recuperate the momentary lost market shares before.

For (inaudible) [what happened] for shipment is that in South Africa, don't forget that it is summer. And that is from the middle of December to the -- particularly the middle of January, particularly our customers do not receive materials. And then for Ukraine and Kazakhstan, due to the winter, there were a lot of logistics problems, the Black Sea ports for (inaudible) and Caspian Sea port for (inaudible). So all this metal has been put in stock and the orders, of course, will be delivered during the Q1.

[Offsetting price], [I call] things $[36], particularly the figure of South Africa. Kazakhstan is much higher, and (inaudible) is lower, but the average is $36.

On the question whether we can build extra inventory in anticipation of the higher iron ore price or coal price, the answer is no, because the suppliers understand and they would not like to ship more before they know the conclusion of the negotiations. And our -- every company have a different supply chain arrangement, so it is not really possible to create a buffer stock or extra stock in anticipation of the price. And I think we have to run our business in a normal way. Thank you.

David Martin, Deutsche Bank.

Thank you, and let me say, I do like the new format of the call.

The first question is just on your pricing guidance for the first quarter. Can you comment on auto contracts, what impact did they have on your pricing guidance for the first quarter? And, was there a reset modestly lower that could have impacted that guidance?

And then, secondly, on your coal consumption, can you remind us -- I know your internal supply is 15% or 20%. But can you remind us, of your remaining purchases, what percentage would be seaborne and non-seaborne purchases? And then, for the non-seaborne purchases, can you give us a sense of how much your coal costs will change in the first half of 2010?

First of all, in terms of automotive contracts, I can say that guidance is, there is a very slightly decrease in euros for the -- but it is almost close to zero. So this has apparently -- this has no impact. There is obviously one impact; there is a translation of, in fact, in the sense that the dollar is weakening in terms of translation of euros into dollars for our European automotive contracts; it's a little bit going down.

You remember that with our automotive contracts from 2008 on, we tried to diversify the duration of contracts through some of our contracts, and in end of the first quarter, as of second quarter, and so that we can say that more than 50% of our automotive contracts, prices are not fixed for the second half of the year.

I think our total purchase is about 28 million tonnes. And out of this, between 6 to 7 million tonnes will come from our internal resources, and about 16 million is seaborne and 6 million tonnes is from local supplies. So I think this is the estimated numbers. I don't have the exact numbers.

And on the local supplies, which is in the Eastern Europe, the prices get reset in the -- or got rest in the beginning of the year. And with the benchmark, these prices will also change. And the seaborne is about 60 million tonnes, and those negotiations are still on.

Lastly, can you just update us briefly on the delta hedge gains? How much is remaining under those, and what may we expect to see gained in 2010?

I'll give you the global four-year number. 1.736 billion is remaining, and in 2010 we expect 447 million, so approximately 100 million per quarter, which increases to about 650 in 2011 and then 570 in 2012 and then 72 in 2013.

In 2008, we consumed approximately 890 million of the delta hedge gain, of which fourth quarter was 19.

Nik Oliver, Banc of America/Merrill Lynch.

Firstly, regarding utilization rates for the full year, I saw some comments on the newswires guiding to 80% to 85% in utilization. Could you just confirm if that is an official guidance or not, as the case might be? And if it is, just how we should expect that sequentially to map out through the year. I know normally Q3 is a weaker quarter sequentially. Do you expect that to be offset just by the general pickup in apparent demand and through the year?

Secondly, regarding blast furnace restarts, I know you commented a little earlier that there are two restarts announced so far this year. Could you just update us by region and where we are in terms of idle facilities? So how many are idled per region?

Finally, just one accounting question. The 750 million mandatory convertible bond announced at the back end of 2009 -- am I right in thinking that is excluded from the headline net debt number? And that appears, I think, in minorities. But, if you could just clarify that for me, that would be great.

80% to 85% capacity utilization we hope to reach towards the end of the year. What we are trying to say -- that we were at 70% in the Q4 '09, and in Q1 we expect to operate between 73% to 75%. And as the year progresses, we hope that by end of the -- in the fourth quarter we should reach between 80% to 85%.

Okay, very clear, thanks.

Blast furnace to restarts -- we are not giving specific information as such, but we are just announcing the names of the furnaces. Suffice to say in the first half and up to the third quarter we are restarting furnaces both in Europe and the United States. Europe is under consideration, and in the United States we announced the restart on number 4 furnace at our Indiana Harbor facility.

In terms of Tubarao, we have completed the re-line of blast furnace number 2. So that will start up, hopefully, on April 15. And in Dofasco, we are now completing the work on blast furnace number three, which should start up by third quarter.

So as a result, in North America, in Flat Carbon Americas, apart from our US facilities, all furnaces will be up and running. Michel can comment a little bit more on Europe, if you want to.

And in terms of the MCB, you are right; out of the 750 million mandatory convertible bond, approximately 695 million has been treated as equity and has helped the reduction in net debt for the quarter.

In Europe the last [totals] we have announced was the smallest blast furnace in Eisenhuettenstadt, and thus, we have four blast furnaces in Germany, which are all running to date. So we are at full capacity. We have announced also the starting of the third blast furnace in Dunkerque, in France, and the second blast furnace in [Florence]. This is mainly at the moment when we have [for short repair] to close one of the two blast furnaces in (inaudible), which was a big blast furnace, and which means that today we have a little bit tight and we're just evaluating our possibilities to see what would be the next moves.

Luc Pez, Oddo.

First of all, could you quantify the CapEx associated with your ongoing project, if there are any updated figures to be provided there.

Secondly, I had some questions with regards to you view on the current inventory situation in China. Also a question on the apparent tax you are assuming for the current year, which is something very difficult to assess for us. And last question, perhaps, to what extent you see current condition on the scrap and iron ore spot markets being sustained, given the volatility of the Chinese markets.

Thank you, Luc, what was your question on ongoing CapEx? What is the forecast for 2010?

Not the forecast for the (inaudible) CapEx, but on the page 8 of your press release you provide all sorts of ongoing projects and there is no detailed CapEx associated to that. I was wondering if there was any update to be provided, for example, in the Liberia project, Monlevade or whatever.

Okay, so maybe I'll ask Gonzalo to provide you some of these details and maybe Peter can talk about Liberia.

Just coming back on taxes, we don't really have a guidance for 2010. Suffice it to say that we have generated significant NOLs. Most of these NOLs don't have an expiration date, so therefore these are good assets. And I think they will come handy in 2010. So there would be -- I would not expect any cash payment of taxes in 2010.

In terms of the investments, it's the following. You see, we have completed projects. I won't go into them. Then we have different projects that you see. The first one is Tubarao. That will be a [forecasted competition]. That is (technical difficulty) the new hot dip galvanizing line, which will give us 350 KTs. Okay, that would be the first one. And we are talking and investment of around 110 million.

Now, going forward, in Volcan mine, as you can see here, that is -- and sorry, the second one you have is the Dofasco -- just a second -- the Dofasco optimization. Then we have this investment. The project will be -- it's an optimization footprint program that will increase the slab production in Hamilton by 630 KT.

Now, the third one is the modernization of the continuous cast that you know what we will do this reconstruction project is the third and last continuous cost that we have to rebuild for the slab and for the future of this plant.

Okay, next one you want is in the coal, where I'll leave you, if you want. If you want, after, Peter, you can do the ones of the mines, if you prefer.

Now, you have another one that is at Tubarao. You know what the Tubarao is; it's basically the expansion of the Tubarao plant. It's an increase (inaudible) from 1.7 million tonnes to -- so Monlevade, sorry. I'm sorry, Monlevade -- to 4 million -- I apologize -- to 4 million tonnes. The hot metallic will be doubled from 1.1 million to 2.2 million in the figures; in billets, also, 1.2 million to 2.4 million; and then, we will duplicate the wire rod capacity of that investment.

Then we have, before we step into the mines, the other three ones. That is the projects that Mr. Mittal referred to before that were the two JVs in China for automotive and for electrical steel and the tube steel mill that we were doing in Saudi Arabia for 600 KT.

And if you want, Peter, now for the mining ones?

Certainly. On mining, in Liberia the focus this year is to complete the infrastructure so that we can ship DSO next year. In -- at [QCM], we have really a utilization -- not utilization, but a yield improvement project which involves replacing of all these barrels in the concentrator for about a 2% improvement in yield, or 2 million tonnes, eventually. And in Princeton we're planning to increase production capacity by about 800,000 tonnes per year through improvement of washing yields and improvement of and addition of some equipment.

Can you also just get back to us on your last question? You wanted some more outlook from us on ore and scrap prices in this volatile environment. And I don't know if we got the second half of your question.

There was two parts to my question. One was with regards to current inventory situation for steel in China, and the second part was your take on the current tight -- or the sustainability of the tight market condition for scrap and iron ore markets. Thank you.

Yes; we have seen some media information that there is an increase in the inventory buildup in China, but clearly, this we need to continue to monitor. But I believe that China will continue to have a strong demand. And now, once they are back from holidays and the winter is sliding down, we will have improved demand in China. And these inventory numbers are not very high. In China, capacity to hold high inventory by the traders and in the pipeline is really low. So I really am not really -- we believe that the inventory levels in China at this time is manageable, and they will continue to consume this product.

And on the tight environment of iron ore, it's clearly to increase demand in China. And it all depends on the Chinese demand, and if they continue to have a strong domestic demand they will continue to import more iron ore. And that is one reason we are seeing that spot prices have gone up. And the spot prices clearly depend on China's demand.

Rochus Brauneiser, Kepler Markets.

Hi, good afternoon and good morning; it's Rochus Brauneiser from Kepler. Just a few follow-up questions, maybe one on your shipment performance in the first quarter. When I remember what you said at the third quarter stage, you sounded pretty bullish in terms of your shipment expectations, partly because there were some pushback orders which should have been realized in the fourth quarter. And it sounded like that you expect volumes to grow well over 20% rather than the 10% you realized. Maybe could you analyze a little bit, they probably have left behind your original expectations.

In terms of the guidance for the first quarter, on a per tonne basis this means a deterioration in profitability. Can you share with us whether this is coming more from lower average revenue per ton, or is this more effect on the cost side in terms of the higher raw material cost?

And in terms of the volume figure for the first quarter, when you are guiding for a 75% utilization rate, it implies that the crude production goes up by 7%. Thus, if there is a minimum level in terms of the shipments, or could this be higher than the 7%? What do you expect for the first quarter? That's it for the moment.

I'm not sure where we have this 20% increase. Perhaps it has to do with -- I don't know [if] (inaudible) steel capacity utilization also did not increase by 20%. Generally, we saw an increase in shipments across all markets and all products. We had some missed opportunities to sell steel in North America and perhaps some in AACIS, due to weather-related issues. But even if we had achieved those opportunities, it would not have increased shipments by another 10%. So maybe that's another couple hundred thousand tonnes which you could call as an opportunity lost.

But as we were ramping up in North America, we faced productivity issues and we heard about the weather issues in AACIS.

If you look at it from Q1 to Q3, clearly we are up almost 20%. So we can see that the recovery is underway, just slow and progressive. And we are forecasting higher shipments in Q1 as well. I don't know if that answers your questions and whether you have any more specific --

You said 75%. We're saying that capacity utilization will be 72% -- 73% to 75% in Q1.

But based on your working capital outlook, guessing that what you said, that it's not so much related to raw materials and it is more, probably, on steel and steel product inventory as preparation for the coming months, I must assume that the shipment growth is probably less than your crude steel production expansion.

That's theoretically always natural on a part-time basis, just because there's (inaudible) loss. But fundamentally, they should be moving in line. There perhaps was some inventory buildup in AACIS. But right now, we are shipping out most of what we produce. And so I don't think there's really a big disconnect in those numbers.

In terms of one-off items in the first quarter, so in the fourth quarter you only stick -- will remain in the guidance because of the 108 million from carbon dioxide and the 90 million from raw material hedges. Is there any one-off items, positive or negative, we can model in for the first quarter, as you can see right now?

The thing that will continue remains the dynamic delta hedge, which will have an impact in the first quarter. Our expectation for the full year of 2009 is 447, and then therefore I would expect approximately $90 million to $100 million or perhaps slightly more of that in our Q1 results.

Finally, can you give us a little bit of a split in your Stainless performance in terms of shipments and EBITDA between Europe and Brazil?

Of the shipments, it was, in Q4, 415 KT. Of that, 253 in Europe, 171 in Brazil. Okay, that was the first one. In terms of capacity utilization, we were at 67% as an average, 57% for Europe and 89% for Brazil.

And what was the other?

EBITDA.

EBITDA, out of the 113 we are talking two thirds was Brazil and one third was Europe.

Andrew Snowdowne, UBS.

A couple of number-specific questions, if I may. The first one, rotation days -- impressive draw down to 63. I wonder if you could give us the split between receivables, payables and inventory and also your target for Q1 in terms of total days. Can we expect that to go above the 70 days which is the target you've seemed to point towards? Also, an indication of pension charges in the quarter, which are booked through the interest line. A split of impairments by division in Q4, 502 million. Is that all at the other consolidation line, or should we assume some of that's split between the various divisions?

And another question -- the provision for redundancies. Are there any more to be booked through the cash flow in 2010?

And then another one -- in your, in particular, Flat Carbon Europe and Flat Carbon Americas, if I was to take the price times the volumes in terms of steel revenues versus other revenues, quite a significant number in Q4. Flat Carbon America over 1 billion, Flat Carbon Americas, 867 million. Maybe you could give us more color what's driving those numbers and also what sort of margin we should assume on that in terms of the contribution to EBITDA, i.e., non-steel specific EBITDA relative to the steel EBITDA.

And then a more general question -- the comment was made that your fixed costs higher than expected in the quarter, yet you have an impressive sustainable cost savings of 2.7, also 5 billion temporary. I wonder if you could give us more color around that and why the surprise on those fixed costs rising more than expected.

And, sorry, I know it's a long list, final question -- given the comments, in particular, of higher prices achieved in March versus January and February, could you maybe just give us a sense, would it be reasonable or totally unreasonable, put it that way, to assume that it's possible that you could achieve double the level of guided EBITDA in Q2 than what you are currently guiding to for Q1? Is that totally unreasonable?

Let me just begin with working capital rotation days. You're right; we came in lower than we expected. We are at 63 days. Our target guidelines is about 75 to 85 days. We were at this level also, actually, in the second quarter of 2008. So it's not unusual for us; it has happened in the past. This time it was primarily driven by improvement in both receivables and payables. Receivables were at 28 days, payables at 61 days. Those will deteriorate, i.e., receivable days will go up and payable days will come down. And inventory may increase or remain similar, on a days basis, but clearly will increase as the volume of business is increasing.

I would expect that will be closer to the target, i.e., closer to 75 days than where we are today.

In terms of pension, we have $142 million of pension costs in Q4. This was the Forex and other costs line.

In terms of impairment, all the impairment is charged at the division level. There is no impairment which is occurring at any other. So that is on impairment. I don't know if you want me to get more specific; I can do that.

(inaudible)

Provisions for redundancy is 487 million remains on the voluntary separation schemes. This is something that we need to review as the year begins, as to how we want to further our cost reduction programs and increase our sustainable management gains. At this point in time we don't have significant VSS programs outstanding, so this is something that we'll be reviewing in 2010.

In terms of -- let me try and answer your FCA question. What exactly is the question, the increase in revenue?

Yes, the other items. If you were to take the achieved steel price times the volumes, it gives you the revenue. But the total revenues are a little higher than that, which implies other revenue of 867 million at FCA, 1052 million in Flat Carbon Europe. For us, that's a bit of a black box. I was wondering if you could give us more of an indication of what makes up that revenue and what sort of margin contribution to the EBITDA line from that revenue line.

In terms of other revenue for FCA, it primarily has to do with our mining activities. Even if you look at our CapEx projects, a lot of them related to mining are a part of the FCA division because geographically they are there. The big one is QCN, which accounts for a substantial part of this revenue. Also, the coking coal assets in North America, which is Princeton and Mid Vol, are a part of this. And we have given you a flavor of the level of tonnage coming out of some of these geographies. So you can calculate your margin. But clearly, both QCM and Princeton and Mid Vol are high-margin operations.

In terms of FCA, Michel?

I must say, I cannot give a precise answer to this question at this moment. So I would propose that we come back to it maybe at the end of the call.

From my memory and recollection, it has to do with byproduct sales that occurred.

To some extent this is right, and then there is some coking, some coke coal from (inaudible) [that], but I cannot make the exact list of what it fully represents.

So we will come back. From what I understand, the breakdown of byproduct sales at FCE level is about 200, and some of it may be the coking coal assets [ZKZ] which we own 93% of. But we'll come back to you with more detail on other revenue items and FCE.

In terms of doubling of EBITDA, that would be ideal, clearly, in Q3. Our run rate of March does not show that at this point in time. It clearly shows a substantial improvement, but our run rate in March does not show that at this point in time.

(multiple speakers) just one that was missed in terms of fixed costs coming in slightly higher than you may have expected. Maybe if you can just re-consolidate relative to the actual achieved fixed cost savings and also the (inaudible) 5 billion of (inaudible) pre-cost savings?

I don't -- why do you feel the fixed costs are higher than --

There's just a comment by Mr. Mittal earlier in his presentation, where he said fixed costs are higher than were originally anticipated.

Some of the temporarily fixed cost is coming back due to restart of the new facilities. And some of the fixed cost is going hide due to impact -- due to currency.

I can give you some more breakdown on how we have performed in terms of fixed cost reduction. Clearly, we had an increase of about 1.8 billion Q3 to Q4. And as you know, some of this is foreign exchange as well. On a foreign exchange basis, from Q3 to Q4, we lost $400 million of cost savings. So let me give you perhaps all the numbers.

Q3 -- our fixed cost is $18.8 billion. Out of that, and using the baseline of $28.3 billion, which was our average for '08, we had calculated at that point in time $6.2 billion of temporary fixed cost savings, $1.1 billion of foreign exchange and $2.2 billion management gain.

Coming into the fourth quarter, our fixed costs were $20.6 billion, which is $1.8 billion higher. Out of this, $4.3 billion were temporary fixed cost savings. On foreign exchange it came up $2.7 billion, so we lost $400 million in foreign exchange savings, but we had an improvement in our sustainable management gains to $2.7 billion.

So that is the fixed cost picture. Clearly, it's always going to be a bit lumpy and also linear as sizes of the furnace and crude costs differ. But that is the trend. And when we looked at it from an average cost per tonne, it was quite similar to what we had recorded during the year. Maybe was $2 off or $2 down, but it was very similar. So on a part-time basis, fixed costs are demonstrating that they remain variable in nature as we ramp up capacity.

Michael Gambardella. JPMorgan.

With the seaborne raw material prices likely to go up very high; in fact, with the spot prices of both iron ore and met coal up 60% to 70% higher than the 2009 seaborne contracts which expire on April 1, it looks like your second quarter pricing could be very tricky in the sense that these raw material seaborne contracts, I believe, are retroactive back to April 1, once they get settled. And if they get settled late, that could impede some of your second quarter results.

I'm just wondering what you are doing in this hyperinflation environment for raw materials to try to offset this risk in your second quarter pricing book, particularly in the sheet products. And are you -- I know, in the US, you have contracts that are now linked to CRU pricing, and I believe also in Europe. Could you go through the order book in terms of how the pricing contracts have changed from the annual fixed price contracts to more of an indexed contract that's basically effectively a spot price with maybe a month or a quarter delay?

Lastly, do you have any contracts on the sheet side or on any of your products besides stainless that are tied to or index off of the raw materials, like iron ore and met coal?

Clearly, that remains one of the big issues in 2010 as we look out as a steel company. The good news, as you know already with ArcelorMittal, is that we have a high degree of iron ore self-sufficiency. So cleverly, those assets will come in good stead.

Number two, we do believe that margins are not that rich. And therefore, as ArcelorMittal, we need to pass on some of these cost increases to our customer base.

Coming back to your specific question on seaborne coking coal, for North America we have fixed up the coking coal prices for the year. We are primarily exposed at FCE level and at AACIS, which is our sheet division, as well as our assets in South America, i.e., Brazil. In the CIS mills in Kazakhstan we have some coking coal assets. But, for example, in (inaudible) as well as other assets we are on the spot market, and we have seen some of that cost increase occur already.

In terms of seaborne, clearly this is a discussion. There is a movement to change the pricing dynamic. That is something which remains unsettled. Clearly, the steel industry has its own point of view, and the mining industry has its own point of view. And I would not like to comment on how that pricing discussion will evolve at this point in time.

I believe one of your big competitors in the US, US Steel, which historically used to be roughly 50-50 spot and contract, which was -- their contract was largely annual or longer. In their recent quarter release, in the Q&A, they indicated that, of their contract business, 60% of it is indexed off of CRU prices. Do you have a similar type of index which actually helps them capture the spot price a lot quicker?

We don't have such a high percentage in our US business. We are dealing with spot as it comes. There have been instances where CRU is lower than the spot price, so you may capture the volatility. But you may lose on the absolute price level. And we are a bit -- we are not so keen on, as ArcelorMittal, indexing our products onto an index. We'd rather maintain the customer relationship and the customer franchise and manage pricing as we have done in the past.

We do have some exposure to indexing in contracts. But they are basically quarter lagged and they are 20% of our order books. And about 40% is contract with automotive. So our spot exposure in the US is not that high, but it remains about 40%.

The 40% you have with automotive is an annual contract?

These are the annual contracts, which -- one of them is index-linked, clearly. But most of them are annual contracts and they have different maturities in 2009, depending on which automotive client it is -- in 2010.

And the index link -- is that on raw materials, or is that on like a CRU price?

The index link is on CRU.

Alain William, Societe Generale.

I have three questions, please. First, I was just wondering if you were exposed to different cargoes on coking coal deliveries, i.e., a coking coal that you may not have taken at 2008 inflated prices.

Then a general question -- I was just wondering how would you qualify the industry pricing power in the developed world now and its ability to avoid a squeeze going forward, given the strength in raw material prices, the weakness in the domestic [can] markets and a relatively low utilization rate?

And just a last question concerning the tax rate -- I'm sorry, the question on the tax rate guidance for 2010. Could you help on that, please?

In terms of coking coal, I think you ask a very interesting question. Nine months ago we had estimated that the coking coal negative carryover cost to us would be about $550 million for 2010. As prices have moved up, I think that dramatically shrinks. I would not venture out a number at this point in time until we close the negotiations, and then perhaps in the second quarter and third quarter we can brief you on whether this coking coal carryover will be eliminated or not.

In terms of the effective tax rate, I have not given a guidance; you are absolutely right. I think it's difficult for us to give a guidance because we are dealing with NOLs and, etc., and so there may not be a relevant [ETR] guidance for 2010.

And then the last question, concerning the pricing power, please?

Basically, ArcelorMittal will continue to -- our endeavor will be to pass on the increased cost on raw material to our customers. And that is ArcelorMittal's policy, and we will work on this. There is no pricing power or anything, but since there is a demand, and our customers are prepared to take more volume the costs have gone up. So we would like customers to pay more cost.

Charlie Dove-Edwin, MF Global.

Looking at your guidance for this quarter, what impact will the strengthening dollar have on your actual EBITDA absolute number, if any?

The dollar strengthened against the euro by about 2%, I would say, in the fourth quarter. So, it was not a substantial change. In the first quarter, clearly, there will be a larger impact in our European business because, as we will have a euro which is weakening, the EBITDA that is generated by FCE converted into dollars will be worth less than it was in the fourth quarter.

On a medium-term basis, clearly, a weakening euro is still good because it improves the competitiveness of our European division. And, nevertheless -- I sound like I'm contradicting it myself, but fundamentally for ArcelorMittal a weaker dollar is better as we are a commodity play, and therefore, we have higher margins in a weaker dollar environment.

So there is a negative impact for Q1. I have not quantified it at this point in time, and we can provide more details in the Q1 results.

Would that have had any effect why your EBITDA guidance this quarter is lower than it was in Q4, for Q4, even?

Yes, I think it has some impact, clearly, because almost 40% to 50% of our euro EBITDA has an impact. But we need to see where the exchange rate ends up in the quarter. And, depending on if it stays at this level, clearly, it has an impact.

And what about the other currencies, Brazil, etc.? Most of them would have weakened against the dollar. Is that correct?

Yes, yes. So there is an impact on other emerging market economies such as Brazil. However, in Brazil, we are also exporting some steel so some of that impact is negated. On the long side in Brazil, clearly, the impact is greater as we are not exporting that much of steel. But simultaneously, we are trying to drive price increases in Brazil as the real weakens, to compensate for the weakening of the currency.

Danny Van Doesburg, SNS Securities.

It was a minor question on the D&A level in the Long Carbon division. It was substantially higher than the quarter before. Is there an explanation for that?

Then maybe a bit more color on pricing, as Mr. Mittal explained that China had some impact on pricing for the first quarter most likely, in my view, in the Long Carbon division. But is it also affecting the Flat Carbon as well?

Then the question on mining. Is there also a number you could give for CapEx guidance, particularly related to the mining for 2010?

And the last question was one I missed a bit on the carbon rights sale. How much was it in the fourth quarter, and can we expect further proceeds from carbon rights sale in this year?

In terms of the Long Carbon, the deterioration you see in terms of that -- or the higher figures of depreciation it's basically impairment charges we've done in the tubular products division, on the one hand, also in some of the Mexican assets, that is, basically the mining and also in US, in Georgetown, and some of the European assets. So that is the basic reason.

(Operator instructions). Ladies and gentlemen, our question and answer session is now finished. I will have the call over to Mr. Mittal for final remarks.

No; we have still got two answers to give. And before we answer on the last two questions, earlier there was a question on the coal. So I'd like to clarify here that our total purchase is not 28; it is about 40 million tonnes expected this year. Out of this, 22 million tonnes will be seaborne. 11.2 million tonnes is coming from domestic non-seaborne supplies and about 8 million coming from captive supplies. So this is the breakup of this earlier question. I think I gave the answer 28 million tonnes. That 28 million was only the external supplies. So that was for 2009. But for 2010, this is our expectation.

And then maybe also I continue on a question where I did not give an answer. That was the non-steel sales in Europe. So, in terms of order of magnitude, it is number one, coke, which we sell mainly to other divisions of the group. Second, there is byproduct, which is also directly related to the steel product. And the third one was to some billing of higher works we have done for outside people in the way to [flexibilize] our manpower and manpower costs.

Then, in terms of CO2, there was a question. So we have not decided what will be our CO2 policy. You know that the CO2 debate in Europe is still ongoing, and we will determine our policy later on.

And on mining CapEx, to answer the last question, it's around $600 million for the year.

We had one last question, I believe, and that's on carbon credits. At this point in time, the Company doesn't have any plans. We purchased about 19.1 million, we have sold 18.5. So we still have some purchased carbon credits. We also have carbon credits which are allocated to us, due to our production base in Europe. So at this point in time we have no plans for further sales in 2010.

With this, thank you very much for participating in this quarter's conference call, and I'm looking forward to talking to you all next quarter. Thank you. Have a good day.

Thank you for joining today's conference. You may now replace your handsets.