Posco Holdings Inc (PKX) 2024 Q2 法說會逐字稿

Good afternoon. Thank you for joining us for the POSCO Holdings earnings call for Q2 2024. We will have a presentation of POSCO Holdings followed by Q&A with the participants. (Operator Instructions).

午安.感謝您參加 POSCO Holdings 2024 年第二季財報電話會議。我們將介紹 POSCO Holdings，然後與與會者進行問答。（操作員說明）。

Now we'll begin the POSCO Holdings call for Q2 2024.

現在我們將開始 POSCO Holdings 2024 年第二季的電話會議。

Greetings. I'm CSO of POSCO Holdings. My name is Ki-Seop Jeong.

問候。我是 POSCO Holdings 的 CSO。我叫鄭基燮。

Earlier this month, we hosted events in Seoul, Hong Kong, and Singapore for POSCO Group's Rechargeable Battery Materials Business Value Day. Amidst the uncertain business environment, how we plan to continue to grow and to achieve shareholder return was the strategy we shared at these venues.

本月早些時候，我們在首爾、香港和新加坡舉辦了 POSCO 集團充電電池材料商業價值日。在不確定的商業環境中，我們計劃如何繼續成長並實現股東回報是我們在這些場所分享的策略。

The group's new management vision and the buyback and cancellation of treasury stocks comprised the shareholder policy message that was announced. Taking advantage of the market chasm, the rechargeable battery materials business will take firm hold as the second growth engine for the group. This is the strong commitment that we communicated.

該集團的新管理願景以及回購和註銷庫存股構成了已宣布的股東政策資訊。抓住市場鴻溝，二次電池材料業務將牢牢佔據集團第二成長點。這是我們傳達的堅定承諾。

In this process, investors have offered feedback from multiple perspectives. First, on the plan to buy back and cancel treasury stocks, we shared that, going forward, treasury stocks would be canceled immediately upon buyback. On this principle, many investors mentioned that they heard a more shareholder-friendly policy from the Board and the management.

在此過程中，投資者從多個角度給出了回饋。首先，關於回購註銷庫存股的計劃，我們表示，今後回購註銷庫存股後，將立即註銷。基於這項原則，許多投資者提到他們從董事會和管理層聽到了更有利於股東的政策。

Next, on our restructuring plans, investors urge that the impact of restructuring will translate into substantive performance outcome through additional funds that will feed into generating future growth and for shareholder returns.

接下來，關於我們的重組計劃，投資者敦促重組的影響將透過額外的資金轉化為實質的業績成果，這些資金將用於創造未來的成長和股東回報。

The industry of EV battery materials has soured. During this time, we are closely monitoring demand fluctuations and adjusting the speed of our investments. For essential resources such as lithium, we will not lose out on the opportunity to invest. With this new strategy, the predominant share of investors offered their buy-in. Through this communication with shareholders, we firmed up our strategy. In our management activities, we intend to make sure to meet investor expectations with integrity and determination.

電動汽車電池材料產業已經惡化。在此期間，我們正在密切監控需求波動並調整投資速度。對於鋰等重要資源，我們不會失去投資機會。透過這項新策略，大多數投資者都表示支持。透過這次與股東的溝通，我們堅定了我們的策略。在我們的管理活動中，我們旨在確保以誠信和決心滿足投資者的期望。

Despite that only about two weeks have passed since our last value day event, large-scale events that impact the sentiment surrounding the EV industry have happened, and they continue to surface. Changes are happening in the makeup of the US presidential election. On the very far end of the EV business value chain, major OEMs are shifting their strategies. These events are expanding the breadth of uncertainty and unpredictability, prodding us to be relentless in our re-examination of our own strategies.

儘管距離我們上次價值日活動僅過去了大約兩週，但影響電動車產業情緒的大型事件已經發生，並且仍在不斷浮出水面。美國總統選舉的組成正在改變。在電動車業務價值鏈的最遠端，主要原始設備製造商正在改變其策略。這些事件正在擴大不確定性和不可預測性的範圍，促使我們不斷地重新檢視自己的策略。

While we continue to examine and re-examine the specifics of our tactics such as adjusting our investment schedule, the core essence of our strategy, which is to seek growth in the EV battery materials business, remains unchanged. We'll move forward undeterred.

儘管我們不斷審視和重新審視調整投資計畫等策略細節，但我們策略的核心本質——尋求電動車電池材料業務的成長——保持不變。我們將義無反顧地前進。

In steel, we have built the electric smelting furnace demo facility, which is an essential part of the hydrogen-based steelmaking technology. The first batch of molten iron was produced in April, which is a clear proof that we are on schedule to be ready to make future low-carbon steel. We are not alone in having to deliver on the mandate to offer decarbonized steel. Based on the belief that hydrogen-based steelmaking should be a national technology interest, we're making efforts to develop this technology with government partnership. Therefore, we are working with MOTIE, MSIT and other government agencies to seek close consultation.

在鋼鐵方面，我們建造了電熔爐示範設施，這是氫基煉鋼技術的重要組成部分。4月第一批鐵水已經生產出來，這清楚地證明我們正在按計劃為未來的低碳鋼做好準備。我們並不是唯一一家必須履行提供脫碳鋼任務的公司。基於氫基煉鋼應該成為國家技術利益的信念，我們正在努力與政府合作開發這項技術。因此，我們正在與MOTIE、MSIT和其他政府機構合作，尋求密切協商。

We must also work hard to generate more profit in steel by addressing the lackluster market. Through multiple efforts, we have hit the bottom in Q4, and now we're making a slow but steady recovery. In the rechargeable battery materials business, for facilities that have been constructed or close to completion, we continue to gas the pedal to enhance operational rate for reliable plant operation.

我們也必須努力解決低迷的市場，增加鋼鐵的利潤。經過多方努力，我們在第四季已經觸底，目前正在緩慢但穩定的復甦。在充電電池材料業務中，對於已建成或接近竣工的設施，我們繼續加強提高開工率，並實現工廠的可靠運作。

In our infrastructure business, we have businesses that are pulling the weight for the group by generating stable profits, which is natural gas production. We're on schedule to expand that facility. In particular, the stage four Myanmar gas field development business is the first project where a Korean company is managing a deep sea development project. We'll acquire our own and own our know-how gains, which we hope to have application for in future projects.

在我們的基礎設施業務中，我們有一些業務透過產生穩定的利潤來為集團帶來影響，這就是天然氣生產。我們正按計劃擴建該設施。特別是緬甸第四期氣田開發業務是韓國公司管理的第一個深海開發案。我們將獲得自己的專有技術成果，希望在未來的專案中得到應用。

I'll stop here and allow the Head of IR to deliver more detail on our key business activities as well as our second quarter performance.

我將在此停下來，讓 IR 主管提供有關我們的關鍵業務活動以及第二季業績的更多詳細資訊。

Good afternoon. I'd like to share with you our earnings for second quarter, which is on page 4 of the presentation.

午安.我想與您分享我們第二季的收益，該收益位於簡報的第 4 頁。

In Q2 of 2024, revenue increased 2.5% from previous quarter to KRW18.51 trillion, and operating profit 29% to KRW752 billion, driven by higher profits at our steel subsidiary POSCO and improved infrastructure performance. If you look at the EBITDA, in Q2, it was KRW1.74 trillion, up by KRW201 billion.

2024年第二季度，受鋼鐵子公司POSCO利潤增加和基礎設施績效改善的推動，營收較上季度增長2.5%至18.51兆韓元，營業利潤增長29%至7,520億韓元。如果你看一下 EBITDA，第二季為 1.74 兆韓元，增加了 2,010 億韓元。

CapEx invested amounted to KRW2.6 trillion on a consolidated basis. Despite the continued investment, with lowering working capital and sell-off of noncore assets, net borrowings [increased] by KRW115 billion from the previous quarter end, resulting in a net debt-to-equity ratio of 15.9%, down 0.4 percentage points from Q1.

綜合資本支出投資額達 2.6 兆韓元。儘管持續投資，但隨著營運資金減少和非核心資產拋售，淨借款較上季末增加了1,150億韓元，淨負債與股本比率為15.9%，較上季末下降0.4個百分點。

Next, performance by key business segments. OP of the steel business went from KRW339 billion in Q1 to KRW497 billion in Q2, up KRW150 billion. POSCO improved by KRW123 billion to record KRW418 billion. And as sales of high-margin products like automotive steel plates increased at its rolling mills and processing centers in Mexico, Thailand, and Turkey, overseas steel profits also improved.

其次是重點業務板塊的業績。鋼鐵業務營業利潤從第一季的3,390億韓元增至第二季的4,970億韓元，增加了1,500億韓元。POSCO 增加 1,230 億韓元，達到 4,180 億韓元。隨著墨西哥、泰國和土耳其軋機和加工中心汽車鋼板等高利潤產品銷售的增加，海外鋼鐵利潤也有所改善。

The infrastructure business went up KRW89 billion from Q1 to post KRW429 billion. Recertification of Phase 3, 4 reserves in Myanmar's gas field and higher selling prices resulted in improved energy profits. Rechargeable battery materials posted a loss of KRW28 billion. POSCO Future M's profit narrowed due to initial start-up costs and inventory valuation losses for artificial graphite, while expenses continued to be incurred for projects in its final construction phase, including ramp-up and so forth, including the lithium business in POSCO Argentina.

基礎建設業務較第一季增加 890 億韓元，達到 4,290 億韓元。緬甸氣田三期、四期儲量重新認證、銷售價格上漲導致能源利潤提高。充電電池材質虧損280億韓元。POSCO Future M的利潤因人造石墨的初始啟動成本和庫存估價損失而收窄，而最終建設階段的項目繼續產生費用，包括爬坡等，包括POSCO阿根廷的鋰業務。

Next, I'd like to briefly highlight key business activities by second -- segment in Q2 of 2024.

接下來，我想簡單介紹一下 2024 年第二季的關鍵業務活動。

First is HyREX. The HyREX technology under development was designated as a national strategic technology in January this year and was selected for a pre-feasibility study by the ministry of trade, industry, energy in March. In May, the project to develop raw materials for HyREX was selected at a global R&D flagship project by the Ministry of Science and ICT, so we're promoting the technology development in earnest aligned with national R&D demo program.

首先是 HyREX。正在開發的HyREX技術於今年1月被指定為國家戰略技術，並於3月由產業通商資源部選定進行預可行性研究。今年5月，HyREX原料開發項目入選科技部全球研發旗艦項目，我們正配合國家研發示範計劃，認真推動技術開發。

In April, the first batch of molten iron from electric smelting furnace or ESF, a part of the HyREX facility, was produced. Leveraging the experience of operating two of the world's largest ESFs at its subsidiary SNNC, POSCO completed the production capacity of achieving a maximum molten iron production capacity of 1 ton per hour over a seven month period, so with this initial output from the test facility, we can say that POSCO has officially begun preparing for the demo of HyREX technology.

4 月，HyREX 設施的一部分電熔爐或 ESF 生產了第一批鐵水。憑藉在其子公司SNNC 運營世界上最大的兩座ESF 的經驗，POSCO 在七個月的時間內完成了實現每小時1 噸鐵水最大生產能力的生產能力，因此，從測試設施的初始產量來看，可以說，POSCO已經正式開始準備HyREX技術的示範。

Next is page 6, highlighting the progress of lithium and nickel production. POSCO Pilbara Lithium Solution, which produces lithium hydroxide from ore, achieved a daily plant operation rate of up to 76% in June. And leveraging the experience from operating the demo plant, efforts are being made to shorten the ramp-up period and obtain certification. Plant one is targeting full operation by February next year, and plant two by September next year.

接下來是第 6 頁，重點介紹了鋰和鎳生產的進展。從礦石中生產氫氧化鋰的 POSCO Pilbara Lithium Solution 6 月的日常工廠開工率高達 76%。並利用示範工廠的營運經驗，努力縮短啟動週期並獲得認證。一號工廠計劃於明年 2 月全面投入運營，二號工廠預計明年 9 月全面投入營運。

POSCO Argentina, which is based on brine, completed the construction of Phase 1 as scheduled this month. And to train operations workers and stabilize the facility early, the operational know-how from POSCO Pilbara Lithium Solution in Gwangyang is utilized, targeting full-scale operation by April next year.

以鹵水為主的POSCO阿根廷公司本月如期完成第一期建設。為了培訓操作人員並儘早穩定設施，利用位於光陽的 POSCO Pilbara Lithium Solution 的操作知識，目標是在明年 4 月之前實現全面運作。

As for recycling subsidiary, POSCO HY Clean Metal, following plant completion in July last year, achieved 100% qualified product rate as of January this year and a 92% plant operation rate -- of June. So you can say that, currently, quality certification is underway with POSCO Future M local cathode material, electrolyte manufacturers.

至於回收子公司，POSCO HY Clean Metal 繼去年 7 月工廠竣工後，截至今年 1 月，產品合格率達 100%，6 月工廠開工率達 92%。可以說，目前POSCO Future M當地正極材料、電解液製造商正在進行品質認證。

The nickel business involves smelting and refining operation, with a capacity of about 20,000 tons that goes from SNNC to POSCO. The refinery plant successfully completed the trial run, and shipments are expected to begin in third quarter. Indonesia nickel project, it reached 69% construction progress by the end of Q2 and is on track for completion by Q2 of next year.

鎳業務涉及冶煉和精煉業務，產能約2萬噸，從SNNC運往POSCO。煉油廠順利完成試運行，預計第三季開始出貨。印尼鎳計畫第二季末建設進度達69%，預計明年第二季完工。

Next is the natural gas upstream expansion. The development of the Myanmar offshore gas field stage 3 has been completed and finally began commercial production in April. Also the stage 4 expansion is underway. This year, the main construction began in July. And once drilling starts in January 2026, we expect full-scale gas production to begin in July 2027. The stage 4 is the first deep sea development project to be carried out by a Korean company as the main operator, which is different from other stages and which we believe is significant in terms of enhancing and internalizing our capabilities in natural gas upstream business.

接下來是天然氣上游擴張。緬甸海上氣田三期開發已完成，並於4月開始商業生產。第四階段的擴建也正在進行中。今年7月主體工程開工。一旦 2026 年 1 月開始鑽探，我們預計天然氣將在 2027 年 7 月開始全面生產。第四階段是韓國公司作為主要營運商進行的第一個深海開發項目，與其他階段不同，我們認為這對於增強和內部化我們在天然氣上游業務的能力具有重要意義。

If you look on the right. In June of this year, in Australia, Senex obtained final approval and this is a very good news. So it obtained final approval from the Australian federal government for its project to triple production capacity. So with this approval, development is expected to accelerate. And new contracts for the increased gas production have also been signed. Senex in Australia plans to secure an annual production capacity of 1 million tons by 2026 by progressively ramping up production.

如果你看右邊。今年6月，Senex在澳洲獲得了最終批准，這是一個非常好的消息。因此，其產能增加三倍的項目獲得了澳洲聯邦政府的最終批准。因此，隨著這項批准，開發預計將加速。增加天然氣產量的新合約也已簽署。澳洲Senex計畫透過逐步提高產量，到2026年確保年產能達100萬噸。

Lastly, let me update you on the ESG matters. If you go to our website. There is a sustainability management report that was published at the end of June. So the report includes climate change response strategies and measures to address physical and transitional risks required by global disclosure standards for major operating companies with high carbon emissions like POSCO, POSCO International, POSCO Future M. And not only that, we have made efforts to transparently and comprehensively disclose that as a major controversy surrounding the group. And we expanded the scope of ESG data consolidation to include 10 Korean and major overseas group entities. So we have made such improvements, and with regards to the ESG direction and performance of POSCO Group, please refer to this report.

最後，讓我向您介紹 ESG 議題的最新情況。如果您造訪我們的網站。六月底發布了一份永續發展管理報告。因此，該報告包括了氣候變遷因應策略和措施，以解決全球揭露標準所要求的物理和轉型風險，針對POSCO、POSCO International、POSCO Future M等高碳排放主要營運公司。透明的方式並將其作為圍繞該團體的重大爭議進行全面披露。我們也擴大了 ESG 資料整合範圍，將 10 家韓國和主要海外集團實體納入其中。所以我們做了這樣的改進，關於POSCO集團的ESG方向和表現，請參考這份報告。

Our efforts to enhance ESG information disclosure have been recognized by external agencies. We're seeing an uptick in our ratings, so as a result, in April, we obtained MSCI ESG rating of A, enabling us to achieve the highest levels in various domestic and international ESG evaluations. So if you have any inquiries, please let us know, and we'll get back to you.

我們加強ESG資訊揭露的努力得到了外部機構的認可。我們的評級不斷上升，因此，4月份我們獲得了MSCI ESG評級A，使我們在國內外各項ESG評估中達到了最高水平。因此，如果您有任何疑問，請告訴我們，我們會盡快回覆您。

Next, I would like to share with you in detail our business performance by key areas.

接下來我想跟大家詳細分享我們重點領域的經營績效。

POSCO's crude steel output was significantly affected by the refurbishment of the Pohang blast furnace 4, leading to a decrease of 660,000 tons Q-o-Q, recording a total of 8 million tons. Consequently, product sales volume also fell. And revenue also dropped to KRW9.27 trillion. Despite the output cut -- usually when the output is cut, the fixed cost goes up, but the March operating profit improved. Due to the rise in product sales prices and the decline in raw materials input costs. So the operating profit increased by KRW123 billion Q-o-Q, totally KRW418 billion.

POSCO粗鋼產量受浦項4號高爐改造影響較大，較上季減少66萬噸，總計減少800萬噸。受此影響，產品銷售也隨之下降。收入也下降至9.27兆韓元。儘管減產－通常當減產時，固定成本就會上升，但三月的營業利潤有所改善。由於產品銷售價格上升和原材料投入成本下降。因此，營業利潤較上季增加了1,230億韓元，總計4,180億韓元。

So you can see that, if you break down the increase, the unit price hike and FX impact contributed KRW15,000 per ton. And the changes in product composition also accounted for KRW4,000 per ton. And as for the raw material cost, it went slightly down. So you can say that the raw materials costs dropped and it was covered by the sales price increase.

所以你可以看到，如果細分漲幅的話，單價上漲和匯率影響貢獻了每噸15,000韓元。而產品成分的變動也造成每噸4000韓元。而原材料成本則略有下降。所以你可以說原材料成本下降了，並且被銷售價格上漲所抵銷。

Now if you look at the Q3, the sales environment for Q3. And also the prices, all of these environments for Q3 appear to be challenging, yet there is a completion of the blast furnace and downstream refurbishment, which is expected to restore production levels to at least that of the first quarter. And second, the continued decline in the costs of major raw materials is anticipated to lower input costs in the third quarter, so if we are to consider all of these different factors, we are cautiously optimistic about achieving further profit improvements in Q3 compared to Q2.

現在，如果你看一下第三季度，第三季的銷售環境。還有價格，第三季的所有這些環境似乎都充滿挑戰，但高爐和下游翻新工程已經完成，預計將至少將生產水平恢復到第一季的水平。其次，主要原料成本的持續下降預計將降低第三季的投入成本，因此如果我們考慮所有這些不同因素，我們對第三季利潤較第二季進一步改善持謹慎樂觀態度。

Now let's look at page 10. As for the overseas steel business, there's been an influx of cheap imports in the East and Southeast Asia that has significantly impacted our operations, so our major integrated mill subsidiaries PT. KP in Indonesia and PY VINA in Vietnam recorded about a 6% decrease in sales, thus turning into the red.

現在我們看第 10 頁。至於海外鋼鐵業務，東亞和東南亞廉價進口鋼材大量湧入，對我們的經營產生了重大影響，因此我們主要的綜合鋼廠子公司PT.印尼KP和越南PY VINA銷售額下降約6%，出現虧損。

As for the Maharashtra in India, it saw a 3% decrease in sales as well, but the profits actually increased because there was increasing sales of high-margin products, like automotive steel sheets at the rolling mills and processing centers in Mexico, Thailand, and Turkey, so the overall profit from overseas still has improved.

至於印度馬哈拉施特拉邦，銷售額也下降了3%，但利潤實際上有所增加，因為高利潤產品的銷售增加，例如墨西哥、泰國的軋機和加工中心的汽車鋼板、和土耳其，因此海外整體利潤仍有改善。

Now POSCO International. Revenue fell by about 7% Q-o-Q, but OP rose by 32%. In the energy sector, the E&P business saw an increase in operating profit due to the effect of lower depreciation costs from the recertification of gas field reserves and increase in the cost recovery ratio.

現為浦項國際。營收季減約 7%，但 OP 成長 32%。能源板塊，勘探生產業務因氣田儲量重新核證折舊成本下降以及成本回收率提高等因素影響，營業利潤增加。

Meanwhile, for the power generation, as gas power plants entered the off season, so it's due to the seasonal factor, operating profit fell. The trading business for major materials like steel generated stable profits, thanks to strong sales of high-tensile steel bound for Europe, Americas, and green industry related products.

同時，發電方面，由於燃氣電廠進入淡季，因此受季節性因素影響，營業利潤下降。鋼材等主要原料貿易業務獲利穩定，歐洲、美洲高強度鋼材及綠色產業相關產品銷售強勁。

Next is POSCO E&C. The overall construction sector is not doing very well, but through rigorous management, both revenue and OP have been stably maintained and we have secured sufficient cash reserves. And you are seeing also that we have sufficient cash reserves of KRW1.2 trillion to manage risk -- and operating by conducting monthly reviews of all of our PF projects.

接下來是 POSCO E&C。建築業整體表現不太好，但嚴格管理，收入和營運成本保持穩定，現金儲備充足。您還看到，我們擁有 1.2 兆韓元的充足現金儲備來管理風險，並透過對所有 PF 項目進行每月審查來進行營運。

Now let's look at POSCO Future M. Its revenue and operating profit decreased by 20% and 92%, respectively, Q-o-Q. As for the cathode materials. If we exclude the inventory valuation loss, you can see that the situation has improved. So the low operating rate of N65 production line led to a decline in sales volume, although sales volume and margins for high-nickel products increased. And as for the anode materials, revenue and profits from natural graphite remained similar to the previous quarter, but the initial operation costs of artificial graphite were accounted for, shifting to a loss.

現在讓我們來看看POSCO Future M。至於正極材料。如果我們排除庫存估值損失，可以看到情況有所改善。因此，儘管高鎳產品的銷量和利潤率有所增加，但N65生產線的低開工率導致銷量下降。而負極材料方面，天然石墨的營收和利潤與上季持平，但人造石墨的初始營運成本被計入，轉為虧損。

So this concludes the brief overview of POSCO Holdings' Q2 earnings. We'll now proceed to the Q&A session. Thank you.

POSCO Holdings第二季財報的簡要概述到此結束。我們現在將進入問答環節。謝謝。

(Operator Instructions). The first question is from Hyundai Motor Companies. Name is Park Hyun-Wook.

（操作員說明）。第一個問題來自現代汽車公司。名字叫做樸賢旭。

My name is Park. I have three questions. The first is about the steel market situation. So you mentioned that you had hit rock bottom in terms of the global steel market, but how do you expect to see the steel business performing for POSCO? And how do you see the customers behaving in the future? In Europe, CSDDD was passed as a law, in Europe, so the requirements for carbon neutrality has become more intense. So what are the impacts for us? And what kind of countermeasures are you preparing?

我叫帕克。我有三個問題。首先是關於鋼材市場的情況。您提到全球鋼鐵市場已經觸底，但您預期 POSCO 的鋼鐵業務表現如何？您如何看待客戶未來的行為？在歐洲，CSDDD作為法律通過，在歐洲，因此對碳中和的要求變得更加強烈。那麼對於我們來說有哪些影響呢？你們準備採取什麼樣的對策？

The third question is, at the EV Battery Materials Value Day, we heard about some of your strategies going forward. So first of all, HyREX development, of course, it needs to succeed, but there are some other things that you are planning in parallel. And I think this is a positive development, but HyREX is happening in Korea, while in the United States and in India, you're planning to take some upstream processes. So some of the upstream processes seem to be happening overseas. If you have more specifics on this, I would like to hear more about that.

第三個問題是，在電動車電池材料價值日，我們聽說了你們的一些未來策略。所以首先，HyREX 的開發當然需要成功，但還有一些其他事情正在並行規劃。我認為這是一個積極的發展，但 HyREX 正在韓國發生，而在美國和印度，您計劃採取一些上游流程。所以一些上游流程似乎發生在海外。如果您對此有更多具體信息，我想聽聽更多相關資訊。

And something that is of concern to all of us is. When will green product demand become more readily realized. Because that timing has to come in sync with when we are able to offer those green products. If they are out of sync, then the opportunity to earn from the green premium price, to be able to put that back into our development cost, that needs to offset each other, but I'm not so sure that these time lines are going to be in sync, looking at some of the projections. The demo plant will be completed in 2027 and then commercialization begins in 2030. And after that point, that's when some of the products will be rolling off the plant, but some of the EV plants have been pushed out to 2035. So of course, these are mid to long-term goals, but these schedules don't seem to be aligning to be thinking -- so what are your thoughts on how to align these time lines and schedules? Thank you.

我們所有人都關心的事情是。綠色產品的需求何時才能更容易實現？因為這個時間必須與我們能夠提供這些綠色產品的時間同步。如果它們不同步，那麼就有機會從綠色溢價中獲利，能夠將其重新計入我們的開發成本，這需要相互抵消，但我不太確定這些時間線是否會持續為了保持同步，查看一些預測。該示範工廠將於 2027 年完工，然後於 2030 年開始商業化。在那之後，一些產品將在工廠下線，但一些電動車工廠已被推遲到 2035 年。當然，這些都是中長期目標，但這些時間表似乎並沒有與思考一致——那麼您對如何協調這些時間線和時間表有何想法？謝謝。

So on the question about the steel market, I would like to ask the Marketing Strategy Chief of POSCO to respond, Mr. Jeong. And then the second question, about the supply chain and Europe, we will have Mr. Henry Do, who is the head of ITA at POSCO, respond. And POSCO's development strategies and schedules, we will ask Ms. Kim Hee, head of carbon neutrality strategy at POSCO Holdings.

那麼關於鋼鐵市場的問題，我想請浦項製鐵行銷策略負責人鄭先生來回答。然後第二個問題，關於供應鏈和歐洲，我們將請POSCO ITA負責人Henry Do先生來回答。還有POSCO的發展策略和日程安排，我們會詢問POSCO Holdings碳中和策略負責人Kim Hee女士。

My name is Jeong. I'm in charge of marketing strategy. In construction and many other industries, we are seeing a slowdown. And some of the iron ore and coal prices are also falling, and that's why the market is slow. Because some of these stringent measures are becoming more prolonged, there are projections that trade issues will become more intense. And that's why we think the market is going to continue to post challenges.

我叫鄭。我負責行銷策略。在建築業和許多其他行業，我們看到經濟放緩。而且部分鐵礦石和煤炭價格也在下跌，這就是市場緩慢的原因。由於其中一些嚴格措施的持續時間越來越長，預計貿易問題將變得更加激烈。這就是為什麼我們認為市場將繼續面臨挑戰。

But there are chances of the interest rates coming down in the United States. And then some of the steel policies will become more concrete. So these are some of the positive aspects that we're looking forward to, and these are all going into our strategies.

但美國的利率有可能下降。然後一些鋼鐵政策就會變得更加具體。因此，這些是我們期待的一些積極方面，這些都將納入我們的策略中。

So to speak briefly about our strategy. For automotive companies, of course, there are some differences between companies, but because our contracts are based on their EV rollout plan, we do believe that there's going to be a slight increase in some areas and some slight declines in other areas. Looking at shipbuilding, looking at both the demand and supply side, there are some differences in opinions. And so I think we need to watch this a little bit further and take a little more time to device strategies there. In home electronics as well as other markets, we are in negotiations about price for the third quarter, but we believe that price will not budge too much from the current situation. Thank you.

那麼簡單談談我們的策略。對於汽車公司來說，當然，公司之間存在一些差異，但由於我們的合約是基於他們的電動車推出計劃，因此我們確實相信某些領域會略有增長，而其他領域會略有下降。看看造船，無論從需求端或供給端來看，都存在一些意見分歧。所以我認為我們需要進一步觀察這一點，並花更多的時間來制定策略。在家用電子以及其他市場，我們正在就第三季的價格進行談判，但我們認為價格不會比目前情況有太大變化。謝謝。

I'm in charge of ITA. I'd like to give you my thoughts about the European market. CSDDD was passed in May of 2024 and it went into effect as of July 25, 2024. So it went through many stages and this has now finally gone into effect, and the full breadth of this policy will become evident in 2027. So it will have a broad impacts on many supply chains.

我負責ITA。我想談談我對歐洲市場的看法。CSDDD於2024年5月通過，並於2024年7月25日生效。所以它經歷了很多階段，現在終於生效了，這項政策的全面性將在2027年顯現出來。因此它將對許多供應鏈產生廣泛的影響。

First, I'd like to explain a little bit about this policy. Some of the supply chains will be negatively impacted. And some of the processing systems, they will have to be offset by getting buy-in from our shareholders; and so we will have to disclose a lot more. How are we preparing as a group. From 2027, we will begin disclosure.

首先，我想稍微解釋一下這個政策。一些供應鏈將受到負面影響。對於一些處理系統，它們將必須透過獲得股東的支持來抵消；因此我們將不得不披露更多資訊。我們作為一個團隊準備如何？從 2027 年開始，我們將開始揭露。

And we will also revise some of our practices, and to do that, we will be conducting some due diligence in our own sites. France and Germany are performing their due diligences now, so with BMW and Volkswagen, we will be renegotiating some of our contracts with them. And so our ESG principles and policies will become part of the assessment.

我們還將修改我們的一些做法，為此，我們將在我們自己的網站上進行一些盡職調查。法國和德國現在正在進行盡職調查，因此我們將與寶馬和大眾重新談判一些合約。因此，我們的 ESG 原則和政策將成為評估的一部分。

In October 2022, responsible steel was a badge that we earned as an exemplary steelmaking company. So this is a start in the right direction of our certification as an exemplary steelmaker. And so through many internal controls as well as improvements, we will address all of these policies, global trade policies, that are coming to fore. Thank you.

2022 年 10 月，我們作為模範煉鋼公司獲得了負責任鋼鐵徽章。因此，這是我們作為模範鋼鐵製造商認證的正確方向的開始。因此，透過許多內部控制和改進，我們將解決所有這些正在出現的政策，即全球貿易政策。謝謝。

My response to number three, question number three, is not only HyREX, but also we have decided to use the shaft method as an option as well. And HBI, a much more ecofriendly material, will be considered as well, especially from Australia and from the Middle East because they have a lot of renewable energy offerings. We will be considering all of those and evaluating what we need to do going forward.

我對第三個問題的回答不僅是 HyREX，而且我們也決定使用軸方法作為一種選擇。HBI 是一種更環保的材料，也將被考慮，特別是來自澳洲和中東的材料，因為它們擁有大量的可再生能源產品。我們將考慮所有這些並評估我們未來需要做什麼。

On the timing of green steel offers. Rather than wanting 100% green steel, what customers want is decarbonize that steel. That's what they want by 2030. Major customers such as automotive OEMs as well as energy companies, these are our key clients. What they want is basically what we can offer, so we are negotiating price at the moment for various clients in Europe because premium pricing is possible. We are in the process of creating a green premium system.

關於綠色鋼材報價的時機。顧客想要的不是 100% 綠色鋼鐵，而是鋼鐵脫碳。這就是他們到 2030 年想要的。主要客戶如汽車原始設備製造商以及能源公司，這些都是我們的主要客戶。他們想要的基本上就是我們能提供的，所以我們目前正在為歐洲的各個客戶談判價格，因為溢價是可能的。我們正在創建綠色保費體系。

Moving on to the next question. Next question will be from Kim Yoon Sang of HI Investment & Securities.

繼續下一個問題。下一個問題將由 HI Investment & Securities 的 Kim Yoon Sang 提出。

Yes, I am Kim Yoon Sang. I would like to ask you three questions. First is regarding the East Asia. So there is a rising concern. There's a massive export coming from China. And it's very difficult, increasingly, to export to Europe, so -- and to Southeast Asia, so in the mid to long-term, what are your plans? Is my first question. And as for this year. So steel profits or steel revenue, I would like to know if you have any guidance to give us.

是的，我是金潤尚。我想問你三個問題。首先是關於東亞。因此，人們的擔憂日益加劇。來自中國的大量出口。向歐洲出口越來越困難，因此，向東南亞出口，從中長期來看，你們的計劃是什麼？這是我的第一個問題。至於今年。那麼鋼鐵利潤或鋼鐵收入，我想知道您是否可以給我們一些指導。

And Nippon Steel is also seeing some changes. And there is a high likely chance that Trump will be elected in the United States, so there is this changing dynamic, so with regards to the Americas, I would like to know what kind of steel strategy or steel business strategy you have vis-à-vis the Americas.

新日鐵也看到了一些變化。而且川普在美國當選的可能性很大，所以存在這種變化的動態，所以對於美洲，我想知道你們對美國有什麼樣的鋼鐵戰略或鋼鐵業務戰略？

And the third question is recently, when it comes to IRA, there's also an expanding trend in Australia as well where there's a decreased investment in the nickel as well, so when it comes to the nickel prices, I would like to know your outlook. And there is nickel prices going down and lots of, like, restructuring of steel companies going on in China regarding the stainless steel, so I would like to know your outlook on stainless steel.

第三個問題是最近，說到IRA，澳洲也有擴大的趨勢，鎳的投資也在減少，所以說到鎳價，我想知道您的展望。鎳價正在下跌，中國正在進行許多有關不銹鋼的鋼鐵公司重組，所以我想知道您對不銹鋼的前景。

So regarding the three questions, I think that it can be addressed by Jung Ki-Seop, Head of Marketing Strategy Office.

那麼對於這三個問題，我認為可以由行銷策略室主任鄭基燮來解答。

Yes. So that's a very difficult question to answer. So yes, the Southeast Asia market situation is challenging. It's becoming very difficult to export to Europe. And also it will be very difficult in the future to sell, like, Chinese steels. Maybe there's going to be a shift taking place towards Southeast Asia, but when it comes to Southeast Asia, there's lots of trade barrier issues. And the prices are already very low, so it is very -- there is formation of prices that are under the unit prices of China, so there are limitations for additional overflow in Southeast Asia, but we believe that there is going to be volume coming to South Korea that will progressively increase. And in the future, we believe, there is going to be additional volume coming to Korea, so we are taking many active measures to address the unfair trading.

是的。所以這是一個很難回答的問題。是的，東南亞市場情勢充滿挑戰。出口到歐洲變得非常困難。而且未來像中國鋼鐵一樣銷售也將非常困難。也許將會發生向東南亞的轉變，但當談到東南亞時，存在著許多貿易壁壘問題。價格已經非常低了，所以價格正在形成低於中國的單價，因此東南亞的額外溢價受到限制，但我們相信將會有成交量韓國的這一數字將逐步增加。我們相信，未來韓國的貿易量將會增加，因此我們正在採取許多積極措施來解決不公平貿易問題。

Now regarding the second question, about the American region and the re-election chances of Trump. We are very cautious to confirm that yet, but as for the US, there are lots of trade-up areas that are very high. And we believe that we are limiting our direct supplies to the US or direct sales to US. So we are not very much directly impacted by the US, so we're leveraging, like, Mexico and other countries to promote our sales in that region.

現在談第二個問題，關於美洲地區和川普連任的機會。我們也非常謹慎地確認這一點，但就美國而言，有很多以舊換新的領域非常高。我們認為我們正在限制對美國的直接供應或對美國的直接銷售。因此，我們並沒有受到美國的直接影響，因此我們正在利用墨西哥和其他國家來促進我們在該地區的銷售。

And when it comes to the increasing trade barriers for Mexico that was implemented by the US, there is a high chance that there will be more tariffs imposed on Mexican-scale steel, but our steel going to the US through Mexico is not very high. And when it comes to the supplies that are directly provided in Mexico, they're not subject to the regulations, so I think that will have a minimal impact on POSCO, but if Trump is re-elected, of course, it's going to have an impact on the exports. And we have to be very preemptive in addressing the import-related risk as well. And we will promote organic collaboration with the overseas entities so that we can collectively respond to trade risks coming from the US.

而當美國對墨西哥實施不斷增加的貿易壁壘時，很有可能對墨西哥規模的鋼鐵徵收更多的關稅，但我們透過墨西哥進入美國的鋼鐵並不是很高。當涉及到直接在墨西哥提供的供應時，它們不受法規的約束，所以我認為這對浦項製鐵的影響很小，但如果川普連任，當然會產生影響。我們也必須非常先發制人地解決與進口相關的風險。我們將推動與境外主體的有機合作，共同因應來自美國的貿易風險。

And when it comes to the stainless outlook or nickel prices. It is very difficult to predict or forecast the prices. So nickel prices has gone under USD16,000. And the nickel stock or inventory is more than 30 months -- or inventory turnover is more than 30 months, so we believe that the prices will not go lower, but in the first half, the stainless prices were improved. But we believe that it will be lowered slightly. And nickel prices will stabilize at around USD16,000. In Q3, it's not going to be that good, but we believe that the nickel prices -- or the stocks will be used. And the stainless prices will improve in Q4.

當談到不銹鋼前景或鎳價時。預測或預測價格是非常困難的。因此鎳價已經跌破16,000美元。而鎳庫存或庫存超過30個月——或者庫存週轉超過30個月，所以我們認為價格不會走低，但上半年不銹鋼價格有所改善。但我們相信它會略有下降。鎳價將穩定在16,000美元左右。在第三季度，情況不會那麼好，但我們相信鎳價或庫存將被利用。第四季不銹鋼價格將有所改善。

I am in charge of the nickel operations, so I would like to answer your question about the IRA. As for the company, AMP in Australia shut down their businesses. And there's only company and that is in operation. So regarding the nickel, sources related with [IRA] is very limited. And yet, when it comes to Indonesia, Chinese players are engaged in a lot of projects, especially Halmahera. Looking at Halmahera alone, there are ongoing ore project and nickel projects that exceed 1 million ton. So there are upsides regarding to IRA, but when it comes to supply, the nickel prices increase will be quite limited.

我負責鎳業務，所以我想回答你關於IRA的問題。至於該公司，澳洲的AMP關閉了業務。而且只有一家公司在營運。因此，關於鎳，與[IRA]相關的來源非常有限。然而，在印尼，中國企業參與了許多項目，尤其是哈馬黑拉項目。光是看哈馬黑拉，正在進行的礦石計畫和鎳計畫就超過100萬噸。因此，IRA 有上行空間，但就供應而言，鎳價漲幅將相當有限。

I hope that answered your questions. We'll wait for the next question. Next is from Eugene Securities, Ms. Eugene.

我希望這回答了你的問題。我們等待下一個問題。接下來是尤金證券公司的尤金女士。

My name is Eugene Lee from Eugene Securities. I have a few questions. First of all, EV demand industry is slowing; and I'd like to know how you're addressing the impacts. In steel, China has some energy-related regulations, and I'd like to know how you're addressing that.

我叫尤金李，來自尤金證券。我有幾個問題。首先，電動車需求產業正在放緩；我想知道你們如何應對這些影響。在鋼鐵方面，中國有一些與能源相關的法規，我想知道你們是如何解決這個問題的。

Another question on nickel. So you spoke about IRA premium. Indonesia and the United States, just like Japan, I think, are being considered as FTA partners, so I'd like to know what kind of risk we may have. And in the United States, I believe there are two nickel companies that are being built out. How will they impact us, if any? And finally, about iron ore and coking coal, do you have any investment plans for coking coal?

另一個關於鎳的問題。所以你談到了 IRA 保費。我認為，印尼和美國，就像日本一樣，正在被視為自由貿易協定夥伴，所以我想知道我們可能面臨什麼樣的風險。在美國，我相信有兩家鎳公司正在興建中。如果有的話，它們將如何影響我們？最後，關於鐵礦石和焦煤，您對焦煤有什麼投資計畫嗎？

On the EV market slowdown, let me address that question. Recently, whether it's Tesla, Volkswagen, GM or Ford, they have delayed some of their time lines, investment time lines. And even Ultium CAM recently has been impacted, and they have announced a slowdown.

關於電動車市場放緩，讓我來回答這個問題。最近，無論是特斯拉、福斯、通用或福特，他們都延後了一些時間表、投資時間表。甚至 Ultium CAM 最近也受到了影響，他們宣布放慢速度。

Whether it's cathodes or anodes, when we build new plants, we make sure that we have customer orders. Same is true for our lithium plants and nickel plants. So of course, there are concerns about the market slowdown, but because our plants are based on customer orders and we do not expand our facilities unless there are additional orders, we're not as concerned. But there is an EV market slowdown, and because of that, asset prices are falling. And so we think this is an important opportunity for us to acquire new blue chip assets for next-generation battery materials. We want to be better prepared.

無論是陰極還是陽極，當我們建造新工廠時，我們都會確保有客戶訂單。我們的鋰工廠和鎳工廠也是如此。因此，當然，人們擔心市場放緩，但由於我們的工廠是基於客戶訂單的，除非有額外訂單，否則我們不會擴大我們的設施，所以我們並不擔心。但電動車市場放緩，因此資產價格正在下跌。因此，我們認為這是我們收購下一代電池材料的新藍籌資產的重要機會。我們希望能做好更好的準備。

On the second question, about steel in China and energy efficiency rules that have come into play. In May, the Chinese government announced its decarbonization strategy. So this was supposed to be a 14-phase five year plan, but three years have transpired, so between next year and the year after that, they have to come up with something more specific. Per GDP, they need to be able to calculate how much energy has been saved. And carbon emissions reduction also fares into this equation, and that's why they announced some of those goals.

關於第二個問題，關於中國的鋼鐵以及已經生效的能源效率規則。5月，中國政府宣布了脫碳戰略。所以這本來應該是一個十四階段的五年計劃，但是三年過去了，所以從明年到後年，他們必須拿出更具體的東西。根據 GDP，他們需要能夠計算出節省了多少能源。減少碳排放也符合這個等式，這就是他們宣布其中一些目標的原因。

So the Chinese government in the past, when it came to environmental regulations. They have announced many policies and plans, and I think this is part of that. Especially in steel, they've talked about adjusting their steel production capacity. In regions where they are unable to meet carbon emissions reduction targets, they will limit facilities. And in restructuring steelmakers, they want to be able to increase the ratio of electric furnaces.

所以中國政府過去在環境法規方面。他們宣布了很多政策和計劃，我認為這就是其中的一部分。特別是在鋼鐵方面，他們談到了調整鋼鐵產能。在無法實現碳減排目標的地區，他們將限制設施。而在鋼鐵企業重組中，他們希望能夠提高電爐的比例。

So about 53 million tons of carbon dioxide emissions reduction is what they're targeting for next year, but how realizable is this? If we talk about 53 million tons of CO2 and comparing that to the production volume of crude steel, it equates to about 10 million tons of crude steel. So in a way, because they have adjusted their production capacity and maybe reduced their production capacity by about 10 million tons, perhaps this is realized through that reduced capacity, but how much possible -- how feasible is this without production capacity adjustment? I don't think that's big.

那麼明年他們的目標是減少二氧化碳排放約5,300萬噸，但這個目標能達成多少呢？如果以5300萬噸二氧化碳來計算，與粗鋼產量相比，大約相當於1000萬噸粗鋼。那麼從某種程度上來說，因為他們調整了產能，可能減少了1000萬噸左右的產能，也許是透過減少產能來實現的，但是有多大可能，不調整產能的話，可行性有多大呢？我認為這沒什麼大不了的。

So looking at the current market situation, I think we have to continue to look at what will happen in the Chinese market. I think they will continue to try and reduce emissions, but what's more important is to look at what kind of products are leaving the shores of China's; and what kind of inexpensive, cheaper steel products will be coming into the Korean market. And we need to strengthen our regulations to block that from continuing.

所以從目前的市場情況來看，我認為我們還要繼續看中國市場會發生什麼事。我認為他們會繼續努力減少排放，但更重要的是看看什麼樣的產品正在離開中國；什麼樣的廉價、更便宜的鋼鐵產品就會進入韓國市場？我們需要加強監管以阻止這種情況繼續發生。

I'd like to answer the third question. So between Indonesia and the United States, if FTA is signed, then I think we can trade more volume, but the big players in the Indonesia markets -- market is China. And so this has to be exhausted first before it can have any positive impact on us. A lot of the projects that are going on in Indonesia. It's very hard to find one that is not owned by China.

我想回答第三個問題。因此，在印尼和美國之間，如果簽署了自由貿易協定，那麼我認為我們可以進行更多的貿易量，但印尼市場的主要參與者 - 市場是中國。因此，必須先將其耗盡，然後才能對我們產生任​​何積極影響。許多項目正在印度尼西亞進行。很難找到一個不屬於中國的。

So there may be Vale. And then there might be [Washin], which is a Japanese project. Vale does about 30,000 tons. Most of it is first metal, and so very little of that is used for our battery material. And most of this enters the Chinese market as metal, so even if FTA is signed with Indonesia, if the volume of nickel that is [SEOC waived ], that may not be a huge amount of volume.

所以可能有淡水河谷。然後可能還有[Washin]，這是一個日本計畫。淡水河谷的產量約為 30,000 噸。其中大部分是第一金屬，因此很少用於我們的電池材料。而且其中大部分以金屬形式進入中國市場，因此即使與印尼簽署自由貿易協定，如果[SEOC 豁免]的鎳量，可能也不是一個巨大的量。

There is a partner we're working with. And nickel -- they produce a lot of nickel sulfides, and they are experiencing a lot of difficulty acquiring material that is IRA compliant. So conclusively, I think we can say that IRA-compliant nickel is very difficult to come by. And there are only a few companies that are remaining, and production volume is very limited. I hope this answers your question.

我們有一個正在合作的合作夥伴。還有鎳——他們生產大量硫化鎳，並且在獲取符合 IRA 標準的材料方面遇到了很大困難。總而言之，我認為我們可以說符合 IRA 標準的鎳非常難以獲得。而且僅存的企業寥寥無幾，產量也十分有限。我希望這能回答你的問題。

On iron ore and coal investments. So to achieve carbon neutrality, we need certain types of iron ore and coal, and so we are working continuously to acquire this. Through Roy Hill, we already have reliable supply; and most of it is based on hematite.

關於鐵礦石和煤炭投資。因此，為了實現碳中和，我們需要某些類型的鐵礦石和煤炭，因此我們不斷努力獲取這些資源。透過Roy Hill，我們已經擁有可靠的供應；其中大部分以赤鐵礦為主。

On HBI project linked plans, DRI pellets and investments for that project is continuously under investigation. For coking coal, because we foresee a shortage in high-grade hard coking coal, we are looking for opportunities for hard coking coal, high-grade hard coking coal. And for the time being, blast furnaces need to continue to operate, but we need to be able to reduce the carbon that is emitted from these blast furnaces. And that's why we need decarbonization technologies. And to make that happen, we need premium-grade coking coal, and that's why we need to acquire more hard coking coal. However, there are ESG issues. And we need to be able to trust our partners, so we are examining investments on those that are aligned to our ESG strategy only.

在 HBI 專案相關計劃中，DRI 顆粒和該專案的投資正在持續接受調查。對於煉焦煤來說，因為我們預期高品位硬焦煤會出現短缺，所以我們正在尋找硬焦煤、高品位硬焦煤的機會。目前，高爐需要繼續運行，但我們需要能夠減少這些高爐排放的碳。這就是我們需要脫碳技術的原因。為了實現這一目標，我們需要優質煉焦煤，這就是我們需要購買更多硬焦煤的原因。然而，也存在 ESG 問題。我們需要能夠信任我們的合作夥伴，因此我們正在審查那些僅符合我們的 ESG 策略的投資。

Next question is [Hyun-Soo Ha from Yuanta Securities].

下一個問題是[元大證券河賢秀]。

I am Hyunsoo from Yuanta Securities. I would like to ask you two questions. First is I read that Hyundai Steel has filed an antidumping complaint against China. That's what I read in the morning, in the newspaper. So when it comes to this filing the antidumping complaint, I would like to know if there are some prior negotiations that take place between the different entities and negotiating parties. And I would like to know if POSCO actually discussed with Hyundai Steel not to file a complaint. I would like to know the process that is taking place not only for the steel plate but as for the hot-rolled and low-price steel. I would like to know your plans when it comes to antidumping issues, so I'd like to know what kind of strategies that you have.

我是元大證券的賢秀。我想問你兩個問題。首先，我了解到現代鋼鐵公司已對中國提出反傾訴申訴。這就是我早上在報紙上讀到的內容。因此，在提起反傾銷申訴時，我想知道不同實體和談判方之間是否進行過一些事先談判。我想知道POSCO是否真的與現代鋼鐵商討過不提出投訴。我想了解不僅是鋼板的加工過程，還有熱軋和低價鋼材的加工過程。我想知道你們在反傾銷問題上有什麼計劃，所以我想知道你們有什麼樣的策略。

And second is, in the beginning of July, the Chairman, during the town hall meeting, said that the steel and the secondary battery materials will be important business portfolio, but he also mentioned about new growth -- new businesses -- so that he plans to promote these new industries or -- for new materials. So I don't really understand exact meaning of the new materials or the advanced materials. Can you elaborate more on the definition of new or advanced materials?

第二個是，7月初，董事長在市政廳會議上說，鋼鐵和二次電池材料將是重要的業務組合，但他也提到了新增長——新業務——所以他計劃促進這些新產業或新材料。所以我不太明白新材料或先進材料的確切含義。能詳細說明一下新材料或先進材料的定義嗎？

Yes. So regarding the two questions, the first question will be addressed by [Do Henry], who is the Head of the International Trade Affairs Office, regarding the steel plates antidumping. And regarding the advanced materials, it will be by [Iju Te], Head of The Business Strategy.

是的。那麼關於這兩個問題，第一個問題將由國際貿易事務辦公室主任[Do Henry]回答有關鋼板反傾銷的問題。至於先進材料，將由業務策略主管 [Iju Te] 負責。

Regarding the steel plate and also the Hyundai's complaint, yes. So of course, we discuss about these matters among different countries. And regarding the response to the steel plate imports, yes, regarding the antidumping complaint, it was addressed in the media. And it was based, solely based, on the Hyundai Steel decision. And as for ourselves -- and there is going to be also a government response to that matter, so we at POSCO will also give our opinion to the government later on.

關於鋼板以及現代汽車的投訴，是的。當然，我們在不同國家之間討論這些問題。關於對鋼板進口的回應，是的，關於反傾銷投訴，媒體對此進行了討論。它是基於、完全基於現代鋼鐵公司的決定。至於我們自己──政府也會對此事做出回應，所以我們浦項製鐵稍後也會向政府提出我們的意見。

Regarding the new materials, I would like to address your question. So during the town hall meeting, our Chairman, as you mentioned, mentioned about how to promote the new materials. And POSCO is trying to enhance competitiveness in steelmaking and also further develop the EV materials business, and that have been the main pillars of our business operations.

關於新材料，我想回答一下你的問題。所以在市政廳會議上，正如你所提到的，我們的主席提到瞭如何推廣新材料。POSCO正在努力提高煉鋼競爭力，並進一步發展電動車材料業務，這一直是我們業務營運的主要支柱。

So the business portfolio that we promote or seek, as it's outlined in our vision, is to open up the future with materials. And when it comes to materials, there's, of course, steel and EV battery materials, but other than these, we can also consider other materials that are somehow associated with these fields, areas. So that was just his comment during the town hall meeting.

因此，正如我們願景中所概述的那樣，我們所提倡或尋求的業務組合是用材料開闢未來。說到材料，當然有鋼鐵和電動車電池材料，但除此之外，我們還可以考慮與這些領域、領域有某種關聯的其他材料。這只是他在市政廳會議上的評論。

So other than the steel and the EV materials, we are currently exploring what kind of other materials can create synergies and what kind of materials can be established as a true business domain of POSCO. And in the latter half of this year, we will review these potential domains to make a decision as to what kind of domains we should enter going forward.

所以除了鋼鐵和EV材料之外，我們目前正在探索什麼樣的材料可以產生協同效應，什麼樣的材料可以成為POSCO真正的商業領域。今年下半年，我們將檢視這些潛在領域，以決定我們下一步應該進入什麼樣的領域。

The review is currently underway. And I cannot elaborate on the specific matters, but mostly, as you can -- as you saw in the steel and the EV materials, the new materials or the advanced materials will be related with our existing business operations. So I can largely name like advanced materials related with mobility or related with green energy and green infrastructure. It may sound a little bit abstract, but we would like to focus exploring new materials in these areas so that they can become our main domains of business.

目前審查正在進行中。我無法詳細說明具體問題，但大多數情況下，正如您在鋼鐵和電動車材料中看到的那樣，新材料或先進材料將與我們現有的業務運作相關。因此，我可以在很大程度上命名與移動性或與綠色能源和綠色基礎設施相關的先進材料。聽起來可能有點抽象，但我們希望專注於探索這些領域的新材料，使其成為我們的主要業務領域。

Thank you.

謝謝。

Next question from [Park Yushin from HSBC].

下一個問題來自[匯豐銀行的 Park Yushin]。

I have have questions. First is about CapEx. So how much of it has been administered this year? And are there any adjustments based on the guidance that was released earlier? And updates on some next year CapEx plans as well. And next, you mentioned during value day about some of cash reserves. And so based on the cash reserves that you intend to make available, how does CapEx change?

我有疑問。首先是關於資本支出。那麼今年管理了多少呢？在先前發布的指導意見的基礎上，是否有一些調整？以及一些明年資本支出計畫的更新。接下來，您在價值日期間提到了一些現金儲備。那麼，根據您打算提供的現金儲備，資本支出會如何變動？

Next is on lithium. We -- the market is flooded, so there's oversupply. And that's why the price is falling. Of course, there are various variables, but when do you intend to meet BEP? Thank you.

接下來是鋰。我們——市場被淹沒，所以供應過剩。這就是價格下跌的原因。當然，存在各種變數，但是您打算什麼時候遇到BEP？謝謝。

The question about capex and investment.

關於資本支出和投資的問題。

The question about CapEx and investment, let me address that portion. This year, what we're planning is -- for investment, that is, is in consideration of the market chasm as well as the steel market outlook. Because the situation is much more depressed than we had originally projected, our investment plans are also being reduced. So we have reduced our original CapEx by about KRW 200 million, and about [KRW100 billion] has already been executed. Infrastructure had about 0.5%. EV battery materials received more than 30%-some.

關於資本支出和投資的問題，讓我來談談這部分。今年我們的規劃是──投資方面，就是考慮到市場的缺口，也考慮到鋼鐵市場的前景。由於情況比我們最初預計的要低迷得多，我們的投資計劃也在減少。因此，我們將原來的資本支出減少了約 2 億韓元，並且已經執行了約 [1000 億韓元]。基礎設施約佔0.5%。EV電池材料收貨超過30%——有的。

And so we rarely execute as much CapEx as we planned. They are usually a little bit shy of the plan, and so we believe that is how it will proceed this year as well. For next year -- we don't have a business plan for next year yet. That will come in about September, October time frame. And that's when we will start to read into some specifics, but for Steel, infrastructure and EV battery materials, some of the investments that we have already planned, of course, there will be small adjustments, but they will move forward undeterred. So based on this year's original plan, we have upped that a little bit, so they have increased a little bit. About KRW10 trillion is what we believe will be executed next year.

因此，我們很少執行我們計劃的那麼多資本支出。他們通常對計劃有點猶豫，所以我們相信今年也會如此。對於明年——我們還沒有明年的商業計劃。這將在大約九月、十月的時間範圍內發生。那時我們將開始研究一些具體細節，但對於鋼鐵、基礎設施和電動車電池材料，我們已經計劃的一些投資，當然會有小的調整，但它們將毫不畏懼地向前推進。所以根據今年原來的計劃，我們提高了一點，所以他們也增加了一點。我們認為明年將執行約10兆韓元。

And some of the cash that will become available through restructuring, what we intend to do with that.

一些現金將透過重組獲得，我們打算用這些現金做什麼。

Yes. Through our value day event, we explained some of what we plan to do. First of all, shareholder return is what we will expend some of that for. And most of the available cash will, of course, go into investment. And some of the investments that we're making are not small, whether it's EV battery materials or other growth businesses. And that includes steel. So whatever other growth businesses that we believe require extra investments, additional investments.

是的。透過我們的價值日活動，我們解釋了我們計劃要做的一些事情。首先，股東回報是我們將花費其中一部分的目的。當然，大部分可用現金將用於投資。我們正在進行的一些投資並不小，無論是電動車電池材料還是其他成長業務。其中包括鋼鐵。因此，無論我們認為其他成長型業務需要額外投資，或是額外投資。

Second question, I'd like to address that. Lithium prices, as you all know, especially hard rock lithium prices, is determined by the hard rock itself, so that's why it's very challenging to answer this question. Lithium prices, we believe, have hit rock bottom. That's what we believe, and of course, there are various different perspectives about when this will begin to rebound. Some people look out to 2028. Others pull it into 2026. So BEP is when price will recover, but one positive point is, Argentina as well as PPLS in Argentina, they have each entered ramp-up stage. And production volume is incremental. And while the prices stay low, we want to be able to firm up our facility and to incrementally increase operation right -- rate and to certify our products. So we are kind of waiting for prices to rebound so that we can pull that into higher gear.

第二個問題，我想回答。眾所周知，鋰的價格，尤其是硬岩鋰的價格，是由硬岩本身決定的，所以回答這個問題非常具有挑戰性。我們認為，鋰價格已觸底。這就是我們所相信的，當然，對於何時開始反彈存在著各種不同的觀點。有些人展望 2028 年。其他人則將其推遲到 2026 年。所以BEP是價格恢復的時候，但一個積極的一點是，阿根廷以及阿根廷的PPLS，他們都已經進入了爬坡階段。且產量是增量的。在價格維持較低水準的同時，我們希望能夠鞏固我們的設施並逐步提高營運權率並認證我們的產品。因此，我們正在等待價格反彈，以便我們可以將其推向更高的檔位。

Next question is from Park Kwang-rae of Shinhan Investment Securities.

下一個問題是新韓投資證券公司的 Park Kwang-rae 提出的。

I am Park KwangRae from Shinhan Investment Securities. I have a question about the iron ore industry. So in the latter half, we see that the sales will go up, but what is your sales outlook for the latter half of this year? And when it comes to the steel prices, it's sort of recovering, but do you believe that the profit will be on par with the increasing profits in the second half? So I would like to know of what will be the outlook for the latter half.

我是新韓投資證券公司的樸光來。我有一個關於鐵礦石行業的問題。那麼下半年我們看到銷售量會上升，但你們對今年下半年的銷售前景有什麼看法呢？鋼材價格也有一定程度的回升，但你認為下半年的利潤能與利潤的成長持平嗎？所以我想知道下半年的前景如何。

And during the value day, you mentioned about the restructuring of the non-core assets. And I would like to know. In the process of restructuring these assets, there could be some losses that could be generated and it could actually lead to increased volatility in the short term. Is that also of your concerns?

在價值日期間，您提到了非核心資產的重組。我想知道。在重組這些資產的過程中，可能會產生一些損失，實際上可能會導致短期內波動性增加。這也是您所擔心的嗎？

Regarding the steel business. In the second half, the overall sales and operating profit outlook, I think that was the gist of the question. So I think that we'll be able to see an increasing -- increase of about 1 million ton of sales in the second half because there's been the restructuring of [BF]. And we are going to expand a high-profit or high-margin products in the second half as well. So we believe that will lead to reduced fixed costs and increasing sales prices. So that will contribute greatly to increasing the overall profits.

關於鋼鐵業務。下半年的整體銷售和營業利潤前景，我認為這就是問題的要點。因此，我認為下半年我們將能夠看到銷量增加約 100 萬噸，因為進行了重組[BF]。下半年我們也將拓展高利潤或高利潤的產品。因此我們認為這將導致固定成本降低和銷售價格上漲。這將大大有助於增加整體利潤。

But in Q3, the global steel prices will go down. And the overall raw materials prices are declining, so we believe that steel prices will continue to go down in Q3 as well. As I mentioned before, in Q4, there is a production cut or output cut scheduled by China, so there is a high chance also that the prices could go up, but I -- we believe that in Q3 the price will go down, and slightly go up in Q4.

但第三季度，全球鋼材價格將會下跌。而且原物料價格整體正在下降，因此我們認為三季鋼材價格也將持續下跌。正如我之前提到的，在第四季度，中國有減產或減產計劃，因此價格也很有可能上漲，但我 - 我們認為第三季度價格會下降，並且第四季度略有上升。

But as for the mill margins, there is a reduced fixed cost. And also, compared to the steel prices cut, the raw materials prices will go much down, so we believe that will lead to increased profits or slight increase of profits.

但就工廠利潤而言，固定成本有所下降。另外，相對於鋼材價格的下調，原料價格將會下降很多，所以我們認為這將導致利潤的增加或利潤的小幅增加。

So the losses that could be incurred during the restructuring process was the -- regarding the second question. So yes, 120 assets will be restructured if they are not aligned with our strategy. We will go ahead with this progressively, so this year as well as next year. And we will sell off about -- restructure about 97% of the assets by 2027. So as we restructure our non-core assets -- but there could be like underperforming assets included as well, so of course, there could be losses temporarily incurred. However, the temporary sell-off losses could be spread out evenly across over different years, and in that process, there will be cash generated. And every year, the consolidated earnings will also improve, so they will be accounted for on an accumulated basis. So in the short term, we'll be able to fully cover the losses, so in the mid to long-term, we'll be able to implement this restructuring well. So each one year -- these losses will not be accounted for one specific year, so it's not going to have a huge impact on the earnings is what we believe.

因此，關於第二個問題，重組過程中可能產生的損失是。所以，是的，如果 120 項資產不符合我們的策略，它們將被重組。我們將逐步推進這項工作，今年如此，明年也是如此。到 2027 年，我們將出售約 97% 的資產，進行重組。因此，當我們重組非核心資產時，但也可能包括表現不佳的資產，所以當然，可能會暫時產生損失。然而，暫時的拋售損失可能會平均分佈在不同年份，在此過程中，將會產生現金。而且每年合併收益也會提高，所以會以累計計算。所以從短期來看，我們能夠完全彌補損失，所以從中長期來看，我們能夠很好地實施這次重組。因此，每一年，這些損失都不計入某一特定年份，因此我們認為，它不會對收益產生巨大影響。

And to add some comments. When it comes to operating profit, once the restructuring is complete, the losses will go to profits, shift to profits. And the losses that you're talking about probably is about some of the operating profit losses that could happen on the balance sheet.

並添加一些評論。說到營業利潤，一旦重組完成，虧損就會轉為利潤，轉為利潤。您所說的損失可能是資產負債表上可能發生的一些營業利潤損失。

No other questions have come up. [Operator Instructions]

沒有出現其他問題。【操作說明】

I believe all the questions have been asked. I'd like to wrap this up. I'd like to thank everyone for participating. And I hereby close the second quarter earnings release reporting session. Thank you very much.

我相信所有的問題都已經被問到了。我想結束這一切。我要感謝大家的參與。我在此結束第二季財報發布報告會。非常感謝。

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本筆錄中的英語陳述是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。