Ternium SA (TX) 2022 Q2 法說會逐字稿

Thank you for standing by, and welcome to the Ternium Second Quarter Conference Call. I will now hand today's call over to Sebastian Marti, please go ahead.

感謝您的支持，歡迎參加 Ternium 第二季度電話會議。我現在將今天的電話交給 Sebastian Marti，請繼續。

Good morning. And thank you for joining us today. My name is Sebastian Marti, I am Ternium's Global Investor Relations and Compliance Senior Director. Ternium released yesterday financial results for the second quarter and first half of 2022. This call is complimentary to that presentation.

早上好。感謝您今天加入我們。我叫 Sebastian Marti，是 Ternium 的全球投資者關係和合規高級總監。 Ternium 昨天發布了 2022 年第二季度和上半年的財務業績。這次電話會議是對該演示文稿的補充。

Joining me today are Ternium's Chief Executive Officer, Maximo Vedoya; and the company's Chief Financial Officer, Pablo Brizzio, who will discuss Ternium's business environment and performance. At the conclusion of our prepared remarks, there will be a Q&A session.

今天加入我的是 Ternium 的首席執行官 Maximo Vedoya；以及公司的首席財務官 Pablo Brizzio，他將討論 Ternium 的商業環境和業績。在我們準備好的發言結束時，將有一個問答環節。

Before we begin, I would like to remind you that this conference call contains forward-looking information, and the actual results may vary from those expressed or implied. Factors that could affect results are contained in our filing with the Securities and Exchange Commission, and on page 2 in today's webcast consultation. You will also find any reference to non-IFRS financial measures reconciled to the most directly comparable IFRS measures in the press release issued yesterday. With that, I'll turn the call over to Mr. Vedoya.

在開始之前，我想提醒您，本次電話會議包含前瞻性信息，實際結果可能與明示或暗示的有所不同。可能影響結果的因素包含在我們向證券交易委員會提交的文件中，以及今天網絡直播諮詢的第 2 頁。您還可以在昨天發布的新聞稿中找到與最直接可比的 IFRS 措施一致的非 IFRS 財務措施的任何參考。有了這個，我會把電話轉給 Vedoya 先生。

Thank you, Sebastian, and good morning everyone. Thank you very much for your participation today in our conference call. Ternium reported strong results for the second quarter, with $1.2 billion adjusted EBIDTA, and a margin of more than $400 per ton.

謝謝你，塞巴斯蒂安，大家早上好。非常感謝您今天參加我們的電話會議。 Ternium 公佈了第二季度的強勁業績，調整後的 EBIDTA 為 12 億美元，利潤率超過每噸 400 美元。

Oops. Hello? I don't know if everybody's hearing.

哎呀。你好？不知道大家有沒有聽到。

Sorry, I will continue. With a margin of more than $400 per ton. These results were similar to those obtained in the first quarter of the year representing a solid start for 2022.

對不起，我會繼續。每噸利潤超過400美元。這些結果與今年第一季度獲得的結果相似，代表著 2022 年的良好開端。

Over the past 12 months, Ternium's solid competitive position and the outstanding effort of its people enable it to take advantage of a very attractive business conditions. In this period, we generate $5.8 billion of adjusted EBIDTA, $1.9 billion of free cash flow, and returned to shareholders over $500 million in dividend payments. Looking ahead, we expect increased volatility, volatility, sorry, in the business environment. In the first quarter, Russia's invasion of Ukraine caused an upsurge in raw material and steel prices. But over the last few months, higher energy costs, inflationary pressures, a consequent monetary tightening, and the effect on global supply chains of China's COVID-19 restrictions drove raw material and steel prices to a significant decrease.

在過去的 12 個月中，Ternium 穩固的競爭地位和員工的傑出努力使其能夠利用極具吸引力的商業環境。在此期間，我們產生了 58 億美元的調整後 EBIDTA、19 億美元的自由現金流，並向股東返還了超過 5 億美元的股息支付。展望未來，我們預計商業環境的波動性，波動性，對不起，會增加。一季度，俄羅斯入侵烏克蘭導致原材料和鋼材價格暴漲。但在過去幾個月中，能源成本上升、通脹壓力、隨之而來的貨幣緊縮以及中國 COVID-19 限制對全球供應鏈的影響，推動原材料和鋼鐵價格大幅下跌。

Looking ahead, I believe the main steel business variables are today closer to more sustainable level. So we could see a stabilization during the next couple of months. Having said this, volatility will persist for some time, as there continues to be a considerable level of uncertainty related to the factors I've just mentioned.

展望未來，我相信今天的主要鋼鐵業務變量更接近更可持續的水平。因此，我們可以在接下來的幾個月中看到穩定。話雖如此，波動性將持續一段時間，因為與我剛才提到的因素相關的不確定性仍然很大。

Let's turn now to a review of our main markets. In Mexico, the industrial market remains relatively healthy, with different dynamics in the different industries. The auto industry continue to suffer from supply chain disruptions affecting the availability of semiconductors and other inputs for its production process. We have been expecting these disruptions to decrease for several quarters already, but they seem to be harder to solve than what most people expected. And recent China's lockdowns continue to affect these global supply chains. On the other hand, there is significant unsatisfied end user demand in this industry. So when these procurement problems are finally worked through, there will be an opportunity for us to increase shipments to OEMs. In addition, we have been making progress with product certification in our new hot rolling (inaudible), something that will enable us to gain market share in this sector.

現在讓我們回顧一下我們的主要市場。在墨西哥，工業市場仍然相對健康，不同行業的動態不同。汽車行業繼續遭受供應鏈中斷的影響，影響其生產過程中半導體和其他投入的可用性。幾個季度以來，我們一直預計這些中斷會減少，但它們似乎比大多數人預期的更難解決。最近中國的封鎖繼續影響著這些全球供應鏈。另一方面，該行業存在大量未滿足的最終用戶需求。因此，當這些採購問題最終得到解決時，我們將有機會增加對 OEM 的出貨量。此外，我們在新熱軋（聽不清）的產品認證方面取得了進展，這將使我們能夠在該領域獲得市場份額。

Other manufacturing industries like HVAC and electrical motors are doing well. On the other hand, the white goods industry is slowing down production rates as a result of accumulation of end product inventory in the value chains. Finally, the commercial market in Mexico, (inaudible) by construction activity, is currently having weak apparent demand due to a destocking process resulting from the decrease in steel prices over the last few months, as well as the impact on end customers of higher interest rate and inflation. Looking forward, the low level of inventories in the market is going to need a restocking that will probably happen during the second (inaudible).

暖通空調和電動機等其他製造業表現良好。另一方面，由於價值鏈中終端產品庫存的積累，白色家電行業的生產率正在放緩。最後，墨西哥的商業市場（聽不清）建築活動目前的表觀需求疲軟，原因是過去幾個月鋼鐵價格下跌導致庫存減少，以及對更高興趣的最終客戶的影響利率和通貨膨脹。展望未來，市場上的低庫存水平將需要補充庫存，這可能會在第二個（聽不清）期間發生。

Moving now to Argentina, steel demand in the market remains at similar levels to those of the last few quarters, despite higher level of volatility in the country's macroeconomic environment. Most of the sectors in Argentina continue to show good demand, like agribusiness sector, the auto industry, the white goods industry, and the energy sector, but the uncertainty regarding the country's macro situation has increased since our last conference call. So steel demand further on may reflect substantial macroeconomic volatility.

現在轉到阿根廷，儘管該國宏觀經濟環境的波動程度較高，但市場上的鋼鐵需求仍與過去幾個季度的水平相似。阿根廷的大部分行業繼續表現出良好的需求，如農業綜合企業、汽車行業、白色家電行業和能源行業，但自上次電話會議以來，該國宏觀形勢的不確定性有所增加。因此，鋼鐵需求進一步可能反映宏觀經濟大幅波動。

I would like now to share our progress on some sustainability topics. Last quarter, Ternium released its annual sustainability report. In this new edition, we will reinforce our reporting framework by adding SASB standards for iron and steel producers, and also the recommendations of TCFD. We believe this is a step forward in the sustainability disclosure of our company in line with current discussions on the matter. We have also been working on improving the tools we use for the management of CO2 emissions in our company.

我現在想分享我們在一些可持續發展主題上的進展。上個季度，Ternium 發布了年度可持續發展報告。在這個新版本中，我們將通過添加針對鋼鐵生產商的 SASB 標準以及 TCFD 的建議來加強我們的報告框架。我們相信，這是我們公司在可持續發展披露方面向前邁出的一步，符合目前對此事的討論。我們還一直致力於改進我們用於管理公司二氧化碳排放的工具。

Recently, we completed the assessment of Ternium's greenhouse green gases emission under the GAG protocol accounting standard. This is complimentary to reporting of CO2 emissions and the world steel methodology, which has been carried out over the last few years. With the application of the GAG protocol standards, we are extending the assessment boundaries to the whole company. This methodology also provides enhanced emissions management capabilities down to each production line. It is important to note that we have also performed for the first time a third party verifications of Ternium emission metrics.

近期，我們完成了 GAG 協議核算標準下對 Ternium 溫室氣體排放的評估。這是對二氧化碳排放報告和世界鋼鐵方法學的補充，該方法已在過去幾年中開展。隨著GAG協議標準的應用，我們正在將評估邊界擴展到整個公司。這種方法還為每條生產線提供了增強的排放管理能力。值得注意的是，我們還首次對 Ternium 排放指標進行了第三方驗證。

Another relevant topic for Ternium is safety. A few weeks ago, we had our annual safety day event with the participation of employees and managers from all the countries where we operate. It is an opportunity to share the results of safety programs in place, our best practices around the organization, and future actions plans. Safety is a key issue in the company's agenda, and we are encouraged by the results we are getting so far, as our lost time injury frequency rate during the first half of the year has been the lowest ever.

Ternium 的另一個相關主題是安全性。幾週前，我們舉辦了一年一度的安全日活動，來自我們經營所在的所有國家的員工和經理都參加了活動。這是一個分享現有安全計劃結果、我們在組織中的最佳實踐以及未來行動計劃的機會。安全是公司議程中的一個關鍵問題，我們對迄今為止取得的成果感到鼓舞，因為我們在今年上半年的誤工工傷率是有史以來最低的。

Wrapping up, we expect to keep showing healthy shipments over the following quarters. On the other hand, the normalization of steel business variables will bring a decrease of margin to more sustainable levels. I am positive Ternium is well positioned to show distinctive probability once steel business variables stabilize, and all recent changes to steel prices and raw materials cost goes through our books. The strength of Ternium's balance sheet and our enhanced competitive position will enable Ternium to navigate the expected volatility in the markets. Further on, we anticipate cash generation will remain robust as we should (inaudible) a good share of the working capital investments made when input cost and steel prices were significantly higher than they currently are. Okay. With that, I stop here and ask Pablo to go ahead with the review of our quarter's performance.

最後，我們預計在接下來的幾個季度中出貨量將保持健康。另一方面，鋼鐵業務變數的正常化將帶來利潤率下降到更可持續的水平。我很肯定，一旦鋼鐵業務變量穩定下來，並且近期鋼鐵價格和原材料成本的所有變化都會出現在我們的賬簿上，Ternium 能夠很好地顯示出獨特的可能性。 Ternium 資產負債表的實力和我們增強的競爭地位將使 Ternium 能夠應對市場的預期波動。此外，我們預計現金生成將保持強勁，因為當投入成本和鋼鐵價格顯著高於當前水平時，我們應該（聽不清）在營運資本投資中佔有很大份額。好的。有了這個，我在這裡停下來請巴勃羅繼續審查我們季度的業績。

Thanks, Maximo. Thanks everybody for participating in our call. As you will see in today's webcast presentation, Ternium continues showing very strong results in the second quarter of the year, similar to those records in the first quarter.

謝謝，馬克西莫。感謝大家參與我們的電話會議。正如您將在今天的網絡廣播演示中看到的那樣，Ternium 在今年第二季度繼續表現出非常強勁的業績，與第一季度的記錄相似。

Let's start by looking at Page 3 in the presentation with adjusted EBITDA and its earnings. Adjusted EBITDA in the second quarter was at $1.2 billion, and margins of 28% or $414 per ton. We expect lower margins going forward as they start to reflect the significant decrease in the steel benchmark prices over the last 3 months. Although market prices for raw material has also been decreased lately, we expect cost per ton to increase in the third quarter as the company will consume raw material purchase in previous months at higher cost. The income in the period reached $936 million, or $4.07 per (inaudible), solid by historical standard, reflecting the strong operating performance.

讓我們首先查看演示文稿中的第 3 頁，其中包含調整後的 EBITDA 及其收益。第二季度調整後的 EBITDA 為 12 億美元，利潤率為 28% 或每噸 414 美元。我們預計未來利潤率會下降，因為它們開始反映過去 3 個月鋼鐵基準價格的顯著下降。儘管近期原材料市場價格也有所下降，但我們預計第三季度每噸成本將增加，因為公司將在前幾個月以較高的成本消耗原材料採購。該期間的收入達到了 9.36 億美元，即每股 4.07 美元（聽不清），按歷史標準衡量，表現穩健，反映了強勁的經營業績。

Let's turn now to Page 4, to review steel shipments. In Mexico, the volumes were 1.7 million tons in the second quarter of the year, increasing sequentially and slightly below the level achieved in the prior year's second quarter. In the southern region, shipments in the second quarter were 600,000 tons, slightly higher sequentially and down from a year over year basis. In the other market regions, shipments were 376,000 tons in the second quarter, lower sequentially. On a year over year basis, the decreasing the volume of (inaudible) was mostly offset by higher finished steel shipment in Ternium's market in the region. Ternium has been gradually increasing the integration of a [slab] facility in Brazil, (inaudible) finishing facilities mainly in Mexico, Argentina. As you can see in the top right half (inaudible).

現在讓我們翻到第 4 頁，查看鋼鐵出貨量。在墨西哥，今年第二季度的產量為 170 萬噸，環比增長，略低於去年第二季度的水平。在南部地區，第二季度出貨量為 60 萬噸，環比略高，同比下降。在其他市場區域，第二季度出貨量為 376,000 噸，環比下降。與去年同期相比，（聽不清）數量的減少主要被 Ternium 在該地區市場的成品鋼出貨量增加所抵消。 Ternium 一直在逐步增加巴西 [slab] 設施的整合，（聽不清）主要在墨西哥和阿根廷的精加工設施。正如您在右上半部分看到的（聽不清）。

In the next Page #5, you can see that combining this development, we arrive at consolidated achievement of 3 million tons in the second quarter, stable sequentially and a little down versus the prior year second quarter. Looking forward into the third quarter, we anticipate to remain relatively stable. Moving on to steel prices, Ternium's revenue per ton the second quarter increased slightly sequentially and advanced substantially on a year over year basis. As I mentioned earlier, we anticipate the decrease in (inaudible) steel prices in the third quarter, as steel prices have decreased significantly, and this will be reflected by the larger set of contract prices in Mexico.

在接下來的第 5 頁中，您可以看到結合這一發展，我們在第二季度達到了 300 萬噸的綜合成就，環比穩定，比去年第二季度略有下降。展望第三季度，我們預計將保持相對穩定。轉向鋼鐵價格，Ternium 第二季度的每噸收入環比略有增長，同比大幅增長。正如我之前提到的，我們預計第三季度（聽不清）鋼鐵價格會下降，因為鋼鐵價格已大幅下降，這將在墨西哥更大的合同價格中反映出來。

Let's now review on Page 6, demand drivers behind the changes in adjusted EBITDA and net income. There was slight sequential increase in adjusted EBITDA in the second quarter, reflecting higher realized steel prices in Mexico and Argentina, partially offset by higher cost. Labor cost increasing the second quarter, mainly in connection with Ternium's Mexico employees profit sharing. This together with increase in energy cost was partially offset by lower (inaudible). Let me remind you that we use (inaudible) sales accounting to value our inventories. So it takes up to 5 months to reflect in our financial changes in lab and raw material prices. Looking forward, Ternium expects adjusted EBITDA to decrease sequentially in the third quarter, reflecting lower margin and relatively stable (inaudible).

現在讓我們回顧一下第 6 頁，調整後 EBITDA 和淨收入變化背後的需求驅動因素。第二季度調整後的 EBITDA 環比略有增長，反映出墨西哥和阿根廷的實際鋼材價格較高，部分被較高的成本所抵消。第二季度勞動力成本增加，主要與 Ternium 的墨西哥員工利潤分享有關。這與能源成本的增加一起被較低的（聽不清）部分抵消。讓我提醒您，我們使用（聽不清）銷售會計來評估我們的庫存。因此，我們最多需要 5 個月的時間才能反映實驗室和原材料價格的財務變化。展望未來，Ternium 預計調整後的 EBITDA 將在第三季度環比下降，反映出利潤率較低且相對穩定（聽不清）。

The chart at the bottom shows a sequential increase in the second quarter, mainly driven by better financial results. This improvement, primarily reflected a higher value of financial instruments, while income tax increase sequentially as the result of slightly better results and a higher effective tax rate.

底部的圖表顯示了第二季度的連續增長，主要是由於更好的財務業績。這種改善主要反映了金融工具價值的提高，而由於業績略好和有效稅率提高，所得稅依次增加。

Let's turn now to Page 7. There was no cash for operations in the second quarter, mainly as a result of a working capital increase of $681 million, and income tax cash payments of over $600 million. Tax payment in the period includes an increase in above payments for fiscal year 2022 in Mexico, and the payment of their standing tax balance for fiscal year 2021 still in (inaudible) both as a result of strong earnings records in 2021.

現在讓我們轉到第 7 頁。第二季度沒有用於運營的現金，主要是由於營運資金增加了 6.81 億美元，以及所得稅現金支付超過 6 億美元。該期間的納稅額包括墨西哥 2022 財年上述款項的增加，以及由於 2021 年強勁的收入記錄而支付的 2021 財年常期稅款餘額（聽不清）。

Increasing working capital include the significant impact of investors' values of higher steel and raw material cost as well as slightly higher volumes. Free cash flow in the second quarter of 2022 was a negative $166 million at the CapEx of $161 million. This together with the $353 billion paid in May, resulted in a reaction of turning net cash position to one billion dollars by the end of June.

營運資金的增加包括投資者對鋼鐵和原材料成本上漲以及銷量略高的價值的重大影響。 2022 年第二季度的自由現金流為負 1.66 億美元，資本支出為 1.61 億美元。這與 5 月份支付的 3530 億美元一起，導致到 6 月底淨現金頭寸變為 10 億美元。

Now in the finance Slide #8, let's review our cashflow performance on a yearly basis. Cash flow operation in the first half of this year was $687 million. After deducting income tax payments of $1.5 billion, working capital increase of $350 million.

現在在財務幻燈片 #8 中，讓我們每年回顧一下我們的現金流表現。今年上半年經營現金流為6.87億美元。扣除所得稅15億美元後，營運資金增加3.5億美元。

Looking forward to the second half of the year, our expectation is that (inaudible) will show healthy cash generation based on the CapEx estimate for the year of our product, so maybe $600 million increase in income tax payment compared to also of the first half, and a reaction of working capital as a price inflation of steel and raw material flow through return and database. Okay. With this, we finish our prepared remarks. Thank you very much again for your time and attention. And now we are ready for the questions. Please operator, proceed with the Q&A session.

展望下半年，我們的預期是（聽不清）將根據我們產品當年的資本支出估算顯示健康的現金產生，因此與上半年相比，所得稅支付可能增加 6 億美元，以及營運資金作為鋼鐵和原材料價格上漲的反應，通過回報和數據庫流動。好的。至此，我們完成了準備好的評論。再次非常感謝您的時間和關注。現在我們準備好回答這些問題了。請接線員，繼續問答環節。

(Operator Instructions) Your first question comes from the line of Timna Tanners with Wolfe Research.

（操作員說明）您的第一個問題來自於沃爾夫研究公司的 Timna Tanners。

Wanted to ask volumes a few questions if I could. First one was, just looking at the volumes down year over year in Mexico, it still begs the question of where the Pesqueria volumes are showing up, or if it's just offsetting existing tonnage. And should we expect that to continue to ramp up as you get qualified at any timeframe there? The other question is just on the EBITDA guidance of a more sustainable level. I was hoping it to see if you could help quantify that a little bit better. If we look at the 5 years prior to COVID, the average has been about $150 bucks a ton, but of course the last couple years has been closer to $400 bucks a ton. So any thoughts on the gap between those 2 levels would be helpful? Thank you.

如果可以的話，想問一些問題。第一個問題是，僅看看墨西哥的銷量同比下降，它仍然引出了 Pesqueria 銷量出現在哪裡的問題，或者它是否只是抵消了現有的噸位。我們是否應該期望隨著您在任何時間範圍內獲得資格，這種情況會繼續增加？另一個問題只是關於更可持續水平的 EBITDA 指導。我希望它看看你是否可以更好地量化它。如果我們看一下 COVID 之前的 5 年，平均價格約為每噸 150 美元，但過去幾年當然接近每噸 400 美元。那麼對這兩個級別之間的差距有什麼想法會有幫助嗎？謝謝你。

Thank you, Timna. Pesqueria is running between 80 and 85% of capacity, which is very high. And to be honest, running very good. But as I think I mentioned in the last conference call, the problem are the market in Mexico, especially the commercial market, where we have a decrease in apparent demand because of what we are talking. So the issue with the volumes is that the other (inaudible), the one into the (inaudible) is running lower much lower than capacity. The other issue is, the certification process of all this new steel takes time. And all the automotive certifications take at least one year. So we are starting to see now these new products starting to flow through our customers. But this is a process that will take at least one year or more ramping up every quarter.

謝謝你，蒂姆娜。 Pesqueria 的運行容量在 80% 到 85% 之間，非常高。老實說，跑得很好。但正如我想我在上次電話會議中提到的那樣，問題出在墨西哥市場，尤其是商業市場，由於我們的談話內容，我們的明顯需求下降。因此，卷的問題是另一個（聽不清），進入（聽不清）的那個運行的比容量低得多。另一個問題是，所有這些新鋼材的認證過程都需要時間。所有汽車認證至少需要一年時間。所以我們現在開始看到這些新產品開始流向我們的客戶。但這是一個每個季度至少需要一年或更長時間才能完成的過程。

So that's the main issue. Regarding EBITDA, your second part of the question, what do we need with the most sustainable level? I think, and I would like then Pablo put more color to this, but if you remember Timna, we have always put our objective of EBITDA ratio before these last almost 2 years, let's say, between 15 and 20%. That was normal and higher compared to most of our peers. I think this is the outlook. We are looking at this range for the third quarter, and probably what we will be doing in the future, especially in the next year, is that we will have to increase that objective that we have and put the bar a little bit higher of this range between 15% and 20%. So I don't know, Pablo, do you want to put more clarification into this?

所以這是主要問題。關於 EBITDA，您問題的第二部分，我們需要什麼才能達到最可持續的水平？我想，然後我希望 Pablo 對此進行更多的說明，但如果你還記得 Timna，我們一直將 EBITDA 比率的目標放在過去近 2 年之前，比如說 15% 到 20% 之間。與我們的大多數同齡人相比，這是正常的並且更高。我認為這是前景。我們正在研究第三季度的這個範圍，未來我們可能會做的事情，特別是在明年，我們將不得不增加我們的目標，並將這個標準提高一點範圍在 15% 和 20% 之間。所以我不知道，Pablo，你想對此做更多的澄清嗎？

Okay, Maximo, you have already answered basically the question. But let me add some color to it. So yes, clearly what Maximo was saying is what we're expecting entering into this second part of the year. We are looking, or we are expecting, of course there is uncertainty that Maximo mentioned in prices especially, but we should be returning during this period to the levels that we had before the pandemic.

好的，Maximo，您已經基本回答了這個問題。但是讓我為它添加一些顏色。所以，是的，很明顯，Maximo 所說的是我們在今年下半年的預期。我們正在尋找，或者我們正在期待，當然，Maximo 在價格中特別提到了不確定性，但我們應該在此期間恢復到大流行之前的水平。

But I think it's important also what Maximo mentioned, which is that going forward or entering to 2023, or if you want, depending on your expectations, when we have a more normalized level of prices, and especially raw materials, the term after all the investment that we did at the ramp up of the new Pesqueria facility, we should be targeting margins that are at the upper side of the range, or even a little lower of that range. So I think that's the main point to pass to you, that clearly there will be a reaction in margins during the next couple of quarters. And then we should be returning not only to the normal level that we used to have, but approaching or targeting a little higher one.

但我認為 Maximo 提到的內容也很重要，即未來或進入 2023 年，或者如果你願意，取決於你的期望，當我們的價格水平更加正常化，尤其是原材料，畢竟這個詞我們在增加新的 Pesqueria 設施時所做的投資，我們應該將目標鎖定在該範圍的上端，甚至略低於該範圍。所以我認為這是傳遞給你的主要觀點，在接下來的幾個季度中，利潤率顯然會有所反應。然後我們不僅應該恢復到我們曾經擁有的正常水平，而且應該接近或瞄準更高的水平。

So the guidance of the higher end of the range would be a function of the investments that Ternium's made in Downstream, the vertical integration in Mexico, and some of the other company specific actions? Is that what you're saying?

因此，該範圍的高端指導將取決於 Ternium 在下游的投資、在墨西哥的垂直整合以及其他一些公司具體行動？這就是你說的嗎？

Yes, exactly, exactly. You're right. Of course, taking into consideration the prices of the final product, that you never know where we did, but this is clearly what you have said. It's clearly we are what we are looking for and what we are targeting.

是的，正是，正是。你是對的。當然，考慮到最終產品的價格，你永遠不知道我們在哪裡做過，但這顯然是你所說的。很明顯，我們就是我們正在尋找的東西和我們的目標。

Your next question is from a line of Andreas Bokkenheuser with UBS.

您的下一個問題來自瑞銀集團的 Andreas Bokkenheuser。

Just 2 quick questions from me. Just looking at the Mexican steel market at the moment, I mean, we've obviously seen some new capacity coming online in the US, and some of that volume was reportedly destined for Mexico. Are you starting to see increased import volumes or increased price pressure from some of the volumes that is coming in from the US into Mexico? That's the first question. And maybe the second question, if you could just give us your updated thoughts on potentially expanding within the EAF meal capacity, that would be great. Thank you very much.

我只有 2 個簡單的問題。看看目前的墨西哥鋼鐵市場，我的意思是，我們顯然已經看到一些新的產能在美國上線，據報導其中一些產能是運往墨西哥的。您是否開始看到從美國進入墨西哥的一些進口量增加或價格壓力增加？這是第一個問題。也許是第二個問題，如果您能向我們提供您對可能擴大 EAF 膳食容量的最新想法，那就太好了。非常感謝。

Okay. Thank you, Andreas. Yes, Mexican, the increase in import, we are not seeing it. To honest, if you see the imports on the Mexican market, and let's talk about flat products, which are the biggest part of the imports in Mexico, there was a huge increase last year between, I think it was between March, April, October, November when prices were going up and our steel mill, our (inaudible) mill was not still functioning. And then prices started to decrease, and those volumes come, and I mean, the lead time of imported material are very high.

好的。謝謝你，安德烈亞斯。是的，墨西哥，進口的增加，我們沒有看到。老實說，如果你看墨西哥市場的進口，再來說說墨西哥進口最大的平板產品，去年之間有很大的增長，我想是在3月、4月、10月之間, 11 月價格上漲，我們的鋼廠，我們的（聽不清）鋼廠還沒有運轉。然後價格開始下降，這些數量來了，我的意思是，進口材料的交貨時間非常長。

So it was a long several months of the arrival of those imports. Today we are seeing that imports are coming down from that peak. And to be honest, they are a little bit lower than what were they were in 2020. I think our market share is going up, or that's at least the numbers we have. So we are not seeing that problem, let's say, in Mexico. At least not yet. But again, we are seeing our customers very eager to buy the material from us, and the market share increasing. The second question was? Sorry, Andreas.

因此，這些進口商品的到來是漫長的幾個月。今天我們看到進口正在從那個高峰下降。老實說，它們比 2020 年的水平要低一些。我認為我們的市場份額正在上升，或者至少這是我們擁有的數字。所以我們沒有看到這個問題，比方說，在墨西哥。至少現在還沒有。但是，我們再次看到我們的客戶非常渴望從我們這裡購買材料，市場份額也在增加。第二個問題是？對不起，安德烈亞斯。

Just an update, or your updated thinking on expanding on the EAF or (inaudible) side?

只是更新，還是您對在 EAF 或（聽不清）方面擴展的更新想法？

Yes. No I mean, as I told you, last contract call, it's a very complicated project. But we are still doing all the engineering, and we should go forward to have US NCA compliance for the automotive industry in 2027, for sure. So we are going. I mean, we are still in the process of doing all the engineering on the site and everything. So still in track.

是的。不，我的意思是，正如我在上次合同電話中告訴你的那樣，這是一個非常複雜的項目。但我們仍在做所有的工程，我們應該在 2027 年為汽車行業實現美國 NCA 合規性，這是肯定的。所以我們要去。我的意思是，我們仍在進行網站上的所有工程和一切工作。所以還在路上。

Your next question is from the line of Alfonso Salazar with Scotiabank.

您的下一個問題來自加拿大豐業銀行的 Alfonso Salazar。

So I have 2. The first one is, I know that we have been asking this for years now, but if you can comment anything about how Ternium's going to unlock value and try to be really behind all the things that we've seen in the share price, and very related to steel prices. So anything that you can point toward recognizing the share price. And the second is regarding the auto industry and some trends that we are seeing today. For example, there is this trend in which OEM's are reducing in the menu, affordable cars.

所以我有 2 個。第一個是，我知道我們多年來一直在問這個問題，但是如果你能評論一下 Ternium 將如何釋放價值並嘗試真正支持我們所看到的所有事情股價，和鋼價有很大關係。因此，您可以指出任何可以識別股價的東西。第二個是關於汽車行業和我們今天看到的一些趨勢。例如，在這種趨勢中，OEM 正在減少價格實惠的汽車。

They are basically disappearing from the menu, and they are focusing more on SUV's, premium vehicles. And in that regard and considering that there are EV's coming and the price tag is going to be much higher, it's unclear to see why auto sales will return to past levels. And against this backdrop, I want to understand what is the strategy of OEM's increasing the use of high strength steel, and how it compares with aluminum auto parts. Aluminum is very attractive for OEM's to produce autos using more aluminum. So just want to understand what is the strategy there, and how do you see this market going forward for Ternium?

他們基本上從菜單上消失了，他們更多地關注 SUV 和高檔汽車。在這方面，考慮到電動汽車的到來並且價格會更高，目前還不清楚為什麼汽車銷量會回到過去的水平。而在這種背景下，我想了解OEM增加高強度鋼使用的策略是什麼，以及它與鋁製汽車零部件的比較。鋁對於 OEM 使用更多鋁生產汽車非常有吸引力。所以只是想了解那裡的策略是什麼，您如何看待 Ternium 的這個市場？

Okay. Alfonso, let me take the first question that you make. As you know, we have been discussing this for a long period of time. What we are seeing today, and then we can reflect on the future is that, probably taking out some of the US companies. The rest of the steel sector is having clearly a low multiple on reflecting the value of the companies. And probably this is a consequence of the re-adjustment that Maximo and myself, we have mentioned during the opening remark, where we are seeing, as Timna mentioned also during her question, that there will be an adjustment on margins to probably a region closer to what we used to have prior to the pandemic after having a couple of years of very or extremely good margins in the companies.

好的。阿方索，讓我回答你提出的第一個問題。如您所知，我們已經討論了很長時間。我們今天所看到的，然後我們可以反思未來的是，可能會淘汰一些美國公司。鋼鐵行業的其餘部分在反映公司價值方面的倍數明顯較低。這可能是馬克西莫和我自己重新調整的結果，我們在開幕詞中提到，正如蒂姆納在她的問題中提到的那樣，我們看到，邊際可能會調整到更接近的區域在公司擁有幾年非常或非常好的利潤率之後，我們在大流行之前曾經擁有的東西。

And since we are still having or reflecting the multiple with an VBA, that is not yet reflecting that new level we are seeing multiples that are lower than the historical numbers. So on itself, this multiple should recover at some point. But also, if you look at the share price of 30, which I think is your specific question, it is all relatively well, in comparison to our peers. And clearly, we have been taking certain actions in the past to try to enhance, to support the value of our company. And this has been very clear. We have discussed also in the past, dividing the DD and payment into parts or increasing or significantly increasing the DD and payment in relationship to the yield of the pay range, which now are quite high, in comparison to other companies.

由於我們仍在使用 VBA 或反映倍數，這還沒有反映新的水平，我們看到的倍數低於歷史數字。所以就其本身而言，這個倍數應該會在某個時候恢復。但是，如果你看一下 30 的股價，我認為這是你的具體問題，與我們的同行相比，這一切都相對較好。很明顯，我們過去一直在採取某些行動來嘗試提升、支持我們公司的價值。這一點已經很清楚了。我們過去也討論過，將 DD 和付款分成幾部分，或者增加或顯著增加與其他公司相比現在相當高的薪酬範圍的收益率。

We continue to work. In our France, we have tried to perform our operation as team in order to review or simplify our corporate structure. We have not been able yet successful to that. But what I'm trying to say is that we have different alternatives. And if we find a way to show that the company value is higher to what we have today, we are trying to do that. And we are trying to show the market that, not only we care, but we work in that direction.

我們繼續工作。在我們的法國，我們試圖以團隊的形式開展業務，以審查或簡化我們的公司結構。我們還沒有成功。但我想說的是，我們有不同的選擇。如果我們找到一種方法來證明公司價值比我們今天擁有的更高，我們正在努力做到這一點。我們正試圖向市場展示，我們不僅關心，而且朝著這個方向努力。

Of course, there are some things that will be difficult, because we have some compact that, or characteristics are different from our peers. Like the diversity of geography that we have, that will be, in some cases, to be a plus, but in some else, will be a minus. So we have that issue also to take into consideration, but in general, first, they must commit to point and telling will continue to perform and to do the things that we have been doing up to now in order to try to increase our share value.

當然，也有一些事情會比較困難，因為我們有一些緊湊的東西，或者說特點與我們的同齡人不同。就像我們擁有的地理多樣性一樣，在某些情況下，這將是一個加分項，但在其他一些情況下，將是一個減分項。所以我們也有這個問題需要考慮，但總的來說，首先，他們必須承諾指出並告訴將繼續執行並做我們迄今為止一直在做的事情，以嘗試增加我們的股票價值.

Okay. So let me take the second part and the auto industry, and it was a very -- I mean, there's several things in your questions. The first thing to say, I think the OEMs, and this is from our knowledge, but again, probably the automotive can speak better. They are putting more luxury or SUV, because of the restrictions they have. And clearly, they preferred selling SUV and luxury car and more luxury cars that have higher margins than producing the other type of cars. But it's more of a restriction of all these inputs and semiconductors. So they choose to do the higher margin products, because they don't have enough capacity, because of these restrictions. I think that's the mobile. If you see the automotive market, total production of automotive in the world, I'm saying, but it's similar in every market.

好的。所以讓我談談第二部分和汽車行業，這是一個非常 - 我的意思是，你的問題中有幾件事。首先要說的是原始設備製造商，這是據我們所知，但同樣，汽車可能會說得更好。由於他們的限制，他們正在投入更多的豪華或SUV。顯然，與生產其他類型的汽車相比，他們更喜歡銷售 SUV 和豪華車以及更多利潤率更高的豪華車。但這更多是對所有這些輸入和半導體的限制。所以他們選擇做利潤率更高的產品，因為他們沒有足夠的產能，因為這些限制。我覺得是手機如果你看到汽車市場，我會說世界上汽車的總產量，但每個市場都是相似的。

It was around 103 million units. That's the total automotive production of the world. Last year, it was final 78 million units. Although the same forecast of them was to do similar. And the demand that we see in the market was to do similar 2017. This year is 82 million units. Again, these difference is the restrictions are not the demand. I think in the U.S. and in Mexico, you see it also. In Brazil, we are seeing it also. There are not inventory in the dealers. There's no inventory. So I think that, once these supply chain issues, which, as I said in my initial remarks, has seemed much harder to solve than what everybody thinks, including the OEMs.

大約是1.03億台。這就是世界汽車總產量。去年，最終銷量為 7800 萬台。雖然他們的相同預測是做類似的。我們在市場上看到的需求是在 2017 年做類似的事情。今年是 8200 萬台。同樣，這些差異是限制不是需求。我想在美國和墨西哥，你也看到了。在巴西，我們也看到了。經銷商沒有庫存。沒有庫存。所以我認為，一旦這些供應鏈問題，正如我在最初的評論中所說的那樣，似乎比所有人（包括原始設備製造商）認為的更難解決。

So that's the first part. Aluminum versus steel. I don't see a big change in that. If you see the different reports that are out there, probably demand for steel for the automotive industry, it's going to stay stable for the next couple of years, until the new generation of batteries come forward. And then, cost will be also the main issue from industry. So demand is for steel is, again, going to peak. I think, in the long term, electric vehicles are going to be produced mostly from steel. That's what we are seeing. The cost driven or the equation, of course, even, it's very clear there. So I don't see a problem also there upon so. I hope to this I answer the question, but I don't know if I left something not answering, Alfonso.

這是第一部分。鋁對鋼。我看不出有什麼大的變化。如果你看到不同的報告，可能是汽車行業對鋼鐵的需求，未來幾年它將保持穩定，直到新一代電池問世。然後，成本也將成為行業的主要問題。因此，對鋼鐵的需求將再次達到頂峰。我認為，從長遠來看，電動汽車將主要由鋼鐵生產。這就是我們所看到的。成本驅動或等式，當然，甚至，在那裡非常清楚。所以我也沒有看到問題。我希望我能回答這個問題，但我不知道我是否留下了一些沒有回答的東西，阿方索。

Yes, those are my concerns. What I think is that this could be a little bit more structural. The fact that OEMs are realizing that they can do a better margins by not producing affordable cars in the future. And it has also to do with safety regulations, with emission regulations, which are very, very expensive for them to comply with. And that makes the affordable car less interesting to them. Cause there is no margin left. So that is probably something that we will see in the future, how this evolves. But I see you (inaudible)...

是的，這些都是我的擔憂。我認為這可能更具結構性。事實上，原始設備製造商意識到他們可以通過在未來不生產價格實惠的汽車來獲得更好的利潤。它還與安全法規、排放法規有關，這些法規對他們來說遵守起來非常非常昂貴。這使得負擔得起的汽車對他們來說不那麼有趣了。因為沒有餘量。所以這可能是我們將來會看到的，它是如何演變的。但我看到你（聽不清）......

No, I totally agree with you, but I am not seeing that trend. I think that some of the OEMs are going to produce affordable cars. There is a demand and somebody's going to do it. If you see what Tesla's doing, they want to do the, of course, the high margin cars, Model X, Model S. But Model 3 and the new one that they are talking about, they are much less expensive cars and they are much more steel usage on the other side. But somebody's going to build the demand. The world did need the more affordable cars also.

不，我完全同意你的看法，但我沒有看到這種趨勢。我認為一些原始設備製造商將生產負擔得起的汽車。有需求，就會有人去做。如果你看到特斯拉在做什麼，他們當然想做高利潤汽車，Model X，Model S。但是 Model 3 和他們正在談論的新車型，它們的價格要便宜得多，而且價格要高得多。另一方面更多的鋼材使用。但有人會建立需求。世界也確實需要更實惠的汽車。

I totally agree with you. I'm just concerned that it's going to be Asian brands and Chinese brands coming, which are going to get rid of that. So that a good part of that market, but we'll see how things go forth. Thank you, Maximo.

我完全同意你的看法。我只是擔心這將是亞洲品牌和中國品牌的到來，它們將擺脫這一點。所以這是那個市場的一個很好的部分，但我們會看看事情會如何發展。謝謝你，馬克西莫。

Also, it could be, Alfonso, that they need to use steel, melt it, and pour in the NAFTA, to be USMCA compliant. So customers, if we have Chinese, so we have American, we have Japanese. For us, they are our customers.

此外，阿方索，他們可能需要使用鋼材，將其熔化並倒入北美自由貿易協定，以符合 USMCA。所以客戶，如果我們有中國人，我們就有美國人，我們就有日本人。對我們來說，他們是我們的客戶。

Your next questions from a line of Caio Greiner with BTG Pactual.

您的下一個問題來自 BTG Pactual 的 Caio Greiner。

Just 2 quick questions from my... First one, the situation in Argentina, we've seen some companies with operations in Argentina reporting what could be seen as unsustainable high results, largely because of the large gap between the official and the unofficial foreign exchange. So just 2 points here. And I know it's mostly on the consumer side, so I just wanted to check with you, what kind of impact could we expect from this going forward for Ternium, on an accounting perspective, if we should be aware of anything that's going to be coming up for the third quarter or anything that we could have seen in the second quarter as well? And the second point, what kind of impact have you guys been sensing to steel demand in the country? Have you seen any slowdown from your customers or anything that we should be on alert for?

來自我的兩個快速問題... 第一個，阿根廷的情況，我們已經看到一些在阿根廷開展業務的公司報告了可能被視為不可持續的高業績，這主要是因為官方和非官方外國公司之間的巨大差距交換。所以這裡只有2分。而且我知道這主要是在消費者方面，所以我只是想與您核實一下，從會計的角度來看，我們可以從 Ternium 的未來中獲得什麼樣的影響，如果我們應該意識到將要發生的任何事情第三季度或我們在第二季度可以看到的任何事情？第二點，你們感受到了對該國鋼鐵需求的何種影響？您是否看到客戶的任何放緩或我們應該警惕的任何事情？

And the second point here, just to follow up to the previous question on Cascadia. I do remember that, in the last conference call, I think Maximo mentioned that you guys expected to see incremental shipments, especially from Cascadia, but for the Mexico division, for the Mexico geography to be around 1 million tons for 2022. I just wanted to check that that's still the case where you guys have been looking at, because you guys have been saying that commercial markets have been slow. And certification process takes around one year. So we might not see that for 2022. So just wanted to check if we can get an updated estimate for those incremental volumes for Mexico. And even if you guys have anything for 2023 as well, that could be helpful. Thank you.

這裡的第二點，只是為了跟進上一個關於 Cascadia 的問題。我確實記得，在上次電話會議中，我認為 Maximo 提到你們預計會看到出貨量增加，尤其是來自 Cascadia，但對於墨西哥分部而言，2022 年墨西哥地區的出貨量將達到 100 萬噸左右。我只是想要檢查你們一直在關注的情況是否仍然如此，因為你們一直在說商業市場一直很緩慢。認證過程大約需要一年時間。所以我們可能在 2022 年看不到這一點。所以只是想檢查一下我們是否可以獲得墨西哥這些增量數量的更新估計。即使你們也有 2023 年的任何東西，那也可能會有所幫助。謝謝你。

Okay. Thank you very much, Caio. I start with the second part of the Argentinian question and let Pablo talk about accounting, your first part. The impact on the market, as I said before, we are not seeing yet any impact in the market. Shipments from Ternium, Argentina, and still demand is still at the same levels as last quarter and the quarter before. It has been very stable and at the very good levels, to be honest.

好的。非常感謝，Caio。我從阿根廷問題的第二部分開始，讓 Pablo 談談你的第一部分會計。正如我之前所說，對市場的影響，我們還沒有看到對市場的任何影響。來自阿根廷 Ternium 的出貨量和需求仍與上一季度和上一季度持平。老實說，它一直非常穩定並且處於非常好的水平。

Having said this, today, it is important day. The new minister of economy is going to speak about the new economic plan. And as I said in my initial remarks, the macroeconomic situation is very complicated. So we think that, at the end, there is going to be an affection to the demand in Argentina. When it's coming, I am not able yet to say, but again, today, we see very stable. Our orders are very good and our customers are selling everything, to be honest. So we are very cautious. In spite of that, we are very cautious. Pablo, why don't you answer the accounting part?

說了這麼多，今天是重要的一天。新任經濟部長將談論新的經濟計劃。正如我在最初的發言中所說，宏觀經濟形勢非常複雜。所以我們認為，最終，阿根廷的需求將會受到影響。當它到來時，我還不能說，但同樣，今天，我們看到非常穩定。老實說，我們的訂單非常好，我們的客戶什麼都賣。所以我們非常謹慎。儘管如此，我們還是非常謹慎。巴勃羅，你為什麼不回答會計部分？

Okay. Ciao, how are you? So let me try first to answer your question in a theoretical way, and then we can enter into what's happening in Ternium. If, as you said, especially in some cars, let's say customers or companies that are working in Argentina more in the retail side are able to buy at the official exchange rate and put in prices more related to the, let's say, the financial exchange rate.

好的。曹，你好嗎？因此，讓我先嘗試從理論上回答您的問題，然後我們可以進入 Ternium 中正在發生的事情。如果，如您所說，尤其是在某些汽車中，假設在阿根廷從事零售業務較多的客戶或公司能夠以官方匯率購買，並提出與金融交易更相關的價格速度。

Clearly, there will be an expanded margin. So this could be the case of some companies that you have been talking to. This is not our case. We use the official exchange rate, which is, by the way, the only exchange rate that you can use to have the numbers, both in selling our products and in buying our products. So we have been buying all our raw materials and that are in Argentina imported, using the official exchange rate, and similarly, in the case of our sales in the market.

顯然，利潤將會擴大。因此，您一直在與之交談的一些公司可能就是這種情況。這不是我們的情況。我們使用官方匯率，順便說一下，這是您在銷售我們的產品和購買我們的產品時可以用來獲取數字的唯一匯率。因此，我們一直在使用官方匯率購買所有在阿根廷進口的原材料，同樣，我們在市場上的銷售也是如此。

So we have not that specific situation. In any case, and as you mentioned, if there is a devaluation, usually devaluation help initially to increase a little bit profitability. Because devalue (inaudible) is not dollar denominated in our case in Ternium Argentina, around 30% of our cost is special denominated. Then you have a possible gain in relationship to that, but also, and also Maximo mentioned this in the first part of answering your question, the uncertainty and the new plan or the consequences of the situation that we have today in Argentina, that if you consider that possible solution would be to adjust the expenditure in the country and add things to control inflation could have an impact on volumes or demand in the market.

所以我們沒有那個具體的情況。無論如何，正如您所提到的，如果出現貶值，通常貶值最初有助於增加一點盈利能力。因為在 Ternium Argentina 的案例中，貶值（聽不清）不是以美元計價的，所以我們大約 30% 的成本是特殊計價的。那麼您可能會因此而受益，而且馬克西莫在回答您的問題的第一部分中也提到了這一點，不確定性和新計劃或我們今天在阿根廷的局勢的後果，如果您考慮可能的解決方案是調整該國的支出並增加控制通貨膨脹的措施可能會對市場的數量或需求產生影響。

So very uncertain situation at the moment. And we need to wait until what's going or will be the announcement of today. And then, we probably have a clarity on that. But going back to the initial part of your question, it's not something that is impacting Ternium today.

所以目前情況非常不確定。我們需要等到今天發生的事情或將要宣布的事情。然後，我們可能對此有一個清晰的認識。但回到您問題的最初部分，它不會影響今天的 Ternium。

Well, I go to the Pesqueria question on the incremental shipment, Caio. And you're right. We said in the past, I think it was last year when we put, I think it was a conference call in November of last year when we were ramping up the Pesqueria project. And to be clear, we are not going to achieve that objective that we put in that conference call. I think there are 2 things.

好吧，我去 Pesqueria 關於增量裝運的問題，Caio。你是對的。我們過去說過，我認為是去年我們提出的，我認為是去年 11 月的電話會議，當時我們正在加速 Pesqueria 項目。需要明確的是，我們不會實現我們在電話會議中提出的目標。我認為有兩件事。

One is all these huge imports that came at the end of last year, we were not expecting that. And that was in the stock for the first part of this year. The second point is that clear the commercial market is worse than what we expected. If you see the construction or the infrastructure, GDP in Mexico is continue declining, although Mexico is growing as a whole in the country. Those 2 things we didn't expect.

一個是去年年底的所有這些巨額進口，這是我們沒有預料到的。這是今年上半年的庫存。第二點是商業市場的明朗比我們預期的要差。如果您看到建築或基礎設施，墨西哥的 GDP 正在繼續下降，儘管墨西哥在該國整體上正在增長。這兩件事是我們沒有預料到的。

The certification process is something normal that we had into account. But we were hoping to ramp up production to go first to commercial market and to substitute these imports that were coming where we didn't have any capacity in the middle of last year to go. But the volume of the Pesqueria plant today, the production is in line with the perception. The (inaudible) mill is running exactly as we projected.

認證過程是我們必須考慮的正常現象。但我們希望提高產量，首先進入商業市場，並替代去年年中我們沒有任何產能的進口產品。但是今天Pesqueria工廠的產量，產量符合人們的認知。 （聽不清）工廠正在完全按照我們的預期運行。

The problem is the Churubusco facility, which of course is an older facility, so we are not producing the capacity we did expect. 2023, I think the volume will be there. I think that these certifications, part of that is going to be ready in 2023 so we are going to see incremental volumes from the industrial customers. The question is, if the commercial market is going to react if construction infrastructure in Mexico is going to grow. And that's a big if. I think it will, but we have to see that in the coming month.

問題是 Churubusco 設施，當然這是一個較舊的設施，所以我們沒有達到我們預期的產能。 2023年，我認為量會在那裡。我認為這些認證，其中一部分將在 2023 年準備就緒，因此我們將看到工業客戶的數量增加。問題是，如果墨西哥的建築基礎設施會增長，商業市場是否會做出反應。這是一個很大的如果。我認為會的，但我們必須在下個月看到這一點。

Just to get a sense from you, do you guys expect any kind of increase in terms of shipments for Mexico this year? And could you maybe provide a guidance for 2023, an expectation that you guys are currently working with? Or is that still too far away to say anything? Thank you.

只是為了讓您了解一下，你們預計今年墨西哥的出貨量會有所增加嗎？您能否為 2023 年提供指導，這是你們目前正在努力的期望？還是說這還太遠了？謝謝你。

I think given the uncertainty of the moment, of the world's economy, not of the steel business, I think talking about 2023 is a little bit early today. We have our own projected projections, but they are internal ones. Of course they're growing, but to say a number publicly, I think we should wait a little bit more. I don't see any increase in 2022, or a little bit increase in 2022 in Mexico.

我認為考慮到當前世界經濟的不確定性，而不是鋼鐵行業的不確定性，我認為今天談論 2023 年有點早。我們有自己的預測，但它們是內部的。當然，它們正在增長，但要公開說出一個數字，我認為我們應該再等一會兒。我認為 2022 年沒有任何增長，或者墨西哥 2022 年會略有增長。

The next question is from the line of Thiago Lofiego with Bradesco BBI.

下一個問題來自 Thiago Lofiego 和 Bradesco BBI。

Just a quick follow up on, still on Pesqueria and on Mexico volume, the first question is if we see a more adverse scenario in 2023, and considering you have all of the certifications you mentioned, are you going to prioritize Pesqueria volumes over other sites, given its lower costs or better margins? Does it make sense to think that way?

只是對 Pesqueria 和墨西哥卷的快速跟進，第一個問題是我們是否在 2023 年看到更不利的情況，並且考慮到您擁有您提到的所有認證，您是否會優先考慮 Pesqueria 捲而不是其他網站，鑑於其成本更低或利潤率更高？這樣想有意義嗎？

And then the second question, specifically about the construction sector which you expressed a caution there, you also mentioned that you see the inventory levels relatively low and you expect some restocking to support volumes in the second half. Can you talk a little bit more about that, and also about underlying demand? Beyond this restocking, how do you see construction activity evolving in the next 6 to 12 months in Mexico? What are the key drivers that you're basically following for this bucket? Thank you.

然後是第二個問題，特別是關於建築行業，您在那裡表達了謹慎態度，您還提到您看到庫存水平相對較低，您預計下半年會有一些補充庫存來支撐銷量。你能多談談這個，以及潛在的需求嗎？除了補貨之外，您如何看待墨西哥未來 6 到 12 個月的建築活動？對於這個存儲桶，您基本上遵循的關鍵驅動因素是什麼？謝謝你。

Okay, perfect. Yes, well, thank you for your question. Volume, we prioritizing Pesqueria. We are doing that today and we are going to continue. The first mill is Pesqueria, the second is the Guerrero plant, the mini mill. Or the first is the mini mill and Pesqueria, those are at full capacity today. Pesqueria is at 85, but it's the ramp up curve we had, to be honest. The one that we are not prioritizing is Churubusco. That's the one that is going to take more or less volume according to the demand. That's the point.

好的，完美。是的，好的，謝謝你的提問。量，我們優先考慮 Pesqueria。我們今天正在這樣做，我們將繼續這樣做。第一個工廠是 Pesqueria，第二個是 Guerrero 工廠，即小型工廠。或者第一個是小型工廠和 Pesqueria，它們今天已滿負荷生產。 Pesqueria 是 85 歲，但老實說，這是我們的上升曲線。我們沒有優先考慮的是 Churubusco。根據需求，這將需要或多或少的數量。這才是重點。

The construction industry, there are 3 drivers, 2 and a half drivers. The first driver is infrastructure. Infrastructure is not good in Mexico. I don't expect that to improve in the near future. The second is construction of the residential homes and buildings of the private sector. It's also going down the last couple of years to be honest. But I do think that in some point that's going to make a turn. When? It's hard to say. But I think that you are seeing more people looking for increase in permits and trying to see their new projects. Again, it would take some month to see if this is really going to come in.

建築行業，有3個司機，2個半司機。第一個驅動因素是基礎設施。墨西哥的基礎設施不好。我不希望在不久的將來會有所改善。二是建造私營部門的住宅和建築物。老實說，過去幾年它也在下降。但我確實認為，在某些時候，情況會發生轉變。什麼時候？很難說。但我認為你看到越來越多的人尋求增加許可證並試圖看到他們的新項目。同樣，這需要幾個月的時間才能看到這是否真的會出現。

The third one is the industrial sites, the construction of industrial sites. That's the only one that is doing very, very well in Mexico. I mean the thing that we talk a lot in this conference call about reassuring all the north of Mexico is having a booming in building these industrial facilities. The industrial parks are building very much. All our customers and ourself that we have a building unit or our customers that may structure for this industrial business, they have a backlog of several month, some say even one year. That's the only thing that is really increasing in Mexico, which is a very good news because those facilities that are coming, some of them are going to consume steel in the future. They're customers of us, some of them.

第三個是工業用地，工業用地的建設。這是唯一一個在墨西哥做得非常非常好的人。我的意思是，我們在這次電話會議中經常談論的關於讓墨西哥北部地區放心的事情正在蓬勃發展，這些工業設施的建設正在蓬勃發展。工業園區正在建設中。我們所有的客戶和我們自己，我們有一個建築單元或我們的客戶可能為這個工業業務構建，他們有幾個月的積壓，有些人甚至說一年。這是墨西哥唯一真正在增加的東西，這是一個非常好的消息，因為那些即將到來的設施，其中一些將在未來消耗鋼鐵。他們是我們的客戶，其中一些。

But the other 2 are not working, Thiago, so I think that is the main issue in Mexico. Inventories, as I said, in the distribution I think they're low. They are low because of prices. Prices started to decrease and they stopped buying. I think they have to do some restocking, if not in the third, in the fourth quarter. We think that's what is going to happen. But again, it's not going to change a lot the volumes, I think. The main issue is construction really start moving, not only in industrial buildings, but in private investment and the infrastructure investment. I hope I'd answered your question, Thiago.

但是其他兩個都不起作用，蒂亞戈，所以我認為這是墨西哥的主要問題。正如我所說，我認為分銷中的庫存很低。它們之所以低是因為價格。價格開始下降，他們停止購買。我認為他們必須在第三季度或第四季度進行一些補充庫存。我們認為這就是將要發生的事情。但同樣，我認為它不會改變很多數量。主要問題是建設真正開始動起來，不僅是工業建築，還有私人投資和基礎設施投資。我希望我已經回答了你的問題，蒂亞戈。

Your next question is from the line of Caio Ribeiro with Bank of America.

您的下一個問題來自美國銀行的 Caio Ribeiro。

I have 2 questions here. The first, going back to your upstream slab capacity expansion plans in Mexico, I was just wondering if you could look to also expand your iron ore production as well to feed into that additional upstream capacity. And in the second question, in terms of pricing for US HRC in the US, after that correction with prices near 800 to $900 for a short ton, do you feel that we're near a bottom right now? And after that correction, have you started noticing your bids for your volume starting to pick up?

我這裡有 2 個問題。首先，回到你們在墨西哥的上游板坯產能擴張計劃，我只是想知道你們是否也可以擴大鐵礦石產量，以增加上游產能。第二個問題，美國熱軋卷在美國的定價方面，經過調整，每短噸價格接近 800 美元至 900 美元，您是否認為我們現在接近底部？在那次更正之後，您是否開始注意到您對交易量的出價開始回升？

Yes, good question. Yes, thank you, Caio. Good questions. We are not seeing, although we are analyzing our iron ore facilities, and we are always looking for new projects with our (inaudible), we are far away from saying that we are going to open or have a new iron ore facility for the new (inaudible) capacity. Probably what we are seeing is that we are going to buy iron ore for that facility. I agree with you. It's very hard to say because it can take a little bit, some month more, but I think we are near at the bottom, for sure in hot rolling prices, hot (inaudible) prices in the US.

是的，好問題。是的，謝謝你，Caio。好問題。我們沒有看到，儘管我們正在分析我們的鐵礦石設施，並且我們一直在尋找我們的（聽不清）新項目，但我們遠沒有說我們將為新的鐵礦石設施開放或擁有一個新的鐵礦石設施（聽不清）容量。可能我們看到的是我們將為該設施購買鐵礦石。我同意你的看法。很難說，因為它可能需要一點時間，再過幾個月，但我認為我們已經接近底部，肯定是熱軋價格，美國的熱（聽不清）價格。

And we are seeing that with our sales in the US. To be honest, in the last couple of weeks we have much more inquirers. People are starting to buy futures, prices future, although they're not indicative of anything, but they are higher than the actual price that we have today, so I think that, as I said, demand in industrial customers and in construction in the US is still very healthy. Although everybody's talking about recession, still demand is very healthy. Industrial demand is very healthy, reassuring it's also happening in the US. We see this both sides of the border, what I call, I talk about construction. I think that again, price is (inaudible) coming to the bottom in some part of the month, or in the next month. And we are going to see a rebound, or at least that they stay steady there. This is our vision, to be honest.

我們在美國的銷售中看到了這一點。老實說，在過去的幾周里，我們有更多的詢問者。人們開始購買期貨，為未來定價，雖然它們並不代表任何東西，但它們高於我們今天的實際價格，所以我認為，正如我所說，工業客戶和建築業的需求美國還是很健康的。儘管每個人都在談論衰退，但需求仍然非常健康。工業需求非常健康，令人欣慰的是它也在美國發生。我們看到這兩邊的邊界，我叫什麼，我講建設。我再次認為，價格（聽不清）會在本月的某個時間段或下個月觸底。我們將看到反彈，或者至少他們會保持穩定。老實說，這是我們的願景。

Your next question is from a line of Jens Spiess with Morgan Stanley.

您的下一個問題來自摩根士丹利的 Jens Spiess。

I just wanted to ask on working capital. You had a large use of working capital this quarter. And if you could give any caller onto how you see that evolving throughout the rest of the year, the second half of the year, considering or assuming that prices remain relatively stable in terms of raw materials.

我只是想問一下營運資金。本季度您大量使用了營運資金。如果你能告訴任何人你如何看待今年剩餘時間，下半年的變化，考慮或假設原材料價格保持相對穩定。

Thank you, Jens. The increase in working capital, most of increase is because of the prices to be honest. There was some increase in some slab increase, but that's in volume. And we have some increase in Brazil, in the PCI carbon. Remember PCI, we bought it from Russia 100%, and we have to change, and we are buying now from Australia. And to be honest, we make a higher inventory because we didn't know if the Australian PCI was going to work. But the volume of the working capital, part of the increase of the working capital is not that much. I think it accounts for the 10% of increase, mostly what prices. And we see that this is coming down, so the next several, at least the next 2 quarters, we are going to see a decrease in the working capital.

謝謝你，詹斯。營運資金的增加，說實話，大部分增加是因為價格。一些板坯的增加有所增加，但這是數量上的。我們在巴西的 PCI 碳排放方面有所增加。記住 PCI，我們 100% 從俄羅斯購買，我們必須改變，我們現在從澳大利亞購買。老實說，我們增加了庫存，因為我們不知道澳大利亞 PCI 是否會起作用。但營運資金的量，部分營運資金的增加並沒有那麼多。我認為它佔增加的 10%，主要是什麼價格。而且我們看到這種情況正在下降，因此接下來的幾個季度，至少在接下來的兩個季度，我們將看到營運資金的減少。

That concludes today's Q&A session for today. I will now hand the call back over to the CEO for any closing remarks.

今天的問答環節到此結束。我現在將把電話轉回給首席執行官，以便發表任何結束語。

Okay, thank you all very much for participating in the call. As always contact us if you have any feedback or additional question, and I hope to talk to everybody in the next conference call. Goodbye, thank you.

好的，非常感謝大家參加電話會議。如果您有任何反饋或其他問題，請一如既往地聯繫我們，我希望在下一次電話會議中與大家交談。再見，謝謝。

This concludes today's call. Thank you for joining. You may now disconnect.

今天的電話會議到此結束。感謝您的加入。您現在可以斷開連接。