Ternium SA (TX) 2022 Q4 法說會逐字稿

Good morning. My name is Rob, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Ternium Fourth Quarter 2022 Earnings Results Conference Call. (Operator Instructions) Thank you. Sebastián Martí, you may begin your conference.

早上好。我叫 Rob，今天我將擔任你們的會議接線員。此時，我想歡迎大家參加 Ternium 2022 年第四季度收益結果電話會議。 （操作員說明）謝謝。塞巴斯蒂安·馬蒂，你可以開始你的會議了。

Good morning. Thank you for joining us today. My name is Sebastián Martí, and I'm Ternium's Global Investor Relations and Compliance Senior Director. Ternium released yesterday its financial results for the fourth quarter and full year 2022 and announced new investment projects. This call is complementary to that presentation.

早上好。感謝您今天加入我們。我叫 Sebastián Martí，是 Ternium 的全球投資者關係和合規高級總監。 Ternium 昨天發布了第四季度和 2022 年全年的財務業績，並宣布了新的投資項目。此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. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and on Page 2 in today's webcast presentation. 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.

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 的業務環境和績效。在我們準備好的發言結束時，將進行問答環節。在我們開始之前，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結果不同。可能影響結果的因素包含在我們提交給美國證券交易委員會的文件中以及今天網絡廣播演示文稿的第 2 頁。您還將在昨天發布的新聞稿中找到任何與最直接可比的 IFRS 措施相協調的非 IFRS 財務措施的參考資料。有了這個，我會把電話轉給 Vedoya 先生。

Thank you, Sebastián, and good morning to all, and thanks very much for your interest in this conference call. Ternium had a strong performance in 2022. EBITDA reached $3.4 billion. Net income was $2.1 billion and earnings per ADS were $9. On top of these very positive results, the company had significant cash generation with free cash flow of $2.2 billion, which increased our net cash position to $2.6 billion. Considering these good results, and Ternium's solid financial position, the company's Board of Directors proposed an annual dividend for 2022 of $2.70 per ADS, equivalent to $530 million. This represents an increase of $0.10 per ADS compared to 2021's annual dividend.

謝謝塞巴斯蒂安，大家早上好，非常感謝您對本次電話會議的關注。 Ternium 在 2022 年表現強勁。EBITDA 達到 34 億美元。淨收入為 21 億美元，每 ADS 收益為 9 美元。除了這些非常積極的結果之外，公司還產生了大量現金，自由現金流為 22 億美元，這使我們的淨現金頭寸增加到 26 億美元。考慮到這些良好的業績，以及 Ternium 穩健的財務狀況，公司董事會提議派發 2022 年每股 ADS 2.70 美元的年度股息，相當於 5.3 億美元。與 2021 年的年度股息相比，這意味著每份 ADS 增加了 0.10 美元。

Another thing I would like to share today is that yesterday, we approved several projects that are very significant to our company. First, we launched a project to build a new slab facility in the USMCA region. We talk about this plan several times in previous calls, and we are excited to be able to give you the details about this project today. I believe this initiative will be very positive for our company. It will include the construction of an electric arc furnace-based steel shop with annual capacity of 2.6 million tons as well as a DRI module with annual capacity of 2.1 million tons. Together with this, we will also build a port facility for raw materials handling.

今天我想分享的另一件事是，昨天，我們批准了幾個對我們公司非常重要的項目。首先，我們啟動了一個在 USMCA 地區建造新板坯設施的項目。我們在之前的電話中多次討論過這個計劃，我們很高興今天能夠為您提供有關該項目的詳細信息。我相信這一舉措將對我們公司產生積極影響。建設年產能260萬噸的電弧爐煉鋼廠和年產能210萬噸的直接還原鐵組件。與此同時，我們還將建設一個用於原材料處理的港口設施。

We currently expect to commission these facilities in the first half of 2026 with a total CapEx of $2.2 billion. The exact location of the facilities will be disclosed in due course. After careful consideration, we choose to install a technology that we believe have several advantages against other alternatives. The steel shop will have only 1 large EAF instead of 2 smaller units. This lowers the CapEx of the project as well as its operating expenses. The facility will also have a vacuum degassing facility and a slab caster with 2 lines. All of this will enable us to produce the highest specifications still necessary for the most demanding applications like those of customers from the auto industry.

我們目前預計將在 2026 年上半年啟用這些設施，資本支出總額為 22 億美元。這些設施的確切位置將在適當時候公佈。經過仔細考慮，我們選擇安裝一項我們認為相對於其他替代方案具有多項優勢的技術。鋼廠將只有 1 個大型 EAF，而不是 2 個較小的單元。這降低了項目的資本支出及其運營費用。該設施還將擁有真空脫氣設施和帶 2 條生產線的板坯連鑄機。所有這些將使我們能夠生產出仍然需要的最高規格，以滿足汽車行業客戶等要求最苛刻的應用。

In addition, this increased slab production capacity will complement and support our new state-of-the-art cold-rolling mill, which began operation in 2021 and the downstream project in Mexico that we announced in February of 2022. The implementation of the USMCA trade agreement and the recent trends of nearshoring manufacturing capacity in the steel value chain has made the USMCA region an attractive destination for continued investment. These new projects will advance the integration of our industrial system and reinforce Ternium's position as a leading steel supplier in the region. This initiative will also support our ongoing compliance with the USMCA melt and pour requirements for the auto industry.

此外，增加的板坯產能將補充和支持我們於 2021 年開始運營的最先進的新冷軋廠以及我們於 2022 年 2 月宣布的墨西哥下游項目。USMCA 的實施貿易協定和最近鋼鐵價值鏈中近岸製造能力的趨勢使 USMCA 地區成為持續投資的有吸引力的目的地。這些新項目將推進我們產業體系的整合，鞏固Ternium作為該地區領先鋼鐵供應商的地位。該計劃還將支持我們持續遵守 USMCA 對汽車行業的熔化和澆注要求。

Another significant aspect of this new project is related to the decarbonization of our operations. The technology we decided to use for the steel shop is the most modern and greener currently available. Also, the new direct reduction model will include carbon capture capabilities as all of our DRI models do, and it will be ready to switch from natural gas to green hydrogen whenever this is visible in the future. Wrapping up this announcement of this new project, we expect it to be very beneficial for Ternium, not only from a business aspect, but also from a sustainability of its operation in the years to come.

這個新項目的另一個重要方面與我們運營的脫碳有關。我們決定在鋼鐵車間使用的技術是目前最現代、最環保的技術。此外，新的直接還原模型將包括我們所有 DRI 模型所具有的碳捕獲能力，並且只要在未來可見時，它將準備好從天然氣轉向綠色氫氣。總結這個新項目的公告，我們希望它對 Ternium 非常有益，不僅從業務方面，而且從未來幾年運營的可持續性來看。

And with sustainability in mind, I'm also very excited to announce that Ternium will build a wind farm in Argentina from which it will source electricity. We expect to invest $160 million in this project, which will have a nominal power capacity of 72 megawatts and will begin operations in the second half of 2024. This will allow us to replace 65% of the electricity that our Argentine subsidy currently purchase from external providers. We have already secured access to the national grid to transport this power to our facilities in the country. This wind farm will be our first company-owned renewable energy project, and we plan to expand its capacity if we see opportunities for doing so in the future.

考慮到可持續性，我也非常高興地宣布 Ternium 將在阿根廷建造一個風電場，並從中獲取電力。我們預計將在這個項目上投資 1.6 億美元，該項目的標稱容量為 72 兆瓦，並將於 2024 年下半年開始運營。這將使我們能夠替代我們的阿根廷補貼目前從外部購買的 65% 的電力提供商。我們已經獲得國家電網的訪問權，可以將這種電力輸送到我們在該國的設施。這個風電場將是我們公司擁有的第一個可再生能源項目，我們計劃在未來看到機會時擴大其產能。

We are thrilled with these announcements we are sharing with you today as I believe these projects are a proof of the commitment of Ternium has to make its operation more and more sustainable over time. As you know, another top priority for Ternium is safety in our operations. In this aspect, as we close 2022, I'd like to report that we had a Lost Time Injury Frequency Rate of 0.6 accidents per million hours worked in the year. This is the lowest rate in the history of the company. The safety of our people has always been a priority in our agenda, and we keep incorporating the best safety practice and make awareness of its importance to all levels.

我們對今天與您分享的這些公告感到非常興奮，因為我相信這些項目證明了 Ternium 必須隨著時間的推移使其運營越來越可持續的承諾。如您所知，Ternium 的另一個首要任務是我們運營的安全性。在這方面，當我們接近 2022 年時，我想報告一下，我們這一年的失時工傷頻率為每百萬工作小時 0.6 起事故。這是公司歷史上最低的利率。我們員工的安全一直是我們議程中的優先事項，我們不斷採用最佳安全實踐，並讓各級都意識到其重要性。

Let's turn now to the state of our main markets. We have a positive expectation regarding Ternium's performance in 2023. During the first half of the year, we expect margins to normalize as cost per ton should decrease and steel prices in the USMCA region are recovering. The second half of 2023 is a bit more difficult to forecast, considering the ongoing interest rate tightening cycle, which introduces some uncertainty regarding its impact on the economy down the road. In Mexico, we anticipate a continued increase in steel volumes during the first half of the year. Since the end of 2022, when steel prices in the region began recovering, we are seeing a restock in the commercial market.

現在讓我們談談我們主要市場的狀況。我們對 Ternium 在 2023 年的表現抱有積極的預期。在今年上半年，我們預計利潤率將正常化，因為每噸成本應該會下降，而且 USMCA 地區的鋼鐵價格正在復蘇。考慮到持續的利率緊縮週期，2023 年下半年的預測有點困難，這給未來對經濟的影響帶來了一些不確定性。在墨西哥，我們預計今年上半年鋼材銷量將持續增長。自 2022 年底該地區鋼材價格開始回升以來，我們看到商業市場出現了補貨。

On the other hand, industrial market demand is slightly improving and Ternium's most recent investment program is yielding new steel products that are allowing us to gain market share against imports. In this positive situation, we are increasing the utilization of our downstream facilities in the country and capitalizing on opportunity to serve new customers. Ternium is perfectly positioned to take advantage of this market environment as we are very advanced in the ramp-up of our new constraint mill, and we are bringing back up capacity utilization in other lines, which we had reduced last year to adjust to lower market demand.

另一方面，工業市場需求略有改善，Ternium 最近的投資計劃產生了新的鋼鐵產品，使我們能夠獲得相對於進口的市場份額。在這種積極的形勢下，我們正在提高國內下游設施的利用率，並抓住機會為新客戶提供服務。 Ternium 完全可以利用這種市場環境，因為我們在新約束工廠的產能提升方面非常先進，並且我們正在恢復其他生產線的產能利用率，去年我們為了適應較低的市場而降低了產能利用率要求。

Another interesting dynamic under development in the Mexican market is an increase in the investment activity of the value chain linked to the nearshoring of manufacturing capacity. Since our last conference call, a remarkable number of companies in the steel value chain has announced expansion of capacity of greenfield investments in the country. And the New Orleans state, where our main facilities are located is the #1 destination for these investments.

墨西哥市場正在開發的另一個有趣的動態是與製造能力近岸外包相關的價值鏈投資活動的增加。自我們上次電話會議以來，鋼鐵價值鏈中的許多公司都宣布擴大在該國的綠地投資能力。我們主要設施所在的新奧爾良州是這些投資的第一目的地。

We are ready to serve these growing needs in the market. In addition, the different projects we are currently under development, such as a new steel shop and the project we launched last year to expand our downstream facility will put us in an even better position to take advantage of this opportunity to grow our business.

我們已準備好滿足市場上這些不斷增長的需求。此外，我們目前正在開發的不同項目，例如新的鋼廠和我們去年啟動的擴大下游設施的項目，將使我們處於更好的位置，可以利用這個機會發展我們的業務。

Turning now to Argentina, our customers in the industrial and construction sector are performing well and maintaining a good level of purchasing activity. The most active ones during 2022 were construction, the automotive industry and the energy sector. The agribusiness also did very well in 2022, although the extend drought in the country should affect activity in the sector in the year to come. We are expecting good levels of demand in Argentina during the first half of 2022 with the usual seasonality in the first quarter but economic uncertainty is always present in this market. So, this could adversely affect economic activity and steel demand in the future.

現在轉向阿根廷，我們在工業和建築領域的客戶表現良好，並保持良好的採購活動水平。 2022 年最活躍的行業是建築、汽車行業和能源行業。農業綜合企業在 2022 年也表現出色，儘管該國持續的干旱應該會影響來年該行業的活動。我們預計 2022 年上半年阿根廷的需求水平良好，第一季度通常存在季節性，但該市場始終存在經濟不確定性。因此，這可能會對未來的經濟活動和鋼鐵需求產生不利影響。

To finish my prepared remarks, I would like to emphasize our positive view regarding Ternium's performance in 2023. In addition, we are very excited with the growth projects under development. We believe this project will enable Ternium to accompany the growth of the USMCA region, supporting the nearshoring of manufacturing capacity and contributing to the company's decarbonization and import substitution strategy.

最後，我想強調我們對 Ternium 2023 年業績的積極看法。此外，我們對正在開發的增長項目感到非常興奮。我們相信該項目將使 Ternium 能夠伴隨 USMCA 地區的增長，支持製造能力的近岸化，並為公司的脫碳和進口替代戰略做出貢獻。

With this, Pablo, please go ahead with the review of Ternium's results in the fourth quarter and full 2022. Thank you.

有了這個，Pablo，請繼續審查 Ternium 在第四季度和整個 2022 年的業績。謝謝。

Thanks, Max, and good morning to everyone. Let me start by describing Ternium's shipments. And to do that, let's begin on Page 3 of the webcast presentation. Ternium's finished steel shipments reached in 2022, the highest level on record, supported by our investment in the new hot strip mill in Mexico. In addition, Ternium has advanced its integration strategy as evidenced by the reduction of the volume of slab shipped to third parties, which moved from 2.9 million tons in 2018 to 800,000 tons in 2022.

謝謝，麥克斯，大家早上好。讓我從描述 Ternium 的出貨量開始。為此，讓我們從網絡廣播演示文稿的第 3 頁開始。 Ternium 的成品鋼材出貨量在 2022 年達到歷史最高水平，這得益於我們在墨西哥投資新建的熱帶鋼軋機。此外，Ternium 還推進了整合戰略，向第三方運送的板坯數量減少，從 2018 年的 290 萬噸減少到 2022 年的 80 萬噸。

Adjusted EBITDA and net income were very strong in 2021. And in 2022 was the beginning of a transition to a more normal level of profitability. The decrease during last year, mainly reflecting higher cost of sales due to increased price of purchased slabs and raw material linked to the disruption in the global steel and raw material market caused by Russia's invasion of Ukraine. This negative effect was partially offset by higher realized steel prices, mostly reflecting a higher value sale mix due to integration of Ternium's slabs production in Brazil.

調整後的 EBITDA 和淨收入在 2021 年非常強勁。2022 年是向更正常的盈利水平過渡的開始。去年減少，主要是由於俄羅斯入侵烏克蘭導致全球鋼鐵和原材料市場中斷，採購的板坯和原材料價格上漲導致銷售成本增加。這一負面影響被更高的實際鋼價部分抵消，主要反映了由於 Ternium 在巴西的板坯生產整合導致的更高價值的銷售組合。

Annual dividend payment increased significantly in the last 5 years from $1.20 in 2018 to $2.70 proposed for 2022, equivalent to $530 million. We started to pay interim dividends in 2021 with $0.80 per ADS in November of 2021 and $0.90 in November last year. Once the Board's latest proposal is approved, the company will pay the remainder of 2022 dividends in May, equivalent to $1.80 per ADS or $353 million. This is the annual dividend payment, net of November interest interim dividend.

過去 5 年的年度股息支付從 2018 年的 1.20 美元大幅增加到 2022 年的 2.70 美元，相當於 5.3 億美元。我們在 2021 年開始支付中期股息，2021 年 11 月每 ADS 0.80 美元，去年 11 月為 0.90 美元。一旦董事會的最新提議獲得批准，公司將在 5 月份支付 2022 年剩餘的股息，相當於每份 ADS 1.80 美元或 3.53 億美元。這是扣除 11 月利息中期股息後的年度股息支付。

On the next page, you can see Ternium's cash generation in the past 5 years. Cash from operation was partially strong in 2021 and also in 2022, a significant shift in working capital in those years, reflecting tariff fluctuations in steel prices and raw material costs and inventory is up in 2021 in connection with the ramp-up of the new mill in Mexico. CapEx over the last 3 years has been relatively stable of $500 million to $600 million per year. This is about to change as a result of investment projects under development. Mainly the upstream project we announced yesterday and the downstream project we announced last year, which has-that is clearly in 2 of the 4 initiatives, the cold-rolling mill and the galvanizing line, which are now expected to start up at the end of 2025.

在下一頁中，您可以看到 Ternium 在過去 5 年中產生的現金。 2021 年和 2022 年的運營現金部分強勁，這些年營運資金發生重大變化，反映出鋼材價格和原材料成本的關稅波動，以及 2021 年庫存隨著新鋼廠的投產而增加在墨西哥。過去 3 年的資本支出相對穩定，每年 5 億至 6 億美元。由於正在開發的投資項目，這種情況即將改變。主要是我們昨天公佈的上游項目和我們去年公佈的下游項目，很明顯是4個舉措中的2個，冷軋廠和鍍鋅線，現在預計年底開工2025.

The sum of these projects will take total CapEx for the company in 2023 to approximately $1.1 billion and will add a total of $2.9 billion to the company CapEx over the next 4 years with peak CapEx intensity in 2025. Turning now to free cash flows, as can be seen in the chart, it has been exceptionally strong in the last 2 years at around $2.2 billion each. This is equivalent to $11 per ADS. The significant cash generation strengthened Ternium's balance sheet enabled us to continue with a high level of dividend payment and will also help us fund the announced new capital expenditure program.

這些項目的總和將使公司在 2023 年的資本支出總額達到約 11 億美元，並將在未來 4 年內為公司資本支出增加 29 億美元，資本支出強度將在 2025 年達到峰值。現在轉向自由現金流，因為從圖表中可以看出，它在過去兩年中異常強勁，每年約為 22 億美元。這相當於每個 ADS 11 美元。大量現金產生加強了 Ternium 的資產負債表，使我們能夠繼續支付高水平的股息，也將幫助我們為宣布的新資本支出計劃提供資金。

Let's now review Ternium's results for the fourth quarter in the next page. As we anticipated in the previous quarter's call, adjusted EBITDA margin in the fourth quarter declined to a level below the company's usual range. This happened because there was a mismatch in the pace at which revenue per ton and cost per ton deflated. With lower price raw materials lagging, the decline in revenue per ton and raw material prices gradually flow through the company's inventory before impacting the cost of sales. We expect Ternium's cost per ton to continue increasing over the next couple of quarters, reflecting lower priced raw materials purchased in the second half of last year. We believe the development should help Ternium's margin to globally normalize over the coming quarters.

現在讓我們在下一頁回顧一下 Ternium 第四季度的業績。正如我們在上一季度的電話會議中預期的那樣，第四季度調整後的 EBITDA 利潤率下降至低於公司通常範圍的水平。發生這種情況是因為每噸收入和每噸成本縮減的速度不匹配。隨著低價原材料的滯後，每噸收入的下降和原材料價格在影響銷售成本之前逐漸流過公司的庫存。我們預計 Ternium 的每噸成本在未來幾個季度將繼續增加，反映出去年下半年採購的原材料價格較低。我們認為，這一發展應該有助於 Ternium 的利潤率在未來幾個季度在全球範圍內正常化。

Net income was $59 million in the fourth quarter, reflecting the decreased level of adjusted EBITDA and also the negative impact of a $99 million write-down of Ternium's investment in Ternium Brazil. And now to Page 6, we can see a 9% increase in steel shipments in Mexico. We reached an all-time high of 1.9 million tons in the fourth quarter. Shipments in Mexico increased, mostly driven by the factors as described in Maximo's initial remarks and should continue growing in the next few quarters. On the other hand, shipments in the Southern region decreased 16% in the fourth quarter compared to the third, and sales volume in the Southern region remained unchanged. We expect shipment in the Southern region to seasonally decrease in the first quarter of this year.

第四季度淨收入為 5900 萬美元，反映了調整後 EBITDA 水平的下降以及 Ternium 對 Ternium Brazil 的投資減記 9900 萬美元的負面影響。現在到第 6 頁，我們可以看到墨西哥的鋼鐵出貨量增加了 9%。我們在第四季度達到了 190 萬噸的歷史新高。墨西哥的出貨量有所增加，主要受 Maximo 最初評論中所述因素的推動，並應在未來幾個季度繼續增長。另一方面，華南地區四季度出貨量較三季度下降16%，華南地區銷量保持不變。我們預計今年第一季度華南地區的出貨量將出現季節性下降。

Let's turn now to Page 7. As anticipated, consolidated revenue per ton declined sequentially in the fourth quarter as steel prices decreased in Ternium's steel markets and Mexico contract steel prices reset at lower levels. Although spot steel prices are improving in the USMCA region, we expect this positive trend to be offset in the first quarter of this year by the receipt of contract prices at lower levels. So, we anticipate revenue per ton to stabilize after the decreases days ago during the second half of last year.

現在讓我們翻到第 7 頁。正如預期的那樣，由於 Ternium 鋼鐵市場的鋼材價格下跌以及墨西哥合同鋼材價格重新設定在較低水平，第四季度每噸綜合收入連續下降。儘管 USMCA 地區的現貨鋼材價格正在上漲，但我們預計這一積極趨勢將在今年第一季度被較低水平的合同價格所抵消。因此，我們預計在去年下半年幾天前的下降之後，每噸收入將趨於穩定。

On Page 8, let's review the main drivers behind the decrease in net income in the fourth quarter. The sequential decrease in net income reflected the mentioned decrease in adjusted EBITDA and the $99 million write-down of the company investment in Ternium Brazil. These negative results were partially offset by the onset of the fourth quarter of 2 items that we will realize in the third quarter earnings call. A $120 million impairment of Ternium in Usiminas and a $95 million decrease in the fair value of the securities received as a dividend in time from Ternium Argentina.

在第 8 頁，讓我們回顧一下第四季度淨收入下降的主要驅動因素。淨收入的環比下降反映了上述調整後 EBITDA 的下降以及公司對 Ternium Brazil 投資的 9900 萬美元減記。這些負面結果被我們將在第三季度財報電話會議上實現的 2 個項目的第四季度開始部分抵消。 Usiminas 的 Ternium 減值 1.2 億美元，及時從 Ternium Argentina 收到的作為股息的證券的公允價值減少 9500 萬美元。

To finalize the presentation, let's now review Ternium's cash generation on Page 9. Cash flow operations in the fourth quarter was $1.1 billion, including a working capital release of $955 million. The change in working capital resulted from the impact of decline in prices of steel, purchase slabs and raw materials. Free cash flow in the fourth quarter of last year was $873 million after CapEx of $159 million. This drove our net cash position to $2.5 billion at the end of December.

為了完成演示，現在讓我們回顧一下第 9 頁上 Ternium 的現金產生。第四季度的現金流量為 11 億美元，包括 9.55 億美元的營運資金釋放。營運資金變動系鋼材、採購板坯及原材料價格下跌影響所致。扣除資本支出 1.59 億美元後，去年第四季度的自由現金流為 8.73 億美元。這使我們在 12 月底的淨現金頭寸達到 25 億美元。

With this, I am finalizing my presentation. Thank you very much for your time and attention. And now we are ready for your questions. So please, operator, let's start with the Q&A session.

有了這個，我正在完成我的演講。非常感謝您的時間和關注。現在我們準備好回答您的問題了。所以，接線員，讓我們從問答環節開始吧。

(Operator Instructions) Your first question comes from the line of Caio Greiner from BTG Pactual.

（操作員說明）您的第一個問題來自 BTG Pactual 的 Caio Greiner。

So, my first question on the project; I guess the EAF mill was slightly smaller scale than you guys had been indicating in the past. I think it's slightly lower CapEx per ton, too. So, I just wanted to understand what were the main drivers for that? And also, if you can provide any details on the estimated cost per ton for this plant, that will be helpful, too or if you can provide a number, just any color on whether it will be on the first quartile, the second quartile of the cost curve, I think it will be helpful, too.

所以，我關於這個項目的第一個問題；我猜 EAF 工廠的規模比你們過去所說的要小一些。我認為每噸資本支出也略低。所以，我只是想了解其主要驅動因素是什麼？而且，如果您可以提供有關該工廠每噸估計成本的任何詳細信息，那也會有所幫助，或者如果您可以提供一個數字，只是關於它是否會在第一個四分位數、第二個四分位數上的任何顏色成本曲線，我認為這也會有所幫助。

And secondly, on the direction of margins. I mean you guys mentioned that you expect the normalization of margins in the first half of 2023. But I just wanted to understand your views on the first quarter specifically. So firstly, on prices, even though spot prices are on the rise, I mean, we might still see some damage from the resetting of quarterly contracts in the fourth quarter. So, I just wanted to understand the direction of revenue per ton here for the first quarter. And then on costs, I understand that the trend is still downwards, but maybe if you guys could provide any color on the magnitude for the first quarter, that would be helpful, too.

其次，關於邊距的方向。我的意思是你們提到你們預計 2023 年上半年利潤率正常化。但我只是想具體了解你們對第一季度的看法。因此，首先，在價格方面，即使現貨價格在上漲，我的意思是，我們可能仍會看到第四季度季度合同重置造成的一些損害。所以，我只想了解第一季度每噸收入的方向。然後在成本方面，我知道趨勢仍在下降，但也許如果你們能提供有關第一季度幅度的任何顏色，那也會有所幫助。

Okay. Thank you, and good morning to you, Caio. I take the first part of your question regarding the investment. It's not that it's a smaller EAF, the EAF we are putting is the biggest, probably the biggest EAF that is available in the market today. What we have said in the past that the alternative would probably be putting 2 EAFs for a total capacity of roughly 3 million tons. What we are doing today is putting only one of those EAFs, but much bigger of the 2 EAF's of 4 million tons.

好的。謝謝你，早上好，Caio。我回答你關於投資的問題的第一部分。這並不是說它是一個較小的電弧爐，我們放置的電弧爐是最大的，可能是當今市場上最大的電弧爐。我們過去曾說過，備選方案可能是放置 2 個 EAF，總產能約為 300 萬噸。我們今天所做的只是放置其中一個 EAF，但 400 萬噸的 2 個 EAF 中的更大。

So, we are changing a little bit the configuration, putting only 1 EAF gives you the 2.6 million tons or roughly the 2.6 million tons. And that helped us with the other part of that question, that is the CapEx is lower or it's a little bit smaller than what we thought would be if we put the other configuration, that's number one. Number two, the operating cost is smaller if you have only 1 EAF, that's also. And number three, but this is in a long run, so don't expect this revenue but it could allow us to grow the capacity fairly easy in the future, putting a second one.

因此，我們正在稍微改變配置，僅放置 1 個 EAF 即可提供 260 萬噸或大約 260 萬噸。這幫助我們解決了這個問題的另一部分，即資本支出較低，或者比我們放置其他配置時想像的要小一點，這是第一。第二，如果您只有 1 個 EAF，那麼運營成本也會更低。第三，但這是從長遠來看，所以不要指望這個收入，但它可以讓我們在未來相當容易地增加產能，投入第二個。

So, I think it's very convenient for our operation to go through this technology than to do the different alternative that was putting a little bit more capacity, but with 2 EAFs. So that, I think, is the answer for the first part of the first question. The second question about margins, Pablo, why don't you answer that?

因此，我認為通過這項技術對我們的運營來說比採用不同的替代方案非常方便，該替代方案增加了一點產能，但使用了 2 個 EAF。因此，我認為這就是第一個問題第一部分的答案。關於利潤率的第二個問題，Pablo，你為什麼不回答這個問題？

Okay. Perfect. So, as we have been expecting the fourth quarter, we have been seeing a squeeze on margin because everything that we have already card, which is the decrease in prices in an environment of also decreasing cost, but taking longer to be reflected in our numbers. Clearly, what we have done in the fourth quarter, the EBITDA margin at around 9% is below the expected range or within the expected range of Ternium have.

好的。完美的。因此，正如我們對第四季度的預期一樣，我們一直看到利潤率受到擠壓，因為我們已經知道的一切，即在成本也在下降的環境中價格下降，但需要更長的時間才能反映在我們的數字中.顯然，我們在第四季度所做的 EBITDA 利潤率約為 9%，低於預期範圍或在 Ternium 的預期範圍內。

So, we are expecting to get back to this range in the coming years, specifically in the coming quarters. Clearly, prices that are increased in the region, I guess, at some point, Maximo will comment extensively on that, will not yet be fully reflected in our numbers in the coming quarter because the reset of prices of our contracts, especially in Mexico.

因此，我們預計在未來幾年，特別是在未來幾個季度，會回到這個範圍。顯然，該地區價格上漲，我想，在某個時候，Maximo 將對此進行廣泛評論，但由於我們合同價格的重置，尤其是在墨西哥，我們下一季度的數字尚未完全反映出來。

On the other hand, costs, we continue to see some reduction, and you are expecting or we are expecting to see that coming into the first quarter results. So, all in all, and to give you a more precise answer and summarizing the whole thing, as I've been saying, we will start to recover and return to more normal levels in the first quarter of the year, not yet in the range that we are expecting to have that, but we should be approaching that level at the end of the second quarter or beginning of the third quarter.

另一方面，成本，我們繼續看到一些減少，你期待或者我們期待看到第一季度的結果。所以，總而言之，為了給你一個更準確的答案並總結整個事情，正如我一直在說的，我們將在今年第一季度開始恢復並回到更正常的水平，而不是在我們期望達到的範圍，但我們應該在第二季度末或第三季度初接近該水平。

I hope Caio, with that, we answered the 2 questions.

我希望 Caio，有了這個，我們回答了 2 個問題。

Yes. Just one point on the project still, can you guys provide any color on what you're expecting in terms of cost for the EAF plus DRI facilities? The cost in terms of cost per ton for your slab production operations and for the announced projects, not the total CapEx, but your expected cost per ton.

是的。關於該項目的一點仍然是，你們能否就 EAF 加 DRI 設施的成本提供任何顏色？您的板坯生產運營和已宣布項目的每噸成本成本，不是總資本支出，而是您的每噸預期成本。

It's very difficult to provide a number because as you might expect, some part of that, it depends on the cost of our raw materials. To put some numbers and I put the numbers that are today, slab market prices are around $700 and the operating cost of this project if we take today's numbers will be around $550. That's what I can tell you about the cost.

很難提供一個數字，因為正如您所料，其中一部分取決於我們原材料的成本。給出一些數字，我給出今天的數字，板坯市場價格約為 700 美元，如果我們採用今天的數字，該項目的運營成本將約為 550 美元。這就是我可以告訴你的費用。

Your next question comes from the line of Timna Tanners from Wolfe Research.

您的下一個問題來自 Wolfe Research 的 Timna Tanners。

Thanks for the great detail. I wanted to follow up on the last question and get a little more color on how you're thinking about volumes. So, on the last question, the answer you gave was about margins returning to more normal. When you talk about normal, I just wanted to reiterate, is that the historical guide of 15% to 20% target that you're talking about when you refer to normal EBITDA in the steelmaking segment. That's the first question.

感謝您提供的詳細信息。我想跟進最後一個問題，並進一步了解您是如何考慮交易量的。所以，關於最後一個問題，你給出的答案是關於利潤率恢復到更正常的水平。當你談到正常時，我只想重申，當你提到煉鋼部門的正常 EBITDA 時，你所談論的 15% 至 20% 目標的歷史指南。這是第一個問題。

If you could just clarify that, that would -- it sounds like definitely in that range second half and then kind of approaching that in the first half. Does that mean first quarter would be more like fourth quarter or improving from the fourth quarter? And then the second question, like I said, on volumes. Obviously, with AMSA not operating fully, there seems to be kind of a gap in availability in the Mexican market. So, is it possible to see a meaningful uptick in your volumes to fill that gap given the good demand that you described? Just any more color on where volumes could go to, given your availability would be great.

如果你能澄清一下，那就是——聽起來下半場肯定在那個範圍內，然後在上半場接近那個範圍。這是否意味著第一季度會更像第四季度或比第四季度有所改善？然後是第二個問題，就像我說的，關於數量。顯然，由於 AMSA 沒有全面運作，墨西哥市場的可用性似乎存在差距。那麼，鑑於您描述的良好需求，是否有可能看到您的銷量出現有意義的增長以填補這一缺口？考慮到您的可用性，只要有更多關於卷可以去哪裡的顏色就可以了。

Yes, the first question, the answer is yes. When we refer to normalized margin is between 15% and 20%. In the first quarter, what we are expecting is not to be like the fourth quarter, a little bit more near the lower range of this margin. We are not getting the normalized range, but will be a little bit closer to those numbers than the fourth quarter. Volumes in Mexico, yes, volumes in Mexico are going to increase in the 2 following quarters. Clearly, one aspect of that is AMSA.

是的，第一個問題，答案是肯定的。當我們指的標準化保證金在 15% 到 20% 之間時。在第一季度，我們預期不會像第四季度那樣，更接近這個利潤率的下限。我們沒有得到標準化範圍，但會比第四季度更接近這些數字。墨西哥的銷量，是的，墨西哥的銷量將在接下來的兩個季度增加。顯然，其中一個方面是 AMSA。

The second aspect that you can see is that we are gaining market share against imports. And so, we are starting to work our facilities at much higher utilization rate, especially the old mill, the old but it's not old, it's new, but the Churubusco facility, which was the one that was working at a very low capacity and at least for the next few quarters, we see that facility working at much higher capacities. The exact number of the increase, we don't have it yet clear, but we are very working very hard with our customers to see the final demand.

您可以看到的第二個方面是我們正在獲得相對於進口的市場份額。因此，我們開始以更高的利用率運行我們的設施，特別是舊工廠，舊但不舊，它是新的，但是 Churubusco 工廠，這是一個以非常低的產能和在至少在接下來的幾個季度裡，我們會看到該設施以更高的產能運行。增加的確切數量，我們還不清楚，但我們正在非常努力地與客戶合作，以了解最終需求。

I think that one thing that is also clear Timna is that demand in the consumption of steel in Mexico, we are thinking that it's going to increase in the future, and we are seeing all the investments our customers and new customers are doing, but it is coming on the time over time. Last year, apparent consumption decreased in Mexico. And next year, when we see the kind of set of figures, it's going to increase, but marginal. So, the volumes we are gaining is against import and market share. And so that's kind of what we are seeing in the market today. And I hope with this, I clarified a little bit your question.

我認為 Timna 也清楚的一件事是墨西哥鋼鐵消費的需求，我們認為未來會增加，我們看到我們的客戶和新客戶正在進行的所有投資，但它隨著時間的推移即將到來。去年，墨西哥的表觀消費量有所下降。明年，當我們看到一組數字時，它會增加，但很少。因此，我們獲得的數量是針對進口和市場份額的。這就是我們今天在市場上看到的。我希望通過這個，我澄清了一點你的問題。

No, that's really helpful. So, it sounds like even as AMSA were to reopen and I'm not sure I'm quite up-to-date on the telenovela down there and what's happening but if we do see it return to operations, do you think that at least some of the volume improvement is sticky because of market share gains against imports, it sounds like as well. Yes?

不，這真的很有幫助。所以，這聽起來像是 AMSA 將重新開放，我不確定我是否了解那裡的電視劇和正在發生的事情的最新情況，但如果我們確實看到它恢復運營，你認為至少由於進口市場份額的增加，一些銷量的改善是有粘性的，聽起來也是如此。是的？

Yes, yes. You see both trends. Remember, in Mexico, you have AMSA, you have now ArcelorMittal, of course, with the new hot strip mill, and you have us. And what we are seeing is that we are increasing market share against mainly imports. And of course, AMSA is producing less tons, that's also true. What we expect in the future, probably not next year, but you are seeing that demand is going to increase for several years to come with this nearshoring, with this all the industrial manufacturers that are coming. Remember that our capabilities also before the hot strip mill, some of the products we couldn't be able to produce.

是的是的。你會看到這兩種趨勢。請記住，在墨西哥，您有 AMSA，您現在有安賽樂米塔爾，當然還有新的熱帶鋼軋機，還有我們。我們看到的是，我們正在增加主要進口產品的市場份額。當然，AMSA 的產量正在減少，這也是事實。我們對未來的期望，可能不是明年，但你會看到隨著這種近岸外包，所有工業製造商都將到來，需求將在幾年內增加。請記住，在熱帶鋼軋機出現之前，我們的能力也是如此，有些產品我們無法生產。

So now industrial customers, we are going through the painful, let's put it this way, painful certification process of a lot of industrial customers, which is -- I mean, they have to do it. But this year and next year, all the certification process are mostly completed. So, we are starting to gain all that volume against imports.

所以現在工業客戶，我們正在經歷痛苦，這麼說吧，很多工業客戶的痛苦認證過程，我的意思是，他們必須這樣做。但是今年和明年，所有的認證過程都基本完成了。因此，我們開始獲得所有進口量。

Your next question comes from the line of Jens Spiess from Morgan Stanley.

你的下一個問題來自摩根士丹利的 Jens Spiess。

I just wanted to ask, where do you plan to divert the volumes of Ternium Brazil and which markets? And also, I want to ask of the volumes you currently have integrated from Ternium Brazil to your Mexican operations, what percentage goes to the auto industry approximately? Yes, just to have some more color there.

我只是想問一下，您打算將 Ternium Brazil 的數量轉移到哪些市場？而且，我想問一下您目前從 Ternium Brazil 整合到墨西哥業務的數量，大約有多少百分比用於汽車行業？是的，只是為了那裡有更多的顏色。

Yes, Jens, thank you for your question. Very good question. Let me start with a broad answer. The capacity we have in Mexico and a little bit in Argentina, I will put it because Argentina also have a spare capacity of hot strip mill, we have capacity of roughly 7.5 million tons that need slabs. So, I'm taking out the Guerrero facility, the hot mini mill facility.

是的，延斯，謝謝你的提問。很好的問題。讓我從一個廣泛的答案開始。我們在墨西哥和阿根廷有一點產能，我會說是因為阿根廷也有熱軋機的備用產能，我們有大約 750 萬噸的產能需要板坯。所以，我要拆除 Guerrero 設施，即熱迷你軋機設施。

So, if we are producing at full capacity, which we are not producing yet at full capacity but if we produce the hot strip Pesqueria full capacity, the Churubusco mill at full capacity, and there's a San Nicola mill in Argentina, probably we'll need between 7.5 and 8 million tons of slabs. Brazil is producing today around 4.7 million tons. So, we have a deficit that is bigger or its kind in line with the new capacity we are bringing in. So, we don't have to divest anything from Ternium Brazil. Probably, we will continue consuming most of the slabs in our own operations.

所以，如果我們滿負荷生產，我們還沒有滿負荷生產，但如果我們滿負荷生產 Pesqueria 熱軋帶鋼，滿負荷生產 Churubusco 軋機，還有阿根廷的 San Nicola 軋機，我們可能會需要 7.5 至 800 萬噸板坯。巴西目前的產量約為 470 萬噸。因此，我們的赤字更大或與我們引入的新產能相符。因此，我們不必從 Ternium Brazil 剝離任何東西。我們可能會在自己的操作中繼續消耗大部分板坯。

Having said that, there are customers and a partner of us that is Usiminas that needs slabs for the long-term in Brazil. So, probably will increase our selling to Usiminas, and we continue buying in the market some slabs for Ternium as a general. That's our view when this new capacity come into line. Volume specific of the automotive industry from Brazil, it's increasing. I would say that 2023 will be around I think 1.2 million tons, specifically for Brazil. Remember, in Mexico, we sell around today around 2 million tons to the automotive industry.

話雖如此，我們的客戶和合作夥伴 Usiminas 在巴西長期需要板坯。因此，我們可能會增加對 Usiminas 的銷售，並且我們會繼續在市場上為 Ternium 一般購買一些板坯。這是我們對這種新產能投入使用的看法。巴西汽車行業的特定數量正在增加。我想說 2023 年將達到 120 萬噸左右，特別是對巴西而言。請記住，在墨西哥，我們今天向汽車行業銷售了大約 200 萬噸。

Your next question comes from the line of Isabella Vasconcelos from Bradesco BBI.

您的下一個問題來自 Bradesco BBI 的 Isabella Vasconcelos。

I have one question here on my end. And in terms of Mexican demand, you mentioned that there's restocking happening in the commercial market. So, I just wanted to understand where do you think that stock are currently at in the supply chain? Is it already above average or if we should continue to see more restocking happening in Mexico in the coming months?

我這邊有一個問題。就墨西哥的需求而言，您提到商業市場正在補貨。所以，我只想了解您認為庫存目前在供應鏈中的什麼位置？它是否已經高於平均水平，或者我們是否應該在未來幾個月繼續看到墨西哥發生更多補貨？

Okay. Thank you, thank you very much. I think the restocking is just starting to be honest. When you see the apparent consumption in Mexico that decreased 2% last year, although GDP in Mexico increases, you see that through the year or especially in the second half, there was a destocking or profound destocking in Mexico. So, I'm expecting that this restocking and we see it in all the value chain, there's not much stock in the value chain in Mexico. So, I think it's going to continue for a couple of months or at least a couple of quarters. And then as I said, industrial demand will come on. There are some industries that are increasing automotive industry is one of them. We have huge problems in the automotive industry and the consumption of the automotive industry in Mexico because of the lack of components.

好的。謝謝，非常感謝。我認為補貨才剛剛開始說實話。當你看到去年墨西哥的表觀消費下降了 2% 時，儘管墨西哥的 GDP 有所增長，但你會看到全年或尤其是下半年，墨西哥出現了去庫存或深度去庫存。所以，我期待這種補貨，我們在所有價值鏈中看到它，墨西哥的價值鏈中沒有太多庫存。所以，我認為它會持續幾個月或至少幾個季度。然後正如我所說，工業需求將會出現。有一些行業正在增加，汽車行業就是其中之一。由於缺乏零部件，我們在汽車行業和墨西哥汽車行業的消費方面存在巨大問題。

But we are seeing in January that most of the OEMs in Mexico are producing again without any stoppage because of lack of components. And it seems that the supply chain in the automotive industry is already working. So, we are expecting more demand from them. And I think that in the second half of the year or in the second quarter, demand for other industries are going to come back. So that's a view that we have from the Mexican market. I hope it helps Isabella.

但我們在 1 月份看到，墨西哥的大多數原始設備製造商都在沒有因缺少組件而停工的情況下再次生產。汽車行業的供應鏈似乎已經在運轉。因此，我們期待他們有更多的需求。而且我認為在今年下半年或第二季度，對其他行業的需求將會恢復。這就是我們對墨西哥市場的看法。我希望它能幫助伊莎貝拉。

Yes, that's very helpful. And just one quick follow-up on nearshoring. Have you already been seeing actual steel demand for nearshoring products projects or do you think that's something to expect later on in 2023, 2024?

是的，這很有幫助。以及關於近岸外包的快速跟進。您是否已經看到近岸產品項目的實際鋼鐵需求，或者您認為這會在 2023 年、2024 年晚些時候出現？

No, I mean, in all our numbers for 2022 and 2023, we are not seeing demand except the demand you have in the constructions of the facilities that takes a lot of steel, of course, but we are not seeing that demand because that production is coming on board late '23. The first one we saw last year, and it's going to come in '24 and '25. That's why I said in the beginning that nearshoring is something that is happening that we are seeing because we are seeing the buildings and the factories being built, but this is coming in a couple of years when all the production facility is running.

不，我的意思是，在我們 2022 年和 2023 年的所有數字中，我們沒有看到需求，當然，除了您在需要大量鋼材的設施建設中的需求，但我們沒有看到這種需求，因為生產將於 23 年底上船。我們去年看到的第一個，將在 24 和 25 年推出。這就是為什麼我在一開始就說近岸外包是我們正在發生的事情，因為我們正在看到正在建造的建築物和工廠，但是當所有生產設施都在運行時，這將在幾年後出現。

Your next question comes from the line of Alfonso Salazar from Scotiabank.

你的下一個問題來自豐業銀行的 Alfonso Salazar。

The questions that I have, the first one is regarding the location of the new plant that you are building the new EAF. Just want to know what are the considerations for the location that you need to have it keep in mind? Does it have to do with water availability, energy, clean energy availability, your carbon goals because Pesqueria looks to me like a good fit. But I don't know if you can give some color on what is what are you considering for the location. The second question is just a clarification about Ternium Brazil. So, if I understood correctly, with this new facility, you will be basically neutral on your slab needs. Even at the margin, you would be buying small amounts for some plants or selling some for Usiminas and other end users? Is this correct?

我的問題，第一個是關於您正在建造新 EAF 的新工廠的位置。只是想知道您需要牢記的位置注意事項是什麼？它是否與水的可用性、能源、清潔能源的可用性、您的碳目標有關，因為 Pesqueria 在我看來很合適。但我不知道您是否可以就您考慮的位置給出一些顏色。第二個問題只是對 Ternium Brazil 的澄清。所以，如果我理解正確的話，有了這個新設施，你基本上對平板的需求保持中立。即使是利潤，你也會為一些工廠購買少量或為 Usiminas 和其他最終用戶出售一些？它是否正確？

Yes. Thank you, Alfonso. So, I think the second part, you are correct. We are going to be almost hedged; I think. But yes, mainly yes. But as I said, we are probably going to sell to Usiminas. I think it's a very reasonable and a very logistic -- from a logistics point of view, it's it makes a lot of sense. And so, we are going to continue buying probably slabs in the market as Ternium. But we are going to be almost hedged. To the location, yes, Pesqueria could be or is one of the possibilities, clearly. But as I said, we are discussing and the exact location, to be honest, we are going to disclose it soon. I mean, there's still some things we are analyzing. I hope I tried to answer the question, Alfonso.

是的。謝謝你，阿方索。所以，我認為第二部分，你是對的。我們將幾乎被對沖；我認為。但是，是的，主要是。但正如我所說，我們可能會出售給 Usiminas。我認為這是非常合理且非常符合邏輯的——從邏輯的角度來看，它很有意義。因此，我們將繼續在市場上購買可能作為 Ternium 的平板。但我們將幾乎被對沖。就地點而言，是的，很明顯，Pesqueria 可能是或者是其中一種可能性。但正如我所說，我們正在討論具體位置，說實話，我們很快就會公開。我的意思是，我們仍在分析一些事情。我希望我試著回答這個問題，阿方索。

Yes. Just to clarify, we know there were some problems with water scarcity in the region of Nuevo León, in the state of Nuevo León. Energy is not really a problem at this point, but it could be in the future, and clean energy availability is also a concern of many that invest in Mexico. So just wanted to understand if those are kind of the considerations that you have?

是的。澄清一下，我們知道新萊昂州的新萊昂地區存在一些缺水問題。在這一點上，能源並不是真正的問題，但它可能在未來成為問題，清潔能源的可用性也是許多在墨西哥投資的人關注的問題。所以只是想了解這些是否是您的考慮因素？

Well, yes and no. I mean, to be honest, water for our Pesqueria plant is not a problem. As you know, I mean, from a water standpoint of view, today Pesqueria plant with the increase in the downstream facilities and the electrical plant we had, all of that consumes water from the disposal facility that is close to Pesqueria. So, we are not consuming clean water and so, it's very, very efficient from a water point of view and the plant is prepared to grow.

好吧，是的，不是。我的意思是，老實說，我們 Pesqueria 工廠的水不是問題。如你所知，我的意思是，從水的角度來看，今天 Pesqueria 工廠增加了下游設施和我們擁有的電廠，所有這些都消耗了靠近 Pesqueria 的處理設施的水。所以，我們沒有消耗乾淨的水，所以，從用水的角度來看，這是非常非常有效的，而且植物已經準備好生長了。

So, although it's a concern in the north of the country, the water park is not a concern for Pesqueria at all because of the sustainability without the plant, and we are consuming all -- I know how you say it in English, the black water yes, I think it's sewage, waters and so we don't have any problem with water. Energy, which is a big concern in Mexico, I think it's not a concern in the north of the country. The North of the country has more energy supply than energy consumption. So, it shouldn't be another problem. I think that our decision is based on discussing alternative we have and to disclose the location pretty soon.

所以，雖然它在該國北部是一個問題，但水上樂園根本不是 Pesqueria 的問題，因為沒有工廠的可持續性，我們正在消耗所有 - 我知道你用英語怎麼說，黑色水 是的，我認為是污水、水，所以我們對水沒有任何問題。能源在墨西哥是一個大問題，我認為在該國北部不是問題。該國北部的能源供應多於能源消耗。所以，這不應該是另一個問題。我認為我們的決定是基於討論我們擁有的替代方案並很快公佈位置。

(Operator Instructions) Your next question comes from the line of Alex Hacking from Citi.

（操作員說明）您的下一個問題來自花旗的 Alex Hacking。

I just have a few follow-ups. I guess, mostly on the project. So, with the DRI, would Ternium be consuming all of that DRI at the new EAF facility or would you be selling some of that to third parties.

我只有一些跟進。我想，主要是在項目上。因此，對於 DRI，Ternium 會在新的 EAF 設施中消耗所有 DRI，還是將其中的一些出售給第三方。

Yes. We are all consumed in the DRI.

是的。我們都沉浸在 DRI 中。

Okay. What technology is that going to be based on? Will it be the (inaudible) technology that you're very familiar with?

好的。這將基於什麼技術？它會是您非常熟悉的（聽不清）技術嗎？

Most likely. I mean there are 2 technologies Midrex and HYL, Tenova. Clearly, we have HYL in all our plants. So probably, it's not decided. But of course, it's what we intend to do.

最有可能的。我的意思是有兩種技術 Midrex 和 HYL，Tenova。顯然，我們所有的工廠都有 HYL。所以可能還沒有決定。但當然，這是我們打算做的。

Okay. And then finally are there any steel quality implications from shifting from very high-quality Brazilian slabs to slabs made in an EAF, In particular, for the automotive supply chain, exposed auto body sheet, are you fully comfortable that you can replicate your current tolerances and quality?

好的。最後，從高質量的巴西板坯轉向電弧爐製造的板坯對鋼材質量有何影響，特別是對於汽車供應鏈，裸露的車身板材，您是否完全放心可以復制當前的公差和質量？

Yes, the answer is yes. Of course, it's a different technology, but we have to go that growth for several reasons. First, we have to be USMCA melted and pour compliant, and we are not going to make a blast furnace in Mexico or anywhere, to be honest. So, we work hard all last year to see the technology and to see exactly how this steel shop will be to produce the same quality that the Brazilian slab operation produces. The caster and the secondary steel shop will be probably the same that we have in Brazil. So, we are comfortable, although we are working very hard that the quality will be the same.

是的，答案是肯定的。當然，這是一項不同的技術，但出於多種原因，我們必須實現這種增長。首先，我們必須符合 USMCA 熔化和傾倒標準，老實說，我們不會在墨西哥或任何地方建造高爐。因此，我們去年一整年都在努力工作，以了解這項技術，並確切了解這家鋼廠將如何生產出與巴西板坯廠生產的質量相同的產品。鑄造廠和二級鋼廠可能與我們在巴西的相同。所以，我們很舒服，儘管我們非常努力地工作以確保質量相同。

Okay. And then just back on the raw material side, I assume that outside of the DRI, then you would also be using some prime scrap in the mix. Is that a correct assumption?

好的。然後回到原材料方面，我假設在 DRI 之外，你也會在混合物中使用一些優質廢料。這是一個正確的假設嗎？

Yes. Probably the mix depends, of course, of the steel, the quality of the steel and the facility is prepared to produce with more DRI or with less DRI, depending again, in the steel quality. But roughly, on a general mix, it's going to be 65% DRI and 35% is scrap.

是的。當然，混合可能取決於鋼材、鋼材的質量以及準備生產更多 DRI 或更少 DRI 的設施，這再次取決於鋼材質量。但粗略地說，在一般組合中，65% 是 DRI，35% 是廢料。

And there are no further questions at this time. I will turn the call back over to Ternium's CEO, Maximo Vedoya, for some closing remarks.

目前沒有其他問題。我將把電話轉回給 Ternium 的首席執行官 Maximo Vedoya，聽取一些結束語。

Okay. Thank you all very much for your interest in our call today; for your very good questions. And as usual, please contact us if you have any comments or any additional questions. If not, we'll talk next conference call. Thank you very much, and goodbye.

好的。非常感謝大家對我們今天的電話感興趣；對於你很好的問題。和往常一樣，如果您有任何意見或任何其他問題，請聯繫我們。如果沒有，我們將在下一次電話會議上討論。非常感謝，再見。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。