POSCO HOLDINGS INC. American Depositary Shares (Each representing 1/4th of a share of Common Stock)

Good afternoon, ladies and gentlemen. The 2023 Q1 earnings release conference call will now begin. Postco Holdings will first present, which will be followed by a Q&A session with the participants. Please press star and one to ask questions. Postco Holdings will now present.

Good afternoon, ladies and gentlemen. I am Jeong Gi-Seob, CSO of Postco Holdings. First and foremost, I would like to extend my gratitude to all the investors for your keen and lasting interest in Postco Holdings. Today's earnings call is joined by key executives from Postco Holdings, as well as from major subsidiaries, including Postco, Postco International, and Postco Future M. Last September, Pusko Group underwent an unprecedented natural disaster as Pohang Steel Mill was hit with typhoon Hinanur and was flooded as a result. But thanks to the efforts and hard work of the people at Pusko Holdings as well as the partners, vendors and customers, we miraculously completed recovery in 135 days and reopened for normal operation as of January 20th this year. Consequently, steel business returned to the black in Q1 from a deficit of $713.8 billion in Q4 last year. And on top of that, we laid the foundation for additional performance improvements for Q2. Even in times of recovery from the natural disaster, our investment for post-growth group did not stop. We invested in electric arc furnaces to roll out low-carbon products from 2026 in order to transition to an eco-friendly green production system. Furthermore, we spent our product portfolio to include hyper-NO and cylindrical battery materials for EVs to respond to the growth of the EV industry. Through these measures, we believe we can generate demand in the next and new future growth sectors. The secondary battery materials business also saw some positive developments. In Q1 this year, green materials business sales jumped 44% Q1Q and posted once again a record high quarterly sales. Argentina brine project phase one is well underway with the plant and brine pond now complete and mechanical and electric works initiating this April. A few days ago, with regard to the seawater, rather saltwater, the lithium construction project phase two, we obtained approval and license from both the state of Salta and Catamarca. Presco Pilbara Lithium Solution, a hard lithium mineral player, now has its headquarters building and sub-center completed, and MNE Works commenced in April. It is moving forward in line with the timetable for scheduled commercial operation. Postco Holdings is committed to do its utmost to ensure growth as a leading green materials business and subsequently to enhance shareholder value. Next, I would like to share with the shareholders and investors our midterm shareholder return policy, which will be effective for three years until 2025. Please turn to page 18 of the pre-read.

The company first disclosed its medium-term dividend payout ratio in January 2020, and over the next three years, it paid out dividends and retired shares to return a total of 3.4 trillion Korean won to the shareholders. The next three years' shareholder return plan is as follows. As a leading eco-friendly materials company, Posco Holdings seeks to boost corporate value and maintain a steady dividend payout by pushing for business growth. As Posco Holdings shifted to a holding company in 2022, it unveiled its 2030 growth strategy to increase shareholder value. To this end, for the next three years, the company will build a global production system for its secondary battery materials business, such as lithium. Through years of hard work and experience, the management is confident that investing in these new growth businesses will further boost corporate value. During 2023 to 2025, for three years, the company will return 50% to 60% of its free cash flow to equity to the shareholders. Also, to ensure that dividends are highly predictable, a basic dividend policy of $10,000 per share will be introduced so that shareholders can receive steady dividends even in the midst of uncertainty. Quarterly dividends will be paid out as before, and during the General Shareholders' Meeting in March, the Articles of Incorporation will be revised to preemptively adopt the Dividend Confirmation First, Record Date Later program to enhance shareholder value. Dear Shareholders, Uncertainty in the global economy remains, and the regulatory environment keeps changing rapidly, as can be seen from IRA and CBAM. To this end, Postco Group launched emergency operations. The group will continue to focus on its strategic core business while responding to the changing business environment in a proactive and agile manner to meet the shareholders' expectations. Next, the head of the IR team will report on the earnings release of Q1 2023.

Good afternoon, ladies and gentlemen. Allow me to walk you through our business results from Q1 2023. Bosco Holdings' Q1 consolidated revenue rose 0.7% QOQ to record $19.38 trillion, and it will be posted a plus $704.7 billion. Let me elaborate on each business. First is steel. Steel business recorded a deficit of $718.4 billion Q4, but made a turnaround in Q1 to post a surplus of $337.9 billion. Bohang Steel works... 100% resumed normal operation from January 20th, and as a result, the output and product mix are also recovering really fast. Despite an additional recovery cost of $60.9 billion in Q1, POSCO posted a surplus of $251.3 billion. Overseas steel also posted a modest surplus of $19.4 billion from a deficit of $166.2 billion in Q4 last year. If you do a deep dive into Postco's monthly OOP, up until January, the company was still in the red due to the lingering effects of the flood and steel price declines. But as the mill was normalized and steel prices rose, started to trend upwards. In February, POSCO quickly returned to the black. OP improved further in March with additional price increases. So judging from this trend, we expect still OP in Q2 will be clearly better than Q1 this year. Second is green infrastructure. OP climbed 63% QOQ, In January, POSCO International merged with POSCO Energy and recorded a quarterly OP of $280 billion despite the market downturn. And thanks to Sound Energy Business, it was able to achieve a considerable OP. POSCO DX, a listed company, also posted a positive OP. Third is Green Materials. Thanks to increased capital sales, green materials revenue jumped 44% QOQ and posted the highest quarterly sales once again. OP also inched up compared to the previous quarter and is expected to maintain its upward trend into Q2. Next, I would like to move on and brief you on major business activities in Q1. On page 5, you can see the progress in lithium, nickel, recycling, next generation lithium battery materials plants. POSCO Future Ends and Facility Expansion and POSCO International's LNG project can be found separately in the presentation deck for your reference. As for the brine project phase one in Argentina, the factory and the pond is completed. Upstream M&E works will begin this month and downstream M&E works will commence next month. The brine project phase two approved late last year has upstream, in Argentina and downstream in Korea. The detailed design for the two is currently underway. Hard lithium mineral producer Pusko-Kirbaer Lithium Solution now has its headquarters and sub-center completed and commenced the M&A work. The total capacity of 43,000 tons, number two plan, will account for about half and it will be completed coming October and start commissioning. Number one plan responsible for the remaining half will be completed by February 2024 and the progress is in line with the schedule. SNSC and Post School's iron removal and nickel metal refining projects have respectively completed their civil engineering works and commenced Yemeni installation works in Q1. They are moving according to the construction schedule to be completed in Q4. CLSC in Poland was completed last year and secured license and approval for waste treatment and went into operation. In March, it shipped the initial black powder production. ProSco HYCM, the recipient of this shipment, completed its construction work late last year and obtained a business license in February. It finished the hard run of the leaching process to start rolling out products sometime in May. Once the initial batch of products become available, they will be tested for certification, and we expect normal operation will be achieved sometime in November this year. Finally, there was an approval for investment in postcode silicon solution. I will elaborate further on this on the next page. I trust many of you would recall that Pusko Holdings in July 2022 acquired 100% stakes in a silicon anode producer, Terra Technos. The company had been renamed as Pusko Silicon Solution. And I A decision was made in January this year to execute Phase 1 investment worth $59.1 billion to produce 450 tons of silicon oxide. For the next six years, the company will have four rounds of investments so that by 2030, the Silicon oxide capacity can be ramped up to 25K tons. Silicon oxide is high in energy density and thus helps to improve mileage. For this reason, we expect the demand thereon will grow rapidly going forward. Fusco Group is expanding its business into not just natural and artificial graphite, but also into silicon anodes. Also for silicon carbonite, silicon carbonate, POSCO Future M is building a demo plant with an annual capacity of 50 tons in Youngil Industrial Complex. And for silicon oxide, POSCO Silicon Solution will take on the task of developing next-generation technologies. On the next page, you see a map of Youngil Industrial Complex in Pohang. POSCO Holdings and POSCO Future M will invest here to build a silicon anode complex. Once POSCO solution reaches the planned capacity of 25k tons, then its annual sales will exceed 1.5 trillion won. Also, the OOP margin is expected to be quite high.

For your reference, POSCO Group also keeps investing in next-generation materials other than the core materials for secondary batteries, such as cathode and anode, and core minerals, such as lithium and nickel. Examples are on top of POSCO Silicon Solutions, solid electrolyte operator PJK Solid Solution, and Taiwanese solid battery maker Prologium. And POSCO Holdings is making investment into these companies. To this end, Nextop Lab was built to focus on manpower training and technology development. Next, during Q1, Progress was made towards the transition to eco-friendly steelmaking, including investment decisions for the construction of new electric furnaces. This is page 8. Steelmaker POSCO is on track to transition into eco-friendly steelmaking. By 2030, POSCO plans to cut carbon emissions by 10% against base year. To this end, in Q1, we initiated a detailed feasibility study of the HVI project, in Western Australia to secure low-carbon, eco-friendly raw materials. And also, the BOD approved a new investment in a 2.5 million ton electric furnace set to go live in 2026. Finally, together with Prime Metals in the UK, the design of a Hyrex test facility began, which is hydrogen reducing steel. The test facility is scheduled to go on in operation in 2026, and tests will be conducted to develop and complete HI-REx commercial technologies. These investments will accelerate our plan to transition into an eco-friendly steelmaker by 2030, 40, and 50. So we have concrete plans. Next, I will tell you more about the performance by company. If you look at page 10, first and foremost, postcode. Post-cost production and sales volumes almost normalized during Q1 for both carbon steel and STS, as you can see on the slide. There was slight disruptions in early January, so Q2 production is expected to be slightly higher than Q1. With normalized downstream process, as you can see at the center, The supply of semi-finished products, which exceeded 2 million tons at the end of last year, declined. The sales volume of low-cost products, such as slabs in the right table, went down from 740,000 tons in Q4 to 120,000 tons in Q1. On the other hand, sales of relatively more expensive STS and WTP recovered, although it plunged in Q4. Now moving on to page 11. Accordingly, Thanks to the volume and the sales mix, Q1 OP was 251.3 billion won. So it turned around, and the figure turned to black thanks to production recovery and reduction of recovery costs. Q1 OP accounts for the recovery cost of 60.7 billion won, while inventory loss returned at 5.4 billion won. S&P was 1.019 million per ton in Q1. down 6,001 QOQ. The sales mix normalized the QOQ. And when valuing this at 46,001 per ton, the net unit price due to slow demand and exchange rate fluctuation plunged by about 52,001 per ton. The selling prices continued to decline until January this year. However, the price increase in January began to be reflected in February, and the trend upward continued until April. However, the unit price of steel in 2023 H2 is still unclear, and we will have to wait and see the economy. Next, overseas steel. Overseas steel turned black in Q1. After the new HR line went into operation, PT Krakatau's HR sales volume went up and the price rebounded partially, contributing to the turnaround. As for India's Mahashtra and Vietnam's Vina, P&L improved as sales prices went up. However, China's Zhangjiagang Stainless saw deteriorating P&L due to high SES inventory. Next, Postco International. POSCO International's revenue fell 9% QOQ due to a decline in steel prices and the $1 exchange rate, but profitability improved driven by increased sales of high-margin, high-profit products in markets like Europe, and palm business profits also went up. Energy also showed strong overall profits with Q1 OP at $280 billion. Now moving on to page 14. POSCO ENC's business priority was profitability and posted a profit of 55 billion Korean won, recovering from Q4. However, as for the future market conditions, it still remains conservative. It will thus maintain its profit-oriented strategy. Orders went down QOQ and the order backlog as of the end of Q1 is 2.7 trillion won. The share of orders for captive and urban renovation projects is growing. As for a post-cofuture M, cathode materials showed strong growth. As for cathode materials, N65 sales grew 73% QOQ showing recovery and new NCMA sales was posted starting March with revenue growing 85% QOQ. However, the operating margin was still low at 1.8%. Considering the initial operating costs of the new line, raw material prices and sales prices, we expect improved profitability in Q2. That brings an end to the earnings release report of Postco Holdings. We will now move on to a Q&A session.

We will now open up the floor for Q&A. If you have any questions, please press star followed by 1. If you have any questions, if you want to cancel, you can press 2 after star. The first question is from Hyundai Motor Security. Mr. Park, you have the floor. Hello. Good afternoon. My name is Park. First of all, I'd like to thank you for the opportunity to ask a question. I have three questions. First, regarding the steel market, starting from early this year, I believe that steel market has bottomed out. However, the demand of steel is quite sluggish. And I understand that this will have a huge influence. But towards the end of this year, there are some market outlooks that China construction market is going to recover. So from Puskal Golding's point of view, in Q2 and also second half of this year, what is your position on the steel market outlook? Second question, with regard to new businesses, I think that there is a lot of interest in the market, especially on lithium. In October, I understand that the lithium factory is going to be completed in October in Gwangyang. So when do you believe that it's going to commercialize and break even? And with regard to lithium, China's lithium spot prices tend to be independent from other factors. Now, Postco Holdings' lithium subsidiary, when providing lithium to various clients, are you going to follow the spot prices of China, or are you going to follow North America or European prices? Can you comment that? That would be appreciated. For your information, the U.S. and also European lithium prices compared to those of China are quite high. So if the benchmark price is Europe or that of North America, then I think that it will be independent from the effects from the Chinese market. My third question has to do with IRA of the U.S., Now, what is the impact of this in your subsidiaries? Thank you. First of all, with regard to still market outlook, I would like to invite still marketing head and we will start with that. Hello. I am head of marketing strategy, Um Ki-chun. As you rightly commented, starting from early this year, the steel market started to pick up early this year. And in China, the price for May was stayed, and the real market did not really catch up. And so there is some sort of a fatigue in the market. So that's what we have seen so far. You talked about the real estate market in China. The Chinese government had its government meetings and parliamentary meetings, and we expected some countermeasures to be released, but it was not, so there is some discouragement. But it announced about... $2,300 trillion, one worth of market stimulus package. So it's quite positive. And also, if you look at tax revenue, according to the Chinese authority, it increased by about 1.3%. And last month, there was an increase by about 18%. And if you look at the real estate prices in 70 cities, Yes, the degree is quite minimal. However, 0.2, 0.3, and 0.44, you can see that the real estate market prices are increasing. So in quite some time, you can see that the housing prices in China are increasing. So we believe that if they continue, then in the second half of this year, we believe that the steel prices will pick up even further. But because of the limited real demand, that can also be a damper. Now, for Q2 and second half, I think that our team had commented briefly. Anyways, global steel market, in line with the global steel market, we also raised our steel prices in January, February, and March. And for March, we believe that we were able to achieve average. And for Q2 and Q3, I think that we stayed HR, but for home appliances, shipbuilding, we are in the process of raising our prices. So for Q2, we were able to recover fully from the effects of Hinnom Noir, so I think that we will be able to reach our normal business. And I think that we have to wait and see what would happen in the second half. Thank you. Now, as for the second question, lithium-related. And for question number three, the question was about the impact of IRA in our subsidiaries. Well, I think that this can be best answered by the chief of lithium battery materials business head, Yes, thank you very much. My name is Yi-Kyung Sa, Chief of Lithium Battery Materials Business. I understand that there were three questions. First, had to do with lithium business, when the commercialization will begin and when the normal operation will begin. Well, all in all, if you look at our plans, as our team had elaborated, So far, the construction is in progress without any major hiccups. So I believe that we will be able to complete construction work according to the schedule. The ramp-up period is going to be about one year, and in that one-year period, we're going to work on normalization of operations, and we will also work on receiving approvals and licenses. For lithium, for PPLS especially, In Gwangyang, we already have a demo plant. And together with OEMs, we are getting some feedback. So when it comes to certification, I think that we can speed up the process a little. So BEP plant or PPLS by 2025, I think that we will be able to achieve a positive OPEC And for brine lithium, I think that starting from 2024, we will break even. So that is our projection at the moment. You also talked about the Gwangyang plant. In October, we will complete the construction, and the progress is about 65%. The building, the base construction work is completed, but we are currently working on M&E installation work. So by late September this year, we will finish that, and October we will do commissioning. So late October, I think that we will be able to start producing products. The second question was lithium price deciding mechanism. Well, in the past, when it comes to Chinese lithium prices, Well, I think that China, Japan and China, the prices of lithium were brought together and had a weighted average. However, now the lithium prices are on the overside recently. And seawater, lithium prices also are moving independently from the brine. I think that the test market... is the benchmark that we're following, and it's quite different from the Chinese market price or spot price of China. So I think that going forward, the test market is going to be the baseline for volumetric procurement and sales. I think that is going to be used as the benchmark price. Now, let's go back to YRA. Yes, there are many speculations regarding that. with regard to cathode and anode. Now, they are now considered as part of components, and it is not essential to invest in North America. It's classified as minerals and for cathode and anodes for OEMs. If they require local investment, then we can do so. then from Korea or from the most suitable country given the investment and also the operating cost we can produce from there. So I think that overall it's working to our favor. And when it comes to lithium, the mineral is being procured mostly from Australia. So I think that we can benefit from RIA because we meet the requirements. I think that we are okay when it comes to selling in North America. And when it comes to brine, lithium, Argentina is not a country with FDA with the U.S. But phase one or I think that we can produce some in Argentina and some in Korea. And value added can be quite different. And the RIA is not quite clear on that yet. And FDA-related, and whether or not Argentina is going to be included as part of FDA requirement, something that the two countries are currently discussing. And SNNC has nickel refining, and that is going to meet the requirement of the RA. And Indonesia, it's not currently. the beneficiary of RIA, but we in the market expect that it is eventually going to be a beneficiary of RIA. Significant amount of nickel is going to be coming from Indonesia, so we are going to take that into consideration so that not just for RIA, but when it comes to other minerals, and I think that we are going to diversify our minerals procurement North America, Europe, and Asia. We're going to diversify our procurement and production to align ourselves with different regulations. So I think that the impact of RA is going to be minimal. Thank you. Thank you very much.

The next question will come from high securities, Mr. Kim Yoon-sung. You have the floor. Yes, hello. My name is Kim Yoon-sung. I have a question about lithium. I have two questions about that, and I will have one more question. First about lithium. So we talk about less production in China. So as we hear that, so we say that the price will go even down or it will recover or rebound. Well, when we used to talk about the cost before, And the cash cost level, how do you expect that, and how do you see the outlook for lithium? And also, you have finalized to invest 980,000 tons, and you will add up about 300,000 going forward. Do you have any detailed investment plans that you want to disclose to the investors? And recently, we have been hearing news about nationalization of lithium. Do you have any changes in your strategies or any elements that can push change in strategy? And also, I have a question about the market itself, the market conditions, Ben. Our market conditions was much better than that of China, and what drove that? That would be the question. So by market conditions, do you mean steel, or what exactly do you mean? Yes, steel market conditions. Then for lithium, the two questions will be addressed by the head of the secondary battery material head. Yes. So I think you had three questions there. So for the lithium price, as you said, in the early days of this year and late last year, it actually went up to $85,000. But then at the end of the year, because China had to secure more inventories and there was the issue with OEMs and also the battery providers, And we had all these players joining the race. And because of that, we saw this surge of lithium price. But earlier this year, China, with CHTL, reducing the carbon lithium, the lithium carbonate, and also they also reduced and scrapped their initial plan for subsidy. So as a result, we do see a change. And for now, lithium globally, if you look at the global projects, so against the demand, we do not have a lot of projects ongoing. So if you look at that trend, in the midterm, it takes about four to five years for lithium projects to kick start. Unless we have a one-bolt project, it's not likely that the price will plunge. So in the mid-term, the current lithium price, I think there was some bubbles last year. And I believe that the bubble has bursted. So we will see stabilized prices this year. And we will see more stabilized market this year. And as a result, the price will also rebound. So that is at least our outlook. And during the IR last year, we said it would be like mid-40,000 range, and we believe that it will be 60,000 mid-range this year. So maybe the market thinks between 40,000 to 50,000, and it will stay in that range. And the second question was about the 300,000 lithium range. that we disclosed or announced. And as for specific projects, we cannot disclose any details. We have to wait for that. But then for secondary battery materials business, it's a mid to long-term business. But then we want to expand the volume and scale up the project. So it's on track, and so please believe us when we say that. And number three, it was about nationalization of lithium. And you talked about Chile, but then in fact, while there are some rumors in the market, and it's confusing, but then in Chile and in South America, I want to clarify that here, nationalization is not a seizure of a private... properties or assets, but the government will have like a lithium association, and the association will carry out lithium projects, the new ones. So, for instance, we have Argentina project, and for instance, we do have ongoing project in Latin America. However, it does not affect us. I want to clarify that it's not nationalization, but the national organizations will oversee the process going forward. And for Chile, now the mining rights cannot be fully privatized. So like Chile, when you expire your license, then there are some uncertainties, but then I just want to clarify that the nationalization does not mean seizing private properties or assets. Yes, also about the third question, that was about the steel market conditions. Bosco Marketing, Mr. Um Gitton, Head of Marketing Strategy Office, will answer that question. Yes, hello, I am Um Gitton. So I would like to talk about Europe's than China because you saw a price surge there, and you, I think, talked about the outlook for H2. And the reason why the price surged is because the U.S. and EU, they have a Section 232, and they have a quota. And because of that, in terms of supply, we have to meet that quota. It was about 70% to 75% range in the U.S. And in Europe, as you know, there's a war in Ukraine, and there was still coming from those two countries, Russia and Ukraine, but then we lost that. And also metal and the mills in France caught fire, and there was an earthquake in Turkey as well. And that actually brought down supply chains. Then what about the second half of this year? Well, basically, when it comes to energy cost, the mills will recognize that, and they want to normalize the market. So CRU's outlook is as follows. So HR, it's about 1,200 to 1,300 mills. So it can pick up to 1,500 down. The bottom will be about 1,000. So that is at least the projection for now. Yes, thank you very much.

Next question is from Uanta Securities. Mr. Lee Hyun-soo, you have the floor. Yes, good afternoon. I am from Uanta Securities. My name is Lee Hyun-soo. I have about three questions. First, With regard to POSCO's earnings results, we believe that Q2 you're going to recover further, and for the second half of this year, we have to wait and see. When it comes to sales volume, POSCO did say that 8.16 million tons were sold in Q1. I understand that by quarter there were some differences, but 8 million to 9 million quarterly sales were recorded in the past. So throughout this year, Q1, Q2, and first half, second half, what do you see or how do you expect PUSCO's sales volume will trend?

Second.

If you turn to page 19 from the 20... To 2030, you talked about dividends, and the dividend is going to be 101 per share. When it comes to shareholder return, regardless of the performance, you're saying that minimum dividend for a given year is going to be 10,000 Korean won. Is that correct? And the final question is this. After the Holden Company was founded, Overseas, still subsidiaries were placed under POSCO. So from the POSCO group's point of view, you have POSCO and green materials and green infrastructure. So do you have any further plans to reshuffle the organization structure in the future? Thank you. Yes, with regard to the first question, POSCO's future sales outlook, I'd like to invite Mr. Lee Sung-kyu, the head of finance office of POSCO, to answer. In Q1, if you look at sales of steel, carbon steel, And steel is still about 350K tons. And in Q2, in Q1, there were some production disruptions. And in Q1, the production was not fully normalized. But Q2, everything is going to be normal. So compared to Q1, we believe that there is going to be at least an uptick in sales volume by 5%. And the second half, I believe that it's going to be much better. It's going to pick up even better compared to the first half. So overall, for the year 2023, we believe that not as high as 2021 where the sales was stellar. I think that we will be able to go back to normal production. Second question had to do with dividends, so I'd like to ask the head of IR team to take that question. And the third question had to do with an issue that I think Mr. Jung Dae-young could answer. Yes, with regard to a basic or base dividend of 10K1, regardless of our OP, every year, the bare minimum dividend we're going to pay out to all shareholders is going to be 10K1. So that's how we plan to do it. So it's not 101, it's 10K1. And 50% to 60% of the free cash flow, what that means is that we're going to pay the base dividend, but at the same time, that 50% to 60% of the cash flow is going to be used so that if there is an excess cash, we will pay out more to the shareholders. So we have this kind of structure because we want to continue with our investment to grow our business, but at the same time, we want to evenly and in a balanced manner give out the dividends to our shareholders. So for the sake of predictability, we introduced this system. Thank you. Yes, I am Jung Dae-hyung, head of our corporate strategy team. So after the launch of the Ho-dong company, the target or the objective that we established was to maximize the values of the business and also generate synergy effects. So for these two, we worked tirelessly, and their target was to achieve ESG. So these three were the targets that we aim to achieve with the launch of the holding company. And with that in mind, last year for Steel, we made some efforts in order to maximize synergy and also for energy and energy business. So we worked on some organizational reshuffle to make that happen for others. We are going to study various options, but as of now, there is no or nothing that we can share. Thank you. Thank you.

Next, NHG Securities and Investment, Mr. Lee Jae-kwang will ask a question. Yes, hello. I'm from NHG, Lee Jae-kwang. I will ask a few questions. You talked about the lithium price. And it's a fast market, you said. And of course, I guess the benchmark was Korea and Japan. And then we have China and Europe because we have these different categories. So what was your benchmark? I would like to double-check that. And number two, about Argentina, the contract period, Up to when will the contract last? If you can disclose that, please do. And also, what about the structure? Well, depending on the price, like what would be the share. So is that the business model that you have there? And about for ore lithium, for now we have Pilbara partnership. And going forward, you will also work with Pilbara. That's my understanding. But then it feels like... Maybe it's risky to invest with just one provider. So do you have plans to maybe work with another partner? And last but not least, about the electrical furnace. You will be investing in that, but then the scale will be quite large. And I believe that the steel industry Type is about 80% to 85%. So would that affect the current business practice? Yes. For the lithium, Mr. Lee Kyung-sub will answer that. And for the fourth question about the electric furnace, Mr. Seok-gyu Yeon will answer that. Yes. So I will entertain your question. For the lithium market, yes, that was based on the three countries of Korea, Japan, and China as of customs clearance. So that was the benchmark price that I talked about. And number two, about the Argentina, well, we do not have a contract. We actually acquired all the assets. So it's permanent. So it's different from Chile. And there, Argentina, we actually, well, it's our asset. And for royalties, if we look at Argentina, if we look at the business model or royalty business model, it's about 3.5% against the sales or revenue. And that was the deal with the central government. And about Tilbara partnership, you asked whether we had plans to – strike other partnerships as well? Well, other than Pilbara, we also, for 300K up to 2030, well, let's say that if Pilbara is 1 million, then lithium LH would be, how much would it be? About 1 eighth? About 150,000 tons? So we are on a good term with Pilbara. So they're a good supplier. And, of course, we plan to scale up the partnership. But then for other regions, we have actually projects with other partners as well. That would be all for me. Hello. My name is Seoji Won from Postco Materials. I will ask you about the scrap. So now the seal makers are expanding the electric furnaces. So how are we going to secure scrapping process? So I guess that was the question, and I would like to briefly talk about the current status. So 27 million tons is the volume, and we have about 4 million imported, and the rest is here in Korea. And the plan is to, well, we have already set the scrapping volume as a target. And to secure that, we will collect and also process and we will actually take that approach And also we have a thirst scrapping from the customers. And we also have another option, which is to have a partnership with overseas companies and invest in their shares. So we have these three options. So please do not be concerned. Thank you. Thank you.

So that's all for questions. If there are any additional questions, again, please press star followed by one. Next question is from Citi Group. Mr. Lee Seung-sun, you have the floor. Yes, thank you very much for the opportunity. I would like to ask about page eight, carbon neutrality roadmap. Now, if you look at the roadmap, the Korean government makes a certain proposal, and I understand that your roadmap is in line with that. And compared to Europe or the U.S., Do you think that your roadmap is in line with their guidelines? If not, from a business point of view, are there going to be any disadvantages? Or from the investor's point of view, don't you think that there can be some concerns? What's your point or position on that? With regard to that question, I would like to invite Mr. Kim Kyung-hwan, head of the International Trade Affairs Office of POSCO, to answer. Yes, I am the head of International Trade Affairs Office. Now, if you look at the carbon neutrality roadmap, this is in line with Paris Agreement. So we have to lower the global average temperature. limit the global temperature increase by 1.5 degrees Celsius, and we have certain carbon reduction goals. I think that different countries have different regulations, like CBAM in Europe, and they're trying to reduce carbon, and they're trying to accelerate the process. And I believe that all businesses, not just Korean businesses, are going to bear a burden accordingly. So national carbon neutrality roadmap and businesses roadmap may differ. Now, for steelmakers in Korea, we also are trying to develop roadmaps and trying to comply with them. Thank you.

Can you please check whether we have more questions? We do not have any more questions. Can I ask a question? Yes, please go ahead. You have the floor. Yes. About the international, you said that the steel materials export went up. So is that the same with Korea as well? And the U.S. and EU, you talked about the quota and some measures, regulations. Any signs of easement? And also, now... You said that last time you will invest in North America and with IRA. Any plans to invest in Korea or elsewhere? So any plans for that? That would be my question. Yes, for the first question, post-marketing strategic team, Mr. Umgisun will answer. Yes, we talked about international. And the revenue went up, and the RIA had said that export volume went up. But if you look at the post-goes volume, well, international takes the largest share. And in Q1, the reason why export exceeded domestic is because the domestic market recovery was slower. And the U.S. and EU, we do have quota, and we wanted to really increase deplete all the inventories, which is why you saw that number. And number two was about the quota, right? Were there any signs of easement or so? Well, that's up to the U.S., the government, and the European Union as well. So not in the foreseeable future. And about the brine treatment... Mr. Lee Kyung-seop, chief of LIB materials business, will answer that question. For Argentina, the brine lithium phase three and four, well, I wouldn't say domestic investment, but I said, well, we will follow IRA going forward. When it comes to core minerals, it's not processing-based. but it's origin of country-based, country of origin-based. So that's for our primary, and then processing is for secondary. So we haven't decided yet whether to take this project to North America or not. Whether we can actually kick-start a project within North America and also for brine, Phase 3 and 4 in Argentina. Next year, we will complete Phase 1. And once that takes place, we will choose which specific technologies or process we want to use. And then, whether we want the LH process there or in Korea, we will make such a decision at the latter half of next year so that we can invest in 2025. That is the plan. Thank you very much.

Ladies and gentlemen, thank you once again for your participation. Despite your busy schedules, we will take your input and suggestions so that we can better prepare at Postco Group. With that, we would like to finish the earnings call for Q1 2023 of Postco Holdings. Thank you.