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

Good afternoon. I am Ki Sub Jung, CSO of Posco Holdings. First of all, I would like to thank our investors for your continuous support and attention to Posco Holdings. 2023 was a difficult year, both internally and externally. Looking inward, the early recovery from flood-related damage was encouraging. However, high interest rates in the U.S. weighed down on the global economy. while China's underwhelming reopening suppressed steel prices. On the backdrop of the ongoing war in Ukraine, the conflict in Gaza in the fourth quarter escalated geopolitical risks in the Middle East and pushed up energy prices. This has been coupled with softening EV demand and the downturn in critical metals prices, bringing our consolidated revenues in 2023 to 77.1 trillion won, and operating profit to 3.5 trillion won, a decline in profits from last year. Despite the challenging environment, Posca Group continued to lay the groundwork for its future. First, the steelmaking business expanded introduction of low-carbon bridge technologies for the BFBOF route and defined our transition strategy to HIREX, positioning us for sustainable growth. Second, in the rechargeable battery materials business, construction was completed on lithium hydroxide and recycling plants in Guangyang. We are progressing with Phases 1 and 2 of the Argentine Lithium Brine Project and the Nickel JV Project. The strong uplift in lithium and nickel production will put us on a solid path into the EV supply chain. POSCO Pilbara Lithium Solution completed construction on POSCO Type Plant 1 which uses hard rock lithium, and now final testing with raw material speed is underway. The first batch of products will soon come off our production line. Third, the reshaping of our business portfolio, such as the merger of POSCO International and POSCO Energy, generated synergy and enhanced operational efficiency. Finally, we increased board oversight on group-wide ESG governance and a preventive workplace safety system was established by the Group Safety Council. As a result, major local and global ESG rating providers, such as Sustain Analytics, ISS, and the Korea Institute of Corporate Governance and Sustainability upgraded our ESG scores. Uncertainties remain high about demand for steel, and prices of critical battery metals. But our executives cautiously conjecture that we are moving past the most difficult period of time for our business. To offset mid to long-term price volatility, we will continue to strengthen our bottom line by lowering costs and improving P&L management. New investments in long-term growth projects will be put under closer scrutiny to enhance capital efficiency. My final point is on the dividend payouts and record date announced at the Board meeting earlier today. Based on our mid-term shareholder return policy, business performance, and dividend yield, the Board approved a 2,500 won per share Q4 dividend, bringing the total annual payout to 10,000 won per share. As our shareholders agreed at the March AGM, we have renewed our shareholder return program that defines the dividend prior to posting the record date. The year-end record date is set to February 29th. Going forward, Posca Holdings will continue to pursue a balance between stronger enterprise value driven by growth and reliable shareholder returns. With that, I would like to hand over the call to the head of our IR team for an in-depth briefing.

Hello. On our website, we have posted the earnings report, so we will take note of that as I give you this presentation. First year on year, the 2023 annual revenue and operating profits fell by 9% and 27% respectively, each closing with $77.127 trillion won and $3.531 trillion won. We generated annual EBITDA of $7.355 trillion won. Inclusive of CapEx and shares purchases, total investment came to $8.6 trillion. Consequently, net debt rose to $8 trillion won, but net debt ratio was kept consistently low at about 13.4%. Looking at the fourth quarter, the consolidated revenue and operating profit, respectively, were $18.664 trillion and $304.1 billion, recording significant losses compared to the previous year. Year on year, in the fourth quarter, despite the very strong 24.2% profit in eco-friendly infrastructure business, other businesses, namely steel and eco-friendly future materials, suffered weakened performance. Let's first look at steel. Price decline that began in the third quarter continues today, while costs of raw materials such as iron ore held on strong. Then in December, feed costs actually rose. The rare and momentary decoupling of prices associated with raw feed and steel drove down steel business profits from $853 billion in Q3 to $346 billion in Q4. Eco-friendly future materials recorded a $169.1 billion deficit in Q4, with the fall in price of metals, including lithium. Price of cathode-active materials also declined. Profit was also driven down by the reverse lag effect generated by the time difference between raw materials feed and product sale. Reflected in the current earnings report is the loss of inventory valuation, or inventory repairment that results from metals price declines. in eco-friendly future materials that inventory valuation loss across 2023 was 148.2 billion won, of which 130.6 billion was recognized in the fourth quarter. This impairment was felt not only at POSCO Future M, but also in the entity that fed the raw materials into initial plant ramp-up, which involved POSCO HY Clean Metal, and other new incorporations whose valuation losses were larger than normal. These valuation losses will likely shrink meaningfully once raw materials price stabilize. Next, allow me to briefly discuss 23 key business activities by each business sector. First, again, steel. We completed a 150,000-ton capacity high-grade NO plant expansion in Guangyang. Additionally, another 150,000-ton plant will come online by the end of this year, making a positive dent in enlarging our production capacity of high-value add products. Moreover, we aim to build a 300,000-ton capacity hydrogen reduction process pilot plant in 2027. Therefore, design, engineering, and construction work is being lined up. Since the Board approved in February 2023 the installation of a 2.5 million ton electric furnace required to produce decarbonized steel, And with the goal to commission the plant in 2026, we have begun work on construction. This exemplifies our commitment and action to invest toward decarbonized steel production. Finally, to enhance our position in China, we have a JV with HVIS, a number two steelmaker in China. Secondly, in eco-friendly infrastructure, by merging POSCO International with POSCO Energy, a new combined entity has launched. This was a deliberate decision to complete the LNG value chain loop and to cultivate our sustainable energy business as a means to galvanize the growth engine of POSCO Group. We invested to increase capacity at Cenex in Australia. EV motor core plant was completed in Mexico, too, and at this plant we're already picking up speed on orders from OEMs. In eco-friendly future materials, at the end of 23, construction of PPLS plant 1 was completed. Solid progress is being made in the brine lithium plant in Argentina, helping to build out our lithium production system. After 2026, we need to be ready to put our hydrogen reduction still-making facility into operation. So we're all in on ways to acquire the requisite hydrogen. In Tucum, Oman, we have secured exclusive rights to business development and operation to produce green hydrogen. Feasibility study is underway. On the next slide, I would like to discuss our ESG performance, and Mr. Kim, our CSO, already mentioned some of this, but in 2023, many local and global agencies such as Sustain Analytics, ISS, and Korea Institute of Corporate Governance and Sustainability published reports that revealed POSCO Group's phenomenal improvements in ESG indicators. Since transitioning to a holding company structure, we've dramatically enhanced our ESG governance, For instance, we actively respond to issues identified at different affiliated companies. Real-time disclosures are made on key ESG controversy issues. In effect, there is a broader disclosure. Emissions per ton of crude steel made is expressed at POSCO by carbon intensity. To improve this index, we use a variety of bridging technologies, which led to a 3% reduction against the baseline year. By strengthening the Group Safety Council, preventive index, such as LTIFR assessments, have taken root. Finally, I'll discuss dividends and dividend record date. In April 23, we released the midterm shareholder return policy, based on which today the Board approved 2,501 per share Q4 dividend payout. That brings the total 2023 annual dividend to 10,001 per share, which will be submitted to the annual general shareholders meeting. Year-end dividend record date will be changed for your information based on the new and advanced policy to determine dividend distribution first, then post-dividend record date. For your information, 2024 first quarter quarterly dividend record date is March 31. Next, I'd like to dive deeper into each company earnings. Once again, first up is POSCO. On POSCO's crude steel output, because operations recovered in the first quarter after the severe inundation caused by the river overflow, production grew 4% year-on-year to record 35.687 million tons. Sales also climbed 1 million tons year-on-year. In that growth, because automotive WTP sales comprised 50%, it helped to defend against the lower profits on standard steel products that experienced a price decline. On the right side, you have the PL chart. So taking a look at some of these data, despite increased sales in fourth quarter, the average price of carbon steel fell by about 34,001 per ton. So due to price declines, revenue fell 9% year-on-year to close at 38.972 trillion won. Operating profit was also impacted by price declines, 212 billion won lost year-on-year to close at 2.83 trillion won. Looking at each quarter, you can see that most of the loss was in the fourth quarter, and key reasons for that is that as we entered into the fourth quarter, there was a sharp decline in steel price, and this continued And some expectations about China's stimulus program have not panned out. And so because of these various factors, the mill margin, or the spread, shrank. And I've marked these in our charts. On the high-cost raw materials, we actually saw a little bit of a spike in the month of December, and that's why you can see that some of our performance looks lackluster, especially in December. However, during Q1, the material price hike will be reflected in higher price of our products. The effort to raise our price will help to enhance the likelihood of our Q2 profit recovery. And because we have a lot of fixed contracts, this will impact a lot of our second quarter earnings, so I think there will be some improvement that we can see there. Looking at the spot prices in various different countries, we are seeing a trend toward increasing prices, so I believe we'll be able to push up our price as well. Let's go to page 10. Overseas steel subseries are experiencing different signs by region. PT Krakatau, POSCO, is relatively profit-healthy, supported by profit-dominant domestic HR sales. That has expanded to 82% of its total sales. That helped to defend overall profitability. However, given the weak market situation, price continues to fall, causing overall operating profit to shrink by about 20%. Zhangjiagang SCS in China. Due to delayed economic recovery in China, steel demand has fallen while competition have expanded their production capacity, fomenting oversupply. This has caused operating profits to record deficits in 2022 and in 2023. At Paskomarashtra in India, while global steel market slowdown led to low-tier import products, causing further price squeezes thanks to the Indian government's investments in infrastructure building and the ensuing steel demand rise, as well as the stable demands generated in the automotive steel sales. Operating profit in 2003 saw a 92% growth year-on-year, recording $75 million. PYV9 Vietnam, through diversified sourcing of raw materials, cost reduction efforts, and the ability to purchase low-cost feeds, they have helped to grow operating profit year-on-year in spite of the global construction market recession. Next is POSCO International. Consolidated operating profit was similar to the previous year, closing at $1.163 trillion. Despite increased sales in eco-conscious industrial materials, The decline in palm oil price and the initial startup costs associated with Mobility Solutions' new traction motor core plant in Pohang squeezed the profits. Consequently, global business profits fell 9% compared to the previous year. However, in the energy business, through direct sourcing of LNG, costs have been reduced, yielding better profits and power generation. Overall, POSCO International was able to sustain similar levels of profitability as the year before. Next is POSCO ENC. With new project starts, revenue increased over the year before. However, price hikes in raw materials and the subsequent cost escalation led operating profit to decline. New orders expanded in construction by $700 billion. This is a $300 billion increase over the previous year. It closed at $11 trillion. Next is POSCO Future M. N86 cathode active materials and low-expansion natural graphite anode active materials are two of our high-end products that are made to new client demands. Their growth and sales led to continuous revenue expansion for the rechargeable battery materials business. But because metal prices have been falling, including lithium price, inventory impairments have hit fourth-quarter profitability in a big way. So this concludes the brief earnings report of Fosco Holdings, and now I'd like to move into the Q&A.

We will begin our Q&A session. To ask a question, please press asterisk and number one. To cancel your question, please press asterisk and number two. The first question is from Park Hyunwook from Hyundai Securities.

Hello, my name is Park Hyunwook. Thank you for the opportunity to pose this question. I have three questions. The first, in Q1, You explained that you believe that steel price can be pushed up, but because demand still remains sluggish, I think that poses some limitations on price hikes. So how do you see the market for steel in the first quarter in automotive and shipbuilding as well as other demand industries? How do you see the demand? Second? PPLS, POSCO Pilbara Lithium Solution, the first plant was completed at the end of last year. So this year you're going to ramp up and actually begin production. When will you see products rolling off the conveyor belt? And lithium demand is actually lower than what we had anticipated, so we are seeing some deficits snowballing. Looking at current prices, How do you anticipate the profitability? On the third question, because there's discussions about next leadership at POSCO Holdings, as investors, we believe that there will be a lot of consideration given to the rechargeable battery materials industry and leadership in that field. So during this leadership change or afterwards, will there be some strategy changes in conducting this business? Those are my three questions. So on the first half steel market prospects, we will have Mr. Bunn. And on the profitability of lithium, From rechargeable battery materials business, we will have Mr. Lee Kyung-sup respond. And on the holdings leadership, yes, there's a lot of buzz about that. So what are our growth strategies? I will address that question. I'm at Bosco Marketing Strategy Office. My name is Ban Don-ho. So... Ms. Han already spoke about the market prospects in the first quarter. So just to repeat, last year we saw a lot of recessionary factors such as China as well as the sluggish demand of steel. And in the domestic market, we saw a slight increase in imports, about 20%. And so it was very difficult for us to hold on to our price levels. In the fourth quarter of 23, as Ms. Han already mentioned, with iron ore, about 20%, and with coal, about 51% cost increases were experienced. So raw materials price hikes are really impacting us in a big way. And so we failed to see this happening. And already about a month has passed in 2024. We are anticipating three highs, three high inflation, high interest rates, and high prices. So we're going to have to anticipate a little more slowdown in recovery. By industry, Automotive and shipbuilding industries did very well. We're going to anticipate a little bit of slowdown in that this year. In infrastructure building and SOC, there are some restraints that will cause the market to slow down, and so that's why we believe the steel market is going to continue to experience recession soon. and I'm sure you've heard through media coverage that not only us but also other steelmakers are suffering from profit losses, and we are taking all things into consideration to try and improve our profit structure, especially this year in China. through the lowering of interest rates in China by about 5%, we are anticipating a little bit of a pickup there. And so we saw some prices go as low as $700 and then jump right back up to about $1,100. What's significant is that in the distribution industry in Korea, Because inventory is low, we believe there may be a little bit of a possibility for price rebounds. So anyway, steelmakers are looking to raise prices, so we will collaborate with other steelmakers in the market to see if that can happen. And we already raised prices by about $30,001 in the previous quarter period. And on a monthly basis, starting with the first quarter, we have plans to incrementally increase price just by a little bit. Looking at other companies, they are also in the same boat with us. So we all fail to anticipate this rise in raw materials price, and we are now beginning to apply that to our books. You had a question about the automotive industry. We have long-term contracts with OEMs and the automotive industry. So because of the raw materials price fluctuation in the second half, we are renegotiating some of our agreements. So to apply some of this hike in raw materials price, we will be renegotiating. In the shipbuilding industry, We will look at the supply, the total volume, as well as what our production situation is to adjust price and to renegotiate as well. That will conclude my response. My name is Yiyoung Sub in charge of battery materials business. I will address the second question. So lithium production projections as well as the lithium market projections. So I know that you're all very curious, so I will take this as a general question and try to address as much of it as possible. PPLS completed construction at the end of last year, and so raw materials are being fed in and we are ramping up production. So we consider the first year the period of ramp up, and we are going in phases. By the end of the year, we will see about 80% to 89% operation rate. So by the end of the year, our target is to operate the plant at 80%. So purchasing agreements are in place with Pilbara as well as Fast Market based on the benchmark price formula. We're also almost reaching the end of our sales negotiations as well. So including Argentina, our long-term purchasing agreements are almost at conclusion point. On profit and loss, because lithium prices have fallen, I know that you're all very concerned. This morning, Fast Market said that $17,530. Spodumen was $850. So PPLS Stage 1, which completed last year, by the fourth quarter of this year, we hope it will turn to black. By next year, we will begin to definitely hit Yes, lithium prices have fallen. But even at this rate, we are still seeing operating profit at two digits. And because we are linked to the benchmark price and formula, When lithium prices fall, then other prices also tend to fall, and as a result, we're able to maintain our operating margin relatively. Spodumene was $850 this morning. This is Australian spodumene, and they've hit the highest point. I believe the production cost is $800 to $900. So for small-scale miners, for example, in Western Australia, because bugman prices have been falling, some of them have had to close business. And there are other parts of Australia where we're seeing small-scale miners closing business as well. Liontyne, Lyontown is another region. Albemarle, Australia, Phase IV lithium hydroxide plant is being delayed on their side as well. So lithium price, based on the current spot demand price, I think have hit almost the rock bottom. Lithium production cost is, compared to even Chinese companies, POSCO does not pale in comparison. So if lithium price falls, broadband price falls as well, and that's what gives us the leeway to generate margin. So this market structure for battery-grade materials we are anticipating about a 5% to 10% oversupply in the next two to three years. So in the lithium market, we will begin to see some restructuring of smaller-scale producers. But from a long-term perspective, we believe we are still very competitive. That concludes my response. My name is Jung Gi-seop. I am the CSO. Among your questions, you asked about the leadership change at POSCO Holdings. And so will the leadership change impact our growth strategy in the rechargeable battery materials business? So we are devising strategies, and we have phased management plans Costco Holdings, since it acquired the Salt Lake in Argentina, we have planned two phases, each producing the capacity to produce 25,000 tons. And so we are very close to actually producing lithium from these acquisitions by 2025, we will be expending a lot more. But come the end of 2025, we will begin to turn profits. And we believe we were able to make these decisions, bold decisions, thanks to our investors and shareholders. So we have mid- to long-term strategies, and these are based on various supplies and orders as well. So even if there is a leadership change on the The investments that have already been executed or those that await to be executed, there will not be a dramatic change in direction, and definitely we will not be abandoning any of these plans. However, there could be some short-term changes, environmental change, and whether that will lead to significant risk, we have mechanisms in place, regular meetings, to keep that in check. This year we also will see another presidential election in the United States, so these will impact our business as well. So we are keeping eyes and our antennas up on all of these factors. Our basic strategy is to enhance that shareholder value. And that is why before anything dramatic happens, we will have in-depth discussions with our shareholders. So, yes, we are going through a succession process right now. And our growth strategy fares very prominently in who becomes the leader next. And rechargeable battery materials is a very important part of our strategy. And so I have no doubt that this will continue. and I hope you will continue to pay attention to us and continue to participate actively so that we can continue to show this very positive relationship between the company and investors. If for any reason due to these changes, some of these mid- to long-term strategies, any part of it may have to change, we are going to make sure that we communicate with you through ample discussions. Communication with shareholders, being transparent, and enhancing and maximizing shareholder value, that is our strategy, and that will not budge.

The next question comes from Kim Yoon-sung from High Investment Securities.

This is Kim Yoon-sung from High Securities. I have three questions as well. Business plans for different quarters in 2024 is what I'm interested in. And in steel, the projections are not bright. So how do you see your earnings panning out in 2024? Secondly, on nickel, So there are some restraints concerning nickel, but what are your price projections? And should there be a price fall, will that impact your investment plans? Next is coking coal. Price of coking coal has been fluctuating. Because of net zero goals, I know that there were some cutbacks, but recently I think we're seeing an increase in demand. So any traditional strategies that you can share and changes in those strategies, I would appreciate. So the first question was the business plan by each business in the year 2024. So the numbers for each business will be discussed by the people who are in charge of each business. And for the price on nickel, Mr. Lee Kyung-suk will take over again. And for coking coal, Ms. Mr. Seo Ji Won, in charge of raw materials office at POSCO. My name is Park Jung Bin. I'm head of green infrastructure business team, and I'd like to give you an overview of our business plan. So in 2023, our focus was on the merger of POSCO International and POSCO Energy to generate more synergy there. In 2024, our goal is to expand on that and to realize the potential synergies, especially in energy, because we are able to build out a complete LNG value chain that adds a lot of advantage to us, and so we are able to address a lot more volume, and so that bodes well for growth potential. So that's the growth that we're seeking this year. I can't give you any numbers right now, but we will be at least where we were in 2023, if not more. Pusko E&C, due to market circumstances and construction circumstances, are not the prospects are not bright. And so year on year, we're seeing some lackluster performance here. And I don't think we're going to see too much improvement this year. And this is because of raw materials price hikes as well as just overall cost increase. So we are seeing the peak point subside a little bit. but some of the construction starts that we had previously contracted, they will begin in the year 2024. But because of these cost increases, I think performance-wise, earnings-wise, we might see a little bit of a slip compared to 2023. We will do everything in our ability to manage our costs so that we don't slip by a big margin. So we will continue to pay attention to these factors. In green materials, because of the price fall in metal, PPLS and HY Clean Metal, all of these companies experienced inventory impairment. Starting this year, we believe the impact of the raw materials price declines last year were fully experienced, and the impact of that has now subsided. So I believe we're going to hit black ink this year. And this is not just me speaking, but the entire market believes that the EV battery materials market is going to experience a lot of difficulty this year. So compared to 2022 and 2023, where we had very dramatic growth, we will not meet that kind of growth rate, but we will continue to take orders and continue to seek growth. At PPLS, Plant number one was completed last year, and we have something going on in Argentina, which will complete, if we can be quick, maybe by the end of this year, at least by the first quarter of next year, it will go into operation. So up to that point, there's going to be ramp-up costs, initial costs involved in ramping up a plant. So Some of the losses we will experience in the next year or so is inevitable. I want you to understand that. I'm from the Finance Office. My name is Kim Sung-jin. So business plan in the steel business is what I'll address. This year, the steel market will be focused on ESG regulations as well as carbon net zero and oil. the major economic blocks that are forming around the world. These will act as constraints. But we're most focused on safety. So last year, we had no major accidents. And we wish to continue to hold on to that number zero this year as well. by cultivating our culture of safety through the application of smart technologies as well as just creating a culture of safety. And we will also create new production systems that will invite more green, eco-friendly, sustainable processes. So decarbonized production steel, steelmaking steel, as well as bridge technologies. And Greenit is our new brand that embraces various decarbonization strategies and mechanisms. So green products and green materials will be embraced, and these will add to our engine of growth. we will innovate our processes so that against competition, we will emerge more competitive. Through digital transformation in the production process, we will apply robots, more machines, automation, and also introduce metaverse to create the future platform. So these are some of the strategies that we have in plan, and our prospects for this year, however, the business prospects are not entirely bright, as already mentioned, because of the raw materials cost increases, as well as price fluctuations that have not yet hit our books. We believe that in the first quarter we will not be able to make any meaningful dent, but Because we will be increasing our prices to better reflect raw materials price hikes, we will increase strategic product sales, and these are some of the efforts we will exert in order to improve our profit structure. First quarter will not be easy, but after the first quarter, I hope to be able to report some positive results. Overall, because our goals are much higher than what we had said last year, we look forward to a more robust year. Secondly, for nickel price, I think that there was some concern expressed about JVs with Chinese businesses, but our portfolio puts a lot of emphasis on being IRA compliant, and so SNNC has some plants that are being built in North America, and for low-grade, low-cost nickel, we are working with Indonesia, and these are for certain markets. FEOC and IRA pose some constraints in doing business with Indonesia. That's true. But if Indonesia is designated as an FTA-compliant partner, then through shares adjustments as well as different investment mechanisms, we will be able to create agreements that I think will be compliant with the laws. So China risk I don't think in our business is big. Okay. Chinese companies have invested massively in Indonesia for nickel production. And because they put so much supply out there, yes, price is falling. But the price of nickel is determined by benchmarks such as WMEC. And we're looking at about $17,000 being the benchmark price. Right now we're at $15,000, $16,000. So if there's some price adjustment, it's not going to be big. And how do I know what is the rationale? Because the lowest price imports use the dry method. Dry method nickel from a cost of production perspective is most superior. MPA cost is about $10,000. Nickel matte production cost is about $2,000. And then refining takes about another $2,000. So nickel sulfate using dry method, it will be about $14,000 at cost. So right now, seeing $15,000 or $16,000 as the price, there's not very much margin there. But of course, In other parts of the world, such as Australia, they're not able to make any profit, and that's why the market is generally in adjustment. So for nickel, there is room for a little bit of price increase, but probably not by much, and so that's our projection here. The rechargeable battery materials business is slow. Nickel prices are falling. And so I think you're concerned about whether we will change our investment plans. Clearly, nickel is a big part of NCM battery. And FutureM has market... demands that need to be met. So we will make some adjustments by reading the market, but whether we will dramatically shift our strategy, that's not likely. We will make adjustments based on market situation and timeline, project schedule, and so on and so forth. So that concludes my response. My name is Haji Wan. I'm with the POSCO Raw Materials Office. On coking coal, the price is quite high. What is the reason? From a demand perspective, it's because India is putting out a lot more volume. And there are many new businesses that are producing Coke. But on the supply side, because of difficulties in acquiring labor as well as inclement climate issues, weather conditions, this is the reason for the hike in price. So mid-term price strategy, starting this year with new project starts, because new plants will come online and ramp up, we will see about 10 million ton expansion in production. And so... Price-wise, it will not be as high as the previous year, but we will see it stabilize. Investments, coking coal and raw materials investments, we have basic ground rules. So we have target prices as well as partners, investors, and they have to be ESG issue-free. So these are some of the benchmarks. of our investment plan, and with coking coal, we have some concerns because we have to make some adjustments based on our net zero goal. That concludes my response.

The next question will come from Lee Hyunsoo from Uanta Securities.

Hello, my name is Lee Hyunsoo. I'm from Uanta Securities. I think this was already mentioned. In battery materials, IRA and FEOC are concerns. I would like to know how you will address this going forward. Secondly, because of dull demands in China, there's oversupply because they continue to produce just as much. So I think if this trend continues, we will end up importing more from China. What is your response to this? And the next question? NSC is acquiring U.S. sale. If my memory is correct, In July of 2021, POSCO released record-level crude steel production and made some promises. So I want to know what is happening with this plan, and I want POSCO's opinion on NSC's acquisition of U.S. steel. One more question. Thank you. steel production in 23 and sales did not hit the targets that it had set in 22 or earlier. So with POSCO and POSCO Holdings each, what is the capex and what do you project the capex will be for each company this year? For rechargeable battery materials, we will ask Mr. Lee Kyung-seop to respond. For the steel-related questions, For domestic markets as well as that concerning NFC, we will ask Mr. Pandong Ho from POSCO's Marketing Strategy Office. And on exports, we will ask Mr. Kim Kyung Han from International Trade Office. For battery materials, I already mentioned FEOC when I was addressing nickel. Nickel has no relevance to FEOC because it doesn't involve China. So FEOC applies globally to nickel. For nickel, for IRA-compliant volume, we will use the production from SNNC plant in Guangyang. So we will complete construction in March this year, and this is where our nickel, IRA-compliant nickel, will be produced and supplied to POSCO Future M. So JVs with China that are subject to FEOC, there are some that target European markets, but others target other markets. For example, if Indonesia does not meet IRA rules, then we are prepared to accept that. If, however, Indonesia is recognized as an FTA compliant, or equivalent partner company, then we anticipate additional benefits on top of what we're anticipating. So we don't anticipate any direct negative or adverse impact of SBOC on our business in this year. At POSCO Future M, in their graphite business, natural graphite business, for anode active materials. FAOC or other IRA rules or detailed guidelines have not been released, and so I think they're still discussing and going through some adjustments. So once they're released, we will address them. For natural anode active materials, we are producing spherical graphite. And right now we import a lot of that from China. We will try and make that more endogenous to Korea. I'm from the International Trade Affairs Office. I'd like to address your question about how to substitute imports. So all global steel makers are experiencing the oversupply, and they're also concerned about how to meet carbon neutrality goals. So these are two main goals that need to be addressed. China produces about 50 percent of all crude steel produced in the world, and up to now, they have been exporting much of that volume or actually increasing exports, which is inevitable. And so the question is, will they continue that trend this year? And that, I think, depends on the stimulus package that the Chinese government is rolling out and the impact of that. If it has the positive impact that we're hoping for, then I think imports will go down significantly. But from a domestic perspective, all local steelmakers, for example, in the United States, steelmakers use Trade Expansion Act Section 232 to impose tariffs. And India, Brazil, Thailand, and Indonesia, these emerging economies are also putting in place non-tariff measures to restrain imports So there are a lot of retaliatory measures that are being put in place. But steel is a primary material that is indispensable to infrastructure building as well as just human societies. Compared to other countries, our... import restrictions are not high, and because we have a very strong manufacturing base, we believe that we do need to prepare for these imports coming in from other countries. So is this a temporary market situation resulting from oversupply, or is this something that is going to be more permanent and something that we need to address more permanently? in the Korean market. We need to protect our crude steel industry. And with that in mind, at the moment, we will keep all options open and address each issue to our country's advantage. But I think there's some misunderstanding. I think most people believe that POSCO is a big company. It's going to block all imports. Low-cost imports come in and damage some of our industries. So this would be the basis for which we will be fighting some of the imports for no other reason. I'm with marketing strategy. So overseas market status as well as the acquisition of U.S. Steel by NSC and sales projections for 2024 is what I will address. So overseas investments. So we want to go beyond our growth in the local market and to hold on to our global position as global top three. We will be devising strategies which will also involve investments that will be made in India, not only the ones that have already been planned, but others as well. So let me address some of those. Through PTKP in Indonesia, we have made inroads into that market already. PTKP in the future will become one of the very few, if not the unique, automotive steel sheets manufacturer in Southeast Asia. South Asia, that is. And not just that, about 10 million is... planned to be produced in eco-friendly manner through decarbonized steelmaking process. One of the most active markets is India. And in India, we will be seeking additional opportunities to invest to mitigate business risk. we are in discussions with a trustworthy partner on building an integrated mill. NSC's acquisition of U.S. Steel in December last year, $15 billion was the valuation. But what I understand is in the Biden administration, there is a an overseas investment consultation committee that is looking at this, and unions are objecting to this, and to enhance seal-making competitiveness in the United States. Some of the U.S. population are cheering this decision, so I think we need to wait and see. Costco and NSC's business strategies differ a little bit. NSC has felt the limitations of its local market, so they want to continue to grow their size by investing overseas. On the other hand, POSCO, as you're aware, we want to be able to strengthen our core quality. So we've expanded our portfolio of future strategies, And when you look at the revenue of the two companies, I think it gives you some hints about our strategic direction. About 88% is the overseas market for Japan and 51% for Korea. And there are a lot more trade barriers in the U.S. market, and so they impose tariffs. and we are exporting only based within the threshold of that quota and tariff. So we will continue to monitor whether NSC is able to acquire U.S. steel through government approval, and we will continue to check and to address issues in the U.S. market. Steel's volume last year was about 34 million tons. We completely recovered from the aftermath of Typhoon Hinnom Noir, so we hit our goal. But looking at and considering the different market circumstances, it may be difficult for us to set higher goals in crude steel production. So I think 33 million tons is what we will target this year. Thank you. I'm in charge of corporate strategy. Let me speak a little bit about CAPEX strategy. We plan this every year, and so I want to tell you that this year is similar to last year. Overall, it will be about $8.1 trillion consolidated basis by each business. We can look at steel and battery materials. And so the two are neck and neck in terms of the investment volume or value, about $3 trillion each. And this year's investment plans, whether it's in steel or battery materials, our capex will increase this year for each business. In steel, we need to brace for carbon net zero, decarbonization. So some of our larger investments will begin this year. In battery materials as well, because we have expanded orders, we will be building out more, and that means more CapEx. So at the end of last year, beginning of this year, looking at the economic situation, there are a lot of uncertainties. So some of the investment plans that were devised at the end of last year, we do this every year, but on a quarterly basis, some of that has to be revised. So we need to be conservative but flexible and make sure that we keep an eye on our growth. So a lot more time has transpired than we had planned. We will just take a few more questions.

The next question will come from Yujin from Yujin Securities. Please go ahead.

This is Yujin at Yujin Investment Securities. So a lot of questions were already addressed. I know that you have a hydrogen project in Oman. But we can't find too much information on that. So what is the project? How are you conducting it? And what is the projected margin?

Secondly, retirement of treasury stocks.

You did that in the previous year. Do you have plans to do more? There are claims about dumping. Do you have some progress update on that? Let me talk about dividends first. So we have 10.3% Treasury stocks. In September of 21, we issued transferable bonds, convertible bonds. And so there is a part of that that belongs to KShore, and that's 3.8%. So if we remove that, that brings us to the actual ownership of our treasury stocks. By retiring our treasury stocks in 2022, we have made this mechanism a part of our shareholder return policy. So whether we have that in the plan this year, we cannot discuss that right now. But we are not interested simply in paying out the dividends, but we will actively look into retiring our Treasury stocks as well. That's all I can share at the moment. Second is about the Oman project. In June of 23, with the Oman government, we entered into an agreement about – exclusive land use rights because this green energy generation requires land, appropriate land, suitable land. And so this is what we came into agreement with the Oman government. This land is the size of half of Seoul for solar energy use. and other renewable energies as well, exactly how we're going to use this land, what we're going to do here, and on what schedule. We are still conducting feasibility study, so we couldn't tell you very much in detail about capacity or operating margin. I'm with the International Trade Affairs Office. What I want to say about dumping is every country wants to protect their own steel industry. And this is one of the things that they have to fight. To initiate investigation, there has to be an act of dumping. So these are unfair prices, volumes that come into a market with unfair prices. So we are examining all of the details but I can't tell you for sure right now whether we're preparing a case against dumping. We have all the options open right now and examining the situation. To all people who participated today, I want to thank you because of time constraints. I'm afraid we have to close. It would be lovely to get more questions and comments from you, but I'm afraid we'll have to conclude I would like to conclude the 2023 Fourth Quarter Earnings Release Conference Call. Thank you very much.