Eregli Demir Celik Un/Adr

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your conference call operator. Welcome and thank you for joining the Ergermil conference call and live webcast to present and discuss the third quarter 2024 financial results. All participants will be listening only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. Please note Ergli Demir Celik Fabrikalari may, when necessary, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments and opinions. Erdemir has made the necessary arrangements about the amounts and results of such information through its disclosure policy and has shared such policy with the public through the Erdemir website in accordance with the Capital Markets Board regulations. As stated in related policy, information contained in forward-looking statements, whether verbal or written, should not include unrealistic assumptions or forecasts. It should be noted that actual results could materially differ from estimates taking into account the fact that they are not based on historical facts but are driven from expectations, beliefs, plans, targets and other factors which are beyond the control of our company. As a result, As a result, forward-looking statements should not be fully trusted or taken as granted. Forward-looking statements should be considered valid only considering the conditions prevailing at the time of the announcement. In cases where it is understood that forward-looking statements are no longer achievable, such matter will be announced to the public and the statement will be revised. However, the decision to make a revision is a result of subjective evaluation. Therefore, it should be noted that when a party is coming to a judgment based on estimates and forward-looking statements, our company may not have made a revision at that particular time. Our company makes no commitment to make regular revisions which would fully cover changes in every parameter. New factors may arise in the future which may not be possible to foresee at this moment in time. And now at this time, I would like to turn the conference over to Ms. Idil Onay Ergin, Investor Relations Director. Ms. Ergin, you may now proceed.

Thank you very much, Constantino. Good afternoon, everyone. Welcome to our conference call and webcast of Erdemir for the third quarter of 2024. First of all, I will go through our master presentation, which you can find on our website, and you can also follow it through the webcast. Then at the end of this presentation there is going to be a Q&A session as usual. So our presentation consists two sections as you already know. The first one is the market overview and then the financial results. So let's start with the commodity prices. On page 3 you will see the prices of fuel related commodities and HRT. Let's take a look at Coaching Call, Arvenor, Scrap and HIP prices. During the first nine months of the year, we have seen a downward pressure on commodity markets due to concerns about the demand output in China, multiple macroeconomic uncertainties and high inventories. However, as of September, the Chinese government's announcement of the stimulus package created an optimistic atmosphere in the market. Coca-Cola prices were around $324 per ton at the beginning of the year, and then Coca-Cola, which fell as low as $180 per ton in September, is currently around $202 per ton. The decline in prices was driven by production decrease in China during the third quarter, coupled with weak demand for caulking coal. The impact of stimulus package announced in China has led to an increased appetite for production and an upward movement was observed in caulking coal prices again due to the increase in demand. Ayrun Or, which was around $140 per ton, at the beginning of the year fell to $89 in September as Chinese steel producers made long-term production cuts due to heavy margin losses and high inventories. Currently, Ivanor is fluctuating between $100-$105 a ton on the optimism of the announced stimulus measures despite weak demand conditions. The scrap price, which was around $413 per ton at the beginning of the year, is currently at $372. In Europe, which is Turkey's largest scrap supplier, scrap purchases have been lower than usual due to weak end-product orders leading scrap suppliers to lower their prices. The stimulus announcements made by Chinese government did not fully support the global scrap market. However, marginal declines in scrap prices are not expected due to the decline in scrap supply and seasonality. On the bottom right, we show HRT prices in Black Sea, China, and South Europe. In the first quarter of the year, the lowest price levels in Chinese exports were seen after the pandemic. China has reached the highest export damage since 2016 with aggressive pricing amid a decline in domestic consumption and high supply. This situation has disrupted global pricing balances and measures are being taken urgently against China worldwide. Recently, Turkey finalized an anti-dumping investigation regarding HRT products originating from China, Russia, Japan and India and has decided to impose duties. This result is expected to have a positive impact on Q1 2025 and beyond. Aside from HRC, anti-dumping investigations launched regarding imports of heavy plates and thin plates are expected to be completed within 2025 with results anticipated to positively impact the Turkish steel sector. In Europe, the current high inventory levels are negatively impacting restocking activities, while weak end-user demand is putting pressure on dragging activities. On page 4, you will see the production, consumption, exports and imports figures of 30 steel markets for the 8 months of 2024. In the 8-month period, Turkish steel production increased by approximately 12% compared to the same period last year, with the rice primarily driven by flat steel production. Similar to production, approximately 75% of the increase in Turkish steel exports stems from flat products. During the 8-month period, Turkish flat steel exports increased by 90% to 4 million tons. On the consumption side, steel consumption decreased by 5% compared to the previous year. The decline in consumption can be attributable to the high base effect of last year's earthquake-induced surge. In January-August 2024 period, total steel imports decreased by 13% while flat imports also decreased by 17% to 5.5 million tons.

So let's take a look at the financial results and the operational metrics.