Usinas Sa S/Gdr

Good morning.

Welcome to the Eusiminas conference call to discuss the results for the first quarter of 2025. I'm Leonardo Careano, Investor Relations Director at Eusiminas.

We also have an interpreter for simultaneous translation. Please choose the sound channel on the icon at the bottom of your Zoom screen.

All participants are logged in as listeners only, and their questions can be asked in writing in this Zoom Q&A session. The icon below on your screen. Participants listening in English will also be able to ask questions directly in this session. This conference call is being recorded and broadcast simultaneously on Usumina's YouTube channel. Please note that this conference call is exclusively for investors and market analysts. Please identify yourself so that your question can be answered. We also ask that any questions from journalists be forwarded to usiminasmediarelations at imprensa at usiminas.com. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects as well as projections, operating and financial targets regarding its growth potential, are forecasts based on management's expectations regarding Uzumina's future. These expectations are highly dependent on the performance of the CEO industry, the country's economic situation, and the situation of the international markets, and therefore are subject to change. With us today, we have our CEO, Marcelo Chara, the Vice President for Finance and Investment Relations, Thiago Rodrigues, and the Commercial Vice President, Miguel Homes. Initially, Marcelo will make a few comments. Thiago will then present the results. Then, the questions asked in the Q&A session will be answered. I now turn over to Marcelo. Marcelo, please. Good morning, everyone. It is a great pleasure to be here with you. to share the results of the first quarter of 2025. We started the year following the positive journey or trajectory of the last quarter. We attained 41% on consolidated with 773 million reais and a margin of 11%. confirming our expectations of best results in the first quarter. Increase of poor percent in the sales of steel in the domestic market shows a resilient demand, but our focus to keep on having better results is still in gaining competitiveness, seeking efficiency in all our operations to continue with a cost reduction trajectory that is consistent. In mining, we had 11% higher sales compared to the same period last year, impacted by the rainfall in the region and the quality was higher of the materials extracted from the new. mining areas allowing and contributing to better results. For the next quarter, we have an expectation of consolidated results that is quite stable since the sales volume in similar volumes and the continuity of the gradual reduction in sales and in mining, the volume should be stable. regarding uncertainties on the price of ore. However, we see a scenario that is challenging and uncertain for the second half of 2025, especially because of the high volumes of imports of steel in And their competitive conditions, the impact of domestic consumption, considering the high interest rates and the uncertainties of the international market. In Uzi Mina's mission, the lack of applying effective measures to create fair conditions of competition. And the strong presence and imports subsidize the main threat to the sustainability of the steel industry in Brazil and its whole value chain. Several countries have reacted against the excess of Chinese steel production. According to investors in Brazil, mid last year, there were 215 million commercial defense measures against the Chinese deal. And in the four months, nine new investigations on protection measures against China have been conducted. applied. The rest of the world is doing what Brazil should have done already, defending its industry, its employment, and its investments against an unfair commercial practice. In Brazil, we had 43 investigations that are anti-dumping from January last year, several products in the metal industry, plastic, chemical, and textiles, amongst others, and 34 only are only against China. The Secretariat of Foreign Trade has recently published the preliminary reports that are for corrode and also coated steel by China. Excellent work of the Technical teams of the ministry, they have found the practice of dumping with a margin of up to $645 for cold rolled and $552 for cold rolled. And although those unfair practices, no recommendation has been made of preliminary application of the anti-dumping right or law. This goes against what has happened in most countries defending their industries against the law. Unfair commercial practices. Import data of steel in Brazil are alarming and unacceptable. In March 2025 has shown the third largest volume and import of steel. of in history, and the expectations are very concerning. The volume of import of fat steel has attained 1 million tons, a growth of 42% regarding the same period of 2024. The data reports that the attempts of the country to control the problems of import of steel have been effective. have not actually been effective and they must be urgently reviewed. We keep on working on focusing on operational excellence and serving our customers via development of products and services and integration with the communities where we operate. And our main focus is care and best practices of environmental and performance and safety, allied to high commitment of our teams and our people. Thank you very much. And now I turn over to Thiago, please. You can continue. Thank you very much, Marcelo. Good afternoon, everyone. So we're going to make a brief presentation of our results before opening up for questions. Let us move on to the first slide, please. We highlight in the period the best performance in the steel industry with a bitter margin of 9%, 2.4% point above previous quarter, with an increase of 4% in the sales volume in the domestic market, reduction of 2% of COGS. One of the best results in the mining segment, a consolidated bid attained 733 million reais with a margin of 11% and net income of 337 million reais. Here we see consolidated results. with higher volumes and price, both in the steel and mining. Net revenue was 6.9 million, a growth of 6% in the quarterly comparison, 10% with the first quarter 2024. Beta follows trajectory of growth in the third consecutive quarter and exceeds 10% margin since the first quarter 2023. and confirming our expectation of better results as we see and as we have been communicating in previous calls. With operating strong results, we actually reverted the conditions and we had net income higher since the fourth quarter of 2023. Here we have some more results on results of the steel industry. We see first quarter of steel sales above 3% above previous quarter compared to the previous quarter. the year 5% higher, highlighting the resilient demand in the domestic market. Even with a lot of imported steel that is subsidized, we were able to increase the sales volume. Net revenue followed the increase in volume and grew 4%, 6 billion. A small increase in net revenue per ton per year because of better prices applied to the segment. Beta had a growth of 44% compared to previous period, 528 million, moving up margin from 6% to 9%. Despite the improvement we see, we understand that we're still far from what would be a margin that is sustainable for the industry that enables investment to an industry that is so capital intensive as ours. We are still focused on the main goal, which is improving margins with cost reduction and gaining productivity. But we also need a market that is functional with isonomic competition so that this improvement can be possible. in a gradual way. As mentioned by Marcelo, the both internal and external scenarios with a lot of uncertainties, a lot of imports, make it difficult to have short and long-term forecasts for the second half. We expect stable prices, whilst the cost and steel industry should follow a trajectory of drop. But we are paying attention to risks associated to imports that could still impact the results in June. Hence, it is key, as Marcelo highlighted, that Brazil should position itself quickly, just as many countries are doing, to ensure competition, autonomy, and prevent the crisis. import of subsidized products that may impact the industry. On the next slide, we have the comparison of the EBITDA previous quarter to this quarter, first quarter 2025, as commented. The effect of price and volume have contributed to an improvement of a bit of 64 million reais, whilst the cost, lower cost, additional cost added 109 million reais to the EBITDA regarding previous quarter. The Post-improvement was due to $140 million in costs, a reduction of fixed costs, operational efficiency, $35 million in overarching expenses regarding freight, and $35 million because of an insurance indemnity application on raw materials. Here we see the results of mining. Sales volume of 2.2 million tons, slightly higher regarding previous quarter, 13% higher to the same period in the previous year. Revenue presented an increase of 20%, close the quarter at 917 million reais. This increase in revenue was generated because of the higher volume of sales with steep rate included, and also because of the higher quality of materials and lower This counts as quality applied by the market. These were the main reasons for the increase of 34% in EBITDA and reached 206 million with a margin of 22%. The next quarter, as Marcelo mentioned, we expect stable volumes for the steel industry. On the next slide, we have financial indicators. In this quarter, we had a temporary increase of working capital of 778 million reais, and we expect that most of this increase should be returned in the next quarter. Main reasons for this increase in working capital were first because of higher volume of sales in March as compared to the sales in December last year, which led to receiving accounts for 100 million reais. The natural effect when we have an increase in volume of accounts receivable is following normal levels as the Portfolio heading, temporary increase in raw materials, 770 million reais, is part of the strategy of optimizing the mix for cost reduction, as our expectation is also that there should be a reduction in the next quarter. And we've had a reduction of the forfeiting rate. of 341 million reais since we have robust cash and we don't see a need of increasing the use of this instrument. CapEx in the period was 219 million. We expect to improve this pace in the next quarter as we keep our investment plan around 1.5 billion for this year. With this, we had a negative cash flow in 560 million. As I've mentioned, we expect to revert this increase as of next quarter. The next slide, we see the net debt and leverage. So cash generation that we saw on the previous slide led the net debt to increase to 1.4 billion. We still keep quite comfortable leverage level of 0.71 times the profile of the debt is being equalized as we mentioned previously we concluded the emission of bonds in january with the best spreads attained by using minas showing that the market strategy has been ascertained since the market today does no longer have this favorable condition we're using these resources to buy back the bonds of 2026 we still have 200 million dollars outstanding that will be brought back in July when we have the right to call a par. This is the brief results presentation and I go back to Leo so that we can start the questions. Thank you, Thiago. We start with our Q&A session now. We have a price, which is lots of questions, Ricardo, lots of people asking questions. They want to know about the behavior of prices. So what about the price discussions after the March drops and imports of quite strong dollar falling? Is there space to keep the prices at current levels? And most people are are asking about price transfers to auto industry in April if we apply the same level of transfer that we applied in the first group, in the first quarter. Basically, this is it. Miguel, please. Good afternoon, Leo. Thank you all for the question. Let us start with the closing of contract with OEMs of 1st of April. We closed negotiations, and we closed with the same adjustment that is effective of the contract in January. About 3% was the price transfer for contracts as of 1st of April. Speaking of prices in other industries, it is a fact, as you've mentioned, the strong pressure that we have at the end in certain regions and industries regions as Midwest, the South of the country, and North, Northeast, there is a lot of pressure. With an increase in imports, as we've mentioned, most of them, in our view, in unfair competition conditions added to the appreciation of real. There is great pressure of price adjustment in the coming weeks. Up to now, we haven't... changed our prices, we kept the current conditions. If we have all those factors, high pressure, strong imports, and increase in the foreign exchange, we analyze the exchange, we move from late 2024. So at first quarter 2012, it's 585. And today, a bit below 570. We should certainly expect adjustment in prices, spot negotiations in the coming weeks. And we also talked about expectation for the average price of first quarter. In our release, we mentioned stability in price. And there is a bit the consequence of the increase, obviously, of the average price to be invoiced in the second quarter for the automobile industry and the update of price. as of 1st April, and that we have adjustments justified by the two factors I mentioned, high imports and depreciation of the rail. We expect to have certain stability of average price with the industrial sector. Miguel. Miguel. So, for you, we have questions on export. Igor Gediz from Genial, Tati Kandinian from J.P. Morgan, and Guillermo Nitz from XP. They would like to know what kind of mix are you working on for exports, if there is any project on the pipeline to increase the aggregate value of the mix, or if the price has been something specific to Q1-25 last year. or we measure certain contracted volumes in Argentina. And if you could see that reflected in the quarter, or if you can expect these volumes in the second quarter as well. And then Guilherme adds also on this Argentinian share, what has driven these increases. Please, Miguel. Thank you, Igor, Tati, and Guilherme. Actually, in the previous quarter, we said that we would have an improvement in the imports over the first quarter compared to the fourth quarter of 2024 because of sales projects that we have capitalized and selling. We are invoicing over this quarter, and this is – focused to serve the auto chain in the region. In our expectation today, we would keep these two industries, automobile industry in the region, added to oil and gas projects that are already sold, that will continue to be served over the second quarter. So answering the question, we expect to keep this mix of the first quarter over the second quarter. Thank you, Miguel. Marcelo, our next question. with great interest, is on commercial trade defense. We have Kyra Bader from Back of America, Ricardo Monegaga from Sabre, Edgar Souza from Itaú, and Guilherme Nibs from XP. They ask about the processes, NTW processes, the quota systems in Brazil. What are the expectations of the company regarding that? How do things change considering the announcement of tariffs in the U.S.? If you have any news regarding reviewing import quotas, and if the quotas, the new system, theoretically would end in May, if there are discussions on a potential renewal or changing the current system, and what are the next steps in this debate, if anything may be included in this debate in these expected timelines. Marcelo, please. Thank you very much, Kyle, Ricardo, Olga, and Guilherme. No doubt. As I mentioned in the initial speech, this is the main concern topic for the second half, not only for the second half of the year. It's the industrial productive configuration, the manufacturing industry in Brazil as a whole. Because, as I mentioned, specific is to focus on the quota system for tariffs. It doesn't work. This system in a year has proven ineffective with no impact whatsoever. The fact that the first quarter in this year we had one million tons of fat This is unbelievable. It's a factor of extreme concern. Our technical teams of MD that carried out excellent work, they found the practice of dumping with margins of over $600 of cold road and also So there is damage that has, so the Chinese mills are exported with negative margins. And for sure, the quota system does not work. It has to be revised. We're part of the directive council of Aso Brazil. And with Aso Brazil, we are, showing our concern to the government and we are talking we have told them about this this puts at risk the employment this puts investment at risk not only the steel industry but all the value chain the import of manufactured products to brazil is impressive and it has grown there is an imbalance that has grown the commercial or the trade balance of manufactured products, we have the dozens of million dollars. The growth has been exponential. And this actually goes against Brazilian employment, against the creation of value growth in an industrial society. So what we actually need are defense measures, anti-dumping measures. They have not been applied. The technical timelines for the anti-dumping measures is October this year, and the definition is to see how we reconfigure the quota tariff system. We have to move forward in a fast way in the coming weeks, as it's been mentioned in the previous questions. The deadlines are coming, and it has to be reconfigured, only to mention The quota tariff system impacts a certain group of people, so we define certain items and certain features. So, you know, in terms of escape, there are three of them. So the average... The monthly average that was coming in 2023 were 3,000 tons. These three NTM's that have a minimal technical aspects. That's why we say they are escaped. They came into the country. So we have over 50,000 tons. Well, so almost 20 times higher. We need direct, clear, visible action of defense. All the countries are defending themselves. We don't want protection. We want defense. We cannot compete with those that export with negative margins. We cannot compete with those that apply unfair commercial practices internationally. We have ability to export, to be competitive. Our industry is competitive. We can present our products and markets in the most demanding markets on the planet, but we should not, we have to defend our land, our Brazil, with players that clearly apply unfair practices. Thank you, Marcia.

Thank you, Marcelo.

Now we move on to a session on margins. Thiago, please. Kyrie Beto from Bank of America asks, what margin, normalized margin you expect to attain for the steel business? And what's the timing for that? Thiago, please. You're on mute. Sorry. Now, Kyrie, thank you for the question. We have talked about this previously. What we understand as sustainable EBITDA margin for the steel industry is about 50% above 15%. For an industry that requires high investment volumes to be updated constantly to move forward, Well, in terms of growth and portfolio of products, etc. And we understand it's a margin that is totally possible to be attained, but we have to highlight two main blocks that lead to the margin. We have, obviously, the block that is internal, our cost and efficiency performance. So on this side, we know what has to be done. We know that we're going to move forward in the cost reduction over time. We have operational actions and also investments that will ensure that on this part we have confidence that we're going to move forward to what would lead us to a margin close to the 15%. I'm not going to mention exact numbers because I don't want it to seem like a guidance or something like that. But everything that we have planned in terms of doing, in terms of operations and investments, we would be able to get the EBITDA margin to what we have attained in this quarter, 9%, some points above that getting close to 50%. But we have another factor that makes up the margin, which is market demand and demand. competition capability that is isonomic. Not to repeat everything that we've mentioned that Marcelo just mentioned. It's a key factor today. The Brazilian market is dysfunctional because we have and fair competition at prices that are not true, so to speak. For us to get to our result potential that would be something above the 15% I've mentioned, the market aspect and this unfair competition aspect has to be addressed, okay?

Thank you, Tiago.

To you, I'm going to break down into two topics, the cost part. Henrique Marques from Goldman Sachs and Edgar Souza from Itaú BBA, they're asking the following in the fourth quarter. For the first quarter, it was a slight improvement quarter of a quarter due to efficiency gains, but excluding the on-off. non-recurring one-off, your cost was practically flat. If you could give a bit more color to what happened this quarter so that we can better interpret the outlook for next quarter would be great. And Edgar adds by saying or asking precisely the same thing, but asking whether looking ahead we should expect an increase in that line and others for historical levels. Chago, please. Ricky, Edgar, thank you for your question. Well, yes, in this quarter we've had two one-off effects, as you mentioned, insurance indemnity, reversion of provision. Without those effects, the reduction of our COCs would be about 1%. And this quarter, we still had an effect that was negative due to foreign exchange rate. The peak of December, the time that we got to 620, impacted this quarter, Q1. And in addition, we have raw material price reduction. You can check in the market indicators that are happening, especially from February. Well, rise of slabs and also Coke that will positively impact next quarter. Next quarter, we follow with the gains in efficiency, as we've mentioned, and possibly we're going to have positive impacts due to the foreign exchange rate and price drop and some raw materials. We have to remember that the foreign exchange has an important part In terms of cost, all the raw materials that is consumed by Uzi Minas is basically related to dollars. So all the raw materials received at the end of the previous quarter is the highest exchange rate in the past month. So this obviously has an impact when we look at the cost per ton. compared to the last quarter. So the drop of the foreign exchange, the $5.75, $5.60 that we count today, still has not gone through the results, and it keeps this trajectory drop. This tends to positively impact the next quarter. Thank you, Thiago. We have something to add to this part. It's Garth. Sosa from Itaú, who asks whether sorry, the better efficiency with cost reduction of aromatherapy should more than offset the increase of this line of others that we have in the first quarter. No, Edgar, the line of others is just a simplification because there are many effects that contribute to the cost composition, and all the effects are towards increasing productivity, efficiency gains, or positive effects due to raw material prices. We don't expect to have a reversion of this line of others in the next quarter. So the trend tends to be of improvement, at least in the next quarter. Bill on COGS, Thiago. Also, Ricardo Monegale from San Francisco, Stefan Scott Westcott from Citi. They asked the following, could you quantify COGS drop per ton that we should expect in the second quarter and until the end of the year? What COGS lines have greatest potential for a drop compared to current levels on the expectation of lower COGS per ton, Stefan adds. Could you clarify how much of this comes from the effect of a weaker dollar and how much in the operating improvement. Thiago, please. Ricardo, Stefan, thank you for your question. We usually define the price per ton or the increase per ton because there are many variables that impact it. we prefer to point to the direction we're following. In other words, there is still potential of cost reduction, both due to efficiency, are attaining a highest level of efficiency, especially in the Blast furnace 3 that follows quite stable in terms of performance and also foreign exchange rates are changes without our interference. That's why we do not open this kind of detail. We're looking at the changes that we've seen. The first quarter of 2025 reduction of 2% and 1% was a one-off percent increase one of 1% effect and the other one was due to efficiency. I'd say this level is what we can consider in terms of what we expect of reduction for the next quarter. And opening up on what happens due to the dollar exchange rate, it depends on the fluctuation of dollar over the period. Well, we can model that easily. As Miguel mentioned, 60% of our cost is based on dollar and is paid to the dollar. So this in the midterm tends to follow. the dollar exchange rate. Thank you, Tiago. We have a question on cost that goes to Tiago and Marcelo. Igor Gadgets from Genial asks, how much cost reduction the PCI for the Blast Furnace 3 should impact it? Could it actually mean something related to third-party slabs? I'll make a brief comment and turn over to Marcelo. The cost reduction of our BCI project is important. This project will enable us to almost double the use of BCI in the blast furnaces and reduce the use of coke, especially. Practically in the same proportion, not very precisely one-to-one, but close to that. And so this brings important benefit to CPCI, always cheaper than Coke. I wouldn't say that the PCI impact reduces the dependence on third-party slabs. Of course, the analysis of marginal cost and benefit of buying third-party slabs or producing slabs and transfer to Cubatel that has a high cost, this is an analysis that we make. weekly or almost daily. So there are other factors that could also lead to reduction increase and reduction of acquisition of the bounty slabs and the PCI project follows in the way. And our expectation is to complete the investment by the end of this year and start operations early next year, when we should start seeing this benefit of cost reduction. Marcelo, would you like to add? You have been very clear. I would just like to add that the PCI project is part the project of competitiveness improvement of the all upstream of us. We are implementing it and it's going very well. And we are using state of the art technology. Our expectation is that could be positive and also cost reduction and increase in efficiency. The injection of this kind of coal allows us to reduce the coke costs, generating a much more efficient regime. And we are following all of that, as Tiago mentioned. Late year, early next year, we should have adjustments made. We're doing the fine-tuning to start our test in the blast furnace number three. Thank you, Marcelo. Thiago? Thiago? We have a last question on cost. Let me from XP ask you to comment on price acquired in first quarter and price of slabs acquired in the first quarter compared to the previous quarters. Please, Tiago. You're on mute.

Guilherme, obrigado pela pergunta.

Thank you, Guilherme, for your question. In the two cases, both regarding raw materials and slabs, I'm going to turn over to Miguel to comment on it. The negotiations follow market indicators, so there are indicators that are published and show the evolution of price of those materials, the case of coal and coke, have a trajectory downstream or a downtrend, and this is happening. This reflects our negotiations and the price of materials acquired. Slabs follow the same dynamic, and we have been observing a major recent drop in those indicators. Miguel, if you would like to add, the purchase of slab C is related to this international market, obviously, with volatility and uncertainty generated by tariffs announced by the U.S., generated opportunity of buying slabs at lower price to previous quarters, and this, linked to the appreciation of Riau, can say that the A purchase of slabs in reais per ton has shown a drop in the previous week. Thank you. Tiago, we're going to go into working capital. Ricardo Monegada staff, Frederico Marques from Goldman Sachs, and Rafael Barcelos ask about SG&A and working capital. And we're seeing both increasing considerably at the first quarter, 25. And can we consider that a new level, or should we expect a normalization of both? And Rafael adds by asking if we expect cash generation in the second quarter, 25. Please, Thiago. Thank you, Ricardo and Ricky, Rafael. Yes. We expect a return of this increase in working capital in the second quarter. So the share of working capital increase by accounts receivable because of higher sales, depending on the sales of June, should be stable if volumes and prices are stable. We don't expect a return there. We expect a reduction of the raw material inventory and a return to the level of accounts payable with suppliers similar to what we had December last year. So we expect at least 50% of the increase of working capital that we've seen in this quarter that they should be returned in the second quarter that should generate a positive cash generation. You mentioned second semester, but actually he's correcting himself. It was quarter. Thiago, to you, we had some questions on our outlook that we shared in the release on the expectations. So Tati Cantini from JP, Kyle Greiner from UBS, they ask, well, do you expect stability in the steel unit and... net revenue per ton that is stable, and you have an expectation of drop because of the, in the whole cost drop. Why do you expect stability in the unit? Not an improvement, actually. And Caio asks the same thing, and why are you moving towards stability, considering those moves we are talking about? Well, good question. It's good to clarify that. The outlook actually is of stability in the steel industry regarding volumes and prices, but with an expectation of cost drop that would lead to an improvement of results in the steel part, whilst in mining, We expect volumes also relatively stable, but possibly with a reduction of the result because of lower ore prices currently and future prices that we are observing. So just to clarify, the outlook is this regarding results, a positive rise in steel side and more negative in mining.

Beleza.

Tiago, on TAPEX, we're going to have a section on TAPEX. We have quite a few questions on TAPEX. They asked about our TAPEX guide is 1.6. $4 to $1.6 billion for the year if this is maintained. You could comment on how new investments are going, the overhaul of the coal mill, and this debate for Musa, and if the weaker CapEx this year could... Indicate that we are close to the lower limit of guidance that we mentioned, which is 1.4. If the expectation, Rafael, that the expectation for second have to be more challenging, what can change in this strategy and the expectation of investments for the year? Thiago, please. Thank you. Let me try to address all the points. First, our forecast, our plan for investments is maintained. And so our estimate for this year is still $1.5 billion. With this plan, obviously, the investment pace tends to increase as of next quarter. The amount invested this quarter was below this curve, so we should have an acceleration as of next quarter. Investments of PCI we've mentioned. I'm not going to repeat that. We talked quite a bit about that. The hot Repair in the Coke mill is underway. We stretched the time for the whole overhaul of the Coke mill, and this impacts the disbursement over the period. So we have a lower capex disbursement over the period, but the overhaul is going well we just started the third part of the third group of uh blast furnaces that are being overhauled with that we gain more performance in the coke mill regarding musa no relevant changes regarding what we have been talking about we keep on working in this project, detailing the engineering part, also moving on with environmental licensing that should be completed. Part of it should be completed by the end of this year. So we keep on working with a possibility of our Being prepared to make a decision on investments mid next year. Obviously, if there are any changes regarding this expectation, communicate, but the timing or the schedule is designed this way. With regards to the second half and how this could impact our investments, our comment, and if Marcelo would like to add, feel free to do so. As we've mentioned at some point, the visibility is very short-term. There are a lot of uncertainties in the domestic market due to the high interest rates and how this will impact the economic activity and still demanding when this will happen. Up to now, we follow with a quite resilient demand, but those uncertainties generated due to this trade war and tariff war of imports, brings up a lot of uncertainties, possibility of trade deviation, increase in the steel import levels, not only steel, but also manufactured products. And all of this are things we are following in a very constant fashion. and close and attentive way. And any relevant impact in terms of demand will lead to the necessary actions taken by us. So far, we haven't seen that. We keep our 1.5 investment plan. But in the cyclic industry like ours, we have to be prepared to take the necessary measures to go over a more difficult period. I would add to what Tiago said, that the structural process, we are moving forward. So we have PCI and the COVID. If the measures are not taken, effective measures are not taken to avoid subsidized steel, We're going to revise our investment plan in the second half, because if those volumes are not what they are, we could be providing much more employment. We have idle capacity, because we're not covering, because we cannot compete with those that import subsidized steel, and this is our main concern. So we have to defend the Brazilian industry that is committed to the country. We pay all taxes. And now we refinance debt at market rates as we do, as it is correct to do. But we cannot compete against those that have subsidies in all countries. balance sheet lines and they produce export and sell to brazil at costs or at prices that they cannot even cover the metal margin so we're very concerned regarding that in short so investment levels are maintained, but possibly we can reduce that, and this will mean slowing down the projects that are not linked to the environment, so they have total priority. But if we have the import of steels at this level, and so there are other projects, so we have being able to make a forecast of what imports of manufactured products and also steel. The forecast for this year is 100 million tons of steel in manufactured products. There are also Brazilian jobs, investment of our value chain, our clients and all the value chain if they continue importing subsidized products to Brazil. We have to revise our investment plans. This is the core topic that the whole country, the institutions, the government, the federations, we are trying to sensitize at all fronts to ensure a higher isonomy level. Thank you, Marcela. Our last question, we're about to end. We have a last question. Igor Geddes from Genial asks about mining, Thiago. From Muso, we've noticed the possibility of a richer mix of iron ore that we expect. We know it's a quarter with fewer discounts, but it's still possible to think about this volume of resilience with opening of new mining fronts to offset the east treatment unit more sustained with a mixed with greater iron content. Thiago, please. Thank you, Igor, for your question. Yes, we actually have a more enriched ore mix because of the new mining process that we started late last year in December. And this led us to make our mix to be more enriched with greater iron content and also silica. And this should be maintained in the next quarters. So we have a sale of a product that is more noble with less discount. In addition, the market discount, the percentage of market discount applied to each percentage of iron or silica has also been reduced, which has boosted this positive effect. Regarding volume, we also maintain the stability view with the east treatment plant out of operations. We were able to increase the productive level of the other plants of Musa. And we've added certain purchase of third parties. And we should keep the stable level during the year until the return of the east plant. Thank you, Tiago. With this, we would like to close our Q&A session. We would like to thank you all for your participation. Remind you, if you have any questions, the IR team is available to serve you. We've seen that there are some questions that have not been listed here. We are available. The whole IR team is available for any questions and everything. Thank you very much, and have a good afternoon.