Good day, everybody. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you for joining this call today to discuss the results and progress we've achieved in the first quarter of 2021. Present on this call today, we have Aditya Mittal, our CEO, we have Genuino Christino, our CFO, and we also have Simon Wandke, our Head of Mining. On our website this morning, we published our results presentation with detailed speaker notes. As usual, and in order to be as efficient as possible, the intention today is just to have some opening remarks from Aditya and then move directly to the Q&A session. If you would like to ask a question, please do press star one on your telephone keypad to join the queue. Finally, I would like to remind everyone that this call is being recorded and to draw your attention to the disclaimers on page two of the presentation. With that, I will hand over the call to Aditya. Thank you, Daniel. Good day, welcome everyone, thank you for joining today's call. Before we answer your questions, I would like to begin, as usual, with a few remarks. ArcelorMittal has enjoyed a strong start to 2021, recording our strongest quarterly EBITDA in a decade. The operational performance is a testament to all the hard work and resilience that our teams across our operations have demonstrated. We came out of 2020 stronger than ever, primed to support our customers as their end markets recover. We're very well-positioned to maximize the opportunities that this recovery generates. Whilst our first quarter performance benefited from higher shipments and steel spreads, there is much more to come given our order book and contract lags. I'm encouraged by the still visibly low levels of steel inventories in the supply chain. I'm encouraged by the fact that China is looking to control the steel production and exports, and I'm encouraged by the measures taken by governments in our core markets to stimulate, to rebuild infrastructure, and transition to more sustainable, low carbon and circular economies, all of which will be steel intensive. In recent quarters, we have consciously provided more information and updates on the performance of our key joint ventures. Both AM/NS India and Calvert performed very well this quarter. The fact that our JV and associates line represents 20% of our net income shows how important these assets are, both strategically and to our shareholders. Combined, our JV and associates and our equity stakes in Cliffs and Erdemir are valued at more than $10 billion or 25% of our book equity. Beyond the strong financial and cash flow performance, the company made further strides during the quarter on our decarbonization journey. A milestone this quarter was the launch of XCarb, which brings together all of ArcelorMittal's low and zero carbon products, as well as green innovation projects. We also detailed concept plans to significantly reduce CO2 emissions in key jurisdictions. I wanted to touch on our capital returns to shareholders. All the hard work we have done in recent years to reposition the balance sheet and optimize our business means that we're in an excellent position to consistently generate and return cash to shareholders. With that brief opening, Genuino and I will now happily take any questions you may have. Daniel, should we begin the Q&A? Yes, thank you. We have a queue of questions lined up, and we will take the first question, please, from Alain at Morgan Stanley. Please go ahead. Yes. Good afternoon, gentlemen. Two questions from my side. I'll start with the first one is around India, which is an asset that is clearly exceeding all expectations. It's generating $1.6 billion in EBITDA. From my conversation with investors, it seems that the market is not assigning anywhere close to what this asset is worth. How do you plan to unlock value from this asset going forward? That's my first question. Okay. Thank you, Alain. First of all, clearly we're still in the COVID environment, and we've all seen the harrowing images coming out of India. It's really a heartbreaking situation down there. All our support is to our colleagues, who I think are doing a tremendous job, not only keeping themselves safe, but their families, running the business and also helping the communities. I'm not sure if you're aware, but ArcelorMittal is supplying 210 tons of liquid oxygen a day, which can support up to 21,000 patients. In record time, very proud of the team, we built a makeshift hospital, with 250 beds in 72 hours, and we're growing that capability to 1,000 beds. Really the focus right now is to take care of the community and the people around our facilities. Obviously our thoughts and prayers are that this situation dramatically improves in the near term. In terms of the business, I think you asked the question correctly. There is tremendous potential. We continue to see areas that we can further improve the business. Post-COVID, we would expect that demand would be restored and growth would be there at significant levels, both in the medium and long term. We have growth plans both at Hazira, where we can do brownfield expansion. As you know, two months ago, we also signed an MoU to build a greenfield site on the east coast of India. Clearly focused on improving the business, but also capturing the growth opportunities as they manifest. Thank you. The second question is around Cleveland-Cliffs. Can you remind us when your lock-ups end for the common shares and the preferred shares? What is your strategic thinking around the fit of this investment in your portfolio? Yeah, sure. As you know, we're the largest shareholder of Cliffs. We're very happy with their performance. I think the team is doing a great job there as well. In terms of lockup and specifics, I would refer to the 8-K filing of Cleveland-Cliffs. Thank you. Great. Thanks, Alain. We'll take the next question, please, from Jack at Goldman Sachs. Question. Something we're grappling with is just trying to understand the true spare capacity in the European market. Obviously, we've all seen the price backdrop. No signs of higher prices abating for the time being yet. When we speak with most steel producers, any idled capacity has returned, and they're operating at or close to full capacity. Just very interested if you can quantify from your perspective how you see the European supply-demand backdrop as it stands today. Sure. Thank you. We can't really comment on what others are doing with their capacity or the overall capacity structure of Europe. If you look at ArcelorMittal, I think the same is true. We are running all of our assets. Clearly in Q1, not all of our assets were online. The biggest was obviously the Ghent blast furnace, which was undergoing a reline. The reline got completed in Q1, so you will see the full impact of the Ghent furnace in second quarter and beyond. Other than that, all assets running full, so your statements are appropriate. Just a second question, if I may. Very keen to hear how you're thinking about working capital build through the remainder of the year, given first quarter performance, also given recovering volumes and prices where they are. Genuino? Yeah, let me take this one, Jack. You have seen, we have invested about $1.6 billion in quarter one. We were quite pleased with that performance. As we have been saying, focus on make sure that we retain some of the efficiencies that we have achieved in 2020. Out of the $1.6, I would say that about $1 billion is generally linked to seasonality, as typically in quarter one, we increase shipments, and that's what you see. Of course, there is also a market element. Prices have moved up, not only our prices, but also raw material prices. Then as we move forward, and we think about that going forward, as you know, we don't provide a guidance for the year, but I think it's fair to assume that given how the prices have been evolving recently during the quarter and after the end of the, that we will continue to see prices rising, realized prices rising. It's also a fair assumption that we will continue to see some improvements in shipment as we move into quarter two. I think in Q2, we'll continue to see an investment in working capital. At this point, I would say most likely level that we have in quarter 1. Then after that, I think it's too early to comment. We will wait to see how the markets evolve. Just following up on that, do you think you'll be able to keep the working capital build at a lower level than what was seen in 2018? Well, that's the focus. Of course, it's going to be dependent, of course, what happens in the second half, as we have been saying consistently. The focus is retain the efficiencies and I think then it's going to be your assumptions. How do you see the price environment post into the second half, Jack? The focus is, of course, to keep that very tight and make sure that we don't let go the efficiencies that we achieved in 2020. Okay. Thank you. Thanks, Jack. We'll move to the next question, please, from Bastian at Deutsche Bank. Go ahead, Bastian. Yes, good afternoon, gentlemen. I've got two questions as well. My first one is just on your capital allocation side. Clearly, obviously, if we look at margins, prices and margins have gone way beyond where I think people could expect them to go, probably when you last updated us also on capital returns. I guess given the cash generation runway to where you're running at even post-working capital investments, I think you're probably pretty well on track to be almost debt-free by the end of this year. With all of that capital having become available, how do you think about capital allocation? Are there any strategic projects which have basically climbed up the agenda? How do you think about the strategy side? Sure. Thank you, Bastian. Fundamentally, there is no change in our capital allocation. Capital allocation remains the same. We remain very focused on delivering consistent returns to shareholders. You know our capital return policy, 50% of free cash return to shareholders. In terms of CapEx, we outlined some low CapEx relative to the amount of EBITDA we can generate in emerging markets as well as taking advantage of our mining infrastructure. That remains the focus. There's no fundamental change in how we're viewing our CapEx priorities, the same on the M&A. The real focus is to ensure that we can supply our customer base, ensure that reliability is much better in the second quarter relative to the first quarter, where we had reliability issues in some of our facilities. Ensure that we get full benefits of the spreads that are today into the bottom line. Okay. Perfect. Thanks, Aditya. Just a quick follow-up on that and also on Alain's question at the beginning. Obviously, if we look at India, the business is running extremely well. You've already earned your cash nets for the year. Even at a lower run rate, I guess you'd be very well positioned to cut your debt in the entity down by another $1 billion or so. Do you have any plans to potentially onboard the asset? Is there any contractual option in your contract framework with NS, which would allow you to either buy out the stake or at least increase the stake if you needed to, or would it be just a bilateral negotiation process? Okay, great. The drivers you have pointed out are absolutely correct. The company is performing well, is generating free cash. Net debt will come down this year quite significantly as well. It also came down last year. The acquisition is doing well. In terms of future prospects, changing the JV terms, consolidating it's all a bilateral discussion with Nippon. At this point in time, that's not our focus. Our real focus is to grow the business. Clearly, we see tremendous potential of the business, both based on the existing assets that we have, but also in terms of future growth, whether it's at Hazira or on the east coast of India. Okay, thanks. Very clear. Thanks, Aditya. Thank you. We'll move to the next question now from Seth at Exane. Go ahead, Seth. Morning. In your prepared remarks, you touched on the increasingly tight outlook for steel within China, with increasing domestic production restrictions and export limitations as well. As the largest ex-Chinese steel producer, how do you think about your ability to respond to that? If we see lower Chinese steel exports, is there an opportunity for Mittal to produce more or to adjust your mix of kind of domestic versus export ton in any of your key regions? How should we think about that over the medium term, please? Sure. Thank you. Yeah, in terms of China, what we saw was a reduction in some provinces because of the level of pollution or carbon emissions, and a small increase in electric arc production. I think we are just deducting, right? I think we are not absolutely clear as to what is the Chinese steel industry focus or plan. It seems logical to assume that they don't want to incentivize steel production due to the whole agenda of decarbonization. Simultaneously, they removed the VAT rebate on exports, they made exports of steel less attractive. When you combine the two, I think the impact is not so much in terms of tonnage and what share we can acquire and how we change our operating footprint, but it's fundamentally on ex China, i.e., export China steel spreads. Clearly, Chinese steel spreads have been the final decider of what is pricing globally. To the extent that improves, that's a positive for all of our businesses. Thank you very much. Just one follow-up, please. With regard to your Brazilian business, obviously, it seems like there's a strong inflection both in the domestic steel demand and also profitability for this operation. Can you please give us a little of an update on what you're seeing in the domestic economy? Obviously, despite continued COVID headwinds, what's driving the current strength, and how should we expect profitability to progress going into the latter quarters of this year? Sure. Genuino, you want to take this one? Yeah, I can take this one, Aditya. Yeah, Seth, I think it's right. I'm very pleased with the performance of Brazil this quarter. Strong performance. We have increased shipments quite significantly domestically. The demand domestically has been quite strong. It's actually surprised. We are not really reviewing yet our apparent steel consumption forecast for 2021. I think at this point, it's probably fair to say that we're going to be at the high end of that range, or even see, we will update that as we come for second quarter. We are seeing a very nice recovery over there. Teams are doing a fantastic job to make sure that the opportunities. Everything seems to be pointing to a very strong year for Brazil. This is despite, of course, the COVID situation requires caution. The infection rate is still high. More recently, we have seen it down. It's a good sign. We'll see how it progresses. Can you just give a bit of color on your current mix within Brazil and how you are trying to optimize domestic versus export sales, please, to maximize margins? Yeah, I think the long business, they typically also export. We are diverting exports to develop as much as we can as the domestic market demand improves, right? The same with our flat business. Especially on iron. The flat business in Q1, we had a lower rate of export. We had about 40%, and typically you would see more like 56%. There is a better mix in terms of domestic exports also this quarter. Okay. Thank you very much. Thanks, Seth. We'll take the next question, please, from Arun at Jefferies. Please go ahead. Hey, it's Arun. Following up on Bastian's question around capital allocation, if there's no change in thinking around CapEx from an A, what do you expect to do with the portion of free cash flow listed in buyback, which at this point looks like it'll be quite material for the year? Are special dividends on the table considering you're already below your net debt target and seasonal working capital investment is now behind us? Arun, look, those are all wonderful questions and wonderful points. I think it's very fortunate that we are at this point in time in our journey and in the cycle. Clearly, all the hard work that we put in to create a strong balance sheet is paying dividends, and I mean that both literally and figuratively as well. I think, we just announced our capital allocation policy, where half of the cash is returned to shareholders and the other half is kept by the business. I reiterate, no change in terms of CapEx or acquisitions. These are issues that we will address as the quarters progress and as the year closes. Okay, thanks. On India, can you remind us the time that you expect to achieve the debottlenecking to 8.6 million tons? Then when you might be able to make a firm decision around that more medium-term expansion for the potential new greenfield facility? Sure. The 8.6 million ton debottlenecking should be achieved in 2023. We will have a ramp-up next year already, but the full output of 8.6 is expected for 2023. In terms of the brownfield expansion, we would hope to make an announcement before the end of this year. In terms of greenfield, clearly the work is ongoing and that has a longer gestation. We would like to announce our plans on how we want to grow the Hazira facility, ideally before the end of this year. Okay. Thank you. Thanks, Arun. We'll move to the next question, please, from Patrick at Bank of America. Please go ahead. Hey. Good day. Thank you very much for the opportunity. I think just before I ask a question, thank you very much for the increased disclosure on the JVs. I think that's step one to realizing some value for them in the business. Thank you very much. It'll be very helpful. I wanted to ask two questions. Can you give us a bit more detail about how to think about the lagged pricing kind of going into the rest of the year? If your order book and your lead times are out to almost the end of the year, you should have a pretty good idea of what prices are going to be. How much of it is being settled on a kind of annual basis and the pricing is going to change? How much is lagged from Q1 into Q2 and Q3? The second question is just around XCarb. How should we think about the volumes coming out and what the potential volumes are? Is this going to be a premium product, do you think, realizing a premium above kind of other non-carbon, low-carbon steels? Thanks very much. Sure. I'll take the XCarb, and then I'll get Genuino Christino to address contract lags. In terms of XCarb, look, it captures the improvements we're making in our business to reduce our carbon footprint. We have two products, right? Green steel certificates, which is basically net zero steel. The second is recycled and renewable XCarb. Both of these products are getting a lot of traction in terms of interest. A lot of customers from various segments are speaking to us, and we're able to sell these products with a premium relative to other products. I think it's still early days, though, as to this marketplace and what the premiums would be. But it does demonstrate that there is customer interest, and therefore, as we commence our decarbonization journey, as we further intensify it, there is also a marketplace which can also reward us. Next year, clearly, the level of a product that we will have will grow. Again, it supports our overall franchise as a leading steel company being able to cater to all of our customer requirements. Genuino Christino? Patrick. To respond to your question, we have to go through the various segments, Patrick, because they are different. Starting with the easy one, you have CIS. The business is more export. It's more export-oriented. The lags will be relatively short, 30, 60 days maximum. We tend to see the prices flowing through and results much quicker. In Brazil, it's also quicker also. Now flat some contracts, yearly contracts with automotive, but overall, in the big picture, they are not so significant. I would say that Brazil also relatively shorter will also be two months. When you move to Europe, there you have our thread business. 40% is yearly contracts with OEMs, with different negotiations during the year, you have different dates. It gets a little bit more complicated. The remaining part is typically, we would say, two months now with the tightness on the market, we have to take a little bit longer. In after following the plan USA, our contract business has come down a bit, so it's more in the range of 30%. The remaining, you have to take into account lags as well for the index, and it's spot and index, so you can take at least three months there as a reference. Okay. Thank you very much. Thanks. Thanks, Patrick. We'll move to the next question, please, from Christian at SocGen. Thank you very much. Just before I start, a big thumbs up for all your efforts in India and for you and all the steel makers in India to provide those hospitals and the oxygen, I think is a great effort. Thank you for that. I wanted to ask you on capacity. I think there was a question earlier, where you highlighted that in Q1, you had Ghent only partially included. If I look at Q2 and the rest of the year, we take back in Ghent full on. We take out, what, a million ton per quarter from Ilva? The rest of your system, from what you're saying, is fully operating. There's nothing else which we are ignoring, which is coming online in the next few months? Yeah. Fundamentally, that's absolutely correct. There is a small ramp-up that is happening in our facility in Spain, in Sestao. That's an electric mini mill. As we ramp up it helps that facility because clearly that's part of our decarbonization journey. We're working on de-bottlenecking and further enhancing its capacity base. There may be an impact of Sestao as well, but obviously the impact of Sestao is much smaller than the impact of Ghent. Right. ACIS and Brazil, everything else is on full capacity operating? Yeah. They're all operating at full capacities. We did have operational issues right in the first quarter in ACIS as well, both in South Africa as well as in Kazakhstan. Those issues go away in the second quarter, and so you would have a natural increase in the level of production. The same applies to Dofasco in Canada, in our NAFTA segment, in Q1. Okay. I'm right to assume it's about 1 million tons we take out per quarter from Ilva at present? Can we know? Christian, the level of production of Ilva, at close to 1 million tons. That's the number you should take into account. Okay, great. My last question is, the carbon rights at EUR 50, and still is climbing, is this going to have an impact on your Q2, on your second half profitability? Should we take that into account, and for next year as well? I think as we see prices rising, we have discussed before, Christian, we have protected or hedged part of our exposure. To some extent, we are protected. At least we have fixed our price for part of the exposure, not all of the exposure. To the extent that prices rise, yes, I think we have to assume that there will be some impact on our results as we move forward. Great. Thank you very much. Thanks. We'll move to the next question, please, from Carsten at Credit Suisse. Please go ahead, Carsten. Thank you very much. One question from me on decarbonization. When will we see actually the announcement of sizable CapEx commitments to the transformation to green steel in Europe in particular? Is that still a few years out until you get the agreements and political help from the respective governmental bodies? That's the first one. The second one I have is on India, because, as you pointed out correctly, the situation there is quite serious. India developed quite well in the recent quarter, could the current COVID situation deteriorate the performance short-term, at least domestically? Would you consider in such a case, exporting? Thank you. Sure. In terms of CapEx costs in Europe, I think I would just make two general comments. The first is that as we have been getting deeper into analysis and examining all the plans and the technologies that we have within ArcelorMittal, and as we engage more with government and we develop our ideas, I think I'm encouraged that we can make this transition economically. Okay? Secondly, I think by June end, we will provide the second quarter results, much more disclosure as to what is this level of CapEx and what are we thinking till 2030 in terms of our decarbonization journey. It would be an appropriate time to discuss. Within that, how much are we expecting governments to support? You're aware that the funding mechanisms that are in place in Europe, such as the IPCEI funding, suggest that up to 60% of decarbonization CapEx, which has the hydrogen link, can be funded. There are contract for difference structures in Europe in place. I think when you look at the whole combination and ensuring that there is a level playing field and not carbon leakage, clearly a lot of work needs to be done. You can imagine that the transition can be done economically. In terms of India, as you correctly point out, it's a very difficult situation, a heartbreak, and clearly all of our support is to all of our employees and the communities in which we operate. So far we have not seen any impact, but I think we need to be watchful. Let's wait and see. As you point out, the facilities are coastal and therefore we do have the ability to export. Let us hope that the country can make tremendous progress in reducing the spread of infection. Okay. Thank you. That helps. Thanks. We'll move to the next question from Luke at JP Morgan. Hi. Thanks for taking my question. Firstly, just on Ilva, can you break out how much of the contribution within Europe was from Ilva from an EBITDA point of view? Look, you can assume that it's marginal in Q1. As in it was below the average EBITDA per ton. Yeah zero EBITDA? Clearly below. I think marginal. You can assume that it's marginal. Okay. Just a follow-up with Ilva. There's obviously the stage 1 of the deal with the government has been done, but the final tranche, I suppose, is early next year. There's a couple of conditions precedent set out to finalize that. Can you just remind me exactly sort of, well, what they are? I think you've broken them out in the quarterly, but maybe more so what the critical path is and what risks you see to them maybe not happening or not happening within the timeframe by May next year. Sure. It's basically environmental approvals and the removal of the criminal seizure, right? To put it very simply. It's a judicial process that is running. If we don't get these approvals, then you are right, this transaction reverses, but so does the whole acquisition. As a result, we are in line to receive the monies that we have invested in the asset. It's not just a condition precedent to this investment, it's a condition precedent to the full acquisition as well. That's why, if you remember, originally or historically, it was considered a lease asset till all of these condition precedents were met. We're happy to sit with you and provide you more details offline, if you're interested. The big picture is there's a public-private partnership in place today. The focus of the government, the focus of us is to make Ilva viable, both from an environmental perspective, social perspective, and economic perspective. Clearly everyone is working to ensure that these condition precedents are met. If they're not met, there's a criminal seizure that exists on the steel facility. The whole viability of the steel facility comes into question and all the transactions reverse. Okay. That's very clear. Second question, just on iron ore. Actually, one to Simon. I'd be interested just to see or an update on Liberia and the potential expansion there, and is there any opportunity to maybe fast-track that just given how strong current prices are at the moment? Then I suppose a follow-up, given the wider discussion around decarbonization, is there any discussion or consideration of potentially adding on a DRI facility or HBI that could it be used to import into the European market? Thanks, Luke. Yeah, good question. Look, I'll start with where we're at right today with Liberia. This is really now a construction project, if you will, because I think you recall vast majority, 85% of procurement was done, 60% of civil, 90% of engineering. We have tweaked the plan a bit and changed to wet to dry tailings. Essentially we've started work on the ground in terms of understanding the status of the construction materials like concrete testing. Detailed engineering is getting ready for award, et cetera. A lot of activity will start to happen later this year. The plan is get going on the ground, understand the condition of what's been sitting around for about six years. On the fast track, yes. We have to be careful about this as well. There is a potential always to compress the schedule. At the same time, we have to be aware that we do have certain risks with regard to equipment that's been sitting around. We're now relatively comfortable that the care and maintenance program's been good, fast-tracking is on the table, and we'll just work through that over the coming months. Luke, on the broader question, yeah, it's a really hot thing. I think this company, particularly given our very strong R&D roots, and the value in use. You know about 90% of our iron ore is actually beneficiated. We do that because we're after low impurity, high-quality materials. We've also been working in the background for a few years now on what else can we do across the mining sequence to upgrade materials into that sort of DR segment. I think the world's now caught up with the value in use or value over volume that's been in this company for many years. We're now ready with a few projects just reaching the stage of potential investment decision this year, which are what I would call DR pellet feeds. We've also got, I think, the significant opportunity with the size of the resource in Liberia and of course, AMMC in Quebec also, where we're already producing DR pellets, is a great foundation for potential growth of DR pellets into the group, and to DRI to EAF or HBI to EAF. I think the opportunities are there. We've got good projects delineated in the mining sequence and into the pelletizing, that's something that's on our plate for calendar 2021, Luke. Thanks a lot. Thanks, Luke. We'll move to the next question, please, from Grant at Bloomberg Intelligence. Please go ahead, Grant. Hi. Good afternoon. Thanks for taking my questions. I have two. The first one is just around NAFTA and back to the sort of capacity question. Given you had some issues in the first quarter, would you be able to give us a sort of a rough idea what your current capacity would be? Just to follow up on in terms of how the mix might change. I think in the quarter it was roughly 30% long, 70% flat. Is that indicative of how it's going forward? The second question is, I'm just curious on the cash flow statement, there was a line of other investment proceeds of somewhere above $800 million. I'm just curious to know what that refers to or what that's for. Thanks very much. Hey, Grant. Let me take your question. In NAFTA, basically, we disclose our production levels for Calvert, running full. Run rate of five million tons. Our business also running quite well, Dofasco and Mexico. We pointed out some operational issues linked to the weather disruptions that we face in Mexico. We receive a lot of gas from the U.S. Other than that, the business is running well. The flat business running. In terms of the mix, you're right. With the disposal of ArcelorMittal USA, the mix changed a little bit. We were more 80/20, and now we're more like 70%-30% flat and longs. That's the mix. Then, to the cash flow question, there are two, basically, and you can see some more information in our earnings release as well. One is, of course, the disposal of the 40 million shares that we sold for Cliffs. Part of the short-term investments that we made at the time of the disposal also of AM USA. Hi, Grant. Did that cover your question? Yes. Sorry. Just right at the end, Genuino, a couple. I would just add, Grant, that the proceeds were the Cliff shares that we then used to buy back our own, and it was the TSR unwind that was an investment in the fourth quarter. Again, related to the sale of AM USA. I think just overall on NAFTA, the key point I would make is on the 70/30 or long flat. I think that excludes Calvert, right? If you adjust for Calvert, you will see that we have much more flat shipments into the NAFTA market. Also, when you look at the profitability numbers for NAFTA Q1, there are operational issues. Mexico we highlight, also Dofasco didn't do so well. Those should normalize into Q2 plus. If you look at the overall franchise that we have in NAFTA, we should also look towards Calvert performance. Got it. Thank you very much. Thank you. Thanks, Grant. We'll move to the next question from Myles at UBS. Go ahead, Miles. Great. Thank you. Could you just provide a bit more color around your order books, how they're looking further out, but also, has there been any impact from the chip shortage? We're seeing some curtailments at auto plants, whether in Europe and U.S. Is that starting to be visible in the order books? That's the first question. Sure. In terms of the overall demand situation, clearly as I mentioned in my remarks, visibly, we don't see any inventory build up. Inventory through the supply chain remains low. Our order books continue to lengthen. There remains demand into the end of the year as well. We're obviously not taking orders into Q4, but order books remain quite long, abnormally long, I would say, because everybody in the industry has had difficult time in matching the demand requirements. The service is also down. In terms of automotive, it is not so appreciable at this point in time, but clearly, when we look at the ongoing forecast for automotive pull, it's lower than what we would've anticipated perhaps three or four months ago. That on the margin is positive because clearly all of these automotive contracts were agreed at different periods in time, and are not reflective of today's spot pricing. To the extent that there is less pull, we can transfer those tonnages into the spot markets. Okay. That's helpful. Just going back to the emissions question earlier, what proportion of the emissions are not covered by the free allocation in Europe? How big is that exposure? Well, that we have been discussing openly and, I'm sure you have a good indication. Everybody, as you know, is short, right? You have the benchmarks. What we try to do is to make sure that we can fix our costs to some extent, and that's what we have been doing now for quite some time. I'm not very clear on this particular question is, if you probably have seen there is some more speculation about the certificates, so we have been a little bit more careful who is around it, and we don't want to incentivize that. We feel good with our positions at this point in time. Okay. Maybe one very last question on the European safeguards and how concerned are you that these may be lifted in June? Sure. The safeguard is designed to safeguard, right? From a surge of imports, that risk remains. The safeguards were put in place when Section 232 was put in place in the U.S. Section 232 remains in place in the U.S. The logic of safeguard is still there. Clearly this remains a discussion, but fundamentally, the aspect that we need to safeguard from the surge of imports is present today. Okay. That's helpful. Thank you. Thank you. Thanks, Myles. We'll move to the next question, please, from Rochus at Kepler. Go ahead, Rochus. Yes, thanks for taking the question. I have a question on your DRI strategy. Can you share what your initial thinking is today, where to put these DRI facilities rather closer to the mine or the pellet plant for the hot charging? You were thinking more about the proximity to the steel plant, which I could refer from your ideas and projects now in Germany and France. Secondly, in this regard is, do you intend to cover all the DRI needs internally in the future? Maybe more color on that would be appreciated. I have another one. Sure. Thank you for the question. As you know, we are the world's largest producer of DRI. We produce DRI in almost every continent of this planet. We have tremendous capability. We have both technologies within ArcelorMittal, whether it is the Tenova HYL or the MIDREX technology. On top of it, we are the first company in the world which is experimenting in Hamburg, Germany, with injecting hydrogen into DRI facilities. We also have DRI facilities which are linked to our steel plants in terms of hot charging, et cetera. We start from a position of relative strength and relative knowledge. Your inference is correct. At this point in time, we are evaluating whether the economic case, along with funding support and contract for difference is there to set up DRI facilities along our plants in Europe, because there are obviously some benefits in doing that. As we develop our strategy more and we outline exactly what we're doing, I think that would be the time to get into more detailed discussions. Typically what we would like to do is announce the project and then explain the rationale versus explaining the rationale before we announce the project. Okay. Yeah, this makes sense. Maybe on this Hamburg pilot. Just can you clarify whether that pilot has already started operations, and what do you think is the kind of timeframe you need on such a pilot in order to have a complete or a good picture about the performance metrics and what you need to do to make sure that this hydrogen-based DRI production is working the way you like it? Yeah. The pilot is running, and the hydrogen into DRI is working. Clearly, there are some other aspects to sort out as we take it to steelmaking, but those are all aspects of the research that we're doing. I think we are in the process of examining how we can expand it to a demonstrator plant. A growth from the pilot to a demonstrator plant. That may be an announcement that we make in 2021, and we'll keep you briefed. Okay, very good. Maybe allow me a last one on your announced reporting changes today. You're changing the way you would report your marketable iron ore, so you will only show the Canadian and Liberian operations as a separate mining segment, if I got that correctly. Can you give us some color what you expect in terms of operation improvement from shifting the rest back to the steel plants? I think this is a reflection of how we're managing the business. As we have streamlined the organization, there is much more regional or national responsibility. We find that having one unified organization in the countries in which we are doing both steel and mining is better for various reasons. As we have made those changes, we want to reflect it in our segmentation, right? We should reflect how we run the business and how we report our results. The mining team will still be intimately involved in providing technical assistance because they have the capability and the expertise in terms of mine plan, ensuring that the safety audit, safety plans are done properly, tailing dam support ensuring that the same innovation technologies, R&D capability that we are developing for mines generally is also transferred to all of these captive assets. The technical support assistance from the mining group would continue, but the day-to-day operational management ensuring that we maximize synergies, reduce complexity in the organization, have synergies in terms of CapEx buy or procurement buy or discussions with stakeholders is what we would achieve. Oh, okay, great. Thanks for the color on it. Sure. Thanks, Rochus. We'll move to the next question, please, from Phil at KeyBanc. Hey, thanks very much. Coking coal pricing coming out of Australia right now is really weak. The rest of world pricing looks firm to rising. There's spreads between Aussie coal and rest of world coal pricing is getting large, which historically is unusual. I'm trying to calibrate your costs on the coal side. Should we peg your costs more off of the Aussie levels or more off of a kind of a 50-50 blend of what we're seeing across the rest of the world? You're a big buyer and we've got an unusual situation, obviously. Sure. Most of the coal buy that we do is based on seaborne. Simon is on the call, so he can further elaborate on what he's seeing in terms of the coal business and what is the impact on ArcelorMittal. Phil, mainly skewed, of course, towards the Australian index. The trade situation at the moment with Australia and China is causing that two-speed world. Basically, you've got a very high CFR China arrival price. It's well over $200 today. You have Australian coal, which is pegged on the index today at about $109, $110, but is not moving into China, and there's still ships stuck in ports. That two-speed world is available to ArcelorMittal, and ArcelorMittal can take advantage of the lower end of that spectrum, and that's what the company does. Thanks for all that color. Thanks, Phil. We've got time for maybe two or three more questions before we reach the hour mark. We'll move to the first of those from Andrew at UBS. Go ahead. Thank you very much. Taking my question, just a quick update, if you could, on your operations in Mexico and the U.S. in terms of Calvert and what you're doing in Mexico as well in terms of ramp ups. Referring to that as well, you obviously mentioned you have a little bit of upsize potential in the U.S. on your current mills. Just if you've gotten any further thoughts to what you're going to do there, just given that prices are quite strong and supply is obviously under pressure in the U.S. Thank you. Those are my two questions. Yeah. Andrew, I believe we touched already on it. We had some operational issues in Mexico, right? We are back on track. We lost some production. We should get back now as we move into quarter two. At first, we also had some operational issues that we should be recovering. Station is for production to increase as we move to quarter two, and so should shipments. We talked about Calvert as well. Running at very already at 5 million tons, so close to full capacity. We are operating our facilities full. Of course, to take advantage of the very strong market conditions that we see. Okay. On the upsize potential in the U.S., any further thoughts there? Well, I think the upsides will come as we produce more and increase our shipments. That's exactly your point, Andrew. Maybe I did not understand your question properly. No, I just thought you had a little bit of a capacity upsize potential in the U.S. No, not from on the flat side, clearly not. We are running our facilities full. Got it. Thank you very much. Appreciate that. Thanks. We'll move to I think the penultimate question from Alain at ODDO BHF. Please go ahead. Yes. Good afternoon. Thanks for taking my question. First one, do you see a risk of demand destruction because of the high prices? Is that a real threat? Second question, could you investigate the possibility to debottleneck AMMC beyond the 26.5 million tons nameplate capacity? Sure. In terms of demand destruction, look, steel has very low elasticity. We do not see that in our end segments. We still see robust demand, in all end segments and virtually all geographies. Clearly, if these prices were to last into the long run, then people would examine what other cost-saving measures or how do they reduce the steel intensity. If you look at the material universe, steel is obviously maybe we're all biased, but it's a fantastic material. Not only for value per ton and the quality and characteristics that you get, it also has, amongst all the materials today, the lowest carbon footprint per ton. You already begin with a material which is on the right side of decarbonization, and as you know, it's infinitely recyclable. Clearly when we look at how demand will evolve for steel, we see some support in terms of the stimulus investments, the infrastructure spend, and the green energy infrastructure spend that is also coming. I know I digressed into longer-term demand picture for steel, but in a nutshell, look, the elasticity is very limited. The medium to long-term prospects remain more favorable than perhaps a few years ago. Simon, why don't you answer the AMMC capacity capability? Thanks, Alain. Today, the number is 24 million tons is the installed capacity in AMMC Quebec, both and that's across, of course, pellets and concentrate. There is definitely work underway. If you look at the total value chain from mine rail port, the ultimate bottleneck's probably at the port, and it's somewhere around 30, 31 million tons, we believe. We've got a number of programs that we're looking at, which are around debottlenecking. Seeking to mine no more additional volumes but seek to get higher yield through concentration circuits, et cetera. More efficient grinding, blasting concentration as well. Those projects, some of those have kicked off and others will be part of potential Capital programs, all aimed at basically using that full value chain up to the port limiting capacity as we see it today. They're in the pipeline, Alain. Okay. Sure. Many thanks. Great. Thank you. I think we've got time to squeeze in one last question, which we'll take from Andrew at UBS. Please go ahead. Hi all, just a couple from me. Just one on the one-off impact on NAFTA from these Texas weather issues. I was just wondering if you could quantify that. Secondly, just on the market. As you said, in Europe, you're running close to 100% with demand doesn't seem to be back to "normal levels" yet. We're told that the stocking is the main reason for a lot of this pickup, but we're seeing that stocks in Germany, for example, the visible base we have is down. What's your view of what's actually going on here? Where does the market rebalance itself? Is this a shortage of imports issue, or how do you actually see it in Europe? How does the market rebalance itself from now, given the high price levels? Is it exports coming out of India? Is it these large export numbers we're seeing coming out of China all of a sudden? Okay, maybe that gets choked off, but the numbers are pretty high for now. When do you see the market returning to balance in your view in Europe? Thank you. Sure. Let's do the first question on Texas. Genuino. Yeah. Yeah, Andrew. We estimate the number should be close at EBITDA level, to $30 million. Okay, great. Right. And- Go ahead. Thank you. Andrew, look, overall, this is not just a Europe phenomena, right? This is a phenomena that we're seeing globally. If you look at the Chinese domestic market, spreads are up. If you look at the U.S., if you look at Europe, if you look at Brazil, if you look at India, all the markets which are significant, we can see that spreads are up. In all of these markets, demand is up. We see the same trends, visibly low levels of inventory, strong order books. A macro environment, which at this point in time is constructive. I think that's the takeaway. I think it's hard to project into the future as to how long this will last, when will the inventory restock be completed. As you're aware, the inventory destock started in 2019, continued into 2020. Overall, on the macro, when you move beyond this on the medium to longer term, I think that's the more interesting discussion. I think clearly we at ArcelorMittal are very focused on our four key priorities, which is sustainable development. We think we can really make a difference, and we have leadership capability in decarbonizing at a more cost-effective, whether it's CapEx or OpEx, than our competitors. We have a lot of interesting projects in which we can grow our franchise businesses, whether it's AM/NS India or Calvert or looking at opportunities in Brazil or expanding our Liberia business. If you look at cost, I think we did a great job last year on variabilizing our cost, reducing our cost base. The cost focus clearly remains. We have a strong balance sheet, which allows us to provide consistent returns. In terms of the steel industry on a medium-term basis, what we're seeing is, and we have to better understand, all of us, the changes that are happening in the Chinese steel industry, both on a production and demand perspective. Also the fact that they have reduced incentives to export. I spoke a lot about changes in demand pattern, not so visible today, but we can see that is happening due to stimulus, due to infrastructure spend, and due to all the green energy infrastructure investments that are coming up, whether it is solar or wind. All of these are steel intensive. That provides you with an overview of what we are seeing at this point in time. It's also a good conclusion to the call, I believe. I don't know, Daniel, if you would like to say anything else. No. Thank you, Aditya. That does bring things to a close. Okay, fantastic. Thank you everyone for your questions and continued interest. I wish you and your families the best of health. Stay safe, and we will speak soon.