Good morning, ladies and gentlemen. My name is Donna, and I am your conference facilitator today. I would like to welcome everyone to Cleveland-Cliffs' third quarter 2021 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. The company reminds you that certain comments made on today's call will include predictive statements that are intended to be made as forward-looking within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause results to differ materially are set forth in reports on Form 10-K and 10-Q and news releases filed with the SEC, which are available on the company website. Today's conference call is also available and being broadcast at clevelandcliffs.com. At the conclusion of the call, it will be archived on the website and available for replay. The company will also discuss results excluding certain special items. Reconciliation for Regulation G purposes can be found in the earnings release, which was published this morning. At this time, I would like to introduce Lourenco Goncalves, Chairman, President, and CEO. Please go ahead. Thanks, Donna. Good morning, everyone. Though many of those listening today know him already, I am pleased to introduce on this call our new Executive Vice President and Chief Financial Officer, Celso Goncalves. In his previous role as Senior Vice President of Finance and Treasurer here at Cleveland-Cliffs, Celso was instrumental to our business and financial transformation. Over the past five years, he has led all of our capital structure efforts, being the key person behind the execution and financing for our transformational acquisitions and managed our liquidity through the pandemic. Prior to Cliffs, Celso had a very successful career as an investment banker, first at Jefferies, and then at Deutsche Bank. If you couldn't tell by his last name, Celso is my son. During the last several years, Keith Koci and I have been preparing Celso for this job. With Keith now in charge of our new business unit as President of Cleveland-Cliffs Services, we could not have a better or more prepared professional to lead our financial organization. With that, I will turn it over to Celso. Thank you. Good morning, everyone. I am humbled by the opportunity to serve as Cliffs CFO, fully aware of not only our rich 174-year legacy, but also our position of immense influence as the largest flat-rolled steel producer in the U.S. I also fully expect that, given my family name and the high standards set by our CEO, the expectations for me will be even greater than for anyone else in this seat. I am prepared to deliver. My experience here at Cliffs over the past five years has taught me that strategic and financial opportunities exist at all points in the cycle. My priorities as CFO are simple. One, allocate capital in a way that strengthens our business. Two, maintain and enhance our financial flexibility. Three, de-leverage the capital structure. Four, evaluate and execute opportunistic M&A and capital market transactions, always with the focus on long-term shareholder returns. Five, continue our five-year track record of share outperformance relative to our peer group and the broader market. With those introductory remarks aside, I will jump right into our third quarter results. We reported another quarter of record revenues of $6 billion, record net income of $1.3 billion, and record adjusted EBITDA of over $1.9 billion, ahead of the guidance we recently set of $1.8 billion. Our 42% quarter-over-quarter growth in adjusted EBITDA was primarily driven by continued price increases on our index-linked and spot shipments. These sharp increases on the revenue side were only partially offset by gradual increases on the cost side, including for labor, natural gas, and additional repairs and maintenance. Most notably, the reline of Indiana Harbor No. 7, the largest blast furnace in North America. Even though it was clearly a one timer, we did not add back to EBITDA the vaccination bonus payment of $45 million that was awarded and paid out to our workforce under our very successful vaccination incentive bonus program, which resulted in over 75% of our workforce fully vaccinated against COVID-19. In the steel making segment, we sold 4.2 million net tons of steel products with a mix of 32% hot rolled, 18% cold rolled, and 31% coated steel, with the remaining 19% consisting of stainless, electrical, plate, slab, and rail. Our automotive percentage of revenue was 20%, compared to 33% just 2 quarters ago, clearly reflecting the reduced volumes and the legacy annual prices from that sector, both of which should dramatically improve next year. We expect the trends on pricing and costs in Q3 to carry over into Q4, with higher prices from both index-linked contracts and some of our repriced automotive contracts, offset by similar cost impacts we experienced in Q3. Shipments will likely be lighter in Q4, due primarily to seasonality and lower automotive shipments. Offsetting this, we will be moving up to the 4th quarter some planned maintenance outages originally scheduled for next year, including the Dearborn hot end and both blast furnaces at Burns Harbor, along with a few other associated rolling and finishing facilities. These outages are being accelerated to this year in anticipation of a strong automotive recovery in 2022. All these events considered, our fourth quarter production should be reduced by approximately 300,000 net tons compared to the third quarter. Our free cash flow generation came in at $1.3 billion for the quarter, slightly lower than our original guidance due to slow demand pull from automotive, leaving more inventory to close out the quarter than we expected. The remaining outage period at IH7, as well as the additional outages we scheduled for the fourth quarter, should allow us to reduce these inventory levels during Q4. This free cash flow generated during Q3 was returned entirely to shareholders in the form of a stock buyback, executed via the complete redemption of our 58 million common share equivalent preferred stock. With only one quarter's worth of free cash flow, we completely redeemed our preferred shares. I will note that because of the weighted average calculation and the fact that the prefs were outstanding during a portion of Q3, the full 58 million share reduction is not baked into our Q3 EPS just yet, and we will see a further reduction of diluted share count in the fourth quarter. With the prefs now completely out of the way, we have resumed our aggressive debt reduction activities. In only the last 3 weeks since the end of Q3, we have already generated approximately $500 million in free cash flow and have allocated all of it toward debt repayment under the ABL. Upon closing of the FPT acquisition next month, all excess free cash flow will continue to be allocated towards further debt reduction. By next quarter, our LTM adjusted EBITDA should exceed our overall net debt balance, resulting in less than 1 turn of overall net leverage for the foreseeable future at any reasonable HRC pricing assumption going forward. Because of our strong profitability this year, at some point in the fourth quarter, we will have utilized the majority of our tax NOL balance, leading to an expected Q4 cash tax rate of around 10%. Prior to the acquisitions of AK Steel and AM USA, we once expected to be utilizing these NOLs for several more years, but the significantly higher profit generation following the acquisitions will result in the consumption of the majority of the $2.5 billion NOL balance within one year of closing the December 2020 transaction. Even with the additional cash tax outflow and payments related to the CARES Act FICA deferrals from last year to this year, free cash flow should remain remarkably healthy in Q4. The $775 million price of the previously announced acquisition of FPT is equivalent to less than two months of our free cash flow generation. Wrapping up, the financial position of the company is on stronger footing today than it has been during my entire time here at Cliffs, and the trend should continue into Q4 in 2022. The fixed price contract business we have with high-end clients, such as the automotive OEMs, gives us significant downside protection if spot prices trend lower. Even under the current varied futures curve for HRC, our average selling price should be much higher next year than it has been this year, leading to the expectation of another year of outstanding EBITDA, cash flow generation, and debt reduction in 2022. With that, I'll turn it back to Lourenco. Thanks, Celso. Very few companies can show the magnitude of growth Cleveland-Cliffs has delivered during the last couple of years. We were a $2 billion revenue company in 2019, became a $5.3 billion revenue company in 2020, and expect to be a $20 billion-plus company in 2021. All this growth was achieved preserving and enhancing our profitability, as demonstrated by our Q3 numbers of $1.9 billion of adjusted EBITDA and $6 billion in revenues for an EBITDA margin of 32%. These numbers have come primarily from the 55% of our business that is linked to an index price, with a smaller contribution from the fixed price contracts that were signed before the market price recovery of last year. In the fourth quarter, this will begin to change, and even more so starting next year when the bulk of our annual fixed contracts for automotive as well as appliances, stainless, electrical steels, plate, and tinp late all reprice at significantly higher levels. Our profitability into next year, even assuming the spot prices go down next year. The main reason for that is prime scrap. Prime scrap is what electric arc furnace mills, old ones or brand new, need to produce flat-rolled steel. We have seen a looming shortage of this type of scrap coming for several years, which partially motivated our $1 billion investment in our direct reduction plan four years ago. We were planning to supply HBI to EAF mini mills, and that was in the past, but not anymore. At this time, and going forward, we also plan to use more prime scrap ourselves in our BOFs. That will allow us to stretch our hot metal without building new production capacity. Building new capacity is a common mistake the steel industry insists in making time and time again. Cleveland-Cliffs is different, and we're not going to add capacity ourselves. We are definitely seeing what others do, and we act accordingly. With that in mind, a few days ago, we announced the acquisition of FPT. While the majority of scrap companies we looked at had a prime scrap mix of 10%, 15%, FPT stood out with an outsized 50% of prime scrap in their mix. FPT is actually one of the largest processors of prime scrap in the country, representing 15% of the entire merchant market in the United States. Prime scrap is a by-product of manufacturing, including automotive, and Cleveland-Cliffs is the largest supplier of steel to these automotive and other flat-rolled consuming manufacturers. As such, we can offer a compelling proposition for their scrap offtake, keeping the life cycle of our steel in a closed loop between Cleveland-Cliffs and the OEM. Furthermore, the main theme for the steel industry is decarbonization. Melting clean, low impurity scrap is a good way to reduce carbon emissions. That applies to both EAFs and BOFs. The BOF is often overlooked as a user of scrap, but in our footprint, it's actually where we consume the most. The use of higher amounts of scrap in the BOF boosts liquid steel output for the same amount of hot metal, which is what we call the liquid pig iron from the blast furnace. The more scrap you use in the BOF, the less coke needed in the blast furnace per ton of crude steel produced. With ample access to our own prime scrap, we can optimize our productivity with a higher scrap charge while significantly reducing our carbon emissions. On top of that, during the last 50 years, the supply of prime scrap in the U.S. has been steadily shrinking. We expect that half a century trend to continue as yields continue to improve, and unfortunately, China continues to dominate manufacturing. All of the new flat-rolled capacity coming online in the United States is from the EAF side, which means that demand for prime scrap and metallics will continue to increase. That is, very conservatively, another 9 million tons or 40% growth of demand for these products over the next 4 years. With our decision to use our HBI internally at Cleveland-Cliffs and primarily in our blast furnaces, there's a zero response in supply to this massive growth in demand for prime scrap and metallics coming from the EAFs. Pig iron may be the most likely alternative, but the CO2 emissions that come attached to pig iron, whether imported or made in North America, effectively create a negative impact to the Scope 3 emissions associated to these EAFs. In that regard, we fully expect that in a not so distant future, Scope 3 emissions will have to be reported as much as our Scope 1 and 2 already are reported today. That would create a level playing field for all the steel makers, integrated and EAFs. This is a good opportunity to remind everyone that no other steel company in North America has more capabilities, and modern ones, by the way, than Cleveland-Cliffs, when it comes to producing flat-rolled steel. That's particularly true regarding automotive. People tend to confuse old plant names like Indiana Harbor, Cleveland Works, or Burns Harbor with old plants. In fact, old plant names actually carry pretty modern state-of-the-art equipment. For example, our hot-dip galvanizing line at Rockport Works was built in the '90s, and it's 80 inches wide, and that is six foot eight inches wide, or 2,032 millimeters, if you're a metric system person. More than two meters wide. There's no other facility on the continent that can produce what we make there. The same is true for the six-footers at Tek and Kote in New Carlisle, Indiana, and Columbus, Ohio. Also, our advanced high-strength steels capabilities at Cleveland Works are second to none, and the automotive OEMs know that. Our pickling line, tandem cold mill, and galvanizing line in Dearborn, Michigan, by the way, another six-footer, specialized in exposed panels, were both built in 2011. Say that one more time. Dearborn Works was built by Ford Motor Company in the early part of the 20th century. The PLTCM and the hot-dip galvanizing line are only 10 years old. Our level of technological sophistication and our ability to produce all kinds of automotive flat rolled products, including stainless steel, are the reasons why Cleveland-Cliffs is by far the biggest supplier of automotive steel in this country. A couple of our competitors will be spending billions of dollars and working very hard to build capacity during the next three years. We don't need to because we already have the capabilities we need. That's why Cleveland-Cliffs supplies two and a half times more steel to the automotive industry than the second largest supplier, or more than the second plus the third combined. Another important accomplishment during the quarter was the consistent performance of our direct reduction plant in Toledo. The plant continues to operate above nominal capacity and to exceed our expectations, not only on production, but also in quality and cost. Case in point, our all-in cash cost of HBI in Q3 was $187 per net ton. A number much better than the cost projected when we first approved the construction of the plant a few years ago. Also, differently from our original plan, HBI sales to outside EAF mills are not significant and may be discontinued completely very soon. We actually have already decided to use the majority of our HBI in our blast furnaces, not even in our own EAFs. That allows us to improve hot metal cost and productivity while improving our coke rate and reducing our CO2 emissions. As a consequence of our HBI use in our blast furnaces, we have already idled the coke battery at Middletown Works, as that coke is not needed at this time. Another operational change we started to implement in the 3rd quarter involves our Minorca Mine and pellet plant, which we acquired as part of the ArcelorMittal USA acquisition. Based on our tests, we will soon be shifting our DR-grade pellet production away from North Shore and into Minorca, where we will not have to deal with the unreasonable royalty structure at North Shore. We plan to no longer sell pellets to third parties in the coming years, North Shore will become a swing operation, which we will keep idle every time we decide to do so. In any event, we will continue to be able to feed our Toledo plant with a consistent feed of DR-grade pellets, but from Minorca and not from Northshore. We continue to generate plenty of cash and should see a meaningful reduction in debt during the fourth quarter, even after paying for the FPT acquisition. Based on our expected EBITDA for this year, our 2021 full year leverage is already at a very comfortable level of less than 1x EBITDA. With the new sales contracts we have already signed, our ability to continue to pay down debt is even stronger than what we announced last quarter. Wrapping up, I want to send a special thank you to our workforce for making another record quarter possible. The $45 million that we paid in vaccination bonus this quarter was by far our best use of cash. We're pleased that we reached above 75% vaccination rates across our entire footprint, beating by a large margin the percentage of vaccinated local population in all communities we operate. We are keeping our workforce safe, healthy, and compensating them to do so. Soon, we look forward to welcoming another 600 Cliffs employees from the FPT acquisition. We can't wait to bring them into our company and our way of doing business. I will now turn it over to Donna for Q&A. Our first question is coming from Michael Glick of JP Morgan. Please go ahead. Morning, nice print. On the contract side, I was wondering if you could give us a bit more color there. I know you probably can't get into the quantitatives. To the extent you can, that would be great. Qualitatively, what are you seeing now in contract negotiations versus the old dynamic? How much of your contract book is still open? When you talk about higher average prices next year, just wanted to be clear for the non-fixed business, sounds like you're using the current HRC strip. Yeah, look, Michael, first of all, thanks for the compliments. Talking about automotive, Cleveland-Cliffs today supplies, give or take, five million tons of steel to automotive. As you know, one car, one ton of steel. We're talking about a market that's now below 15 million tons. Let's call it 15 million tons just to make life easier in terms of the calculations. If we supply five out of 15, we supply 1/3. It's a big percentage, but it's a lot less in terms of percentage than when we're just the owners of AK Steel. Now that we're Cleveland-Cliffs combining all these footprints, we diluted the participation of automotive in our mix. We are renewing contract by contract. We are done with a number, a significant number. We're not done with all. The important thing to consider is that as we renew one contract, things get a lot more complicated for the next one, because I'm not going to continue to add automotive. Every single contract that we negotiate right now, we not only negotiate for a higher price, but they also offer us a lot more tons. We are growing the tonnage that we're delivering for the car manufacturers that we have already closed the negotiation. Even though I don't have a hard target for the number of tons that I will supply to the automotive industry, we're going to get to a point that we're going to get selective at the end. Another point that I would like to clarify to you, because it's a change on the way we do business with the automotive OEMs. There's not such a thing of we're going to supply a few things like exposed parts and not supply everything. If we are a supplier of a car manufacturer, we are considering that we are going to supply everything from the most complicated parts that we are the only one that can produce, all the way down to the easy stuff. The microchip shortage has shown that the small things can complicate the life of a car manufacturer a lot. Long story short, we are doing what we plan to do. We're executing. The car OEMs are behaving extremely professional, as do we. I think we're going to be okay at the end. That's all I can tell you. Could you talk maybe about what you're seeing on the input cost side? You're obviously well integrated on metallics and coke, but curious what else you're seeing in terms of alloy materials and the like, and any supply chain issues you're focused on mitigating from a procurement perspective. Yeah, look, supply chain issues are reality, one of the most important parts of the new Cleveland-Cliffs is the logistics business. It sits under Keith Koci and is headed by Executive Vice President of Logistics, Chris Buehler. We designed the company this way because we anticipate that we would have to do a lot of work specifically on that. We are not suffering. We just need to work very hard to make sure that we have the trucks, we have the rail cars, we have access to everything that we need in a timely fashion. Case in point, we just concluded the repair of Indiana Harbor No. 7. It's a big beast. We started the day we planned it, and we finished 24 hours ahead of schedule. Everything came in a timely way, and we didn't have any problems with parts and things that were involved in the repair. Yeah, it's there, but it's like the current way of doing business, and we are not losing any sleep over that. As far as costs, we hedge a lot on things, and we have the financial expertise to do a good job on that, so we're not exposed. Celso has been doing this for a while, and he continues to do so. I don't have anything specific to report on that front. Michael? Okay, great. Thank you. Thank you. Thank you. Our next question is coming from Lucas Pipes of B. Riley Securities. Please go ahead. Good morning, everyone. Lourenco and team, congratulations on the strong quarter and outlook, and Celso, congratulations to you as well, specifically. Look, Lourenco, really appreciated your prepared remarks on metallics and how that market is continuing to evolve, and on that, I wanted to ask you about how you see the spread between prime scrap and HRC over the coming years. Would really appreciate your perspective on that. Thank you. Thanks, Lucas. First of all, this language of spread is not my language. We are not a melter of scrap. We are steel makers. We start from iron ore. With iron ore, we produce pellets. With pellets, we load 100% of our iron needs with pellets until we no longer do that, because we load a lot of HBI that we produce from our own pellets. It's not having HBI or direct reduction capacity. You have to have the capacity, and you have to have access to iron ore. Otherwise, you're going to have your capacity sitting idle. Like we have a bunch of plants, Midrex plants, and other supplier plants sitting idle in the Middle East right now because they can't have access to DR-grade pellets. We don't have that problem. Anyway, I don't play that language of spread. I will talk about the two components that go to this spread. One is prime scrap. If you understand that prime scrap comes from manufacturing, if manufacturing has moved to Asia, and right now resides in China, the U.S. is no longer the U.S. of the 20th century, when we were a real powerhouse in terms of manufacturing. We want to bring that back, but we're not there yet. We are still playing around with China, and China is where manufacturing is. We don't have the support from the manufacturing base. We're stable, but we're not growing. If consumption is growing, you don't need to be an economic genius to understand that you have more demand, and you don't have more supply, prime scrap will become more expensive. Because I want more prime scrap for my own use in our U.S., we went ahead and bought the best company that we could find to have access to prime scrap. If things were not really nice in terms of prime scrap, for the ones that depend on prime scrap, things will get worse, because now we have a big beast called Cleveland-Cliffs going to the market to put our hands around as much prime scrap as we can. On top of that, keep in mind, a lot of, actually, the vast majority of prime scrap that is generated in the United States in automotive and things like that, comes from my steel. Talk about a closed loop, that's exactly what we're going to do. We're going to reclaim our scrap because it's our scrap that comes from our steel, not somebody else's steel. That's a real closed loop. The situation for prime scrap is that. Shortages, higher prices, that's what we're seeing, and that's how we're going to play the game. As far as the price of hot rolled, it's all about the service centers. I have never seen a group of people that like so much to suffer. I was a CEO of a service center company for 10 years, and I was fighting that from the inside. Now I'm a supplier. It's unbelievable for people that live out of the value of their inventory, how much they work against themselves to feed the press with bad information, to sit on their hands where they should be buying, and then they come begging for material. That's what pushed prices up. We could have a business that would be more stable if service centers learn how to play the inventory game. I have been trying to communicate that for too long. I don't think I will be able to do so. Whatever hot rolled prices will end is whatever the service centers would like the hot rolled price to end. At the end of the day, the scrap component, we are taking care of that. Super. I don't know if I covered everything you would like to know, but that's my take on this difference between hot rolls and prime scrap. I appreciated your comments, especially in regards to the circular loop. One quick follow-up question on that. If I recall correctly, you all have about 15%, or FTP had about 15% share of prime scrap. What's your ultimate goal in terms of market share? Can you articulate that? Yeah, look, this 15% is what comes with the company as is, as we acquired the company. We are already communicating with our clients, that would like to acquire our own scrap back. Our proposition to our clients is very compelling because it's not only, Look, I want to acquire your scrap back to melt for you again. They like that because that kind of confines chemical composition to what they really have, they really need, and they really want. That's number one. Second, because scrap is still secondary in my matrix of raw materials, it's not my primary source of raw material. I can offer to these clients a proposal to pay for their scrap more than they are receiving today. It's a double dip. It's good for the business and it's good for the pocket. I believe we are going to grow this percentage from 15% to a higher number. How big? I don't know, but it will be bigger. Super helpful. Thank you. Thank you, Lourenco. Changing topics. You bought back a lot of stock during the quarter. You commented on the exhaustion of the NOLs. Remember my corporate finance 101 class kind of makes debt incrementally more attractive. How do you think about buybacks here, especially where the stock is trading? Really appreciate your perspective on that. Yeah, look, what we did with the preferred was really take advantage of a very unique situation. Stock buybacks are always a double-edged sword. Even though they are a very tax-efficient way to return money to the shareholders, it's also an invitation to bring the stock price down in the next cycle, no matter if the cycle is one week, one month, or one quarter. It happened again. I don't have really a one-size-fits-all opinion on share buybacks. I want to reward the shareholders. I'm a big shareholder myself. I bought stock of this company in the open market, close to 20 times, I think 17 times or something like that, since I came to the company seven years ago. I'm a shareholder myself. I like shareholder-friendly actions, even because I am a shareholder myself. This being said, I'm not going to commit with share buybacks or things like that because things evolve. I believe what we're doing for the shareholders is so much better, so much bigger, and so much efficient than just pay a meager dividend or doing share buybacks that will compromise our cash position that really doesn't matter at the end of the day. What company can say, Two years ago, I was $2 billion in revenue. Now I'm $21 billion in revenue. Two years ago, I was making $50 million, give or take, $100 million EBITDA a quarter. Now I'm making $1.9 billion of EBITDA a quarter. Very few. You've got to be in tech. You've got to be in advertisement. You've got to be producing yoga pants in order to do that. We are doing that with steel, with manufacturing. We are changing our business completely. Shareholders are rewarded if they understand that and play along. Lourenco and team, keep up all the great work and best of luck. Thank you very much. Thanks. Thanks, Lucas. Thank you. Our next question is coming from Emily Chieng of Goldman Sachs. Please go ahead. Good morning, Lourenco and Celso. My first question is around the prime scrap or HBI usage that you mentioned in your blast furnaces. Maybe can you discuss a little bit about how much less coke you can use here if you increase that higher quality raw material input? Perhaps, is there a rule of thumb to think about what the% increase in volumes you could potentially see from using more prime scrap there? Yeah. 2 things. We are using primarily the HBI in blast furnaces, and we're using the prime scrap exclusively in BOFs, just to make sure that we are on the same page on where things go. The HBI, Emily, used in blast furnaces is pre-reduced iron. When it will balance or cinder, like they do in China to pollute the world and create global warming. We don't do that here in the U.S. We use pellets. Pellets in blast furnaces make for extremely environmentally friendly blast furnace. When you load the pellets, you are loading, and I'm going to simplify this a lot. You are loading Fe2O3, so you are loading an oxide. You load coke to reduce the Fe2O3, and reducing is the opposite of oxidizing. We're removing the oxygen with the coke to create Fe metallic. That's why you need the coke over there. When you load a big portion, and we're loading a big portion of HBI in the furnace, we are no longer loading a big portion of Fe2O3. You are loading a big portion of Fe already metallic. To reduce that portion of the metallic burden, you don't need coke. At this point, we're reducing to the order of 20% coke rate. We're going to go further. We're going to continue to increase. Indiana Harbor No. Seven, for example, which is the biggest blast furnace in North America, hasn't used massive amounts of HBI just yet because Indiana Harbor No. Seven was at the end of its life. Now Indiana Harbor No. 7 is brand new. Indiana Harbor will start to eat HBI a lot, and that will push our total tonnage consumption of coal and coke in this company to a much lower level. I don't know yet the numbers, because Indiana Harbor came back to operation on October 14th. We are too early in the game, and the furnace is stable already. We're starting to use HBI. We're generating data. At the next conference call, I will have a lot of information about Indiana Harbor, the users of HBI. We will continue to use our HBI in other blast furnaces. That's the HBI portion of the blast furnace. Are you with me on that so far? Yeah. Now I'm going to move to the BOF. Yeah. Okay. In the BOF, we are using prime scrap, and prime scrap is exactly the steel that we want to produce. It's already done. We only need to melt. When you add scrap, you are basically melting. Like the EAF melt scrap, we also melt scrap in the BOF. We use more prime scrap, we are melting more. When you are melting more, you need less tonnage of what we call hot metal. That's the pig iron that comes from the blast furnace into the BOF. Less pig iron for the same ton of steel produced, we increase the yield of the pig iron. You stretch the pig iron to produce the same amount of steel. Therefore, you're using less pig iron, less coke to produce the same amount of steel. The two components, more HBI in the blast furnace, more scrap in the BOF, all together, massive reduction of coal and coke and less emissions, because coke and coal are C, and C plus O2 is what generates the CO2. Those are the emissions we'd like to avoid. Thanks. That was a good chemistry lesson. Maybe my second question there is just coming back to the average selling prices that you alluded to being higher next year. Can you remind us really quickly what percentage of your book is contracted at fixed prices? Then in your discussions, your contract renegotiations, any changes to sort of length of contract, and appetite for floating versus fixed contracts going forward? Look, just because you mentioned my chemistry lesson, now I'm compelled to give you a little bit of an accounting lesson. Your share count in your first model this morning was wrong. That's why your EPS number was wrong. Please go ahead and fix that, Emily. As far as my percentage of fixed contracts, around 45%. That's very helpful. Appreciate it. Did you fix the share count already or not yet? We will certainly be looking into it. No, it's wrong. Thanks for the flag. Don't look it. Just fix it. You used the wrong number. You need to fix that, because when you use the wrong number in the share count, you calculate the wrong EPS for the same net income. That's math lesson, not chemistry. Thanks, Lourenco. Thank you. Thank you. Our next question is coming from Carlos de Alba of Morgan Stanley. Please go ahead. Yes. Hello, good morning. Thank you very much for taking the question. In the press release, you alluded to $21 billion in revenue for the year. Basically that suggests around $6 billion in fourth quarter revenues, which I take is going to come from a combination of slightly lower volumes and higher prices. Could you mention what do you expect for cost and EBITDA, given relatively stable revenues in the fourth quarter implicitly in your comments? Carlos, you already put all the numbers on the table. Now the EBITDA is just a consequence of everything that you have just said. Right? You said the revenues. You said how we're going to get there. Yeah, you have it. Yeah. I'm not changing my guidance at this point because that's another fool's exercise. You change the guidance, you set yourself for failure. I got that. I'm not changing anything. Right. Fair enough. Is it fair to say that the price increases that you expect will more than offset the cost pressures? Oh, they will more than offset. They will more than offset. All right. Great. Okay, I will give a few indications. Our tin plate business, for example, which you have already renegotiated with all the clients, they are increasing between 2021, 2022 price-wise, 100%. In other words, we are doubling the price of our tin plate. The costs are not increased, not even marginally close, so it's a fraction of that. We are going to have a meaningful, bigger contribution from tin plate. Another one that I'll give to you, electrical steels. Electrical steels have been a problem and were a problem until this year, until supply chain problems showed the clients that were eager to import and use dumping grounds in Mexico and dumping grounds in Canada to try to disrupt the transformers market here in the U.S., and prove them to be naked, because the same ports that bring goods and gadgets from China are the ports that bring the stuff to the U.S. as far as electrical steels. We protected the clients that are not importing, and we punished the ones that were importing. We are heading into next year with much higher prices in electrical steels, a full order book, and we are privileging the clients that were with us during the times that the others were importing. We are still selling to the ones that are importing, but we are selling to them at a much higher price than they were paying before. The pricing equation for us has very little to do with this thing of the spot prices of hot rolled that went down $5 yesterday or went up $2 today. We don't care about that, to be honest with you. We are contract business type of operation, and we are always looking 12 months ahead. Not necessarily calendar year, Carlos, but the 11 months ahead. Right. That makes sense, and it's clear. Talking about imports, how do you see the potential impact if Europe comes out of Section 232 and that is replaced, the 25% import tariff is replaced by a quota system. Is there enough steel in Europe that could come to the U.S. even when China may be reducing exports? Yeah, China is reducing exports, by the way. China is reducing exports. That's probably the first time I say that in several years. China is reducing exports. China is trying to knock down pollution, that's a good thing for the world, for global warming. The problem with the Europeans that they want, it's like the same thing with the Japanese and the South Koreans. The South Koreans and the Japanese, I can understand. They are too close to China geographically. Europe is an enigma to me, because they have no business to play both sides of their mouth. China and South Korea, they do that all the time. They want to be friends with the United States. They don't want to upset China. The Europeans, they need to work with us and not to try to work with us and still smile to Xi Jinping. They need to understand that if they are with us, they should not be with China. Australia, that has a much more geographical compromised position in the globe, understands that better than the Europeans. Every time I have a chance to convey my message to the Biden administration, I keep saying, "Pay attention to these friends in Europe. They are not our friends. They just like to take advantage." I am in support of a tariff rate quota, as long as the quota is fair and the tariff that kicks in after the quota is high. Anything else, we're gonna be very vocal in opposing and expressing our opinion. Another thing that needs to be taken into consideration, among our 25,000 employees, we have 20-plus thousand employees that are unionized, and the unions share the same opinion that I have just expressed. Even though I don't speak for the USW or the UAW or the machinists, I have been talking to them all the time. We are going to be extremely vocal if the negotiators on behalf of the U.S. don't play our side of the game and play the European side of the games. That's one of the very few things that I believe that unifies this industry, this country, Democrats, Republicans, everybody understands that we need to protect ourselves at this point. Not allowing the Europeans to take advantage of us in the negotiation table is extremely important. All right. Last question, if I may. How does switching to Minorca would help or could help the DRI cash cost, and how much is the royalty component? It will go down a lot because the royalty component at Northshore is absurdly high. Even with absurdly high costs out of Northshore, you saw that number I reported for the all-in cash cost of production of HBI of $187 per net ton. Even though it's not prohibitive, could be a lot less. That's why we're moving from the Northshore with a very bad royalty structure to Minorca. That will be big savings in terms of cash cost from the royalty standpoint. Still, even with Northshore, it was $187 per net ton, so we are good, but we can be better. We are always looking for better costs, and that's why we're going to Minorca. By the way, phenomenal plant. Great plant, great equipment. The general manager has things under full control. Rob's doing a great job leading Minorca, integrating into our Cleveland-Cliffs way of doing business, and they are very excited with the opportunity to produce the grade pellets that they just started. Also, the general manager of North Shore, Paul Carlson, was the guy that developed the grade pellets for us, first as a general manager of technology, and then as general manager of North Shore. He's helping, and he will continue to help. I have my North Shore people working to help our Minorca people to move the grade pellets from North Shore to Minorca, and we're going to have a much better royalty structure, lower payment for royalties. We're gonna keep North Shore idle every now and then. That's what we're going to do. All right. Excellent. Thank you very much. All the best in the quarter and next year. Thanks, Carlos. Really appreciate it. Thank you. Ladies and gentlemen, we're showing time for 1 final question today. Our final question will be coming from Alex Hacking of Citi. Please go ahead. Hi, Lourenco. Good morning, and Celso. Alex. Yes. Even though Donna already said that will be the last question, I'm going to take a question from Tristan and Matthew Fields that I'm seeing in the queue. Please don't disconnect. We have time. Sorry, Alex. Okay, sure. Go ahead, please. Yeah, no, I didn't know if you were gonna cancel my question or not. No, I'm just saying that because the way it's being booked- I'm just kidding. I would have the other two that are lined up to ask questions, they would probably disconnect. I don't want them to disconnect. I'll take their questions as well. Just trying to be respectful of, and I appreciate you guys joining the call and asking the questions. This is very helpful for us as well. Please, go ahead, Alex. We appreciate all your candor and straightforward talk, Lourenco. I guess as you look at your cash that's coming in, if we look at there will be a lot of free cash flow next quarter, gonna be a lot of free cash flow next year. Where are you looking to reinvest in the business, sort of upgrading capabilities? You've been clear that you're not gonna add capacity, but obviously there are other kind of investments that you could make. So far, we've seen you invest on the raw material side. Are there any sort of significant investments that you're looking to make, and how are you thinking about what CapEx is gonna be over the next couple of years? Thanks. Yeah, look, that's a great question. Like I explained, I believe I explained clearly during my prepared remarks, we don't have, because we have modern capabilities to produce high-end steels. We have a very environmentally friendly footprint at this point with pellets, HBI, less coke, everything that I explained during the call. We don't have the massive needs of CapEx that other companies are expressing and they committed to deploy. We don't have that. Our CapEx will always be CapEx for the existing footprint. In CapEx for our existing footprint at this point, we are seeing something between, let's go $750 million-$850 million every year. That's more or less what we are envisioning at this point going forward. It's not something to really take our breath away at this point. The biggest project that we have in mind right now, not in mind, it's being planned as we speak, is the reline of Cleveland blast furnace No. 5. That will be, give or take, $100 million type of project. It's a little more than what you would expect for a furnace that's not that big, but that's a furnace that we need a lot of things to allow the furnace to take more HBI, to use more natural gas, to reduce coke rate, all the things that we have been implementing in other furnaces. That's already included in this $750-$850 that I gave to you. What else was in your question, Alex? Sorry, did I miss something? No, that answered the question. Okay. I guess just one very small follow-up. You've talked about the importance of decarbonization in the steel sector, and I guess, what kind of investments are you envisaging Cliffs making over the next few years in terms of decarbonization? Sure, yeah. on the most promising technology there? Thank you. Yeah. Look, we are actually the only company that I know of in the United States or abroad that has already spent more than $1 billion to decarbonize. We put $1 billion in our HBI plant, we improved our capabilities at Northshore to produce DR-grade pellets at Northshore to the level of production that would feed the plant. Little I knew at the time that I made that investment, that I would be able to acquire Minorca inside the transaction of ArcelorMittal. If I had a crystal ball, I would not have invested that $100 million. The fact of the matter is that I did by the time that Northshore was the only one that I could use to produce DR-grade pellets. We have already applied $1.1 billion to decarbonize just in these two projects, $1 billion for Toledo and $100 million for Northshore. That's real money. Am I going to do HBI2? At this point, the answer is no. There's no plan to put HBI2. The main reason for that is I don't need it, because we changed course. We are no longer selling HBI to the market. We changed course. We are not going to continue to sell pellets to the market beyond the expiration of the last contract. It will be all internal, and we changed course. We acquired a scrap company. Am I going to acquire new scrap companies? Maybe. I believe that our growth can be organic, and we might not even need to buy a scrap company. What I like the most about FPT is not only the fact that they have already control over a lot of prime scrap, but also that the management team is phenomenal. We are excited about the people that are coming with the company, and the mindset, and how we're going to grow the business under Keith Koci, who by the way, is my go-to guy for these things for 15 years. We have been doing this together since Metals USA. Keith Koci, in two months, he went from not knowing the market by being the go-to person in this market at this point in scrap, and knowing everything, and finding the right target on FPT, and guiding through and working with Celso to get this thing signed definitive agreement in a short period of time, and everything's lined up for closing in Q4, record time, great performance, perfect solution for us. We are not going to go on a buying spree of scrap companies because, if we find something that fits, maybe, but we don't need. We're going to go to the organic growth, and that's the way we want to do. Long story short, Alex, we don't have big projects to build new plants, build capacity. Oh my gosh, this mistake has been made for so many times. U.S. Steel, Bethlehem kept going, and it's sad to see the same mistake being made again. It's not going to be made by Cleveland-Cliffs. Alex? Yep, thank you. Thanks. All right. Best of luck. All right, appreciate it. Donna, next one. Thank you. Our next question is coming from Tristan Gresser of Exane BNP Paribas. Please go ahead. Yes, hi. Thanks for taking my questions. First one, a quick one. I may have missed it, but just wanted to clarify, the prior full year 2021 EBITDA guidance you provided is still valid? Still valid, $5.5 billion. Okay, thank you. Second question. You know what, Tristan? It will be higher. I just don't want to commit with a number because I commit with a number and then everybody bumps up and then they find a way for me to miss. I always miss. If I don't miss the numbers, I'll miss a comma in my prepared remarks or something like that, or my accent is not good. I'm tired of missing. That's why I'm tired of updating guidance. We do these things at the end of the day to help you guys model. Then you guys say, Oh, they missed against my model. No, your model missed against reality. That's what happens. It's not you alone, Tristan. It's everybody. We don't miss anything. We do what we have to do. You guys eventually miss, and ladies eventually miss because your model is not good. Sometimes it's just share count. Like I was talking today respectfully with Emily Chieng. If you use the wrong share count, your EPS will be wrong and then you call it a miss. That's absurd. Go ahead, Tristan, please. Yeah, no. Second question maybe on energy. I think your energy mix is 40% natural gas. Have you seen any meaningful increase in energy costs in the quarter? Can you remind us a bit of your procurement strategy for natural gas? Do you have any contracts or hedges in place? Yeah, look, we use a lot of natural gas and we love natural gas. Actually I have been trying to educate the U.S. government about how relevant natural gas is for us, not only as the support for the manufacturing that we have today, but also as the support for the manufacturing of the future. For example, our use of natural gas in Toledo, in our direct reduction plant, is actually the real use of hydrogen to reduce ore. The natural gas that we use inside the direct reduction plant is reformed gas. Reformed gas is basically H2, and the CO2 stays in loop just to keep the gas hot. The reductant becomes H2. That's developed by the process of reforming natural gas. We buy a lot of natural gas. The impact in cost is not meaningful. We do a lot of hedging. Celso, talk a little bit about the hedge of natural gas, please. Sure. Hey, Tristan. Just to give you some data points. We consume about 190 million MMBtu of natural gas per year across our entire footprint. Very simplistically, our goal is to be half hedged, 50% hedged, for the next 12-month period. We use a number of different instruments to do that. The impact of the increase in price is pretty muted based on the fact that we have those hedges in place. I think it's important to note as well that higher natural gas prices tend to lead to more drilling, which helps steel demand in the long run. We don't see this as a big impact for us, going into next year. All right. That's really helpful. My last question may be on low carbon steel. You lay out well the competitive advantage versus flat-rolled mini mills and raw materials, and better grades capabilities. How do you see the efforts by certain players in the U.S. to gain market share on autos, by selling low carbon steel product? Do you see that as a risk, or how do you plan to mitigate that? What OEMs tell you about that topic in contract negotiations? Well, we sell today five million tons, like I said, of steel to the auto builders. There's a big opportunity for these folks to grab a lot of market share. Even because I believe that five million tons is excessive. The problem is that when I cut tonnage, I'm not going to cut tonnage a little bit here and a little bit there. I'm gonna take one car manufacturer and say to this car manufacturer, I'm not selling to you anymore. Let's assume that I cut that with one car manufacturer, that I sell 1 million tons. By the way, I have more than one that I sell one million tons. That makes us go from five to four. We are still, with four, twice as much as the second-largest. With four, not with five. With five, we're more than twice. There's a huge opportunity for this type of steels. Let's put it like that. The car manufacturer will have to do everything with that type of steel. I don't think it's a good proposition. I don't think that they will entertain that. That's how I do business. They like it, great. They don't like it, be my guest. I will be the next microchips. Do you understand my point, Tristan? Yeah, no, that's helpful. Thanks a lot. Just helpful? Let's try one more time. The Europeans, you're in London, right? You work out of London, is that correct? Yeah, I don't think my location has anything to do with the question. Thanks for the answer. No, your location is a question that I'm asking you. Are you in an undisclosed location? Are you a person that can't disclose where you're at? Do you work for a company that's headquartered in Europe or not? I need to know because I'm going to give you an explanation on something, and I would like to know. Can you share with us? Yeah, of course. I mean, you asked last time. I'm in Europe. Okay. You're in Europe. The Europeans have been playing the steel makers for a long time. The European car manufacturers. The European car manufacturers have been doing a great job making them slaves of the car manufacturers. Here in the U.S., the biggest supplier of steel to car manufacturers does not accept this role. That's guiding all of our negotiations with them. We want to be treated in an equal footing. We don't want to be the bully, but we are not going to be bullied, and we are not going to accept lip service. If we're going to be buying steel with a brand of being environmentally compliant, please make sure that the ones that are really reducing emissions, like we are, and investing a lot of money to reduce emissions, like we are, we are going to be treated the same way at the very least. That's the thing. I'm not feeling threatened by this type of steels. We are actually, just to give you a few examples, we are actually working on carbon capture here in Indiana Harbor. That's pretty much a well-known thing, that we are the ones that have developed carbon capture technologies in steelmaking for the entire U.S. This thing will be used for the rest of the world. We are starting to work with one of the upcoming company upstarts that are trying to develop a breakthrough technology called Boston Metal. We are working with Boston Metal to develop their component inside one of our plants here in the United States, Burns Harbor, to see if their technology will work in steel making, which I truly believe can be a breakthrough technology. These things, Tristan, are breakthrough technologies, and Europe is trying to make breakthrough technologies to sound like well-established technologies. They are not. You cannot supply 15 million tons of automotive steel and base your thing in breakthrough technologies. If that was the case, Japan would be doing that because they don't have iron ore. They don't have coal. They have a lot of blast furnace. Do you know why? Because they have a lot of automotive. South Korea, same thing. Because they have no iron ore, no coal, but they have a lot of blast furnace. Do you know why? Because they have a lot of automotive. I'm talking about Toyota, Honda, Nissan, Subaru, that's Japan. Kia, Hyundai in South Korea. You know the names. Same thing here in the U.S. You know the names of the car manufacturers, and you now know the name of the biggest supplier for the car manufacturers. That's called Cleveland-Cliffs. We're not only supplying environmentally friendly steel today, but we are going to be at the cutting edge of producing the next generation of steels, because we're already working on them. You don't see the press releases, because I tend to only put the press releases out when we have results. We don't brag and then we try to do. We work hard, then we brag. All right. I appreciate the answer. Thank you. Thank you. Thank you. Our next question is coming from Matthew Fields of Bank of America. Please go ahead. Hey, Lourenço. Thanks for reserving time, I appreciate it. Also, congratulations on the promotion. Well deserved. Hey, Matt. Appreciate that. Just a question for you. Where are you located? New York. Good. I love New York. Me too. Just to make sure that it's not an undisclosed location. I'm not important enough for an undisclosed location. Just a quick one about Minorca first. Is there any kind of construction or project CapEx associated with that transition? Is it because it's so close to Northshore, you can kind of use that DR plant facility for the Minorca pellets? Yeah, we can do a lot of things there, one thing I will not use. I will not use iron ore from the Peter Mitchell Mine in Babbitt, Minnesota, because I don't want to pay that royalty. It's my decision to use the iron ore from another location, I'll use iron ore from another location. Okay. Great. That mine sort of got a three million ton at least capacity. Is that essentially just gonna be feeding the HBI plant and sort of no DR pellets on the merchant side? No DR pellets outside of what gets flown through the HBI plant? That's correct. Okay I will comply with all the contracts that we have in place, but these contracts will go away. When they go away, we'll no longer supply. We will concentrate Minorca for DR-grade pellets. We are moving Mustang pellets to United, because under the previous configuration, we were producing Mustang pellets half at United and half at Minorca. There's no reason for that. We can concentrate Mustang pellets. Mustang pellets are the ones that go in the Indiana Harbor No. 7, the superflux pellets. We can concentrate Mustang pellets into United 100%, so we free up Minorca for DR-grade pellets and make North Shore our swing operation, using as needed. Okay, great. Thank you very much. Then, you sort of talked about metallics today and you're obviously a few years ahead of your peers on the kind of shortage of metallics coming to this country with the HBI investment and whatnot. Can you talk a little bit about the balances that you have to thread. You already said you might sort of grow your appetite for scrap organically, and I appreciate that. What are the kind of balance points that you have to hit. The benefits from the increased yield from using more scrap. It can actually, on the con side, the prime scrap can be a little bit expensive compared to your internal pellet production. Ultimately, is there a ceiling on the amount that you can use of scrap as a percentage of the batch, when you get up to losing quality between flexibility and strength on the ultimate end product? What are the constraints that you see for your footprint on hitting all those points? That's a great question. The very first thing to consider, Matt, is that we're way below what would be the theoretical point of thermal equilibrium above what we can't use more scrap. We have furnaces, BOFs, vessels today, converters, that we're using 82% hot metal. We can go down to 75%, 74% with no fear, with no problem. I actually, when I was a BOF general manager long ago, I used to do 75% hot metal and then 25% scrap, because that was a good practice in terms of stretching my hot metal. We're implementing that. Another thing that over time changed for cost reasons in order to save pennies, was the replacement of good scrap, what's prime scrap, with obsolete scrap. I would like to free up obsolete scrap for the ones that produce rebar and to produce other things that are less sophisticated, that will be in high demand with the infrastructure build. We're going to be building back better this country, hopefully soon. There will be a lot of rebar, a lot of wide plate beams that you need obsolete scrap. We're going to free up that for them, and we're going to use prime scrap where prime scrap belongs. I'm glad to hear that the flat-rolled EAFs are in the process of replacing prime scrap with obsolete scrap. Good for them and good for me, because then I'll have more prime scrap to use to produce highly specified materials, because that's what we do. We don't produce the steel for the floor of the cars. We produce steel for everything, from the door rings to the skins, the skins of the exposed parts. Pretty much everything. We need prime scrap for ourselves. We are far from the theoretical break-even point, because it's a thermal balance problem, not a cost thing. Okay. In theory, over the next couple of years or whatnot, we should look to kind of you growing that scrap business either organically or inorganically. Yeah. We are going to grow by reclaiming our own scrap from our own clients. Let's put it like this. Okay It's not my main source of feedstock, I can even be a little more flexible with the client and pay the clients a little more. It's not my cost, it's in order to produce better steel. It will go back to the other end with us producing and supplying these very same customers with better steel. That's helpful. Matt, I'm not sure if I'm being clear with that. Of course, prime scrap will cost a little more than what you are paying today. On the other hand, everything you gain in terms of higher yields and less rejects, things like that, will offset the fact that we are increasing $1 or $2 per ton. You know what I'm saying? In the big scheme of things, this is nothing. That's how technological this business used to be in the past. Over time, it kind of started to go away from the technological center of things. We're bringing this back because it's a very technological moment right now. We want to produce the same high-quality steels with a lot less emissions. That's what we're doing. Instead of just throwing press release and saying, We're going to do this, we're going to do that. We are doing. We are doing in technological cooperation with the car manufacturer, primarily with car manufacturer, but other flat-rolled consumers as well. No, that's helpful. It's a complex system of raw materials that you're feeding in to optimize along more constraints than the steel business is used to having, especially with carbon emissions now becoming a bigger constraint. Helpful for us to get kind of where you're coming from on all of it. Yeah. I apologize to the ones in the call that we got too much of nitty-gritty details of the chemistry. At the end of the day, you guys are going to have to be prepared for that. When you talk about emissions, we are talking about chemistry. We are no longer talking about cost accounting. We are no longer talking about the average price of HRC. You're going to have to, you, the research analyst community, will have to prepare yourselves to get this conversation to the next level. The phase of announcements and bombastic declarations and trademarks and things like that will pass. After you do a little bit of that, everybody, including the clients and yourselves, will say, Okay, where's the beef? How many tons of this thing you are producing? Where is this steel going? Is this in the door of the Ford Explorer? I'm making this up. It's the first car model that came to my mind. Where is this being used, and what for? I'll tell you, we produce five million tons of steel to the car manufacturers. I would love to produce less because I still believe that's too much of automotive exposure, even though it's less than half of what I had when I only had AK Steel. The biggest synergy, nobody asked about synergies today, by the way, the biggest synergy from the acquisition of both AK Steel and ArcelorMittal USA, Matt, was the fact that you could bring back technological sanity to this business. We are also translating this technological sanity into much higher revenues, much higher profits, EBITDA margins that were unheard of before. I don't know if you guys noticed, for the companies that reported so far, we reported the highest EBITDA margin among them all. We are doing all that in a profitable way, and we'll continue to do so. Next year will be better because of the way we do business, with fixed contract pricing situations that will protect the customer and will protect Cleveland-Cliffs. The rest will play around with the market. All right, Matt, appreciate the questions a lot. Donna, I think we're done. Yes, sir. Do you have any additional or closing comments today? I already did. Wonderful. Have a great Thanksgiving. I'll not be talking to you before. There's a lot to thank for, and here at Cleveland-Cliffs, we thank every day. Let's continue to try to reunite America to show that we are the best country in the world, particularly when you are no longer just talking and we're doing things. Let's continue to do things for the betterment of life of the American people. Let's think about the people, about the employees, not only to pay lip service to safety. Let's pay them better. Let's do things that can improve the lives of average Americans. That will bring peace to this country. Thanks a lot. Bye now. Ladies and gentlemen, thank you for your participation and interest in Cleveland-Cliffs. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.