At this time, I would like to welcome everyone to the Ternium first quarter 2021 results call. I would now like to turn the conference over to Sebastián Martí. Please go ahead, sir. Good morning. Thank you for joining us today. My name is Sebastián Martí, and I'm Ternium's Investor Relations and Compliance Director. Ternium released yesterday its financial results for the first quarter of 2021. This call is complementary to that presentation. Joining me today are Ternium's Chief Executive Officer, Máximo Vedoya, and the company's Chief Financial Officer, Pablo Brizzio, who will discuss Ternium's business environment and performance. At the conclusion of our prepared remarks, there will be a Q&A session. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and on page two in today's webcast presentation. With that, I'll turn the call over to Mr. Vedoya. Thank you, Sebastián. Good morning, and thank you all for participating today in Ternium's conference call. Ternium reported outstanding results in the first quarter of the year, with record EBITDA and EBITDA margins. Steel benchmark prices around the globe have had significant increases over the last nine months. Following a pandemic-induced decrease during the first half of last year, demand for steel increased significantly, outpacing the speed of recovery in global steel production. As a result of this, inventories at the value chain reach very low levels. These unbalanced supply-demand conditions happened not only with steel, but also with iron ore and with many other products along the world markets, affecting supply chains across different industries. We expect steel prices will remain around current levels for the rest of the second quarter and could decrease during the second half of this year as steel capacity utilization gradually catches up with demand. On the other hand, there are some positive factors that will continue to support a healthy steel demand, like the continuous deployment of government stimulus programs and the progress on the different countries' vaccination efforts. In yesterday's press release, we guided for subsequently higher EBITDA and margins in the second quarter of 2021. The main driver for this guidance are higher realized steel prices, partially offset by a higher cost per ton. It is worth noting that as more than half of our sales in Mexico are under contract, realized steel prices in the second and third quarters should remain high, reflecting prevailing steel prices in the first and second quarter of 2021 respectively. In addition, the cost of many of our raw materials, like iron ore and scrap, are also showing elevated levels, and the same is happening with slabs. The higher costs are not yet being totally reflected in our cost per ton, as we consume inventories over time. During the rest of the year, you should see cost per ton gradually increasing. Let's review now the state of our main markets. During February, extreme weather conditions in the Southern U.S. and Northern Mexico disrupted production at our facilities in Monterrey, with a negative impact in shipments of approximately 80,000 tons in the first quarter. Since then, our facilities have been running at high capacity levels. Demand from export-led industrial customers in Mexico continue to be strong, and activity at the commercial market is steady. Consequently, if market conditions remain as they currently are, we expect to subsequently increase shipments in Mexico in the second quarter. During the second half of the year, shipments should continue to gradually increase as we expect our new hot rolling mill at the Pesquería Industrial Center to start up in a month from now. Turning now to Argentina. Industrial activity in the country remained strong during the first quarter of the year, as did the construction sector. Shipments in the first quarter had a slightly sequential decrease as this is the seasonally weak quarter for the region. Although we expect shipments to remain stable during the second quarter, supported by continued domestic demand for durable goods and building material, it is worth noting that a second wave of COVID-19 pandemic is currently on the way across South America. For the time being, there has not been any government-mandated lockdowns of industrial facilities as it happened last year. If conditions deteriorate, we cannot rule this out. Our operations at Ternium's slab facility in Rio de Janeiro are also working at high capacity levels, as most facilities are currently in Ternium's industrial system. Slab prices increased subsequently during 2021, reflecting the increase in iron ore price and better steel market conditions. This facility, which is capable of manufacturing the highest specification steels, is providing a very strong steel production base for Ternium's operations in the region, as it was intended when we acquired it back in 2017. In today's high steel price environment, Ternium Brasil is key for Ternium's competitive positioning, as it integrates further with our facilities across Latin America. In Colombia, Ternium's new facility in Palmar de Varela is doing better than we expected. The local market is recovering strongly, and the ramp-up process is progressing faster than anticipated, with a third shift being incorporated ahead of time. With this production configuration, the new facility is providing Ternium Colombia with approximately 20,000 tons extra shipments per month, in addition to the substitution of 10,000 tons of steel that were previously purchased to third parties. All right, I would like to give some final remarks before going into Pablo's analysis of our performance in the first quarter. As I mentioned, we are very close now to put into operations the new hot rolling mill in Mexico. In the shorter term, this state-of-the-art capacity will become very handy at a time of imbalance in the steel market, as it increases our market offering with an expanded product range and enable higher productivity throughout our facilities. As we ramp up this new line, our current expectation is to achieve total incremental shipments in the North American market, the U.S. and Canada, of more than 400,000 tons in the second half of this year. With a longer-term view, I truly believe this will be a significant milestone in Ternium's life, and it will make us ready for further steps in the country's development. Another issue I would like to mention is a long-term development in the global steel industry that has the potential to be very beneficial for all steel companies. Plans to decarbonize steelmaking operations around the world are taking hold. In our case, we announced a medium-term decarbonization roadmap in February. In China, the government is gradually mandating cuts of steel production with the aim at progressing towards the country's decarbonization targets. If followed through, this could have a relevant effect in the future of world steelmakers, as it would have the potential to solve the country's chronic steel excess capacity and its detrimental effects in the world steel markets. Today's news about China's announcement that it will reduce the export rebates for many steel products, and it will cut the import duty of pig iron, crude steel, and recycled steel to zero are clear steps on the right direction. Finally, a quick note of caution. The COVID-19 pandemic is not over, as vaccination programs in many of the countries in which we operate are not progressing as fast as they are doing in developed countries. Most probably, we will have to continue dealing for some more time with the pandemic effect in these markets, our personal lives, and those of the people in our communities. If this is the case, you can rest assured that we will continue committed, working as a team, doing our best for our business and for our communities, as we have done until now. Okay, Pablo, please go ahead with the slide presentation. Thanks, Máximo, and good morning to everybody. You will see throughout today's slides that following a very strong fourth quarter, Ternium's results and profitability in the first quarter has been outstanding. The attractive steel market environment that Máximo described in his initial remarks is being reflected on Ternium's economic and financial performance, with historically high margin, significant cash generation, and a consistent strengthening of our balance sheet. Let's start on page three in the webcast presentation to review this. EBITDA in the first quarter of 2021 was $1.1 billion, or on the EBITDA margin of 33%, or $341 per ton. Net income in the period was $707 million, or $0.037 per ADS. We expect an even stronger set of results in the second quarter of the year. We will discuss this in more details in the coming slides. Let's turn now to page four to analyze steel shipments. In Mexico, in the first quarter, increases 3%, both sequentially and on a year-over-year basis. We expect volume in the country to increase in the second quarter. Shipments record from first quarter extreme weather conditions impact on our production. In the Southern Region, shipments in the first quarter of 2021 decreased 5% sequentially and increased significantly year-over-year. Let me remind you that activity in the first quarter of 2020 was affected by lockdowns related to the COVID-19 pandemic. Looking forward into the second quarter, we expect steel shipments in the region to remain at relatively similar levels. In the other market region, you can see that the volume slab shipped to third parties, in light gray, decreased in the first quarter, both sequentially and on a year-over-year basis. This reduction reflects the increasing integration of Ternium's slab facility in Brazil with the company industrial system. We expect this slab integration level to continue increasing in the second quarter of this year, offsetting the expected volume increase in Mexico. In the same chart, in dark blue, you can see finished steel shipments in this region, which increased in the first quarter of 2021. Of note, in this regard, we are ramping up Ternium new facility at Palmar de Varela in Colombia, which has contributed to higher shipments in the country. Combining these developments, as you can see in the next page, we arrived to consolidated steel shipments of 3.1 tons in the first quarter, 1% higher sequentially and 3% higher year-over-year. Looking forward, summarizing all that has been discussed, we expect stable consolidated steel shipments in the second quarter, with higher shipments in Mexico offsetting lower slab sales to third parties. Now turning to prices, revenue per ton increased sequentially and year-over-year in the first quarter of this year. Steel prices in our key markets continue strengthening since our last conference call, especially in North America. This, together with the lagged reset of contract prices in Mexico, anticipate this trend to continue in the second quarter, as commented by Máximo. Moving on to net sales, the bottom chart, the combination of relatively stable shipments and higher realized price resulted in a 26% sequential increase in the first quarter to $3.2 billion. Compared to the same period last year, net sales increased 43% in the first quarter. Turning now to the next page, number six, let's review the main drivers behind the sequential changes in the first quarter EBITDA and net income. The chart on the top shows the significant influence of higher realized price on the EBITDA increase, which was partially offset by higher cost per ton as a result of higher raw material and purchased slab prices. We expect a new sequential increase in EBITDA in the second quarter of this year, with even higher realized prices as previously discussed, partially offset by higher cost per ton. As increase in raw material prices continue to flow through the company's inventories. The chart below shows slight sequential increase in net income in the first quarter as a result of significant increase in operating income that cannot be seen entirely due to the $186 million non-recurring gain in the fourth quarter of last year, related to the derecognition of the contingencies in connection with the ISMS credits. This gain was excluded from the calculation of EBITDA in the fourth quarter. We also had in the first quarter better net financial results, mainly due to a 3% depreciation of the Mexican peso against the U.S dollar, compared to a 13% appreciation in the fourth quarter over a net short Mexican peso position. The significant appreciation of the Mexican peso in the fourth quarter also impacted the effective tax rate, which went down to 1% in the fourth quarter, compared to 27 in the first quarter of this year, around what should be expected when there are no significant fluctuation of exchange rates. To finish the presentation, let's now turn to our cash flow and balance sheet quarterly performance on page seven. Cash flow from operations in the first quarter was $328 million, even after the expected increases in working capital in this period. Of note, in the working capital increase were an extra $555 million in trade and other receivables due to higher realized steel prices, and a $316 million in higher value of raw material, suppliers, and others, and in the cost of steel in our inventories. This was partially offset by higher accounts payable. Looking forward into the second quarter, we expect further increases in working capital reflecting higher realized price and cost, as previously discussed. Regarding free cash flow, the company managed to generate $198 million after capital expenditures of $130 million and the mentioned investment in working capital. This enabled Ternium to further reduce net debt to $229 million at the end of March, equivalent to 0.1x net debt to last 12 months EBITDA. Let me remind you that as previously announced, Ternium's board of director has proposed a dividend of $412 million, equivalent to $2.10 per ADS. If approved at the company annual general meeting of shareholders, it will be paid on May 11 to shareholders on record as of May 6. Okay. With this, we finish our prepared remarks. As always, we appreciate very much your time and attention. We are now ready to take your questions. Please, operator, proceed with the Q&A session. If you would like to ask a question, please press star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Caio Ribeiro with Credit Suisse. Hi, good morning, everyone. Thank you for the opportunity. My first question on flat steel prices in the U.S. and Mexico. Clearly prices have been trending very favorably year to date. The market appears to be very tight right now. There is considerable incoming new capacity, both in the U.S. and Mexico, that's coming online this year and next. I was wondering what your expectations are on the impact that this new capacity will have on prices. Do you see prices normalizing at a lower base once this new capacity comes online? If so, when do you see this happening? Secondly, I was just wondering if you could talk about where you see the inventory levels for steel throughout the whole supply chain in Mexico right now. How you think that they compare to normalized levels. Thank you. Thank you very much, Caio. Very good question. I start with the second one because it's a little bit more easy. Inventory levels, at least in industrial customers, are very low today. They're not yet at normalized level, you can see they're even lower if you see the high rate of utilization that all our industrial customer has in the production base. Yes, inventory in Mexico, very low. Flat prices in the U.S. As I said in my remarks, I think flat prices in the U.S. are going to continue during the second quarter as they are today. In the third and fourth quarter, they should decrease somehow, although I don't see something that is going to decrease prices too much. I don't see an event because demand is very strong, the new capacity is not going to be online in the near future. I don't see an event that is going to diminish prices in the near future, in the second, third quarter, fourth quarter by much. In the long term, and I don't know if your question was more of the long term and the new capacity that probably next year, with Steel Dynamics and others is going to be online. If you are talking about the long term, I don't see this new capacity coming online as very problematic. I'm going to take a little bit longer, Caio, I'm sorry, but this is a very good question. There are three things that are moving the market in U.S. and Mexico. First, consumption is going to grow. Mexico has a consumption that it's 160 kilos per habitant. That's a very low consumption. If Mexico is going to develop, it's going to start consuming more steel. Consumption is going to grow in Mexico in the following years. The second effect is the reshoring issue. This is happening. It's happening at a pace that probably is going to increment in the next few years, and this is going to be more consumption. The third thing is infrastructure, which we didn't have in the past. If the plan of the U.S. is going through, this is also going to have an impact in infrastructure. A new capacity that's coming online is coming to fulfill these three things and compete with imports. Because you take the year 2020, imports from finished flat products in the U.S. and Mexico were somehow 15 million tons, a little bit more, a little bit less. This is a year which is not a typical year. You have a lot of room to compete with these imports. The question is if the capacity we are building, at least the one that Ternium is building, is able to compete with imports. That's why we are building our capacity with a very competitive cost position. We think that we are more than able to compete. I don't see that this new capacity is going to have a huge impact on prices. I hope I answered your question, Caio, although a little bit longer. No, that's perfect, Máximo. I really appreciate the full answer, very complete. I was just trying to understand exactly the momentum in the short term and how that's going to flow through in the medium to long term. That was a very complete answer. Thank you very much. If I may just follow up with one thing very quickly on the inventory levels. Yes. How long do you think that this could take to normalize those inventory levels? To be honest, commercial in Mexico, the commercial market, I think it's going to normalize in the near future. Industrial customers, I think it's going to take a little more longer. If demand continue this way, I think it's not going to be over until the final month of the year. Understood. Very clear. Thank you again. Thank you, Caio. Your next question comes from the line of Thiago Lofiego with Bradesco BBI. Thank you. Good morning, guys. A couple questions here. On the capital location side, usual question here that you guys get every quarter, but your cash flow generation will be significant in the coming quarters, right? I mean, most likely in the coming year or two years. What should we think about here in terms of capital location for Ternium? Should we see you guys speeding up on the M&A agenda? Any other significant organic growth opportunities that you guys might consider? Should we just really see more dividends? Just to understand how your mindset is at this point, given this new scenario, given this very high level of steel prices globally, and if that persists, how will Ternium approach this new world? The second question is more specific on your third parties slab shipments for the second half of this year. Where should we see that level as you ramp up the Pesqueria mill? Thank you. Well, I start with the easy one, Thiago. The second one. The other one is also easy. Third party slabs, today in Mexico, we consume around 3 million tons of slabs, more or less. With the ramp up of the new facility, probably next year, we are going to consume a little bit more of 5 million tons. In the fourth quarter, probably we are going to run at a pace of 4 million tons a year. Next year, probably at 5 million tons of needs of slabs for Mexico, then probably a little bit more. On the other side, we have Ternium Brasil. Ternium Brasil is running almost at 5 million tons, a little bit less than that, but almost at 5 million tons. As you know, we finished our contract with Calvert. We don't have to sell anything to the U.S. in the beginning of May. If you see it that way, we are almost balanced in our slab production and our slabs needs. Nevertheless, we are going to buy from third parties because we intend to sell from Brazil, from our slab facility in Brazil, particularly to the local market. It's going to depend on that, Thiago, on what are the opportunities to buy from third parties and to sell to third parties. Ternium is almost balanced today in our slabs needs. I hope that answered the question. Yeah. Máximo, just a quick follow-up. When you say you're going to buy from third parties because you want to sell to the market in Brazil, so that's solely because of better economics for you guys to sell in Brazil at a premium? What is the rationale there? Exactly. Again, the freight- You don't have the freight. Yeah. Exactly. Freight recurrencies, a premium because we ship just in time to the customers. Instead of them receiving a vessel once a month with a huge transit time, we ship by train every day for these customers. They pay a premium, and you don't have the freight. It's an economic analysis, pure economic analysis. Oh, got it. The first question, capital allocation. Well, in the short term, we are going to have a CapEx around $600 million in this year. We are going to still increase working capital. We have a huge investment in working capital in the first Q of almost $700 million. In the second, and probably in the third quarter, with this increase in prices and volumes, probably we are going to also invest in working capital. Next month, we are going to pay $412 million in dividends. Now, in a little bit more further, which was your question, speed it up for M&A, organic growth of dividends. I think the answer is that they are all in the table, Thiago, for us. We always have the aim to analyze any opportunity that strengthens our strategic position in our markets. That is what we are continue doing today. We have plans to continue developing our industrial platform in the region as long as this strengthens our position in this market. I mean, there are opportunities in Mexico. We are very confident in the future of Mexico to grow, and there are also opportunities that we are seeing in other markets where we are strong today, and that's what we are going to do. Okay. That's clear, Máximo. Thank you. Your next question comes from the line of Caio Greiner with BTG. Thank you. Good afternoon, everyone. My first question would be on you guys' EBITDA per ton. I do understand that your guidance said that you're probably going to increase EBITDA in the coming quarters, I was just trying to understand how this equation is shaping out to be over the next one or two quarters ahead. On one hand, steel prices in the U.S. more than doubled year-over-year, and if we look at Ternium revenue per ton only rising by 50%, that's something that calls our attention. I do understand that Ternium has those industrial contracts and that prices might take one quarter on average to flow through results. I was just trying to understand how that's going to shape out over the next coming quarters. On the other hand, you also have higher raw material costs, raw material cost inflation that should also start flowing through results as they also flow through inventory. Also on top of that, you also have Pesquería coming online, which is something that you guys also mentioned that should increase Ternium's profitability. Looking at all of those issues, I was just trying to understand how you guys are thinking about your EBITDA per ton levels over the coming quarters. Does it make sense for us to look at Ternium with an EBITDA per ton of above $400 over the coming quarters, maybe until the end of the year? I was just trying to see if you guys can help us in forecasting the numbers until the end of the year. My second question, just a quick one, as a follow-up of one of the previous ones. Maybe, Máximo, can you share with us how are Ternium's lead times in Mexico nowadays? If you can share with us how many days or months are you guys taking to actually deliver spot volumes, that would be great. Thank you. Our lead times for spot volume are similar to those in the U.S. today. For a hot roll, you are more than eight weeks or a little bit more, to be honest. For a spot volume, we have contracts, and we also have regular customers in a monthly base prices. Those have no problem, but if there is a spot volume that someone wants, it's a little bit more of eight weeks. Máximo, if you allow me, I will take the first part. Yeah. Okay. Hi, Caio. You put it very well in your question. There are some moving parts in trying to analyze which EBITDA per ton we will have in the coming quarter. Clearly, what we have guided is that the increase in prices that we will be seeing in the second and even in the third quarter will outpace the cost increase that we are seeing for specifically this coming quarter. Clearly, what we are guiding and what we are looking is for an EBITDA per ton increase during the second quarter. Moving forward, that will start to depend a little bit on the pricing scenario that you would like to put here. If we follow what Máximo commented and what we are seeing in the market is that in the second semester of the year, there will be some price adjustment, but we are not seeing signs at the moment that this price adjustment could reduce the price to levels that we saw last year. We are expecting a good level of pricing in the second semester. You're also right that we will continue to see some cost moving to our numbers even during the third quarter because prices of specifically slabs continue to increase and continue to go through our numbers. In the third quarter, with the expectation that we have, we should sustain a good level of EBITDA per ton. The fourth quarter clearly will depend a lot in the pricing scenario that you would see will return to more normalized level of pricing, even being a very good level of pricing. Cost then will take some time to reduce or to follow if the, I don't know, for example, of slabs follow the same trend that the price is. You could see some reduction there. In any case, we are seeing the scenario that we have today is that we will continue to see very good level of EBITDA per ton throughout the year. All right. Thank you so much. Your next question comes from the line of Carlos De Alba with Morgan Stanley. Thank you very much. Good morning, everyone. My question is coming back to the capital allocation. In the past, I don't think that we have seen Ternium pay a special dividend. As was elaborated before, the level of cash in your balance sheet is remarkable. Again, I don't think maybe we have seen that before, but it is quite good. Is there an implicit policy by which Ternium doesn't like to pay special dividends and just sticks to a regular, more or less sustainable dividend? Do you see that changing? On the same vein, when you talk, Máximo, about the potential markets where you could do either a greenfield project or a brownfield project, but mostly greenfield and/or M&A. Are you guys going to stick to the Americas? Are there specific regions within the Americas where you would like to focus, maybe getting more into the U.S. directly with more manufacturing capacity there, maybe creating capacity in the U.S.? Finally, coming back to Pesquería ramp up. Could you maybe repeat, I think you said 400,000 tons of incremental volumes in Mexico in the second half of the year. Could you confirm that number and maybe elaborate how do you see the progression of capacity utilization in the new hot rolled coil line in Pesquería in the coming quarters or years? Thank you. Yes. Thank you very much, Carlos. I'll start with the last one. It's more easy. Again, yes, I said 400,000 tons of incremental shipment because of the new hot strip mill. Remember, the hot strip mill is going to start our first coil June 1st, or probably a little bit earlier, but these are very complex equipment. The ramp-up curve, it's a long ramp-up curve. That's what we are seeing today. It's going to produce more, for sure. Remember that we were also importing products to fulfill all our needs. We were importing hot rolled coils from different countries in Mexico to fulfill the needs in the last quarter. It's going to replace that, and incrementally, we are going to sell 400,000 tons more in North America. This could be a little bit higher if the ramp-up curve is better. Remember also that, and one final comment, this hot strip mill is going to produce all the range of products that you can imagine. For doing that, we have to make all the certification process with the provider of the equipment. This takes a lot of time. It's not that the ramp-up curve only, it starts producing and you start producing. You have to make sure that you can produce all the range of products, and that takes a lot of time of trying and stopping the line and making adjustments so that finally the provider or the supplier of the equipment certifies all these range of products. I think with that, I answered that question, Carlos. Capital allocation and special dividends. We don't have a policy against that. I don't know. We like to be very consistent. If you see our track record, except in 2020 when I think we didn't pay dividend, and I think it was more than justified for what we know at that time. We want to continue with this pace, increasing or giving a sustainable dividend in the long term. You can see how we were moving in the different years. Potential markets, yes. Our market is the Americas. We are not thinking on going to other continents, to be honest. If this includes the U.S., yes, we have an operation in the U.S., and we had in the past analyzed some new facility in the U.S. As I said before, the three options, we always analyze the three options, and we are doing it now, but focused in the Americas, Carlos. All right. Excellent. Thank you very much, Máximo, for that. If I may just to squeeze another one. Yeah, sure. Great. Could you tell us what is more or less the level or the volume of the slabs that Ternium Brasil is now sending to Mexico? How much you expect for the year? In the last quarter, I think the level exactly was 700,000 tons. Yeah. That's first quarter of the year. It's going to be at least around that for the next quarters. Great. Thank you very much. Stay well. You're welcome, Carlos. You, too. Again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Alfonso Salazar with Scotiabank. Hello, and good day, Máximo and Pablo. The question I have is regarding Mexico, the Mexican market, and if you can elaborate more on your constructive view on Mexico beyond the rebound that we expect in the GDP this year. Consumption per capita, as you mentioned, is very low, but why should it increase in the future? What we read in the local press is how several reforms, like the energy reform, the hydrocarbons reform, the outsourcing reform, have been creating uncertainty, and investments have been declining for over two years now. Gross capital formation is well below potential. Why do you think this is going to change, and when? Also, if you can comment on the expected impact of the energy reform and the outsourcing reform in your results. Thank you. Perfect. Alfonso, very good questions. Let me start with the Energy Reform and the Labor Reform, which the main objective is to cancel the outsourcing. Energy Reform is not a very good reform. It was a very bad reform. To be honest, I don't think it's going to go through. As you know, there are more than 120, I don't know, but probably you know, 120 demands already put, and the law has been suspended. The Secretariat of Energy already suspended the law. I don't think it's going to go through. The rationale of the law, of course, is to give more balance or to give a little bit more to Pemex and to CFE, the state-owned company. I think that what people didn't realize in the government is that that is not very good for the competitors, and now the people are realizing that. Labor reform does not have any impact on us. To be honest, I think it's even going to have a small positive impact for us. We used to pay the PTU, the performance bonus, as the law requires, to all our employees. I'm not seeing any effect for us in this reform. Alfonso, with that, I answered the second question. I don't know if anything is left of the second question. No, I think that's fine. Thank you. Yes. Why are we confident in Mexico? Again, you are right that the numbers are not very good in what the government is doing in spending or helping after the effects of the pandemic. First of all, I think industrial base is going to continue growing. Again, reshoring is a thing that is happening. We are seeing it every day. It's happening in the U.S. and in Mexico. Most of these transshipments or these plants that were supplying the North American market from production base in China, they're not going to go all to the U.S. Mexico has a very strong competitive advantage, and some of them are coming here. Consumption, because of this, in the next year is going to grow, and it's going to continue growing, first. The other part is, Mexico has a very, I don't know if you say it like this in English, but has a very balanced financial situation. The debt of the country is very low compared to others, and the needs of infrastructure are very high. I know the government has concentrated in three projects only, but sometime in the next year or the following, they are going to realize that the needs of infrastructure in Mexico are huge, and that Mexico has the means to do it. Those two things are going to increase consumption in Mexico of steel, because all those things take a lot of steel. That's why we think Mexico is going to grow. Again, it's not going to be in the near future. I don't see next year a huge infrastructure build. In the next two or three years, Mexico has to make a huge infrastructure build as the U.S. is doing. I hope I answered the question, Alfonso. Yes. I think we can debate on how fast this is going to happen. Yes, thank you very much. You assure us. Yeah, the timing is the issue here. I think that in the reshoring, the timing is going to be much faster than what we are seeing. In the other one, it's a huge debate. Fair enough. Thank you very much, Máximo. Thank you. Our final question comes from the line of Fabian Graimann with Pictet Asset Management. Thank you very much. This is more of a request than a question, and a bit of a repeat. As a shareholder, what I struggle with and what I'm disappointed about is clear communication about capital allocation longer term. When I look at your best-in-class peers across emerging markets, for example, ArcelorMittal guys in Russia, there is a clear leverage target and a dividend linked to free cash flow after CapEx. I'm really not arguing against CapEx here, but the question is, why do we not have a clear message on, say, the holy trinity of leverage, CapEx, and cash returns? Just to state my preferences as a shareholder, we'd clearly like a dividend policy linked to free cash flow and a clear leverage target. Yeah, that's it. I would now like to- Hey, Pablo, you're on mute. Yeah. Sorry. I think- Hi, Fabian. Thanks for the question. Let me try to answer your question. There are two different things in your question. The first one is leverage target, something we do not believe in. Let me explain the reason why. We, as a company in the sector where we are with the volatility that the sector has, we believe in always having or try to have a strong financial position in order to, first of all, among other things, be able to sustain our dividend policy. Second, to be able to take advantage of opportunities if they appear in the market. Even during crisis years, like for example, last year or in many other years that happened in the past, we concentrate in our own business and developing our own business and our own plans without the need to do some restructuring or issuance of capital or different instrument that you have to have when you have a difficult time. That's why we believe in having a strong financial position. Probably, we can argue, and you could be right, that the ones that we have at this moment is too strong, but this is why we believe in having this without forgetting, first of all, as we said, paying an increasing dividend, fulfilling the needs of our CapEx plans, and being always ready to have or to take opportunities if we can. A clear example of that was our last acquisition. Back in 2017, if you remember, when we were analyzing the acquisition of our facility, many other companies in our sector were doing capital issuance or restructuring their debt, and we were having the means to move forward with this acquisition that has been proved to be a great acquisition for Ternium. The second point, which is the one of a clear dividend policy. You're right, it's something that we do not have a formal written dividend policy. What we have is clearly a conduct, a track record, a way of analyzing the way we pay our dividends, and sustaining and increasing, and at least paying a portion of the net income that we generate. We could improve in that sense. That is what we are taking from your question and as the shareholders of the company. What is clear is that we have been paying a significant portion of our net income every year, and the track record that we have is of increasing the dividend payment, as much as we can year after year. Probably is not the answer that you were looking for, but it's what we are doing as a company, and we take your concern to discuss internally, because always it's good to hear what our shareholders are saying. Thank you for that. Maybe just a quick follow-up on CapEx. There was talk about expanding capacity at Pesquería. Could you buy, I think, 400,000 tons? Can you comment on that and sort of the? Yeah. When and how the decision will be made and what that would cost? No, Fabian, I don't think You mean in this conference call, the comment of this $400,000? No. I thought separately that there was a potential to expand the nameplate capacity. No. Is that guess right? No, I don't know if we make any comments to expand the capacity in Pesquería. Although you know that Pesquería is a site that has a lot of potential. One of the things that we are analyzing is clearly the organic growth in Mexico. If this go through, that organic growth should be in Pesquería. When should we have an update here, and what could the expansion project be? There are different sides. Clearly, we comment one of this is, you know that in 2027, the rule of origins of USMCA change, and in order to be considered local, you have to have melted and poured in the region for the automotive sector. As we said several times, in 2027, we need to be compliant with USMCA. One of the options is to invest in Pesqueria to be compliant. There are other options. They are all under analysis. This is one thing that we can produce in Pesqueria. Got it. Okay. Sorry, maybe very last question just on what I really struggle to put in my model, and I think what the software struggles a bit as well with is, how will that impact be split between a total uplift in volume and an increase in EBITDA, given that it's a downstream integration. Can you guide how much you think, say through this cycle, EBITDA per ton should lift given this controlling expansion growth? Yes. I think in another question, I think there was the Carlos or Caio question that I tried to explain how we see this moving through our numbers. Clearly, as we explained during the call, we are working at a high capacity utilization, so that's why we cannot increase that much the shipments as you saw during the last quarter. Next quarter, we are guiding again for a sustained level of shipments. That's because we don't have that much product to keep selling to the market. The increase that Máximo mentioned, and that we have been commenting, it is clearly an increase of volume that we will be doing into the second quarter to add to the level that we are having today. If we are at a level of 3.1 million tons in a quarter with that, let's say it will not be the case, but let's say that evenly distributed in every quarter, we can say that we will move in the next semester to 3.3 million tons. We also are guiding that with the current level of prices, we are expecting to increase a little bit the EBITDA margin or the EBITDA per ton in the second and even in the third quarter. Will depend a little bit on the pricing scenario that you want to utilize in your model to know exactly or to have an idea which will be the margins over the year. All in all, the message is Pesqueria will allow us to increase shipments starting next semester. At least in the coming couple of quarters, we will be able to increase or sustain the margin that we are producing at the moment. Got it. Okay. Thank you very much. Thank you, Fabian. I would now like to turn the conference over to Ternium's CEO for final remarks. All right. Thank you all again very much for your interest in our company. I hope this call has been useful. Please remain safe and healthy, and see you all in three months in our next conference call. Thank you very much. This does conclude today's conference call. Thank you for your participation. You may now disconnect.