Ladies and gentlemen, thank you for standing by, and welcome to the Ternium third quarter 2022 earnings 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. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Sebastián Martí, you may begin your conference. Good morning. Thank you for joining us today. My name is Sebastián Martí, and I am Ternium's Global Investor Relations and Compliance Senior Director. Ternium released today's financial results for the third quarter and first nine months of 2022. 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 2 in today's webcast presentation. You will also find any reference to non-IFRS financial measures reconciled to the most directly comparable IFRS measures in the press release issued this morning. With that, I'll turn the call over to Mr. Vedoya. Thank you, Sebastián. Good morning, and thank you all for participating in our conference call today. Ternium reported a good set of results for the third quarter, with adjusted EBITDA of $679 million on a margin of more than $200 per ton. This is equivalent to adjusted EBITDA margin of 16% of sales, a level that is within Ternium's historical margin range. On top of this, we had a very strong cash generation in the quarter. Cash from operations was more than $1 billion, aided by a significant working capital release. Last year, we transitioned with an advance in November and a final payment in May. I believe this change in our dividend payment schedule was a positive development that underscores our long-term commitment to the return to our shareholders. In this line, Ternium's board of directors announced today an interim dividend payment of $0.90 per ADS, equivalent to $177 million that will be paid on November 17. This represents an increase of $0.10 per ADS compared to last year interim dividend payment. Looking ahead, we are facing a complex global economic situation with uncertainty driven by policy and geopolitics like monetary tightening, the war in Ukraine, and China's economic slowdown. Rising interest rates combined with high inflation are undermining economic confidence and slowing down investment as well as household spending. Focusing on the U.S., according to the World Steel Association Short Range Outlook that was just released, steel demand is not expected to get into negative territory despite a softening economy. Construction activity in the private sector will decrease due to a downturn in the housing market. Advancing this, the non-residential sector is still strong, and an increase in infrastructure investments due to the infrastructure law and rising investment in the energy sector will support growth in steel demand. In addition, the automotive sector is expected to maintain a positive momentum on the back of pent-up demand and the gradual easing of supply chain constraints. In Mexico, our expectations are very similar to those in the U.S., as both markets are very related. The construction sector recovery has been slow and as a result, activity in this sector is expected to remain below pre-pandemic levels in 2023. In addition, the manufacturing sector, which has performed better since the pandemic, also faces a weakening output in relative industries like household appliances and small HVAC. On the other hand, like in the U.S., the automotive sector will still see growth, thanks to an easing of supply constraints. It is worth noting that even though activity in the North American region is slowing down, we are not expecting Ternium shipments in Mexico to decline. There are several forces at work that should help us sustain and probably increase our shipments in the market during 2023. Nearshoring of manufacturing capacity is a development that is gaining momentum as we speak. There has been a spike in investment announcements for new manufacturing capacity in the north of Mexico, the majority of which has been made by companies that are new to the region. As a result of this, construction activity related to industrial facilities has been strongly increasing there. In the future, many of these new facilities would also turn into steel-consuming customers for us. Another aspect of our activity in Mexico is our progress with the certification of new products. As we advance with the ramp up of the new hot strip mill in Pesquería, the capabilities provided by our new R&D center in this facility are significantly speeding up the certification of new products. This has enabled us to broaden our product range, and as a result, we are booking new supply contracts for 2023 that will help us grow our shipments gradually throughout next year. Over the last 10 years, we have invested in our facility to expand and enhance our product offering. This new capacity puts us in a unique competitive position in the Mexican market to take advantage of these new opportunities, enable Ternium to increase its market share against imports and other local producers. Turning now to Argentina, steel demand remain stable as it has been for more than a year now. The construction sector is healthy, and industries like household appliances, automotive, and energy are working at good levels. Although we expect stable shipments in this market for the fourth quarter, we need to continue making a warning regarding the unstable macro situation in the country. Let me now share some thoughts on safety. Two weeks ago, one of our employees was fatally injured in our Rio de Janeiro facility in Brazil. We are deeply moved by this development, and our thoughts reside with his family and friends. We hadn't had a fatality incident for more than four years. I traveled to Brazil right after I heard the news and worked with our team there to understand what happened. We will continue investigating the causes of this tragic event, and we are set to learn from our findings. Let me now make a brief note about our mining activity in the south of Mexico and the effects of September's earthquake in our facility and surrounding communities. On September 19, there was a 7.7 intensity earthquake in Michoacán, which center was about 120 kilometers from our mining facilities. After the event, we had our tailing dams, both from Ternium and Peña Colorada, inspected twice by a third-party expert, and their findings were that the dams are in perfect condition. Unfortunately, the situation was not the same for some of our surrounding communities, where infrastructure was significantly affected. As a result, we have created a fund to help rebuild some schools and a medical clinic in these remote communities. To wrap up my prepared remarks, I would like to say that we are positive regarding our shipment levels for the following quarters, even in a softening macroeconomic environment as the one expected. We are confident our efforts to increase Ternium competitiveness and expand its product range will help us sustain and gradually increase shipments during 2023, mainly by substituting imports in Mexican market that serves the manufacturing sector. With this, I'll let Pablo go ahead with the analysis of our results in the third quarter. Thank you very much. Thanks, Máximo, and good morning to everybody, and thank you again for your participation today. Let's move to the webcast presentation to page three, and you will see that over the last few quarters, we have begun our transition to a more sustainable level of profitability, as we have already expected. Adjusted EBITDA in the third quarter was $679 million on the margin of $229 per ton or 16%. The sequential decrease in adjusted EBITDA in the third quarter was mainly the result of lower steel prices and higher cost of sales. As we anticipated in last quarter's call, EBITDA margin in the fourth quarter will continue to decline, reaching a level below the company's typical range before reversing this trend in the first quarter of 2023. As a result of the first-in, first-out accounting, our financials in the fourth quarter will have a temporary mismatch between prices and costs. In a way reflecting a price level of one point in time with costs that happened way more in the past. In the fourth quarter, steel prices under quarterly contract in Mexico will reset at lower levels than they did in the third quarter. Cost per ton will not go with that, this decrease. As it will continue to reflect the gradual flow through the company's inventories of relatively high-cost raw material, which were purchased during the first half of the year when Russia's invasion of Ukraine disrupted steel markets. Raw material purchased more recently at lower price will be reflected in our cost per ton from the first quarter of 2023 and on. Net income in the third quarter fell to $220 million, equivalent to earnings per ADS of $0.78. This includes a $0.57 per ADS loss related to a write-down of Ternium's investment in Usiminas. We impaired our investment in Usiminas after the performance of an impairment test at the end of September. The main changes to the company's previous estimation of Usiminas' value in use, which led to this impairment, were related to the lower production availability of Usiminas' core facilities, which need further capital investment along with the current global macroeconomic situation. Net income in the third quarter was affected by the loss of $95 million due to the adjustment of the fair value of certain Argentine securities collected by Ternium as dividend income from its subsidiary, Ternium Argentina. Turning now to page four of the presentation, you can see that steel shipments increased in Mexico in the third quarter of this year compared to the second quarter and on a year-over-year basis, reaching 1.7 million tons. Looking forward, shipments in Mexico are expected to increase slightly again in the fourth quarter, despite a seasonal year-end slowdown in demand as a result of an improvement in Ternium's market share in the region and restocking in the commercial steel market. In the southern region, shipments decreased slightly sequentially. In Argentina, demand for steel products remained relatively stable, but the macro situation, as already mentioned by Máximo, continues to be quite uncertain. Shipments in the other market region in the third quarter were slightly below the levels achieved in the second quarter. As you can see in the top right chart, the volume of slabs shipped to third parties remained at relatively low levels in the period, reflecting a high level of integration of Ternium's slab facility in Brazil within the company's industrial system. Turning now to page five, you can see that on a consolidated basis, Ternium's steel shipments were 3 million tons in the third quarter, very similar to the volume achieved in the previous two quarters. Compared to the third quarter of last year, consolidated steel shipments decreased in the third quarter, reflecting a decrease in the volume of slabs shipped to third parties, partially offset by higher finished steel shipments. Moving to realized steel prices, revenue per ton in the third quarter declined sequentially and on a year-over-year basis as expected. Realized steel prices decreased in Mexico, our revenue per ton this period, reflecting the quarterly reset of contract prices at lower levels and a downward trend in market prices. As I mentioned earlier, we anticipate a further decrease in steel prices in Mexico in the fourth quarter as contract price continues to reset at lower levels, reflecting with a lag the downward trend of steel market prices over the last six months through September. Now on page six, let's review the main drivers behind the decrease of adjusted EBITDA and net income in the third quarter. The sequential decrease was mainly due to the result of lower realized steel prices in Mexico, as already discussed, and higher steel costs in all sectors. The increase in costs in the third quarter reflected the gradual flow through inventories of high-priced steel slabs and raw material purchased during the first part of the year. Regarding net income, at the bottom chart, we have the sequential decrease in operating income and to a lesser extent, the two items I mentioned at the beginning of the call, the $120 million impairment of our investment in Usiminas and the $95 million decrease in the fair value of securities received as dividend income from Ternium Argentina. Let's now review the performance of our cash flow and balance sheet on page 7. Cash flow from operations in the third quarter was $1 billion, including a working capital release of $548 million. Free cash flow in the third quarter of the year was almost $900 million after CapEx of $136 million that drove our net cash position to $1.8 billion by the end of September. To finalize the presentation, let's review now on page 8 our cash flow performance on a year-end basis. Cash from operations in the first nine months of 2022 was $1.7 billion, slightly above the level achieved in the prior year's same period. Looking forward, we expect Ternium will continue generating significant cash in the fourth quarter based on a CapEx estimated for the year of close to $600 million and further working capital release after significant working capital investment last year, as you can see in the top right chart. Moving to the chart of dividends in the bottom of the page, we can see the $0.90 per ADS interim dividend that the board of directors announced early today. As already mentioned, 10 cents per ADS higher than the interim dividend paid last year. We expect Ternium board of directors to announce the yearly dividend corresponding to 2022 in February 2023, when they meet to review the annual accounts. Looking forward, the company will continue striving to sustain, and if possible, improve shareholders' returns. Okay, I will stop here so that we can start taking your questions. Thank you very much for your time and attention. Please, operator, let's proceed with the Q&A session. At this time, if you would like to ask a question, please press star followed by 1 on your telephone keypad. Your first question comes from Caio Greiner with BTG Pactual. Your line is open. Hello, good morning, everyone. Two questions here. The first one on your working capital release. In 2021 you guys had $2.6 billion in working capital investment. That's from your presentation. So far you only reversed a small part of that. My question is, are you guys expected to continue posting positive contributions from working capital in the next quarters? I mean, should we expect a full reversion of those $2.6 billion ahead? Or did something change that might lead you guys to claim only a part of that or even add to that going forward? My second question here on capital allocation. I know that's pretty much the same question we have been asking for a while, but the truth is that free cash flow generation continues to be very robust, maybe even more than expected a while ago. You guys continue to pile up cash, I mean, $1.8 billion already in net cash. My question is, what can you guys do in the short term? I mean, even with the projects that you guys have already announced, that you guys are expected to announce going forward, I mean, the CapEx outflow is only supposed to take a few years. It's gonna outflow in quite some time. You guys going forward, I mean, can even finance that with free cash flow generation, even if the first part of my question is true with working capital being reversed. If that happens, free cash flow generation is still gonna continue to be strong, still gonna continue to be robust. I mean, despite dividends rising, it won't materially change that. The question is, what can you guys do in the short term in order to deal with that amount of net cash that you guys have been piling up? I mean, can you guys announce a buyback? I mean, extraordinary dividends. I know you guys have mentioned in the past that it's not really an option that the board is favorable of. Maybe an M&A that you guys have been analyzing. What can you guys do regarding that? Thank you very much. Thank you very much, Caio. I would let Pablo answer the first question, and then I try to answer the second one. Pablo? Okay. You are, Caio, very right. We have generated because of the significant increase in prices of different raw material, a significant level on working capital that we have starting to reduce. As you mentioned, it's not the full amount that we have already reduced, but as I mentioned in our initial remarks, we are expecting to continue to do that during the fourth quarter and also entering into 2023. You are completely right. Will we continue reducing working capital? Of course. With this, will depend on the prices of the different products and raw material that we purchase. It's at least a significant portion of the build up of working capital we have in the past will be recovered. Thank you, Pablo. The second about capital allocation, Caio. It's true we have a very strong financial position. That's true. To be honest, given the uncertainty, I think the world is coming or it's going to, we feel a little bit comfortable having this strong position. Nevertheless, as you know, we have a very important investment to be made mainly in Mexico with all the investments we already announced and the ones that haven't been announced, but we have been very clear that we are committed to expand our steel shop capabilities to be USMCA compliant by 2027. That's a huge investment we are making. We are, I mean, giving a high yield of dividend as you can see because of this interim dividend we are having. Buyback is not on the table, to be honest, as we have discussed in the past. I think that M&As, I never said no. We analyze and you know that we analyze different opportunities, but we don't have anything to inform today. There are things that are in the table, and we are going to look for opportunities. Again, given the uncertainty that we are expecting the world to have, I think it's good to be in this position. We are very comfortable in this position, giving a huge amount of dividend. No, but because if you calculate the dividend yield, well, we cannot until February, but it's gonna be very high. Mm-hmm. Okay. Thank you very much, gentlemen. You're welcome, Caio. Your next question comes from Jonathan Brandt with HSBC. Your line is open. Hi. Good morning, gentlemen. Thanks for taking my questions. Máximo, I first wanted to ask you about steel prices in 2023 and then sort of what your view is there. Obviously there's concern about, you know, the global economy and how much slowdown we'll see, you know, higher interest rates, higher inflation, you know, zero COVID in China and things like that. I guess, you know, what are your expectations for steel prices, particularly in the U.S. and Mexico, as we head into 2023? Do you think we'll potentially see some more downside to the current spot prices? My second question just relates to the cost pressures that you're seeing. I understand they're temporary. Could you just give us a little bit more detail? What is it mostly, you know, the slabs that you're buying and iron ore prices, or iron ore costs that are, you know, that had the impact on the margins this quarter? I don't know if there's a way to quantify it, but if you sort of take away the timing differences, right? If you look at sort of where spot slab is and then spot iron ore, is there a way to quantify what your margins would have been, if there wasn't this sort of timing impact? Thank you. Thank you very much, John. I ask Pablo to start with the second one because I think it's much shorter, and then I try to make a summary of the first one because it's very broad, the prices issue, I think. Okay. Okay, Máximo. I will be short, no worry. John, how are you? You're right, when you are making your question that clearly what we have is a mismatch between the price of our product and the timing of reflecting the cost of our product in our financial statement. The big issue here is that when you have a trend of prices going down, you will see what we are reflecting, which is a reduction in the margins. At the moment you have the other, the prices moving the other way around, meaning prices going up, you will have higher margin than expected. To answer clearly your question, and it's something that we try to pass the message during the opening remarks, both Máximo and myself, is that what we are reflecting today in our cost is the prices of slabs and iron ore and coal that we saw basically in the second quarter of this year or even in the first quarter of this year, where you saw prices of slabs reaching levels of, in some cases, $1,000 per ton, or prices of coal that reached $600 per ton. You are seeing that these prices today are way below these levels. Also, iron ore prices are way below the prices that we saw in recent quarters. That's why we are very comfortable to say, I'm trying to go to a specific number, that even though that next quarter we will be showing a level, of course, much higher than the real one or the replacement cost of these raw materials, we are expecting to go back to normalized level entering into next year. That's why we said that we will probably go in the fourth quarter to a margin below the normal range of Ternium, and we will return to at least to that level entering into first year, so into the first part of the year. There is where this mismatch is coming from. The second semester of this year, both the third quarter and the fourth, will be having this negative impact, and then this should be over entering into the first part of the year. That's why for us, the numbers of Ternium continues to be relatively good. If you take on average what we are presenting for 2022, you will see that the EBITDA we are generating is pretty solid. Clearly, because of the price levels, we are expecting to see or reflect exactly the same, but we should be reflecting a decent and a good level of profitability entering into 2023. Thank you. Thank you, Pablo. I try to be short also, although I don't know if I'm gonna be able. Prices 2023, clearly I mean, it's clear that steel prices in the North American region continue to decrease, reaching somehow a level of prices that were below our expectations. I still think that the base price or the normal price, the normalized price, is gonna be higher, as I said in several conference calls, of course, between the range between $800, $900, even $1,000. That this is a new range of steel prices going forward. In the short term, clearly what is happening in the world is affecting the steel price in North America. How much is something that we have to still analyze. I think there are good news, or there are some bad news, but there is a lot of good news. Clearly, I mean, prices are going to be a reflection of what happened in the economy in the next quarters. I think that some of the economies in the world are going to have trouble. No doubt, Europe is gonna be much more harder impact than the Americas. The slowdown in China, it doesn't seem that it's going to end, in the very, very short range. I am confident that the recession in the Americas, as I said, is not going to be as hard, if there is a recession, as in other part of the world. Clearly, prices in the short term are going to be a reflection of how bad or how long or how hard this recession is. Again, our expectation is that it's not going to be as hard as in some other parts. The good news is that we are really seeing a change in the dynamics of the market, and we are seeing new customers and old customers we have today, investing heavily in the region. Nearshoring, reshoring, now there's a new term I heard the other day, friendshoring. I mean, this is happening. If you take the Mexican market, for example, we have a very small, so it doesn't make any sense, the numbers, but a very small division that make construction or industrial manufacturing buildings. We are full for the next seven months, and we have quotation for the next two years and a half or two years. These are industrial manufacturers that are coming to Mexico, that are coming to the U.S. to be more, I mean, to put more facilities. The facility consumes steel, of course, and we are selling a lot of that steel. The customers in the future, much of them are going to consume also steel. You are seeing this trend coming. I think that for the medium long term, there is a big opportunity for us, not only in volume, but to have a more stable prices. That's the good news. Clearly, what will happen with the supposed recession in North America is going to impact the short-term outlook of the prices. If it's hard, it's gonna be a little bit lower. I hope to give you a summary of this, Jonathan Brandt. Yeah. It's not an easy question, so I do appreciate your thoughts. Thank you. Your next question comes from Carlos de Alba with Morgan Stanley. Your line is open. Yeah. Thank you. Good morning. Coming back to the CapEx and the cash generation, can we talk about maybe the timing, the potential timing of an announcement for the new electrical furnace in North America, and whether or not this might negatively impact the dividend per ADS or per share that the company pays in the coming years? Well, thank you, Carlos. The second part, no is the answer. Clearly no. I mean, it's a huge investment, but I think Ternium is more than capable of doing. The first part of the question is the timing. I mean, we can be discussing this, and we are working very hard on this, so we in the engineering process. To be honest, this, I mean, we have to have the facility running by 2027. That's the deadline of the new USMCA rule of origins. We have time, and this uncertainty of the economy of the world, to be honest, it's giving us some time to think even harder what is the best technology to use, and that's the discussion we are having, and how we can be more competitive in both sense, competitive in the production cost and in the CapEx. We are in that process. We don't have exact timing, but it should be soon. All right. Thank you very much. My second question is related to the risk of potential imports into the Mexican market, mostly from North America, from the U.S., but mostly from other places, you know. The situation in Europe on the demand side is complicated, and they're shutting down capacity as well. You know, prices are low, demand is weak, and prices in Asia are also quite low. How do you see the risk of imports into the Mexican market? The risk is always there. I think if you see, especially in flat products, which is where we can grow, we are at full capacity in long products. Speaking of flat products, if you see the last 12 months, there has been a steady decline in the amount of imports coming to Mexico. Last month was September. The last information in September. I think that is gonna continue. Why? Because we are very eager to get that market share. We said that when we put our hot mill running. I think that we are gaining more contracts, and we are going through that import. There is a risk, yes. I don't think there is a risk of a continuous export from European or Asian countries. There is a risk of a spot export, yes. To be honest, today North America is very competitive in steel, so I don't think they have the competitiveness as going forward in the long run. Some spot operation probably at a substantial low level. The other thing is remember that in Mexico and in the U.S., you have Section 232, which is very good. In Mexico, you also have a kind of Section 232, so there's some kind of level of. It's not protection, but helping when these countries make this dumping of steel to the North American region. That's a second part that make it a little bit more difficult. The third, you ask about the U.S. Probably, yes, our bigger competitor today is the U.S. Again, we think having the flexibility we have in our facilities and our cost structure, that we are able to compete with them very good. I think imports are going to continue, but the trend of the last 12 months is a trend that is going to continue in Mexico. All right. Thank you very much. You're welcome. The next question comes from Thiago Lofiego with Bradesco. Your line is open. Thank you. Good morning, gentlemen. Máximo, actually one question on my side, on the demand side in Mexico. You mentioned construction activity in Mexico is slow. Can you give us more color on what you're seeing, maybe breaking it down by properties, residential, commercial, infrastructure. If you could give us more color, that would be very helpful. Yeah, Thiago, for sure. I mean, construction in the residential market is the one that is down in Mexico. It's not happening as in the same timing as in the U.S. I think in the U.S. residential housing is also starting to decline, but this is very recently. In Mexico, it has been for quite some time already, this going down for residential. Because of that, some of the industries that sells also to the residential market, I'm talking about home appliances, for example, and that sells to both, to Mexico and the U.S., export material to the U.S., those industries are not performing very well. On the other hand, there is industries that are performing better. Construction in the non-residential, it's very high. As I told you, our example of our metal building facility, which again is very small, so it doesn't make the numbers in Ternium. That's huge to have more than two years of quotation in non-residential construction. It's never happened. There's no good statistic also in Mexico, where you can say how many non-residential construction there are. If you take a survey that JLL makes, that it's a broker, an American broker, they made a survey about how many million square meters are constructed of industrial infrastructure. I mean, it continues growing. This quarter, the first semester of 2022, they constructed the same amount as all the amount that was constructed last year in the first semester. The occupation rate of this industrial, so more. A lot of these warehouses are actually rented. That usually was about 6-7%. Today, it's almost 3%. There is a huge investment in these industrial parks, let's put it that way, Thiago, that offsets it. It's kind of balancing the other one. Another thing that is balancing is other industries. Automotive industry, again, is not perfect, it's not high enough as we thought it would be. They are still having some problems in the supply chain with some stoppage of different plants, but the demand they have is still very big. I mean, you cannot get a new car in Mexico. I think in the U.S. inventories are also very low. I think that they are going to continue trying to increase a little bit capacity. Another companies, especially companies that works in equipment, are also very high in demand. It's a balance. Mm-hmm? I hope I answered the question, Thiago. Yeah. You did, Máximo. Just a very quick follow-up. On the auto- Yeah. The auto sector, right? Is this more of an expectation that things will normalize and then auto production will ramp up, or you're already seeing that? Because I get the demand side of the equation, which is definitely there, you know, you know, there is demand there, but is there enough production already happening? Or do you think there's more? Uh. You know, coming in the coming months? Let me answer with my thoughts, or at least what is happening in Mexico. I think most of the automakers have in their plans to produce much more. There are shortages of some kinds of semiconductors or other pieces that don't allow them to produce at the pace they want to produce. That is happening. From what we heard from them, it is easing, but it's not easing at the pace we thought it was going to be easing these restrictions. I cannot tell you a straight answer saying they're gonna produce 10% more or 15% more. They're gonna produce the same or more, for sure. But how much is that? We don't have exactly the number because it changed very rapidly. I mean, the stoppages are announced for one week for the other one. That's what is happening there. Got it. Very last one. Balancing everything out here in terms of the, you know, steel demand in Mexico, your best guess is for flattish volumes for next year. Is that right? Just confirming that. Yeah, it's an increase. Again, if you see the Short Range Outlook, I think it was an increase of 2 or 3% of the demand in Mexico, which I think it's correct to think that way. Okay. All right. Actually a small increase. Apparent demand. No, it's not a big increase. Again, this is a balance, and it depends a lot. I mean, we are being conservative saying that there is going to be a recession. No? That's our base case scenario in World Steel. And so we are being conservative. Nevertheless, it is an increase in consumption, in steel consumption. Very clear. Thank you, Máximo. Mm-hmm. Your next question comes from Alfonso Salazar with Scotiabank. Your line is open. Yes, thank you, and good day, everyone. The question that I have is regarding global steel trade. What are your expectations, and not only for 2023, but in the long term. The question is regarding the problem of overcapacity and the fact that there is more capacity being built in North America. There could be excess capacity in China because of all the challenges that the country is facing. Just trying to understand or want to hear your thoughts about what's gonna happen four, five years from now against the backdrop of lower demand in China, increased demand in the U.S., but a big difference in prices globally. Do you expect more protectionism coming later in the decade? Also to what extent USMCA protection warrants the investment that you are making in Mexico? Yeah. Alfonso, it's a very good question, and I try to make the best effort to answer it. I think that global steel trade is going at a trend that is going to decrease in the future. We are seeing all this. I mean, today, there's more regionalization or whatever you wanna call it. I think that it's very clear that the Atlantic or whatever you want to call the Atlantic Alliance is moving one way and China is moving another one. Of course, there's overcapacity in China. Of course, that overcapacity has to be dealt with. We have been working or we have been very advocate in that China has to work for that overcapacity. I think that, as I said before, nearshoring is something that is happening, and so that demand, that steel consumption is going to come to the region. North America first, but there are also other parts, Brazil, for example, that will probably benefit from this trend also. I think that in a sense, our operations, which are, I mean, we are very well balanced or very well positioned where we are producing steel, because I think that the places who are going to benefit from this trend, that is something that is gonna happen, and it will continue for the next several years. I am not concerned about overcapacity in the U.S. I think, yes, there are new plants being built. They are gonna compete with us. To be honest, there's a lot of imports in the U.S., more than 25 million tons. Second, I mean, there are also, I mean, some old facilities that in some time in the next five years, some of them has to be shut down. They're not very competitive. I'm not worried about that. I think this trend is helping us as Ternium, as where we are positioning for the next five years. I hope I answered the question with that, Alfonso. Yeah. Yeah, that's very helpful. Thank you. Your next question comes from the line of Timna Tanners with Wolfe Research. Your line is open. Hey, good morning, Máximo, Pablo. Hope you're doing well. We are. I hope you are doing well too. Thanks. Great. Hey, a couple questions. One is, I know you just mentioned, flat volumes in Mexico, but regarding Ternium's volumes, wanted to get a little bit more color thinking ahead about both the mix and your ability to ramp up further, obviously of spare capacity we've talked about in the past. You know, with the qualification process that you're going through or said you were going through ahead, like, how do we think about the mix improving and how do we think about potentially taking more share from import? In light of AHMSA ramping up and in light of just the competitive nature of the broader market. Perfect. Let me try to answer that, Timna, because it's a good question. The market is in Mexico. There are some good and some bad news. The market, as World Steel still puts it in the SRO, is not gonna grow a lot. We are confident that we are going to grow more volume in the flat products. The ramp-up of the hot-strip mill in Pesquería is doing very well. On October, it made 317,000 tons, which was a record. I know that we have the Churubusco mill running at lower capacity, but we have that to increase capacity as we are fighting these imports. The imports in Mexico of flat products are around 450,000 tons a month. There's a lot of imports in Mexico that, of course, most of those imports are industrial customers, so that's that mix. Most of those industrial customers needs to go through our certification process that takes time. We are seeing now new contracts that we are winning for 2023. We are discussing new contracts of products that we weren't able to do. Regarding the other producers in Mexico, I think the two of them are in a different situation. I don't want to talk a lot about competitors, but one of those are increasing production and the other one is in the other side. We don't see a lot of change there. Okay, super. The other questions I had, one is regarding how to think about EBITDA per ton and margins going forward. Clearly, Q3 hit by higher costs as prices fall. Even as costs fall, you should see more prices declining on a lag, right? Into the first quarter from the way that you price your product on a lag on quarterly contracts. Is this a good, you know, run rate margin, do you think, given that both prices and costs still have to decline into the next several quarters? Or how do you think about, you know, the recent run rate relative to, you know, how? You know, obviously out-earning perhaps a bit last year, maybe is this a good run rate, or do you think that there's potential to see margin improvement from third quarter? Hi, Timna, this is Pablo. Let me take this question. Clearly what you saw during the third quarter, which is margin of 16%, is something that we are expecting to see a reaction over that in the fourth quarter because of the reasons that we have explained. Your question is going more to a more sustainable level of margins. That is what we are expecting to see in the coming quarters starting next year, starting the first quarter and moving to the second quarter to stabilize at the new level of prices. Taking into consideration the picture Máximo depicted on the view on prices, I will follow, of course, on that view. If that's the case, with the reduction in the level of cost that we will be seeing entering into the first or the second quarter, with significant reduction in the input cost, we are expecting to return to normalized level of EBITDA margins entering into. After these two quarters of the first of the year, we should be there and sustaining that level. When I mean historical levels, I mean between 15%-20% EBITDA margins. We were at the low part of this range during the third quarter. We will not be there during the fourth quarter, and we will start recovering that level entering into the first quarter and moving into the second, in the second quarter, and then sustain that during the rest of the year. Of course, this will be subject to changes in the market, but this is the goal that we have. This will be helped by all the things that Máximo also mentioned, which is the new customers of new products and the substitution of imports. That's our working scenario, and that's what we are seeing. Oh, that's super helpful. Thanks. Then the last one for me, if I could, was just, you know, in the past you've talked about some thoughts on CapEx heading into 2023, in particular, $1 billion investment in finishing lines. I was just trying to get a sense of how much we might expect to see that increase year-over-year, and if those projects are still on track. Thanks again. Yes, we are still expecting $1 billion in 2023. Probably 2024 is gonna be a little bit higher than that with all the things that we have been discussing. Got it. Okay. Yeah. Thanks again. Thank you, Timna. You're welcome. There are no further questions. I'd like to turn the call back to CEO Máximo Vedoya for closing remarks. Okay. Thank you very much all for your participation today. As always, please contact us for any suggestion or additional question. Have a very good day. This concludes today's conference call. You may now disconnect.