Greetings. I'm CSO of POSCO Holdings. My name is Jeong Kiseop. We have closed third quarter revenues and operating profits at levels very similar to the second quarter. However, steel price fell slightly deeper than we anticipated. In rechargeable battery materials, key raw materials prices continue to decline, creating a challenging business environment. These challenges notwithstanding, we try to stretch profits as much as possible, especially in steel, WTP products, our high-end steel products that make up 32% of our sales, helped to secure a level of profit margin that sustained POSCO's operating profit. In battery materials, lithium hydroxide prices falling below $10,000 per ton. Rapid price decline is exacerbated by the reverse lag created by the time difference between when they are bought and sold. This creates added challenge and disadvantage. In addition, our brine and lithium production plants lined up to complete construct. Anytime a plant comes online, they entail initial investment and operation cost that add to the overall burden of expenditures. However, some have recently been commissioned. The fact that these new plants have been completed and initial pilot operation have gone into effect without a hitch gives us reason to be proud that our lithium production technology and facilities have arrived at commercial scale. Before I give you -- give the floor to the Head of IR for more detail on our earnings, I'd like to take a moment to strategic alliance struck between POSCO Group and JSW Group, which released yesterday. In your deck it pertains to slides 5 and 8. With JSW Group in India, POSCO Group has signed an MOU to cooperate not only in building an integrated steel mill in India, but also to extend that collaboration into rechargeable battery materials and renewable energy sectors. In steel, we're delving into the…

I'd like to discuss the consolidated results for the third quarter. Please go to Page 4 of the presentation deck. Overall, the third quarter ended at a similar level to second quarter. We recorded KRW18.321 trillion for the sales and operating income, KRW743 billion. We made a lot of [indiscernible], a lot of efforts, but because of rather sluggish performance in the steel and rechargeable batteries and the initial cost of subsidiaries being reflected that turned out to be a factor. For the third quarter, we have sales and operating income for the third quarter at KRW18.321 trillion and KRW743 billion. And that's EBITDA of KRW1.75 billion in the third quarter. And we have -- now going into the sectorial outcome. Please go to the steel side. On the operating profit, that was KRW466 billion, and that's down by KRW31 billion from the previous quarter. POSCO posted an improvement of KRW20 billion, recording KRW438 billion, but because of the deterioration in the profitability of the Chinese subsidies, including Jhanjiangang, we have seen the sluggish steel demand in China resulting to the results. Infrastructure segment posted operating profit of KRW449 billion, up KRW20 billion and the profit improved at POSCO International due to high power generation profit. For the Future M, because of the lower anode active material sales volume and losses in the cathode material, the profit shrunk and the POSCO Pillar lithium solution began to reflect the initial cost of production entities, including ramp-up of the POSCO [indiscernible] lithium solution and the completion of the POSCO Argentina. Next, I'd like to share with you the major activities in the third quarter. Mr. [Chung] spoke about the strategic alliance between POSCO and the JWS Group in India and our successful entry into the Indian market. Please go to Page 9…

[Operator Instructions] The first question is from Hyundai Motor Securities, Mr. Park.

I have about three questions. The first is regarding the market -- steel market that is. In automobiles and shipbuilding, what kind of price negotiations are ongoing? And how is it going? And there have been some announcements regarding EVs and there are mixed signals. From POSCO Holdings perspective, looking at the stimulus package that's been released in China, how does that relate to our own steel market? How do you view that? The second question is regarding nonessential assets and underperforming businesses. These are onetime expenditures that are usually consolidated at the end of the year. And I totally understand why you would want to do that. Is this something we should be expecting this year as well? So on certain onetime expenditures, will we see all of this being consolidated towards the end of the year? And third is something that was mentioned by the CSO. So the fact that POSCO is investing in India, I think that's practical and reasonable. However, I do have some questions. You did mention an integrated mill. Is this blast furnace based or is this based on hydrogen steelmaking? And I also have a question about the size. it's probably going to be one blast furnace, but it's probably not going to end there. So does it have expandability? And the location of Odisha, there's quite a distance between Odisha and Maharashtra. So if you produce in Odisha and other sheets are produced in PMH, there's quite a distance and transportation that's required. So how will you calibrate what gets produced where? And about 20 years ago, I believe you had contemplated building an integrated mill in Odisha but failed. And I believe there was a lot of opposition from the community, and that was part of the reason why you failed. What is different this time? And I believe it was in 2022 with [Adani], there was an MOU signed to invest $5 billion into some eco-friendly facility. Now that you have held hands with JSW, what happens with Adani? Has that been canceled? Or are you doing both in parallel? And if this is an investment into a blast furnace, I believe POSCO has already announced its carbon-neutral strategy. If it's blast furnace based, then how does this fare into your carbon neutrality road map? That's all of my questions.

So you asked three key questions. The first is regarding the steel market. And we will have Mr. [indiscernible] from the Head of Marketing Strategy Office. And on the second question, I'd like to ask Mr. [indiscernible], Chief of Corporate Strategy. And on the question regarding the investment in India, we will ask Mr. [indiscernible], Chief of Steel business.

My name is Yoo Young-Sook. The second half of this year, we had mixed signals about either a rebound or a prolonged recession. And it was very much dependent on the stimulus package that was released in China. Since the announcement of the stimulus package, we did see a huge rebound in the Chinese domestic steel prices. But because there were lingering questions about how much impact this was going to have, the prices began to fall again. In shipbuilding and automobile industries, you asked about the impact in those industries. We have half year contracts with the OEMs. And so when we have these half year contracts, of course, the third quarter and fourth quarter run on the same prices. But in the beginning of next year, we may see some prices negotiated upward and downward. Currently, in shipbuilding, we have not negotiated the full price for the fourth quarter. So that is upcoming. And we are trying to up our price with some of the shipbuilding companies, but we are up against some resistance. Since the Chinese stimulus package, what are some projections that we are making? I think that was part of your question. As mentioned before, since the stimulus package, yes, we did see a huge rebound in prices. And rather than thinking that demand was going to follow suit, we did think that there -- the prices had already reflected future stimulus packages. And so at some point, the price went above $100 per ton. But I think thereafter, the price began to reflect some disappointment, and so it began to fall again. But I don't think it's going to fall too low. A lot of the steelmakers in China are already in red ink. And the Chinese government is likely to announce another stimulus package in December. And so we believe it's going to hit another rebound pretty soon.

Second question on nonessential assets that is regarding restructuring. And I think the question was, will all of these costs be consolidated in one quarter towards the end of the year? In the second quarter, during our earnings release, we did release about 120 restructuring projects and our plans to restructure these assets or businesses. But now after some time has transpired in the third quarter, in particular, the restructuring that was scheduled is on schedule and proceeding as planned. So some of the divestments as well as sales. In some of these cases, we can generate a profit. In other cases, we may suffer some losses. And that is exactly what happened, but profits outweighed the losses, and that's why we turned a general profit. In the past, when we sold off our nonperforming assets, yes, we did generate a lot of losses. And so I think a lot of people remember those numbers. And I want to remind you that during this restructuring, we are going to suffer some losses. But according to what we've seen so far and what we plan in the future, there will be more profits than losses. But again, there will be some impairments, but I think they will be overweighted by the profits, and so the impact is not going to be hugely negative.

I'd like to respond to the third question. Regarding hydrogen-based steelmaking and blast furnace and which part will be implemented in India. The hydrogen-based steelmaking is not yet commercial scale. So of course, we are going to install blast furnace and a shaft method, and this will have to go through discussions with our partner. In the first stage, we will do 5 million tons. And what we contemplate at the moment is the first plant site is about 1,600 acres. And so yes, there is expandability to Phase 2. In addition to that site, we could be looking at other sites, too, and that is under consideration. The location of Odisha, there's quite a bit of distance between Odisha and PMH. In Odisha, there are many rolling mills from where we get our supplies. So the upstream process, if we place that in Odisha, we will have no shortage of supplies from the local mills. And so keeping our production site here in Odisha, we have plans to go all the way from upstream to downstream. Yes, about 20 years ago, we failed to acquire the land on which we would be able to build the integrated mill. It was not just the acquisition of land, but also mining rights that became the issue at the time. But this time, yes, we are working with a local partner, so they will take care of the mining rights. The MOU with Adani Group, that MOU was signed at the end of 2022. I think it was in the beginning of 2023 that Adani was languishing in the Hindenburg report. And so we could not carry on that partnership. And that's why JSW and Adani will not go in parallel. In India, carbon net zero goal is by 2070. Ours is by 2050. So in India, we intend to follow local rules. For example, if we invest in a blast furnace, there are many technologies that are under development, such as hydrogen mix technology as well as CCS. And so there are many advanced technologies that are being developed by POSCO Group right now that will all be put to the test and applied there. That's how we will try to get to carbon net zero in India. I hope that answered your question. We'll go to the next question.

The next question is from iM Securities, Mr. Kim.

I have three questions, three very short questions. My first question pertains to India. On India, what is the demand situation, demand to supply situation? What is POSCO's view? If you look at the demand growth, I think it could be quite positive. But if you look at the supply side, I think there's a rapid increase in the supply as well. So if you look at India, it may not be like quite like the Chinese market. But what about -- how do you address the concerns you have the India market, given the market and demand situation? Secondly, if you look at the overseas penetration, you gave us good explanations about Indian experience. What about the United States? China also the Southeast Asia, there is a lot of overflow of Chinese products. So give us an update on what you're doing in this region as well. And for the [indiscernible] steel plates for the Hyundai, and there's been some investigation for the antidumping for the low-cost Chinese steel products, what is your position on the Chinese products? And how do you intend to respond to that situation?

Talk about the demand and supply situation. If you look at this demand, I think it's about 150 million. And by 2030, the government intend to make it to 300 million tons or 200 million tons from our forecast, depending on where we see it. And also, I'd like to say that if you look at the demand itself, if you compare to China and India, I don't think there's a substantive increase in the India side. There's like a 6% or 7% increase every year. If you look at the past experiences in 2000 or right before 2000, if you look at demand increase in China, there was an increase of 20% to 30% every year. So if you look at the situation, and of course, the concerns -- there could be concerns about the oversupply, but even if there is an oversupply situation, partially there could be oversupplied, but POSCO believes that given the portfolio of our products, we focus on the high-end products. So I don't think there will be much of a problem there. And for the steel demand, if you look at the increase in steel demand, you see a slight increase in the Chinese side as well. But in India, there's an increase by 10 million to 15 million tons every year. And if you look at the demand and supply, I still believe that there is a lot more demand than supply. The second point about the U.S. and Southeast Asia, the upstream strategy for the United States, 2026 or 2027 will be the year that we have been considering the upstream process. For the electric furnace, we are continuing to make efforts. That's what I can tell you for now on the United States side. On the third point, for the steel plate AD, the Southeast Asia for the upstream, the AD products, PYV in Vietnam is going on pretty well. And I think we're considering further expansion in the future. For the Indonesia, 3 million tons, we believe that we need to actively consider expanding in the future, Indonesia as well. In Indonesia, I don't think we have anything quite concrete right now. We don't have any concrete plan going on for Indonesia right now. On the third point, for the steel plates, on how we will respond for that POSCO, Mr. [indiscernible] is going to respond.

On steel plate AD filing and what are our responses, I'll give you the answer on that. On steel plates and the antidumping filing, there are inquiries that have been sent out by the Korean government to industries that deal in the same products. And so we will be responding to those inquiries. Our deadline is by mid-November, and I think we may be able to get an extension on that. So we will respond to those inquiries. And of course, there's a lot of cheap Chinese products that are flooding our market. Of course, AD filing is a right protected by international law as a means to address unfair trade practices. So, key steel making economies, in an effort to protect their domestic steel makers often use AD rules as trade remedies. Recently, Chinese and Japanese hot roll steel sheets are under investigation or subject to AD ruling in the EU, Turkey and Vietnam, and Canada, Mexico, Indonesia, Taiwan, Thailand, Australia and UK, AD rulings are being practices on HR steel sheets. So, despite strong protectionist measures undertaken by steel producing economies, the Korean steel industry is so defenseless to imports in an essentially open market, devoid of any protectionist mechanism. Unfair trade practices are flooding the domestic market, and so POSCO has to take some action, as well. Therefore, we intend to strengthen our monitoring activities on steel imports and to address unfair trade practices, we are actively reviewing diverse means of remedy, including AD filing. Thank you.

Next question is from Yin Securities, Eugene Lee.

Can you hear me? I would also like to ask about three questions. First is about the steel market and steel price that -- where recovery is delayed. I feel there are some investments that are being planned, but the cost seems a little bit high. What are your plans here? And regarding CapEx for your Indian project, can you make some comparisons? And regarding PMH, I think you are planning about 40 million tons. What is the feedstock that has been secured for this production volume? I'd like your analysis on that. Silicon Solution is my next question. I wonder if you've acquired some good number of clients, customers.

On the CapEx, we will ask Mr. Kim Seung-Jun in charge of Finance and IR. On PMH and feedstock, we will ask Mr. [indiscernible], and the third question on silicon solution production plans, that question will be answered by the Head of Nickel and Next-generation business team, Mr. [indiscernible].

So first on how to secure the funding. In India, the investor is POSCO. So POSCO is going to make the investment. And our plant capacity is 5 million tons. So it's going to be about KRW8 billion. But this is a joint investment with a partner, a 50-50 investment. So we will be investing maybe about KRW5 trillion. Each year, about KRW4.5 trillion EBITDA should be generated. And this is going to happen over a period of four to five years, not happening all in one year. So with that EBITDA, I think it's something we can definitely manage and accommodate. In lithium, POSCO Holdings will be making the investment here. This is also not 100% from POSCO Holdings. We will have local partners. And so there will be some calibration of how much will be expended. If we look at cash reserves, we have about KRW4.5 billion in cash reserves and the convertible bonds that have recently been cash, that generated about KRW3 trillion as well. So we have sufficient funds. Looking at our financials, these -- this CapEx is not a huge burden.

PMH, so full hards and HR products that are supplied to PMH from POSCO, it's about 1 million tons per year. If we should make this investment, the hot-rolled products will not be removed immediately. It will go through a phased reduction. So about 1 million tons of hot-rolled products will, over time, be removed. And so we will have to find other markets. And downstream capacity is something that we would like to acquire additionally. And so that's how we intend to adjust our demand and supply.

Let me address Silicon Solutions. Our Silicon Solution plant will be commissioned next week. So prior to full capacity production, we will have to go through product certification, of course, through domestic refineries as well as Company P in Japan, cCompany M in Europe and other companies in the U.S. We are in negotiations with a number of companies. Our certification samples have been submitted to these companies. And we have also signed MOUs with a certain part of these clients for a certain volume uptake. And so samples have been submitted and progress is being made so that we will be able to get certified as soon as possible.

Next question is from DBF, Jae Heon Jeong.

I'd like to ask you a question about your investments in India. You said that it is a 50-50% stake investment. And if you do a joint venture based on 50-50 equity, then this may lead to a number of issues, for example, shareholding rights. And so there could be a possible conflict in the future. So we have concerns about that as well because this is an Indian venture. So do you have any like a call option, any special provisions to protect the shareholders? Do you have anything reflected in the shareholder structure? And JSW, as I understand, has sought 10 million ton of the capacity expansion on its own before it entered into a joint venture with the POSCO. So JSW has its plan for the capacity expansion. And with this investment with the POSCO, it looks like that it has a strategy to arrive at the high-end product, as well. So I have concerns that they may abuse you in the future. If you think about the 5 million tons, on what the production process is going to be, how you intend to produce them? You said that nothing concrete has been finalized yet. But this 5 million tons, is that targeting purely the Indian market? Is it your -- is my understanding correct that you are just targeting the Indian market with the 5 million tons of products? And also concerned about carbon neutrality because carbon neutrality is not something you implement just for the POSCO India or POSCO Korea or the United States, it's going to be on a consolidated basis, and you have to look at the carbon emission level as a whole. I think that's what shareholders were looking for. So if you have this 50-50 venture, financial outcome is going to be very important, but you said to be thinking about the carbon emissions level, where would the emissions be calculated? Would it be at the joint venture or the POSCO as a whole? So I'd like to ask you about the questions, ask you to explain that as well. And you're going to begin lithium production and the lithium prices has come down quite substantively. And if you think about the cost competitiveness, if you think about what you have in Argentina, you said that your competitiveness is very high. But if you think about amortization and depreciation cost and the production cost, all considered what would be the BP for the POSCO? You're at the initial stages of production, of course, you can't reach the breakeven point. But let's say the utilization rate rises to 70%, 80% levels. What will be the production cost, which we can realize the breakeven point? If you think about the brines and also the hard rocks, what will be the cost structure? I'd like to ask you to explain on that as well.

Well, we make 50%, 50% investment. We may -- you said that we may enter into some conflicting situation. But we have 50% equity, and we have a BOD that is structured with 50%, 50% from both sides. I don't think we're going to enter into major conflicting relationship. we are trying to secure the site and come up with the FS. And so it will take some time for us to achieve at a certain level. So it's a call options. In the future, we will certainly make considerations for that in the future. 10 million ton, I think to try to secure on their own side is already done. So if you think about the Odisha site, there could be further expansion made so that by 2030, this will be risen to 25 million levels. So what they are trying to negotiate with us is part of the 25 million they have in their plan. And the joint venture with POSCO is not an integrated steel mill. They want to come up with the high-end mill. So that is what has been currently being discussed with the Indian partner. And India has 150 million tons in size in the market size. And the export ratio is relatively very small compared to Indian or the Korean's market size. So this will be purely an Indian market that we are targeting with this joint venture. With the carbon neutrality, I think we need to be very realistic in our purchase. Of course, they need to be consolidated. We need to make public disclosures, but we need to be realistic in our purchase. If we make the reduction efforts in India, I think the market would understand our position in looking at the realities of the market situation in India. On the lithium side, Mr. Lee, who is responsible for the lithium business, Mr. [indiscernible] is going to respond.

On the BP, breakeven point, for the Salt Lake, the brines, I think lithium producers all over the world are suffering because the price of the lithium is less than 10,000. So even if they do a salt lake-based brime business, they're not making good profits. We're still at the early stages. So I'm not really sure what to say as of now. But compared with our competition, competitors, I think the Salt Lake quality is very high. The lithium content is very high. And therefore, we are not very concerned about that, but we have made quite a lot of investments. So there could be quite high amortization cost. But as we enter into full mass production, we believe that I don't think there's going to be a significant difference between what we make and what other competitors do. So I think we can make a good profit with this Salt Lake brine-based business. And if you look at the cost difference between the hard rocks and the brines, first, as we purchase Salt Lake, we make a massive investment for the hard rocks or the lithium solutions, we make monthly investments because import from Australia on a monthly basis. And therefore, this -- there is like raw material cost, feedstock cost. If you think about the process, the processing, I think there's not going to be a great difference, but the difference comes from the feedstock from the raw materials. And the hard rocks are more costly than the Salt Lake as of now compared to the price, it's a lot more costly.

Do we have any other questions? No one has requested to ask a question yet.

So let me speak. I'd like to thank everyone who participated today. The third quarter 2024 earnings release presentation ends now. Thank you very much for your participation.