Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **iron ore and global steel industry**, particularly the dynamics of supply and demand, pricing forecasts, and production trends in China and other regions [2][3][21]. Core Insights and Arguments 1. **Iron Ore Price Forecast**: The Q4 2025 iron ore price forecast has been revised up to **$95/t** from a previous forecast of **$90/t**, reflecting a more balanced iron ore market than expected [2][3]. 2. **Chinese Steel Production**: There are no substantial production cuts in the Chinese steel industry, despite government efforts to address overcapacity. This has led to a worsening domestic oversupply of steel [2][6]. 3. **Domestic Steel Prices**: A **15% rally** in domestic steel prices observed in June/July is expected to fade, putting pressure on steelmaking margins and raw material prices [2][9]. 4. **Iron Ore Port Stocks**: Chinese iron ore port stocks are expected to build by **48 million tons (Mt)** in 2026, contributing to a decline in iron ore prices to **$80/t** by the end of next year [2][3][4]. 5. **Ex-China Steel Markets**: Optimism for ex-China steel markets in 2026 is noted, with demand growth and lower Chinese exports expected to lift international steel prices. China's share of global crude steel production is projected to decline to **51%** in 2026 from **57%** in 2020 [2][3][21][28]. 6. **US Steel Market**: The US steel market is currently weak, limiting near-term price increases. The domestic Midwest hot rolled coil spot price is **15% below** its March peak, despite a **50% tariff rate** [33][37]. 7. **European Steel Prices**: European steel prices are expected to see upside due to improving fundamentals and potential policy changes, including the EU's Carbon Border Adjustment Mechanism and adjustments to steel import quotas [38][44][45]. Additional Important Insights 1. **Global Supply Dynamics**: Global seaborne iron ore demand is expected to contract by **1%** in 2026, while supply (excluding India and China) is projected to increase by **3%**, exacerbating the stock build in China [14][20]. 2. **China's Steel Demand**: China's steel demand is forecasted to continue contracting due to weaknesses in the construction sector and manufacturing [21][28]. 3. **Ex-China Demand Growth**: Ex-China apparent steel demand increased by **1.6% YoY** in H1 2025, with a forecasted growth of **2%** for the full year and **3%** in 2026 [21][22]. 4. **China's Net Steel Exports**: China's net steel exports are expected to rise by **6% YoY** in 2025 but are projected to fall by **21%** in 2026 due to increased headwinds [26][28]. 5. **Policy Risks**: Potential changes in EU steel import quotas and the implementation of the Carbon Border Adjustment Mechanism could significantly impact regional prices and domestic producers' margins [44][45]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the iron ore and steel industry.

Core Viewpoint - The black metal sector in the domestic futures market experienced a decline across all major commodities as of April 30, with significant drops in prices for manganese silicon, iron ore, hot-rolled coil, and silicon iron [1] Price Movements - Manganese silicon futures fell by 1.28%, settling at 5714.00 CNY/ton - Iron ore futures decreased by 0.85%, reaching 703.00 CNY/ton - Hot-rolled coil futures dropped by 0.65%, priced at 3197.00 CNY/ton - Silicon iron futures declined by 0.71%, now at 5592.00 CNY/ton [1] Warehouse Inventory Data - As of April 29, rebar futures warehouse inventory stood at 199,647 tons, unchanged from the previous period - Iron ore futures warehouse inventory was at 3,200 contracts, also unchanged - Stainless steel futures warehouse inventory decreased by 1,799 tons to 163,143 tons - Hot-rolled coil futures warehouse inventory fell by 2,653 tons to 347,020 tons - Silicon iron futures warehouse inventory increased by 388 contracts to 19,180 contracts - Manganese silicon futures warehouse inventory decreased by 612 contracts to 131,826 contracts [1] Basis Data and Price Discrepancies - As of April 29, the commodity futures basis data indicated a "backwardation" phenomenon for rebar, wire rod, hot-rolled coil, stainless steel, and iron ore contracts - Current spot prices for rebar are 3186.89 CNY, while futures are at 3109 CNY - Wire rod spot prices are 3387.5 CNY, with futures at 3286 CNY - Hot-rolled coil spot prices are 3273.33 CNY, compared to futures at 3218 CNY - Stainless steel spot prices are 13050 CNY, with futures at 12700 CNY - Silicon iron spot prices are 5548.57 CNY, while futures are at 5632 CNY - Manganese silicon spot prices are 5652 CNY, with futures at 5788 CNY - Iron ore spot prices are 779.44 CNY, while futures are at 709 CNY [1]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA loss of CAD 60.3 million for Q4 2024, with cash used in operating activities amounting to CAD 76.9 million [14] - Total shipments for Q4 2024 reached 549,000 tons, a 6.3% increase compared to the same quarter last year, while net sales realization averaged CAD 976 per ton, down from CAD 1,079 per ton in the prior year [15] - For the full year 2024, the company shipped 2 million net tons, down from 2.1 million net tons in the previous year, with net sales realizations averaging CAD 1,107 per ton, a decrease of 5.6% [18] - Steel revenue for Q4 2024 was CAD 536 million, a decline of 3.8% year-over-year, while the cost per ton of steel products sold averaged CAD 1,032, similar to the prior year [16][19] Business Line Data and Key Metrics Changes - Plate shipments for Q4 2024 reached approximately 82,000 tons, up from 73,000 tons in Q3 2024, with expectations for Q1 2025 plate production to be directionally higher [5] - The company is dynamically adjusting its product mix between plate and coil products based on market conditions and contractual obligations, focusing on higher-margin products [6] Market Data and Key Metrics Changes - The company noted that the Canadian market is currently oversupplied with coil and undersupplied with plate, which may lead to price increases for plate products [37] - The implementation of tariffs on Canadian steel and aluminum imports has introduced uncertainty into the North American steel market, but the company expects a rational dialogue to restore normal trade [11] Company Strategy and Development Direction - The company is focused on completing its electric arc furnace (EAF) project, with first steel production expected in April 2025, which is anticipated to enhance operational efficiency and cost structure [8][25] - The transition to EAF steelmaking is seen as a long-term strategy to strengthen the company's position in the market and improve its ability to navigate uncertainties [11][25] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenging market conditions due to tariff uncertainty, soft demand, and other macroeconomic factors affecting customer behavior [4] - Despite these challenges, the company remains optimistic about the upcoming EAF operations and the potential for increased production and market share in the plate segment [25][72] Other Important Information - The cumulative investment for the EAF project was CAD 740 million as of December 31, 2024, with expectations to complete the project within 5% of the upper budget range [10] - The company expects to release approximately CAD 100 million of working capital from March 2024 to March 2025 [17] Q&A Session Summary Question: Clarification on the Blast Furnace outage duration and costs - The outage lasted a couple of days to a week due to extreme weather conditions, with no significant costs involved [31][32] Question: Impact of tariffs on EBITDA generation - The company indicated that with current pricing, it could break even or generate a small profit despite the 25% tariff on shipments to the US [34][35] Question: Canadian sheet prices and potential oversupply - The Canadian market is currently oversupplied with coil and undersupplied with plate, which may lead to price increases for plate products [37] Question: Mitigation strategies in response to tariffs - The company is focused on cost reduction initiatives and transitioning to EAF production as a primary strategy to lower costs [45][46] Question: Expected insurance payout and timing - The company expects around CAD 100 million from insurance, with CAD 20 to CAD 25 million anticipated in the next month [52][54] Question: Volume expectations for 2025 - The company anticipates total shipments for the year to be between 2.1 million to 2.2 million tons, with a focus on increasing plate production [98]