Genuino Christino: Yeah, I think that’s the case. So our expectation is to do a little bit better in Mexico, Canada. And yeah, so that’s €“ so I would not suggest that we are taking market share, but I think we will be doing that in some of the other parts of the business.
Tom Zhang: Okay. Thank you. I’ll turn it back.
Daniel Fairclough: Thanks, Tom. So we’ll move to the next question from Rochus at Kepler.
Rochus Brauneiser: Yes. Hi. Good afternoon. Thanks for taking the questions. A couple from my side. One is on your remarks at the beginning about — that there will be, maybe, early next year a point — where from where apparent steel demand could trend better when the destocking is complete. When we look at the whole year of 2023, and we think about a reversal of working capital for stock movements against the decline in real demand, I would like to see what your view is on the moving parts on net imports in Europe? We have been seeing structural decrease in exports over the last decade and also, kind of, growth in imports over the last 10 years. So what would you — what is your thinking from where you know now how net imports are most likely trending in 2023?
Genuino Christino: Yes. But I think that’s a good question, Rochus. And, as you know, we have seen imports rising in Europe, right, taking more market share from domestic mills. And probably one of the reasons we were — of course, the selling price premiums in Europe were high as a result of the strong demand that we enjoyed for most of the last two years. More recently, we have seen a decline in imports, which pretty much is the function of the arbitrage that existed for importers, they’re basically disappeared, right? So when you look at Asian prices and you add all the logistic costs to get the materials into Europe, then I think that the incentive for imports are greatly reduced. So that is — that’s how — what we are seeing right now. So we’ll see how it evolves, but that’s the dynamics that we are seeing right now.
Rochus Brauneiser: All right. And linked with that, what — how should we think about the impact of energy costs? Would that, overall, lead to somewhat higher prices in Europe, or shall we assume that, if that persists next year and beyond that industry margins will be overall lower.
Genuino Christino: Well, I mean the — Rochus, as you know, the energy crisis, call it, it’s really a European phenomenon right now, right? So — and the whole industry in Europe is exposed to the same dynamics, some mills more than others. And that’s why you see the industry as a whole responding. And if you look at the data in September, you can see that there is a significant reduction in production in Europe. So the industry is responding to that. And that’s probably also an important factor here, because I think the market will start to see more the impact of the cuts going forward. So that should also help in terms of rebalancing supply to demand. Right? So I don’t really want to speculate, because as we were discussing, the spot prices for natural gas, at least for some time, were extremely low.
When you look at the average prices that we have right now in Q4, prices are, of course, not yet back to far from levels that we had back before the war, but it has come down quite a lot, right? So we’ll see what happens next year. But I think this is not specific to any particular company. It’s an industry problem. It’s — I would even say, it’s a European problem. And it’s something that we believe that the governments will need to address. I think it’s extremely important for the industry, not only for the steel industry but for the entire industry in Europe.
