Daniel Fairclough - Director of Investor Relations London Lakshmi Niwas Mittal - Chairman, Chief Executive Officer, President, Managing Director of Operations and Member of Group Management Board Aditya Mittal - Chief Financial Officer, Principal Accounting Officer and Member of Group Management Board Louis L. Schorsch - Chief Technology Officer of Research & Development - Global Automotive, Member of Group Management Board and Member of Investment Allocation Committee William A. Scotting - Executive Vice President and Chief Executive of Arcelormittal Mining

Michael E. Flitton - Citigroup Inc, Research Division Michael Shillaker - Crédit Suisse AG, Research Division Alessandro Abate - JP Morgan Chase & Co, Research Division Rochus Brauneiser - Kepler Cheuvreux, Research Division Stephen Benson - Goldman Sachs Group Inc., Research Division Alexander Haissl - Morgan Stanley, Research Division Neil Sampat - Nomura Securities Co. Ltd., Research Division Rui Dias - Espirito Santo Investment Bank, Research Division Philip Ngotho - ABN AMRO Bank N.V., Research Division Carsten Riek - UBS Investment Bank, Research Division Bastian Synagowitz - Deutsche Bank AG, Research Division Alexander Hauenstein - MainFirst Bank AG, Research Division Luc Pez - Exane BNP Paribas, Research Division Jeffrey R. Largey - Macquarie Research Charles A. Bradford - Bradford Research, Inc. Alain William - Societe Generale Cross Asset Research

Please go ahead, Daniel.

Great. Good afternoon, everybody, and good morning to those joining in North America. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you very much for joining us today on our conference call for this third quarter 2013 results. First, I'd like to remind you that this call is being recorded and we're going to have a brief presentation from Mr. Mittal and Aditya, followed by a Q&A session. The whole call should last about 1 hour. [Operator Instructions] And with that, I will hand over the call to Mr. Mittal.

Thank you, Daniel. Good day to everyone, and welcome to ArcelorMittal's Third Quarter 2013 Results Call. I am joined on this call today by all the members of the group management board and Bill Scotting, Head of our Mining group. Before I begin the presentation, I would like to make 3 key points: My opening point would be that the results for this quarter show a clear improvement related to the same period of 2012. At the beginning of this year, I stated my opinion that our results for the second half of 2012 would mark the low point of this cycle. Our third quarter shipments are up year-on-year. This is the first notable year-on-year increase in shipments since the first quarter of 2010. And looking at our EBITDA, the year-on-year comparisons show the continued contribution from our cost optimization efforts and mining expansion. The second point I'd like to make is the progress we have made in a number of areas during the third quarter. We have secured a new long-term iron ore supply and demand for our South African business and dissolved all our outstanding disputes with Kumba. We have achieved a positive development for Annaba, our business in Algeria. And we have completed the industrial phase of our lease in Belgium, restructuring, taking the gains from asset optimization, of a $1 billion level. We have also selectively restarted some of our CapEx to support the development of franchise steel businesses and we continued to make good progress in our iron ore growth plan. My final point would be to highlight that EBITDA for the second half of 2013 will be at least the same level as the first half and likely higher. This is again the normal seasonal pattern of our business and very different from the…

Okay, great. Thank you. Good afternoon and good morning. I'm on Page 13, I'm going to start with the EBITDA bridge from the second quarter of 2013 to third quarter 2013. As you can see on the slide, EBITDA performance for the business was essentially flat in the third quarter. This is unusual as normally the third quarter is weaker as compared to the second quarter. We did better as there was a smaller volume decline, better price cost performance and improved mining results. Specifically in steel, volumes declined in Flat Carbon Europe, in line with normal seasonal trends, offset by an increase in Flat Carbon America, especially after the operational issues we had in the second quarter in AM USA. The positive price-cost benefit in the third quarter was primarily in FCA, partially offset by slight declines in Flat Carbon Europe and AACIS operations. And our mining business, there was an overall increase in marketable iron ore shipments, driven by improved volumes in ArcelorMittal Mines Canada, following the ramp-up of the expanded capacity. The positive price effect of $30 million is because of the higher seaborne iron ore market prices, offset by our liked contracts that we have on a portion of our shipments from Canada and Mexico. Turning to the next slide, on Page 14, we have the P&L bridge. I'm going to focus on the chart in the upper half of the slide, which shows the third quarter results but comparative figures are there for the previous quarter and the lower half. I will point out the key differences below the EBITDA line. During the third quarter, we booked impairment charges of $101 million against all incurred expenses related to the now discontinued Senegal iron ore project. Net interest expense in the third quarter was $409 million,…

[Operator Instructions] We will take the first question from Mike Flitton at Citigroup.

I had a couple of questions. Firstly on capacity and price rises and then on Alabama, if you can. So [indiscernible] came out yesterday and said that we're already seeing capacity coming back to the market, and that impacting the ability to raise prices in Europe. I was wondering if you could maybe comment a bit on how you're seeing the price negotiations and also how that sits in the context of, I guess, consumer expectations that iron ore will crack in the near future and whether that's putting extra pressure and you -- and how hard those negotiations are? Second question on Alabama. Can you just give a little bit of color on the state of negotiations there? Are you actually talking to Thyssen and does -- how much does the strategic importance of that asset sort of play a role in your valuation?

Sure. In terms of Europe. If I understood your question correctly, you're talking about how capacity may increase, which dampens the possibility of price increases. There is some capacity coming back in the market. I don't think it's a significant volume, but you're right, there is some capacity coming back in the market. I don't want to speculate as to what impact that has on market pricing, as I think, that's an inappropriate discussion for me to have from a competitive point of view. What I can talk about is what are the trends in the marketplace and what we are seeing in terms of price. Clearly, when we started or ended the second quarter and talked about our forecast in the second half, there were stronger price momentum in July than there is today. Not to say that the price environment is weak, the price environment is still stable, but momentum in terms of the increasing our prices is more stable now than it was in July. The positive has been since then a stronger intake in terms of volume and better volume intake in the second half. We also saw, in September, strong sales in terms of automotive. In terms of going forward, I would say that with a strong iron ore prices, clearly, there is some pressure on maintaining the price environment that exist in Europe. And therefore with the weakening in the euro, I see less import pressure, the recent weakening as it occurred today. And therefore, price momentum has slowed, there is some capacity coming on stream but we're not seeing a weakness in the pricing environment.

On Alabama. First of all, we have said before that we continue to remain interested in Alabama. We think that it is a good asset and it could strengthen our franchise business in the United States. And because of confidentiality we cannot give you any more information and any more comment, we cannot make any more comments.

Great. Thanks, Michael. So we'll move to the next question from Mike Shillaker, Credit Suisse. Michael Shillaker - Crédit Suisse AG, Research Division: Two questions I guess, from me. Firstly, you had a good call early in the year by talking about the second half being equal at least to the first, which is unusual. Given your experience in an accelerating market, which we seem to be in, would you expect normally Q4 to be better than Q3. And also what does that sort of tell you in terms of how you're shaping up for the outlook for earnings next year given run rates and seasonality and similar? And my second question, I guess, is in terms of Alabama CSA, I mean, you guys made, built the Mittal Steel empire from buying assets that no one wanted at the right part of the cycle. Is there not a time when you sit down there and think well maybe we are at the low point of this cycle and maybe we should actually just go in and buy CSA as well as Alabama, combined the 2, including potentially with our Brazilian assets and actually, does that not actually look a little more attractive, especially now it looks like the cycle is passing the low point because it does feel as though this other asset is being sold at the low point of the cycle.

Thank you for your comments. It's not the question. So I hear it well. Thank you, Michael. We will move on to your question now.

In terms of EBITDA for the fourth quarter, as you know, Michael, we aren't providing a quarterly guidance. What I can talk about is some of the things we're seeing in the marketplace. So as you are aware, seasonal volumes in Europe should pick up, so that's a positive for Q4. We're seeing some weakness in the U.S, that's seasonal as well. December is normally a weaker month in the U.S. and it is -- then August in the U.S. and therefore, we are forecasting a drop in shipments in Q4. We will have increased volumes coming out of our ramp-up in Mining Canada, which is a great story, we're doing very well there and that will be positive. Assuming the price environment is stable, the other negativity we'll have on mining will be increased shipping cost, so there will be some deterioration, FOB rate [indiscernible]. Overall, all things considered, we are not expecting Q4 to be worse than Q3. Michael Shillaker - Crédit Suisse AG, Research Division: Okay. And if you -- and maybe, to turn the second one into a question, would you rule out any interest in CSA, whatsoever?

Rule out?

Any interest in CSA.

I will not comment anything I just hear. But clearly, the one thing is that we are surplus slipped, we are not short slipped.

Yes. And I would just add that our focus as an organization, I appreciate the history of how we're created but equally important in that history has been financial prudence. So it is important for us to maintain our debt targets to maintain that we have a strong balance sheet. If anything we do, we reiterate our net debt target and medium term net debt target, so you can draw whatever conclusions you can as to what our ability is in those contexts based on those limitations.

Great. So we'll move to the next question from [indiscernible] with Goldman Sachs.

I just have 2 questions please. My first question is, if you look at your game footprint, the furnaces that you've got is switched off at the moment, how -- I mean, are you thinking about restarting any capacity at all? What sort of demand environment would you like to see, how long would you like to see this recovery sustained forward before you can make that decision? And my second question is, just on the market, especially in the North American market, could you please share your thoughts with us on, I guess, the spread between U.S. and Chinese prices, do you think they're sustainable?

So I'll take the first question and maybe Lou can comment on the second. In terms of furnaces the Europe, I think there are 2 stories in Europe. There is Western Europe where all furnaces are running. They're running at high levels, to the extend that the market improves in Western Europe over the next few years, we have the ability to improve our activity, to debottleneck at very minimal cost and maintain our cost performance in Western Europe to achieve that growth. We have furnaces, which are idled in our Eastern European operations, they are relatively small furnaces when you look at East Germany, Poland and the Czech Republic. A significant portion of the idled furnaces are actually in Romania, which is Galati, which has its own cost issues. Again, in Eastern Europe, we have the opportunity to increase volumes as the market comes back. We have more flexibility in Eastern Europe because that is where we believe the growth will be stronger. We also have some opportunities in the medium-term to improve the productivity of our Eastern European operations as we have not done the same asset optimization that we have done in the West. In terms of Romania, we're making certain investments now to improve the cost position and to the extent that, that cost position improves, some modifications to the 1 furnace operation there, maybe it will allow us to start up the second furnaces and basically, our footprint will be in balanced based on what we believe is a good productive capacity.

Lou?

I'll turn to the U.S. market, I think we all know there's a lot of factors that would drive prices and price differentials. I think we see a more of a stable market in the U.S. today than in North America in general, for finished product prices. We do see some support for that typically in terms of a key raw material there and scrap prices going up, I think the immediate expectation is at least 25 and maybe through the end of the year, $50 up. So that would put some support to that. But I think we also all recognize that ultimately, this is a global market and arbitrage opportunities are a bid away. And that the current spread between North American prices and those that you see in other major markets is wider than is typically the case. But there's 2 ways that, that can be resolved. Over time, it will get resolved, but I think that the most up-to-date information from China is that in fact prices have started to pick up there a little bit. So again, I think that's a the spread, that's probably unsustainable as you put it. How it gets resolved, still an open question.

Great. So we move onto the next question from Alessandro of JPMorgan. Alessandro Abate - JP Morgan Chase & Co, Research Division: My 2 questions. The first one is related to the new management gain in saving. How much of the today's savings is related to the efficiency improvement of your mining division, and if there is an ongoing study on the table to exploit any further potential? The second one is related to a comment that the CFO, first, have been made yesterday saying that the order book for the automotive is full until March 2014, for mostly for luxury car segment. Can you add your comments on your order book entering to 2014?

Lou, would you like to comment on it a while?

I'm not sure [indiscernible].

Sure. Alessandro, thank you for the message. In terms of your questions, we're not providing direct color on our order book. Clearly, we are seeing an improvement in Europe in 2014 versus 2013. As you know a negative -- we had negative apparent steel consumption in 2013 and 2014. We've not released a forecast but our expectation is that it's, clearly, in positive territory. In terms of the automotive landscape, I think I made some comments earlier. September was a strong month compared to what we have seen in the past. And if that's a good -- if that's a reflection of what we're going to see the future, then clearly, the automotive environment going forward will be stronger. We still -- we have, as I said before as well, high utilization levels in our Western European facilities, both on the primary and the finishing, primarily because the asset optimization work that we have done. In terms of management gains, I think you can add some color and Bill can talk about the work that they have done on the mining space.

I think most of the management gains is proportional to the cost base of the segments that we have, so it's a comprehensive program that we're looking at, as Mr. Mittal indicated, vary by the month and very much driven by, let's say, the extensive information that we have and data that we have from the many plants that we have operated into benchmark and identified improvement opportunities. So I think proportionately, of course, most of these gains are, in fact, coming from the steel side of the business. But as with any mining company, I think we've -- we have an even stronger focus on cost than was the case in, let's say, 2 or 3 years ago. And I think Bill can comment on the activities under way on that front.

Yes. Thank you, Lou. Indeed, cost is very much on the agenda. I think, as with all mining companies and particularly with our steel colleagues, we will get [indiscernible] coming through from the volume impact of the ramp-up. That will be coming through. Furthermore, we're also, from our procurement activities, some of the aggregation we're doing, we're starting to see some visibility, cost-reduction coming through on things like tires, fuels and so on. For contracted costs, it depends on location. But again, we see potentially some benefits in some areas coming through on that. On the roller equipment items, lead times are starting to come down. We expect that will eventually lead through to improved pricing as well.

So we'll take the next question from Rochus of Kepler Cheuvreux.

One question is regarding your Flat Carbon Americas business, where you recorded a pretty strong crude production figure. I'm not sure whether you can strip out the North America portion. What I'm particularly interested in is what was actually the timing of your Cleveland relining. When did it go out of the market and when is it likely to get back? It seems like this has been pushed back from the third quarter more towards in direction of the fourth quarter. Coming toward the mining side, looking at your 18.5 million tonnes guidance for AMMC this year, it looks like that the 2.5 million tonnes from the expansion at AMMC is heavily due to the fourth Quarter and based on the third quarter run rate, it probably points to some 2 million tonnes coming from this new capacity. Is there something you can confirm in terms of your production at Liberia, the first 0.1 [ph] million tonne production at Africa, would still imply that the production at Liberia is not much bigger than the 4 million tonnes you initially targeted?

Lou?

Just commenting on the production recovery in Flat Carbon Americas. This was, I think, overwhelmingly a story that we had a lot of coincident production challenges in the second quarter, primarily in the U.S. and that I think we've had quite a good recovery in most of our operations. So since then, in fact, we're at really very high levels of production at some of our facilities in October, for example. So I don't think the Cleveland reline is a major part of that story. That has been on schedule. It -- the furnace was taken down in the second half of August and we expect that to be back some time this month. So it's basically on schedule, and just to give you some rough numbers on that, it's probably around 100,000 net tonnes a month that you'd look at being out of production during that outage. And in fact, when it comes back, it will be able to produce, after the reline, at a higher level of that.

Bill, on the mining?

Yes. On the mining, certainly, the ramp-up in Canada is going well. We're sticking to the 24 million tonnes run rate by the year and we're confident in that. On Liberia, it's been very much improved year. We've done better in terms of our production and shipments. We're, I think, up around 50% in the quarter year-on-year in production in Liberia. And looking at the fourth quarter, if we can get the shipping right, we'll be targeting close to 5 million tonnes for the year there.

I just want to add maybe -- okay, go ahead.

Sorry to step in, but when I look at the Africa production, which is at current production -- at the run rate of 5.1 million tonnes, if I deduct the Algerian part, it is probably over 1 million tonnes, so effectively there's a significant gap between the shipment level of size and the production, which is probably closer to 4 million. Is it correct?

Yes, that's correct. I think we are targeting slightly more than 4 million production rate. Shipments are higher because there are weaker shipments in 2012 in Liberia. So that assessment is right. Also on Canada, I think the production level actually, the third quarter is higher than what you deduct. Because the way we measure production is a shippable production. So the actual material has to be on port level. And we had quite a lot of material for -- was concentrated at the mine head but not yet transported to the port. So we should have a good quarter in the fourth quarter in Canada. And Bill and his team did an excellent job in terms of doing the ramp-up in their project.

Okay. So we move to next question from Steve Benson at Goldman Sachs.

I had 2 questions. Firstly, just back on the iron ores, just a clarification, in the notes to the report today, on the iron ore production and then iron ore shipments in the back, it says you own iron ore production, 14.9 million tonnes; total shipments, 16.2 million. Why the difference? Because looking back, shipments has always been lower.

It's largely the strategic contracts.

So if you look at own iron ore production on the appendix, you have to add the strategic contracts in iron ore. So if you look at, for example, third quarter, group iron ore production is 17.7 million. If you look at it on a 9-month basis, the shipment levels are matching the production levels.

Okay, that's clear. And then just -- I mean, just looking into 2014, what are your expectations on iron ore price development from here as you go into the first half of next year?

We are -- since we are the buyer and consumer of the iron ore, we do not like to give you any guidance on the pricing environment. What we have seen this year is a good indication that the demand for the iron ore resin is strong and expectedly, the prices have been strong this year, comparing them to 2012. And global growth is about is 3%, 3.5%. And if you look at WSA, World Steel Association, they are saying that next year, steel demand will grow, say, 3.5%, same like this year, which means there's some tension in the iron ore price. And if you look at the various analyses they've also improved their consensus for 2014.

Okay. So we'll take the next question from Alex of Morgan Stanley.

It's Alex of Morgan Stanley. My first question is on Flat Carbon Americas. Can you explain a little bit why cash costs have been so low with USD 760 per tonne, even compared to the last couple of quarters. Is there anything particular here? Or can we expect this cash cost run rate more or less unchanged going forward? That's my first question. My second question is on the bridge you showed year-over-year. If I would make the same bridge just for the steel business on a clean base, improvement is around about USD 200 million in EBITDA, with volumes being up 1.2 million tonnes. Given the operating leverage you have, that pretty much explains this $200 million or even more. What has changed year-over-year? Was it more pricing weakness, given the cost savings here from asset optimization and management gains?

So -- do you want to talk about the cost?

I can check that first. That was the first question. And cost at FCA, I think you have to look at -- again, we had pretty severe production disruptions in the second quarter. And that not only affects your ability to ship, it affects your cost structure. So one of the things that you do in that quarter, as you have those production come, you take the inventories down quite a bit that pulls the fixed cost from that inventory into the income statement. In Q3 then, we're rebuilding inventory to some extent, which has the opposite effect. So there's some -- it's difficult then to look from one quarter to the next when you have that kind of -- those production issues. But I do think we have seen margin expansion, both on the price front and with some better input prices for us, so that's part of the story. The higher volume that we have then we're absorbing more of the fixed costs that are in the business in any period. And in addition, I think we have probably a bit lower maintenance cost in Q3 than we'd have on average through the year just because of the timing of outages. Q4, for example, is typically a period when you do a bit more of the R&M that's required throughout the year. So I think there are some positives in the overall business in terms of better cost performance, but a lot of it is timing effects across Q2, Q3, Q4.

Just to clarify [ph] -- the lowest cost in the second quarter 2010 basically taking this delta of $70, how much would you say is coming from basically, overproduction versus the second quarter and deliver basically of it?

I have a hard time giving you a hard number on that right now. Maybe Daniel or the team can get back to you on that issue. I don't want to shoot on that.

Another way to think about it is we're not seeing -- we are seeing some fixed cost increases in Q4 in FCA but not dramatic. So I think this is a good reflection of maybe slightly lower write-down the third quarter but it's not such a -- it's not an anomaly in terms of cost performance. At least, that's what we hope. Just addressing your other question in terms of bridging last year to this year, we haven't really done this bridge. So maybe we need to do it on a global basis and come back to you. I think there are positives and negatives, and I will list them out to you and then I think the rest is the compression of the metal margins. I don't have an exact number for you. But clearly, the positive is increase in volumes. The other 2 positives are management gains, as well as the asset optimization that has been done in Europe. The negative has been the operational disruptions, right? In the first half, we had issues in the U.S. In the second quarter, we had issues in South Africa. We continue to have certain issues in Kazakhstan and our business in Ukraine. I think the delta of that -- the rest of the delta is the compression of metal margin.

Okay. So we'll move quickly to the next question from Neil at Nomura.

All right, just 2 questions from me. Firstly, I guess just a continuation of that question on the Flat Carbon America cost base. Can I just clarify, earlier in the year, I think it was Q2, you mentioned that there was a $200 million impact of production disruptions in the U.S. So is it fair to say that the large part of that has been reversed in Q3? So that's the first question. And then secondly, a bit more strategic, I mean you said -- you've obviously started the selective investments again in steel in Brazil on the long products side. Given you mentioned your long slab in the Brazil, would rolling capacity be something -- flat-rolling capacity something you think about building out in Brazil, would that be strategically interesting to you?

I think the -- Lou's comment is not that we have regained the $200 million. I mean, there is a loss of volume and cost increase we had to import slabs from some of our other facilities. I think in the third quarter, perhaps some of the R&M -- there's very low R&M that was done because so much of R&M was focused in the second quarter and some of that will come back in Q4. And that's all the story is. Other than that, that U.S. business did a good job of coming back from the operation disruption they had in the second quarter, and that's what you're seeing in 2Q and there's the inventory effect that we spoke about. In terms of investments, I think we should put this all in context. The first context is that we intend to achieve our medium-term net debt target before we materially increase the CapEx. Therefore, 2014 CapEx numbers are also similar to 2013. The projects that we have announced today, some of these projects like Monlevade are -- a lot of the CapEx has already been spent. So almost half of the CapEx has already been spent. So incrementally, this is much lower CapEx on a going-forward basis. At this point in time, we have not chopped out to the market where our long-term expectations are in Brazil. Clearly, another project, which remains on hold, is growing our automotive capability in Brazil. So if there's anything we want to do on the flat side, I think it's fair to say that the first investment would be to expand our cold-rolling and galvanizing operations at Vega.

Okay, and so a slight extension of that question. So you've basically got another $1 billion or so of growth CapEx in your guidance and you outlined a couple of the points when the steel business looked fairly low order. Is it fair to assume that the delta between the $1 billion and the few steel investments that you've outlined, that's Liberia expansion?

Yes, that's right.

Great. So we'll move to the next question from Rui of Espirito Santo.

I have 2 questions. The first, regarding market position, well, it looks like you have gained some market share in the U.S. during this quarter, and I'm excluding the negative effects of Q2 in South Americas. And in Europe, we haven't seen that, at least over this quarter, but I believe that we may see some market share gains as long as you keep materializing and improving your cost structure and improving your pricing power. The question is, if this is true, in which 10 [ph] sectors can we see or is more likely to see these market share gains? That's the first question. The second question on sale of assets, well, assets [indiscernible] sale. There were some speculations. I think you'd restart selling some non-core assets. Is there any chance that we can actually start seeing again a new round of sell of non-core assets, things like China Oriental, Hunan Valin or [indiscernible] strategic or it's simply not quite the time to do it?

Okay, great. Maybe I'll quickly answer these questions and then Lou can add. In terms of market share, the way we look at the market share data, our market share is more or less flat. I think, in the U.S., clearly, when we went down at the second quarter and we have restored our position. And in Europe, it's largely flat as well. Our focus is clearly -- is price per volume as long as we protect our market share, so that's our strategy. So we're not intending to go out and gain share at the expense of driving down the whole market. In terms of sale of assets, we have said that the lion share of the sale of assets has been completed. We feel comfortable that the level of net debt that we have, we believe, that we will achieve our medium-term net debt target through the generation of free cash flow. So at this point in time, we may still do some selective M&A. But the focus on releasing debt is through free cash flow.

Lou, do you have any comment?

I think that you described it correctly. We obviously took a hit on the market share as our shipments were affected by the production outages. But I think their share is basically stable with maybe over a few year period, some increase to recover to where we were before the financial crisis hit.

Okay, so we'll take the next question from Philip at ABN AMRO.

Most questions have been asked. I have one more question actually on AMMC. I was wondering if you can indicate at what level the cash cost is currently at your Canadian mines and at what level you expect them to be in 2014. And perhaps, you can also indicate -- if you could indicate want you expect for additional shipping cost and perhaps, the regions that you plan to ship the incremental production to.

We are not actually giving our specific cost -- per cost basis for industrial mines. What you can really estimate that as we are increasing our volume, our cost position in Canada will continue to improve. I don't know whether they are giving any -- they are giving? Aditya?

Yes. What I would add to Mr. Mittal is that previously, we said we would be carving [ph] around $38 per tonne for the iron ore in Canada. That was 2011 basis. Their normal returns is higher. With the extension, we're confident the cost would come down. We're still targeting that to be where we get to in the mine there.

And shipping cost and where margin [indiscernible] regions?

The primary focus is, of course, Atlantic basin, internal as well as external for the [indiscernible].

Great, okay. Thanks for that. So we'll take the next question from Carsten at UBS.

I'm Carsten Riek From UBS. Just a question on the capacity. In the morning, you mentioned that the -- one of the blast furnace in Poland, I think in Dabrowa Górnicza, is coming back in the fourth quarter. Can you remind me about the capacity here? And the second question I have is on the Southern European market. Have you seen any uptick in the market. Because after the second quarter, you hinted you could also see higher volumes in Spain. It might ramp up in other blast furnace in Spain.

So thanks, Carsten. First of all, we don't have another blast furnace in Spain to ramp up. I think it's important for everyone to understand we're running all of our blast furnaces in Western Europe at high levels. In terms of the DG furnace, that was down just for the quarter -- for the third quarter. That's not been down the whole year, and that's going to come up and that's roughly a 2 million tonne furnace. And so that's -- you can see the impact in the third quarter of that. But that's going to come back in the fourth quarter. So it's not a furnace that was down that is being ramped up, just a maintenance shutdown.

Okay, great. So we'll move on to Bastian of Deutsche Bank.

So I just have one quick question left, which is on your operating cash flow. Can you help us to understand what is in the position of others where you had virtually a $1.3 billion swing to the negative side in Q3 versus Q2? What has been driving this? And maybe you could just give us also some guidance here on what we can expect for the fourth quarter.

Sure. In terms of the fourth quarter, I think the guidance we're providing is that our net debt level is going to come down, and so we're guiding you towards a level of $17 billion of net debt. And you can probably do the math and see how much that is. In terms of the free cash, clearly, we had an investment of $800 million in working capital. We saw iron ore prices move up and other -- and volumes also remain strong. Because normally, otherwise, you tend to have a reason in terms of working capital. We also reduced our TSR outstanding by about $400 million. And I think that basically captures the lion's share of the negative free cash.

I was actually referring to the other -- to the Others item, so working capital is clear. But then if I look at the other -- Others item, I think it was positive, I think roughly plus $700 million last quarter. Now its negative $800 million, which is not including the working capital, so wondering what has caused this swing.

Yes, there's the TSR effect of $400 million in there. And then apart from that, that reflects payments that we made for employee benefits, VAT and other such non-working capital liabilities. If you look at it on an annual basis, the swings are not so much.

Okay. Thanks, Bastian. So we'll move on to the next question from Alex of MainFirst.

Two questions. First of all, what's the situation in the south on European steel markets and especially, what's the impact from Riva [ph] current difficult situation for your business in the region? And the second question, could you elaborate a bit more in detail about the price level expectations for spot iron ore and coal, which are underlying your guidance here and maybe also an indication for Q1?

Okay. So we don't comment on our competitors, so we don't talk about Riva [ph]. In terms of iron ore, our guidance framework is based on an average of $130 for the year. To the extent that iron ore prices for the year are higher than that, then as a business, we should do better than our guidance framework. We have not provided with the coal framework. But clearly, pricing of coal is down second to third quarter. That has had some impact on our mining business as we do ship coal. But clearly, that has been more than offset by the positive price movement in iron ore.

Okay. So we'll move to the next question from Luc Pez of Exane.

Two questions, if I may. First of all, a small one, with regards to the first call, you've not quantified or I haven't heard the CapEx, which is involved with the expansion in galvanizing, so happy to hear the number. Secondly, with regards to market outlook, could you provide a bit more color with regards to how you see demand evolving next year? Are you in line with what the WSA is saying? Or would you see a bit more growth?

Okay. In terms of the first question, it's the reason why you've not heard the CapEx number, is we have not disclosed it. In terms of market outlook, [indiscernible].

We have -- we are not giving the -- we have not finalized our market outlook for 2014. We are still in the process of finalizing our business plan for 2014. Maybe when we meet up in February, we'll have a much better sense of market outlook. But however, I was in a World Steel Association meeting in Brazil, and I think they are in the right direction of thinking. Only surprise, which we saw this year, was Chinese demand, we all expected 3%, 3.5%. And we see that we are ending around 6%, 7%. But basically, when I look at these numbers, so for the World Steel Association, they are the right direction. But we are not able to confirm that this is our forecast at this time.

If I recall correctly, at this half of the year, your growth expectations with regard to China, I would argue were like WSA. But you had also very higher expectations, which regards to the U.S. Therefore, wondering, to what extent destocking has led you to change the numbers and you've been cutting them again today?

No. In the first half of this year, U.S. declined by 6%. In the second half, we are seeing positive 6%. So by the year, we are expecting U.S. to be positive 1%, 1.5%; and our forecast for U.S. was around 2%, 2.5%.

We are forecasting negative for the U.S. for the year, negative 1%. And we were in positive territory when we started the year. And real demand is still in positive territory in the U.S. And so there's some destock, which has occurred in the market. Maybe there's some impact of the sequester because the U.S. federal government has spent less money in 2013. But we are expecting, as we said earlier, positive ASC, apparent steel consumption growth in the U.S.

Okay. Thanks, Luc. So we'll move to the next question from Jeff at Macquarie.

Just 2 questions. The first is kind of just going back to understanding the third quarter result. If I look at the EBITDA reported by each segment, you sum about $1.85 billion of EBITDA. But it looks like there was a larger-than-usual, say, hit from others in elimination. So I was just curious if that number was just a little bit bigger than usual and maybe what was in that number, the 1 -- the negative $144 million, if I do the math. And then, I mean, well, maybe you want to answer that and I have a second question.

Sure. Jeff, the -- you're right. The other elimination was larger. We had lower income from our shipping business and captive insurance and more stock margin elimination that we had previously as volumes increase. I would expect that in the fourth quarter, that number would come back to a more normalized level of about $70 million or $60 million.

Okay, that's helpful. And the second question, I guess, is just looking at capacity utilization rates. And I mean, I get the question quite often as to what's underpinning strength of, say, the U.S. steel price. Secondly, we've seen some pretty good price movements in the second half of this year for the European price. Is there -- I mean, is there are disconnect that we're not understanding that actually in terms of like flat-rolled products, the market is just really actually tighter than we think it is? Because if you think about what you're doing in Western Europe, you're running full out in terms of your blast furnaces. If you think about the U.S. -- I mean yes, there were some competitors who had outages but essentially, I think there's been good discipline from the main producers of flat-rolled product. I mean, is that -- I mean, if we take that in isolation -- I mean, yes, I know you have scrap pricing moving up, which is good. We've got elevated iron ore prices, which is good for underpinning. But I guess, on the demand front, is it something that we're missing that -- like I said, the market is actually maybe a little tighter than, say, the headlines would lead us to believe?

Lou?

If I could talk about the U.S. market, I think people do cite operating statistics that are -- capacity utilization rates that probably understate the rate, the actual rate, in the flat rolled market. Because it's -- those figures are typically cited for the entire market, and I think the long products market is much more construction-oriented. Construction, as you know, is still the segment in North America and the U.S. that is -- has the furthest to go to get back to the pre-crisis levels. We are running our facilities at a very high rate in North America. I do think that, as I mentioned, we're realigning our Cleveland blast -- one of our Cleveland blast furnaces now. As blast furnaces reaches the end of its campaign, it can produce less. So we'll see some boosted capacity back towards the reported level after that repair, and we've got several other furnaces over the next 3 or 4 years that will face similar situation. So I don't want to overstate it but I do think the number in the high 70s that people sometimes talk about, covering the entire industry, it's arithmetically correct but probably understates the operating rates in at least the flat rolled part of the market.

Okay, that's helpful. Is there any sort of commentary that can be provided in the same way for, say, Western Europe?

Yes, sure. In terms of Western Europe, I think the levels are lower than the U.S. Fundamentally, I have not seen the type of recovery we have had in the U.S. marketplace over the last 2 years, right? We have had negative apparent steel consumption growth in Europe in 2012, as well as 2013. And the prognosis for growth remains flat; hence, the asset optimization, which clearly does help. In terms of Europe, nevertheless, I would say that the headline numbers that you see in terms of steel capacity utilization are probably more conservative [ph] than the reality. For people to bring back some of these furnaces, you need to bring back crews. You need to make some nominal CapEx. You need to set up your own material linkages and you only do that if you see a step change in the market and you believe that step change in the marketplace will not impact the overall profitability, because you don't want to bring down the price of the remaining steel that you're selling. So in that sense, I think, asset utilization levels are slightly healthier than the numbers that we all see.

Thanks, Jeff. So I think we've got about 5 more minutes. There's time for 2 more questions, and we'll take the first from Chuck Bradford of Bradford Research.

Maybe a year ago, you signed a contract with Minnesota Iron and Steel for pellets. But they apparently delayed their project a year. What's your current status with them? And where do you stand now with Cliffs?

I think, Chuck, the -- we have a contract with the -- that subsidiary of Essar and I know that they are working then -- lining up the funding they required to complete that project. My understanding is they are investing funds in the fourth quarter and also we expect that the -- to have that material and expect that contract to be honored. I think with Cliffs, we have a good relationship with them. They are very important supplier to us. We have contracts that -- 1 or 2 contracts, basically, one of which runs out, the smaller one, in the end of January 2015. The other one, which is more substantial volumes, runs out the end of 2016, so 23 months later. And they're still far enough away that I think we haven't really initiated any serious discussions, let's say, about how we would resolve those -- or continue or adapt those contracts going forward.

Okay, great. So we will now move to last question from Alain William of Soc Gen.

Okay. I just had a quick question regarding the shipments to crude steel ratio, which was unusually low for Flat Carbon Europe. I just wondered if there was a specific reason there? That was the question.

So we -- what do you mean it was...

The shipments were low but production remained high.

Yes. So clearly, we are building inventory. We tend to do that. If you look at last year, after we did the AOP, we want to run stable operations. And part of the strategy running stable operations is they will maintain the level of steel production throughout the year. Levels of shipments are higher normally in the first half than second half. So we build inventory in the second half, which really is in the first half. So that's...

So before we close this session, I'd like to make 2 comments. One, that I see the low point in our EBITDA is behind us, and all of our efforts and focus of the past couple of years are delivering. We can see the benefits of asset optimization. We can see the volume growth in our mining business, and we have fixed the issues in South Africa and Algeria. We are now in a position to restart some focused CapEx to support our steel franchise. And finally, the improvement in economic indicators give reasons for cautious optimism on the prospects for 2014. With this, I look forward to updating you on the progress at our yearly results in February. Have a good day.