Good morning, and thank you for holding. At this time, we would like to welcome everyone to CSN's Conference Call to present the Results for the Fourth Quarter 2019.Today, we have with us the Company's Executive Officers.

We would like to inform you that this event is being recorded, and all participants will be in listen-only mode during the Company presentation. Once the Company's remarks are over, there will be a question-and-answer session when further instructions will be given.

[Operator Instructions]We have simultaneous webcast that may be accessed through CSN's Investor Relation website at ir.csn.com.br where the presentation is also available. The replay of this service will be available for the period of one week.

Now you can watch the slides around continuous.Before proceeding, we would like to state that some of the forward-looking statements here are near expectations and trends that are based on the current assumptions and opinions of the Company’s Management, and these may differ materially from the forward-looking statements those expressed herein, as they do not constitute projections.Actual results, performances, or events may differ materially from those expressed or implied by the forward-looking statements as a result of several factors such as general and economic conditions in Brazil and other countries, interest rates and exchange rate levels, future rescheduling or prepayment of FERC demonstrated in foreign currencies, protectionist measures in the U.S., Brazil and other countries, changes in laws and regulations, and general competitive factors at global, regional, or national basis.We will now turn the conference over to Mr.

Marcelo Cunha Ribeiro, the IR Executive Officer, who will present the Company's operating and financial highlights for the period. Mr. Ribeiro, you may proceed, sir..

Good morning to all of you, and thank you for participating in the conference call for CSN.As usual, we will have a brief presentation followed by a Q&A session.

I begin with the presentation on Page 2 where we refer to the highlights of the period beginning with the main EBITDA figures.During the year, we were able to have a very strong free cash flow generation, and we achieved record EBITDA figures. Although this was a difficult year, but to be celebrated.

We had a very strong fourth quarter and in terms of the priority of the company to improve its balance, we made significant strides. We reduced our indebtedness that continues to be lengthened with operations that have brought us higher liquidity and a better long-term debt profile. And we also - and mainly reduced our leverage.

We went from 4.55 to 3.7 through growth of EBITDA, cash generation and iron ore pre-payments.We continue on in the presentation going to Page 4, where we show you the evolution of the EBITDA. We had a strong growth of 24% with a margin of 28%, one of the highest in our history despite a very difficult year.

And the sequential good quarter where we obtained growth despite a drop in the cost of iron ore.Now when we look at the results, we have good news, which is that the steel industry once again has increased its results. We had better volume, lower costs and this of course enhance our results.

And mining, despite that drop in prices had good results because of better volumes and a better realization of prices.In cement, we had a significant evolution, even with lower volumes and stoppages for maintenance, we had better prices, better costs and a significant margin evolution.

We've got to 1.64 EBITDA.On Page 5, we're showing you additional and relevant financial indicators. For example, CapEx in 2019, we made investments of 2.2 billion because of a significant evolution in the steel industry.

We had a relevant movement, which was a stoppage of blast furnace number three and of course other very important processes like centering, and other peripheral projects that allowed us to practically double the figures in this business, and this is a very special business when it comes to investments.And this is a non-recurrent point and the CapEx of 2.2 should be reduced in 2020 coming closer to $1.8 billion.

When we look at the financial cycle, we do have good news, a significant source of cash flow 15 days less.

These are the two way team, and in working capital the source of this reduction is an accounts receivable and inventories especially, we have an acceleration and accounts receivable especially in the steel industry with shorter terms, giving us greater liquidity and then inventory of finished products and raw material, we have become more efficient generating almost 910 million in terms of operating cash flow in free cash flow.We also - because of the strong EBITDA that we had, we reach 1.8 billion and we ended the year with 1.7 million in cash flow, which is highly relevant for a goal that is to reduce indebtedness.We go on to Page 6, where we continue our deleveraging.

This quarter we got to 3.1 times net debt EBITDA ratio, this was a great band. We began the year with 4.5. And in this quarter more specifically, we had a significant reduction in net debt of 1.3 million, this still is not sufficient.

The reduction of net debt was less than we expected because of some temporary events, non-recurrent amortizations or operational results that impeded us to have better results. But we continue with our targets in the middle term to get to R$20 billion coming year.

And of course, this will require perhaps financial initiatives such as the sale of assets.On Page 7, we see our debt amortization profile with very relevant events. As a priority, we have the length standing up the debt, a reduction of short-term debt and an increase in liquidity.

And we made great strides since the first semester and later on, we have lengthened our bank debts, and at the beginning of 2020, we took advantage of the window in the international market with the issuance of $1 billion for an eight year period, which has enhanced our liquidity and resolved our challenges of financing for the year 2020.We will continue to do the same, maintaining a high liquidity higher than $4 billion and cash over short-term debt will be one continuing to lengthen the debt, and of course taking advantage of the local market with the issuance of debentures.We also speak about the business highlights on Page 9.

We begin with a steel production and this was a very special year for - still a challenging year. And of course, we lost some competitiveness because of blast furnace number three, and we have a top in the sales volume. Now, our sales indicators is not a very good indicator it compares the year 2018 where we had the Indiana Plant in the U.S.

And of course we have an impact of this and the comparison, but the local market shows our competitiveness and the trough of 5%, these are the Brazilian market that had a trough of 2%.However, in the fourth quarter, we resumed our strength with a growth of 9%.

We have good volume and a good recovery enabling us to foresee that the year 2020 will be quite different. When it comes to revenue and despite the growth of 4%, we have a growth of 1% because the average price has dropped 3% because of the mix of the product sold and with shorter average terms.

Now despite these factors, we made strides in EBITDA, we got up to 177 million with an increase in margin.Thanks to the increase in costs, which we see on Page 10. We see that we had a significant move forward in terms of production volume.

We practically doubled our production and I would like to highlight that most of the production was in December, when we concluded the ramp up once we had resumed the maintenance of the blast furnace and we see a new level of cost.The cost of flats has had a significant decrease of 9% from the third to the fourth quarter, and we believe this reduction will also be reflected in the 2020 results enabling us to reach new profitability levels.

We have had growth, but it is far from what we wanted to have.On Page 11. We see the highlights for mining. We had another very important quarter with record in terms of sales volume reaching 10.3 tons. This is a semester where the production is impacted by the seasonality of rainfall.

We tend to have lower volume, but this was offset with a purchase from third-parties and some inventory. We ended the year with a significant evolution of 11% and 5% for the quarter.Revenues increased vis-à-vis the third quarter although the average prices the market prices did have a drop.

Our cost increased slightly because of a lower reduction of fixed costs, and because the volume was impacted by rainfall and the EBITDA is marginally smaller than that of the third quarter, dropping to 51% but high for the quarter.

We ended the year with 5.9 million of EBITDA, more than double the EBITDA for the year to 2018.In the last Page, we show you the excellent realization of prices in the quarter. And although there was a drop of 13% in the Platts 62 index, we ended up with only minus 2%.

We were favored by the basket of quotations that favored us vis-à-vis the third quarter, and we will have more so - that this costs would helps us and also the drop in the price of freight which was 15%. These are the main indicators that we wanted to present to you.And at this point we can go on to the question and answer session..

[Operator Instructions] Our first question is from Daniel Sasson from Itau Bank. You may proceed, Mr. Sasson..

My first question refers to the cash flow that you reported for the quarter. If you could help us reconciliate as with the drop in net debt of 500 million and compare the fourth quarter to the third quarter.

This would be very helpful, which were the factors that allowed to not to have a greater drop in net debt?The other question refers to cash flow and dividends, if you could give us an update on the sale what is it that is pending still, and which is your expectations for the generation of operational cash and the payment of dividends in 2020.

If we're going to have a payout that is higher than the cash generation for the year has happened in the year 2019. These are the questions I have? Thank you..

Thank you, Daniel for your multiple questions. Let's speak about the net debt and the free cash flow.

Well the free cash flow as shown is the source - the operating source, we generated net revenue, but this quarter we had some temporary events and other non-recurring events that consumed some of our generation among the temporary ones, the amortization of our mining sector R$300 million approximately and we also have the new payment that will be announced in a very short-term.Now this is one of the variations that will cause variations from one quarter to the other.

We also have non-recurring events.

For example, the operational generation still impacted by the resumption of the blast furnace three representing R$117 million in terms of operating revenues, that is still not part of our free cash flow, that is part of the EBITDA that's also consumed resources.We can mention a certain leak of dividends, which are not normal dividends of CSN to shareholders that are dividends of CSN mining to CSN, some consortium that represent R$100 million that are not part of the consolidated figures.

And we had to make contributions to the Transnordestina as part of our commitment with the government to reinitiate the work. And the contribution this quarter was R$115 million and the commitment of new investment for R$215 million.These are non-recurring and temporary investments that explains the variation.

When it comes to SWT, we have a potential buyer, who is fully engaged with us has been engaged for the last year and a half. He is interested. He has undergone that whole process of diligence has improved the proposal until he has come to a proposal that we deem to be attractive.

Now this process is lengthier than we had imagined.After the due diligence, the buyer had a delay in terms of finding insurance and funds to conclude the transaction, but recently has resumed the negotiations.

And as we had already mentioned, if the conditions are attractive and aligned with what we expect, we will continue under the sale to continue to reduce our leverage..

Thank you, Marcelo..

The next question comes from Mr. Leonardo Correa from BTG Pactual. You may proceed, Mr. Correa..

Good morning to all of you. My first question refers to iron ore we have access to the monthly data of volume per ton in Brazil, there are - data from LBH and we are following up on a drop - on a accumulated drop of 40%, including January and February.

I would like to know if there's something wrong with the data or if they are real, and if you are reasonably below the pace that you had last year?And it is what caused any risk, if there is something extraordinary happening, we know the rainfall situation in [indiscernible] but why are these figures so weak? What is happening perhaps from the viewpoint of five years if there's a problem with the coronavirus problems that we are unable to explain to justify this great drop in the shipments of iron ore at the port of CSN.My second question I don't know if Martinez is on the line.

My doubt refers to the fuel plant, we see that the results are still under evolution. Now the renovation had a significant impact on the business until 2019.

This should stop in 2020 and what investors are attempting to do is understand the pace of evolution that we can see in the quarter a result of 200 million and EBITDA is below the potential of steel production.

Therefore, what do you expect in terms of evolution and if you can quantitate tile explain to us when you will get back to a normal pace of EBITDA 700 million per semester in the steel production..

Leonardo, good morning, this is Net. Yes, it's true the rainfall level is 92% above that of previous years and of course. This has an impact on all the mining companies we’re very much aligned with what is happening with other providers of iron ore now our guideline for 2020 are the same. We're going to recover our production.

And we hope that industrially we can guarantee production. And as of April, we should get back to our normal level.We are suffering but nothing that will compromise our activity. We're waiting for normalization in terms of rainfall.

And of course, there is a disadvantage in volume but an advantage in prices, there is a scarcity of Brazilian iron ore in the basket, and our product has an attractive price because of the low alumina content to offset the scarcity of iron ore in the Brazilian market. And there has been an increase in price because of the supply from China..

Good morning, this is Martinez. In steel production, the main emphasis especially at the beginning of the year is to recover our margins. Nowadays we're operating in the industry with a margin and if you look at the results of 3% to 5% sustainably.

This is not something that the steel mills have achieved in the last year they used to attain higher levels at CSN. From the operational viewpoint, the conclusion of the renovation of blast furnace three one of the pillars is to work at full steam.Last year we purchased slab, we bought 800,000 tons, 900,000 tons of slab [indiscernible] others.

So what that means that from now on we can work at full production 85% in the local market and nothing will change. Now when it comes to prices, and with the dollar rate, and the level of the dollar it’s impossible not to restate the prices.

In January, we had a correction or restatement of 10% in February and higher added value of products 7% increase on March 2 for civil construction and distribution, a correction of 10% as well.When it comes to the premium nowadays, the CRO report came out today with a return of some industries from China and they remarked that the level of activity from the region of Wuhan has returned by 30% to 70% to normality and the price of China that had reached $155 is now at - 465.

This amount of 465 with the price increases we had at the beginning of the year and with the level of the dollar means we should work with a new price increase to ensure that the premium is zero.In the local market nowadays, the BQ is 800 with PIS/COFINS.

This will give you an idea that it would cost 620 million and this will show you how we will recover our margins. Now when we return to levels of R$700 million of EBITDA throughout the second semester, without a doubt, we will present to you more relevant statements in terms of dollar per ton for EBITDA.

Well we have to seek at CSN is to return to that level of $100 per ton, giving us $2.3 billion EBITDA in the steel industry per year..

Thank you, gentlemen. If you allow me to check some details, and I begin with a NAS, it was my understanding in the past that [indiscernible] was at $14 million tons of iron ore this year. Is there a minor revisions just 386 or is my understanding wrong?Yes, we're seeking that figure of 40.

Now the rainfall at the end of November and December hit us strongly because of the seasonality. For this year, of course, we were highly impacted the first quarter, but we do have a [indiscernible].

We expect to operate [indiscernible] and industrially we are more ready to advance through the coming quarter.Our guidance therefore is at $40 million and which would be the calendar we ended 2019 was, and for [indiscernible] you were suggesting that given the exchange rate, that you could have a third increase for the year..

Is there anything on the table for the month of April, some evolution or is it still too premature for that?.

Our policy and the policy in the domestic market, which is the more correct policy is to maintain a price for TSN based on our portfolio, but very generally the premium should be 7% to 10% for the nationalized imports of products for the queue with the present day dollar rate for 60 practically brings us a negative premium of 7%.

And this, of course, would justify a new increase for either April or May. We have to make a correction. It's an issue of cost. We cannot recover margins because of the increase in the dollar. Thank you. Thank you very much..

The next question comes from Thiago Ojea from Goldman Sachs. You may proceed sir..

Good morning and thank you all. My first question refers to the cash generation. This year we saw a very strong EBITDA at 7.3b but the net debt also increased because of a combination of exchange rate, and the payment of dividends.

My fellow perhaps you could give us greater guidance, not with specific numbers, but in terms of capital allocation for 2020 and 2021.

For Martinez, if you have any figures confirmed in March it would be interesting if you could remark on this?.

When it comes to our cash flow as I mentioned here, the cash flow and reduction were either non-recurrent or temporary. So, we have focused on cash flow, we will see a better EBITDA in 2020.

These are the 2019 CapEx that will be somewhat lower as mentioned, a working capital that will be quite comfortable, and a lesser cash generation and interest has also lower which means that we will have a favorable situation in an environment where the dividends will follow the minimum mandatory payout of 25%.The dividends into '19 were higher, because we had a year of extraordinary profits coming from 2018.

And there will be a strong reduction in the year 2020 and 2021, which will be the necessary amount to get to that minimum debt of $20 million, perhaps with a sale of assets or more.Now, there was a mention of 5% and we will have to review that situation because with the present day exchange rate it is impossible to maintain the market and desperately going forward we're going to follow up on the forecast and we will recover our margins in the industrials sector, the home appliances, light line, equipment and much more..

Thank you. Thank you for your responses..

The next question is from Mr. Caio Ribeiro from Credit Suisse. You may proceed. Mr. Ribeiro..

Good morning, and thank you for taking my question. My first question refers to the effects of coronavirus in China and your viewpoint, especially the slowing down of the iron ore production domestically, which would be the annualized volumes of production. And you're reading on the stimuli package that was announced recently in China.

Is this a great surprise or was it expected for semester? In the fourth quarter, you were successful in capturing market share in the domestic market. If you could give us a hint of what will happen in the first quarter of 2020. And where will your market share stem..

Caio, good day. Regarding the coronavirus, we haven't had any impact from our clients. The orders continue, what we do observe now is something favorable, there is a greater control in China and with this stimuli, the economy is reacting, there is a greater infrastructure and construction.

Now plus used to be at $95 net there was volatility and what we expect is fast strong flex because of a return to normalcy in China. And as you mentioned, the economy itself is resuming, the steel production tends to increase its production level.

So our outlook for the second quarter is very good.Now when it comes to the fourth quarter '19 with a return of the blast furnace, there was a recovery. It was our obligation to go back to the historical levels of production of products was truly collaborated in the fourth quarter was price. We had a trough of 4%.

But we ended up selling more the queue. We normally had 235,000 for the quarter, we went up to 300,000 in the last quarter, therefore is natural. The two have lost 2% in price only in the mix. Now for 2020, as I mentioned previously, we're going to work at full steam all of our lines are full and coronavirus itself has made him force more vulnerable.

And with the dollar exchange rate any importer will have to think twice because of the cost.What I foresee, therefore is an opportunity to recover part of the market because of the penetration of imports that last year represented 10%, there is a million two hundred thousand tons that could be converted to the domestic market.Now regarding the different sectors, and despite the coronavirus and data that is not satisfactory for the industry, we foresee and apparent conception of approximately 6%, but all of the sectors involved continue on with their same forecast in a specific case of TSN, regardless of the market, we're going to work with a full market domestically, we're going to work for the domestic market.Basically, the strategy for the first quarter is to be careful in the lines that are somewhat more vulnerable, that have ….

If you could give us a quick follow up, besides the steel production in China and the production of iron ore domestic me. Do you have a reading of which was the impact due to coronavirus, which was a drop in production in China..

Are you referring to China or Brazil….

I am referring to China..

China had a drop of production. I truly don't know which was the impact in percentage, but there was a drop in the production due to the coronavirus this is a fact. Percentage wise I can’t give you a figure..

Your next question is from Thiago Lofiego from Bradesco BBI. You may proceed sir..

Thank you, Martinez. I don't know if you have already remarked on this the trend for a drop in price fuel production.

What is it that we should expect in the first quarter and when will you be comfortable to say that there is normalization are the level satisfactory now or not? And you already mentioned this, but simply to gain a better understanding?You had an increase of 10% for distribution in January, another 10%. That will be implemented in March.

And there seems to be room for greater price increases perhaps 7% to be able to recover the negative premium if you could confirm this?The second question for Marcelo, how much more in terms of contributions Do you have to make for the Transnordestina, the total figures for the coming 12 or 18 months and if you confirm the CapEx for 2021 once again? Thank you..

Good morning Thiago, this is Pedro Gutemberg about your question. Referring to the ramp up of blast furnace three, we’re very close to what we would deem to have the ideal result.

The first quarter has been very typical because of the rainfall, something seasonal of course, on our operations, but presently we have a stable operation and we have been able to capture 80% to 90% of the expected results.And we will get to the second quarter with a situation that is more sound.

We have another work that we began recently on our coke plant that will allow us to have even more competitiveness and more than we have in this first quarter, we will have sounder results. And we're very optimistic that as we make your investments we will have a very clear return on this and that we will present on the following three quarter..

Thiago I confirmed this, there is a price increase in tin foil 7.5% for April 1. So civil construction 10% in January/March in February, galvanized 7%, this has already been put in place. This has already been put in place, the portfolio has already been altered so, distribution with a negative premium of seven.

Now when you get to the price of the Q, the more common one with season called season 240/250.Now, if you work backwards and you think of the BQ in China, that was 465 theoretically with $1 between 440 and 470 the premium is negative between minus 2% and minus 8%. So of course there's room for increases.

And we have to transfer this increase otherwise. In this case, it's very clear its cost and we have to recover the cost. And what will prevent you from making a new announcement now.It's not a problem of transferring this one of the distribution - extreme, distribution is not a market it is a channel.

There was a price increase in January another one in February. One for galvanized product, one for hot and cold production 10% theoretically, we should announce a new increase for April or May. But once again the entire chain has to be lubricated and should continue to buy.We have a commitment of contributing to the work of Transnordestina.

This represented R$515 million once this investment is over the work will be proceeding full steam and will be financed by public resources. These resources has already been identified, and they're awaiting the approval of the new budget. In the coming 15 months this budget should be approved and it will no longer need our operational contributions.

We will be contributing R$150 million up to R$250 million more during 2020. Thank you..

Our next question comes from Mr. [indiscernible] from UBS. You may proceed, sir..

Thank you for taking my question about the process that underwent judgment at [indiscernible] will you be successful in this process and this would entitle the - entail I'm sorry, the payment of almost R$1 billion in 2020?.

This is one of the processes that has been resolved or included in our financial statements. With part of the transaction that we had in mining, this is a process that has already been won in the lower chamber of the seven to one vote. And yesterday, it was voted again and as expected.

There was a decision that favor luckily enough.So there was a very positive evolution in our opinion the amount had a reduction of almost 40%. And now we're going to define what to do. We're going to discuss this in courts, but of course this will be a lengthy process.

From our viewpoint, there has been a positive evolution in our opinion on this case has not been offered? Thank you..

Our next question comes from Mr. Carlos De Alba from Morgan Stanley. Mr. Carlos, you may proceed..

Yes thank you very much, good morning everyone. So questions - for Marcelo on Transnordestina could you repeat the commitment for 2020. I think I heard R$250 million but just wanted to double check that.

And also what happened Marcelo after 2020 if there is no agreement for the new funding of the project, what are the obligations and responsibilities of CSN?If we have any records in terms of finishing funding for this project or what if it will stop the company's responsibility? And on SWT Marcelo [indiscernible] we see a firm offer from the buyer because given the uncertainties that we have right now in the macro front.

I just want to understand how likely SID that the company will finally close this transaction?And if I may Martinez, what - has been the actual implementation Martinez of the price increases that the company has already announced [indiscernible] we assume reckon with demand in January, and all of the companies in the domestic market have imported - and showed a decline in the real life prices.

So everyone team is going to pull this but the fact is our prices net prices in the fourth quarter was down for the three companies in the country. So I just want to see how much of the announced price increase has the company been able to implement? Thank you..

Carlos thank you for your questions, when it comes to Transnordestina based on - present day movements so, we do have a very positive viewpoint. This is now awaiting the decision of the tribunal of accounts to proceed with the works. And of course, all of this depends on the budget on the budgetary approval.

Now the budget was prepared in July the work should proceed.And that is why we have this commitment of making contributions to this work even though we have already fully complied with our contractual commitments. We have done our share.

And now we're missing an important contractual part that was foreseen in the original agreements, monetary restatement and other things that were foreseen.

So this is our obligation to try to conclude this work, because it will be positive for CSN.Now financially, what exists and what you see in our balance is a guarantee from CSN to pay part of the debt of this subsidiary that is at about R$2.5 billion. Now this is our exposure in the project.

We're highly confident that this - evolution will allow the project to continue and begin to operate in a few years. Now in terms of SWT, we have an interested buyer perhaps not a firm offer.

This is a buyer that has different moments has participated.He has always been firm in his will to diversify, it is a producer of long steel that works in Germany and is a leader in other parts of Europe and this buyer is truly interested. So on our part, we want this proposal to reach a satisfactory level.

There is nothing contractual so far of course could not happen could not materialize..

Carlos good morning, all of the price increases that I mentioned here has been implemented. And while we have to consider is that part of our invoicing. We have 22%, 23% in the automotive sector, and spare parts and 13% in the industrial market.

The greatest challenge in the first quarter and in the second quarter as well is to recover margin in these sectors.

Those increases for distribution have been fully implemented.When it comes to demand as I mentioned previously, we have the downstream lines working at full steam, painting and metal sheets and a greater capacity and the cold and hot rolling because of the resumption of the blast furnace.

And there will be no problem in placing these new volumes during the first semester..

Thank you very much..

Our next question comes from Alex Hacking from Citibank. And Alex, you may proceed..

Yes good morning. Could you please discuss the performance of the dry stacking technology [indiscernible] is the dry stacking currently operating at the full blake. How is the performance last year versus your expectations and - how was the performance during the very heavy rainfall during the third quarter? Thank you very much..

Alex, good morning, well both are already in operation. We have achieved a 100% of our production capacity, which means that CSN no longer depends on the dam. The final adjustments were made in December, enabling us to reach the nominal capacity of the plant.

And we're now going to have full domain of the technology and produce more, but we're very satisfied with our performance in this field..

Thank you. As we have no further questions. We will now return the floor to Mr. Marcelo Cunha Ribeiro, the CFO and IRO for the closing remarks..

Thank you all for participating in the call. I will very quickly review of some of the questions and to emphasize the company's policy and give you a very brief outlook of what we foresee for the first quarter and the year 2020.I begin with Daniel Sasson from Itau, who asked about the dividend? Our policy is 25% as a minimum payout.

We're going to fixed this for the year 2020.

And in normal situations, this is what we intend to implement as was said last year and for the coming years.When it comes to the shipment of iron ore and the steel production, from the viewpoint of demand, we have never had supply for cargo that has not been placed in the market, which means that there is no problem of lack of demand in the sale of our products.

Quite contrary as you have observed that big drop in shipments because of the torrential rains that we had in the Southeast since November.And now at the end of February and March, we had a very high concentration of rainfall at the port.

And because of this production, transportation and shipments become highly complicated for all the producers in the Southeastern market.

As in Australia, we had problems but due to the bad weather, but the demand exists and it will come back even stronger, especially for high quality iron ore.And this is what we intend to do to have a premium, iron ore is at 91.60 at present, and we think there should be a price increase and a higher premium because of the quality.

We believe therefore that this year will be quite steady in terms of price and quality and from the viewpoint of the prices for the market. Regarding the steel mills, we do have a price recovery.

We have worked a great deal with our steel production last year.You followed up on this, the renovation of blast furnace three, a recovery of 15,000 tons with hot roll process. And we're going to use our distribution chain. And part of the policy of CSN is to give support to our allies and distributors.

We want to significantly increase distribution during these five, six or seven clients that will become our main partner and place the production in the domestic market.Our priority has always been and continues to be to place the production in the domestic market.

As Martinez mentioned, the added values have already been concluded until the first semester and for BQ, we will do everything to six or seven to 30 teachers that are our partners.

When it comes to prices Martinez has already explained to you the new price implementation.Without a doubt, we will be forced because of new cost and devaluation of the real to have an increase of 10% beginning in May for all types of products and all types of segments. It is a re-composition of prices, the dollar will reach 470.

And there is a deficit - I don't think the dollar will have less value and we will have to re-compose our prices due to the costs and these increases will be implemented in April or May.Regarding Thiago from Bradesco, who spoke about iron, ore, coronavirus and shipment. Coronavirus is a reality.

We have seen a high number of people contaminated by this disease. There is a low mortality rate in terms of percentages, but it is a surprise when it comes to the speed of dissemination and increase of this disease in China.They did very good work when it comes to controlling the disease, we will see what will happen in Europe and the United States.

And we're ready for another two months of difficulties in terms of the resumption of logistics, business, and a bit of tranquility for a better consumption. I think we will overcome of all of this. Worldwide I think we are able to fight against this disease. And beginning in the second semester, everything will have been controlled.

And we will no longer have greater interferences in the trough of the GNP that we observe in all countries.When it comes to the shipments of Iron ore, the difficulty of production, transportation and shipments, we're going to recover this production.

We will do everything within our control to get there and in flat field, the first quarter we have had a good performance, and based on January, February, and March, I think we will have a good year in the domestic market.

As you know the market was unsupplied, now the recovery of the Brazilian domestic market is lagging behind from more than a year and three months.Everybody we're sure that the economy would resume, this has not happened. It began well this year, but then we have the coronavirus problem.

We're ready for a full resumption of the local market and from the viewpoint of steel production there have been no difficulties in terms of our sales for the market.To respond to Thiago from Bradesco, we have resumed the Transnordestina work of October of 2019 to an agreement made with a ministry of infrastructure.

The intention was to contribute $254 million for the recovery of some of the part of this highway [indiscernible] and of course, there is a negotiation underway with the entities funding this project. And the FDNE already has funds allocated to the project for the continuity of the project.

And these are funds from the Development Fund of the Northeast that do not depend on the budget.

We have done our share, and beginning in April when we will conclude our commitment, we believe that the work will be resumed at a very fast pace.And in conclusion is 14th April of 2022 to - still within the mandate of President vote for another, about Mr. Smith and the sign as you know, we're involved in a significant litigation with a government.

These are large companies. And we were able to win a favorable decision at the lower chamber. This has gone up to the upper chamber of the card, what happens most of the time.

The President has favored the government, but we do believe we have a very good foundation in terms of our discussion, and as other issues that are being discussed, we do believe that the result will be favorable.Now regarding this year and regardless of the situation with coronavirus, we are ready to work and operationally you can expect that we will do whatever is possible to reduce costs and increase prices.

And we will deliver a better EBITDA than that of 2019.We will do this when it comes to the deleveraging that continues to be a market concern. We're discussing not only the sale of SWT, not only bad, perhaps we made a mistake, we were left with only one interested party after the discussion.

And of course, surprisingly, this is dragging the discussion more than we expected.

However, we cannot impose a time in under so we continue on with our negotiations, regardless of these other issues, prepayments, streaming the sale of assets for mining, a part of mining to conclude our strategy, we're working on the ideal for mining but just to say we're working in all sources to get to 20 billion of net debt for that company as fast as possible.This is our wish and of course in a certain way this coronavirus will delay our intention somewhat.

As you know, all of the markets are quite uncertain about the near future. So we're making the most of the good market opportunities to issue $1 billion in bonds. We thought we would have continuity to streaming or the sale to a strategic partner of 12% of our mining. And that is how we got to the IPO of mining.

But now we will have to wait more and the greatest priority for us here and Martinez is responsible for this is to see alternative - I'm sorry for the leveraging of the company to get the 20 billion in net debt.Now our expectations for this year are good. We are optimistic we're working at full speed with lower costs in mining.

We're going to seek a recovery to deliver what has been budgeted and we are able to do this in Siemens. We believe that we can make enhancements because of the resumption of civil construction.

This would enable us to deliver better figures in 2020 compared to the ones we have already delivered that was quite good.I would like to thank all of you for your participation in this call and Marcelo's team is always at your disposal, what we seek is transparency and we will gladly clarify any of your doubts. Thank you very much..

Thank you. The conference call for CSN ends here. You can disconnect your lines and have a good afternoon..