Good morning. Welcome to Usiminas Conference Call, where we will discuss the results of the second quarter of 2024. I am Leonardo Caram, Usiminas' Investor Relations General Manager. For those who will follow us in English, free interpretation of the webcast presentation is available on the Usiminas IR website. We also have simultaneous interpretation. Please choose the sound channel on the icon at the bottom of your Zoom screen. All participants are connected on listen-only mode, and questions can be asked in writing in the Zoom Q&A session. This is the icon at the bottom of your screen. Participants listening in English can also ask questions directly in this section. This conference call is being recorded and broadcasted simultaneously on the Usiminas YouTube channel. This conference is exclusively for investors and market analysts.
We request that you identify yourself so that your question can be answered. We also ask that any questions from journalists be directed to Usiminas' Media Relations at the email imprensa@usiminas.com. Before proceeding, we would like to clarify that any statements made during this conference call regarding the company's business prospects, as well as operational and financial projections related to its growth potential, are forecasts based on the management's expectations regarding Usiminas' future. These expectations are highly dependent on the performance of the steel sector, the country's economic condition, and the international market situation, and are therefore subject to change. With us today are President Marcelo Chara, Vice President of Finance and IR Thiago Rodrigues, and Vice President of Sales Miguel Homes. Initially, Marcelo will make some remarks, then Thiago will present the results. Subsequently, questions submitted in the Q&A session will be answered.
I now hand it over to Marcelo. Please, Marcelo, you have the floor. Good morning to everyone and welcome. It is a great pleasure to speak to you in our earnings results live call. On July 4th, we completed one year of change of our management, and I would like to share with you a number of important facts that are part of our operational plan. We have concluded during this quarter the ramp-up of our Blast Furnace 3, where we conducted an important investment of R$27 billion. Just in terms of reference, in June, our Blast Furnace 3 was able to achieve the greatest production of the last 11 years.
This is a significant improvement in our productive structure, our cost efficiency, and I would like to highlight that during this last quarter, when we compare it to previous periods, we were able to increase our production of 14% in crude steel, and we gained efficiency and productivity because what we do today with two blast furnaces in the past was done with three blast furnaces. Today, we operate with Blast Furnace 3 that went through an overhaul plus blast furnace 2. This also has allowed us to achieve operational results aligned to our project. This is at least at the end of the quarter. With this, we have been able to improve our fill rate, our fuel rate, and we have increased our metallic recycling level at around 7-8% when compared to the past. Also, we have been able to make progress in energy efficiency.
For instance, the consumption of natural gas was 70% in this period, lower than what we had before the overhaul. We have totally refocused on the environment and safety. We have also completely transformed our management routines. We have incorporated new KPIs that allow us to strongly focus on operational excellence in all the Usiminas processes, also with the incorporation of digital tools in order to make progress quickly. Now, in the market, let's remember what we mentioned during our last call. We provided you an outlook that was conservative because we talked about the stability of the sales volumes and the costs, mainly because, as we mentioned, during the semester of 2024, we would be focused on the operational stability. The ramp-up of Blast Furnace 3 is something that we achieved at the end of the semester.
Now, here, we have other impacts that we will share subsequently, like the non-recurrent effects and depreciation of the dollar and the real. We have to be prepared for a steel scenario that is still challenging. Cost pressure of raw materials that are pegged to the dollar in our industry, like coal, iron, or coke and semi-elaborated. They have an impact with the devaluation of the real, and this particularly has affected our Cubatão plant. Now, international prices are pressured by the excess of offering, especially from Chinese steel, and markets in all the regions of the planet are defending themselves because of these unfair competition practices. We have to pay attention together with the Brazilian government in order to see the evolution of steel imports, especially those that can present subsidy risks. Now, the new measures of rates and quotas have been implemented since June.
We do appreciate the sensitivity, but the fact is that what happened during the first semester, well, with this, we increased 22% of flat steel vis-à-vis when we compare it to 2023. This strongly impacts the industry because we have seen one of the highest penetrations of imported steel in Brazil, which is 21%. One of every five tons consumed in the country are imported, and we are concerned that part of these imports are subsidized during the first month of the quota. For instance, there was then we have 233 million tons. That is above the average of 2023. Our customers are facing strong pressure regarding imports. The automobile industry, there has been an increase of 38% of imported cars when we compare it to the same periods of 2024 and 2023.
200,000 imported automobiles during the first semester of 2024, just something that was published by the press. During the first semester of 2024, Chinese cars were imported in Brazil. There was an increase of 400% when we compare it to the same period of 2023. Now, despite everything that we have mentioned regarding imported products and industrialized products and steel, we can say that the apparent consumption of flat steels during the second quarter of 2024 rose between 6% and 7%. This is higher when we compare it to the first quarter of the year, and our sales throughout all this process have followed this growth. Now, for Q3 of 2024, the volumes of the domestic market will see greater economic activity that we can see in different publications.
There will be a 5% increase in the automobile industry vis-à-vis 2023 and 1.5% in construction when we compare it to 2023. Now, the international scenario shows very little opportunities in the export markets, with exception to the regional markets with high-value products. The strong pressures in the cost of raw material and the depreciation of real shows us means that we have to review our prices. Before I give the floor to Thiago, I would like to talk about our operation in Mineração Usim inas. Here, I would like to share with you that we continue our development plan in order to increase during the next periods our sales and operational level for the time being. During Q3 of 2024, we expect a stable sales volume vis-à-vis Q2 of this year.
Nonetheless, due to the volatility that we are observing of $105 per ton and the high stocks of iron ore that we are observing in the Chinese ports also present a challenging scenario for the mining industry. Thank you very much for your attention, Thiago. Let's go to my presentation regarding the results before we carry out our Q&A session. We will start with the highlights of the quarter. We have positive highlights that are worthwhile mentioning. One is an increase of 6% in steel sales in the domestic market this first quarter to the second quarter following the demand of flat steels. As Marcelo Aço Brasil announced, also crude steel production increased 17% from one quarter to another. This is due to the stabilization of the Blast Furnace 3. This means that we will gain more productivity and we will reduce our cost of transformation.
We ended the quarter with cash of $5.6 billion. This is positive and 300 million reais in dividends payout. On our next slide here, very quickly, we will talk about the consolidated result. There was an increase in net revenue of 2% with the mineração unit contribution. It adjusted a bit of 247 million reais, a margin of 4% because of best result in mining, but this was offset by the steel unit, by great pressure that comes from the sales prices and the cost because of the real devaluation. Net income recorded 100 million in losses, but with a strong effect from the exchange rate, 290 reais negative due to our debt in dollars. When we see our steel unit, despite a high volume of imported steel, we were able to increase by 6% in the automobile industrial sectors.
With a drop of exports, we ended the quarter with 1,042,000 tons of sale. Net revenue during the period we recorded $5,728,000. There was a drop of 1% in tons, and the effects also came from the adjustments in the automobile sector that were partially offset by a better sales mix. The adjusted EBIT of the quarter was $70 million. This was also impacted by an increase of 1% in the ton CPV and non-recurrent effect. We will give you more color during the next slide, where we can also see the EBIT from the first quarter to the second quarter. Here, we can also see a drop of our net revenue per ton of $82 million.
In the CPV, in COGS, we improved our efficiency because of the reduction of fuel, the reduction of natural gas, and a reduction of fixed cost of R$89 million that were offset by the slabs bought in the period and the devaluation of the real that strongly impacts, that is around 60% of our production cost, which is connected to raw material pegged to the dollar. In addition to the R$69 million non-recurring effects, and these are effects that had not been provisioned during the period and R$51 million of non-recurring effects. On our next slide, here we have the mining unit results, where we can see a 3% increase in sales. Nonetheless, the level is below 2023, as Marcelo mentioned, due to the new fronts that we are facing.
We will initiate the operation by the end of the year, where we will go back to the levels of 2023. The net revenue was $777 million, 20% above the first quarter, and there was an impact from the prices realized during this period. This resulted in the increase of the net revenue and the EBIT vis-à-vis the last quarter. Here, we have $156 million reais as a result. When we go to our financial indicators, it was positive during Q2, a positive variation of $152 million of working capital with $381 million. As a result, the capex was $231 million. That was lower than the first quarter.
As we generally see, the second semester is a period of investment acceleration, and we will be able to end the year closer to the inferior limit of the guidance that was $1.7 to $1.9 billion for the year. We have our free cash flow, $150 million reais. This is how we ended. Here on our next slide, we can see our cash and our debt. Our cash continues sturdy with $6.7 million reais when the net debt $6.1 billion because our debt is in dollar, and our net debt was $1 billion reais with a leverage of 0.8. The debt profile hasn't changed for the time being, but we are observing the markets in good conditions, and in a good moment, we will adopt a decision regarding 2026 maturity of our bonds.
So with this, I hand it back to Leo so we can initiate our Q&A session. Thank you very much. Thank you, Thiago. Now, we will go to our Q&A session. Our first question, we have a number of people that want to know the same thing from Miguel. Caio Ribeiro from Bank of America, Yuri Pereira from Santander, Rafael Barcellos from Bradesco, and Lucas Laghi from XP. All of them want to know about prices. Caio says that we have seen the average prices of the industry increasing. So have you followed these increases? Could you give us more color regarding when the price should go up? They also ask if these prices, if this increase of prices during Q3 is something that has already been transferred, or do you expect to increase something in terms of prices?
Also regarding the great industry network, there will be more increases of flat steel during the second semester. Thank you, Leo. We're going to try to explain the price dynamic that we're practicing in the market. As you know, three-fourths of our sales are connected to contracts. One-third would be the automobiles, the industrial, another one-third that is non-auto, and one-fourth of our sales is for the distribution sector. The automobile contracts will not be adjusted during Q3. These are fixed prices. The industrial contract, approximately 50% of them are being adjusted right now during Q3. The other 50% of these contracts will be adjusted or will be renewed as of the fourth quarter. Within these contracts that were adjusted on Q3, there were increases of around 3% to 5%.
Now, regarding the distribution sector or the spot market negotiated month by month, Usim inas has announced we are reviewing a need to increase prices because of the pressure of cost. This increase hasn't been defined. It will be applied as of August, and it will offset part of the depreciation suffered of 6, 8 weeks, that is around 10% to 12%. Another question would be the major industry network. I believe that I have explained the dynamic of these adjustments. Leo, I don't know if there are any more questions or if my comments were properly understood. I think that you outlined everything. Yeah, questions here are very similar. Now, our next question for Thiago.
Thiago, they want to know about Caio Ribeiro from Bank of America, Ricardo Monegagli from Safra, and Rafael Barcellos from Bradesco want to know how much do you expect the CPV per ton to drop during Q3 vis-à-vis Q2 because of the price of slabs and the gain of efficiency of the Blast Furnace 3? What is the average price of the dollar of the reais of the average slab consumed in the quarter? What can we expect on Q3 considering slab and the exchange rate? Rafael wants more details regarding this magnitude. Could you give us some idea of this drop during the third quarter? Caio, Ricardo, and Rafael. We try not to disclose what we see in terms of cost reduction for the next quarter because there are a number of variables that can affect this cost in the future.
For instance, the exchange variation has an effect; 60% of the cost are pegged to the dollar. We would like to remind you from the operational point of view from the productivity that has been in progress from the Ipatinga plant and the stabilization of Blast Furnace 3. The expectation is of improvement. The exchange rate will have an important role. The average rate was 5.21 exchange rate, and before it was below 5 during Q1. This effect during the second quarter was felt strongly. The exchange rate during the past weeks has been above 5.50 and even reached levels of 5.60. In a scenario of the average exchange rate at this level, it is difficult to offset 100% of these effects. Therefore, what I can say is this: at the current levels, we cannot state that we will be able to offset this effect.
I would like to add something here and to convey. During the first part, I mentioned that during June, we were able to achieve an operational level that was more aligned with the high blast furnace alignment. What we want to say in terms of exchange rate is that we have excellence, and in terms of production consumption, everything that impacts our industrial operation, we will capitalize these improvements because the movement of fuel is capitalized. Now, metallic yields, what I mentioned in terms of productive configuration with two blast furnaces, we're doing that in the past. We would have to do with three blast furnaces. Due to all of these points, we do have good expectations, and we are capitalizing in the general improvement of our efficiency.
Our position here before the situation and in terms of dollars per cost tons, this will allow us to transfer steel from the Ipatinga plant to our Cubatāo plant. This was something that was unthinkable in the past. The context is challenging. The situation, the exchange rate volatility is something that affects the entire industry, especially in industries like ours that have their cost pegged to the dollar. And as Miguel already mentioned, we are managing the situation. We are managing the devaluation of the local currency, our trade in the domestic market because we wanted to follow what happens in the market. But we are reassured that during the second semester, we will be able to capitalize the efficiency in our industrial efficiency.
Another question: when you said the price of the slabs or COGS, there is a moment when you negotiate the slab, and after a couple of months, you see the effect on the COGS. The market indicator results in this period, we saw an increase of the price in dollars. The not exchange rate, there was an increase in dollars of 20%, and from the second to three Q, maybe a drop won't even be 5%. So this also impacts strongly the production cost. A nossa próxima pergunta. Next question, Miguel. Complemento aqui. O Caio Greiner, do BTG Pactual. Caio Greiner from BTG Pactual says that he didn't understand the distribution number, if you can clarify. Caio. The depreciation of the currency in the past two weeks has devalued 10% to 12%. Our expectation is to transfer to the distribution sector 50% of this impact.
This is an adjustment of 5% to 7% of our prices toward distribution. Thank you, Miguel. Thiago, also cost. Marcio Farid from Goldman Sachs and from Safra, Ricardo Monegaglia. Marcio says, can we assume that the cost level of Q3 should already incorporate all the benefits of the Blast Furnace 3 ramp-up, or we should expect more improvement? Ricardo asked if the benefits of Q3 had a cost level that was normal and if Q3 should be the first quarter with normal costs. I will start, and Marcelo can also jump in and add something. As he just mentioned, we reached our stability level by the end of Q3. The cost of Q3 still contains effects of the stabilization of the second, of the end of the second.
There are effects of the stabilization process of the furnace that was achieved by the end of the period. This quarter, where we will see a normalized cost, should be Q3. But it's important to mention that the blast furnace is in the situation that we expected. It is what we expected. The continuous improvement process will take place, and we have more challenging targets for this blast furnace in the mid-run. We also expect it to present better performance because it will use less fuel and other production KPIs in the future. But this is in the future. Marcelo, what I want to convey is that this is a nonstop process. I could mention that we have created a strategic plan in the short bid and long run.
Short run was the ramp-up to be able to produce in Blast Furnace 3 the greatest amount in the last 11 years and after an investment of BRL 2.7 billion. It is a short-term measurement. As of this, there are a number of measurements that impact a number of sectors of our industrial operation: efficiency, labor production, energy. Also, we made term improvements of how we handle raw material blast furnaces; it will allow us to improve our rate deals. There is a menu of actions that are continuous, and they will be little by little incorporated in our industrial operation. Yes, an important part of our is an important part is in the next quarter, but we will continue improving in the other quarters. We have a clear strategic industrial plan that has been defined for other quarters as well. Thank you very much.
Our next question regarding the mining unit, Thiago. Daniel Sasson from Itaú wants to know Usiminas made $15 of EBITDA per ton in mining with an average of $112. Does iron ore close to $100? The discount is, or do you expect to do something that will improve this? Number one, we see great volatility in the price of iron ore. It's close to $100, but it will go back to $110. Within this scenario, when the price is between $100 and $110, this is not a major concern. In a scenario where the price is constantly below $100, I believe that not only us, but a great part of the mining companies will look at this very carefully. They will start analyzing the break-even and the marginal cost in order to maintain their mining operations.
At the current level, that would be 100 and 110. I believe this is no major concern, but we are paying attention to the improvement of margin in mining. I would like to mention something, and here I believe that, as we talked about the effect of the exchange rate in mining, the costs are in BRL. This means that our mining operation has a level of competitiveness that is very important due to the flexibility that we have in our operation in order to adapt to the market conditions very swiftly.
What I can convey and mention is that there is no doubt that this volatility that we face in iron ore impacts the revenue of the operations, but we are reassured of our capacity of our team at Musa that will be because they will be able to adapt themselves in a flexible way. We have outlined and defined different productive settings that will allow us to offset in costs all the potential drops. We are prepared for important drops in prices, and we are also prepared for the worst, but we expect the best. We do have a contingency plan in order to mitigate or in order to face this price drop. Thank you, Marcelo. Our next question is about mining. Igor Guedes from Genial, he wants to know about an update regarding the scheduled shutdown of the East Iron ore operation.
We are focusing on licensing, and we're also preparing the logistics in order to enable our operation in the East mine. I would like to say that for starters, we're not going to see this in the next quarters, but we are working in all our fronts in order to incorporate it the fastest possible. Thank you, Marcelo. Still about costs. Lucas Lagi from XP, Thiago, he wants to know if you could talk about the difference of cost between the last month of the last quarter that would be June vis-à-vis April and May when we think about the gradual stabilization of the furnace during the quarter. Lucas, we do not break this out on a monthly basis. As we already said, the blast furnace reached an adequate stability level at the end of the period, especially during the month of June.
The cost of June was better than the past months and better than the quarter average. This is something that we can disclose regarding our costs. Another question regarding Humberto Meireles of Agora Investimentos. He wants to know about the difference in production, cost, and sales costs. He mentions that it is close to above 1,000 tons. What do we need for greater convergence in COGS? This is something interesting to clarify. We change how we communicate in order to give more clarity and to provide more uniform information. When we comment on the expectation of the next quarter COGS, you understand this is a COG or something that will affect the COGS, but we understand that this is so it is easier to understand the effect that we expect from the company. We don't talk about the production effect on a monthly basis.
Yes, we talk about the COGS and CBP. It was difficult to explain because there are effects that don't come from the material, but affect the COGS, like freight delivery, freight that depends on the mix where we sell. Credit effect because of our tax benefits in Minas Gerais, there are a number of lines that affect our COGS, and you don't capture them in the CPP. The CPP wasn't the best indicator in order to project the impact of the cost. Now we comment on the expectations of the COGS in our company's results. Thank you, Thiago. Our next question is about CapEx. Daniel Sasson from Itaú says that the CapEx was around $500 million during Q1 and the average point of the guidance was $1.8 billion. Will it accelerate during the second semester, or will it be lower? When do you expect to disburse these two main projects?
That would be Coke, the Coke Plant 2, and the PCI. Without going into details regarding the dispersed value, the expectation is to end close to the lower limit of the guidance that would be 1.7 for the time being. We see nothing different from this. So yes, there will be an acceleration of our CapEx during the next semester. Our Coke Plant, as we had planned, we already initiated an investment in the second battery of our Coke Plant, and up till the moment, we spent R$1 billion in three years. The PCI, that is an investment that was part of the Blast Furnace 3, that is an important investment that will provide competitiveness to Usiminas.
We will additionally diminish the amount of Coke that we use because we will use more PCI that's scheduled to become operational by the end of the year or the beginning of next year. Thank you, Thiago. Our next question for you, Marcelo, about Coke Plant. Marcelo Farid from Goldman Sachs, he wants to know about the expectation regarding the overhaul of Coke Plant 3. What I can anticipate here is that we have already defined how our Coke Plant settings will be like, and it will be aligned with the horizon on the mid and long run. This is something that we have to present to our board because of the magnitude of investment. Nonetheless, I cannot provide you details, but the good news is that we have industrial and the productive setting for this production line of our Ipatinga plant.
We have already carried out a deep analysis and study of everything that we need to incorporate. Also, the improvement of fuel efficiency together with our decarbonization commitment. We want to reduce by 50% CO2 emissions by 2030. All of this has allowed us to outline our future interventions in our Coke Plants. The expectation, perhaps during the next call, we will be able to give you more details, but we already know, and it is already clear how to continue evolving here. Thiago, something regarding another question connected to this question from Igor. He wants to know about efficiency. I know that there are a number of variables that you can control, like the price of salt, but you're investing in Coke Plants to reduce more and more the dependency of the price of the input by third party. How does this balance the COGS per ton?
I don't know if I understood clearly your question, but when you depend on external Coke, it doesn't provide you the best situation in terms of competitiveness. So the need to make progress in overhauls and in the production of additional Coke is extremely important for Usim inas competitiveness. Everything that we are doing in terms of improvement of production costs currently have a very small effect when we see the investment in our Coke Plant. The Coke production is still very low, and the expectation has always been that this is a project underway. We will have a more relevant effect by the end of the three years of project. This is in terms of production volume of Coke.
Now, parallelly, what we have already done during the past year and this year we continue is we've improved our capacity to manage the external Coke, going after more qualified producers, more reliable in terms of the quality of the product, handling better this Coke until it reaches the plant, and we have already achieved important gains here. Another comment. Today, we performed the hot repair of battery number three, and we've introduced an important concept in the production with mathematical models that allow us mainly to align 100% of the emissions to the limit of particles to the environment. This is a very important point. As we've introduced these new concepts in our industrial operation, we have been able to improve our efficiency and cost, and we've increased the production for the limited volume that we can produce.
We have changed completely the carbon emission of the coke plant. We have other raw materials in the coke plants that allow us to reduce emissions, increase productivity, and to increase the resistance and the efficiency of this coke. We have pulverized coal injection of blast furnace that this will allow us to double our injection carbon rate in the blast furnace. This is a significant competitiveness because this reduces the coke demand. We have the project that we already mentioned that is a midterm project because we will only be capitalized in three years, but it is to increase the production capacity of our coke to gain efficiency, reduce consumption, and to increase our capacity to be self-sufficient in the coke consumption. The Blast Furnace 3, that is our main line for the upcoming 20 years. This is our focus on the short, mid, and long run.
Our next question, Thiago, comes from Igor Genial. He said we saw the prices realize and improving in the mining unit on Q2, and we believe that during the past quarter, we saw more iron ore low grade. Can you give us an outlook how the company sees the opportunistic movements regarding trade-off of downgrade of the mix, but with an increase of sales? Igor, during the last quarter, we did not see opportunistic sales of downgrade iron or yes during the first quarter because of a market matter, and it was an opportunity, but during Q2, this did not take place. Thiago, Mauro Lúcio from Investimentos, he wants to know about the exchange hedge in our dollar debt. If there is a strategy to back this debt in dollars and if there are exports, today we do not have derivatives in order to protect the dollar variation.
We do understand that by enlarging in the long run, there is a balance because of the exposure, the active exposure we have to the sales in iron ore and liability or debt in dollar. In the steel industry, we are in an environment pegged to dollar, and we're trying to transfer this to the market in BRLs. We still have a number of questions, and we're heading towards the end. Let's be brief. Rafael Barcelos from Bradesco, he wants to confirm the Coke's expectation for Q3, Cokes per ton. He says, is there a risk to see higher costs during Q3 vis-à-vis Q2? Rafael, as we stated, there's an expectation of growth due to the gain of efficiency that we've achieved in Ipatinga. External factors like the exchange rate strongly influence the production cost. Currently, it's very difficult to state something.
Let's wait till the end of the quarter to see what the effect will be like. Miguel, Yuri Pereira from Santander wants to know about the demand. How do you feel the demand of flat steel at the beginning of the second semester? We are very optimistic regarding demand. We see positive activities in all of the segments. If you see these statistics announced by AÇO Brasil, June presented a significant growth. When we compare it to the average of Q2, we expect to maintain this level of activity throughout Q3. With a solid portfolio, we expect to follow the evolution of the market. Miguel, regarding prices for the automobile industry, Igor Guedes wants to know. Now, customers from the automobile sector prefer to buy imported steel with more generic specifications. Perhaps you won't be able to increase volume, but you will be able to maintain the prices.
I believe that this preference doesn't exist. I believe that the preference of the assembly lines wants the level of services. The automobile service is one of the sectors that demands more quality in terms of product and services. We closely follow up, and we work with all of the automobile industries to develop more competitive products that can follow all the decarbonization products and green economy in the country. There is no such thing as this preference. The local assembly lines prefer local steel. Yes, we are part of the leadership of the steel sector that services the Brazilian automobile sector. What concerns us is the imports of cars. These are cars that are not produced. There is no labor because of this and doesn't generate salaries here. What about quotas? Rafael Barcelos and Lucas Lage from GXP want to know about the quotas.
Do you believe that there was an advance anticipation of imports? Will there be a will you destock during Q3? Do you believe that this can postpone the increase of prices in the short run? Yuri, Rafael and Lucas, up till the day, we haven't seen any impact of the quota. We haven't seen a high level of imports. And to the history of imports in Brazil and consumption, this is important. We follow up together with authorities and the Brazilian government regarding the impact that this level of imports can present. And there are tools that can be used if we see unfair competition. And we will pay attention together with the associations and the Brazilian government to apply this mechanism. We continue monitoring. This is important for us. It's important to the market and very important for the Brazilian industry.
We are still concerned with the level of imports, the inflow of imports in Brazil. Now, thank you, Miguel. Our last question is for Thiago Marcelo regarding the Cubatão strategy. Edgar Sousa from Itaú, how do you see the Cubatão operations in the long run? Are you seeing alternatives to mitigate the exchange rate effect in the cost of the slab? In this line, if there are also alternatives to mitigate the price of the slab. What I would like to convey, we have to be more competitive in any environment and analyze internally the company. As we produce steel in Ipatinga and as we consolidate the productive level that is efficient and of greater yield, with this, we will be able to transfer slabs from Ipatinga to Cubatão. We have challenges to improve efficiency, yield, productivity.
What I would say here, the agenda here is focused on these two drivers: to improve efficiency, productivity, and competitiveness of the Cubatão plant in the product lines that we supply and try to supply with our own steel in order to reduce the level of exposure that we have. But we are strongly focused on internal management, always. Thank you, Marcelo. And this is the end of our Q&A session. Now, Marcelo, I hand it back to you for your final comments. Well, once again, I would like to thank all of you for your attention and also convey that our project is a long-term project. Our vision is not a monthly or quarterly view. Our view is to build strongly focused with industrial strength that will allow us to supply to the market and to our customers in a competitive fashion and to improve the industrial sector.
We want to be closer to our customers and, as a main target, the markets of greater added value. We believe that Usiminas represents a differential, has a potential of development in terms of service and the quality of the products. Strongly focused on environment that are very important because we're close to our communities. We have to be good neighbors to our communities to earn the trust of our community, to earn the licenses, the environmental licenses in all the sites where we're present. We'd also like to acknowledge all our employees because of their efforts, their dedication, professionalism, enthusiasm that they convey in all the units in the middle of a transformation process that is being developed with trust in Usiminas.
I could not end without mentioning our support to our employees, customers, and suppliers from Rio Grande do Sul that had to face very difficult situations due to the rainfall impacts in the past months. We are closely following up all the recovery process. Once again, thank you to everyone and have a very good afternoon. We thank all of you for your participation. Should you have further questions, our IR team is at your disposal. Thank you very much.