JFE Holdings, Inc.

JFE Group Investor Meeting(FY2023 1Q Financial Results and FY2023 Earnings Forecasts)
Summary of Q&A Session on August 3, 2023

Moderator: We would now like to move on to the question-and-answer session. First question, please.
Participant: I would like to ask two questions. The price of main raw materials in 1H of FY2023, assuming an
exchange rate of about JPY140, is probably down by JPY3,000 to JPY4,000 per ton of steel from 2H in FY2022.
If the current spot prices in the raw material market continue, we can imagine a further decline of about
JPY3,000 to JPY4,000 per ton from 1H of FY2023 to 2H of FY2023. Rather than achieving this widening of the
spread by raising prices, would it be to maintain steel prices to some extent even as raw material prices fall?
Please tell me if I am correct in assuming that the selling price of steel will not fall as much as it has in the past,
although it will be linked to the main raw material price?
In addition, overseas steel market prices have recently dropped significantly, as have raw material prices. With
the suspension of the upstream process in the Keihin area in September, do you see the spread widening in
2H as a result of not making contracts at unreasonably low prices? What can you tell us about the concept ofthese spreads? We have heard that some trading companies are looking to lower Steel product supply prices
over 2H. My intention with this question is to confirm that even if those prices drop, the spread will not be a
problem.
Second question. I understand that the land use policy after the suspension of upper process in Keihin will beannounced in September, but how much will be disclosed when it is announced? Will there be a roadmap for
the future cash flow and other factors such as land sale price, demolition costs, etc.? We would like to knowwhat will be published in September, including those details. These are the two major points. Thank you.
JFE: Regarding raw material prices, in the current plan, the current raw material prices are expected tocontinue to a certain degree, even in 2H. On the other hand, regarding sales prices, overseas steel market
conditions were quite poor this past July and August, but we assume that they will increase from September
onward. As for the 2H average, we are looking at the assumption that it will recover to the 1H level, and we
expect the export spread to gradually improve from the current level. As I have mentioned in the past,
domestic prices for ferroalloys, energy, and other commodities are still at relatively high levels compared tothe past. Therefore, we are negotiating considering future trends and hope to take the spreads in the future.
We believe that we have gained some understanding of our customers, and we intend to continue these
activities and take the spreads firmly in this plan.
Regarding the land use in Keihin, the City of Kawasaki issued the plan of its land use policy in June, and we will
be issuing our own basic policy. Kawasaki City has provided certain estimates of, for example, demolition costs
and investment, but we will be discussing this with the government in the future. Therefore, rather thanannouncing detailed costs and investment amounts in September, we will announce in September our basic
policy on how we will approach this land and what form we will take in response to the City of Kawasaki's use
policy. That's all.
Participant: I see. Regarding domestic steel prices, even if raw material prices decline, is it safe to assume thatthe policy is to raise prices in the base price portion that is not linked to raw material prices in order to increase

1the spread, and that discussions with customers have been settled to some extent over the long term, up toaround 2H?
JFE: To a certain extent, I believe they understand.
Participant: Regarding the cash out and cash in for Keihin land use, I heard that it would not be announced
yet in September. In addition to the removal of buildings such as equipment, if plumbing, underground water
pipes, etc., are to be removed, the cost would be enormous. Is it safe to assume that there is a considerable
range of demolition costs?
JFE: Yes, that is right. According to the use policy released by Kawasaki City this time, the leading area will be
used starting in 2028. Other areas will be dealt further down the road. In addition to that, only partial areaout of the leading area will be used at first. There is also a large hinterland outside of the leading area thatwill be developed over time, and we expect significant fluctuations.
Moderator: Next question, please.
Participant: As to the first question, I would like to talk about the domestic market for store-bought products,
where electric furnace makers are cutting prices significantly, imports are flowing in, etc. Please tell us about
your thoughts on risks regarding this.
Second, please explain again how you view the export market environment.
Third, it has been announced that some automakers are introducing Gigacast, a one-piece aluminum molding
process. What is the impact on your company's demand for steel products? That's all.
JFE: First, regarding the first point, as you mentioned, indeed, electric furnace makers have reduced theirprices and imported materials have slightly increased in volume. I believe that mainly in the field of generalpurpose products, electric furnace materials or imported materials may replace them. However, we ourselves
are in the process of shifting from general-purpose products to high-value-added products as we reduce
supply volume through structural reform. Therefore, we do not consider this area to be a major threat at thistime. However, we will closely monitor future trends.
JFE: Regarding the second point, in terms of export mill scale prices this time, if we look at it by quarter, theaverage price has not yet fallen that much in 1Q of H1. We expect the 2Q average to reverse and rise slightly
from September. It is particularly bad in July and August, falling below the 1Q average. The 3Q average
incorporates the recovery from September but is not much different from the 2Q average. The recovery fromthe beginning of the year that I mentioned in the presentation means that it will be recovered in 4Q from the
3Q average, or 2Q average price. As a result, for 2H, it is assumed to be at the H1 average level.
JFE: Also, regarding the third point, Gigacast, we do not have a clear view of the impact at this time. However,according to the announcement by the automaker, Gigacast will be used for 1.7 million vehicles worldwide
by 2030, and we believe that domestic portion will be mainly affected, but the direct impact will be limited
and the time frame is still far off.
For our part, we would rather capture new demand for steel materials by taking advantage of the workability,
strength, and other strengths of steel as EVs and the structure of cars change in various ways in the future.
The advantage of using steel is that it can be made lighter and stronger by mixing strong and weak parts
according to the customer's needs, rather than forming it into large pieces like Gigacast. When changing toelectric vehicles, new parts will be needed, such as protective parts for batteries and battery cases. So, we
would like to use, make proposals on, and develop steel materials in this area with customers. That's all.

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Moderator: Next question, please.
Participant: I have two questions. First, let me ask you about the establishment of a joint venture company
for grain-oriented electrical steel sheets (GO) with JSW, which you explained today. Originally, for such ecofriendly products, the Company has announced this year the expansion of its production capacity of nonoriented electrical steel sheet (NO) in Kurashiki, and in terms of volume, an index of three times theconventional level for the high-end NO.
It was mentioned that the project in India this time is for the manufacture of grain-oriented electrical steel
sheets (GO), and that the investment ratio with JSW is 50-50. The grain-oriented electrical steel sheets aremainly used in motor cores for transformers. In terms of specific manufacturing processes, what kind of
production lines will be set up and what will be the supply system for base materials? Also, is it correct tothink that as far as profit capture is concerned, 50% of the equity interest will be recorded separately from
JSW's share? You also explained that the quantity will be added in response to demand growth in the future,but since full operation is scheduled for 2027, which is not that far away considering the acquisition ofcertification, I think it is necessary to move ahead of schedule. Could you please explain a little more about
how this business works?
The second question is about JGreeX. The material states that the premium is increased by 40% of regularsteel. We feel that this is a very interesting business model, in which the shipbuilding company does not bearthe 40% increase in the cost of thick plates, but rather the entire value chain shares this premium. I believethat this business model is an indication of the trend toward society as a whole bearing the cost of this carbon
neutrality, rather than a particular company or a particular industry being solely responsible for it.
I think this model was built rather user-driven, but as we aim to expand JGreeX volume in the future, is it safe
to assume that this kind of pricing structure, where the entire value chain bears the burden and successfully
captures the premium, will become the standard? Or could there be some further initiatives? I would
appreciate a more detailed explanation of the background behind the creation of the premium sharing
mechanism in this area. Thank you in advance.
JFE: Regarding the first point about JSW, especially in relation to electrical steel sheets, I cannot give you
details about the production line, production volume, etc., but basically, electrical steel sheets will be madein JSW's steel mill in Vijayanagar, based on base materials manufactured by JSW. The grain-oriented electricalsteel sheets are used in transformers for power transmission and distribution, and demand for these sheets
is expected to increase in the future as India develops its infrastructure.
Regarding the second point, JGreeX, you mentioned that it is user-driven, but our company is a supplier ofsteel products and a user at the same time in this supply chain. We believe that it would be difficult to haveany one party bear the brunt of the cost of selling green steel, so we have proposed a model in which theentire supply chain bears a certain amount of the cost. We have started this initiative in the belief that green
steel materials will not spread unless the entire supply chain bears the burden.
Participant: Thank you very much. Regarding JGreeX, just about two weeks ago, there was also a release about
the signing of memorandum of understanding on a reduced iron in the UAE. Am I correct in thinking that theutilization of off-take rights for UAE reduced iron projects and other projects is the next step? Please let me
also check with you the timing of future JGreeX volume changes.
JFE: We have been promoting activities to reduce CO2 emissions toward 2030. The biggest effect now is still
the use of scrap in converter furnaces. Activities are underway to increase the ratio of scrap and reduce thehot metal blending ratio. While there is a viewpoint of using reduced iron, we are also considering various
measures to reduce CO2 emissions, such as replacing the blast furnace in Kurashiki with an electric furnace.

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Therefore, we believe that changes in the supply volume of JGreeX will also occur in the progress of thoseefforts.
Moderator: Next question, please.
Participant: The first point is that the spread has improved by +JPY70 billion compared to the previous plan
this time, and the forecast for profit per ton has also been revised upward. Does this mean that price pass-on
is progressing more than expected? Or does it mean that the market price of raw materials just went down
more than expected? What is your view on whether this improved outlook for spreads can be sustained in
the future?
Regarding the second question, it is true that the demand for steel itself is a bit weak domestically. However,inventories of the three thin sheet products are decreasing, while automobile production is recovering. As forthe inventory cycle, is there a possibility of recovery in the future? What is your company's view in this regard?
That is all from me.
JFE: Regarding your first question about the spread, in comparison to the previous announcement, based on
our assumptions, the selling price was lower than expected, especially the export price. On the other hand,
raw materials have also fallen much lower than assumed.
Domestic prices, on the other hand, maintained. In that sense, rather than raising the price, we maintained
the domestic price, thereby securing the spread for the decline of raw material prices. As for continuity, as
we have been talking about, we believe that we will have to pass on further to some customers in the future.
We have been discussing and agreeing with our customers on these matters, and we believe that we will beable to continue to do so.
JFE: It is difficult to say about inventory, but I believe that the recovery of automobile production is progressing
well. Looking at the domestic automobile production volume accumulated by each company, it has alreadyreached a level of over 9 million units, up from 8.1 million units last year. In line with the conventional trend,
I believe that inventories will be eliminated to some extent as the recovery of the automobile industry
progresses.
Moderator: Next question, please.
Participant: I have two questions. First question. Related to the spread in the previous question, I think you
said that in the previous and current comparisons, exports were lower than expected, but raw materials werealso lower, and that domestic sales prices were maintained despite the drop in raw materials.
Regarding the response in the area of being able to maintain the sales price, is the Company now doing better
than before in terms of negotiating with customers and having them agreeing? I am hoping that you canprovide some clarification in this area.

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My second question is about pages 40 and 41 of the document. The analysis item “Other” has profit/loss
increase/decrease of group companies. Page 40 has positive JPY7 billion, and page 41 has the forecast of
JPY11 billion deterioration from April to June and from July to September. What is the breakdown of this?
That's all.
JFE: Regarding the spread, there is certainly a portion that is linked to the main raw materials, so while taking
this fluctuation into account to some extent, we have been persistently negotiating for the portion of cost
increases that had not been fully covered, and I have heard that we have gained considerable understanding
from our customers. Therefore, we have the feeling that we can get a certain spread for sure.
JFE: Regarding your question about the group companies, the main impact is the increase/decrease in incomeof the overseas group companies, especially JSW and CSI. First, let's talk about page 40. As for JSW, theirOctober to December and January to March financial results are incorporated into our January to March andApril to June financial results which means that there is the three-month shift in the reflection of their resultsin our financial results.
In the case of JSW, profit/loss improved significantly in the January to March period versus the October toDecember period. We have taken in that improvement in the April to June period, which means that we haveseen positive results in the April to June period.
On the other hand, CSI is synchronized with our fiscal period. April to June was a very good market timing for
the US. Thus, CSI's profit was also favorable. Both JSW and CSI's performance in the April to June period wasvery good compared to the January to March period.
On the other hand, in the comparison between April to June and July to September on page 41, financial
results have already been announced with respect to JSW. The JSW standard comparison between January to
March and April to June shows a decrease in profits due to a decline in volume and other factors, and the
profit decline is included in the figures.
Also, the CSI was very good from April to June, but from July to September, the market is still falling a bit. We
have taken this situation into account in generating our profit/loss and expect a deterioration in comparison.
We hope you understand that the red and black of the two companies are mainly manifested in the
differences between the two group companies. That's all.
Moderator: As the scheduled end time is approaching, the next person will be the last to ask a question.
Please go ahead.
Participant: I have just one question. There was a question earlier about JGreeX on page 33. The selling pricewill be increased by 40%, but since the cost of CO2 reduction will be added to the JGreeX steel products, thecost will also increase considerably. If the price is set at a 40% increase, does that mean that the cost has also
increased by the same amount? Or would the calculation be that the cost increase would be about 30%, if not
40%? I believe that the cost is expected to increase, but I would like to know what the breakdown of theincrease will be. For example, do you mean that the expansion of the use of steel scraps from converter
furnaces and coking coal are significant? Or, if there are various other cost items that would increase, I would
appreciate your comments on the big picture, if you don't mind.
JFE: As for how much it has gone up in cost, I can't give you a figure. As for carbon neutrality, in general terms,
capital investment must be made to reduce CO2 emissions while producing the same product. Therefore, I
believe that the largest cost increase is still in the area of making investments that were not necessary in thepast. It is a very important issue that the cost of that investment must be passed on to the sales price andrecovered. CR blast furnaces and electric furnaces are also to be built in the future, so it may not appear thathuge investments are being made now. However, we have been making investments in individual cases, such6

as expanding the use of scrap in converter furnaces, as I mentioned earlier, to make them available. We hope
you will consider such cost increases to be the most significant. That's all.
Moderator: Thank you very much. With that, we would like to conclude the question-and-answer session. We
will now conclude this briefing. Thank you very much for joining us today. Please leave the meeting.
[END]

This presentation material was prepared for the purpose of publicizing the status of our company's financial
results for the first quarter of FY2023. The information included in this presentation does not constitute a
disclosure under the Financial Instruments and Exchange Act and we do not guarantee the accuracy orcompleteness of the information contained within. The information included in this presentation is not anoffer to sell, or a solicitation of an offer to buy, any securities in Japan, the United States or any otherjurisdiction. The forward-looking statements regarding forecasts included in this presentation were basedon information available to us at the time when this presentation was prepared and include uncertainties.
Therefore, please refrain from making any investment decisions based solely on this document. Our
company shall not be liable for any damages arising as a result of the use of this document.

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