Ladies and gentlemen, thank you for holding, and welcome to Suzano’s Conference Call to discuss the results for the Third Quarter of 2024. We would like to inform that all participants will be in a listen-only mode during the presentation that will be addressed by the CEO, Mr. Beto Abreu, and other executive officers. This call will be presented in English with simultaneous translation to Portuguese. To change the audio, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese Room. After that, you can select mute original audio. Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano’s management and known information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. You should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Suzano's and could cause results to differ materially from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Beto Abreu. Please, you may begin your conference, sir.

Thank you. Hello, everyone. Thank you for attending our call for the third quarter results. I will start with the highlights. So, let me start with sales. Sales volumes improved as you saw in our business. And here, I want to highlight that it was a very well-defined commercial strategy from the team. This strong sales with a better FX allowed us a strong EBITDA of BRL6.5 billion, despite the higher cash costs. Indeed, the cash cost was higher than the previous quarter and in the previous quarter last year, but that was planned, as you know. And I want to reinforce here that considering the performance that we have been seeing at Ribas in the ramp-up and considering the efficiency level, which is higher than we planned, I have to say that the peak of higher cost is already behind us. So, we will see further detail during the presentation. My last comment on the financial side is related to leverage, which is still declining as planned, now with 3.1. And still on the leverage top book, I would like to share with you that on the capital allocation side, I do not see Suzano going through any transformational changes in the near future. So, leverage will keep declining; it’s a clear declining trend going forward. Also, during the quarter, we had the closing of Lenzing, the closing of forestry assets from BTG that we acquired. And in the beginning of October, we also had the closing of Suzano Packaging U.S., the former packaging assets in Pine Bluff. So, looking forward, the focus of Suzano for the next quarters will be generating value from those assets that we brought to our portfolio, delivering what we're planning for the Cerrado project and also continuing the deleveraging of the business as a whole. So, that's the main highlights from Suzano in the third quarter. So, let me hand over to Fabio, who will cover the Paper and Packaging business.

Thanks Beto and good morning everyone. Please let's turn to the next page on the presentation. Through the combination of good commercial execution and logistics flexibility, we were able to deliver the highest EBITDA since the third quarter last year, despite growing operational challenges related to bottlenecks in our export supply chains. On the domestic market, according to EBA, print and writing demand increased 7% in the first two months of the third quarter on a year-over-year basis. Sales from domestic producers grew 8% on the same comparison base. Demand was solid in all product lines, supported by better economic activity and from the election cycle tailwind on the coated paper grades. Demand for paperboard continued to grow, increasing a strong 18% during the first two months of the quarter compared to the same period last year. Paperboard demand has been strong this year in all market segments, supported by the growth in paper packaging consumption and better economy overall. In the international markets, demand was sustained in North America and Latin America. Higher in Europe, demand for paper has shrunk during the summer due to seasonality. Prices in U.S. dollars were mostly flat in international markets during the period. Looking now at Suzano's figures: Our sales volume in the quarter was 8% higher year-over-year and 9% above Q2 performance, pushed by higher sales volumes in the domestic market. Our export volumes were mostly flat versus the same period last year but increased versus last quarter. Although we have seen a continuous deterioration of the container supply chain with congestion at ports domestically and abroad related to poor service levels and higher costs for non-container carriers. This is a result of a mix of different events: Red Sea traffic restrictions, low water levels in the Panama Canal, and weather-related restrictions at Brazilian ports, which seem to be creating the perfect storm for Brazilian export companies that rely on containers. Suzano is seeking alternatives to continue to serve its international customers despite these issues. A 3% net price growth over Q2 was led by slightly better prices in the domestic market and favorable FX on our exports. On a year-over-year comparison, prices were lower by 3.8%, reflecting market adjustments after the normal price levels of the first half of 2023. Looking at the EBITDA performance, the 13% quarter-over-quarter was driven by higher sales volumes and better prices. In the quarter, we had the annual maintenance downtime at our Suzano mills, which are the two largest paper mills Suzano has, and that pressured the COGS in line with the budget. Compared to Q3 2023, Suzano EBITDA decreased by 8% due to lower prices in both Suzano Paper and Packaging EBITDA decreased by 8% due to lower prices in both domestic and international markets, despite higher sales volumes. Looking ahead, we expect strong seasonal demand in Q4 from our domestic market for uncoated papers and paperboard. For coated grades, we anticipate a return to structural decline as the election cycle impact fades. In international developed markets, we foresee demand returning to a structural decline trend. In Latin America, we expect demand to be more resilient, albeit also declining. Cost-wise, logistics expenses are expected to remain high due to ongoing disruptions and geopolitical uncertainties, which could offer support for paper prices in most markets. Regarding our cash costs, we anticipate improved performance on COGS in Q4 following the lack of maintenance stoppage. We also foresee stable cash cost ex-downtimes in the coming quarter. On October 1st, Suzano kicked off its operations of the Pine Bluff and Waynesville packaging assets acquired from Pactiv Evergreen. Our first weeks went quite well so far, focused on supporting our new colleagues, customers, and suppliers through this transition. We remain very excited about the business opportunities that this move will bring Suzano in the future. Now, I'll hand it over to Leo, who will be presenting our Pulp business results.

Thanks, Fabio, and good morning everyone. So, moving to the next slide of our presentation, I would like to begin by sharing some facts related to this past quarter. It was indeed a very special moment for us as we had started to operate and sell the first volumes of our brand-new Ribas mill. During these past months, we have built up pulp inventories in the outbound logistics chain from Mato Grosso do Sul to Santos port in order to operate Ribas efficiently. These new volumes were the only additions in Q3 to our previously announced inventory levels, which, as we have been stating, were quite low and remain at the same operational levels as we speak. Our first shipments from Ribas pulp have taken place during the latter part of the quarter. During Q3, we noticed a challenging market, led especially by headwinds from China. There, paper producers' ability to increase paper prices during previous quarters squeezed their margins, and the new pulp purchases came to a halt almost completely in July, right when the news of the start-up of Ribas and the local Chinese mill were announced. As the quarter evolved, a sharp decrease in softwood prices led to a wave of intense price reductions in hardwood grades, both in local resale markets as well as for new negotiations regarding imported pulp. Prices declined sharply, much faster than in previous cycles, reaching a point that triggered customers to reestablish their purchases, especially by the end of the quarter. In Europe and North America, despite better dynamics in terms of demand, prices started to correct following the trend posted by China. We navigated Q3 by focusing on maximizing our sales in Europe and America while also positioning pulp in these markets to cope with higher seasonal demand in Q3 and Q4, and reestablishing our service levels to regions and customers for whom we invoice directly once cargo is shipped from Brazil, reducing, therefore, our backlog from previous quarters. This dynamic, which includes the sales of Ribas' first volumes, resulted in strong invoicing during the quarter. Our realized prices were mostly affected by a higher concentration of our sales during the second half of the quarter once the significant price drop was already in place as well as a higher mix into Asia, where most of Ribas initial volumes were sold. Despite lower prices in U.S. dollar terms in Q3, the combination of higher volumes and favorable FX resulted in a 3% increase in our EBITDA margin, now reaching BRL5.7 billion. Now, moving forward, I would like to highlight the following points. Coming into the fourth quarter, we forecast healthy demand in all regions due to market seasonality, consequently favoring operational rates of paper producers globally. Tissue production rates have been the highlight in most global markets and the latest production figures have shown its demand resilience, despite eventual geopolitical or macroeconomic challenges. As usual, at this time of the year, Chinese tissue producers are boosting their production as they prepare for the 11 Shopping Gala. For several weeks and counting, mid-$500 price levels in China should have over-reached profitability thresholds for marginal cost producers based on consultant estimates of their delivered marginal cash cost to China. Not surprisingly, we have already noticed some integrated Chinese pulp and paper producers buying market pulp since August, with their purchases of market pulp increasing with Suzano ever since. Despite higher volumes coming into the stream, we believe prices in China are either at the bottom of the cycle or quite close, grounded by low to equalized pulp inventory levels in Chinese ports and in the hands of Chinese customers. Solid paper production figures are further incentivized by mid- and small-sized customers who have recovered their operating rates once their margins increased and created an above-average price gap between softwood and hardwood, incentivizing fiber substitution. Customers in China and Asia are recovering their buying patterns, and actually increasing order intake over historic figures. And on top of that, the fact that current price levels in Asia are below the marginal cash cost of producers is likely triggering a new round of unplanned downtimes, as seen recently in later cycles. To give you some context on our October sales in China, negotiations are coming in line with our expectations, which includes Ribas volumes, and our order intake is being confirmed above historic average, enabling us to reestablish our operational backlogs, all of that with completely stable prices. Looking forward and focusing on the supply side of the equation, just this week, reliable independent sources from the sector have confirmed a significant delay in the start-up of the main pulp project expected for Indonesia, for which the start-up of the first line was delayed from Q1 2025 to November 2025, and the second line has now been pushed forward to 2026. In addition, I wouldn't be surprised if we continue to see further conversions of paper-grade pulp into dissolving pulp, as announced by a leading dissolving pulp producer to take place in Q1 2025. These factors should ground a healthier market outlook for the coming months and the beginning of 2025. With that said, I would now like to invite Aires to address the cash cost performance of the quarter.

Thank you, Leo. Good morning, everyone. Regarding our performance of cash production costs, I would highlight three main factors that explain the 4% increase versus the last quarter. The first is related to the higher consumption of energy at Aracruz Mill due to a non-recurring event that brought lower operations stability in the period. This occurrence has already been overcome, and we are now back to the performance outlined in our operation plan. The second one, the startup of a new Ribas mill in July also caused a temporary increase in costs, specifically in the wood and chemicals components, which were totally in line with the expected performance. In addition to these factors, the higher FX, although it benefits the company's cash generation, also pressured the cash costs this quarter, given that some inputs are linked to foreign currency. The third quarter marked the peak of cash costs in 2024. Now, looking forward to the fourth quarter, the solid progress of Ribas ramp-up allows us to estimate a middle single-digit reduction in the consolidated cash production cost when compared to the third quarter. In the year-over-year analysis, the stable performance of cash costs can be essentially explained by a 14% FX depreciation in the period, which offset the cost reduction of attaining the wood in line with better harvest productivity, average radius, and specific consumption of inputs mainly due to lower natural gas prices. Moving to the next slide, I would like to share some important aspects about the first months of operations of our new plant. In the chart on the upper left, it should be noted that we had a one-off effect of BRL25 per tonne in the COGS in the third quarter, fully related to the start-up costs of the new mill, which, therefore, will no longer exist in the fourth quarter. When we look at the mills' cash cost performance in the chart right below, we see that based on June's cost performance, Ribas has already started to benefit the company's consolidated cash costs since September due to the successful evolution of the plant's ramp-up. By the end of the third quarter, Ribas reached 8% completion of the learning curve, above the 71% forecast for the period. Lastly, it's also worth mentioning that the CapEx disbursement is according to the guidance already announced by the company. Now, I turn the floor over to Marcelo Bacci, who will continue the presentation.

Thank you, Aires, and good morning everyone. On the next page, we see that the behavior of our capital structure in the quarter has been shaped by some strategic capital allocation initiatives. We had a very robust operational cash flow generation. We spent a significant amount of cash in this quarter on initiatives that had already been announced before and had their closing during the quarter, especially the purchase of forestry assets and participation in Lenzing. We also executed a significant investment in share buybacks in the period of close to $500 million, which helped lead our net debt position to $12.88 billion, compared to $12 billion at the beginning of the period. Despite the increase in the absolute amount of the net debt, which was expected since we took these decisions on capital structure and capital allocation, we saw a reduction in our leverage in terms of net debt to EBITDA from 3.2% to 3.1%, marking the end of the investment period of the Cerrado project with a leverage ratio below what we had expected before. As I mentioned on the previous page, the payments related to Cerrado will be minor from now on, and this will help the company to continue in its deleveraging process. In terms of liquidity, we continue to have a significant amount of liquidity, which is probably more than what we need since the Cerrado project came to an end, and there has been a very significant derisking of our capital structure coming from that. So, we will be working in the coming months to reduce our liquidity, although we are not in a rush to do that because the market conditions today are favorable for carrying more cash. So, we'll do this according to the opportunities that we have and that we will see in the market. With that, I conclude the presentation here, and I'll turn it back to Beto for final considerations.

Thank you, Marcelo. A few takeaways from what we just heard from the team here. The first one is the execution of our largest investment ever, which is the Cerrado project. So, we must say that we are kicking off a new cycle with a completely different level of competitiveness and cash generation. So, this first measure here will place us at a completely different level of resilience. Despite the pricing scenario, as mentioned by Leo, we see the business completely prepared to face different scenarios in terms of prices. And after all the progress on the business strategy, which is related to the closing of the forestry asset deal, Lenzing, and also the Suzano Packaging business, we are now in the moment of extracting value from those movements, and this will be the focus of the company going forward. So, that's the takeaway from what we heard here. Let me open for questions, and thank you for all of you.

Thank you. We will now start the Q&A session for investors and analysts. Our first question comes from Jon Brandt from HSBC. Please go ahead, Mr. Brandt, your microphone is open.

Can you hear me okay?

Yes.

Yes, we can.

Perfect. Thank you. Congratulations on the results. It was a great quarter in terms of transformation and all the initiatives that you were able to achieve. I guess my first question is really sort of a debt capital allocation question. So, Marcelo, now that Cerrado is bigger with the Ribas mill coming on, is there any change to your debt policy either in terms of leverage ratios, targeted gross debt, targeted net debt? I know you briefly mentioned it in your remarks. I'm hoping you can sort of expand on it. And sort of what does that mean for capital allocation, CapEx looks like it will fall in 2025, pretty substantially depending on pulp prices. So, I guess I'm just trying to figure out sort of what's next, right? You should be able to come down into your targeted leverage ratios pretty quickly depending on pulp prices. So, should we see sort of increased dividends, maybe share buybacks? Are there other initiatives that you're working on in terms of where some of this capital could be spent? I guess that's my first question. And then sort of my second question, just briefly, you mentioned the pulp production, the 4% capacity reduction. I'm just wondering if we don't see a rebound in prices later this year or next year, is there any sort of other capacity that might be at risk of stopping? Thank you.

Thank you for your questions. This is Marcelo speaking. With the completion of the Cerrado project and the start-up of the Ribas mill, we will continue to accelerate our deleveraging as capital expenditures are decreasing. We are still finalizing the capital expenditure guidance for next year, but it will definitely be lower than this year's, which we will announce in December. Our primary objective is to bring the company's leverage back to acceptable levels outside of investment periods, specifically below 3 times net debt to EBITDA, ideally between 2 and 3 times. We expect to achieve this quickly in the upcoming quarters, although the pace will depend on pulp price trends. This remains our top priority. Regarding capital expenditures, we will provide details for next year in December, confirming it will be a reduced amount compared to this year. We are exploring other capital allocation options. As Beto mentioned earlier, at present, we do not see any transformative initiatives that could significantly alter our deleveraging path. Share buybacks remain a viable option; we have an ongoing program with approximately 28 million shares still available for purchase, which we aim to complete within the program's duration of over 12 months. We will not specify the pace of buybacks, as it will rely on the company's cash flow generation relative to its market valuation. Thus, you can anticipate that our capital allocation strategy will focus on reducing capital expenditures and debt in the coming months, while remaining selective with new investments. Regarding pulp production, our announcement a few weeks ago reflects the current market price conditions. This decision pertains to 2024, and while price fluctuations may occur, it will be challenging to adjust our plans because our processes involve a lengthy chain from harvesting to client delivery. Therefore, we are set for 2024 based on the current market outlook, and we are still analyzing 2025 plans, which will be influenced by market expectations.

Thank you very much.

Our next question comes from Rodolfo Angele from JPMorgan. Left the queue. Our next question comes from an unidentified analyst at BTG Pactual. Please, your microphone is open.

Hello, gentlemen. Can you hear me?

Yes.

Okay. I have a couple of questions. First for Beto. It was clear from your initial remarks that you aim to communicate a message of deleveraging and that there are no significant M&A plans in the pipeline. Can you confirm if my understanding is correct that Suzano will focus on smaller bolt-on acquisitions, similar to what you did with Pactiv and Lenzing? Is the strategy to continuously evaluate market opportunities, but only in the $1 billion range at most? I'd like to clarify what you mean by no transformational moves, as the market seems concerned about larger M&A transactions at Suzano. It would be beneficial if you could elaborate on that. On the topic of pulp cash cost, your explanation regarding the higher numbers this quarter was clear. Given the ramp-up and the lower pulp cash costs being factored into your overall cash cost numbers, it seems those figures will decrease going forward. Aires, you mentioned a projected single-digit reduction for the fourth quarter. How do you see this for 2025? What potential is there for further reductions in pulp cash costs? Additional clarity on this for 2025 would be appreciated. Thank you.

Thank you for the question. I will start with Aires, who can add if needed. Regarding cash costs, we expect 2025 to maintain a positive level as Aires mentioned for the next quarter. Our goal for the Ribas project is to deliver 900,000 tons in the first twelve months of operation, and we are confident that we will achieve this target. This achievement will further improve our cash costs next year. Aires has already provided insights on this. On capital allocation, I believe you understood correctly. We do not plan any significant movements in the near future. There is still much for us to do with the assets already in our portfolio, particularly in maximizing value from Cerrado. We have the potential to continue reducing our debt, and we do not anticipate any changes that would significantly impact our debt reduction plan. Marcelo has also been clear about our liquidity position. Given our current scenario, our liquidity is high—higher than we require for our near-term plans. Regarding the U.S. market, pursuing a bolt-on strategy seems to be a sound approach. This reflects our perspective on potential transformation movements in the near future.

Just in addition to what Beto said, we are very confident that we are able to deliver a double-digit reduction for 2024 compared with the third quarter, taking into account of course the same level of FX and branch price. That's very important and impacts our costs. But considering the full ramp-up in Ribas, the mix of production across the year, we are very confident about showing double-digit reductions. Of course, we have specific quarters with more challenges. We have double times predicted to trade like a Line 1 and 2 and Ribas in inspection shut down, we have six months that's very important to evaluate the assets and have the confidence to execute the campaign of 12 months. But what we have noticed in the asset and the results to this moment is that we are running well at a good pace, and perspectives are positive. Just to clarify, double-digit for 2025 compared with the third quarter of 2024.

Our next question comes from Caio Ribeiro from Bank of America. Please, Mr. Ribeiro, your microphone is open.

Great. Thank you for the opportunity. So, my first question is on the wood chip market in Asia, where we note availability of which has been picking up, particularly in China, as a result of the downturn in the property market. There's also this force of farmland policy. And while we note integrated paper supply additions are happening, wood chip import prices into China haven't really increased recently, which also suggests that domestic wood chip availability has increased right? So, I just wanted to get your views, if possible, on whether you perceive this to be a structural phenomenon for the industry, this increase in availability of wood chips in China, and what impacts the addition of this integrated capacity that we see year after year in China will have on the industry cost curve and the demand outlook? And then my second question is more on the softwood market and the implications there for hardwood, with some players in the softwood market already attempting price hikes lately, do you perceive that we're at an inflection point for softwood, right? And what implications do you see for hardwood if that's the case? Is there room for hikes in the coming months for hardwood as well? Or do you see substitution into hardwood at the very least favoring a demand recovery for that fiber as well? Thank you.

Caio, this is Leo. Thank you for your questions. I will do my best to address all of them. First, regarding your inquiry about wood chips entering China or for Chinese production, you are correct that there is currently more availability than we had anticipated. This is primarily due to two factors: firstly, the downturn in the housing market has led to wood that was originally intended for furniture being redirected towards other products such as pulp and paper. Secondly, there is a program in China that we are observing, which involves converting planted tree areas to agricultural use, and this program is expected to continue until the end of 2025. We do not believe this situation is structural; we think that once these factors normalize, China will again rely more on imported wood as it did previously. Imported wood has constituted 71% of the pulp wood consumed in China, but this figure has decreased to 60%. The gap is being filled by local Chinese wood, yet we anticipate that these trends will revert to previous patterns once the two variables stabilize. The effects of vertical integration we are witnessing in the fourth quarter and into next year include several significant paper producers who are backward integrating, and we plan to share more insights on this at our Suzano Day, including forecasts not just for the end of this year and 2025, but extending to 2028. This vertical integration will stimulate pulp demand in the market. However, there are uncertainties, particularly concerning the precise start dates for these projects and their ramp-up speeds. To clarify, all of these operations will be fully verticalized, meaning they will not have drying capacity. This will not position them as competitors in pulp, but will likely decrease the overall demand. These operations come with high production costs, so whether they use Chinese or imported wood, the cost basis of this new output will be significant. We expect their pulp cash costs to range from $550 to $600. As we've seen in previous cycles, when pulp prices fall below these thresholds, these producers will also need to enter the market to acquire pulp, thus increasing pulp demand. Regarding your question about softwood and hardwood, we believe softwood has hit a significant turning point. We are closely monitoring the softwood prices in China. As mentioned earlier, the price declines we observed in July were initiated by softwood, followed by hardwood. Currently, with prices delivered to China in the mid-$700 range, many Canadian and Nordic European producers are operating below breakeven when delivering to China. This situation is likely to drive an inflection point, which is why we anticipate a $20 price increase announcement from several producers in China expected in October and November. This initial shift will likely benefit us as well in terms of fiber substitution. Today, there exists a net price difference of $200 between softwood and hardwood. Should the price increases be successful, this gap could widen further. We have multiple customers reaching out to our teams in China, Europe, the U.S., and Brazil seeking guidance on how we can assist them in transitioning from softwood to hardwood. Consequently, the immediate effect will be an increase in demand for hardwood. As for whether this marks an inflection point for hardwood prices, it may be too early to determine; we might be at or near the bottom, but we need more time to confirm if this is indeed a turning point. Nonetheless, the initial impact will certainly be a rise in demand.

That's super clear. Thank you very much, Leo.

Our next question comes from Daniel Sasson from Itaú BBA. Please, Mr. Sasson, your microphone is open.

Thank you so much. Good morning everyone. Most of my questions have been answered. Maybe just a follow-up from a previous question. You mentioned Leo, the integration movements in China and the potential new capacity additions coming from them. Can please shed some light on potential marketable projects in Asia? I know that there's a lack of visibility or transparency, let's put it this way. But whenever you guys have or forecast, for instance, for Oki's expansion, I think that could help us to build our supply-demand models. That could be great. And piling up on the discussion regarding wood chips, you know that Oki 1 took maybe four or five years to fully ramp up; do you think that despite the increased availability of wood chips due to the downturn in the housing property sector, as you mentioned, there is a chance that this project is going to be delayed or at least the ramp-up is going to take much longer than usual for a project like that? Thank you so much.

Hi, Daniel. Thank you for your question. As I mentioned earlier, this news is very recent and comes from well-regarded consultants in our industry, which we received just earlier this week. There is a notable delay in the Oki 2 project. As you’re aware, and as some of your colleagues have noted, the original start-up date for Line 1 was March; this has now been moved to November 2025, and Line 2 has been postponed to 2026. The information we have indicates that the project is meant to be verticalized, starting with 50% integration for every board over 1 billion tons, which includes print functionality and tissue production in Indonesia. However, this is all based on market information that I believe you have access to as well. So far, I'm only discussing the start-up; the substantial delay in start-up raises questions about the availability of wood and the ramp-up curve. I completely agree with you; we monitored the start-up of Oki 1, which took four to five years, and I think it was more than four years to reach full capacity. This could be a similar situation for Oki 2. It's difficult to predict with too much detail what will occur in Indonesia or China regarding pulp production due to the challenging situation with wood supply. However, based on past experiences, it's reasonable to expect something similar may occur. That’s my best estimate.

Thanks, Leo. Sorry, you mentioned 50% of the Oki line would be integrated. Is that right? And then maybe the second thing still on this front, do you have an estimate on the production cash cost of the recent projects in China? For instance, Lenzing, do you have an estimate on the year current cost base right now? Thank you.

Okay. Yes. So, Oki, again, Daniel, based on market information, which we have gathered through our BI teams either in China or in Brazil, is that the second project for Oki 2 is to begin at 50% verticalization into paperboard, printing, writing papers, and tissue. So this is to start with 50% verticalization and 50% market pulp, okay? So that's the info on Oki 2. Regarding Chinese cash costs based on this unforeseen availability of wood related to the two factors I mentioned previously, we estimate that the Chinese cash cost today is close to $500, maybe ranging from $490 to $510, which, as you see, or can note, is lower than our marginal cash cost scenarios delivered to China, which is at $560 and $580, illustrating that at this moment in the production curves, the marginal cost producers are not Chinese, but rather other Asian producers or even Americans or Europeans delivering to China. So Chinese producers currently have, in our view, a $50 advantage in costs below marginal cash cost, but still at around the $500 range.

Perfect, Leo. Thank you so much for the very detailed answer; it helps us a lot. Thank you.

Our next question comes from Marcio Farid from Goldman Sachs. Please, Mr. Farid, your microphone is open.

Thank you. Good morning everyone. Thanks for the opportunity. My first question, maybe to Fabio. Fabio, concerning the recently acquired assets, my understanding is that profitability was not clear when you first acquired the assets. So now that we have taken over, right? I think I mean the idea wanted to understand what are the initial findings so far in terms of how the new ratings are, in terms of, obviously, potentially early days, but what's the future of those assets, what you see in terms of improving the operations and eventually expanding as well into the U.S.? And your first assessment of the U.S. markets, that would be great. And secondly, going back to the decision to restart 4% of the volumes. I think I had a similar question in the second quarter, but my understanding is that the cycles are becoming shorter, right? If you're talking about six months up and six months now, and that 12-month decision feels like it's always going to be live, right? Prices were at a high of 750 last year, and you did not have the opportunity to raise production because you had earlier last year decided to cut. And now prices fall again, and obviously, the decision was basically maintained. So at 12 months, the structure feels like it's always going to be lagging a cycle that tends to be shorter and shorter by nature. So how should we think about that? I mean, how do you reconcile the nature of the cycle with more long-term decisions? It seems to make a lot of sense from a strategic perspective as well. Thank you.

So Marcio, and thank you for your question. It's Fabio here. I'm going to take the first one about active, just to briefly update you. I am currently in Pine Bluff, sitting here at the mill as we speak. We have been here since the beginning of October when we transitioned the business from Pactiv to Suzano. As you know, this is an old mill built in the '50s, and the mill active was more concerned about its converting business. So the mill lacks good maintenance today. It needs proper care, and that's what Suzano knows how to do. There’s a turnaround story for us on the industrial side. We've started with short-term and medium-term plans to bring this mill back to the level of operational stability that we believe we can achieve. The first signs are very positive. A good sign is that the raw materials basket here, especially the cost of wood, is very competitive. There's abundant pine available at a very competitive price in the state of Arkansas. I've been visiting some of the sources and talking to people, and this is a good start, giving us hopes that we can have a very competitive operation here in the near future. So right now, our focus has been on focusing on the people here, ensuring a smooth transition, and taking care of our customers and suppliers as well as the community we interact with here at Pine Bluff, putting in all the necessary efforts to stabilize the operation. The perspective is a positive one. Regarding the market, as you know, the mill is serving the liquid packaging market in North America and is one of the large suppliers for that specific market space. It's a good market with long-term contracts and also good prices. It's very stable in terms of demand and prices as well. We are looking for opportunities to expand our portfolio to serve other markets like Cupstock and food service. We have a good product for those, and we want to increase our participation in that market. We do resell a bit to this other market space, and we plan to aim for more in 2025. We have plans to increase our participation in these market spaces from Pine Bluff and Waynesville. So, in summary, we're excited; we have a plan here for the turnaround and the industrial rejuvenation of the mill, while also looking at strategies to increase participation in different market spaces.

Marcio, this is Marcelo. Speaking about the question on the production cuts, of course, there's a lag between when we take the decision and when we can implement it, because of the nature of our supply chain. But there is no other way to manage this than to constantly look at what's happening in the market, reach our conclusions about the trends on prices, and then make decisions about production. The lag will always be there. But on the other hand, we have our tools also to try to anticipate what's going to happen in the market. So for the time being, the decision is that one, and we are working on the scenario for next year. If we have a major change in the middle, we always have the flexibility to adapt.

Thanks, Fabio. Thanks, Marcelo.

Our next question comes from Rafael Barcellos from Bradesco BBI. Please, Mr. Barcellos, your microphone is open.

Hello. Good morning and thanks for taking my questions. So both my first question, I wanted to go back to your capital allocation strategy. Beto, I know that you mentioned during the presentation that Suzano will not do any transformational movement. But I just wanted to discuss it in more detail. For example, after the acquisition of Lenzing and Pactiv, could you please give us more details on which type and size of the assets that you are now looking for? Other than that, also, given the lack of big M&A initiatives in the pipeline, I mean, I wanted to understand whether the company could bring a new dividend policy in the future. And then my second question is about your investment in Lenzing. I know that it's still quite recent to ask this type of question, but you're now probably following Lenzing closely. Could you please comment on your thoughts on how you could generate synergies with these assets in the future, of course, in a scenario that you acquired control in the future? And how do you see these assets inside Suzano's portfolio?

So, Rafael, thank you for your question. This is Beto. Let me take the first question regarding capital allocation, and then I will hand over to Marcelo to share his first impression regarding the business at Lenzing now that we have our two Board members, Marcelo and Carlos, sitting in. They have already taken their position in the Board of Lenzing. What I said is that Suzano is not going to any transformation moves. What I’m trying to say is that any kind of ticket size that we might do in the near future will not impact in an important way our declining trend in terms of leverage. So that’s the simple message. We have these two movements, Lenzing, which is for us time to extract value from. Again, a bolt-on strategy is something we can pursue in the future while maintaining our trend of reducing leverage. That’s it.

This is Marcelo speaking. Just to complement, we don't foresee any change in our dividend policy as a result of the moments that we live today. We need to keep in mind that our cash flow generation is volatile by nature, and we have to manage that in our capital structure. In relation to Lenzing, we took our position as a shareholder, and as Beto mentioned, we now started to participate in the Board meetings at Lenzing. We don't have a direct impact on the management of the company. We will be shareholders with two votes on the Board. We understand that Lenzing is a company with an incredible reputation and an excellent product portfolio, known for its technological advancements in the sector. The access that the company has to the most important clients in the world, along with the strength of its brands and reputation, is substantial. They have a very important industrial footprint. They have been working on improving operational efficiency, reducing costs, and enhancing overall efficiency over time. This will be the journey we embark on to continue in that direction. I think it’s too early to go into more details. What they have been trying to do, I think is in the right direction, and we aim to help speed up that process and extract value. More importantly, we have between one and four years to decide whether we want to increase our participation and become the main shareholder of Lenzing. We are going to take our time initially to understand better the industrial aspects of the company, as the dissolving pulp part is very similar to what we do. But beyond that, it’s a completely different process in both industrial and commercial terms. So, we need to learn before making more significant decisions in the coming months, which include whether we want to become controlling shareholders of Lenzing.

Super clear. Thank you, Beto and Marcelo.

Our next question comes from Lucas Laghi from XP. Please, Mr. Laghi, your microphone is open.

Good morning everyone. Congratulations on the results. I would like to go back with a follow-up question on the integration trends in China. I mean, Leo, you provided a very good overview of the local availability in China of wood chips. But I would like to return to the imported part of the wood, especially considering low-cost supplier regions like Vietnam, which are already closing its peak levels that we saw in 2022. However, when we examine the wood chip import prices, they're still significantly lower compared to the peak that we saw two years ago. So my question is, how do you see this availability of wood chips in these low-cost suppliers of wood to China? And if it’s reasonable to think that incremental volumes to meet this integration expansion in China in the upcoming months would come from high-cost suppliers of wood like Australia and other regions rather than from low-cost regions like Vietnam? Is it reasonable to expect that Vietnam is reaching its limits in providing further wood chips to China and increasing these expansion trends that we are seeing from these vertical players?

Hi, Lucas. This is Leo here. Thank you for your question. First, I want to point out that Vietnam is lower cost, not low cost. By the end of the day, yes, it is lower than what comes from Australia delivered to China, but it is still likely to bring cash costs of any Chinese producer to the low 500s to mid-500 cash cost, regardless of the difference of peak to cycle levels that we see today. Today, we see a bit more availability in Vietnam and imports of imported wood as well. As you probably know, last year, there was a decline of almost 30% of imported wood into China. That's when we saw the bulk of this local Chinese wood being used in the short term. This year, we already see a recovery of imports, again growing almost 30%, but still a bit lower than the levels that we saw in 2022. Therefore, we see space for further Southeast Asian wood supply to China. However, we believe that based on our base scenario, once we have the two variables that I mentioned, which are the housing market restoring and the program we see today in China of forestland conversion to agriculture, which will end by the end of 2025, those structural changes will make verticalized pulp and paper production in China or Chinese market pulp players more and more reliant on imported wood. At that point, we believe that we will see a higher cost scenario compared to where it stands today. That said, Vietnam is expected to remain one of the major sources to meet the growth of demand for wood in China.

That's perfect, Leo. Thank you for the answer.

The Q&A session is over. We would like to hand the floor back to Mr. Beto Abreu for his final remarks. Please go ahead, sir.

Yes. Thank you. I just want to remind you that we're going to have our seasonal Investor Day on December 12, as well as our visit to the bus project on December 13. I'd like to thank you all for joining us on the call today and for your interest in Suzano. Our IR team remains available for any additional questions you may have, and I wish you all a great day. Thank you very much.

Suzano S.A. third quarter of 2024 conference call is concluded. The Investor Relations department is available to answer further questions that you may have. Thank you and have a wonderful day.