Ladies and gentlemen, thank you for holding, and welcome to Suzano's conference call to discuss the results for the third quarter of 2025. 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. Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano's management and on 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 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 presentation.

Hi, everyone. Thank you for attending our third quarter call results. Let me start with the highlights of the quarter, which most of the figures were quite aligned with what we planned for the quarter. But I'd like to highlight a couple of things. The first one is congratulations to the team in Pine Bluff for the process of turning around the business. So as you saw, we have the first positive EBITDA result for the quarter for Pine Bluff, and I think this is the new trend for the business. The team over there is doing a great job, and we are very glad about what we have achieved at this time. But the most important highlight is the cash cost. We are glad to have the chance to keep the trend of reducing our cash cost. This is something that we're going to keep working on, not only for the next quarter but also for the next couple of years, as we still see opportunities to keep gaining efficiency and productivity. This is an area that is under our control, and this will be our main focus for the next two years. Reducing total operational disbursement is key and will be our first priority for the organization. This is something that we control, and we understand that we don't need to wait for different cycles of price to do the job we have been doing. We must anticipate ourselves to make sure that we bring to the organization any opportunity to maintain efficiency and productivity in our business. The consequence of that is, of course, deleveraging the company, which is absolutely a priority for us. Having the chance to deleverage the company even in a low-price cycle is something that we believe we can do, and we want to keep doing that without waiting for different cycles in terms of price to focus on deleveraging the company. So that's my highlight and main message. Now I will hand over to Fabio that will cover the Paper and Packaging business.

Thanks, Beto. Good morning, everyone. Please let's turn to the next page of the presentation. Our third quarter results were highlighted by strong sales volumes in all markets in our first quarterly positive EBITDA for Suzano Packaging. We have had stable operations in all our mills with lower cash costs compared to the previous quarter in Brazil and also in the United States, with no annual planned shutdowns. Our third quarter volume marks the highest quarterly volume for our Paper and Packaging business unit in history, even facing very challenging paper market conditions. Print and write demand, including imports in the Brazilian market according to IBA, declined by 7% in the first two months of the third quarter compared to the same period last year. However, domestic producers outperformed imports with a more moderate 4% decline and a 29% drop in imported volumes. The overall contraction in demand was primarily driven by the coated paper segment, which had benefited from additional demand during the 2024 election period. Demand for cut size and uncoated papers remained relatively stable. Turning to the international markets served by the company, we see that despite the structural reduction for print and write in mature markets, uncoated paper grades, our main export product, perform better than the other grades. On the negative side, there are continued negative effects of economic headwinds and uncertainties related to the ongoing trade war. In Europe, demand has been more sensitive to those trends, reducing 6% on the year-to-date, while in North America and LatAm, demand for uncoated wood-free continues to be stable. Now looking at paperboard demand. In Brazil, we saw a 4% demand decrease in the first two months of Q3 compared to the same period last year. Sales from domestic producers dropped only 1%, while imports shrunk 14% in the same comparison period. In the U.S. market, data from the American Forest and Paper Association show SBS shipments have grown 5.9% on a year-over-year basis, while inventories have grown 17% on the same basis. This is mainly due to the ramp-up of a new SBS machine in the second quarter of the year. Yet, according to FP&A, our operating rate for SBS producers grew 3.4 percentage points versus Q2, reaching 86.5% albeit below historical levels. Looking at Suzano figures, our sales volumes were higher on a quarter-over-quarter and year-over-year basis. Our export volumes in Brazil remained strong in the period. Better sales performance in Brazil quarter-over-quarter reflects demand for uncoated and cut size while the year-over-year reduction in Brazilian sales is led by the coated paper segment. Suzano packaging volumes recovered from the maintenance outage and increased 7% versus the previous quarter. In terms of pricing, prices from sales in Brazil reduced 2% on a quarter-over-quarter basis due to seasonality and product mix, but were 2% higher on a year-over-year basis. Prices in other external markets suffered from our Brazilian operations, reducing 6% quarter-over-quarter and 10% year-over-year, reflecting challenging market conditions across all regions as well as FX effects. Prices in dollars for Suzano packaging grew 2% quarter-over-quarter, reducing 1% in reais due to FX effects. Our EBITDA has reached BRL 542 million in the quarter, an 11% increase quarter-over-quarter and a 10% decrease year-over-year. On a quarter-over-quarter basis, we have had improvements in our cash costs in Brazil and also in the U.S., higher sales volumes and on the downside, lower prices in our export markets and unfavorable exchange rate. On a year-over-year basis, the decrease in EBITDA is mainly due to lower export prices and exchange rate. This is our first positive quarterly EBITDA for Suzano packaging. Looking ahead to Suzano's Paper and Packaging business performance, we have planned maintenance outages in Limeira and Suzano mills in Q4, which would have an impact on costs. During the Limeira outage, we will finalize the implementation of a series of improvements at the mill, which will upgrade the site's sustainability attributes and reduce its pulp and paper cash costs moving forward. Ex outage, we expect costs to be stable in the next quarter for all our paper operations, and sales volumes should increase in line with the historical seasonality for the period. We expect stable sales prices in Q4 and better regional mix due to higher sales volume in the Brazilian domestic market. Suzano Packaging EBITDA will continue to improve in Q4 and beyond. Now I'll hand over to Leo, who will be presenting our pulp business results.

Thanks, Fabio, and good morning, everyone. Let's now turn to our pulp business unit, where I'd like to share some highlights for the third quarter. The early July announcement of potential 50% tariffs from Brazilian pulp exports to the U.S., which could compromise midterm continuity of pulp flows into this market and its customers, introduced unprecedented short-term turbulence in the market. This uncertainty affected logistics streams and reduced visibility for market participants regarding near-term dynamics, which contributed to a deterioration in sentiment and triggered a further drop in pulp prices in China to sub-500 levels. Prices in Europe and North America followed the same downward price trend with the usual lag. As the quarter evolved, when Brazilian pulp was included in the U.S. exemption list, the restored tariff-free access allowed operations to stabilize and ease commercial risk. It's worth noting that although the potential new U.S. tariffs on Brazilian pulp would likely be neutralized over the medium term, given the tendency of global pulp markets to rebalance through interconnected trade flows, the initial reaction from pulp and paper participants underscored market sensitivity to trade policy signals. As usual, in pulp cycles, the sub-500 price point triggered strong buying activity from Chinese customers, including integrated paper producers who also secured significant pulp volumes during the quarter. Our order intake levels in China were abnormally high throughout the quarter, generating backlogs of deliveries, which persist today as our sales to other regions in the world were executed as previously planned for the quarter. We have effectively sold all our production volumes during Q3, keeping our inventory stable in line with our commercial strategy. Our invoice volumes were, however, impacted by our announced production curtailment, which started in July in the last 12 months. We have announced 3 rounds of price increases for all markets starting in August, which are being implemented as we speak, but still not yet reflected in our third quarter's invoiced prices due to the carryover effect on our higher-than-usual backlog, as well as the lagging effect in Europe and North America. Looking to the right side of the slide, despite strong volumes, a combination of lower prices in U.S. dollar terms and a less favorable FX resulted in a BRL 4.5 billion EBITDA for our pulp business unit, equivalent to a 49% EBITDA margin. Now looking forward, I would like to highlight the following points. In China, following our strong sales performance in the previous quarter, October order intake also reached high levels with all of our customers confirming purchases with a new $10 price hike, including integrated paper producers who keep buying market pulp. As these orders were received or closed in the last days of October, you probably saw that, that is already reflected in today's index publication. Since September, paper and board production in China has continued to grow, driven by seasonally higher demand during this time of the year and supported by exports of coated paper, tissue, and carton board that exceeded levels seen in the same period of 2024. In China, price increases were announced by paper and paperboard producers for November across most grades. Although this is still in the process of being implemented, these moves may indicate a turning point in paper pricing dynamics. Still on the outlook for paper pricing and pulp demand, September brought yet another shift for Chinese producers. Stricter regulations on imported recycled grades, which represent over 3 million tons of furnishing to this market, prompted domestic pulp producers to fill the gap using unbleached BCTMP and other mechanical pulp grades made from local hardwood, which has consequently driven up demand for local wood. In addition, wood chip demand in China is being fueled by the ramp-up of new integrated capacities launched since late 2024 as well as the restart of some of Chenming's operations. Despite uncertainties around local wood prices and its full market impact, these developments are expected to intensify demand in the coming months and further pressure wood chip prices. We continue to monitor wood cost dynamics in the region as rising demand for Chinese wood chips, also supported by tighter recycled fiber imports, points to a more favorable paper pricing environment and higher cash costs for Chinese market pulp and integrated paper producers. All considered, we expect that pulp prices will continue to move up from the current levels. During the next months, we will seek the implementation of the remaining part of our price increase announcement, meaning $20 on a net basis, which are still not implemented. Volume-wise, as we progress through the fourth quarter, we continue to allocate our targeted volumes across all regions with full confidence in closing 2025 as planned. On the supply side of the equation, it's important to notice that hardwood pulp prices have remained below the estimated cash cost of roughly $600 per ton for 13 consecutive months. According to a leading consultancy in our sector, over 15% of global hardwood market pulp production today is operating underwater, and softwood pulp producers are facing even greater pressure. Zooming into Europe, producers have now enjoyed 1 year below breakeven levels considering their regional sales only, and we estimate that more than 25% of European capacity is currently unprofitable, all based on local delivery costs and the European price index net of rebates. As I have stated in multiple occasions, I view this scenario as completely unsustainable and believe that more significant supply side adjustments are likely to take place going forward. Still on the supply side, just this week, a major Brazilian competitor has announced further capacity swings to dissolving pulp, taking approximately 600,000 tons of paper grade pulp out of the market in '26 when compared to 2025, which should improve the supply-demand fundamentals for the upcoming months. With that said, I would now like to invite Aires to address our cash cost performance for the past quarter.

Okay, Leo. Thank you very much. Moving on to the next slide. The cash costs, excluding downtime in the third quarter came in at BRL 801 per ton, making a 4% decrease compared to the second quarter. The most significant driver of this reduction was the lower wood cost, mainly due to improved wood quality, resulting in a lower specific consumption and operational efficiencies in harvesting and logistics. Additional contributing factors included lower consumption and price of key inputs such as caustic soda, chlorine dioxide, and lime, reduced energy costs, especially for natural gas, driven by the decline in Brent prices and FX appreciation, which lowered the cost of dollar-denominated foods in local currency. When we compare our cash cost to the third quarter in '24, the cash cost decreased 7%, reflecting gains from operational efficiencies, input cost reductions, and scale. The key highlight was the broad contribution of Ribas units, which supported improvements across all cash cost components. The highlights of improved performance were wood costs, which saw the most significant reduction driven by shorter average ratios, better performance in the field and a lower diesel price. Scale gains also helped dilute indirect costs and lower input consumption, especially caustic soda and fuel oil, supported by operational improvements and fuel to gas conversion in the lime kilns at the Ribas and Imperatriz mills. Looking ahead, we are pleased to share that the cash production cost excluding downtime is already running below the BRL 800 per ton mark. This solid performance gives us confidence that we will deliver in the fourth quarter '24-'25 the most competitive quarterly cash cost of the year while also supporting a full year average close to the level recorded in the fourth quarter of '24. Now I hand over to Marcos to continue the presentation.

Thank you, Aires. Good morning, everyone. So I'll start with the leverage. Our leverage in dollar terms ticked up to 3.3x. Despite our net debt remaining stable in the quarter, our EBITDA over the last 12 months declined mainly because of lower pulp prices. In terms of our net debt, as I mentioned, it remained stable on a quarter-on-quarter basis, and I would like to highlight that we continue to generate positive free cash flow throughout the quarter, and that we saw some non-recurring events impacting our liquidity and leverage in the quarter, namely the wood deal that we did with Eldorado and also the premium we paid for the repurchase of the bonds of 2026 and 2027. These events totaled close to BRL 1 billion. In terms of liability management, we did a lot of different transactions, highlighting the issuance in September of $1 billion new 10-year bond for Suzano issued at the lowest corporate spread ever for the company, and we also repurchased the bonds maturing in the short term, 2026 and 2027. The result of that is we were able to reduce our short-term maturity risk, and we also were able to increase the average terms of our debt from 74 months to 80 months without changing the average cost of our debt, which remains stable at 5%. Moving to Slide #8, we highlight the healthy hedge portfolio that we have at this point with a put option of BRL 564 and a call option above BRL 650. Our total portfolio is at $6 billion. If we were to see the BRL remain stable at BRL 532, which was the level of closing of the third quarter, we would have a positive cash impact of nearly BRL 2.5 billion in the upcoming 2 years, including a positive impact of BRL 800 million in 2026. Moving to the next Slide #9, we would like to reinforce our guidance for CapEx for 2025 at BRL 13.3 billion, which implies a CapEx of BRL 2.9 billion in the last quarter of the year. Now I would like to hand over to Beto for his final remarks.

Thank you very much, Marcos. A couple of things that we understand are absolutely key to send as a final message regarding the next couple of quarters. So looking ahead, as I said, we will keep focusing the whole team on cash production costs, not only for the fourth quarter but we understand that it must be constant in the way we manage the business, dealing with something that we control to be prepared for any scenario in the long term. So that's the first thing. The second one is that we have a couple of investments that we made in the last, mainly over the last couple of 2 years. As I mentioned, Suzano Packaging, there's a new tissue mill in Aracruz that just started up and also we keep working on the progress to finalize the JV with K-C. This is an investment that we have made that we must keep working to gradually improve performance in packaging, in Aracruz, but make sure that we will extract the values and the efficiency that we mentioned when we signed a JV with K-C. So having said that, the focus is extracting value from the investments that we have made already and not putting other initiatives on the table. To summarize this is to focus on what we control. We continue to reduce cash costs while also making sure that we will extract value from the investments we have been making. Having said that, I will open for questions.

Our first question comes from Caio Ribeiro with Bank of America.

I wanted to dive into a little bit more detail on your view on the dynamics of wood chips and softwood in the Chinese market specifically. First of all, I wanted to ask you if you've noted any meaningful changes in terms of the prices of domestic wood chips in China as a result of all of the supply additions that we've been seeing coming from Huatai, Nine Dragons, and in particular, Chenming's announced resumption, right? Whether that has had any meaningful impact on your perception of the marginal cost of production of pulp in China? Secondly, regarding softwood, clearly, the dynamics for that fiber have been weaker in comparison to hardwood with prices dropping, while hardwood has been on a recovery track. Our perception is that this has largely to do with an abundance of this type of fiber, softwood in Chinese markets as a result of higher domestic production. I wanted to ask whether you've seen any meaningful changes there in terms of domestic producers in China perhaps reducing softwood output as a result of the recent drop in softwood prices and whether that incentive from customers to switch from softwood into hardwood is still present, or if there have been any changes there given that reduction in the spread between both fibers?

Caio, this is Leo here. Thank you for your questions. Regarding wood chips, yes, we have seen an uptick in the prices, not only of the Chinese wood chips, but also of imported wood chips in the last 2-3 months. Imported wood chips on a BDMT basis have increased almost $10, which would generate roughly an effect of $20 in the cash cost of bleached hardwood production, while Chinese wood chip prices, as per our monitoring, have increased from $25 and in some cases, $40, and that's always a double effect, approximately on the cash cost of production. So your assumption is aligned with ours that yes, this will create an effect in an increased cash cost for Chinese producers, both of market pulp and also integrated paper and packaging producers, which we are seeing are now and more intensely pushing for paper price increases. This is a consequence of higher costs in their season, and that should support the supply-demand fundamentals for hardwood for the upcoming months. Regarding softwood, yes, indeed, it's weaker. It seems to be trending in the opposite direction to hardwood for the past months, especially in China. I think there are two effects. First is the availability of unforeseen softwood chips at a very competitive price, in some cases, at the same price as hardwood chips since the beginning of this year due to the infected wood and the policy to try to cut and use this wood as soon as possible. We believe that this wood will last more 2 to 3 quarters in the market. This put pressure on softwood both by some integrated players now producing softwood in their system, who used to buy it, but also leaving less space for softwood pulp. The second factor, which I would like to call your attention to is the fiber-to-fiber movement. Obviously, even with the gap that has reduced from over $200 to roughly $150-$160, there remains a huge incentive for fiber substitution. We see a lot of traction, a lot of action in China, many customers interested in seeking our support in this journey. So in terms of how they can become less and less dependent on softwood and more and more dependent on hardwood fibers like ours. So I think it's a double effect that is making the scenario for software producers a bit worse than what we see in hardwood today.

Our next question comes from Daniel Sasson with Itau BBA.

My first question is for Aires. Could you provide some insight into your cash costs? You mentioned that you're already operating below BRL 800 per tonne in the fourth quarter. Considering the deal you announced with Eldorado and the TOD, are you close to your projected cash cost levels for 2027? Is there potential for further reductions or improvements in cash costs in the medium term? Specifically, regarding 2027, do you expect this cost-cutting trend to be linear through 2026 and 2027, or are there particular events we should be aware of in 2027 that may influence your costs? My second question is for Grimaldi. Thank you for the thorough overview you provided about pulp prices. Can you discuss your expectations for the key topics to be addressed at London Pulp Week in a week? Last week, Chenming's stoppage seemed to be a significant issue. You mentioned that you remain hopeful about price increases. Has anything changed recently that makes you feel more optimistic, especially since the industry struggled to implement price increases in September and October? Could you elaborate on why you feel more optimistic now compared to the past couple of months?

Daniel, thank you for your question, Aires speaking. Considering the deal with Eldorado, we start to supply our facilities in Mato Grosso do Sul with this wood probably in January. We do not suffer any impact, just probably reschedule the sequence that we receive at the facility in the fourth quarter to rebalance considering these new volumes. But the main reason for this deal that gives our rationale to do this was our reduced consumption per ton of wood, consumption of wood per tonne in the coming years. When we compare with your previous analysis, we are considering in the business case and with the first samples that we have of this wood, a reduction of around 4% the necessity of wood per ton in Mato Grosso do Sul. If you consider that we will supply on average 18 million cubic meters per year, we will need 4% less for the coming years to produce the same amount of pulp. That's the rationale we have to do this deal. We'll try to explain better in the Suzano days next month. The rationale for next year and the other is to run always below 800 tonnes per quarter. Of course, we can be affected by some scheduled downtimes that will affect a specific quarter. But the idea that we have in our plans is that our average will be below 800 tonnes per year.

Okay. And Daniel, now it's Leo here. I'm going to answer the second part of your question regarding expectations for London Pulp Week. I think first, expectation, which is more and more clear is that this market scenario is completely unsustainable. As we are going to a market that is a core of production of softwood, I think this tone is even higher than what we see or sense when we’re talking about South American pulp production. It's completely unsustainable, even if we consider European cash costs and sales into the European market. Again, as I stated in my speech, as per our calculations, more than a year already bleeding 25% of the local hardwood production. So this is unsustainable and the fact that the market is unsustainable as is, I think, will be one of the main factors being discussed during London Pulp Week. I also think that what will be a topic is the rhythm of unexpected closures. As I mentioned during the last call, we saw a very low level of unexpected closures in the first half of this year. Our line of thought is that all the instabilities around the world and geopolitical issues made some decisions not to be taken in the short term, as many were in a wait-and-see mode to try to see what could be the scenario after there was a clear view on tariffs. As this is now clear, we see that the addition of this unsustainable scenario with a clarity in terms of tariffs will speed up the amount of unexpected closures and commercial downtimes that we see in the market. In fact, as per our controls according to consultancies numbers, if we compare the unexpected closures of beach chemical pulp in the first half of the year, and just the 4 months of the second half of the year, there is already a 40% increase on disclosed unexpected closures. Our thoughts or our line of thought seems to be executing or seems to be happening as we speak. We again believe much more has to happen under this very depressed pricing scenario. Now regarding your question on my optimism a quarter ago and today, I think my optimism level is slightly better now despite I was optimistic in the last quarter. The reason we have announced a sequence of 3 price increases. The reason we did that is because, obviously, we were monitoring order inflows in all markets and in China, more deeply even with the purchasing patterns of integrated paper producers, the amount of capacity on the water in the world as we speak, and this feeling of optimism now has been a bit upgraded, if I could put it this way, due to the fact that we're seeing a reversion in the cost of wood chips to Chinese producers. As I mentioned to Caio previously, we have seen this $25 to $40-ish increase on the prices of BDMT, meaning an impact of anywhere from $50 to $80 in the cash cost of Chinese producers who are using Chinese wood. This obviously puts pressures on the whole system and establishes a new ground for what they can accept or base their decisions in terms of timing that they buy market pulp rather than consume local wood as well. So my optimism increased a bit, I would say, due to the effect of this new scenario regarding regulations on recycled fiber, as I mentioned, and wood increases. It is, however, important to say that my optimism is somehow limited. We see gradual price increases, but under this oversupply scenario, unless something major happens on the supply side of the equation, my optimism is not as big as you can imagine. So I would just like to point this out.

I'm sorry, just complementing the first question regarding the TOD that you asked. Just a remark here, we are completely committed to the guidance that we shared with the market regarding what we have to deliver by 2027 and confident that we're going to be able to deliver, okay?

Our next question comes from Rafael Barcellos with Bradesco BBI.

Beto, I wanted to use one of your highlights during your speech. Congratulations for the results in your U.S. Packaging business. It's good to see that you are on track to keep delivering in this new business. My first question is exactly about it. What can we expect in the coming quarters? Or do you have any sense of EBITDA contribution from this business for next year? Ultimately, what is the full potential in the long term for the business? My second question, Beto, is about Lenzing. If I'm not wrong, you can already exercise the option to acquire an additional stake in the company. Could you please share with us your overall thoughts on the investment? I mean, other than that, after roughly a year, what has changed in terms of how you see Lenzing as part of your portfolio?

Thank you very much. Yes, since October, we already have the option to execute if we want. As you know, we are not considering using this call in the short term. We're still with the team analyzing all the trends, all the investment in further capacity in the business, mainly on dissolving pulp globally. This is a market that is also facing a business environment in terms of competition, mainly in Asia, which we should further analyze. I'd say that the best answer for Lenzing now is to keep our 15% stake and analyze the business further. There is no plan for using the call in the short term. Regarding Suzano Packaging, we are very glad to be anticipating the business plan, first, in terms of positive EBITDA after taking a business that used to have a negative EBITDA. A lot of initiatives have been implemented on the commercial side, on the procurement side, and on the logistics side. On the logistics side, we have been able to take advantage of our strong logistic operation in the U.S., which is led by Leo's team, and there's our synergy in those negotiations. We have also adjusted the team to the reality that we have in the company and in the market. I would say that it's still a lot to come. Fabio has a clear plan for the next two years, not only for generating positive EBITDA but also to generate the amount of cash we are expecting for the business. It's a small business, as you know, but it's helping us a lot to understand the market, of course, to extract value from the unit, but also to understand what it means for a company moving abroad. Having the chance to implement our principles in terms of management in a different future is also beneficial. We are also learning a lot in Pine Bluff that will help us on the K-C JV in the future. So I cannot disclose a number in terms of next figures, but I would say that we are very glad regarding what we have delivered so far.

Our next question comes from Caio Greiner with UBS.

My first question on pulp. I wanted to go back to the discussion on the long-term fundamentals that Suzano discussed during the Investor Day. We've seen a significant number of capacity additions in China in 2026, but pulp production in China still seems to be growing only gradually. Still, I guess, the market in general and investors have been very concerned about this idea of China becoming the dominant player in the industry. I know you provided a deep dive on this during our Investor Day in 2024. So I just wanted to understand if there are any updates on that structural view, noting maybe a tighter wood chip market as we already discussed, anti-involution ideas in China. Since last year, have you become more or less concerned at the margin regarding the structural fundamentals for pulp? The second question on Kimberly-Clark, following up on this last topic. Just maybe Beto or Fabio, if you guys can give us an update on how the asset is performing. How have you been able to dig a bit deeper into each asset that you're acquiring? Is there more clarity on the synergy potential, fiber-to-fiber potential? Or if you got the chance to understand if there are any assets that don't really fit quite well into the portfolio that are likely to be sold? Anything that you could comment here would be very helpful.

Caio, this is Leo here. I will try to answer your question, not taking color out of our Suzano Day 2025 as we are planning to update completely the scenario that we presented last year, bringing insights on the verticalization effect of Chinese production in our hardwood market. Again, it's important to say that as we have local market intel teams in most major markets, including China, this anticipation of view of trends makes us, I guess, more prepared for any kind of reaction or action that we need to take in terms of what's coming ahead of us. Our view, I would say, is quite neutral at this time. The same trend that I have presented to you during our last investor call is maintained. We still see this verticalization affecting our market. But as you mentioned, we are not seeing this pulp production growing yet. Obviously, when you timeline all these projects, we think the effect we will see is more short to midterm, in the next 4 quarters. This has two ways of looking at this. The negative way is impacting market fundamentals. The positive way is that there is an increased demand for local wood chips and a pressure that this could further pose on wood chip prices. We have to monitor that and as we speak, what we are seeing is that this market, despite being low, after slightly increasing from the low points a few months ago, is still incentivizing many Chinese producers, integrated paper producers to buy market pulp. This is the reason why we see that pulp production is still not growing, while imports of pulp are booming in the market. You probably saw that hardwood pulp imports are growing more than 11% year-to-date in China. Our view remains cautious. We are in a cautious mode, which obviously will depend on how we interact and see these moving parts in wood chip prices in China. It also depends on this unsustainable pricing scenario and how it correlates to cash costs around the world and will depend on supply side adjustments in the near term.

As we have already disclosed before, during the phase of pre-signing, we have visited all the mills around the globe and we were very positively impressed at that time with the conditions of the plants and also housekeeping and everything. We have received more information and have been talking to KC given the constraints that the process requires. We are more positive with the initial estimates that we had. As time goes by, we will have more time to fine-tune the estimates and to build a business plan for closing. Our idea is when we close the deal, we will already have a business plan for the coming 2 years with the right level of detail on which are the levers to generate value on the deal.

Just to complement on that, we see the value creation in the business we mentioned. It's very clear for us the elements that we have analyzed before the deal and maybe further elements that we will find and are already discovering. I would say that our main concern is not regarding the assets. If there's an opportunity to optimize the asset, we will do it. If there's an opportunity to optimize geographies, we will pursue that. This is something that usually is not on the agenda of a big multi-national, but we will consider portfolio management as necessary. I would say that the main elements we should take into account against not the assets, but the carve-out we have to do, which is difficult. But putting two cultures to work together with the same values while having the ability to extract the best of each one. That's the main challenge this organization has in this process.

Our next question comes from Yuri Pereira with Santander.

I'd like to ask if you have any information about the floods in Southeast Asia, if you see any further impacts on wood prices in China, if you have any information, please? And regarding dissolving pulp, do you see more shifts like Bracell's one for next year? If you can recap for us what's going on in the dissolving pulp market to result in this shift or if it's only low hardwood prices per se?

Yuri, this is Leo here. I'm going to answer both questions. Obviously, floods have influenced wood chip prices in the short term. I didn't mention it because obviously, this is very punctual and short-term-ish, first in the southern part of China, and now as you probably saw in Vietnam, where the daily rainfall was a record all-time high just a few days ago. But yes, this is also influencing wood chip prices and its dynamics. In terms of dissolving pulp, what we see is that today, prices in DWP are trending higher than the historic average of delta between hardwood and DWP over $250, and that's incentivizing this flex capacity to swing in that direction. So in this case, yes, we expect that possible new flex capacity moving or shifting from hardwood, which, as I mentioned, is unsustainable to dissolving is possible.

Our next question comes from Lucas Laghi with XP.

I have one question regarding CapEx. Could you please provide an update specifically on expansion CapEx? If we exclude the BRL 935 million expected from your three main projects as outlined in your latest presentation and consider the BRL 1.6 billion in the guidance for 2025, is it reasonable to expect this line to reduce next year in proportion to the reduction from the three main projects that you are completing this year? Alternatively, should we anticipate that Suzano will continue to approve new competitive projects like those planned for 2026? It would be helpful if you could explain your reasoning for approving these competitive projects in relation to market conditions, as this would help us understand how to approach the expansion CapEx line moving forward.

Lucas, Marcos here. We will update the market with our guidance for 2026 CapEx by the end of this month. However, I will try to give you a little bit of a trend on what we see in terms of CapEx. As you mentioned, we still had in 2025 disbursements for the Cerrado project. We also had the conclusion of some growth projects that we undertook in 2025, namely the Fluff project at Limeira mill, which will start up in the fourth quarter. Also the additional capacity in tissue at Aracruz Mill and the new biomass boiler at Aracruz as well. So going forward, we should expect a declining trend in terms of CapEx for next year as we will have lower disbursements and also we will have fewer projects in our pipeline.

Our next question comes from Henrique Marques with Goldman Sachs.

Regarding pulp prices, Leo, you mentioned that the current situation is unsustainable. However, the price hikes have been gradual, which is different from previous cycles. Additionally, we have APP OKI entering the market in the first half of next year along with other projects in China. I would like to know your thoughts on the future of pulp price cycles. Are we experiencing a decline in this price range? Historically, prices would exceed $700 per tonne in these cycles, but it seems unlikely we will see prices reach that level again. What are your expectations for these price ranges moving forward?

Hi, Henrique, thank you for this question. It's a tricky one to answer as obviously, it has several parts that are connected to our commercial strategy and are very sensitive in that case. But let me try. And I'm going to give a lot of color in terms of how we see the variables that can change this game in the short term and looking forward during our Investors Day. But in principle, they all originate from the fact that we have now been living a scenario where for several months the industry is bleeding. Several things could happen to change this scenario. First is, again, reintensifying permanent closures. We have seen a decline in permanent closures in BCP during this year. We suppose that a lot of that has to do with the uncertainties the geopolitical and tariffs have created around the decision-making process of the extremely high-cost and unsustainable producers we see in the Northern Hemisphere. Second is the unexpected downtime rhythm going forward. Even though I mentioned that we see an uptick already in the 4 months of the second semester compared to the first semester of this year, it is still low compared to previous years. For the same reasons mentioned regarding permanent closures and uncertainties tied to tariffs and geopolitical timing, this is also unsustainable, and something should or could happen in that direction. The third point that could change these dynamics is the timing of the new projects being implemented. Today, we have official news regarding OKI, which are the same as you have. All these more challenging scenarios can stimulate different actions in terms of time to market for new projects. The same goes for timing of the verticalized projects in China or their ramp-up curves. So that is a variable that we have to follow closely and could change the game as we look forward. Fourth, and very importantly as we talk about verticalization in China and its impact in reducing demand for hardwood pulp, there is a huge opportunity, which is what we see on the Western world. Over 2/3 of the pulp produced globally is integrated into paper and packaging production. Many old sites, old mills, which were originators of paper production and board production are located in Europe and North America. We believe that persistent trends or pricing trends imply that these mills are unviable or unsustainable. We strongly believe in the thesis of deep verticalization in the western part of the world as a consequence of what we see happening in China as we speak.

Our next question comes from Eugenia Cavalheiro with Morgan Stanley.

I wanted to explore a bit more what you're seeing as growth opportunities in the paper market in the U.S. And also on the profitability side, where do you feel like it's reasonable for the company to achieve? How far are you from that right now?

Eugenia, it's Fabio here. Beto, I can take that about the U.S. We're still a very small player here in the American market. We have 45% of the SDS market. There is still plenty of room to grow. At the moment, what we are doing here, Eugenia, is focusing on our growth in foodservice, trying to diversify a little bit from the liquid packaging board market where we are concentrated, and it's doing well. Regarding business moving forward and our profitability moving forward, we cannot provide any color on that, but I would like to say that there are still lots of opportunities for us to improve in terms of costs here, and we're going to be addressing that in the next quarters and moving into the next year.

Thank you, Fabio. Absolutely aligned with what we said in the beginning, which is to focus on efficiency. So as Fabio said, there are still lots of opportunities to improve the portfolio and costs in the current facility that we have in the U.S. There are no further, let's say, inorganic alternatives for the U.S. in the short term at this time. So we are again completely focused on extracting the value from those assets we have. We will finalize the call here. I remember that we have the Suzano Investor Day 2025 on December 11. We hope to have all of you with us. Thank you for attending the call. The RI team is always available to clarify any further questions. Thank you very much.

The Suzano S.A. third quarter of the 2025 conference call is concluded. The Investor Relations department is available to answer further questions you may have. Thank you, and have a good day.