Paranapanema : Notice to the Market

Dias d'Ávila, February 7, 2018. PARANAPANEMA S.A. ("Company", B3: PMAM3), the largest non-integrated Brazilian producer of refined copper, rebar, drawn wires, laminates, bars, tubes, connections and its alloys, comes to the public to inform that:

•  Entered into agreements with its suppliers by guaranteeing 100% of its supply and by obtaining a TC/RC slightly close to the current benchmark;

•  Sought a cathode Trade-In agreement (purchase of raw material and tie-in sale of cathode), which is in the process of formalization for the period from February to December 2018, representing a total volume of 59,400 tons of cathode;

•  Quotation the sale for all the year (2018) anodic slime production, whose contract is being terminated, for an estimated amount of up to 750 tons, and in 2017 were produced 685 tons; and

•  The Company has programmed a CAPEX of approximately R$ 320 million for 2018, for investments in operational guarantee or mandatory and investments focused on the production enhancement. These values also depend on the capture of specific financing lines as well as greater detail of the projects and subsequent approval of the executive board. The production enhancement of CAPEX includes investments of R$ 45 million in 2018 and foresees an additional R$ 155 million approximately during 2019 and 2020. The production enhancement will allow the Company to obtain in its smelter a better mix of raw material that will bring better profitability in its operations.

If you have any questions, please contact the Investor Relations Area: (11) 2199-7604 [e-mail].

André Luís da Costa Gaia

Chief Financial Officer and Investor Relations Officer

We make statements about future events that are subject to risks and uncertainties. Such statements are based on estimates and assumptions of our Management and information that the Company currently has access to. Statements about future events include information about our current intentions, estimates, or expectations, as well as those of the members of the Company's Board of Directors and Officers. The caveats regarding statements and information about the future also include information about possible or assumed operational results, as well as statements that are preceded, followed or that Include the words "it believes", "it will can", "it will", "it continues", "it waits", "it predicts", "it wants", "it plans", "it esteems", or similar expressions. Statements and information about the future are not performance guarantees. They involve risks, uncertainties and assumptions because they refer to future events, depending, therefore, on circumstances that may occur or not. Future results and value creation for Shareholders may differ significantly from those expressed or estimated by statements in relation to the future. Many of the factors that will determine these results and values are beyond the ability of the Paranapanema to control or predict them.