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SEEN THE NEWS LATELY?

“Never before have I seen such a sharp decline and I have been in the business since 1974.” – Nucor COO John

Ferriola

2007 2008

Rank Output Rank Output % change

ArcelorMittal 1 116.4 1 103.3 -11.3

Nippon Steel 2 35.3 2 35.6 0.7

Baosteel 5 28.6 3 35.4 23.8

Hebei I&S -- -- 4 33.3 --

Posco 4 31.1 5 33.1 6.4

JFE Steel 3 33.9 6 33 -2.7

Wuhan I&S 11 20.2 7 27.7 37

Tata Steel 6 26.5 8 24.4 -7.9

Anshan-Benxi 7 23.6 9 23.4 -1

Shagang 8 22.9 10= 23.3 2

US Steel 10 21.5 10= 23.3 8.3

Shandong I&S -- -- 12 21.8 --

Gerdau 13 17.9 13 19.6 9.4

Severstal 15 17.3 14 19.2 10

Nucor 12 20 15 18.5 -7.4

Evraz 17 16.5 16 17.7 7.1

Riva 14 17.9 17 17.2* -3.9

ThyssenKrupp 16 17 18 16 -5.9

Maanshan 18 14.2 19 15 6

Sumitomo MI 20 13.5 20 13.9 2.9

*SBB estimate

Largest steel-making companies m tonnes crude steel

Seen the news?

US Steel to indefinitely idle Lone Star facility – February 13

US Steel idles Lorain mill for at least 60 days - March 5

US Steel exiting DOM tubular business - January 6

PTC Alliance idles WV DOM operation -February 12

Synalloy: helped by trade case, hurt by surcharge decline - February 19

Timken announces organizational changes, job cuts – March 3

New Chinese pipe mill in the US expected to open in 2011 - January 12

Tenaris Algoma Tubes shutting down two Canadian

facilities for six weeks beginning March 20 - March 10

EAF’s running under 50%

Estimated mid 40%

STLD projecting loss

Can shut on & off

EAF’s running intermittently with reduced work weeks

AISI raw steel production

Running (12) BF's (33)

AK Steel Ashland 1 1AK Steel Middletown* 0 1ArcelorMittal Dofasco 2 3ArcelorMittal Burns Harbor 1 2ArcelorMittal Cleveland 0 2ArcelorMittal Indiana Harbor E 1 5ArcelorMittal Indiana Harbor W 1 1Essar Algoma 1 2Severstal Dearborn 1 2Severstal Sparrows Point 1 1Severstal Warren 0 1US Steel Fairfield 1 1US Steel Gary 2 4US Steel Granite City 0 2US Steel Great Lakes 0 3US Steel Hamilton 0 1US Steel Lake Erie* 0 1

North American Blast Furnaces

East Chicago West 30%

East Chicago East 30%

Burns Harbor 35%

Cleveland 0%

Riverdale 18%

Coatesville 75%

Steelton 80%

Conshohocken 35%

Weirton 90%

Georgetown 0%

Source: USW

ArcelorMittal Operating Levels

MSCI FY inventory (all products)

MSCI inventory data

MSCI FY shipments

MSCI FY pipe & tube shipments

High: April 335,200Low: Dec 178,500

AISI FY domestic pipe shipments

2008 2007 Change

Carbon Alloy Stainless Total

Standard Pipe 1,013,184 1,013,184 1,081,706 -6.30%

Oil Country Goods 1,416,420 968,051 2,384,471 2,141,378 11.40%

Line Pipe 487,010 487,010 632,116 -23.00%

Mechanical Tubing 633,061 271,604 904,665 1,000,813 -9.60%

Pressure Tubing 51,430 51,430 31,725 62.10%

Structural Pipe and Tubing 122,915 122,915 148,627 -17.30%

Pipe for Piling 7,230 7,230 12,543 -42.40%

Stainless Pipe and Tubing 974 14,260 14,201 0.40%

Total Pipe and Tubing 3,731,250 1,239,655 974 4,985,165 5,063,109 -1.50%

29%

9.2%

Other includes non-classified shipments, rail, mining, agricultural, military

US pipe imports

WeakWeak BetterBetter

Non-res construction bounces back in 2014

Housing recovers in 2012

White goodsAutomotive (February

at 1982 levels)

energy (could improve if oil prices rise)

agriculture

End markets

Industry forecast

Inventories balance at end of May

Buying resumes in JulyH2.09 improvement

but no real recovery through H1.10

Prices lower in Q2; flat in Q3 and then relapse

Credit issuesFailures, distressed

mergers

Even Warren Buffett feeling the pinch

Berkshire Hathaway FY.08 worst results ever. Buffett says economy “has fallen off a cliff.” Also notes that recent efforts to spur recovery may cause inflation higher than the 1970s.

Impact of stimulus plan

domestic industry could see an additional 3.5-4m short tons of steel shipments

go disproportionately to long product producers

4% of infrastructure spending slated for actual steel purchases which would amount to $3.2bn in steel purchases with an average selling price of $800 s.t.

RARE IN THE GOOD TIMES,NOW BECOMING COMMONPLACE

Lawsuits

Tubular Lawsuits

Olympic Steel suing Valmont Industries for $791,900 for breach of contract contending that a sheet order was rejected only because the inventory devalued significantly between when the contract was signed and when the order was delivered.

When Valmont placed an order for 2,000 short tons of hotrolled coil last September, the selling price was $1,010 per short ton; when shipped in November, HRC was selling for $820/s.t.

Valmont contended that the steel did not meet specifications and refused to process it into tubes, according to the complaint.

US Steel is being sued by distributor JD Fields of Houston for $992,000. The complaint states that USS agreed to sell Fields 800 feet of pipe for $2,205 per tonne, but then changed the terms of the agreement.

Fields claims that after it had already accepted an order from a customer based on this price, USS told the company it needed a 100-tonne minimum to fill the order, which would be rolled in April. Fields said it agreed and then was informed on May 30 that USS would not honor the agreement.

The dispute also involves a 6,150 ft seamless pipe order and a pipe invoice price that was allegedly 57% higher than agreed.

and more lawsuits

US mill antitrust case --A series of lawsuits have been filed against nine US producers contending they fixed prices and coordinated outages to keep prices high.

Each case alleges the mills conspired to "fix, raise, maintain and stabilize the price at which steel products were sold in the US" beginning in 2005.

Russian steelmaker Novolipetsk will pay DBO Holdings $234m to settle a lawsuit over NLMK's failure to purchase North American tubemaking group John Maneely Co.

The payment is due within four business days of yesterday's signing of the agreement, Steel Business Briefing notes. NLMK last November terminated the deal to purchase the Maneely assets for $3.5bn and was sued for breach of contract by DBO on behalf of the Carlyle Group, which owns Maneely.

"The agreement provides for the full mutual release and discharge by NLMK and DBO from their claims arising from the transaction," NLMK states.

In early January pre-trial dockets seen by SBB, NLMK denied the breach claim saying it terminated the agreement properly. The steelmaker also asserted that Maneely was not entitled to a claim for more than the termination fee in the merger agreement. The amount of the fee was not disclosed.

Maneely owns 11 NA plants with total pipe and tube production capacity of over 3m short tons per year.

The Steel Index March 2-8

The Steel Index Reference Prices (Domestic Markets)

USA (FOB Midwest mill)1-week change 4-week change Low* High*

HR Coil ($/short ton) 493 13 -2.6% 41 -7.7% 493 1,095

CR Coil ($/short ton) 571 14 -2.4% 63 -9.9% 571 1,171

HDG Coil ($/short ton) 642 7 +1.1% 29 -4.3% 635 1,246

Plate ($/short ton) 736 45 -5.8% 67 -8.3% 736 1,489

N. Europe (ex-mill)

HR Coil (€/tonne) 439 6 +1.4% 34 -7.2% 433 758

CR Coil (€/tonne) 464 31 -6.3% 84 -15.3% 464 843

HDG Coil (€/tonne) 503 16 -3.1% 60 -10.7% 503 877

Plate (€/tonne) 623 1 +0.2% 83 -11.8% 622 923

Rebar (€/tonne) 360 2 -0.6% 12 -3.2% 358 876

S. Europe (ex-mill)

HR Coil (€/tonne) 381 2 -0.5% 24 -5.9% 380 787

CR Coil (€/tonne) 465 8 +1.8% 28 -5.7% 457 849

HDG Coil (€/tonne) 480 5 +1.1% 13 -2.6% 475 894

Plate (€/tonne) 535 11 -2.0% 24 -4.3% 535 892

Rebar (€/tonne) 338 33 -8.9% 63 -15.7% 338 844

Turkey (ex-mill)

HR Coil ($/tonne) 471 9 -1.9% 17 -3.5% 450 1,236

CR Coil ($/tonne) 548 2 -0.4% 37 -6.3% 542 1,324

HDG Coil ($/tonne) 701 3 -0.4% 54 -7.2% 698 1,470

Plate ($/tonne)** 663 9 -1.3% 37 -5.3% 625 1,452

Rebar ($/tonne)** 446 5 +1.1% 45 -9.2% 441 1,325

* Past 12 months, except Turkish prices since April 1, 2008 ** Under development

The Steel Index Reference Prices (Domestic Markets)

Stainless Steel CR Coil 304 1-week change 4-week change Low* High*

USA ($/short ton)** 3,075 175 -5.4% 175 -5.4% 3,075 4,760

N. Europe (€/tonne)** 1,721 149 -8.0% 149 -8.0% 1,721 3,264

S. Europe (€/tonne)** 2,663 162 -5.7% 137 -4.9% 2,663 3,350

* Past 12 months ** Under development

The Steel Index March 2-8

Average Delivery Lead-Times - USA (Weeks)

4.15.3 5.0

4.13.54.6 5.2

4.5

0

2

4

6

8

HRC CRC HD Galv Plate

Feb 23-Mar 1

Mar 2-8

Average Delivery Lead-Times - N. Europe (Weeks)

6.1 6.15.2 5.4

3.1

5.46.2

5.0 4.7

3.1

0

2

4

6

8

HRC CRC HD Galv Plate Rebar

Feb 23-Mar 1

Mar 2-8

The Steel Index

Average Delivery Lead-Times (Weeks) Chinese Exports to Asia

6.75.3 6.06.3

5.3 6.0

0

2

4

6

8

10

HRC** CRC** Plate**

Feb 23-Mar 1

Mar 2-8

Average Delivery Lead-Times (Weeks) Chinese Exports to Europe/N.America

16.012.0 12.5

16.012.0 12.5

0

5

10

15

20

HRC CRC Plate**

Feb 23-Mar 1

Mar 2-8

Average Delivery Lead-Time Stainless CR Coil 304 (Weeks)

7.0

4.0

7.57.0

4.0

7.5

0

2

4

6

8

10

USA** N.Europe** S.Europe**

Feb 23-Mar 1

Mar 2-8

The Steel Index

Reference Prices - USA Domestic (US$/short ton)

2500

3000

3500

4000

4500

5000

Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09

US Stainless CRC 304 (FOB Midwest mill)

TSI –Global Inventory

Carbon Steel Stock Levels (Weekly Movement)

0%

10%

20%

30%

40%

50%

60%

Increased No change Decreased

Feb 23-Mar 1

Mar 2-8


0%

20%

40%

60%

80%

100%

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09

% o

f C

ompa

nies

Increased

No Change

Decreased

The Steel Index – Global Demand Outlook

Carbon Steel Demand Outlook (Next 3 Months)

0%

10%

20%

30%

40%

50%

60%

StronglyDecrease

Decrease No change Increase StronglyIncrease

Feb 23-Mar 1Mar 2-8

Steel Demand Outlook Expectations (Next 3 Months)

0%

20%

40%

60%

80%

100%


% o

f C

om

pa

nie

s

No Change

Decrease

Increase

Strongly Decrease

The Steel Index – Global Price Outlook

Carbon Steel Price Outlook (Next 3 Months)

0%

10%

20%

30%

40%

50%

60%

StronglyDecrease


Feb 23-Mar 1

Mar 2-8

Steel Price Outlook Expectations (Next 3 Months)

0%

20%

40%

60%

80%

100%


% o

f Com

pani

es

Increase No Change

Decrease

Strongly Increase

Strongly Decrease

The Steel Index – N. American Inventory


0%

10%

20%

30%

40%

50%

60%


Feb 23-Mar 1

Mar 2-8


0%

20%

40%

60%

80%

100%

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09%

of

Com

pani

es

Increased

No Change

Decreased

The Steel Index – N. American Demand Outlook


0%

10%

20%

30%

40%

50%

60%

StronglyDecrease


Feb 23-Mar 1

Mar 2-8


0%

20%

40%

60%

80%

100%


% o

f C

ompa

nies

No Change

Decrease

Increase

Strongly Decrease

The Steel Index – N. American Price Outlook


0%

10%

20%

30%

40%

50%

60%

70%

StronglyDecrease


Feb 23-Mar 1Mar 2-8


0%

20%

40%

60%

80%

100%


% o

f Com

pani

es

Increase No Change

Decrease

Strongly Increase

Strongly Decrease

TSI Asian/Middle East inventory


0%

10%

20%

30%

40%

50%


Feb 23-Mar 1

Mar 2-8


0%

20%

40%

60%

80%

100%

Apr-08 Jul-08 Oct-08 Jan-09

% o

f C

ompa

nies

Increased

No Change

Decreased

TSI - Asian/Middle East demand outlook


0%

10%

20%

30%

40%

50%

60%

StronglyDecrease


Feb 23-Mar 1

Mar 2-8


0%

20%

40%

60%

80%

100%


% o

f C

ompa

nies

No Change

Decrease

Increase

Strongly Decrease

TSI - Asian/Middle East price outlook


0%

10%

20%

30%

40%

50%

60%

StronglyDecrease


Feb 23-Mar 1

Mar 2-8


0%

20%

40%

60%

80%

100%


% o

f Com

pani

es

Increase No Change

Decrease

Strongly Decrease

Summary

Prices will continue to decline

Demand will remain weak

No improvement until H2.10

Service centers still buying amongst themselves

US raw steel output should be near bottom

Non-residential construction downturn just getting underway

London | Pittsburgh | Shanghai | Sao Paulo | Singapore | Bursa

Thank you!

Documents

London | Pittsburgh | Shanghai | Sao Paulo | Singapore | Bursa