Steel Industry Update/259 February 2011

Locker Associates, 225 Broadway, Suite 2625 New York NY 10007 Tel: 212-962-2980

Table 1: Selected U.S. Steel Industry Data, December & Year-To-Date

Month of December Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Raw Steel Production ............... 7,329 6,462 13.4% 88,730 64,150 38.3%
Capacity Utilization ................. 68.4 60.9 -- 70.4 51.4 --
Mill Shipments .......................... 7,111 6,035 17.8% 83,444 60,347 38.3%
Exports ..................................... 928 929 -0.1% 12,004 9,282 29.3%
Total Imports............................. 1,872 1,410 32.8% 23,929 16,215 47.6%
Finished Steel Imports ............ 1,505 1,132 33.0% 18,857 14,179 33.0%
Apparent Steel Supply*............. 7,688 6,238 23.2% 90,297 65,244 38.4%
Imports as % of Supply* ......... 19.6 18.1 -- 20.9 21.7 --
Average Spot Price** ($/ton) ...... 724 564 28.4% 685 555 23.5%
Scrap Price# ($/gross ton) .......... 397 290 36.9% 348 236 47.5%
Source: AISI, SteelBenchmarker *Excl semi-finished imports **Avg price of 4 carbon products #steel scrap-shredded

Table 2: U.S. Spot Prices for Selected Steel Products, January & Year-to-Date 2011
Month of January Year-To-Date
($ per net ton) 2011 2010 % Chg 2011 2010 % Chg
Hot Rolled Band..………….. 772 586 31.7% 772 586 31.7%
Cold Rolled Coil…......……. 886 687 29.0% 886 687 29.0%
Coiled Plate................…….. 890 656 35.7% 890 656 35.7%
Rebar.........................…...... 712 541 31.6% 712 541 31.6%
Average Spot Price…….... 815 618 32.0% 815 618 32.0%
OCTG Seamless Tube……. 1,753 1,569 11.7% 1,753 1,569 11.7%
#1 Heavy Melt……………... 425 301 41.2% 425 301 41.2%
Scrap Steel-Shredded……. 455 335 35.8% 455 335 35.8%
#1 Busheling………………. 477 371 28.6% 477 371 28.6%
Sources: World Steel Dynamics’ SteelBenchmarker, Spears Research

Table 3: World’s Top Steelmaking Countries, 2005-2010p

Country 2010p 2009 2008 2007 2006 2005 % chg
China 626.7 573.6 500.3 489.3 419.1 353.2 9.3%
Japan 109.6 87.5 118.7 120.2 116.2 112.5 25.2%
US 80.6 58.2 91.4 98.1 98.6 94.9 38.5%
Russia 67.0 60.0 68.5 72.4 70.8 66.1 11.7%
India 66.8 62.8 57.8 53.5 49.5 45.8 6.4%
South Korea 58.5 48.6 53.6 51.5 48.5 47.8 20.3%
Germany 43.8 32.7 45.8 48.6 47.2 44.5 34.1%
Ukraine 33.6 29.9 37.3 42.8 40.9 38.6 12.4%
Brazil 32.8 26.5 33.7 33.8 30.9 31.6 23.8%
Turkey 29.0 25.3 26.8 25.8 23.3 21.0 14.6%
Italy 25.8 19.8 30.6 31.6 31.6 29.3 29.7%
Taiwan 19.6 15.9 19.9 20.9 20.0 18.9 23.7%
Mexico 17.0 14.0 17.2 17.6 16.4 16.2 22.1%
Others 202.8 174.6 225.6 240.0 234.2 223.7 16.2%
Total World 1,413.6 1,229.4 1,327.2 1,346.1 1,247.2 1,144.1 15.0%
Source: WorldSteel.org, 1/27/11; in million tonnes

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 Steel Industry Update/259

Table 4: World Crude Steel Production by Region, December & Year-To-Date

(000 metric tons) Month of December Year-to-Date
Region 2010 2009 % Chg 2010 2009 % Chg
European Union……. 12,953 11,962 8.4% 172,906 138,834 24.5%
Other Europe………. 3,090 2,495 23.9% 33,079 28,722 15.2%
C.I.S…………………. 9,640 8,888 8.5% 108,425 97,535 11.2%
North America……… 9,515 8,186 16.2% 111,798 82,403 35.7%
South America……... 3,431 3,579 -4.1% 43,775 37,775 15.9%
Africa………………... 1,556 1,361 14.3% 17,151 14,806 15.8%
Middle East…………. 1,658 1,369 21.1% 18,980 17,046 11.3%
Asia………………….. 73,628 69,311 6.2% 881,197 788,326 11.8%
Oceania………...…... 686 651 5.3% 8,149 6,014 35.5%
Total………………… 116,157 107,792 7.8% 1,395,459 1,211,481 15.2%
Countries
China………………… 51,524 48,492 6.3% 626,654 573,567 9.3%
Japan………………... 9,173 8,951 2.5% 109,600 87,534 25.2%
United States……….. 6,748 5,862 15.1% 80,594 58,196 38.5%
India(e)…….………… 5,915 5,506 7.4% 67,021 60,011 11.7%
Russia(e)...…..……… 5,610 5,711 -1.8% 66,848 62,838 6.4%
South Korea……...…. 5,591 4,498 24.3% 58,453 48,572 20.3%
Germany.…………… 3,162 3,024 4.6% 43,815 32,670 34.1%
Ukraine(e)..………….. 3,050 2,749 10.9% 33,559 29,855 12.4%
All Others………….... 25,384 22,999 10.4% 308,915 258,238 19.6%
Source: World Steel Association, 2/11

Graph 1: World Crude Steel Production

Source: World Steel Association, 2/11; in million metric tons

Steel Industry Update (ISSN 1063-4339) published 12 times/year by Locker Associates, Inc. Copyright © 2011 by Locker Associates Inc. All
rights reserved. Reproduction in any form forbidden w/o permission. Locker Associates, Inc., 225 Broadway Suite 2625 New York NY 10007.

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Graph 2: Crude Steel Production Annual Growth Trend

Source: World Steel Association, 2/10; percentage change year-to-year

Graph 3: World Steel Capacity Utilization Ratio

Source: World Steel Association, 2/10

Graph 4: Share of World Crude Steel Production, 2009 & 2010

Source: World Steel Association, 2/10

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 Steel Industry Update/259

Table 5: North American Crude Steel Output, December 2010

Country Dec '10 Dec '09 % Chg 2010 2009 % Chg
Canada 1,100 943 16.6% 12,990 9,286 39.9%
Cuba 25 24 4.2% 278 267 4.2%
El Salvador 4 6 -37.5% 51 56 -8.6%
Guatemala 25 22 14.2% 272 224 21.3%
Mexico 1,570 1,287 21.9% 17,041 13,957 22.1%
Trinidad & Tobago 43 41 5.5% 572 417 37.1%
United States 6,748 5,862 15.1% 80,594 58,196 38.5%
All North America 9,515 8,186 16.2% 111,798 82,403 35.7%
Source: WorldSteel.org, 1/27/11; in ‘000 tonnes

Table 6: Direct Reduced Iron (DRI) Output in 2010

Country 2010 2009 % Chg % Share
India 20,650 20,754 -1% 37%
Iran 9,350 8,099 15% 17%
Mexico 5,455 4,147 32% 10%
Saudi Arabia 4,937 4,623 7% 9%
Venezuela 3,760 5,508 -32% 7%
Qatar 2,150 2,097 3% 4%
South Africa 1,845 1,340 38% 3%
Trinidad & Tobago 1,752 1,182 48% 3%
Argentina 1,566 807 94% 3%
Libya 1,425 1,077 32% 3%
Canada 600 342 75% 1%
Peru 100 100 0% 0%
Total 56,555 53,137 6% 100.0%
Source: WorldSteel.org, 1/25/11; in ‘000 tonnes; includes hot briquetted iron

Table 7: US Iron and Steel Scrap Exports for September, 2010

Item Sep ‘10 Sep '09 % Chg YTD '10 YTD '09 % Chg
Turkey 546 309 76.7% 2,990 2,770 7.9%
South Korea 218 510 -57.3% 2,260 2,490 -9.2%
China 107 385 -72.2% 2,250 5,160 -56.4%
Taiwan 195 177 10.2% 1,950 1,490 30.9%
Canada 131 91 44.0% 1,080 676 59.8%
Malaysia 31 108 -71.3% 680 444 53.2%
India 46 22 109.1% 670 1,300 -48.5%
Mexico 32 92 -65.2% 500 482 3.7%
Vietnam 117 85 37.6% 443 593 -25.3%
Egypt 114 79 44.3% 394 321 22.7%
Thailand 5 11 -54.5% 335 379 -11.6%
Indonesia 45 51 -11.8% 266 187 42.2%
Peru 32 62 -48.4% 218 94 131.9%
Others 34 39 -2.0% 613 841 1.6%
Total 1,660 2,020 -17.8% 14,800 17,300 -14.5%
Source: Bloomberg, 2/2/11

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Table 8: Contract Prices for Australian Iron Ore Fines, 2010

Analyst Q1’10 Q2’10 Q3’10 Q4’10
ANZ $149 $175 $160 $160
BoA Merril 136 150 130 120
Barclays 142 165 160 160
Bernstein 138 129 129 129
Commonwealth Bk of Australia 139 155 150 146
Hatch 180 170 150 140
Macquarie 148 166 164 135
Morgan Stanley 148 171 176 156
National Australia Bank 137 150 155 150
Steel Index 138 175 160 140
Source: Reuters, 2/7/11; in US&/tonne, free onboard; iron ore fines are 62% iron content

Table 9: Contract Prices for Australian Iron Ore Fines, 2010

Range Q1 Q2 Q3 Q4
Median $141 $165 $158 $143
High 180 175 176 160
Low 136 129 129 120
Source: Reuters, 2/7/11; US$/tonne free onboard; fines are 62% iron content

Table 10: Russian Coking Coal Output, 2010

Date Coal Coking Coal
Jan 26.5 5.5
Feb 27.3 5.9
March 29.3 6.1
April 24.8 5.8
May 24.3 5.6
June 23.4 5.3
July 24.4 5.3
Aug 24.9 4.9
Sept 25.8 5.3
Oct 27.7 5.8
Nov 28.6 5.5
Dec 30.2 6.1
2010 317.0 67.1
’09-’10 % Chg 5.4% 9.9%
Source: SteelOrbis.com; in million tonnes, except % change;

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Table 11: China Steel Exports by Country, 2010

Country Dec’10 YTD2010 % Share
South Korea 621,574 8,435,661 20.0%
India 154,784 3,375,084 8.0%
Viet Nam 147,413 2,419,488 5.7%
Brazil 84,280 1,717,227 4.1%
Italy 93,125 1,310,412 3.1%
Thailand 99,486 1,288,141 3.1%
Philippines 72,996 1,158,088 2.7%
Singapore 66,304 1,047,288 2.5%
US 76,583 1,013,085 2.4%
Indonesia 80,799 984,106 2.3%
UAE 67,708 971,714 2.3%
Hong Kong 43,294 951,744 2.3%
Taiwan Region 55,063 912,674 2.2%
Malaysia 59,444 886,914 2.1%
Saudi Arabia 75,968 815,906 1.9%
Japan 36,827 807,514 1.9%
Russian Fed 42,329 794,388 1.9%
Australia 73,347 766,280 1.8%
Belgium 39,744 749,010 1.8%
Chile 22,412 707,535 1.7%
Others 826,142 11,336,592 26.8%
Total 2,839,653 42,448,880 100.0%
Source: mysteel.net, 1/28/11; in tonnes

Table 12: Top 10 Steelmakers in China, 2010

Rank Company 2010 2009
1 Hebei Iron & Steel Group 52.9 49.7
2 Baosteel Group Corp 44.5 38.9
3 Angang New Co 40.3 37.4
4 Wuhan Iron & Steel Group 36.6 30.3
5 Jiangsu Shagang Group 30.1 26.4
6 Shougang Corp 25.8 19.5
7 Shandong Iron & Steel 23.2 21.3
8 Hebei New Wuan Iron & Steel 18.6 16.7
9 Tianjin Bohai Iron & Steel 17.4 16.0
10 Magang (Group) Holding Co 15.4 14.8
Source: Bloomberg, 1/27/11; in million tonnes

Table 13: Japanese Galvanized Sheet Exports, December 2010

Dec'10 YoY % Chg YTD '10 YoY % Chg
Korea 50,349 211.0% 370,689 248.0%
China 110,865 75.4% 1,680,423 139.0%
Taiwan 15,060 62.2% 218,637 160.3%
Thailand 100,462 138.1% 1,107,840 209.0%
US 6,374 120.1% 50,409 171.7%
Others 179,211 -- 2,204,365 --
Total 462,321 98.5% 5,632,363 157.2%
Source: Japan Iron & Steel Federeation (JISF), 2/8/11; in tonnes

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Table 14: ArcelorMittal Company-wide Financial Results, 2010

US$ million unless otherwise shown Q4 '10 Q3 '10 Q4 '09 FY '10 FY '09
Sales 20,699 19,744 17,434 78,025 61,021
EBITDA 1,853 2,162 2,056 8,525 5,600
Operating Income 397 1,028 713 3,605 -1,470
Inc from discontinued operations -547 38 40 -330 -57
Net Income -780 1,350 1,109 2,916 157
Basic Earnings Per Share (USD) -0.51 0.89 0.73 1.93 0.11
Source: SteelGuru.com, 2/9/11

Table 15: ArcelorMittal Company-wide Results From Operations, 2010

US$ million unless otherwise shown Q4 '10 Q3 '10 Q4 '09 FY '10 FY '09
Iron Ore Production (Mt) 18.9 17.4 15.6 68.5 52.7
Crude Steel Production (Mt) 21.6 22.2 22.1 90.6 71.6
Steel Shipments (Mt) 21.1 20.5 19.5 85 69.6
EBITDA (US$/t) 88 105 105 100 80
Operating Income (loss, US$/t) 19 50 36 42 -21
Source: SteelGuru.com, 2/9/11

Table 16: Severstal Company-wide Results From Operations, Q4 and FY 2010

Total Output Q4’10 Q3’10 % Chg 2010 2009 % Chg
Hot metal 3.0 3.0 0% 12.6 10.7 18%
Russian Steel 2.3 2.2 4% 8.7 7.2 20%
North America 0.8 0.9 -9% 3.9 3.5 12%
Crude steel 4.2 4.2 -1% 17.0 15.0 14%
Russian Steel 2.9 2.9 2% 11.1 9.6 16%
North America 1.3 1.4 -8% 6.9 5.5 9%
Source: Steelguru.com, 2/11/11; in million tonnes

Table 17: Severstal-North America Results From Operations, Q4 and FY 2010

Sales Volume Q4’10 Q3’10 % Chg 2010 2009 % Chg
Rolled products: 1.2 1.4 -17% 5.7 5.1 11%
Hot rolled strip and plate 0.6 0.7 -14% 2.6 2.0 27%
Cold rolled sheet 0.2 0.3 -29% 1.4 1.3 2%
Galv and metallic coated sheet 0.3 0.4 -12% 1.7 1.7 1%
Color coated sheet 0.0 0.0 -45% 0.0 0.1 -44%
Downstream goods (Metalware) 0.0 0.0 1% 0.1 0.1 -8%
Source: Steelguru.com, 2/11/11; in million tonnes

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Table 18: US Hot-dipped Galvanized Steel, Jan. 2009 - Oct. 2010

Date Shipments Exports Imports Usage
Jan’09 534 36 87 584
Feb’09 529 35 81 575
Mar’09 540 42 108 606
Apr’09 538 46 104 596
May’09 500 49 69 520
Jun’09 638 55 47 630
Jul’09 675 63 59 670
Aug’09 694 72 50 672
Sep’09 859 76 69 852
Oct’09 934 78 74 930
Nov’09 808 78 57 788
Dec’09 855 72 66 848
Jan’10 1,050 90 83 1,044
Feb’10 1,043 74 83 1,052
Mar’10 1,226 100 123 1,248
Apr’10 989 86 94 997
May’10 993 81 117 1,030
Jun’10 957 92 106 972
Jul’10 851 66 108 893
Aug’10 956 71 111 996
Sep’10 987 67 79 1,000
Oct’10 875 65 102 911
Source: Metal Strategies as reported in Metal Center News, January 2011; in tons

Table 19: Metal Center News 2011 Outlook Survey

Service Center Markets Service Center Products Service Center Processing
% of Respondents Serving % of Respondents Distributing % of Respondents Offering
Each Market the Following Types of Metal the Following Services

Fabricators 78% Carbon Steel 82% Cut-to-Length 75%

Construction 72% Stainless Steel 71% Sawing 59%
Agriculture 55% Aluminum 61% Shearing 57%
Energy 52% Galvanize/Coated 56% Flame/Laser Cut 48%
Automotive 52% Carbon Alloys 53% Slitting 48%
Appliances/HVAC 50% Copper/Brass 34% Leveling 44%
Architecture 48% Titanium/Rare 19% Blanking 38%
Tanks/Vessels 48% Flat-roll 81% Toll Processing 36%
Heavy Equipment 47% Plate 69% Edge Conditioning 21%
Defense 42% Pipe & Tube 65% Heat Treating 13%
Machine Tool 40% Bar/Rod/Wire 63% Waterjet 12%
Metal buildings 40% Structural 54% Polishing 12%
Chemicals/Food 38% Pickling 11%
Transportation 38% Rerolling 7%
Aerospace 33%
Lumber/Pulp/Paper 26%
Electronics 23%
Packaging 21%
Source: Metal Center News, January 2011

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Locker Associates Steel Track: Spot Prices

U.S. Flat-Rolled Prices U.S. Scrap Prices
($ per ton) ($ per ton)
500
1100

1000 450
#1 Busheling

900
400

Plate Shredded Scrap

800
350
CR Sheet
700

300
600
#1 Heavy Melt
HR Sheet
Rebar
250
500

400 200
'06 '07 '08 '09 J F M A M J J A S O N D J '07 '08 '09 J F M A M J J A S O N D J

Locker Associates Steel Track: Performance

U.S. Raw Steel Production 100%
U.S. Capacity Utilization
10.0
(mil net tons)
2010 2010 2009
9.0 2009 90%

8.0 80%

7.0 70%

6.0 60%

5.0 50%

4.0 40%

3.0 30%
J F M A M J J A S O N D J F M A M J J A S O N D
2010 6.9 6.9 7.8 7.7 8.0 7.8 7.5 7.3 7.3 7.2 7.1 7.3 2010 64% 71% 73% 74% 75% 75% 72% 68% 70% 67% 68% 68%
2009 4.5 4.4 4.4 4.2 4.5 4.8 5.6 6.1 6.4 6.6 6.3 6.5 2009 43% 46% 43% 41% 43% 47% 52% 58% 62% 62% 61% 61%

Steel Mill Products: US Imports, December & Year-to-Date

Imports: Country of Origin Month of December Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Canada……………………….. 408 482 -15.4% 6,643 4,272 55.5%
Mexico………………………… 216 184 17.4% 2,822 1,748 61.4%
Other W. Hemisphere……….. 212 96 120.8% 1,277 949 34.6%
European Union……………… 368 249 47.8% 4,305 2,603 65.4%
Other Europe*……………….. 103 43 139.5% 2,154 1,110 94.1%
Asia……………………………. 495 321 54.2% 5,940 5,161 15.1%
Oceania………………………. 50 29 72.4% 659 338 95.0%
Africa………………………….. 19 6 216.7% 129 33 290.9%
Total 1,872 1,410 32.8% 23,929 16,215 47.6%
Imports: Customs District
Atlantic Coast………………… 238 199 19.6% 2,971 2,112 40.7%
Gulf Coast/Mexican Border… 789 396 99.2% 8,423 6,256 34.6%
Pacific Coast…………………. 302 253 19.4% 4,413 2,680 64.7%
Gr Lakes/Canadian Border…. 532 547 -2.7% 7,920 4,988 58.8%
Off Shore……………………… 11 16 -31.3% 202 180 12.2%
Source: AISI; *includes Russia
Update
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 Steel Industry Update/259

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