Steel Industry Update/249 April 2010

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

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

Month of February Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Raw Steel Production ............... 6,881 4,356 58.0% 13,753 8,856 55.3%
Capacity Utilization ................. 71.1 45.5 -- 67.5 43.9 --
Mill Shipments .......................... 6,311 4,320 46.1% 12,891 8,896 44.9%
Exports ..................................... 890 603 47.6% 1,842 1,284 43.5%
Total Imports............................. 1,582 1,589 -0.4% 3,244 3,957 -18.0%
Finished Steel Imports ............ 1,222 1,479 -17.4% 2,508 3,635 -31.0%
Apparent Steel Supply*............. 6,643 5,195 27.9% 13,557 11,247 20.5%
Imports as % of Supply*.......... 18.4 28.5 -- 18.5 32.3 --
Average Spot Price** ($/ton) ...... $652 $675 -3.3% $632 $686 -7.9%
Scrap Price# ($/gross ton) .......... $333 $190 75.3% $337 $211 59.5%
Source: AISI, Purchasing Magazine *Excl semi-finished imports **Avg price of 8 carbon products #shredded bundles

Table 2: World Crude Steel Production by Region, February & Year-To-Date

(000 metric tons) Month of February Year-to-Date
Region 2010 2009 % Chg 2010 2009 % Chg
European Union.......... 13,350 10,381 28.6% 26,969 20,459 31.8%
Other Europe .............. 2,186 2,058 6.2% 4,602 4,303 7.0%
C.I.S............................ (e)7,835 7,274 7.7% 16,388 13,857 18.3%
North America............. 8,211 5,818 41.2% 16,849 11,693 44.1%
South America ............ 3,376 2,779 21.5% 7,073 5,283 33.9%
Africa .......................... 1,218 1,149 6.0% 2,572 2,214 16.2%
Middle East................. 1,591 1,360 17.0% 3,169 2,610 21.4%
Asia............................. 69,180 55,453 24.8% 142,091 111,901 27.0%
Oceania ...................... 594 338 75.9% 1,270 851 49.3%
Total ........................... 107,541 86,610 24.2% 220,983 173,171 27.6%
Countries
China………………… 50,357 41,113 22.5% 102,892 82,053 25.4%
Japan………………... 8,435 5,479 54.0% 17,159 11,857 44.7%
United States……….. 5,980 3,952 51.3% 12,214 8,034 52.0%
Russia………..……… (e)4,690 4,332 8.3% 9,880 8,235 20.0%
India.………………… (e)4,900 4,652 5.3% 10,330 9,372 10.2%
South Korea..………. 3,943 3,155 25.0% 8,455 6,563 28.8%
Germany.…………… 3,419 2,545 34.3% 6,916 5,209 32.8%
Ukraine …………….. (e)2,565 2,317 10.7% 5,291 4,440 19.2%
All Others…………... 35,407 19,065 85.7% 47,846 37,408 27.9%
Source: World Steel Association, 4/10; e=estimate

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 Steel Industry Update/249

Table 3: Top 10 Steel Importing Countries in 2009

Rank Country 2009 2008 % Chg
1. China 22 15 43%
2. EU 27 21 40 -48%
3. S Korea 20 28 -29%
4. USA 14 28 -50%
5. Turkey 10 13 -23%
6. Vietnam 9 8 18%
7. Thailand 9 12 -23%
8. Iran 9 8 10%
9. India 8 7 13%
10. Taiwan 6 9 -29%
Source: ISSB, April 10. 2010; in million tonnes

Table 4: Top 10 Steel Exporting Countries in 2009

Rank Country 2009 2008 % Chg
1. Japan 33 37 -11%
2. EU 27 30 34 -12%
3. Russia 27 28 -3%
4. Ukraine 24 28 -16%
5. China 22 56 -61%
6. S Korea 20 20 0%
7. Turkey 17 18 -6%
8. Taiwan 10 10 0%
9. USA 9 13 -30%
10. Brazil 9 9 -6%
Source: ISSB, April 10. 2010; in million tonnes

Table 5: Top Ten Steelmakers in the World, 2009

Rank Company Production % Chg
1. ArcelorMittal 73.2 -30.0%
2. Hebei Steel Group 40.2 +20.7%
3. Baosteel 38.9 +9.9%
4. POSCO 31.1 -6.0%
5. Wuhan Iron & Steel 30.3 +9.4%
6. Anben Steel Group 29.3 +252.0%
7. Shagang Group 26.4 +133.0%
8. Nippon Steel 24.3 -31.7%
9. JFE Steel Corp 23.5 -28.8%
10. TATA Steel 21.9 -13.5%
Source: www.posco.com, March 15, 2010; in million tonnes

Table 6: Top Five Chinese Steelmakers, 2009

Company Shipments
1. Hebei Iron & Steel Group 40.2 million tonnes
2. Baosteel 38.9 million tonnes
3. Wuhan Iron & Steel Group 30.3 million tonnes
4. Anshan Iron & Steel Group 29.3 million tonnes
5. ShaGang Group 26.4 million tonnes
Source: Steel Guru, 3/19/10

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Table 7: Iron and Crude Steel Output for Steel Producing Countries, 2008
South Ger- World
Method China Japan USA Russia India Korea many Ukraine Total
BF 471.1 86.2 33.0 48.3 28.9 31.2 29.1 31.0 926.7
DRI -- -- -- 4.0 20.2 -- 0.6 -- 56.8
Total iron 471.1 86.2 33.0 52.3 49.1 31.2 29.7 31.0 983.5
Crude steel 502.0 118.7 91.5 68.5 56.1 53.5 43.8 37.1 1,329.7
Ratio iron/steel 0.94 0.73 0.36 0.76 0.89 0.58 0.65 0.84 0.74
Source: Iron & Steel Technology, 3/30/10; in million tonnes

Table 8: Stainless & Heat Resisting Crude Steel Production, 2001-2009

Region 2001 2002 2003 2004 2005 2006 2007p 2008p 2009p
W. Europe/Africa 8,210 8,628 9,043 9,422 8,823 9,972 8,669 8,272 6,449
Cent. and E. Europe 285 279 322 318 310 363 364 333 237
The Americas 2,289 2,735 2,830 2,933 2,688 2,951 2,604 2,315 1,958
Asia 8,403 9,048 10,645 11,897 12,498 15,074 16,200 15,011 15,935
World 19,187 20,690 22,840 24,570 24,319 28,359 27,836 25,930 24,579
Source: International Stainless Steel Forum, 4/8/10; p=preliminary; (in 000 tonnes)

Table 9: Top Ranked Stainless Flat Rolled Producers, 2009

Ranking 2008 Ranking 2009
1. ThyssenKrupp Stainless Group Shanxi TISCO
2. POSCO Group POSCO Group
3. Acerinox Group YUSCO Group
4. ArcelorMittal Stainless Group ThyssenKrupp Stainless Group
5. Shanxi TISCO Acerinox Group
6. YUSCO Group ArcelorMittal Stainless Group
7. Outokumpu Stainless Group Baosteel Stainless Steel Branch
8. Baosteel Stainless Steel Branch Outokumpu Stainless Group
9. NSSC Fujian Wuhang/Deshang Nickel
10. AK Steel NSSC
Source: Steel Guru, 4/7/10

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Table 10: Top Ten Global Metals Deals, 2009

Target Buyer Value
Rank Sale Date Target Bidder Nation Nation (US $mil) Sector
Corporacion
1. May ‘09 Ternium Sidor Venezolana de Venezuela Venezuela 1,970 Steel
Guayana
ThyssenKrupp CSA
2. Sep ‘09 Siderurgica do Vale SA Brazil Brazil 1,371 Steel
Atlantico Ltda
Pangang Group
Panzhihua New
3. May ‘09 Sichuan Changcheng China China 962 Steel
Steel & Vanadium
Special Steel Co Ltd
Rio Tinto PLC - Cia Vale do Rio
4. Sep ‘09 Brazil Brazil 750 Iron Ore
Iron Assets Doce
American Molygold United Other
5. Jan ‘09 Undisclosed Unknown 620
Corp States Metals
Australian Bulk
6. Jan ‘09 Grange Resources Australia Australia 599 Iron Ore
Minerals Pty Ltd
OAO Trubnaya
United Russian
7. Feb ‘09 NS Group, Inc Metalurgicheskaya 500 Steel
States Fed
Kompanya (TMK)
Fortesque Metals Hunan Hualing
8. Feb ‘09 Australia China 409 Iron Ore
Group Iron & Steel Group
Fortesque Metals Hunan Hualing
9. Apr ‘09 Australia China 407 Iron Ore
Group Iron & Steel Group
VS Dempo & Co Pvt
10. Jun ‘09 Ltd-Goa Mining Sesa Goa Ltd India India 370 Iron Ore
Assets
Source: PriceWaterhouseCoopers, Metals Deals 2009 Annual Review, April, 2010

Table 11: M&A Activity by Continent, 2008-2009

Value % of Total
North America Deals % World (US$bn) Value
2008 84 21% $17.2 28%
2009 73 14% $1.6 11%
% Chg -13.1% -90.7%
Value % of Total
Asia Pacific Deals % World (US$ bn) Value
2008 185 47% $16.4 27%
2009 266 51% $7.6 50%
% Chg 43.0% -53.7%
Source: PriceWaterhouseCoopers, Metals Deals 2009 Annual Review, April, 2010

Table 12: Total Metals Deals, 2003-2009

Cross border Cross border
number as % Value value as % of
Year Number of total # (US$bn) total number
2009 521 25% $15.1 29%
2008 397 38% $60.6 62%
2007 411 35% $144.7 68%
2006 385 29% $86.4 73%
2005 250 40% $34.8 49%
2004 166 40% $37.0 31%
2003 164 30% $16.1 60%
Source: PriceWaterhouseCoopers, Metals Deals 2009 Annual Review, 4/10

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Table 13: Number of Cross Border & Domestic Metals Deals

2009 2008 % Chg
Cross border 150 129 -14.0%
Domestic 247 392 58.7%
Total 397 521 31.2%
Source: PriceWaterhouseCoopers, Metals Deals 2009 Annual Review,
April, 2010

Table 14: Value of Cross Border & Domestic Metals Deals

2009 2008 % Chg
Cross border $37.7 $4.4 -88.3%
Domestic $22.8 $10.7 -53.1%
Total $60.6 $15.1 -75.1%
Source: PriceWaterhouseCoopers, Metals Deals 2009 Annual Review,
April, 2010; deal value in US$ billion

Table 15: Estimated Market Share of Top 5 Companies, by Sector

Iron Ore 2009 Steel 2008 Aluminum 2009
Vale 256 ArcelorMittal 103 Rusal 3,897
Rio Tinto 165 Nippon Steel 37 Rio Tinto 3,803
BHP Billiton 115 Baosteel 35 Alcoa 3,301
ArcelorMittal 42 POSCO 35 Chalco 2,557
FMG 34 Hebei Steel 33 BHP Billiton 1,235
Top 5 total 611 Top 5 total 244 Top 5 total 14,793
Global total 2,213 Global Total 1,329 Global Total 36,736
Top 5 as a % Top 5 as a % Top 5 as a %
28% 18% 40%
of global of global of global
Source: PriceWaterhouseCoopers, Metals Deals 2009 Annual Review, April, 2010; market shares for steel
and aluminum are based on total global production; market share for iron ore is based on estimated saleable
iron ore production as a percentage of global production; iron ore and steel in million tonnes; aluminum in
thousand tonnes

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Table 16:North American Vehicle Production, Y-T-D 2009 & 2010

Jan-Feb, ‘10 Jan-Feb, ‘09 % Share ‘10 % Share ‘09
U.S. Car 463,048 241,721 25.3% 23.4%
U.S. Light Truck 691,715 414,927 37.7% 40.2%
Total Light Vehicle 1,154,763 656,648 63.0% 63.6%
U.S. Med./Hvy. Truck 21,270 24,888 1.2% 2.4%
Total U.S. Vehicle 1,176,033 681,536 64.2% 66.0%
Canada Car 159,408 94,833 8.7% 9.2%
Canada Light Truck 152,965 64,767 8.3% 6.3%
Total Light Vehicle 312,373 159,600 17.0% 15.4%
Canada Med/Hvy Truck 879 3,672 0.0% 0.4%
Total Canada Vehicle 313,252 163,272 17.1% 15.8%
Mexico Car 194,656 108,618 10.6% 10.5%
Mexico Light Truck 136,273 72,276 7.4% 7.0%
Total Light Vehicle 330,929 180,894 18.1% 17.5%
Mexico Med/Hvy Truck 12,635 7,379 0.7% 0.7%
Total Mexico Vehicle 343,564 188,273 18.7% 18.2%
Total NA Vehicle 1,798,065 997,142 98.1% 96.5%
Total Med./Hvy. Truck 34,784 35,939 1.9% 3.5%
Total Vehicle 1,832,849 1,033,081 100.0% 100.0%
Source: Ward’s Automotive Group, April 2010

Table 17: NA Vehicle Production, by Manufacturer, Y-T-D 2009 & 2010

Jan-Feb, ‘10 Jan-Feb, ‘09 % Share ‘10 % Share ‘09
Chrysler 228,495 126,400 12.5% 12.2%
Ford 350,934 191,922 19.1% 18.6%
GM 414,512 190,490 22.6% 18.4%
Big 3 Total 993,941 508,812 54.2% 49.3%
AutoAlliance 17,247 3,526 0.9% 0.3%
BMW 21,365 19,370 1.2% 1.9%
CAMI 0 2,602 0.0% 0.3%
Honda 204,316 141,800 11.1% 13.7%
Hyundai 40,470 23,030 2.2% 2.2%
Kia 16,284 0 0.9% 0.0%
Mercedes 18,720 9,071 1.0% 0.9%
Mitsubishi 5,507 4,228 0.3% 0.4%
Nissan 155,720 94,435 8.5% 9.1%
NUMMI 58,786 27,113 3.2% 2.6%
Subaru 36,771 23,522 2.0% 2.3%
Toyota 177,239 94,784 9.7% 9.2%
Volkswagen 56,919 51,761 3.1% 5.0%
Others 29,564 29,027 1.6% 2.8%
Non Big 3 Total 838,908 524,269 45.8% 50.7%
Grand Total 1,832,849 1,033,081 100.0% 100.0%
Source: Ward’s Automotive Group, April 2010

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Locker Associates Steel Track: Spot Prices

U.S. Flat-Rolled Prices U.S. Other Product Prices
1100 1350
($ per ton) ($ per ton)
1250
1000

1150
900 CF Bar (SBQ)
1050
Plate
800
950

700 850
CR Sheet
600 750
Beam
650
500

HR Sheet 550
400 Wire Rod
450

300
350

200 250
89 93 97 04 05 07 q2 q4 J M M J A S O N D J F M 89 93 97 04 05 07 q2 q4 J M M J A S O N D J F M

Locker Associates Steel Track: Performance

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

8.0 2010 80%

2009
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 2010 64% 71%
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%

U.S. Spot Prices for Selected Steel Products, March & Year-to-Date
Month of March Year-To-Date
($ per net ton) 2010 2009 %Chg 2010 2009 %Chg
Hot Rolled Sheet………….. 650 471 38.0% 594 495 20.0%
Cold Rolled Sheet......…….. 765 563 35.9% 701 586 19.7%
HD Galvanized Sheet..…… 804 627 28.2% 730 658 10.8%
Coiled Plate................……. 635 693 -8.4% 583 778 -25.0%
Cold-Finished Bar (SBQ)….. 796 804 -1.0% 759 822 -7.7%
Wide-Flange Beams....…… 717 786 -8.8% 701 823 -14.9%
Wire Rod/Low Carbon.…… 666 591 12.7% 632 642 -1.6%
Rebar.........................…….. 581 492 18.1% 542 531 2.0%
Average Spot Price+…….. 702 628 11.7% 655 667 -1.8%
Stainless Sheet 304……… 2,848 2,376 19.9% 2,706 2,452 10.3%
OCTG Seamless Tube…… 1,685 2,046 -17.6% 1,617 2,260 -28.5%
Scrap ($/gross ton)*....………. 650 471 38.0% 594 495 20.0%
Sources: Purchasing Mag, Spears Research +Comp price of 8 carbon products *shredded bundles

Update #249
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 Steel Industry Update/249

Locker Associates, Inc.

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

Locker Associates is a New York City based business-consulting firm that specializes in enhancing the
competitiveness of businesses and industries on behalf of corporate, union and government clients. By
combining expert business and financial analysis with a sensitivity to labor issues, the firm is uniquely
qualified to help clients manage change by:
• Leading joint labor/management business improvement initiatives
• Conducting strategic industry studies to identify future challenges and opportunities
• Representing unions in strategic planning and workplace reorganization
• Formulating business plans for turnaround situations
• Performing due diligence for equity and debt investors
Over the last twenty-two years, the firm has directed over 250 projects spanning manufacturing,
transportation, warehousing and mining industries. Typical projects involve in-depth analysis of a firm's
market, financial and operating performance on behalf of a cooperative labor-management effort. Locker
Associates also publishes a widely read newsletter, Steel Industry Update that circulates extensively
throughout the steel industry.

Major Clients
AFLCIO George Meany Center Minnesota Gov's Task Force on Mining
Air Line Pilots Association North American Refractories
Algoma Steel Northwestern Steel and Wire
American Federation of Musicians Prudential Securities
Armco Employees Ind. Federation Santander Investment Securities
Bethlehem Joint LaborMgmt Committee Service Employees International Union
Boilermakers Union Sharpsville Quality Products
Canadian Steel Trade & Employment Congress Special Metals
Carbide Graphite Group Stelco Steel
Cleveland State University SYSCO Food Service of San Francisco
Hancock Venture Partners Trustee for Sharon Steel Bankruptcy
Inland Steel Joint Labor/Mgmt Committee UNITE HERE!
International Association of Machinists United Auto Workers
International Brotherhood of Teamsters United Mine Workers
International Union of Electrical Workers United Steelworkers
Ipsco US Steel Joint Labor/Management Comm
Lazard Freres US Steel/KOBE
LTV Joint Labor/Management Project Wheeling-Pittsburgh Steel

Recent Projects
AFTRA-Contract Negotiations: advised American Federation of Television and Radio Artists on contract
negotiations with one of the largest U.S. media companies, including research and analysis of relations.

Save the World Air-Marketing: developed a marketing plan to help drive sales of a green technology
product, ELEKTRA, an electronic fuel device for trucks that increases fuel economy.

IBT-Interstate Bakeries: financial advisor to the Teamsters during Chapter 11 proceedings and
reorganization, including identifying potential buyers and partners.

Liberia-Iron Ore Negotiations: advised Liberian government in its iron ore negotiations with Mittal Steel;
helped to obtain a $100 million improvement in contract value.

UAW Steel Council: periodic presentations on steel industry trends and developments, with special focus
on industries and companies employing UAW members.

IBT-U.S. Foodservice: helped union and management identify major problems impacting warehouse and
distribution performance and provided recommendations for making improvements.

email: lockerassociates@yahoo.com | website: www.lockerassociates.com

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