Steel Industry Update/283

Locker Associates, 225 Broadway, Suite 2625 New York NY 10007

March 2013
Tel: 212-962-2980

Click on the links below to go to a table

Table 1 Selected U.S. Steel Industry Data, 2009-2012 Table 2: U.S. Spot Prices for Selected Products, February & YTD, 2013 Table 3: World Crude Steel Production, January & Year-to-Date, 2013 Graph 1: World Crude Steel Production, February 2013 Graph 2: World Steel Capacity Utilization, February 2013 Table 4: World Crude Steel Production, 2005-2012 Table 5: Worlds Top Flat Product Producers, 2012 Table 6: Worlds Top 15 Flat Product Producers, 2012 Table 7: US Steel Company Results, 2012 Table 8: Steel Company Raw Materials Exposure, 2012 Table 9: U.S. Spot Prices for Selected Products, March & Year-to-Date, 2013 Table 10: Top Steel Industry Political Contributors, 2012

Table 1: Selected U.S. Steel Industry Data, January & YTD, 2013
(000 net tons)

Raw Steel Production. Capacity Utilization. Mill Shipments.. Exports.... Total Imports. Apparent Steel Supply.. Imports as % of Supply..
Sources: AISI, US ITA

Month of January 2013 2012 % Chg 8,002 8,497 -5.8% 77% 8,211 1,077 2,604 9,738 26.7 78% 7,483 1,262 2,722 8,943 30.4 -9.7% -14.7% -4.3% 8.9% --

2013 8,002 77% 8,211 1,077 2,604 9,738 26.7

Year-To-Date 2012 8,497 78% 7,483 1,262 2,722 8,943 30.4

% Chg -5.8% -9.7% -14.7% -4.3% 8.9% --

Table 2: U.S. Spot Prices for Selected Products, March & Year-to-Date, 2013
($ per net ton)

Hot Rolled Band.... Cold Rolled Coil........ Coiled Plate.................. Average Spot Price.... OCTG* #1 Heavy Melt... Shredded Scrap... #1 Busheling. Iron Ore ($/dmtu)*...... Pig Iron ($/tonne)**....

Month of March 2013 2012 % Chg 620 693 -10.5% 715 788 -9.3% 736 929 -20.8% $690 1,814 362 392 399 155 387 $803 2,045 397 439 459 140 442 -14.1% -11.3% -8.8% -10.7% -13.1% 10.7% -12.4%

2013 625 721 731 $692 1,846 347 379 385 153 387

Year-to-Date 2012 719 816 938 $824 2,030 403 447 478 140 442

% Chg -13.0% -11.6% -22.0% -16.0% -9.0% -14.0% -15.1% -19.5% 8.9% -12.4%

Sources: World Steel Dynamics, Spears Research; SteelontheNet.com; IndexMundi.com; *OCTG and iron ore data is 2/13; **pig iron data is 1/13, $/dmtu: US$/dry metric tonne unit

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Table 3: World Crude Steel Production, February & Year-to-Date, 2013 Month of February Year-to-Date (000 metric tons) Region 2013 2012 % Chg 2013 2012 European Union. 13,384 14,171 -5.6% 27,045 28,329 Other Europe. 2,787 2,899 -3.9% 5,793 6,234 C.I.S. North America South America... Africa/Middle East..... Asia.. Oceania...... Total Country China....... Japan... United States.. India(e). Russia.. South Korea....... Germany... Turkey.. Ukraine... Brazil All Others.... 61,830 8,317 6,655 6,200 4,981 5,160 3,447 2,655 2,480 2,629 18,904 56,311 8,612 7,544 6,229 5,441 5,857 3,578 2,763 2,513 2,803 20,180 9.8% -3.4% -11.8% -0.5% -8.5% -11.9% -3.7% -3.9% -1.3% -6.2% -6.3% 125,452 17,180 14,017 12,966 10,733 10,865 7,032 5,514 5,228 5,451 38,599 113,429 17,242 15,251 12,827 11,216 11,906 6,946 5,898 5,386 5,594 40,717 10.6% -0.4% -8.1% 1.1% -4.3% -8.7% 1.2% -6.5% -2.9% -2.5% -5.2% 8,055 9,240 3,421 2,937 82,928 505 123,258 8,918 10,191 3,778 3,112 78,308 454 121,831 -9.7% -9.3% -9.4% -5.6% 5.9% 11.3% 1.2% 16,968 19,465 7,062 5,988 169,701 996 253,037 18,421 20,642 7,506 6,229 158,108 943 246,412

% Chg -4.5% -7.1% -7.9% -5.7% -5.7% -3.9% 7.3% 5.6% 2.7%

Source: World Steel Association, 3/13; e=estimate

Graph 1: World Crude Steel Production, February 2013

Source: World Steel Association, 3/13; in million metric tons

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Graph 2: World Steel Capacity Utilization, February 2013

Source: World Steel Association, 3/13

Table 4: World Crude Steel Production, 2005-2012

Source: World Steel Association, 2/13

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Table 5: Worlds Top Flat Product Producers, 2012 (million tonnes) Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Company ArcelorMittal Baosteel Nippon Steel POSCO JFE Steel US Steel AnBen Thyssen Krupp Severstal TATA Corus MMK Wuhan Iron & Steel China Steel Jiangsu Shagang Riva Group Nucor Shandong NLMK AK Steel Hebei Total Top 20 Total World
Source: World Steel Association, February 2013

Base Luxembourg China Japan Korea Republic Japan USA China Germany Russia India Russia China Taiwan China Italy USA China Russia USA China

Capacity 113.3 34.9 32.9 31.3 30.5 29.2 28.1 24.2 19.2 17.4 16.5 15.7 13.7 13.5 12.6 10.6 10.3 9.9 9.5 9.4 482.7 821.4

Table 6: Worlds Top 15 Long Product Producers, 2012 (million tonnes) Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Company ArcelorMittal Gerdau Evrazholding Group TATA Corus Nippon Steel Nucor JFE Steel Baosteel Hebei Steel Riva Group Celsa Group Wuhan Iron & Steel Severstal Metinvest Group Hyundai Group Total Top 15 Rest of World
Source: World Steel Association, February 2013

Base Luxembourg Brazil Russia India Japan USA Japan China China Italy Spain China Russia Ukraine Korea Republic

Capacity 54.4 25.1 18.4 11.9 11.1 10.8 10.2 9.4 9.1 9.0 8.6 8.1 7.9 7.8 7.0 214.8 735.9

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Table 7: US Steel Company Results, 2011 & 2012 Company Shipments

(mil net tons)

Sales
($ millions)

Sales/ton
($)

EBITDA
($ millions)

2012 AK Steel Nucor SDI U.S. Steel Total 5.4 23.1 5.4 16.0 49.9

2011 5.7 23.0 5.4 15.5 49.6

2012 $5,934 $19,429 $7,290 $11,976 $44,629

2011 $6,468 $20,024 $7,998 $11,776 $46,266

2012 $1,099 $841 $1,350 $749 $894

2011 $1,135 $871 $1,481 $760 $933

2012 $238 $1,534 $595 $891 $3,257.7

2011 $267 $1,926 $732 $937 $3,862.1

Source: World Steel Dynamics, 2/13; Company data is steel-related business only; U.S. Steel data is flat-rolled and tubular, excluding Europe

Table 8: US Steel Company Raw Materials Exposure, 2012 Ticker X AKS NUE STLD CMC SCHN Iron Ore 100%** 6% na 0% na na Coking Coal Contracted at $188/t Contracted near $190/t na Contracted near $190/t na na Coke 100% 60% na na na na Scrap Processing* 0 0 35% 50-100% 100% 100%

Source: Morgan Stanley; *Scrap processing capability / tons of scrap consumed; **N. American operations

Table 9: Vale Financial Results, 2008-2012

(in US $ million)

Operating revenues Adjusted EBIT Adjusted EBIT margin Adjusted EBITD Underlying earnings Capital and R&D expenses

2008 38,509 15,698 41.9 19,018 13,716 10,191

2009 23,939 6,057 26.0 9,165 4,885 9,013

2010 46,481 21,695 47.9 26,116 17,550 12,705

2011 60,389 28,599 48.5 33,759 23,234 17,994

2012 46,454 14,279 31.5 19,135 11,236 17,729

% Chg -23% -50% 35% 43% 52% 1%

Source: SteelGuru.com, 2/28/13; % Chg 2011-2012

Steel Industry Update (ISSN 1063-4339) published 12 times/year by Locker Associates, Inc. Copyright 2013 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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Source: The Atlantic, 3/4/13

Source: The Atlantic, 3/4/13

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Source: Export Tax Advisors, 3/18/13

Table 10: Top Steel Industry Political Contributors, 2012 Company Renco Group Nucor Corp US Steel Elwood Group Kenwal Steel Worthington Industries Charlotte Pipe & Foundry Fry Steel Co American Iron & Steel Institute ArcelorMittal USA Midwest Steel Permian Enterprises AK Steel Allegheny Technologies Qualico Steel Damascus Steel Casting King Steel Steel Dynamics Superior Supply & Steel New Process Steel
Source: OpenSecrets.org, 2012

Amount $1,118,700 $439,854 $234,596 $202,450 $151,150 $150,000 $101,668 $100,000 $96,650 $87,161 $79,825 $74,000 $72,983 $70,850 $69,600 $61,050 $55,000 $50,550 $50,000 $50,000

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Locker Associates, Inc.

LOCKER ASSOCIATES is a business-consulting firm that specializes in enhancing the competitiveness of businesses and industries on behalf of unions, corporate 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; facilitating ownership transitions to secure the long-term viability of a business; conducting strategic industry studies to identify future challenges and opportunities; representing unions in strategic planning, workplace reorganization and bankruptcy formulating business plans for turnaround situations; and performing due diligence for equity and debt investors.

Over the last 28 years, the firm has directed over 225 projects spanning manufacturing, transportation, distribution and mining industries. Typical projects involve in-depth analysis of a firms market, financial and operating performance on behalf of a cooperative labor-management effort. Locker Associates also produces a widely read monthly newsletter, Steel Industry Update that circulates throughout the U.S. and Canadian steel industry.

MAJOR CLIENTS
United Steelworkers Bank of Boston Congress Financial Santander Investment Securities AEIF-IAM/AK Steel Middletown Prudential Securities US Steel Joint Labor-Mgmt Comm LTV Steel Joint Labor-Mgmt Committee Intl Union of Electrical Workers Bethlehem Joint Labor-Mgmt Comm Inland Steel Joint Labor-Mgmt Comm Northwestern Steel and Wire Boilermakers American Federation of Musicians USS/KOBE Sysco Food Services of San Francisco International Brotherhood of Teamsters Development Bank of South Africa J&L Structural Steel Air Line Pilots Association/Delta Air Lines MEC Sharpsville Quality Products IPSCO International Association of Machinists CSEA/AFSCME United Auto Workers Service Employees International Union American Fed of Television & Radio Artists Supervalu United Mine Workers Algoma Steel North American Refractories UNITE/HERE AFL-CIO George Meany Center Watermill Ventures Wheeling-Pittsburgh Steel Canadian Steel Trade & Employment Congress Minn Gov's Task Force on Mining Special Metals

RECENT PROJECTS
Metallic Lathers and Reinforcing Ironworkers (2010-Present): strategic industry research and ongoing advisement on major industry trends and companies to help enhance the competitive position of the unionized NYC construction industry Building & Construction Trades Council of Greater NY (BCTC) (2011-present): analysis and advisement regarding major trends in the New York City construction industry, including capital market developments which affect BCTC members Communication Workers of America (CWA) (2011-present): research and analysis to prepare CWA for nationwide contract negotiations with AT&T IBT-Supervalu (2010): assist union and management to identify major operational problems impacting warehouse performance and provide recommendations for joint improvement Metallurgical Coal Producer (2011): prepared a detailed study on the major trends in the world metallurgical coal market for a large metallurgical coal producer
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