Intellinews - Romania Steel and Iron Report Mai 2013

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Romania Iron and Steel Report May 2013
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Romania Iron and Steel Report
May 2013
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May 2013
Contents
Executive Summary ............................................................................................................................. 4
Strategy Comment Change in the Business Model .......................................................................... 5
Industry Overview ............................................................................................................................... 6
2011 WorldSteel Statistics .............................................................................................................. 7
Romanias apparent steel use down 4% y/y to 181kg per capita; 34% down from 2007, 53%
of EU27 average WorldSteel. ................................................................................................... 7
European steel makers lose share on shrinking market. ............................................................ 8
Russias Mechel sells out Romanian steel assets to cut loss. ...................................................... 8
Government says it cannot intervene in Mechels abandoned steel plants. ............................. 9
Steel plant of ArcelorMittal says cannot stand current energy prices .................................... 9
and alsol seeks delay of natural gas price liberalisation ......................................................... 9
In response, government drafts amendment to renewable energy support scheme. ............ 10
Separately, market regulator recommends trimming down the support to renewable energy
.................................................................................................................................................. 11
Lakshmi Mittal in energy price talks for ArcelorMittal's units in Romania............................... 11
STYLISED STRUCTURE OF METAL INDUSTRY ................................................................................. 12
IntelliNews model of Romanian steel market recent developments. ................................... 12
Industry Indicators............................................................................................................................. 13
A. INDUSTRIAL OUTPUT INDEX [2010=100] .................................................................................. 13
B. SALES INDEX [2010=100] .......................................................................................................... 14
C. UTILISATION BALANCE .............................................................................................................. 15
IntelliNews model of Romanian steel market utilisation balance. ........................................ 15
Foreign Trade Balances ..................................................................................................................... 19
Foreign Trade - Detailed .................................................................................................................... 21
Corporate Update.............................................................................................................................. 26
ARCELORMITTAL ........................................................................................................................... 26
ArcelorMittal cuts capacity of main Romanian steel mill to 3mn tonnes per year. ................. 26
TMK ............................................................................................................................................... 26
TMK reports weaker profit for 2012, slips in the losses in Q1/2013. ....................................... 26
MECHEL ......................................................................................................................................... 26
Romanian wire maker formerly owned by Mechel files for insolvency. .................................. 26
INDEPENDENT ............................................................................................................................... 26
Indian investor considers small EUR 100-200mn steel plant in Romania. ............................... 27
Appendix............................................................................................................................................ 28
Appendix 1: Romanias Crude Steel production monthly, 2004-2012....................................... 28
Appendix 2: Romanias Industrial Activity Indices annual 2006-2011, quarterly 2008- 2012 ... 29
Appendix 3: Romania Steel Industry detailed exports&imports annual 2002-2012 [USD/EUR,
tonnes] .......................................................................................................................................... 30
Copyright 1999-2013 EMERGING MARKETS DIRECT MEDIA HOLDINGS LLC. ALL RIGHTS RESERVED
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May 2013
Figure 1: Steel benchmark prices [global] starting 2003 ..................................................................... 6

Figure 2: Romanias total steel balance [tonnes] 2007-2012 ........................................................... 6
Figure 3: Average steel export & import prices 2007-2012 [EUR/ton] ............................................... 6
Figure 4: Apparent use of steel per capita, by region vs. Romania ..................................................... 7
Figure 5: Stylised IntelliNews model of Romanias metal industry ................................................... 12
Figure 6: Romanias industrial production index, metal and metal processing industries 2000-2012
........................................................................................................................................................... 13
Figure 7: Industrial production index, metal PRODUCTION industry seasonal pattern ................. 13
Figure 8: Industrial production index, metal PROCESSING industry seasonal pattern .................. 13
Figure 9: Sales volume index, metal PROCESSING industry [EUR, 2005=100] .................................. 14
Figure 10: Sales volume index, metal PRODUCTION industry [EUR, 2005=100]............................... 14
Figure 11: EUR sales per industrial production unit in metal production and metal processing
sectors [2006-2012]........................................................................................................................... 15
Figure 12: Romania Balance of Steel (thousand tonnes) annually 2005-2012 .............................. 17
Figure 13: Romania Balance of Steel (thousand tonnes) quarterly 2010-2012 .............................. 17
Figure 14: Trade balance, iron and products .................................................................................... 19
Figure 15: Romanias quarterly Exports&Imports of metal and metal products [EUR] 2001-2012.. 20
Figure 16: Romanias quarterly Exports & Imports of metal. [EUR], 2001-12 .................................. 20
Figure 17: Romanias quarterly Exports&Imports of metal products [EUR], 2001-2012 .................. 20
Figure 18: Detailed structure of Romanias exports in 2007 vs. 2012 EUR thous ............................. 22
Figure 19: Detailed structure of Romanias exports in 2007 vs. 2012 tonnes................................... 22
Figure 20: Detailed exports for main items [tonnes], quarterly 2007-2012 ..................................... 24
Figure 21: Detailed exports for main items [EUR thous], 2007-2012 ............................................... 24
Figure 22: Export prices for export items, quarterly, 2007-2012 [EUR/ton]..................................... 25
Table 1: Price for main steel products [global] starting Dec 2003 ...................................................... 6
Table 2: Romania Sales / Industrial Activity Indices (2010=100) ...................................................... 14
Table 3: Romania Balance of Steel 2005 to 2012 (thousand tonnes) ............................................... 16
Table 4: Export, import, balance, annual, iron and iron products separately; annual ..................... 19
Table 5: Export, import, balance, annual, iron and iron products separately; quarterly.................. 19
Table 6: Romanias metal industry detailed exports annual, 2007-2012 [EUR thous, tonnes]... 21
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May 2013
Executive Summary
Romania will produce raw steel/raw steel goods [code 72] only for local processing or
consumption [and not for exports]; the industry has a potential for growth that depends on the
construction sector mainly but also on the exploitation of high value-added segments now
delivered only by exports [for which investments are needed]. Provided the EU/local government
turn more supportive to energy-intensive industries, such investments would make sense
economically. Under current circumstances however imports of raw steel goods might increase
from neighbouring, non-EU countries such as Ukraine. The business model adopted by local steel
industry will critically depend on the energy policies. Electricity and natural gas prices in Romania
are lowest in the EU. While the electricity prices have increased significantly as a result of the
renewable energy support, the natural gas price is likely to increase in the coming couple of years
as the gas market is liberalised. Shale gas abundance is far from imminent in Europe and the
carbon cut policies are making energy-intensive industries even less profitable.
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
Romanias crude steel output increased

gradually from 5.5mn tonnes in 2002 to nearly 7,000
6.3mn tonnes in 2006-2007. It further plunged 6,000 thous.
tonnes
to below 2.8mn tonnes in 2009 amid deep
5,000
recession and inventory effects, but returned
meanwhile and has stabilised to around 3.7- 4,000
3.8mn tonnes in 2011-2012. The output of
raw steel goods followed a similar pattern 3,000
and stabilised around 3.2-3.5mn tonnes 2,000
[2012 data is still not final the 8.3% y/y
decline calculated by us for the year might 1,000
have been lower]. What has essentially
0
happened is that local steel mills stopped
producing raw steel goods for export since
output of raw steel goods
this business model is now no more costeffective. From a net export of 2mn tonnes of
domestic intake of steel goods
raw steel goods in 2003, Romania turned to a
net importer with nearly 0.5mn tonnes. Net balance of processed goods returned in the surplus
area after strong demand in the pre-crisis years pushed it into the deficit area. The domestic
intake of steel goods [either raw or processed but used domestically] has surged from 2.65mn
tonnes in 2002 to 5.75mn tonnes in 2007 to shrink at 3.14 mn tonnes in 2009. Please note that
the 2009 steel intake was still well above the 2.65mn tonnes intake in 2002. Steel intake further
strengthened to above 3.5mn tonnes in 2011-2012. We expect it to increase more or less
moderate depending on the expansion of construction sector essentially and of ArcelorMittal
Galati commitment of taking advantage of the abundant demand generated by the automobile
sector. The wind power sector remains a potential customer for local steel makers shipyards, but
not as much as it was in the past years.
iulian ernst, iulian@emergingmarketsdirect.com
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May 2013
Strategy Comment Change in the Business Model

As any emerging European economy, Romania suffers from lack of local capital and from its
major industrial units being part of foreign groups, thus subject to global optimisation at group
level. This is of practical importance for all major industries, including the steel industry. When
replacing the corrupt, public ownership with private ownership as part of the EU accession process
[to achieve what was called functioning economy status] this aspect was visibly overlooked. In
essence, group-level optimisation means that when recession hits globally, there are the periphery
units like the ones in Romania that feel first the negative effects. Asymmetrically, when
opportunities occur globally, the periphery units are the latest to benefit. The mechanics depends
on the organisation of the specific industry -- but the big picture is the same. This is valid for all
major industries be them banking, oil, automobile or steel. Local units are rarely subject of high
value added R&D operations and never used as vehicles for expansion abroad. Industrial activity
thus depends mainly on the local demand; the foreign markets are of certain importance, yet
asymmetric in nature as explained above: contraction hits quickly while expansion impacts with a
delay and only as an opportunity for exports, and not investments.
Under a more practical approach, instead of opening a new plant in Algeria* and expanding to
capture fast-growing markets, integrated steel mill Sidex Galati currently ArcelorMittal Galati,
threats local government with closing down even more units unless the electricity and natural
gas the cheaper in the EU, remain cheap. The business model of local steel industry has largely
relied on low energy prices so far. But the energy price is decreasing globally; furthermore, the
steel demand in high-energy prices countries remains weak. The room for arbitrage between
regions with energy price differential is thus narrowing.
To demonstrate the validity of the model described above, it is enough to see that while enjoying
the cheapest energy in Europe, ArcelorMittal Galati is at the same time unable to deliver steel
sheets of adequate quality to local automobile producer Dacia which thus imports the needed
steel sheets from the US Steels Slovak plants that pay higher wages and energy prices. This simply
means that US Steel put more capital in Slovakia.
In a separate case, Russias Mechel abandoned recently its Romanian assets employing over
5,000 -- some Indian investors plan to open a new steel mill in Romania. It only means that
Mechels investment [by taking over former state-owned local steel companies] have already paid
their dividends during the profitable years 2006-2008 and the opportunities are now elsewhere.
EU membership limits the governments room of manoeuvre in helping the industry on its own
[the recent European Council sketched some intentions to prevent side effects of costly carbon cut
policies]. In neighbouring Serbia, the government pushes to re-start the operations of a steel plant
abandoned by US Steel also employing 5,000. For comparison, the Romanian government cannot
take over Mechels assets or help the plants abandoned. The fate of former Mechel plants remains
uncertain.
* Algerias government and ArcelorMittal are to invest USD 1bn to increase the annual production
capacity of El Hadjar iron and steel complex to 2.2mn tons, Algerie Presse Service said on April 10.
5|Page
Romania Steel and Iron Report

May 2013
Industry Overview
Figure 1: Steel benchmark prices [global] starting 2003
No good news for the steel industry. With decreasing energy prices driven by the oil and gas glut in the US, the prices of
neither long nor plate goods have recovered from the peak level reached in the first part of 2011.
Steel Prices (USD per ton)

1,400
140
1,200
120
1,000
100
800
80
600
60
400
40
200
20
0
01/03
01/05
01/07
BRENT CRUDE
01/09
01/11
01/13
Hot Rolled Steel Plate
Steel Wire Rod
Figure 2: Romanias total steel balance [tonnes] 2007-2012
Table 1: Price for main steel products [global] starting Dec 2003
Price for steel products, USD/ton

Sections
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12
Hot Rolled Steel Coil
354
648
514
558
630
565
579
663
699
661
Hot Rolled Steel Plate
367
750
647
757
837
901
639
782
846
706
Cold Rolled Steel Coil
Steel Wire Rod
Medium Steel Sections
434
323
403
737
512
667
608
446
594
665
499
734
705
598
859
659
609
780
681
555
691
772
688
794
796
750
836
753
659
798
759
682
807
BRENT USD/barrel
29.9
39.7
56.8
62.3
91.5
41.6
74.7
91.8
108.0
109.5
113.0
Source: http://www.steelonthenet.com/prices.html
Figure 3: Average steel export & import prices 2007-2012 [EUR/ton]
Average Exp. and Imp. Prices [EUR/ton]
Total Steel Balance [tonnes/quarter]
Thousands
1,800
1,500
1,200
900
600
300
0
-300
-600
Q1 07
Q1 08
Q1 09
Q1 10
Q1 11
hot rolled goods prod.
balance
export
import
Q1 12
Jan-13
669
726
1,200
120%
1,000
100%
800
80%
600
60%
400
40%
200
20%
0%
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
Exp price / Imp price
Exp avg price
finished steel use
Imp avg price
GLOBAL STEEL PRICES: Global steel prices have decreased

over the past six quarters ending Q4/2012 partly driven by
certain easing in the energy prices but mainly by the
weakening on the demand side.
ROMANIA TOTAL STEEL BALANCE: Domestic use of
finished steel goods [steel used for other purposes than
further processing] lost predictability in terms of
seasonality over the past years. After visible increase in
H2/2010 to H1/2011, the domestic intake followed a
downward pattern. On the opposite, the production of
hot rolled goods continued to increase. Romania remains
marginal net importer of steel in most of the quarters.
ROMANIA EXP/IMP PRICES: there remains a visible
differential between the average export prices and
average import prices.
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May 2013
Figure 4: Apparent use of steel per capita, by region vs. Romania
2011
WorldSteel
Statistics
Romanias apparent steel
use down 4% y/y to 181kg
per capita; 34% down from
2007, 53% of EU27 average
WorldSteel.
2011
annual
statistics
released by the WorldSteel
association in the 2011
yearbook indicates that the
apparent use of steel in
Romania decreased in 2011
to 181kg per capita far
from the 342kg in EU27.
The decline in Romanias
consumption was however
against a global recovery.
Apparent Steel Use [kg per capita]
thous tonnes
Total Production of Crude Steel
Production of Crude Steel in Oxygen Blown Converters
Production of Crude Steel in Electric Furnaces
2002
5,491
4,507
984
2003
5,691
4,542
1,148
2004
6,042
4,682
1,360
2005
6,280
4,509
1,771
2006
6,266
4,369
1,897
2007
6,261
4,356
1,906
2008
5,035
3,343
1,692
2009
2,761
1,790
971
2010
3,721
1,990
1,731
2011
3,835
1,880
1,955
Production of Hot Rolled Products

% of crude steel
Production of Hot Rolled Long Products*
Production of Hot Rolled Flat Products
4,649
85%
1,106
3,543
4,653
82%
1,058
3,595
5,156
85%
1,168
3,535
5,305
84%
1,221
3,608
5,696
91%
1,484
3,676
5,730
92%
1,463
3,662
4,652
92%
1,221
2,869
2,862
104%
870
1,674
3,540
95%
1,295
1,815
3,560
93%
1,100
2,060
Exports of Semi-finished and Finished Steel Products

Imports of Semi-finished and Finished Steel Products
3,492
1,339
3,657
1,393
3,703
1,519
3,900
1,645
3,609
2,436
3,785
3,550
3,193
3,685
2,030
2,095
2,950
2,770
3157
3374
Exports of Ingots and Semis

Imports of Ingots and Semis
141
485
...
443
161
576
101
448
88
633
147
916
220
758
52
108
196
455
268
771
Exports of Long Products

Imports of Long Products
150
174
...
252
...
381
444
392
379
679
321
1,176
316
1,380
246
789
704
907
1,003
1,041
1,777
320
...
414
...
467
2,784
653
2,566
909
2,722
1,095
2,062
1,169
1,407
950
1,531
1,152
1,275
1,239
246
82
...
113
...
78
549
126
551
184
562
256
561
311
309
211
497
218
592
271
Exports of Scrap
1,874
2,364
2,385
162
1,863
1,970
1,960
2,565
2,517
2,340
Apparent Steel Use (crude steel equivalent)
3,440
3,730
3,960
4,250
5,100
6,110
5,800
3,350
4,170
4,000
500
Romania
450
European Union (27)
400
C.I.S.
350
North America
300
South America
250
Africa
200
Middle East
150
Other Asia*
100
World
50
China
0
2000
2002
2004
2006
2008
Exports of Flat Products

Imports of Flat Products
2010
Exports of Tubular Products

Imports of Tubular Products
Apparent Steel Use per Capita (kilograms crude steel equivalent)
CAGR
CAGR growth
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2000-07
2007-11
2000-07
growth
2007-11
Romania
154
167
177
190
229
274
261
151
188
181
10%
-10%
99%
-34%
European Union (27)
363
382
389
371
420
447
415
258
326
342
2%
-6%
17%
-23%
C.I.S.
153
163
175
190
223
255
225
160
218
247
8%
-1%
70%
-3%
North America
330
303
344
317
355
318
287
179
240
258
-2%
-5%
-16%
-19%
South America
84
79
94
91
105
114
120
91
121
121
4%
2%
31%
7%
Africa
37
36
36
41
43
44
49
53
46
43
6%
0%
46%
-1%
Middle East
208
245
252
277
268
314
335
302
335
339
9%
2%
89%
8%
Asia
127
142
154
176
185
200
207
223
242
254
9%
6%
89%
27%
China
160
200
221
277
299
330
350
429
454
479
17%
10%
203%
45%
Other Asia*
107
107
114
116
117
124
124
103
120
120
2%
-1%
18%
-3%
World
158
167
180
190
205
217
215
196
223
234
5%
2%
45%
8%
Source: WorldSteel.org, *calculations
7|Page

May 2013
OUTLOOK
EUROFER director-general Gordon Moffat: For the time being, our client sectors will remain heavily exposed to weak domestic demand.
Particularly the automotive and construction sectors struggle on in 2013. What is needed to kickstart the internal market, is better sentiment. This
European Union
will only happen if credit supply improves and a credible growth perspective is offered by EU policymakers. [Economic & Steel Market Outlook
European steel makers lose 2013-2014]
share on shrinking market.
Steel demand in the EU headed further down (y/y) in Q1/13, despite some moderate restocking of inventories. Meanwhile, imports [to EU]
increased sharply, reversing the falling trend registered in 2012. As a consequence, domestic producers lost market share to suppliers from third
countries.
Romania
Rising electricity and natural gas prices and tough environmental regulations diminish the competitiveness of Romanian steel companies against
their peers in Ukraine, Russia and Turkey, ArcelorMittal Galati country manager Ionel Bors warned during his conversation with Romanian minister
of economy, Varujan Vosganian. The statement comes after Russian group Mechel sold its Romanian steel assets for a symbolic price in order to cut
losses and avoid the hurdles of closing down the plants. ArcelorMittal officials reportedly underlined the effects of rising energy prices on its activity
in the past three years and argued that the steel industry in other European countries benefit of better economic and financial allowances.
WHERE DEMAND IS: Algeria and ArcelorMittal to invest USD 1bn in iron and steel complex expansion
Algerias government and ArcelorMittal are to invest USD 1bn to increase the annual production capacity of El Hadjar iron and steel complex to
2.2mn tons, Algerie Presse Service said. The exact financial contribution of each party to the expansion project remains to be decided. El Hadjar
complex, which is 70% owned by ArcelorMittal and 30% by the Algerian state through Sider, produced only 580,000 tons of its 700,000 tons steel
production target in 2012. Algeria has embarked on several iron and steel production projects over the past year with the aim of achieving selfsufficiency in iron and steel production to cut down on its USD 10bn iron and steel import bill.
WHAT OTHERS DO: Serb steel mill Zelezara restarts production on April 22 - FinMin
Serbian steel mill Zelezara Smederevo will restart one of its two blast furnaces and launch production, finance minister Mladjan Dinkic announced.
Dinkic added the government is also in talks with an unnamed European company that could become a strategic investor in Zelezara, which was
abandoned by US Steel in early 2012 and shortly after suspended its operations. The state will not always administer the company but via
restarting its production it returned 5,000 workers back to their jobs and already agreed the sale of the complete output, Dinkic said.
The company typically generates 5% of Serbia's total production and around 14% of the country's exports. If the states attempt to relaunch
production is successful, this would have a significant positive effect on this years economic performance of the whole country, especially
considering the fact that Zelezara going back on stream has not been taken into account in the governments projection for a 2% GDP 2013 growth.
Russian mining and steel group Mechel said it has sold out its Romanian steel assets to a small Romanian limited liability company for the symbolic
Russias Mechel sells out sum of RON 230 (USD 70) in order to cut losses and concentrate on its core metallurgical coal production business. The five production facilities -Romanian steel assets to cut two electric furnaces and three steel processing plants, employ over 5,000. Earlier in November, Mechel said that it expects USD 150mn from the
sale of its Romanian steel assets. Subject to disposal were Ductil Steel Mechel, Campia Turzii, Mechel Targoviste, Mechel East Europe Metallurgical
loss.
Division and Laminorul. The buyer is Invest Nikarom, controlled by two Russian nationals. Since the anticipated loss of the Romanian assets this year
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May 2013
is RUB 2.4bn (USD 80mn), this transaction will have a marked financial effect for Mechel's shareholders, the company said in a statement. The freed
cash flow will be used for operational activities as well as for decreasing the company's leverage.
The "disposal of assets", as Mechel calls the deal, seems to avoid the hurdles prompted by closing down the production units and minimising the
cost of firing the over 5,000 workforce. The identity of the buyer indicates that the group might have secured potential benefits from the sale of
the plants. Romanian labour and social protection minister Liviu Pop announced in August 2012 that the Romanian government would start a probe
into the privatisation of wire maker Mechel Campia Turzii after the Russian group revealed plans to lay off some 80% of its roughly 1,000 staff. The
government will check whether the post-privatisation commitments, mainly related to investments, have been observed, Pop specified. The exports
of scrap iron to non-EU countries will also be investigated, he added, implying that the intra-group transfers involved transfer pricing
Romanian PM Victor Ponta admitted that the Romanian government cannot intervene in the case of the five steel plants abandoned recently by
Government says it cannot Russian group Mechel in Romania, news agency Mediafax reported. The statement comes as the employees at the former Mechel plants hold
intervene
in
Mechels demonstrations, demanding the payment of their wages/severance pays and restarting production at the plants. As we reported, Mechel sold its
Romanian steel assets to a small vehicle, allegedly indirectly controlled by the same Russian mining/steel group, earlier this year for a small price of
abandoned steel plants.
some EUR 50. The five production facilities -- two electric furnaces and three steel processing plants, employ over 5,000. Earlier in November,
Mechel said that it expects USD 150mn from the sale of its Romanian steel assets. One of the plants, special steel producer Mechel Targoviste said it
has filed for insolvency immediately after the Russian steel and mining group sold out its 86.6% stake to the small Romanian limited liability
company.
Romanian integrated steel plant ArcelorMittal Galati can no longer operate under the current high energy prices, the companys general manager
Steel plant of ArcelorMittal Bruno Ribo told Mediafax news agency. Romanias government currently plans to trim down the support for costly renewable energy. Large
says cannot stand current industrial consumers such as ArcelorMittal would get a 50% waiver for the renewable electricity surcharge. But the figures indicate that the lower
energy prices alone would not help the company become profitable. The plants losses from operations were EUR 134mn in 2011 close to the
energy prices
value of its electricity bill. The revenues from Romania shrank in 2012, the group reported, meaning that the profitability has not improved but
rather the opposite. The workforce at the Galati plant decreased to 7,500 currently from 9,000 at end-2011 amid a lower activity.
ArcelorMittal was very vocal recently in criticising the high energy prices prompted by the renewable energy support scheme and also advocated
against the natural gas price hikes planned by the government for the coming couple of years as part of the energy market liberalisation. The plant
has reported losses for five years in a row and it will eventually have to close down unless the energy prices decrease, Bruno Ribo warned. The
electricity bill surged from EUR 115mn in 2009 to EUR 140mn in 2012 and it will reach EUR 169mn in 2015 if current regulations remain in place on
the market, Ribo explained. In some cases, the renewable energy is paid 50% above its cost including all production costs and investments
depreciation, he stressed, pointing to the hot issue on the energy markets agenda these days.
The natural gas price liberalisation in Romania has to be postponed in order to avoid a major impact on industrial end-users, Romanian steel
and alsol seeks delay of company ArcellorMittal Galati, one of the biggest energy consumers in the country, said in a statement quoted by news agency Mediafax. Nonnatural
gas
price residential users will face annual price hikes of 18% in each 2013 and 2014 after a 10% price hike already in effect as of last autumn. The electricity
and natural gas law, endorsed under Romanias stand-by agreement (SBA) with the IMF last year, allows for slowing down of the liberalisation
liberalisation
9|Page

May 2013
process in case the social or economic impact is excessive. But any decisions in this direction at such an early stage of the process might complicate
the SBA completion due this summer. ArcelorMittal has also criticised the excessive support given by end-users to renewable energy producers
under the support scheme designed and enforced by the government. The government promised to trim down the support via adjusting the
scheme this month.
In the first stage of the liberalisation, scheduled to end in December 2014 for non-residential users, the regulated natural gas prices for end-users
would rise to levels supposed to be in line with the regional market prices. The regulated price for non-residential users already increased 5% as of
February 1 and is scheduled to rise by 5% on April 1 and July 1 and by 3% on October 1 this year. Another 10% hike was operated last autumn with
the purpose of covering the higher costs of gas distribution companies.
Romania has the option to delay the liberalisation of the residential natural gas market, the head of the market regulatory body, Nicolae Havrilet,
said in November 2012. Considering President Traian Basescus comments on the same topic, it seems that the country officials will try to
moderately slow down the EU-supported gas market liberalisation.
In response, government
drafts
amendment
to
renewable energy support
scheme.
Romanias economy ministry has drafted and posted on its website for public debates an amendment to the law 220/2008 that regulates the
renewable energy support scheme. The government said that it will endorse the amendments in late May. The amendment would remove half of
the renewable energy support burden from large consumers, like steelmakers. The burden would decrease as part of the support would be delayed
under a rather complicated schedule.
In essence, the amendment trims down the support given to producers of electricity generated from renewable energy sources [E-RES] under the
quota and auction [or tradable green certificates, TGC] scheme. The amendment is aimed at preventing uncontrolled rise in end-user electricity
prices and preserving the competitiveness of the energy-intensive industrial sectors while still maintaining regulatory predictability. The draft
amendments are subject to public debates for 30 days. It is unclear whether the ministry wants to adopt the amendments concomitantly with the
recommendation issued earlier this week by market regulator ANRE. As we reported, ANRE recommended under the stipulations of the 220/2008
law, trimming down the number of TGCs given to E-RES producers in order to prevent overcompensation.
Technically, the government wants to delay the issuance of part of the TGCs owed to E-RES producers for the electricity to be delivered in July2013-December 2016. Part of the TGCs for this period would be given to electricity producers starting January 2017 for micro-hydro plants and solar
farms and starting January 2018 for wind farms. The number of TGCs subject to delayed issuance is i. one for new micro-hydro plants [of three], ii.
one for wind farms [of two] and iii. two for solar farms [of six]. The producers that use one of the other technology covered by the TGC system,
namely refurbished micro-hydro plants or plants based on biomass processing are not subject of the amendment. The amendment stipulates that
the issuance of the TGCs subject to the delay will be managed under a secondary regulation to be drafted by ANRE.
Furthermore, the amendment to the 220/2008 law stipulates that large industrial energy consumers with annual consumption of over 150,000
MWh can be waived from the TGCs scheme for 50% of their annual consumption, if they draft credible energy efficiency improvement action
plans. Technically, the electricity suppliers will not have to buy TGCs for half of the electricity supplied to such large industrial consumers. We recall
that under the TGC support scheme, electricity suppliers have to buy from E-RES producers a quantity of TGCs proportional to the electricity
delivered to end-users. The proportionality factor is set annually by market regulator ANRE based on the projections for next years E-RES
10 | P a g e

May 2013
production and the requirement is corrected ex-post also annually by ANRE based on the actual E-RES production.
Finally, the market regulator will check for overcompensation twice a year [instead of once per year as it is now] the E-RES producers and will
recommend accordingly trimming down the support given to each category of technology used. The results of the monitoring will be made public
within 90 days on ANRE website.
Separately, market regulator
recommends trimming down
the support to renewable
energy
Romanian energy market regulator ANRE has recommended cutting the support for renewable energy producers provided under the tradable green
certificates* [TGC] system currently in force. ANRE published its recommendations on its website. The move might be followed by open debates
before the government takes a final decision. If ANREs recommendation is endorsed as it is, the impact will be moderate to none on the windpower sector but will prevent excessive expansion of costly PV projects after January 2014. The impact on the end-user prices is significant but only
on the long term since the support for wind power projects will be reduced only in the case of projects commissioned after January 2015. The
support can be reduced starting January 2014 for PV projects - they however account for only a small share of the renewable energy. ANREs
recommendation, made under the annual mechanism aimed at avoiding overcompensation, is based on the analysis of i. the cost of investments
carried out in 2012 and of ii. the expected fixed and variable future costs. Technically, the amendments are aimed at bringing the profitability of
future investments in line with the target IRR [10-12% depending on technology] stipulated under the law 220/2008** while having no impact on
the investments already commissioned or to be commissioned in the current year.
* also known as quota and auction system; the alternative is the feed-in tariffs system prevalent among the EU countries.
** though not official, you can find a complete version of the 220/2008 law at www.energystreet.ro; official texts of the law are available at ANRE,
but the amendments have not been merged into a final version.
The owner of steel group ArcelorMittal, Lakshmi Mittal, has met Romanian President Traian Basescu and PM Victor Ponta on May 19 over the
Lakshmi Mittal in energy energy prices paid by the groups local plants. Romanias position in the EU talks over the future energy and metallurgy sector policies was
price talks for ArcelorMittal's reportedly tackled as well.
units in Romania.
ArcelorMittal has diminished significantly its activity in Romania during the past years but still remains an important employer with more than 7,500
employees. Russias Mechel already pulled out from the country, leaving over 5,000 employees in five companies facing now major financial
problems.
Mittals visit to Romania was visibly aimed at getting the countrys support at a moment when the metallurgy lobbies heavily for better business
conditions in the European Union. Romania along with France, Belgium, Poland and Luxembourg will draft the action plan for the EU metallurgy in
an attempt to tackle the pressure put by the carbon emission targets on the energy-intensive industries.
Separately, the May 22 European Council focused on the energy in the context of the EU's efforts to promote growth, jobs and competitiveness [the
other focus being tax policy].
ArcelorMittal owns a major steel mill and employs 7,500 in Romania, where it accounts for a large yet decreasing, part of the countrys crude steel
and steel products output. However, ArcelorMittal Galati produced only 1.7mn tonnes in 2012, down from 4.5mn tonnes in 2007-2008.
11 | P a g e

May 2013
Furthermore, it remains unable to deliver products at the quality required* by automobile producers such as Renaults local car plant Dacia.
Now, ArcelorMittal promises to invest in a new furnace and increase the steel output to 2.5mn tonnes, economy minister Varujan Vosganian
said. In exchange, it wants to pay lower renewable energy surcharges. But the company can already produce 3 tonnes of steel peer year -- indeed
down from 5mn tonnes before demolishing a couple of other furnaces.
The government drafted in April a bill under which large power consumers like ArcelorMittal would be waived half of the surcharges. The bill is not
yet endorsed. The steel company has also asked the government in the past to freeze the natural gas market liberalisation which can hardly be
done under the countrys commitments as an EU member state.
* Ziarul Financiar daily revealed that Renaults local car plants imports steel sheets from Slovakia and large car parts producer Compa also imports
steel sheets to manufacture products for European automobile producers.
STYLISED STRUCTURE OF
METAL INDUSTRY
IntelliNews model of Romanian
steel
market
recent
developments.
Figure 5: Stylised IntelliNews model of Romanias metal industry
Commercial flowchart
import
import
long &
plate CCS*
[semi-finished]
products
[7207]
hot rolling
cold rolling
coating
raw
steel
code 72
[less 7207 & 7204-scrap]
manufacturing
processed
[finished]
steel
code 73
domestic
use
export
export
ingot
billet
bloms
slab
long [different sections]

plate [thick, thin]
*CCS=continuous casting steel
Technological flowchart
Crude steel > [continuous casting] > long[sheet] products > [hot rolling] > seamless tubes, structural sections, reinforced concrete bars
plate products [hot rolling] > plates, tubes
[hot rolling] > hot rolled coil and plates > [cold rolling] > cold rolled coils and plates
12 | P a g e

May 2013
Industry Indicators
METHODOLOGY:
Sales indices are calculated from turnover indices converted from local currency RON to EUR and re-based for 2010=100.
The production indices and the turnover indices are supplied by the statistics office monthly bulletins.
A. INDUSTRIAL OUTPUT
INDEX [2010=100]
Industrial production indices are not adjusted for seasonality or working days.
Figure 7: Industrial production index, metal PRODUCTION industry
seasonal pattern
Figure 8: Industrial production index, metal PROCESSING industry seasonal

pattern
Indus t ria l P ro d, M e t a llurgy, 2 0 10 =10 0
Figure 6: Romanias industrial

production index, metal and metal
processing industries 2000-2012
Ind. P ro d. Inde x, 2 0 10 =10 0
Indus t ria l P ro d, M e t a l. P ro c e s s ., 2 0 10 =10 0
180
150
160
140
140
130
120
120
200
100
150
80
110
100
90
60
100
80
40
50
0
01/05
F M A M J
2007
01/07
01/09
01/11
2008
A S O N D
2012
2013
F M A M J
2007
01/13
S o urc e : IN S
metallurgy
70
J
2008
A S O N D
2012
2013
S o urc e : IN S
metal processing
S o urc e : IN S
Indus t ria l P ro d, M e t a llurgy, 2 0 10 =10 0
Indus t ria l P ro d, M e t a l. P ro c e s s ., 2 0 10 =10 0

150
180
140
160
130
140
120
120
110
100
100
90
80
80
70
60
40
01/05
60
01/07
01/09
01/11
01/13
S o urc e : IN S
50
01/05
01/07
01/09
01/11
01/13
S o urc e : IN S
13 | P a g e

May 2013
Table 2: Romania Sales / Industrial Activity Indices (2010=100)
2006
2007
Domestic mkt.
Foreign mkt.
Industrial Output
Fabricated metal products
Sales Index, EUR Total, o/w
Domestic mkt.
Foreign mkt.
Industrial Output, avg.
Source: INS, IntelliNews calculations
B. SALES INDEX [2010=100]

Methodology: The statistics office reports
sales volume index that we converted from
RON to EUR by keeping the base year
2010=100; the corrected index thus
reflects the sales in euros, based for
2010=100
2009
2010
2011
2012
2012
Q1 12
Q2 12
Q3 12
Q4 12
Jan-Feb2013
106.4
117.8
PEAK
YEAR
132.8
66.9
100.0
127.7
116.7
-9%
-13%
0%
-9%
-12%
-11%
120.3
95.9
133.7
105.8
156.7
114.7
73.4
61.9
100.0
100.0
130.8
124.7
117.1
116.3
-10%
-7%
-19%
-8%
-3%
4%
-7%
-12%
-14%
-11%
-10%
-12%
142.7
145.1
122.6
78.5
100.0
107.9
100.2
-7%
-13%
0%
-8%
-8%
-7%
66.9
95.6
130.6
91.1
100.0
114.7
129.9
13%
20%
20%
10%
5%
-1%
72.8
49.7
104.9
68.3
145.4
86.9
94.2
82.1
100.0
100.0
110.4
127.8
120.7
157.6
9%
23%
20%
21%
18%
26%
6%
21%
-1%
26%
-4%
5%
92.6
108.2
125.4
109.1
100.0
109.0
103.9
-5%
-8%
-5%
-7%
2%
8%
Metallurgy
Sales Index, EUR Total, o/w
2008
Figure 9: Sales volume index, metal PROCESSING industry [EUR, 2005=100]
S a le s , M e t a llurgy, E UR , 2 0 10 =10 0
y/y
y/y
150
150
100
100
50
50
01/09
01/11
y/y
y/y
S a le s , M e t a l P ro c e s s . E UR , 2 0 10 =10 0
200
01/07
y/y
Figure 10: Sales volume index, metal PRODUCTION industry [EUR, 2005=100]
200
0
01/05
y/y
01/13
S o urc e : IN S
0
01/05
01/07
01/09
01/11
01/13
S o urc e : IN S
Industrial output decreased by 7% in metallurgy and 5% in metal processing sectors last year [2012]. Nonetheless, the trend is rather steady
in the metal processing sector while the decline continues in the basic metal production. This is also illustrated by the first 2013 monthly data
while the output in metal processing decreased by 7% y/y in Jan-Feb, the output in the metal processing increased by 8% y/y.
14 | P a g e

May 2013
Rising prices for metal processed products helped the turnover to expand in this area as opposed to the negative dynamic in the basic metal
production. The sales of metal processed products increased, in euros, [despite the decrease in sectors output!] by 23% y/y in 2012. The
expansion rate hit 26% y/y in Q4. On the opposite, the sales of basic metals decreased on both domestic and foreign markets, by 10% and 7%
respectively in line with the lower industrial production.
Notably the sales-per-output index expressed in euros remained at high levels for the metal products segment during 2012 while the index
decreased for the basic products in line with the global metals indices.
C. UTILISATION BALANCE
BRENT CRUDE
Steel Prices (USD per ton)
Sales per Ind Prod (EUR per Arbitrary Unit; 2010=100)
Metallurgy
Fabricated metal products, except machinery and equipment
Jan-13
20
Jan-12
40
200
Jan-11
0.7
Jan-10
60
400
Jan-09
0.9
Jan-08
80
600
Jan-07
1.1
Jan-06
100
800
Q1 12
1,000
Q1 11
1.3
Q1 10
120
Q1 09
140
1,200
Q1 08
1,400
1.5
Q1 07
The indicators for the two sectors cannot

be compared directly among them; such
as to conclude that the sales per unit in the
lower value added segment of metallurgy
would be inferior to the sales per unit in
the more value added fabricated metal
products segment is invalid.
Figure 11: EUR sales per industrial production unit in metal production and metal processing sectors [2006-2012]
Q1 06
METHODOLOGY: we have calculated the

sales per industrial production index
from the sales index, expressed in euros,
divided by the industrial production index
for each of the two segments [metals,
metal products]. By using both indices
[sales, output] with 2010=100 base, the
sales per ind. Output index has naturally
the same base.
Hot Rolled Steel

Coil
Hot Rolled Steel
Plate
Cold Rolled Steel
Coil
Steel Wire Rod
Medium Steel
Sections
APPARENT CONSUMPTION = OUTPUT NET EXPORTS (volume, tonnes)

Please also refer to the stylised structure of the metal industry in the first section of the report, for the differentiation between raw steel and
finished steel.
IntelliNews model of Romanian

This balance [Romanias Balance of Steel, see table above] refers to volume terms only, but is calculated separately for each of the two
steel market utilisation balance.
sections so that exports/imports are roughly comparable. Several charts are derived from the tables. On the left side, there is plotted the
long-term perspective, while the right hand side provides information on short term dynamics.
Crude steel > [continuous casting] > long[sheet] products > [hot rolling] > seamless tubes, structural sections, reinforced concrete bars
plate products [hot rolling] > plates, tubes
[hot rolling] > hot rolled coil and plates > [cold rolling] > cold rolled coils and plates
15 | P a g e

May 2013
Table 3: Romania Balance of Steel 2005 to 2012 (thousand tonnes)
Romania Balance of Steel -quarterly, 2002-2012 (thousand tonnes)
Output of Raw Steel Goods* - code 72 (1)

Exports of Raw Goods (2)**
Imports of Raw Goods (3)
Net Export of Raw Goods - code 72 (4=2-3)
Intake*** of Raw Goods (5=1-4), o/w
Exports of Processed Goods - code 73 (7)
Import of Processed Goods (8)
Net Export of Processed Goods (9=7-8)
Final Intake*** of Goods (=5-9)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
4,649
2,889
1,057
1,832
2,817
4,653
3,078
1,044
2,034
2,619
5,052
3,025
1,396
1,629
3,423
5,196
3,250
1,487
1,763
3,433
5,563
2,828
2,148
680
4,883
5,678
3,113
3,149
-36
5,714
4,652
2,511
3,263
-752
5,404
2,862
1,673
1,821
-148
3,010
3,540
2,346
2,434
-88
3,628
3,505
2,505
2,898
-393
3,897
3,213
1,992
2,458
-467
3,680
364
204
160
2,657
350
270
80
2,539
539
301
238
3,185
723
316
407
3,026
700
562
137
4,745
716
756
-40
5,754
729
789
-60
5,464
439
570
-131
3,141
674
627
47
3,582
802
626
175
3,722
797
649
148
3,532
3,253
1,261
1,992
3,428
1,314
2,114
3,564
1,697
1,867
3,973
1,803
2,170
3,527
2,710
818
3,829
3,905
-76
3,240
4,052
-812
2,112
2,391
-279
3,019
3,061
-42
3,307
3,524
-217
2,789
3,108
-319
Q4 11
Q1 12
Q2 12
*estimate **not including scrap iron **apparent consumption
exports
imports
balance
Source: DCE, INS, IntelliNews
Romania Balance of Steel -quarterly, 2002-2012 (thousand tonnes)
Q1 10
Output of Raw Steel Goods* - code 72 (1)
Exports of Raw Goods (2)**
Imports of Raw Goods (3)
Net Export of Raw Goods - code 72 (4=2-3)
Intake*** of Raw Goods (5=1-4), o/w
Exports of Processed Goods - code 73 (7)
Import of Processed Goods (8)
Net Export of Processed Goods (9=7-8)
Final Intake*** of Goods (=5-9)
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q3 12
Q4 12
924
571
476
95
829
564
582
634
-51
615
907
619
657
-38
945
1,145
574
668
-94
1,239
1,051
567
692
-126
1,177
867
564
842
-278
1,145
623
685
822
-137
760
963
690
542
148
815
852
493
559
-66
919
836
535
733
-198
1,034
820
445
637
-192
1,012
705
519
530
-10
715
144
118
25
803
179
164
11
600
162
167
-4
949
189
179
10
1,229
192
139
53
1,124
215
156
59
1,085
189
161
28
732
206
171
35
780
195
118
77
841
192
174
18
1,016
207
182
25
987
203
175
28
687
714
593
121
761
797
-36
781
823
-42
762
847
-84
758
831
-73
779
997
-219
874
983
-110
896
712
183
688
677
11
727
907
-180
652
819
-167
722
704
17
*estimate **not including scrap iron **apparent consumption
exports
imports
balance
Source: DCE, INS, IntelliNews
16 | P a g e

May 2013
Figure 12: Romania Balance of Steel (thousand tonnes) annually 2005-2012
Figure 13: Romania Balance of Steel (thousand tonnes) quarterly 2010-2012
Raw Steel Goods [code 72, Ktonnes]

3,500
1,200
3,000
1,000
2,500
800
2,000
1,500
1,000
exports tonnes
600
exports tonnes
imports tonnes
400
imports tonnes
balance
500
200
balance
-200
-500
-400
-1,000
2002
2004
2006
2008
2010
Q1 07
2012
Q1 08
Q1 09
Q1 10
Q1 11
Q1 12
6,000
2,000
5,000
1,500
4,000
output
3,000
2,000
net export
1,000
apparent intake
1,000
output
500
net export
apparent intake
-500
-1,000
-1,000
-2,000
2002
2004
2006
2008
2010
2012
Q1 07
Q1 08
Q1 09
Q1 10
Q1 11
Q1 12
17 | P a g e

May 2013
Finished, Semi-F.shed Goods [73, Ktonnes]
Finished, Semi-F.shed Goods [73, Ktonnes]

250
800
700
200
600
150
500
exports tonnes
400
300
imports tonnes
200
100
balance
exports tonnes
100
50
imports tonnes
balance
-50
-100
-100
-200
2002
2004
2006
2008
2010
2012
Q1 07
Q1 08
Q1 09
Q1 10
Q1 11
Q1 12
18 | P a g e

May 2013
Foreign Trade Balances

Figure 14: Trade balance, iron and products
Table 4: Export, import, balance, annual, iron and iron products separately; annual
EUR mn
total balance (EUR mn)

5,500
exports
1,000
800
600
400
200
0
-200
-400
-600
-800
-1,000
-1,200
4,500
3,500
2,500
1,500
500
balance
export
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
815
1,026
1,217
1,821
1,875
1,898
2,387
2,462
1,317
2,164
2,532
2,087
products
401
420
383
576
773
917
1,107
1,244
809
1,124
1,435
1,471
1,216
1,446
1,598
2,397
2,649
2,814
3,496
3,706
2,127
3,287
3,965
3,559
19%
11%
50%
11%
6%
24%
6%
-43%
55%
21%
-10%
total
y/y
imports
iron & steel
470
503
563
851
1,095
1,464
2,227
2,704
1,224
1,833
2,424
2,135
products
351
425
511
676
919
1,290
1,743
1,915
1,340
1,589
1,797
1,710
total
821
928
1,073
1,526
2,014
2,753
3,969
4,619
2,564
3,425
4,222
3,844
13%
16%
42%
32%
37%
44%
16%
-44%
34%
23%
-9%
524
655
970
780
434
160
-242
93
327
107
-46
50
-4
-129
-99
-147
-373
-634
-672
-532
-467
-365
-239
397
519
527
870
634
60
-474
-914
-438
-138
-256
-285
31%
2%
65%
-27%
-91%
-890%
93%
-52%
-68%
86%
11%
y/y
balance
iron & steel
346
products
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-500
2001
iron & steel
total
import
y/y
Source: INS
Table 5: Export, import, balance, annual, iron and iron products separately; quarterly
EUR mn
exports
imports
balance
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
iron & steel
667
874
558
363
298
328
362
329
402
601
585
576
656
641
651
584
506
607
539
435
products
292
297
336
319
226
191
198
194
229
277
288
330
329
376
353
377
357
355
392
367
total
959
1171
894
682
525
519
560
523
631
878
872
906
984
1016
1005
960
863
962
931
803
y/y
8%
25%
7%
-18%
-45%
-56%
-37%
-23%
20%
69%
56%
73%
56%
16%
15%
6%
-12%
-5%
-7%
-16%
iron & steel
534
743
891
536
297
282
315
330
339
471
509
514
564
678
636
546
507
582
550
496
products
428
521
508
458
285
305
368
382
318
399
432
440
380
458
461
498
387
453
448
422
total
962
1264
1399
994
582
587
683
712
658
870
942
955
944
1137
1097
1044
894
1034
998
918
y/y
10%
22%
38%
-5%
-39%
-54%
-51%
-28%
13%
48%
38%
34%
44%
31%
17%
9%
-5%
-9%
-9%
-12%
iron & steel
134
131
-333
-174
46
47
-1
62
129
75
61
92
-38
15
38
25
-10
-61
products
-137
-224
-172
-139
-59
-114
-170
-189
-90
-122
-145
-110
-52
-83
-108
-122
-30
-98
-56
-55
40
-120
-92
-84
-31
-73
-66
-115
-248% -1684%
33%
71%
-176%
-40%
-28%
38%
total
-3
-93
-505
-313
-58
-68
-123
-189
-27
-70
-49
y/y
-125%
-8%
191%
47%
1597%
-27%
-76%
-39%
-53%
-111%
-43%
-74%
Source: INS
19 | P a g e

May 2013
Figure 15: Romanias quarterly Exports&Imports of metal and

metal products [EUR] 2001-2012
Figure 16: Romanias quarterly Exports & Imports of

metal. [EUR], 2001-12
Sources of Trade Deficit (EUR mn)
Figure 17: Romanias quarterly Exports&Imports of metal products

[EUR], 2001-2012
iron and steel products (EUR mn)
iron and steel (EUR mn)
300
200
100
0
-100
-200
-300
-400
-500
1,000
600
800
400
600
200
400
200
-200
-200
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
01 02 03 04 05 06 07 08 09 10 11 12
total
iron & steel
products
-400
-400
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
01 02 03 04 05 06 07 08 09 10 11 12
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
01 02 03 04 05 06 07 08 09 10 11 12
balance
export
balance
imports
exports eur mn
export
imports
imports eur mn
1,200
1,400
1,000
1,200
1,000
800
800
600
600
400
400
200
200
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
01 02 03 04 05 06 07 08 09 10 11 12
TOTAL
iron & steel
products
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
01 02 03 04 05 06 07 08 09 10 11 12
TOTAL
iron & steel
products
20 | P a g e

May 2013
Foreign Trade - Detailed

This section covers the exports and imports in both volume and value terms, detailed for the main trade items. Furthermore, we have
calculated the average prices per item and for exports / imports separately to trace structural patterns and reveal shifts in the quality, or
value added, of the exports.
Table 6: Romanias metal industry detailed exports annual, 2007-2012 [EUR thous, tonnes]
Romania Steel Industry - Detailed Exports
tonnes
2007
2008
2009
2010
2011
2012
2007
2008
2009
1,963,212
1,985,824
semi-finished goods
179,810
flat, hot rolled-goods
2010
2011
2012
2,565,447
2,518,213
2,354,388
1,908,067
522,043
648,862
497,799
216,758
50,080
190,917
235,109
190,077
70,447
725,888
770,822
613,308
113,131
19,232
89,259
132,492
2,309,420
1,745,452
1,167,560
1,206,412
945,047
996,319
117,432
1,164,848
1,067,368
452,704
578,070
525,899
87,510
70,341
86,484
108,020
103,294
114,077
516,446
54,047
41,567
40,506
68,367
73,411
26,969
135,166
178,086
79,192
8,922
55,213
87,761
28,006
31,321
87,445
244,643
427,084
218,153
13,059
17,085
30,855
104,461
226,248
136,423
158,256
66,427
164,436
23,979
28,574
23,087
46,349
194,431
93,434
78,984
112,807
32,935
81,165
98,705
55,877
49,935
50,111
99,160
102,012
60,875
137,549
179,734
163,056
tonnes
scrap
flat, cold rolled-goods - coated

w elded and hot rolled tubes
bars
profiles
laminated below 600mm w idth, stainless
unw elded pipes, tubes, tubular profiles
thous EUR
120,863
432,849
438,182
235,726
391,790
466,042
443,655
398,295
455,974
233,942
373,534
519,520
536,490
metalic constructions, parts of.
53,922
55,564
42,904
63,055
71,591
85,918
97,335
111,133
92,719
128,467
134,741
168,206
cables, similar
47,601
46,879
42,181
61,559
69,003
64,456
84,193
89,416
76,137
110,007
136,099
128,870
529,768
437,888
283,259
390,146
612,738
547,137
573,372
618,283
347,574
499,088
768,542
724,287
Total ex ports
5,792,500
5,215,041
4,677,570
5,520,706
5,706,748
4,711,405
3,155,784
3,377,638
1,894,200
2,951,068
3,653,973
3,224,025
Total ex ports, scrap ex cl
3,829,288
3,229,216
2,112,122
3,002,493
3,352,360
2,803,338
2,633,741
2,728,776
1,396,401
2,225,180
2,883,152
2,610,718
other
Source: DCE, IntelliNews
METHODOLOGY: We have collected separate export and import data for the products of the metallurgy industry [plus some several others] included in the categories 72 and 73 of
the harmonised system code1 of foreign trade items. The source was Romanias Department for Foreign Trade (DCE2). The limitation was that DCE releases detailed volume and
value foreign trade data only for the foreign trade items with a share of more than 1% in the countrys exports or imports. Nonetheless, for the exports we have calculated a
coverage ratio of 90% or more for exports and 85% or more for imports. In other words, we have not covered items accounting for 10% of exports and 15% of imports.
Nonetheless, the dynamics and average prices calculated based on existing data are coherent and not skewed by the missing items.
1
2
http://www.foreign-trade.com/reference/hscode.cfm?cat=12
www.dce.gov.ro
21 | P a g e

May 2013
Figure 18: Detailed structure of Romanias exports in 2007 vs. 2012 EUR thous
Figure 19: Detailed structure of Romanias exports in 2007 vs. 2012 tonnes
2007 - w.out scrap EUR thous.
2012 - w.out scrap - EUR thous.

semi-finished goods
70,447
semi-finished goods
117,432

573,372
welded and hot rolled tubes
724,287
516,446
bars
84,193
1,164,848
79,192
profiles
laminated below 600mm width, stainless
398,295
128,870
120,863
55,877
unwelded pipes, tubes, tubular profiles

97,335

99,160
78,984
13,059
other
136,423
28,006
87,510
612,738
69,003
945,047
bars
profiles
2,309,420
23,979
semi-finished goods
235,109
432,849
53,922
2012 - w.out scrap - tonnes

semi-finished goods
529,768
other
168,206
2007 - w.out scrap - tonnes
47,601
profiles
cables, similar
cables, similar
54,047
179,810
163,056
536,490
bars

profiles
466,042
71,591
49,935
194,431
bars
427,084
103,294
178,086

cables, similar
cables, similar
other
other
22 | P a g e

May 2013
ROMANIAS DETAILED FOREIGN TRADE [tonnes]
Romanias largest export item is visibly the scrap, when it comes to either volume or value. But excluding the scrap that is not really the output of local steel industry, other major
export items are the flat, hot rolled goods [hot rolled longs] and the pipes. The hot rolled flats were nearly half of the exports in 2007 [see chart above], but they narrowed by
more than two times and accounted for roughly one fifth in 2012.
Romania Steel Industry - Detailed Exports
tonnes
scrap
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
450,788
785,484
607,737
674,205
677,031
624,222
547,777
505,357
387,614
637,627
477,010
405,817
62,872
52,153
75,893
36,967
94,685
77,622
25,835
70,139
79,736
40,202
727,317
767,046
573,738
semi-finished goods
19,127
19,083
11,870
298,762
304,263
302,967
362,442
324,002
296,756
223,212
239,050
154,726
257,883
293,389
296,745
281,054
210,427
208,092
25,872
27,256
21,622
35,433
25,186
22,552
24,849
37,077
16,537
24,463
25,217
25,237
27,251
28,766
32,823
10,284
9,634
7,051
57,322
41,504
36,340
30,570
56,913
53,877
36,727
bars
29,041
21,010
15,149
54,147
48,848
78,165
63,483
89,799
110,451
125,623
101,211
88,344
59,250
35,893
34,666
profiles
20,900
16,461
17,658
29,696
31,430
39,702
63,608
44,876
53,828
55,223
40,504
21,738
17,546
24,076
30,074
4,242
7,503
6,203
9,943
12,038
13,100
11,268
13,044
11,965
13,220
11,705
12,500
13,096
12,779
11,736
49,353
55,058
62,678
83,261
104,691
90,239
113,600
103,168
131,954
105,761
125,159
109,792
106,120
119,019
108,724
10,657
13,318
10,956
11,321
15,739
18,023
17,971
15,594
15,797
18,148
22,051
16,427
21,688
21,541
26,262
8,597
11,940
11,272
13,584
15,871
16,385
15,719
17,208
18,494
18,424
14,877
17,659
16,086
15,607
15,104
48,605
105,516
87,577
60,072
87,398
126,407
116,269
144,279
133,678
133,491
201,290
99,752
114,374
104,033
228,978
1,252,756
1,358,085
1,128,740
1,110,687
1,570,880
1,402,722
1,436,418
1,448,663
1,423,251
1,431,513
1,403,322
1,075,809
1,364,232
1,128,887
1,142,477
525,440
591,040
555,002
659,899
785,396
794,985
762,213
771,631
799,029
883,736
897,964
688,195
726,605
651,877
736,660
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
130,289
159,555
113,324
113,138
231,019
186,027
195,704
233,954
196,854
179,152
160,862
133,425
209,082
149,346
121,455
cables, similar
other
Total ex ports
thous EUR
scrap
semi-finished goods
8,477
7,209
3,546
28,151
23,405
37,702
19,745
50,981
44,864
16,902
43,944
49,592
23,895
118,220
97,223
116,159
144,901
168,647
151,199
113,322
132,580
90,825
144,524
157,970
148,594
153,040
112,529
102,282
22,010
10,869
12,908
11,056
19,522
17,786
15,349
15,709
24,415
12,407
18,055
18,535
16,835
19,576
20,772
3,359
3,233
2,330
21,918
17,649
15,645
14,894
27,388
27,232
18,247
bars
9,517
7,516
5,292
19,075
22,408
34,820
28,159
46,983
57,759
66,506
54,999
46,829
33,036
21,381
19,617
17,849
profiles
8,786
7,684
7,898
11,943
16,273
20,908
32,041
21,930
26,808
28,057
21,910
12,498
11,072
14,458
11,361
19,073
17,250
26,261
37,328
38,017
35,943
47,406
43,706
44,297
44,325
41,080
42,600
41,792
37,584
50,515
47,461
52,329
72,515
93,036
93,496
114,487
107,503
141,054
121,595
149,368
132,307
127,889
148,690
127,603
24,766
26,169
22,285
26,001
31,799
34,965
35,702
29,879
30,934
35,416
38,513
34,310
42,983
41,838
49,075
cables, similar
16,082
20,791
18,554
22,433
27,149
30,165
30,261
33,340
36,018
36,922
29,819
34,125
32,671
31,804
30,271
other
72,741
91,456
107,405
85,693
117,294
146,618
149,482
182,664
181,141
170,489
234,248
124,621
163,626
154,761
281,279
Total ex ports
464,985
500,278
477,429
541,481
812,808
792,620
804,159
895,293
895,874
917,109
945,698
724,623
879,518
786,963
832,921
334,696
340,724
364,104
428,343
581,789
606,593
608,455
661,339
699,020
737,957
784,836
591,199
670,436
637,617
711,465
Source: DCE, IntelliNew s
23 | P a g e

May 2013
Figure 20: Detailed exports for main items [tonnes], quarterly
2007-2012
900,000
100,000
800,000
90,000
scrap
30,000
semi-finished goods
700,000
70,000
600,000
500,000
flat, cold rolled-goods coated
60,000
40,000
300,000
unwelded pipes, tubes,

tubular profiles
200,000
20,000
15,000
50,000
400,000
profiles
30,000
5,000
cables, similar
welded&hot rolled tubes
10,000
bars
Q1 07
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
metalic constructions,
parts of.
10,000
20,000
100,000
laminated below 600mm

width, stainless
25,000
80,000
Q1 08
Q1 09
Q1 10
Q1 11
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
Q1 12
Figure 21: Detailed exports for main items [EUR thous], 2007-2012
60,000
350,000
50,000
semi-finished goods
scrap
300,000
50,000
250,000
150,000
100,000
profiles
20,000
bars
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
30,000
metalic constructions,
parts of.
20,000
15,000
10,000
10,000
50,000
35,000
25,000
30,000
unwelded pipes, tubes,

tubular profiles
laminated below 600mm

width, stainless
40,000
40,000
200,000
45,000
cables, similar
5,000
-
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
ROMANIAS DETAILED FOREIGN TRADE [exports prices; EUR per ton]

The export prices have constantly increased over the past year, recovering most of the decline experienced in late 2008 amid subdued demand prompted by lower end-user
consumption and inventory cycle. The rise in sales and prices over the past quarters is no longer an effect of the inventory cycle but reflects, besides demand drivers, supply factors
such as the higher energy prices. The scrap price is, just as most of other commodity prices, nearly as high as they were in mid-2008 before the global meltdown in the developed
economies.
24 | P a g e

May 2013
Figure 22: Export prices for export items, quarterly, 2007-2012 [EUR/ton]
1,000
scrap
5,000
stainless steel laminated below

600mm width
800
semi-finished goods
4,000
unwelded pipes, tubes, profiles
3,000
metalic constructions
600
400
200
cables
2,000
1,000
profiles
bars
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
EUR/ton
scrap
semi-finished goods
bars
profiles
cables, similar
Q1 09
190
Q2 09
179
Q3 09
208
Q4 09
198
Q1 10
251
Q2 10
294
Q3 10
306
Q4 10
290
Q1 11
346
Q2 11
315
Q3 11
327
Q4 11
318
Q1 12
344
Q2 12
328
Q3 12
313
Q4 12
299
463
483
443
396
420
320
474
383
511
400
551
448
521
706
2,615
449
510
681
2,352
497
508
632
2,323
534
555
658
2,052
538
587
750
2,078
578
560
738
1,978
654
538
735
2,013
501
667
627
545
718
622
535
722
594
492
671
2,608
751
2,567
1,219
2,446
1,996
3,051
420
2,678
1,024
2,324
1,871
2,795
467
2,542
862
1,965
1,741
447
2,781
835
2,034
1,646
2,839
402
2,641
871
2,297
1,651
2,180
518
3,101
889
2,020
1,711
2,245
527
2,902
1,036
1,940
1,841
2,254
504
3,190
1,008
1,987
1,925
1,911
489
3,634
1,042
1,916
1,937
1,912
498
3,653
1,069
1,958
1,948
1,889
508
3,351
1,150
1,952
2,004
1,840
541
3,787
1,193
1,747
2,004
1,887
575
3,286
1,205
2,089
1,932
1,794
631
3,253
1,205
1,982
2,031
1,679
601
3,270
1,249
1,942
2,038
1,767
594
3,202
1,174
1,869
2,004
25 | P a g e

May 2013
Corporate Update
ArcelorMittal will scrap one more furnace of the overall five originally held by Romanias largest steel plant located in the eastern Galati
county, Ziarul Financiar daily reported. The statement comes to confirm the bleak outlook of the countrys steel industry. ArcelorMittal has
previously accused excessive energy prices and rising competition from non-EU countries like Turkey and Ukraine for its operational troubles.
ArcelorMittal cuts capacity of main The production capacity of the Galati plant will as a result be reduced to 3mn tonnes of crude steel per year from 5mn tonnes back in 2011
Romanian steel mill to 3mn tonnes when the foreign investor took over it from the Romanian state. Last year, ArcelorMittal already demolished one furnace at the Galati plant.
per year.
Romanias monthly steel production plunged from 0.5mn tonnes in mid-2007 to below 0.2mn tonnes in early 2009 and currently stabilised at
around 0.33mn tonnes. Annual production, of which the largest part is produced at ArcelorMittals plant in Galati, thus dropped from some
6mn tonnes per year in the years before the recession to 4mn tonnes at present.
ARCELORMITTAL
TMK Artrom, the Romanian steel tube manufacturer controlled by the Russian group TMK, has reported net profit of RON 43.20mn (EUR
9.85mn) in 2012, down 32% from 2011. The company's revenues stood at RON 909.1mn in 2012, up by 6% from the previous year.
TMK
TMK reports weaker profit for
2012, slips in the losses in Q1/2013.
Companys revenues reached RON 219.3mn (EUR 50.7mn) in the first quarter of 2013, with losses reaching RON 1.2mn in the same period.
Mechel Campia Turzii, a large-sized Romanian wire maker recently abandoned by its owner Russia's Mechel group in an attempt to get rid of
losses, has filed for insolvency in April 2013. New owners announced full resumption of activity later in May. Companys financials have
deteriorated significantly in Q1. The steel plant reported for the first four months of 2013 loses of RON 18.8mn [EUR 4.3mn] million lower by
Romanian wire maker formerly 17.5% y/y while the turnover plunged to RON 5.2mn [EUR 1.2mn] from RON 81.6mn one year earlier.
owned by Mechel files for Campia Turzii is the third company out of five abandoned by Mechel in Romania earlier this year that goes insolvent. Alloyed steel producer
insolvency.
Mechel Targoviste and steel re-roller Laminorul Braila have already filed for insolvency.
MECHEL
Industry representatives blame the problems faced by steel makers and processors on the rising electricity prices prompted by the renewable
energy resources scheme. The trade unions have demonstrated over the past week, seeking government support. Currently, the executive is
on the verge on trimming down the renewable energy support scheme to prevent further adverse effects on the industry.
The court will rule on the insolvency demand of Mechel's wire maker on April 17. The demand was submitted to the court on March 22, the
company statement filed with the stock exchange and dated April 12 said. All five companies formerly part of the Mechel group, employing
more than 5,000, are currently owned by an obscure local limited liability company controlled by Russian citizens.
INDEPENDENT
An unnamed Indian investor considers building a green-field steel plant in southern Romania, on the Danube, Romanian economy minister
Varujan Vosganian was quoted as saying by HotNews news agency. The investment is seen in the area of EUR 100-200mn but no details were
26 | P a g e

May 2013
Indian investor considers small EUR provided on the production capacity and the range of products.
100-200mn steel plant in Romania. The company would have an Italian management. The investment might be driven by the wind farms expansion in the region or by the
expected expansion of automobile producer Ford in Romania. Furthermore, the investor probably sees the country's need to develop its
infrastructure as another potential driver of the domestic demand for steel products.
Still, the announcement about the new steel mill is encouraging and comes as a surprise after earlier this year Russias Mechel abandoned its
Romanian steel assets and their 5,000 employees in an attempt to cut losses. Romania's major steel company owned by ArcelorMittal has
also constantly complained in the past year about rising energy prices which is consistent with the concerns expressed by the European
steel industry, but somehow exaggerated considering that Romanian industrial users pay one of the lowest electricity prices in Europe.
ArcelorMittal has demolished two of its five furnaces and reduced its production capacity to 3mn tonnes/year from 5mn tonnes before crisis.
On the other hand, Romania has been a net importer of steel since 2006 amid rising domestic demand driven by the construction and
automobile sectors. Furthermore, the wind farm construction in the region created new opportunities. ArcelorMittal Galati currently supplies
heavy plates for wind turbine manufacturers in Greece, Poland, the Czech Republic, Ukraine, India and Turkey, and intends to further expand
its exports this year. The company will deliver 7,500 tonnes of steel for a 32-turbine wind farm in southern Romania, steelguru.net reported
last week.
27 | P a g e

May 2013
Appendix
Appendix 1: Romanias Crude Steel production monthly, 2004-2012
ROMANIAS CRUDE STEEL PRODUCTION [thousand tonnes]
J
F
M
A
M
J
J
A
S
2004
471
464
533
481
531
514
503
490
2005
560
503
557
544
493
483
498
493
2006
481
484
529
541
509
545
533
516
2007
494
512
556
516
577
495
500
503
2008
460
484
519
440
493
453
440
411
2008
466
491
528
447
500
461
458
417
2009
142
192
176
211
206
162
258
256
2009
148
203
180
216
215
169
265
244
2010
282
226
308
323
365
342
345
293
2010
287
231
318
332
374
346
349
304
2011
271
303
345
297
246
274
352
321
2011
280
330
359
308
260
288
358
331
2012
281
207
225
310
312
263
305
325
2012
330
320
330
325
335
325
340
320
Source: EuroFer http://www.eurofer.org/index.php/eng/Facts-Figures/Figures/Crude-Steel-Production/All-Qualities
in red: www.worldsteel.org
498
488
511
489
456
479
522
523
532
391
465
559
529
513
204
500
450
470
451
167
466
283
290
331
343
300
336
281
310
404
292
302
323
337
266
277
294
320
223
270
299
267
281
363
391
285
310
466
237
231
209
217
304
311
204
320
28 | P a g e

May 2013
Appendix 2: Romanias Industrial Activity Indices annual 2006-2011, quarterly 2008- 2012
Romania Industrial Activity Indices - annual 2006-2012, quarterly 2009-2012
2006
2007
2008
2009
2010
S ALES VOLUME - RON 2010=100
Metallurgy
Total
106.4
117.8
132.8
66.9
100.0
Domestic mkt.
120.3
133.7
156.7
73.4
100.0
Foreign mkt.
95.9
105.8
114.7
61.9
100.0
Metallurgy, y/y
Total
13%
11%
13%
-50%
50%
Domestic mkt.
31%
11%
17%
-53%
36%
Foreign mkt.
1%
10%
8%
-46%
61%
Total
66.9
95.6
130.6
91.1
100.0
Domestic mkt.
72.8
104.9
145.4
94.2
100.0
Foreign mkt.
49.7
68.3
86.9
82.1
100.0
Fabricated metal products, except machinery and equipment, y/y
Total
16%
43%
37%
-30%
10%
Domestic mkt.
18%
44%
39%
-35%
6%
Foreign mkt.
8%
38%
27%
-6%
22%
S ALES VOLUME - EUR 2010=100
Metallurgy
Total
127.2
148.8
152.4
66.4
99.9
Domestic mkt.
143.9
168.9
180.0
72.9
99.8
Foreign mkt.
114.6
133.6
131.5
61.5
99.9
Metallurgy, y/y
Total
17%
2%
-56%
50%
Domestic mkt.
17%
7%
-60%
37%
Foreign mkt.
17%
-2%
-53%
62%
Total
80.1
120.6
149.3
90.4
99.8
Domestic mkt.
87.1
132.3
166.3
93.5
99.8
Foreign mkt.
59.3
86.1
99.4
81.5
99.8
Fabricated metal products, except machinery and equipment, y/y
Total
51%
24%
-39%
10%
Domestic mkt.
52%
26%
-44%
7%
Foreign mkt.
45%
15%
-18%
23%
INDUS TRIAL OUTPUT 2010=100
M etallurgy
142.7
145.1
122.6
78.5
100.0
Fabricated metal products, except machinery
92.6 and
108.2
equipment
125.4
109.1
100.0
M etallurgy, y/y
2%
-16%
-36%
27%
Fabricated metal products, except machinery and17%
equipment,
16%
y/y -13%
-8%
S ource: INS, Intellinews
2011
2012 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
127.7
130.8
124.7
116.7
117.1
116.3
72.5
73.5
71.8
63.0
75.5
53.5
63.0
70.8
57.1
68.9
73.8
65.2
78.5
74.3
82.3
106.4
111.2
102.0
105.6
107.6
103.8
109.5
106.9
111.9
123.8
123.4
124.2
130.9
135.3
126.9
132.6
135.6
129.8
123.3
129.0
118.1
107.4
100.3
113.7
131.3
130.6
131.9
120.1
126.2
114.4
108.0
111.3
104.9
28%
31%
25%
-9%
-10%
-7%
-46%
-52%
-41%
-59%
-59%
-58%
-56%
-61%
-51%
-31%
-31%
-31%
8%
1%
15%
69%
47%
91%
68%
52%
82%
59%
45%
72%
58%
66%
51%
23%
22%
24%
26%
26%
25%
13%
21%
6%
-13%
-19%
-8%
0%
-3%
4%
-9%
-7%
-12%
-12%
-14%
-11%
114.7
110.4
127.8
129.9
120.7
157.6
83.1
83.9
80.9
90.5
94.2
79.9
97.7
102.5
83.7
93.0
96.1
84.0
80.0
79.1
82.7
100.5
101.2
98.2
106.2
108.2
100.4
113.3
111.5
118.6
94.8
85.2
123.6
108.5
102.6
126.1
126.1
123.8
132.8
129.5
129.9
128.5
113.8
102.1
148.9
130.8
121.3
159.0
138.7
131.3
160.6
136.4
127.9
161.8
15%
10%
28%
13%
9%
23%
-24%
-28%
-10%
-32%
-36%
-16%
-32%
-37%
1%
-31%
-38%
6%
-4%
-6%
2%
11%
8%
23%
9%
6%
20%
22%
16%
41%
19%
8%
49%
8%
1%
28%
19%
14%
32%
14%
16%
8%
20%
20%
21%
20%
18%
26%
10%
6%
21%
5%
-1%
26%
126.9
130.1
124.0
110.2
110.6
109.9
71.6
72.5
70.9
63.1
75.7
53.6
62.8
70.6
56.9
68.0
72.7
64.4
80.3
76.0
84.3
107.1
111.9
102.7
104.5
106.5
102.7
107.5
105.0
109.9
123.6
123.1
124.0
133.3
137.8
129.2
131.1
134.1
128.4
119.8
125.3
114.7
103.8
97.0
110.0
124.9
124.2
125.5
111.8
117.5
106.5
100.5
103.5
97.6
27%
30%
24%
-13%
-15%
-11%
-53%
-58%
-49%
-64%
-64%
-64%
-63%
-67%
-58%
-39%
-39%
-39%
12%
5%
19%
70%
48%
92%
66%
51%
80%
58%
44%
70%
54%
62%
47%
24%
23%
26%
25%
26%
25%
11%
19%
4%
-16%
-21%
-11%
-6%
-10%
-3%
-15%
-12%
-17%
-16%
-17%
-15%
113.9
109.5
127.0
122.6
113.8
148.8
82.0
82.7
79.8
90.7
94.4
80.0
97.3
102.1
83.4
91.7
94.8
82.8
81.9
81.0
84.7
101.1
101.8
98.8
105.1
107.0
99.4
111.2
109.5
116.5
94.6
85.0
123.2
110.5
104.5
128.4
124.6
122.4
131.3
125.8
126.1
124.8
110.1
98.7
144.0
124.4
115.4
151.2
129.1
122.3
149.5
126.9
119.0
150.5
14%
10%
27%
8%
4%
17%
-35%
-38%
-22%
-41%
-44%
-27%
-42%
-47%
-14%
-39%
-45%
-6%
0%
-2%
6%
11%
8%
24%
8%
5%
19%
21%
15%
41%
15%
5%
46%
9%
3%
30%
19%
14%
32%
13%
15%
7%
16%
16%
17%
13%
10%
18%
4%
0%
14%
1%
-6%
21%
107.9
109.0
8%
9%
100.2
103.9
-7%
-5%
67.4
106.2
-52%
-14%
72.4
107.2
-46%
-18%
85.8
116.6
-34%
-7%
88.4
106.2
4%
-13%
90.4
81.2
34%
-24%
106.5
103.9
47%
-3%
104.5
106.7
22%
-9%
98.6
108.3
11%
2%
107.3
98.0
19%
21%
107.0
111.7
0%
7%
111.9
122.5
7%
15%
105.6
103.8
7%
-4%
93.9
90.2
-13%
-8%
106.7
105.9
0%
-5%
103.2
114.2
-8%
-7%
97.2
105.5
-8%
2%
Q2 12
Q3 12
Q4 12
29 | P a g e

May 2013
Appendix 3: Romania Steel Industry detailed exports&imports annual 2002-2012 [USD/EUR, tonnes]
EXPORT
2002
code
tonnes
72,040,000 Scrap iron or steel
2003
thous USD
USD/ton
tonnes
2004
thous USD
USD/ton
tonnes
2005
thous USD
USD/ton
tonnes
000 USD
USD/ton
2,070,121
189,565
92
2,386,017
318,605
134
2,394,490
498,276
208
1,661,747
374,465
225
162,874
26,342
162
130,074
29,323
225
160,336
55,486
346
98,239
34,750
354
2,137,341
470,648
220
2,294,215
624,978
272
1,936,589
935,193
483
2,265,905
1,188,884
525
72,090,000 I&US thick flat, cold rolled-goods - uncov ered
285,839
75,492
264
381,299
130,286
342
384,680
197,861
514
344,407
189,721
551
72,100,000 I&US thick flat, cold rolled-goods - cov ered
100,153
33,366
333
119,032
50,424
424
119,959
72,834
607
113,122
72,876
644
72,140,000 Bars - simply forged, rolled, w arm draw n or ex truded
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
164,155
66,598
406
172,249
73,367
426
72,150,000 Other bars of iron or steel
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
26,442
23,441
887
35,740
34,598
968
108,372
25,946
239
58,852
18,176
309
84,543
42,643
504
107,258
53,817
502
72,170,000 Coil of I&US
52,214
22,267
426
59,818
26,399
441
105,793
60,986
576
75,564
50,884
673
72,190,000 Stainless steel laminated, 600mm w idth
42,052
55,487
1,319
34,790
51,882
1,491
42,454
76,202
1,795
25,044
59,384
2,371
966
72,070,000 Iron or unalloy ed steel (I&US) semi-finished goods

72,080,000 I&US thick flat, hot rolled-goods
72,160,000 Profiles of I&US
73,040,000 Unwelded pipes, tubes, profiles
333,520
176,748
530
276,200
149,702
542
366,601
256,457
700
405,928
392,202
73,060,000 Other pipes, tubes, profiles
n.a.
n.a.
n.a.
38,884
16,365
421
115,197
71,833
624
84,800
56,327
664
73,120,000 Cables, similar

73,260,000 Other items of iron or steel
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
15,031
20,926
1,392
29,328
52,009
1,773
2,041
89,010,000 Ships
85,440,000 Wires, cables, insulated w ires
84,810,000 Metal fittings
72+73
TOTAL
30,402
31,768
1,045
34,552
46,185
1,337
42,178
74,636
1,770
51,590
105,315
187,847
301,241
1,604
236,543
280,141
1,184
244,002
361,785
1,483
262,584
525,425
2,001
50,658
497,785
9,826
66,439
748,255
11,262
86,447
1,078,988
12,481
106,238
1,427,958
13,441
12,866
44,147
3,431
13,229
52,894
3,998
12,339
55,363
4,487
12,757
81,555
6,393
5,411,255
1,128,487
209
5,940,817
1,512,071
255
6,142,128
2,562,845
417
5,622,098
2,832,129
504
IMPORT
2002
code
tonnes
26,010,000 Iron ore and other raw material

72,020,000 Fero-alloy
2003
000 USD
USD/ton
tonnes
2004
000 USD
USD/ton
tonnes
2005
000 USD
USD/ton
tonnes
000 USD
USD/ton
6,198,081
145,558
23
6,977,977
194,143
28
6,609,026
285,319
43
6,601,393
369,885
56
66,083
36,180
547
69,411
42,892
618
92,302
108,682
1,177
82,579
127,832
1,548
630,119
133,890
212
449,068
118,259
263
536,967
220,590
411
382,762
188,397
492
85,965
26,388
307
132,422
50,022
378
81,462
48,967
601
146,275
111,028
759
57,602
29,582
514
82,506
43,525
528
119,618
74,106
620
172,671
126,458
732
68,788
39,354
572
85,999
61,510
715
95,243
87,274
916
140,333
132,213
942
72,110,000 I&US thin flat, cold rolled-goods - uncov ered
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
24,356
18,283
751
40,609
39,033
961
72,130,000 I&US w elded and hot rolled tubes
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
71,935
34,675
482
101,471
46,775
461
60,348
31,394
520
104,656
62,151
594
108,412
89,386
825
123,894
109,725
886
72,170,000 Coil of I&US
35,223
12,899
366
59,484
25,346
426
59,148
39,933
675
47,138
53,341
1,132
52,727
65,129
1,235
60,410
86,607
1,434
64,179
136,172
2,122
52,098
130,110
2,497
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
75,132
40,025
533
81,422
59,564
732
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
66,956
55,458
828
67,788
74,508
1,099
22,414
37,024
1,652
27,138
45,676
1,683
22,700
53,233
2,345
26,212
64,640
2,466
59,113
35,569
602
79,023
53,047
671
63,488
69,815
1,100
86,882
98,711
1,136
7,968
24,972
3,134
8,897
36,171
4,065
9,090
44,724
4,920
11,203
55,715
4,973
73,080,000 Metalic constructions, parts of.
43,595
62,037
1,423
59,542
99,577
1,672
89,527
170,189
1,901
108,112
223,798
2,070
73,180,000 Screws, similar
12,380
38,030
3,072
16,535
59,994
3,628
20,764
88,529
4,264
30,305
136,246
4,496
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
7,543
28,223
3,742
12,092
42,314
3,499
39,127
42,658
1,090
53,239
66,545
1,250
51,432
75,364
1,465
57,877
88,859
1,535
19,298
45,982
2,383
25,716
73,854
2,872
36,390
123,209
3,386
51,117
181,542
3,551
1,260,751
661,088
524
1,314,048
925,176
704
1,696,643
1,606,837
947
1,822,841
2,090,810
1,147
72,250,000 Flat laminated goods, stainless steel w idth >600mm

72,280,000 Other bars and tubular profiles of alloy ed steel
73,070,000 Accessories for pipes
73,210,000 Ovens (cooking, heating)

73,220,000 Radiators for central heating
72+73
TOTAL
source: DCE, CRCE
30 | P a g e

May 2013
EXPORT
2005
code
tonnes
000 EUR
2006
EUR/ton
tonnes
000 EUR
2007
EUR/ton
tonnes
2008
000 EUR
EUR/ton
tonnes
000 EUR
EUR/ton
1,661,747
298,390
180
1,862,498
408,207
219
1,963,212
522,043
266
1,985,824
648,862
327
98,239
27,066
276
87,242
35,479
407
179,810
70,447
392
216,758
113,131
522
2,265,905
946,116
418
2,110,945
905,496
429
2,309,420
1,164,848
504
1,745,452
1,067,368
612
344,407
150,691
438
303,528
127,278
419
228,362
102,739
450
142,977
80,288
562
113,122
58,081
513
59,232
33,744
570
87,510
54,047
618
70,341
41,567
591
172,249
58,711
341
28,006
13,059
466
42,307
24,668
583
35,740
27,539
771
33,250
30,416
915
40,053
38,610
964
26,875
37,612
1,400
713
72,070,000 I&US* semi-finished goods


107,258
42,926
400
113,124
55,696
492
136,423
78,984
579
158,256
112,807
72,170,000 Coil of I&US
75,564
40,597
537
69,661
36,882
529
58,136
35,904
618
62,277
49,059
788
72,190,000 Stainless steel laminated, 600+mm w idth

72,200,000 Stainless steel laminated below 600mm w idth
25,044
47,421
1,893
31,364
72,447
2,310
21,598
84,289
3,903
17,584
59,764
3,399
12,623
28,189
2,233
19,555
49,791
2,546
23,979
99,160
4,135
28,574
102,012
3,570
405,928
314,552
775
418,878
364,228
870
432,849
398,295
920
438,182
455,974
1,041
84,800
44,672
527
75,312
41,965
557
70,197
45,930
654
72,082
58,427
811
27,403
49,852
1,819
27,532
54,289
1,972
26,060
66,583
2,555
24,835
87,589
3,527
108,112
181,218
1,676
45,670
73,628
1,612
53,922
97,335
1,805
55,564
111,133
2,000
29,328
42,040
1,433
39,398
68,073
1,728
47,601
84,193
1,769
46,879
89,416
1,907
7,308
21,341
2,920

73,180,000 screw s, similar
16,080
35,308
2,196
16,683
34,503
2,068
17,404
40,393
2,321
17,700
42,831
2,420
51,590
84,599
1,640
68,809
127,618
1,855
67,960
158,925
2,339
73,558
202,712
2,756
89,010,000 Ships
262,584
425,139
1,619
345,111
607,540
1,760
240,920
663,416
2,754
272,404
751,530
2,759
106,238
1,147,117
10,798
133,203
1,543,176
11,585
168,509
1,804,841
10,711
189,230
1,912,417
10,106
12,757
65,780
5,156
15,561
94,782
6,091
16,018
118,894
7,423
15,138
127,652
8,432
5,635,139
2,477,968
440
5,389,987
2,541,079
471
5,792,500
3,155,784
545
5,226,026
3,385,221
648

72+73
TOTAL
IMPORT
2005
6,601,393
296,038
45
6,117,270
277,836
45
6,262,528
326,679
52
5,021,510
350,035
70
82,579
102,596
1,242
78,645
66,744
849
98,868
105,892
1,071
65,714
120,403
1,832
382,762
151,031
395
557,758
185,453
332
848,527
324,200
382
686,576
337,228
491
146,275
88,750
607
269,588
139,437
517
315,171
186,800
593
289,641
229,016
791
172,671
101,343
587
212,240
120,231
566
203,820
117,646
577
180,552
120,422
667
140,333
106,859
761
200,351
170,135
849
317,341
276,753
872
407,847
384,651
943
40,609
31,453
775
59,346
43,218
728
83,273
63,280
760
80,503
60,717
754
101,471
37,462
369
206,456
81,149
393
294,132
133,212
453
371,072
237,785
641
48,333
22,633
468
84,732
41,025
484
366,950
175,990
480
529,104
344,875
652
123,894
88,485
714
200,578
139,218
694
292,964
217,895
744
273,673
243,412
889
72,170,000 Coil of I&US
47,138
43,065
914
61,948
60,284
973
94,940
87,886
926
95,290
105,154
1,104
52,098
104,242
2,001
76,171
176,739
2,320
60,290
196,111
3,253
56,961
156,193
2,742

81,422
47,756
587
64,231
39,609
617
77,134
49,634
643
126,464
87,522
692
67,788
59,495
878
75,458
72,234
957
95,461
105,345
1,104
99,845
130,064
1,303
26,212
51,832
1,977
51,987
77,304
1,487
52,272
105,253
2,014
97,065
178,391
1,838
86,882
79,479
915
114,907
109,721
955
187,404
167,090
892
194,470
187,970
967
11,203
44,833
4,002
16,768
56,404
3,364
19,574
70,423
3,598
18,060
75,902
4,203
34,126
54,211
1,589
188,421
306,820
1,628
201,465
370,770
1,840
182,819
357,910
1,958
6,271
21,783
3,473
n.a.
n.a.
n.a.
30,305
109,625
3,617
37,396
133,038
3,558
66,375
198,606
2,992
65,113
207,930
3,193
12,092
34,262
2,833
15,050
44,701
2,970
18,256
51,234
2,806
22,247
62,553
2,812

57,877
71,934
1,243
62,622
77,860
1,243
69,428
92,841
1,337
67,457
106,514
1,579
51,117
146,167
2,859
74,946
212,040
2,829
141,249
321,320
2,275
141,931
398,030
2,804
85,179
437,957
5,142
100,586
640,483
6,368
133,121
773,013
5,807
124,493
799,672
6,423
16,178
158,942
9,825
18,592
191,176
10,283
23,422
214,188
9,145
23,329
233,095
9,992
1,803,459
1,599,292
887
2,709,600
2,353,365
869
3,904,893
3,418,180
875
4,052,405
4,132,643
1,020

73,090,000 metal reserv oirs, similar
72+73
TOTAL
tonnes
000 EUR
EUR/ton
tonnes
2008
EUR/ton
2007
tonnes
000 EUR
2006
code
000 EUR
EUR/ton
tonnes
000 EUR
EUR/ton
source: DCE, CRCE
31 | P a g e

May 2013
EXPORT
2009
2010
2011
2012
code
72,020,000 ferro-alloy
tonnes
14,393
000 EUR
16,216
EUR/ton
1,127
tonnes
33,664
000 EUR
37,821
EUR/ton
1,123
000 EUR
45,401
EUR/ton
995
tonnes
14,793
000 EUR
56,529
EUR/ton
3,821
2,565,447
497,799
194
2,519,235
728,838
289
770,822
327
1,908,067
613,308
321
50,080
19,232
384
190,917
89,242
467
132,492
564
190,077
117,432
618
1,167,560
452,704
388
1,206,388
578,043
479
525,899
556
996,319
516,446
518
81,746
25,046
306
100,174
51,283
512
151,010
733
196,440
138,077
703
86,484
40,506
468
108,020
68,367
633
73,411
711
114,077
79,192
694
26,969
8,922
331
134,981
55,108
408
87,761
493
87,445
30,855
353
237,743
100,601
423
226,248
530
218,153
120,863
554
10,294
13,545
1,316
54,635
44,691
818
61,699
1,149
51,984
58,920
1,133
66,427
32,935
496
164,457
81,226
494
98,705
508
93,434
55,877
598
72,170,000 Coil of I&US
63,036
33,953
539
85,703
50,367
588
68,028
687
80,929
59,204
732

72,200,000 Stainless steel laminated below 600mm w idth
10,148
23,689
2,334
16,150
45,846
2,839
42,892
3,224

23,087
60,875
2,637
46,334
137,131
2,960
179,734
3,599
50,111
163,056
3,254
235,726
233,942
992
391,757
373,229
953
519,520
1,115
443,655
536,490
1,209
40,706
26,802
658
64,103
45,983
717
68,080
905
93,633
70,695
755
19,227
61,088
3,177
19,735
59,982
3,039
67,322
3,085
21,803
75,055
3,442
42,904
92,719
2,161
63,233
127,752
2,020
134,741
1,882
85,918
168,206
1,958

42,181
76,137
1,805
61,571
109,785
1,783
136,099
1,972
64,456
128,870
1,999
46,443
134,443
2,895
62,501
182,181
2,915
213,890
2,676
75,808
218,473
2,882
89,010,000 Ships
296,111
883,069
2,982
225,934
738,225
3,267
839,848
3,480
226,328
675,130
2,983
160,423
1,583,876
9,873
194,274
1,947,398
10,024
2,421,976
11,096
215,536
2,493,709
11,570

72+73
9,734
106,919
10,985
12,017
186,358
TOTAL
4,691,962
1,910,416
407
5,571,943
3,001,044
TOTAL ex cl. scrap iron
2,126,515
1,412,616
664
3,052,708
2,272,206
15,508
539
744
14,639
251,103
3,653,973
205,838
640
14,380
4,711,405
3,224,025
684
17,153
2,883,152
860
2,803,338
2,610,718
931
source: DCE, CRCE

IMPORT
2009
tonnes
000 EUR
EUR/ton
000 EUR
2012
1,608,605
105,286
65
2,878,453
236,090
82
236,848
107
2,053,241
179,061
87
28,014
30,186
1,078
48,247
67,043
1,390
75,861
1,318
54,993
68,762
1,250
EUR/ton
2011
tonnes
000 EUR
2010
code
EUR/ton
tonnes
000 EUR
EUR/ton
88,985
37,438
421
419,558
174,412
416
353,166
487
298,150
149,846
503
310,990
165,140
531
364,104
210,457
578
259,454
642
410,134
254,222
620
197,456
117,927
597
230,219
151,694
659
65,934
593
80,003
47,406
593
249,729
188,827
756
276,550
232,030
839
285,416
890
316,915
278,608
879
61,143
41,066
672
73,315
56,347
769
66,921
844
82,578
68,504
830
239,424
85,558
357
254,436
112,826
443
132,570
532
299,433
153,954
514
262,742
104,792
399
284,402
132,082
464
196,248
564
299,954
166,955
557
147,443
93,247
632
128,277
84,635
660
121,377
729
159,041
112,126
705
72,170,000 Coil of I&US
75,995
79,339
1,044
93,943
102,814
1,094
139,852
1,268
114,661
137,731
1,201
35,918
67,081
1,868
86,412
183,863
2,128
193,109
2,167
74,415
172,183
2,314

77,561
43,736
564
90,017
66,664
741
89,335
760
125,578
89,324
711
45,966
54,512
1,186
84,275
97,047
1,152
152,636
1,284
115,510
155,626
1,347
2,131

53,402
99,768
1,868
58,549
129,537
2,212
152,053
1,972
70,566
150,402
142,731
103,108
722
144,712
126,670
875
156,767
920
168,450
152,094
903
11,820
55,706
4,713
14,030
65,429
4,663
74,821
4,358
17,654
79,626
4,510
285,873
2,269
121,494
248,942
2,049
132,741
256,771
1,934
143,786
303,286
2,109
17,402
29,993
1,723
21,703
43,396
2,000
36,914
148,274
4,017
54,162
207,778
3,836
251,403
3,975
60,860
246,131
4,044
73,200,000 Springs (incl. shets-springs) of iron and steel
10,538
38,930
3,694
12,384
45,294
3,657
52,534
3,388
14,115
56,153
3,978

39,862
56,555
1,419
45,384
61,887
1,364
58,172
1,377
41,710
59,527
1,427
107,941
284,206
2,633
132,197
343,018
2,595
407,936
2,694
154,518
405,749
2,626
115,912
653,546
5,638
143,625
856,815
5,966
1,066,493
7,628
126,780
1,076,932
8,494
16,506
152,902
9,263
19,805
215,901
10,901
261,208
12,287
25,460
294,766
11,577
2,390,871
2,222,787
930
3,060,662
2,998,206
980
3,571,438
1,003
3,080,731
3,253,870
1,056

72+73
TOTAL
source: DCE, CRCE
32 | P a g e

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Romania Iron and Steel Report May 2013

Romania Iron and Steel Report

Romania Iron and Steel Report

Romania Iron and Steel Report

Figure 1: Steel benchmark prices [global] starting 2003 ..................................................................... 6

Romania Iron and Steel Report

Romanias crude steel output increased

Romania Iron and Steel Report

Strategy Comment Change in the Business Model

Romania Steel and Iron Report

Steel Prices (USD per ton)

Hot Rolled Steel Plate

Steel Wire Rod

Figure 2: Romanias total steel balance [tonnes] 2007-2012

Price for steel products, USD/ton

Average Exp. and Imp. Prices [EUR/ton]

Total Steel Balance [tonnes/quarter]

hot rolled goods prod.

Exp avg price

finished steel use

Imp avg price

GLOBAL STEEL PRICES: Global steel prices have decreased

Romania Steel and Iron Report

Figure 4: Apparent use of steel per capita, by region vs. Romania

Apparent Steel Use [kg per capita]

Production of Hot Rolled Products

Exports of Semi-finished and Finished Steel Products

Exports of Ingots and Semis

Exports of Long Products

Apparent Steel Use (crude steel equivalent)

European Union (27)

Exports of Flat Products

Exports of Tubular Products

Apparent Steel Use per Capita (kilograms crude steel equivalent)

European Union (27)

Source: WorldSteel.org, *calculations

Romania Steel and Iron Report

Romania Steel and Iron Report

Romania Steel and Iron Report

Romania Steel and Iron Report

Romania Steel and Iron Report

Figure 5: Stylised IntelliNews model of Romanias metal industry

long [different sections]

*CCS=continuous casting steel

Romania Steel and Iron Report

Figure 8: Industrial production index, metal PROCESSING industry seasonal

Indus t ria l P ro d, M e t a llurgy, 2 0 10 =10 0

Figure 6: Romanias industrial

Indus t ria l P ro d, M e t a l. P ro c e s s ., 2 0 10 =10 0

Indus t ria l P ro d, M e t a l. P ro c e s s ., 2 0 10 =10 0

Romania Steel and Iron Report

B. SALES INDEX [2010=100]

Figure 9: Sales volume index, metal PROCESSING industry [EUR, 2005=100]

Romania Steel and Iron Report

Steel Prices (USD per ton)

Sales per Ind Prod (EUR per Arbitrary Unit; 2010=100)

Fabricated metal products, except machinery and equipment

The indicators for the two sectors cannot

METHODOLOGY: we have calculated the

Hot Rolled Steel

APPARENT CONSUMPTION = OUTPUT NET EXPORTS (volume, tonnes)

IntelliNews model of Romanian

Romania Steel and Iron Report

*estimate not including scrap iron apparent consumption

*estimate not including scrap iron apparent consumption