Steel Industry Update/260 March 2011

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

Table 1: Selected U.S. Steel Industry Data, January & Year-To-Date, 2011
Month of January Year-to-Date
(000 net tons) 2011 2010 % Chg 2011 2010 % Chg
Raw Steel Production ............... 7,927 6,872 15.4% 7,927 6,872 15.4%
Capacity Utilization ................. 73.2 64.2 -- 73.2 64.2 --
Mill Shipments .......................... 7,529 6,580 14.4% 7,529 6,580 14.4%
Exports ..................................... 1,059 951 11.4% 1,059 951 11.4%
Total Imports............................. 2,117 1,662 27.4% 2,117 1,662 27.4%
Finished Steel Imports ............ 1,700 1,285 32.3% 1,700 1,285 32.3%
Apparent Steel Supply*............. 8,169 6,914 18.2% 8,169 6,914 18.2%
Imports as % of Supply* ......... 20.8 18.6 -- 20.8 18.6 --
Average Spot Price** ($/ton) ...... $815 $618 32.0% $815 $618 32.0%
Scrap Price# ($/gross ton) .......... $455 $335 35.8% $455 $335 35.8%
Source: AISI, SteelBenchmarker *Excl semi-finished imports **Avg price of 4 carbon products #steel scrap-shredded

Table 2: U.S. Spot Prices for Selected Steel Products, March & Year-to-Date, 2011
Month of March Year-To-Date
($ per net ton) 2011 2010 % Chg 2011 2010 % Chg
Hot Rolled Band..………….. 869 662 31.3% 829 619 33.9%
Cold Rolled Coil…......……. 960 764 25.7% 924 721 28.2%
Coiled Plate................…….. 1,010 771 31.0% 956 709 34.8%
Rebar.........................…...... na 607 -- 750 573 31.0%
Average Spot Price…….... 946 701 35.0% 865 655 31.9%
OCTG Seamless Tube……. na na -- na na --
#1 Heavy Melt……………... 404 301 34.2% 408 314 30.2%
Scrap Steel-Shredded……. 442 335 31.9% 443 347 27.7%
#1 Busheling………………. 472 371 27.2% 471 402 17.1%
Sources: World Steel Dynamics’ SteelBenchmarker, Spears Research

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 Steel Industry Update/260

Table 3: World Crude Steel Production by Region, February & Year-To-Date, 2011
(000 metric tons) Month of February Year-to-Date
Region 2011 2010 % Chg 2011 2010 % Chg
European Union……. 14,402 13,343 7.9% 29,101 27,065 7.5%
Other Europe………. 2,741 2,062 33.6% 5,780 4,341 33.1%
C.I.S…………………. 8,455 7,935 6.5% 17,824 16,421 8.5%
North America……… 8,997 8,662 3.9% 18,841 17,429 8.1%
South America……... 3,733 3,267 14.3% 7,519 6,772 11.0%
Africa………………... 1,086 1,270 -14.5% 2,319 2,677 -13.4%
Middle East…………. 1,574 1,591 -1.0% 3,376 3,169 6.5%
Asia………………….. 74,949 68,405 9.6% 157,447 140,708 11.9%
Oceania………...…... 631 594 6.2% 1,364 1,270 7.4%
Total………………… 116,568 107,119 8.8% 243,571 219,852 10.8%
Countries
China(e)…………....... 54,307 49,518 9.7% 114,178 101,362 12.6%
Japan(e)…………..… 8,928 8,445 5.7% 18,583 17,169 8.2%
United States……….. 6,595 6,243 5.6% 13,786 12,477 10.5%
Russia(e)…….……… 5,200 4,980 4.4% 10,970 10,126 8.3%
South Korea……...…. 5,100 5,125 -0.5% 10,710 10,767 -0.5%
India(e)………………. 5,014 3,988 25.7% 10,626 8,519 24.7%
Germany.…………… 3,668 3,399 7.9% 7,333 6,911 6.1%
Ukraine(e)..………….. 2,640 2,397 10.1% 5,558 5,169 7.5%
All Others………….... 25,116 23,024 9.1% 51,827 47,352 9.5%
Source: World Steel Association, 3/11; e=estimate

Graph 1: Crude Steel Production

Source: World Steel Association, 3/11; in million metric tons

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

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 Steel Industry Update/260

Graph 2: Steel Capacity Utilization Ratio

Source: World Steel Association, 3/11

Table 4: US Steel Exports by Country, 2009-2010

Country 2010 2009 % Chg
Canada 6,632 4,706 40.9%
Mexico 2,606 2,026 28.6%
EU 472 360 31.2%
Russia 11 18 -40.8%
Turkey 22 38 -42.6%
Brazil 158 148 6.2%
Venezuela 68 73 -6.1%
Ecuador 62 91 -31.6%
Argentina 16 8 99.0%
Colombia 111 51 117.8%
Others 1,848 1,763 4.8%
Total 12,004 9,282 29.3%
Source: AIIS, 2/25/11; in ‘000 tons

Table 5: Chinese Crude Steel Production, February, 2011

Product Feb YoY Jan-Feb YoY
Pig Iron 50.5 10.0% 102.7 8.9%
Crude Steel 54.3 9.7% 114.2 12.6%
Steel Products 63.5 17.4% 130.9 14.5%
Source: MySteel.com, 3/12/11; in million tonnes

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 Steel Industry Update/260

Table 6: Top 20 Stainless Steel Mills and Nickel Alloy Melt Shops, 2010
Company City St
1 AK Steel Butler PA Stainless steel
2 AK Steel Mansfield OH Stainless steel
3 ATI Allegheny-Ludlum Brackenridge PA Stainless steel
4 ATI Allegheny-Ludlum Brackenridge PA Stainless steel
5 ATI Allegheny-Ludlum Latrobe PA Stainless steel
6 ATI Allegheny-Ludlum Midland PA Stainless steel
7 ATI Allegheny-Ludlum Washington PA Stainles steel and other nickel-alloys
8 ATI Allvac Monroe NC Nickel-based alloys and superalloys
9 ATI Allvac Lockport NY Nickel-based alloys and superalloys
10 Carpenter Technology Reading PA Stainless steel and specialty alloys
11 Crucible Industries Solvay NY Stainless, specialty and tool steels
12 Doncasters-Cert Alloy Prod Long Beach CA Nickel and cobalt superalloys
13 Doncasters-Precision Groton CT Precision nickel and cobalt superalloy castings
14 Doncasters-Southern Tool Oxford AL Superalloys and stainless steel castings
15 Doncasters-IET Evansville IN High-temp super alloys, nickel & stainless steels
16 Electralloy Oil City PA Specialty alloys incl high-temperature alloys
17 Haynes International Kokomo IN High-temp bar, billet, wire & remelt materials
18 Haynes International Arcadia LA High-temp seamless & welded pipe and tubing
19 High Performance Alloys Tipton IN Small quantities of development alloys
20 Latrobe Specialty Corp Latrobe PA High-performance alloy steels
Source: Recycling Today, January 2011

Table 7: Stainless and Heat-resisting Crude Steel Production, FY 2010p

Region (in 000 tonnes) FY '08 FY '09 % Chg FY '10p % Chg
Western Europe/Africa 8,272 6,449 -22.0% 7,871 22.1%
Central/Eastern Europe 333 237 -29.0% 340 43.6%
The Americas 2,315 1,942 -16.0% 2,609 34.4%
Asia w/o China 8,068 7,130 -12.0% 8,611 20.8%
China 6,943 8,805 26.8% 11,256 27.8%
Total World 25,930 24,562 -5.3% 30,687 24.9%
Source: International Stainless Steel Forum, 3/9/11

Table 8: Home Appliance Domestic Shipments, 2010

Product 2010 2009 % Chg
Ranges/ovens 16,571 16,557 0.1%
Washers 7,999 7,865 1.7%
Dryers 6,547 6,484 1.0%
Dishwashers 5,708 5,404 5.6%
Refrigerators 9,369 8,397 11.6%
Freezers 1,958 2,043 -4.2
AHAM 6 Total 38,169 36,498 4.6%
Source: Metal Center News, March 2011; AHAM 6 - Association of
Home Appliance Manufacturers

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Locker Associates Steel Track: Spot Prices

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

1000 450
#1 Busheling

900
400

Plate
800
Shredded Scrap
350
CR Sheet
700

300
600
#1 Heavy Melt

Rebar HR Sheet 250

500

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

Locker Associates Steel Track: Performance

U.S. Raw Steel Production 100%
U.S. Capacity Utilization
10.0
(mil net tons)
2011 2010 2011 2010
9.0 90%

8.0 80%

7.0 70%

6.0 60%

5.0 50%

4.0 40%

3.0 30%
J F M A M J J A S O N D J F M A M J J A S O N D
2011 7.9 2011 73%
2010 6.9 2010 64%

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

Imports: Country of Origin Month of January Year-to-Date
(000 net tons) 2011 2010 % Chg 2011 2010 % Chg
Canada……………………….. 475 583 -18.5% 475 583 -18.5%
Mexico………………………… 352 214 64.5% 352 214 64.5%
Other W. Hemisphere……….. 198 50 296.0% 198 50 296.0%
European Union……………… 342 252 35.7% 342 252 35.7%
Other Europe*……………….. 79 118 -33.1% 79 118 -33.1%
Asia……………………………. 571 371 53.9% 571 371 53.9%
Oceania………………………. 85 72 18.1% 85 72 18.1%
Africa………………………….. 16 2 700.0% 16 2 700.0%
Total 2,117 1,662 27.4% 2117 1662 27.4%
Imports: Customs District
Atlantic Coast………………… 246 174 41.4% 246 174 41.4%
Gulf Coast/Mexican Border… 880 554 58.8% 880 554 58.8%
Pacific Coast…………………. 466 318 46.5% 466 318 46.5%
Gr Lakes/Canadian Border…. 513 606 -15.3% 513 606 -15.3%
Off Shore……………………… 11 10 10.0% 11 10 10.0%
Source: AISI; *includes Russia
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Update #260
 Steel Industry Update/259

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

RECENT PROJECTS
• Business Plan for High-Tech Startup (2009-present): drafted detailed business plan to
raise capital and promote a new hydrogen battery technology
• IBT-Supervalu (2010): assist union and management to identify major operational problems
impacting warehouse performance and provide recommendations for joint improvement
• Institute of Scrap Recycling Industries (2010): presented a status report on the U.S. steel
market before the Institute of Scrap Recycling Industries Commodities roundtable
• Save the World Air-Marketing (2009-present): developed a marketing plan to help drive
sales of a green technology product, ELEKTRA, an electronic fuel device for trucks that
increases fuel economy (mpg's), reduces exhaust emissions and improves engine performance