Steel Industry Update/261 April 2011

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

Table 1: Selected U.S. Steel Industry Data, February & Year-To-Date, 2011
Month of February Year-to-Date
(000 net tons) 2011 2010 % Chg 2011 2010 % Chg
Raw Steel Production ............... 7,374 6,881 7.2% 15,301 13,753 11.3%
Capacity Utilization ................. 75.4 71.1 -- 74.2 67.5 --
Mill Shipments .......................... 6,967 6,311 10.4% 14,496 12,891 12.5%
Exports ..................................... 951 890 6.9% 2,011 1,842 9.2%
Total Imports............................. 1,845 1,582 16.6% 3,962 3,244 22.1%
Finished Steel Imports ............ 1,438 1,222 17.7% 3,138 2,508 25.1%
Apparent Steel Supply*............. 7,454 6,643 12.2% 15,624 13,557 15.2%
Imports as % of Supply* ......... 19.3 18.4 -- 20.1 18.5 --
Average Spot Price** ($/ton) ...... $882 $648 36.2% $848 $633 34.1%
Scrap Price# ($/gross ton) .......... $432 $330 30.9% $444 $333 33.4%
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, April & Year-to-Date, 2011
Month of April Year-To-Date
($ per net ton) 2011 2010 % Chg 2011 2010 % Chg
Hot Rolled Band..………….. 879 700 25.6% 841 649 29.6%
Cold Rolled Coil…......……. 960 805 19.3% 933 754 23.8%
Coiled Plate................…….. 1,067 799 33.5% 984 749 31.3%
Rebar.........................…...... 774 657 17.8% 766 601 27.5%
Average Spot Price…….... 920 740 24.3% 881 688 28.0%
OCTG Seamless Tube……. na na -- na na --
#1 Heavy Melt……………... 400 338 18.3% 406 320 27.1%
Scrap Steel-Shredded……. 442 372 18.8% 443 353 25.3%
#1 Busheling………………. 471 457 3.1% 471 416 13.3%
Sources: World Steel Dynamics’ SteelBenchmarker, Spears Research

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 Steel Industry Update/261

Table 3: World Crude Steel Production by Region, March & Year-To-Date, 2011
(000 metric tons) Month of March Year-to-Date
Region 2011 2010 % Chg 2011 2010 % Chg
European Union……. 16,246 15,619 4.0% 45,620 42,684 6.9%
Other Europe………. 3,046 2,409 26.4% 8,822 6,751 30.7%
C.I.S…………………. 9,920 9,447 5.0% 28,378 25,858 9.7%
North America……… 9,863 9,829 0.3% 28,903 27,259 6.0%
South America……... 4,142 3,622 14.4% 11,664 10,393 12.2%
Africa………………... 1,193 1,452 -17.8% 3,474 4,129 -15.9%
Middle East…………. 1,816 1,524 19.2% 5,242 4,692 11.7%
Asia………………….. 82,392 76,313 8.0% 237,329 217,602 9.1%
Oceania………...…... 725 682 6.3% 2,089 1,952 7.0%
Total………………… 129,343 120,897 7.0% 371,522 341,322 8.8%
Countries
China……………....... 59,418 54,521 9.0% 169,910 156,327 8.7%
Japan….…………..… 9,092 9,341 -2.7% 27,683 26,511 4.4%
United States……….. 7,101 7,112 -0.2% 20,981 19,589 7.1%
India(e)………………. 6,350 5,845 8.6% 18,229 16,749 8.8%
Russia(e)…….……… 6,160 5,735 7.4% 17,657 15,861 11.3%
South Korea……...…. 5,762 5,037 14.4% 16,388 13,556 20.9%
Germany.…………… 4,026 4,022 0.1% 11,388 10,932 4.2%
Ukraine(e)..………….. 3,050 3,057 -0.2% 8,688 8,217 5.7%
All Others………….... 28,384 26,227 8.2% 80,598 73,580 9.5%
Source: World Steel Association, 4/11; e=estimate

Graph 1: World Crude Steel Production

Source: World Steel Association, 4/11; 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/261

Graph 2: World Steel Capacity Utilization Ratio

Source: World Steel Association, 4/11

Table 4: Apparent Steel Use & Short-range Outlook, 2010-2012f

Apparent Steel Use Growth Rate %
Regions 2010 2011f 2012f 2010 2011f 2012f
European Union (27) 144.8 151.8 157.5 21.2 4.9 3.7
Other Europe 29.6 32.8 35.2 23.8 11.0 7.3
CIS 48.5 52.1 56.7 34.3 7.5 8.9
NAFTA 110.3 122.3 130.0 33.0 10.9 6.3
Central & South America 45.8 48.8 52.8 36.4 6.6 8.3
Africa 25.9 25.1 27.4 -3.6 -3.1 9.1
Middle East 45.3 46.5 49.9 7.2 2.6 7.3
Asia & Oceania 833.6 879.9 931.1 8.4 5.5 5.8
World 1,283.6 1,359.2 1,440.6 13.2 5.9 6.0
Developing Economies 373.1 392.0 406.8 24.7 5.1 3.8
Emerging & Dev. Economies 910.5 967.2 1033.8 9.1 6.2 6.9
-- China 576.0 604.8 635.0 5.1 5.0 5.0
-- BRIC 698.9 738.8 784.7 8.0 5.7 6.2
-- MENA 60.6 60.5 65.3 2.4 -0.1 7.9
World, excl China 707.6 754.5 805.6 20.7 6.6 6.8
Sources: American Metal Market, April 15, 2011; f=forecast; ASU in million metric tonnes

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Table 5: US Exports of Ferrous Scrap, by Destination Y-T-D 2010 & 2011

Country Feb Jan Dec 2011 2010 % Chg
Canada 129 112 84 241 200 20.6%
China 380 211 201 591 611 -3.4%
Hong Kong 8 7 5 15 15 -0.7%
India 32 26 57 58 236 -75.2%
Japan 9 4 4 13 14 -5.4%
Malaysia 103 1 61 104 87 -20.1%
Mexico 104 26 20 130 152 -14.7%
South Korea 338 80 106 418 551 -24.1%
Taiwan 216 252 316 469 320 46.4%
Thailand 73 64 77 137 124 10.0%
Turkey 383 222 552 605 270 124.2%
Others 135 215 302 350 244 43.3%
Total 1,910 1,221 1,785 3,131 2,824 10.9%
Sources: American Metal Market, April 15, 2011; in 000 tonnes

Table 6: US Exports of Ferrous Scrap, by Grade Y-T-D 2010 & 2011

Grade Feb Jan Dec 2011 2010 % Chg
Alloys 95 57 66 152 148 2.7%
Borings 9 9 6 17 10 66.9%
Cast iron 41 38 30 79 76 4.3%
No. 1 bundles 33 34 28 67 58 16.1%
No. 2 bundles 1 -- -- 1 -- 198.1%
No. 1 heavy 615 329 573 945 682 38.5%
No. 2 heavy 65 36 68 102 104 -2.1%
Plate/structural 65 56 153 121 126 -4.2%
Shavings 11 15 16 26 28 -7.6%
Shredded 707 397 585 1,104 1,047 5.4%
Stainless 39 48 94 87 139 -37.8%
Tinned 6 7 6 13 18 -27.6%
Unspecified 224 194 159 418 388 7.8%
Totals 1,910 1,221 1,785 3,131 2,824 10.9%
Sources: American Metal Market, April 15, 2011; in 000 tonnes

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Table 7: US Iron and Steel Scrap Exports, by Country, 2010 & 2009
Country YTD '10 YTD '09 % Chg
Oceania 12,500 15,700 -20.4%
Turkey 4,350 3,680 18.2%
China 3,210 6,210 -48.3%
South Korea 2,820 3,110 -9.3%
Taiwan 2,820 2,230 26.5%
America 2,430 1,880 29.3%
Canada 1,360 971 40.1%
India 976 1,580 -38.2%
Malaysia 802 688 16.6%
Mexico 665 668 -0.4%
Egypt 649 361 79.8%
Vietnam 647 750 -13.7%
Thailand 562 458 22.7%
Indonesia 390 369 5.7%
Peru 281 155 81.3%
All Others 817 1070 -28.6%
Total 20,500 22,400 -8.50%
Source: AIIS, 4/17/11; Figures include tinplate and terneplate; excludes rails and
ships, boats and other vessels for scrapping; in 000 tonnes

Table 8: OCTG Production Capacity in US & Canada

Company (000 tons) Tons (000’s)
U.S. Steel 1,700*
Tenaris SA 1,300
TMK Ipsco 600
V&M Star 550
Evraz NA 480
Boomerang Tube LLC 340
JMC Steel Group 200
Lakeside Steel Corp 180
Welded Tube of Canada 160
Northwest Pipe Co 120
Source: American Metal Market, March, 2011; *U.S. Steel’s OCTG
shipments totaled about 940,000 tons in the 12 months ending on
12/30/10

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Table 9: Evraz Group Results from Operations, 1st Quarter 2011

Product Q1'11 Q1'10 % Chg Q4'10
Coke (saleable) 426 616 (30.8)% 396
Pig iron 3,066 2,991 2.5% 2,889
Pig iron (saleable) 22 20 5.9% 32
Crude steel 4,388 3,997 9.8% 4,145
Rolled products 4,022 3,576 12.5% 3,760
Semi-finished products 1,096 955 14.8% 962
Construction products 1,274 1,197 6.4% 1,302
Railway products 502 451 11.5% 466
Flat-rolled products 720 632 13.8% 599
Tubular products 199 193 2.9% 259
Other steel products 232 147 57.1% 173
Source: Steel Guru, 4/16/11; in 000 tonnes

Table 10: United States Steel Industry Fatalities January 1, 2011 through April 1, 2011
Date Company Location Alleged Cause
Molten metal erupts from
Feb 4 ArcelorMittal USA LaPlace, LA
ladle
Feb 12 Erie Coke Corp Erie, PA Struck by front-end loader
Pinned between forklift and
Feb 14 Steel Warehouse Co. South Bend, IN
truck
Crushed by hydraulic truck
Feb 15 Republic Engineered Canton, OH
door
Feb 16 Norfolk Iron & Metal Norfolk, NE Struck by heavy metal tray
Struck by vehicle on forklift
Feb 28 Bingham Lake Salvage Bingham Lake, MN
being dismantled
Scissor lift collapse, pinning
Mar 8 Allegheny Ludlum New Castle, IN
worker
Mar 31 AK Steel (coke plant) Ashland, KY Explosion and fire
Flash fire erupts as workers
Apr 1 American Metal Recycling Fontana, CA
use metal-cutting torches
Source: American Metal Market, April 13, 2011; one death per incident

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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
Plate #1 Busheling

900
400

800 Shredded Scrap

350
CR Sheet
700
Rebar #1 Heavy Melt
300
600
HR Sheet
250
500

400 200
'06 '07 '08 '09 1q 2q J A S O N D J F M A '07 '08 '09 1q 2q J A S O N D J F M A

Locker Associates Steel Track: Performance

U.S. Raw Steel Production 100%
U.S. Capacity Utilization
10.0
(mil net tons)
2011 2011 2010
9.0 2010 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 7.4 2011 73% 75%
2010 6.9 6.9 2010 64% 71%

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

Imports: Country of Origin Month of February Year-to-Date
(000 net tons) 2011 2010 % Chg 2011 2010 % Chg
Canada……………………….. 398 547 -27.2% 873 1,130 -22.7%
Mexico………………………… 173 300 -42.3% 524 514 1.9%
Other W. Hemisphere……….. 262 38 589.5% 460 88 422.7%
European Union……………… 258 213 21.1% 600 465 29.0%
Other Europe*……………….. 218 102 113.7% 297 220 35.0%
Asia……………………………. 458 322 42.2% 1,029 692 48.7%
Oceania………………………. 65 57 14.0% 150 129 16.3%
Africa………………………….. 11 3 266.7% 27 6 350.0%
Total 1,845 1,582 16.6% 3962 3244 22.1%
Imports: Customs District
Atlantic Coast………………… 233 219 6.4% 480 394 21.8%
Gulf Coast/Mexican Border… 924 424 117.9% 1,805 978 84.6%
Pacific Coast…………………. 235 333 -29.4% 701 650 7.8%
Gr Lakes/Canadian Border…. 430 573 -25.0% 943 1,179 -20.0%
Off Shore……………………… 22 34 -35.3% 33 43 -23.3%
Source: AISI; *includes Russia
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Update #261
 Steel Industry Update/261

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-
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Industry Update that circulates throughout the U.S. and Canadian steel industry.
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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

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