Steel Industry Update/258 January 2011

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

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

Month of November Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Raw Steel Production ............... 7,074 6,296 12.4% 81,402 57,688 41.1%
Capacity Utilization ................. 68.3 61.4 -- 70.5 50.5 --
Mill Shipments .......................... 6,549 5,424 20.7% 76,333 54,312 40.5%
Exports ..................................... 1,017 935 8.8% 11,076 8,353 32.6%
Total Imports ............................. 1,786 1,377 29.7% 22,058 14,805 49.0%
Finished Steel Imports ............ 1,497 1,010 48.2% 17,352 13,046 33.0%
Apparent Steel Supply*............. 7,029 5,498 27.8% 82,609 59,006 40.0%
Imports as % of Supply* ......... 21.3 18.4 -- 21.0 22.1 --
Average Spot Price** ($/ton) ...... $649 $588 10.5% $686 $601 14.2%
Scrap Price# ($/gross ton) .......... $350 $235 48.9% $344 $226 52.1%
Source: AISI, Global Insight *Excl semi-finished imports **Avg price of 8 carbon products #shredded bundles

Table 2: Global Stainless Steel Crude Steel Production, 1st 9 Months, 2010
Region FY’ 09 FY '08 % Chg 9 M ‘10 9 M ‘09 % Chg
Western Europe/Africa 6,449 8,272 -22.0% 6,013 4,641 29.6%
Central/Eastern Europe 237 333 -28.9% 252 175 44.2%
The Americas 1,942 2,315 -16.1% 2,041 1,476 38.2%
Asia (w/o China) 7,130 8,068 -11.6% 6,418 5,000 28.3%
China 8,805 6,943 26.8% 8,313 6,569 26.5%
Total World 24,562 25,930 -5.3% 23,037 17,862 29.0%
Sources: International Stainless Steel Forum, 1/18/11

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 Steel Industry Update/258

Table 3: World Crude Steel Production by Region, November & Year-To-Date

(000 metric tons) Month of November Year-to-Date
Region 2010 2009 % Chg 2010 2009 % Chg
European Union……. 14,685 14,109 4.1% 160,094 126,768 26.3%
Other Europe………. 2,848 2,508 13.5% 29,916 26,227 14.1%
C.I.S…………………. 9,015 8,723 3.3% 98,650 88,480 11.5%
North America……… 9,006 8,152 10.5% 102,314 74,217 37.9%
South America……... 3,632 3,755 -3.3% 40,321 34,196 17.9%
Africa………………... 1,454 1,235 17.7% 15,401 13,421 14.7%
Middle East…………. 1,590 1,353 17.5% 17,318 15,677 10.5%
Asia………………….. 71,243 68,090 4.6% 809,308 718,122 12.7%
Oceania………...…... 646 670 -3.7% 7,463 5,363 39.2%
Total………………… 114,118 108,596 5.1% 1,280,785 1,102,472 16.2%
Countries
China………………… 50,173 47,858 4.8% 577,253 524,182 10.1%
Japan………………... 8,984 8,858 1.4% 100,424 78,583 27.8%
United States……….. 6,453 5,711 13.0% 73,882 52,334 41.2%
India(e)…….………… 5,565 5,390 3.2% 61,329 57,127 7.4%
Russia(e)...…..……… 5,540 5,396 2.7% 61,101 54,434 12.2%
South Korea……...…. 5,150 4,426 16.4% 52,519 44,075 19.2%
Germany.…………… 3,820 3,538 8.0% 40,639 29,646 37.1%
Ukraine(e)..………….. 2,850 2,668 6.8% 30,439 27,008 12.7%
All Others………….... 25,583 24,751 3.4% 283,199 235,083 20.5%
Source: World Steel Association, 12/10

Graph 1: World Crude Steel Production

Source: World Steel Association, 12/10

Steel Industry Update (ISSN 1063-4339) published 12 times/year by Locker Associates, Inc. Copyright © 2010 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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Graph 2: World Steel Capacity Utilization Ratio

Source: World Steel Association, 12/10

Table 4: Apparent Steel Use and Growth Rate, 2009-2011F

Apparent Steel Use (mt) Growth Rate (%)
Region 2009 2010(f) 2011(f) 2009 2010(f) 2011(f)
EU 27 1,172 1,394 1,474 -35.7% 18.9% 5.7%
Other Europe 239 287 314 -17.3% 20.1% 9.5%
CIS 358 453 503 -28.3% 26.5% 11.1%
Nafta 827 1,085 1,180 -36.2% 31.3% 8.7%
Central & S America 341 436 476 -23.6% 28.2% 9.1%
Africa 288 280 300 9.7% 5.1% 7.1%
Middle East 422 456 476 -7.5% 7.9% 4.4%
Asia & Oceania 7,628 8,331 8,674 8.9% 9.2% 4.1%
World 11,253 12,722 13,397 -6.6% 13.1% 5.3%
Developed Economies 2,913 3,588 3,753 33.5% 23.2% 4.6%
Emerging Economies 8,341 9,134 9,644 8.7% 9.5% 5.6%
China 5,424 5,787 5,990 24.8% 6.7% 3.5%
BRC 6,410 6,960 7,301 17.5% 8.6% 4.9%
MENA 590 624 657 0.4% 5.9% 5.3%
World, excl China 5,829 6,935 7,407 -24.4% 19.0% 6.8%
Source: Steel Times International, December 2010; f=forecast; ASU in million tonnes

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Table 5: Asia Crude Steel Production, November 2010

Country Nov '10 Nov '09 % Chg YTD '10 YTD '09 % Chg
China 50,173 47,858 4.8 577,203 524,182 10.1
India 5,565 5,390 3.2 61,329 57,127 7.4
Japan 8,984 8,858 1.4 100,424 78,583 27.8
South Korea 5,150 4,426 16.4 52,519 44,075 19.2
Taiwan 1,370 1,559 -12.1 17,782 14,155 25.6
All Asia 71,243 68,090 4.6 809,308 718,122 12.7
Source: World Steel Association, 12/27/10; in 000 tonnes

Table 6: China Steel Product Exports, November 2010

11 Month
Country Nov '10 J-N '10 % Chg
South Korea 546 7,814 19.7%
India 166 3,220 8.1%
Viet Nam 133 2,272 5.7%
Brazil 59 1,633 4.1%
Italy 62 1,217 3.1%
Thailand 129 1,189 3.0%
Philippines 89 1,085 2.7%
Singapore 77 981 2.5%
US 76 937 2.4%
Hong Kong 67 908 2.3%
UAE 58 904 2.3%
Indonesia 77 903 2.3%
Taiwan Region 74 858 2.2%
Malaysia 59 827 2.1%
Japan 55 771 1.9%
Russia 44 752 1.9%
All Others 1,125 13,336 --
Total 2,895 39,608 --
Source: World Steel Association, 12/27/10; in 000 tonnes

Table 7: China Imports of Iron Ore, Jan-Nov 2010

Country J-N '10 J-N '09 % Chg Share % Chg
Australia 241 235 2.4% 43.0% 1.4%
Brazil 117 129 -8.9% 20.9% -1.8%
India 89 96 -7.0% 15.9% -1.0%
South Africa 27 31 -11.6% 4.9% -0.6%
Iran 13 6 128.5% 2.3% 1.3%
All Others 70 69 1.4% 13.0% --
Total 561 566 -0.9% 100.0% --
Source: World Steel Association, 12/29/10; in million tonnes

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Table 8: European Union Crude Steel Production, November 2010

Country Nov '10 Nov '09 % Chg YTD '10 YTD '09 % Chg
Austria 640 607 5.4% 6,610 5,179 27.6%
Belgium 680 557 22.1% 7,397 5,116 44.6%
Bulgaria 65 59 10.2% 692 669 3.5%
Czech Republic 370 435 -15.0% 4,732 4,169 13.5%
Finland 318 303 5.1% 3,687 2,744 34.4%
France 1,290 1,311 -1.6% 14,289 11,738 21.7%
Germany 3,820 3,538 8.0% 40,639 29,646 37.1%
Greece 160 179 -10.6% 1,710 1,897 -9.9%
Hungary 141 110 27.8% 1,539 1,268 21.4%
Italy 2,310 1,936 19.3% 23,821 18,371 29.7%
Luxembourg 250 209 19.5% 2,449 200 22.4%
Netherlands 610 578 5.5% 6,133 4,685 30.9%
Poland 690 607 13.7% 7,497 6,578 14.0%
Romania 350 299 16.9% 3,596 2,530 42.1%
Slovakia 338 283 19.4% 4,197 3,433 22.3%
Slovenia 55 46 19.4% 561 396 41.6%
Spain 1,206 1,503 -19.8% 15,136 13,323 13.6%
Sweden 425 330 28.8% 4,454 2,447 82.0%
United Kingdom 803 1,039 -22.8% 9,127 8,988 1.6%
Other EU (27) 165 180 -8.3% 1,829 126,768 14.9%
Total EU (27) 14,685 14,109 4.1% 160,094 1,591 26.3%
Source: World Steel Association, 12/22/10

Table 9: Ukrainian Crude Steel Production, November 2010

Company Nov '10 MoM % Chg J-N '10 YoY % Chg
ArcelorMittal Kriviy 568 1.1% 5,669 25.0%
Azovstal 491 1.1% 5,195 24.4%
Ilyich 520 -3.4% 5,104 33.0%
Zaporizhstal 309 -2.2% 3,051 1.1%
Yenakievo 179 10.5% 2,269 4.3%
Alchevsk 214 -3.2% 2,646 -21.8%
DMKD 250 -3.1% 2,514 -19.7%
Source: Steelorbis.com, 12/15/10; in 000 tonnes

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Table 10: South American Crude Steel Production, November 2010

Country Nov '10 Nov '09 % Chg YTD '10 YTD '09 % Chg
Argentina 455 414 9.8% 4,733 3,622 30.7%
Brazil 2,600 2,676 -2.8% 30,413 23,927 27.1%
Chile 130 141 -7.6% 886 1,161 -23.6%
Colombia 110 88 25.0% 1,108 991 11.8%
Ecuador 40 21 95.1% 341 244 40.0%
Paraguay 5 4 22.0% 59 50 18.4%
Peru 75 73 2.3% 819 661 23.9%
Uruguay 7 5 34.6% 59 51 15.7%
Venezuela 210 334 -37.1% 1,903 3,491 -45.5%
South America 3,632 3,755 -3.3 40,321 34,196 17.9%
Source: World Steel Association; 12/25/10; in 000 tonnes

Table 11: U.S. Sales Volumes by Top Seven Automakers, December 2010
Company Dec ‘10 Dec ‘09 % Chg YTD ‘10 YTD ‘09 % Chg
GM 224 209 7.5 2,215 2,085 6.3
Ford 191 179 6.7 1,935 1,621 19.4
Toyota 177 188 -5.5 1,764 1,770 -0.4
Honda 129 107 21.0 1,230 1,151 6.9
Chrysler 101 87 16.4 1,085 931 16.5
Nissan 94 73 27.7 909 770 18.0
Hyundai 45 34 32.6 538 435 23.7
Total 962 876 9.7 9,677 8,763 10.4
Source: Wards Automotive Group, American Metal Market, 1/6/11; in 000’s

Table 12: N. American Automakers Cap Utilization, December 2010

Company Dec ‘10 Nov ‘10 Dec ‘09 YTD ‘10 YTD ‘09
Chrysler 83.0 78.9 83.3 75.7 56.9
Ford 79.5 91.6 84.0 80.4 66.9
GM 80.2 84.2 79.4 81.1 57.0
Honda 73.8 75.6 75.9 74.5 63.1
Nissan 74.8 74.7 63.2 67.5 48.9
Toyota 85.9 90.6 84.3 86.4 63.1
Total Top Six 79.8 83.6 79.1 78.3 59.8
Others 86.5 86.8 73.2 72.5 56.5
Total U.S. 77.7 82.2 74.7 75.0 57.2
Total Canada 84.7 88.6 87.7 85.2 64.1
Total Mexico 87.9 86.4 81.3 79.1 62.3
Total N.
80.7 84.1 77.9 77.3 59.2
America
Source: Wards Automotive Group, 1/6/11

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Locker Associates Steel Track: Spot Prices

U.S. Flat-Rolled Prices U.S. Other Product Prices
1100 1350
($ per ton) ($ per ton)
1250
1000
Plate
1150
900
1050

800
950
CR Sheet CF Bar (SBQ)
700 850

600 750

HR Sheet Beam
650
500
Wire Rod
550
400
450

300
350

200 250
89 93 97 04 05 07 08 09 O N D J F M A M J J A S O N 89 93 97 04 05 07 08 09 O N D J F M A M J J A S O N

Locker Associates Steel Track: Performance

U.S. Raw Steel Production 100%
U.S. Capacity Utilization
10.0
(mil net tons)
2010 2010 2009
9.0 2009 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
2010 6.9 6.9 7.8 7.7 8.0 7.8 7.5 7.3 7.3 7.2 7.1 2010 64% 71% 73% 74% 75% 75% 72% 68% 70% 67% 68%
2009 4.5 4.4 4.4 4.2 4.5 4.8 5.6 6.1 6.4 6.6 6.3 6.5 2009 43% 46% 43% 41% 43% 47% 52% 58% 62% 62% 61% 61%

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

Imports: Country of Origin Month of November Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Canada……………………….. 464 445 4.3% 6,235 3,790 64.5%
Mexico………………………… 155 116 33.6% 2,605 1,564 66.6%
Other W. Hemisphere……….. 156 144 8.3% 1,066 853 25.0%
European Union……………… 347 232 49.6% 3,937 2,354 67.2%
Other Europe*……………….. 129 93 38.7% 2,051 1,067 92.2%
Asia……………………………. 447 317 41.0% 5,444 4,840 12.5%
Oceania………………………. 72 30 140% 609 309 97.1%
Africa………………………….. 17 1 1,600% 110 27 307.4%
Total 1,786 1,377 29.7% 22,058 14,805 49.0%
Imports: Customs District
Atlantic Coast………………… 215 174 23.6% 2,733 1,914 42.8%
Gulf Coast/Mexican Border… 716 309 131.7% 7,634 5,860 30.3%
Pacific Coast…………………. 234 327 -28.4% 4,111 2,427 69.4%
Gr Lakes/Canadian Border…. 604 555 8.8% 7,388 4,441 66.4%
Off Shore……………………… 18 12 50.0% 191 163 17.2%
Source: AISI; * includes Russia
Update
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Locker Associates, Inc.

LOCKER ASSOCIATES is a business-consulting firm that specializes in enhancing the
competitiveness of businesses and industries on behalf of unions, corporate and government
clients. By combining expert business and financial analysis with a sensitivity to labor issues,
the firm is uniquely qualified to help clients manage change by:
♦ leading joint labor/management business improvement initiatives;
♦ facilitating ownership transitions to secure the long-term viability of a business;
♦ conducting strategic industry studies to identify future challenges and opportunities;
♦ representing unions in strategic planning, workplace reorganization and bankruptcy
♦ formulating business plans for turnaround situations; and
♦ performing due diligence for equity and debt investors.
Over the last 28 years, the firm has directed over 225 projects spanning manufacturing,
transportation, distribution and mining industries. Typical projects involve in-depth analysis of a
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Industry Update that circulates throughout the U.S. and Canadian steel industry.

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• Business Plan for High-Tech Startup (2009-present): drafted detailed business plan to
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• 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