Steel Market Industry Analysis - Presentation to USB on Sept. 09, 2009. Charts include: Comparison HR Indexes, Steel Mill Shipments, DOmestic Supply, Foreign Imports

2. UBS CONFERENCE CALL
SEPTEMBER 9, 2009
John Packard – Steel Market Update

3. Key HR Index Price Points
 July 2008 = $1070 per short ton average
 January 2009 = $510 per short ton average
 June 2, 2009 = $380 per short ton average
 September 9, 2009 = $540 per short ton average
 Momentum is for higher prices

4. Comparison HR Indexes
Price Comparison Indexes
as of 9/9/2009 ($/ton) HR CR Galvanized Galvalume
Steel Market Update 540 650 725 928
CRU 531 649 673 NA
The Steel Index 548 648 702 NA
SteelBenchmarker 514 621 NA NA
Platts 540 635 NA NA
To get cwt (hundred weight) pricing divide by 20.

5. Our three legged stool
Low service center inventories
Foreign steel
Tight supply

6. SERVICE CENTER
INVENTORIES
From Excessive to Balanced

7. AISI Mill Shipments by end user
Service
Centers/Processors
Construction
29%
Automotive
28.7%
Energy
15.4%
3% 12.6% Containers
Exports
9.2% 2.1%
Other
Other includes non-classified shipments, rail, mining, agricultural, military

8. Mill Shipment Reality
25%
Service Centers
10% Toll Processors
65% Direct to OEM's

9. January 11, 2009 SMU Survey

10. August 27, 2009 SMU Survey

11. January vs. August Inventory
 January – 59.3% had two months or less on hand
 August – 80.2% had two months or less on hand
 January – 26.3% had three months on hand
 August – 16.2% had three months on hand
 January – 14.4% had four months or more on hand
 August – 3.7% had four months or more on hand
 Earlier in August 83.6% reported they wanted 2
months or less inventory on the floor

12. DOMESTIC SUPPLY
Return from the debts of despair

13. North American Blast Furnaces - Then
Running (13)
AK Steel Ashland 1
AK Steel Middletown 0
ArcelorMittal Dofasco 2
ArcelorMittal Burns Harbor 1
ArcelorMittal Cleveland 0
ArcelorMittal Indiana Harbor E 1
ArcelorMittal Indiana Harbor W 0
Essar Algoma 1
Severstal Dearborn 1
Severstal Sparrows Point 1
Severstal Warren 0
US Steel Fairfield 1
US Steel Gary 2
US Steel Granite City 0
US Steel Great Lakes 0
US Steel Hamilton 0
US Steel Lake Erie* 0
US Steel Mon Valley 2

14. ArcelorMittal Operating Levels
East Chicago West 30%
East Chicago East 30%
Burns Harbor 35%
Cleveland 0%
Riverdale 18%
Coatesville 75%
Steelton 80%
Conshohocken 35%
Weirton 90%
Georgetown 0%
Source: USW – Late 1st Quarter 2009

15. North American Blast Furnaces - Now
Running (23) EAF
AK Steel Ashland 1
AK Steel Middletown 1
ArcelorMittal Dofasco 2 1
ArcelorMittal Burns Harbor 1
ArcelorMittal Cleveland 1
ArcelorMittal Indiana Harbor E 3
ArcelorMittal Indiana Harbor W 0
Essar Algoma 1
Severstal Dearborn 1
Severstal Sparrows Point 1
Severstal Warren 0
US Steel Fairfield 1
US Steel Gary 4
US Steel Granite City 2
US Steel Great Lakes 1
US Steel Hamilton 1
US Steel Lake Erie 0
US Steel Mon Valley 2

16. Tonnage Being Added
 Since the low of the market in early 2nd Quarter the
domestic mills have brought back or repaired a
number of furnaces.
 Over the past month – August and now September
the integrated mills have or are adding an
additional 29,000 tons of new melt per day.
 The question is once up and running where will all
the steel go?

17. Mini-Mills & Electric Arc Furnaces
 Running at low 40% for
first 4-6 months 2009
 EAF’s running
intermittently with
reduced work weeks
 Now running between
70-100% of capacity
(flat rolled)
 Not automotive

18. FOREIGN STEEL
Too much risk…

19. Foreign Imports All Products
 Foreign Imports 2007 = 33,244,000 short tons
 Foreign Imports 2008 = 31,927,000 short tons
 Foreign Imports 2009 (projected) = 14,000,000
short tons
 At issue – pricing and lead times. U.S. prices have
been lower than foreign offers and with average 3
month lead time risk has been too high for U.S.
companies to purchase large lots of foreign steel.

20. CONCLUSION
More of the same until one leg falls