Steel Industry Update/255 October 2010

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

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

Month of August Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Raw Steel Production ............ 7,296 6,115 19.3% 59,835 38,422 55.7%
Capacity Utilization .............. 68.1 57.7 -- 71.3 46.2 --
Mill Shipments ....................... 7,224 5,570 29.7% 56,014 36,998 51.4%
Exports .................................. 957 800 19.6% 8,076 5,445 48.3%
Total Imports ......................... 2,176 975 123.2% 16,307 10,592 54.0%
Finished Steel Imports ......... 1,689 820 106.0% 12,681 9,767 29.8%
Apparent Steel Supply*.......... 7,956 5,590 42.3% 60,619 41,321 46.7%
Imports as % of Supply* ...... 21.2 14.7 -- 20.9 23.6 --
Average Spot Price** ($/ton) ... 686 585 17.3% 693 600 15.5%
Scrap Price# ($/gross ton) ....... 340 269 26.4% 340 212 60.6%
Source: AISI, Global Insight *Excl semi-finished imports **Avg price of 8 carbon products #shredded bundles

Table 2: U.S. Spot Prices for Selected Steel Products, September & Year-to-Date
Month of September Year-To-Date
($ per net ton) 2010 2009 % Chg 2010 2009 % Chg
Hot Rolled Sheet………….. 581 535 8.6% 615 457 34.4%
Cold Rolled Sheet......…….. 688 625 10.1% 724 546 32.6%
HD Galvanized Sheet..…… 739 630 17.3% 772 604 27.9%
Coiled Plate................…….. 649 581 11.7% 641 614 4.4%
Cold-Finished Bar (SBQ)….. 907 790 14.8% 841 801 4.9%
Wide-Flange Beams....…… 740 633 16.9% 721 726 -0.6%
Wire Rod/Low Carbon.…… 666 532 25.2% 658 552 19.1%
Rebar.........................…….. 581 517 12.4% 572 503 13.7%
Average Spot Price+…….. 694 605 14.6% 693 600 15.4%
OCTG Seamless Tube…… 1,810 1,461 23.9% 1,742 1,767 -1.4%
Scrap ($/gross ton)*....………. 365 290 25.9% 343 221 55.5%
Sources: Global Insight, Spears Research +Comp price of 8 carbon products *shredded bundles
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Table 3: World Crude Steel Production by Region, August & Year-To-Date

(000 metric tons) Month of August Year-to-Date
Region 2010 2009 % Chg 2010 2009 % Chg
European Union……. 12,137 10,513 15.4 115,634 84,086 37.5
Other Europe………. 2,843 2,621 8.5 21,009 18,503 13.5
C.I.S…………………. 8,710 9,277 -6.1 70,414 61,992 13.6
North America……… 9,353 7,490 24.9 74,828 49,773 50.3
South America……... 3,746 3,688 1.6 28,550 23,081 23.7
Africa………………... 1,457 1,319 10.4 10,950 9,686 13.1
Middle East…………. 1,560 1,478 5.6 12,440 11,428 8.9
Asia………………….. 72,322 71,392 1.3 592,706 502,947 17.8
Oceania………...…... 744 573 29.8 5,454 3,320 64.3
Total………………… 112,871 108,351 4.2 931,984 764,814 21.9
Countries
China………………… 51,636 52,231 -1.1% 425,774 369,226 15.3%
Japan………………... 8,899 8,307 7.1% 72,700 52,657 38.1%
United States……….. 6,861 5,548 23.7% 54,523 34,856 56.4%
India.………………… 5,700 5,355 6.4% 44,568 41,161 8.3%
Russia………..……… 5,600 5,958 -6.0% 43,880 38,011 15.4%
South Korea..………. 4,517 4,246 6.4% 37,455 30,468 22.9%
Germany.…………… 3,453 2,950 17.1% 29,670 19,476 52.3%
Ukraine..…………….. 2,400 2,667 -10.0% 21,164 18,944 11.7%
All Others.…………... 23,805 21,089 12.9% 202,250 160,015 26.4%
Source: World Steel Association, 10/10

Table 4: World Short-range Outlook for Finished Steel, 2009-2011

(in million tonnes) Apparent Use Growth Rate
Region 2009 2010 2011 2009 2010 2011
European Union………. 117.2 139.4 147.4 -35.7% 18.9% 5.7%
Other Europe…………. 23.9 28.7 31.4 -17.3% 20.1% 9.5%
C.I.S……………………. 35.8 45.3 50.3 -28.3% 26.5% 11.1%
NAFTA………………… 82.7 108.5 118.0 -36.2% 31.3% 8.7%
Cent & S America…….. 34.1 43.6 47.6 -23.6% 28.2% 9.1%
Africa………………....... 26.6 28.0 30.0 9.7% 5.1% 7.1%
Middle East……………. 42.2 45.6 47.6 -7.5% 7.9% 4.4%
Asia & Oceania……….. 762.8 883.1 867.4 8.9% 9.2% 4.1%
World Total…………… 1,125.3 1,272.2 1,339.7 -6.6% 13.1% 5.3%
Dev Economies………. 291.3 358.8 375.3 -33.5% 23.2% 4.6%
Emerging & Dev Econ.. 834.1 913.4 964.4 8.7% 9.5% 5.6%
China…………………. 542.4 578.7 599.0 24.8% 6.7% 3.5%
BRIC………………….. 641.0 696.0 730.1 17.5% 8.6% 4.9%
MENA………..……….. 59.0 62.4 65.7 0.4% 5.9% 5.3%
World, excl China…….. 582.9 693.5 740.7 -24.4% 19.0% 6.8%
Source: World Steel Association, 10/10

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Table 5: US Steel Exports by Country, July 2010

Country July ‘10 June ‘10 % Chg July ‘09 % Chg

Canada 485,759 569,979 -14.8% 375,369 29.4%
Mexico 196,358 225,326 -12.9% 164,777 19.2%
EU 32,800 45,450 -27.8% 18,670 75.7%
Russia 1,092 214 410.3% 1,059 3.1%
Turkey 1,848 2,292 -19.4% 1,747 5.8%
Brazil 26,765 9,533 180.8% 5,971 348.2%
Venezuela 13,441 5,007 168.4% 4,499 198.8%
Ecuador 1,545 12,621 -87.8% 862 79.2%
Argentina 1,087 377 188.3% 193 463.2%
Colombia 7,769 16,817 -53.8% 3,872 100.6%
Trinidad & Tobago 1,347 2,776 -51.5% 1,525 -11.7%
Peru 19,910 11,664 70.7% 2,006 892.5%
Chile 2,604 3,897 -33.2% 647 302.5%
Dom Republic 784 28,267 -97.2% 571 37.3%
Panama 6,232 12,253 -49.1% 1,063 486.3%
Other W. Hemis 17,032 8,633 97.3% 25,142 -32.3%
Others 80,093 92,697 146.9% 99,346 285.5%
Total 896,466 1,047,803 -14.4% 707,319 26.7%
Source: MySteel.net, 9/28/10; in tons

Table 6: US Steel Exports by Region, Year-to-Date 2010

Region Y-T-D, 2010 Y-T-D, 2009 % Chg
NAFTA 5,551,459 3,424,113 62.1%
Non NAFTA* 702,468 385,368 82.3%
Total Europe 110,301 42,502 159.5%
Africa 51,073 142,082 -64.1%
Total Asia 509,017 482,525 5.5%
Total Exports 7,118,624 4,643,858 53.3%
Source: MySteel.net, 9/28/10; in tons; *Western Hemisphere

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Table 7: China Iron Ore imports by Country, August 2010

Country Aug, ‘10 Jan-Aug, ‘10 Share
Australia 19,394,788 170,519,636 42.1%
Brazil 10,003,445 79,881,332 19.7%
India 5,084,502 76,455,168 18.9%
South Africa 2,041,560 20,425,331 5.0%
Iran 1,072,054 9,054,967 2.2%
Ukraine 601,271 7,067,990 1.7%
Indonesia 467,462 5,127,643 1.3%
Peru 770,128 4,719,909 1.2%
Chile 527,737 4,197,530 1.0%
Kazakhstan 479,639 4,161,529 1.0%
Russian Federation 728,667 3,349,430 0.8%
Venezuela 797,164 2,761,548 0.7%
Mauritania 277,586 2,290,932 0.6%
Mexico 229,821 2,092,522 0.5%
Other 1,567,257 10,970,546 2.4%
Total 44,607,849 405,036,927 100.0%
Source: MySteel.net, 10/10; in tonnes

Table 8: South America Crude Steel Output, August 2010

Country Aug '10 Aug '09 % Chg YTD '10 YTD '09 % Chg
Argentina 473 371 27.5% 3,359 2,386 40.6%
Brazil 2,886 2,676 7.8% 22,119 15,738 40.5%
Chile 50 135 -62.9% 454 749 -39.4%
Colombia 100 95 5.7% 762 713 6.8%
Ecuador 30 26 17.6% 220 173 27.4%
Paraguay 6 5 13.2% 48 34 42.9%
Peru 75 12 4.3% 575 434 32.5%
Uruguay 6 6 9.1% 41 32 30.2%
Venezuela 120 303 -60.4% 972 2,824 -65.6%
Total S. America 3,746 3,688 1.6% 28,550 23,081 23.7%
Sources: Worldsteel.org, 9/28/10; in tonnes

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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

Beam
650
500 Wire Rod
HR Sheet 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 89 93 97 04 05 07 08 09 O N D J F M A M J J A S

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 2010 64% 71% 73% 74% 75% 75% 72% 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 Foreign Trade, August & Year-to-Date

Imports: Country of Origin Month of August Year-to-Date
(000 net tons) 2010 2009 % Chg 2010 2009 % Chg
Canada……………………….. 579 312 85.6% 4,730 2,355 100.8%
Mexico………………………… 280 117 139.3% 1,998 1,175 70.0%
Other W. Hemisphere……….. 129 122 5.7% 725 524 38.4%
European Union……………… 366 129 183.7% 2,837 1,617 75.5%
Other Europe*……………….. 153 60 155.0% 1,556 810 92.1%
Asia……………………………. 648 217 198.6% 3,940 3,893 1.2%
Oceania………………………. 6 18 -66.7% 450 193 133.2%
Africa………………………….. 15 0 -100.0% 72 23 213.0%
Total 2,176 975 123.2% 16,307 10,590 54.0%
Imports: Custom District
Atlantic Coast………………… 199 134 48.5% 2,132 1,366 56.1%
Gulf Coast/Mexican Border… 814 237 243.5% 5,407 4,782 13.1%
Pacific Coast…………………. 443 213 108.0% 3,147 1,589 98.0%
Gr Lakes/Canadian Border…. 703 374 88.0% 5,475 2,733 100.3%
Off Shore……………………… 16 18 -11.1% 145 121 19.8%
Source: AISI; * includes Russia
Update #255
 Steel Industry Update/255

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
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Congress Financial IPSCO
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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