Steel Industry Update #262

8/6/2019 Steel Industry Update #262

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Steel Industry Update/262 May 2011

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

Sources: AISI, SteelBenchmarker *Excl semi-finished imports **Avg price of 4 carbon products #steel scrap-shredded

Table 1: Selected U.S. Steel Industry Data, March & Year-to-Date, 2011

Month of March Year-to-Date

(000 net tons) 2011 2010 % Chg 2011 2010 % Chg

Raw Steel Production ............... 8,121 7,840 3.6% 23,422 21,593 8.5%

Capacity Utilization ................. 75.0 73.2 -- 74.5 69.4 --

Mill Shipments .......................... 8,006 7,647 4.7% 22,502 20,538 9.6%

Exports ..................................... 1,132 1,151 -1.7% 3,142 2,993 5.0%

Total Imports ............................. 2,465 2,054 20.0% 6,427 5,298 21.3%

Finished Steel Imports ............ 1,869 1,651 13.2% 5,007 4,159 20.4%

Apparent Steel Supply*............. 8,743 8,147 7.3% 24,367 21,704 12.3%

Imports as % of Supply* ......... 21.4 20.3 -- 20.5 19.2 --

Average Spot Price** ($/ton)...... $903 $701 28.9% $881 $677 30.2%

Scrap Price# ($/gross ton) .......... $442 $335 31.9% $443 $347 27.7%

Table 2: U.S. Spot Prices for Selected Steel Products, May & Year-to-Date, 2011

Month of May Year-to-Date

($ per net ton) 2011 2010 % Chg 2011 2010 % Chg

Hot Rolled Band..………….. $831 $690 20.4% $839 $648 29.5%

Cold Rolled Coil…......……. 923 800 15.4% 931 753 23.7%

Coiled Plate................…….. 1064 820 29.8% 1,000 760 31.6%

Average Spot Price…….... $939 $770 22.0% $923 $720 28.2%

OCTG Seamless Tube*..…. $1,938 $1,731 12.0% $1,803 $1,645 9.6%

#1 Heavy Melt……………... $391 $311 25.7% $403 $318 26.8%

Scrap Steel-Shredded……. 427 343 24.5% 440 351 25.2%#1 Busheling………………. 461 434 6.2% 469 420 11.8%

Sources: World Steel Dynamics’ SteelBenchmarker, Spears Research; OCTG data is April, 2011



Steel Industry Update/262

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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

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

Graph 1: World Crude Steel Production

Source: World Steel Association, 4/11; in million metric tons




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Table 4: World Apparent Steel Use, Finished Steel (ASU), 2010-2012f

ASU (million metric tonnes) Growth Rates, %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 43.5 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

Developed Economies 373.1 392.0 406.8 24.7 5.1 3.8

Emerging & Dev Economies 910.5 967.2 1,033.8 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

Source: WorldSteel Association, May, 2011

Graph 2: World Steel Capacity Utilization Ratio

Source: World Steel Association, 4/11




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Table 5: U.S. Exports of Ferrous Scrap by Destination, 2011

Country Mar Feb Jan 2011 2010 % Chg

Canada 159 129 112 400 329 21.4%

China 364 380 211 954 910 4.9%

Hong Kong 17 8 7 32 22 47.0%

India 49 32 26 107 299 -64.2%

Japan 43 9 4 56 31 79.3%

Malaysia 118 103 1 222 170 30.5%

Mexico 61 104 26 191 174 9.7%

South Korea 281 338 80 699 853 -18.1%

Taiwan 236 216 253 705 500 40.9%

Thailand 109 73 64 246 190 29.0%

Turkey 318 383 222 923 458 101.7%

Others 135 135 214 485 312 55.4%

Total 1,889 1,910 1,221 5,020 4,249 18.1%

Source: American Metal Market, 5/17/11; in thousand tonnes, 2011

Table 6: Japanese Steel Consumption, by Sector 2001-2011E

Sector 2001 2003 2005 2007 2009 2010e 2011e

Construction 29,151 27,218 27,818 26,229 19,437 18,535 18,784

Shipbuilding 4,196 4,366 5,612 6,072 5,931 5,756 5,678

Auto 11,417 12,803 13,413 14,412 10,406 10,734 9,973

Construction Machinery 4,180 4,934 5,915 6,525 3,658 4,143 4,194

Electrical Machinery 3,798 3,698 3,868 4,052 3,236 3,377 3,264

Secondary Product 3,650 3,496 3,298 3,396 2,432 2,501 1,983

Other 3,576 3,511 3,263 3,296 2,574 2,600 2,548

Total 59,698 60,026 63,187 63,982 47,674 47,646 46,424

% Chg (year-to-year) -5% 1% 5% 1% -34% 0% -3%

Source: Goldman Sachs Global Investment Research, 4/4/11; in 000 tonnes

Table 7: China Target Cuts of Steel & Other Capacity, 2011

Industry Capacity Closure Target

Iron smelting 26.5

Steel smelting 26.3

Coking coal 18.7

Ferroalloy 1.9

Calcium carbide 1.4

Electrolytic aluminium 0.6

Copper smelting 0.3

Lead smelting 0.6

Zinc smelting 0.3

Cement 133.6

Paper 7.5

Source: SteelGuru, May 12, 2011; in million tonnes




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Table 8: U.S. Steel Results from Operations, 1st Quarter 2011

Earnings Highlights Q1 '11 Q4 '10 Q1 '10

Net Sales $4,864 $4,300 $3,896

Flat rolled -57 -156 -80

US Steel Europe -5 -39 12

Tubular 30 96 45

Other Businesses 12 7 10

Retiree benefit expenses -71 -43 -44

Other items not allocated to segments - 21 -

Loss from operations -91 -114 -57

Net interest and other financial costs -21 94 108

Income tax provision (benefit) 16 41 -7

Net loss attributable to US Steel -86 -249 -157

Per basic share -0.6 -1.74 -1.1

Per diluted share -0.6 -1.74 -1.1

Source: SteelGuru, April 27, 2011; in US$ millions, except share amounts

Table 9: ArcelorMittal Results From Worldwide Operations, 1st Quarter 2011US$ million (unless otherwise shown) 1Q ‘11 4Q ‘10 3Q ‘10 2Q ‘10 1Q ‘10

Sales $22,184 $20,699 $19,744 $20,154 $17,428

EBITDA 2,582 1,853 2,162 2,809 1,701

Operating income 1,431 397 1,028 1,603 577

Income/(loss) from discontinued operations 461 -547 38 127 52

Net income/(loss) 1,069 -780 1,350 1,704 640

Basic earnings/(loss) per share (USD) 0.69 -0.51 0.89 1.13 0.42

Continuing Operations

Own iron ore production (Mt) 11.8 12.6 13 12.8 10.6

Iron ore shipped* (Mt) 5.9 6.7 6.1 6.9 5.4

Crude steel production (Mt) 23.5 21.6 22.2 24.3 22.5

Steel shipments (Mt) 22 21.1 20.5 22.3 21

EBITDA/tonne (US$/t) 118 88 105 126 81

Operating income/tonne (US$/t) 65 19 50 72 27

Source: SteelGuru, May 12, 2011; *internally & externally at market price




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

Imports: Country of Origin Month of March Year-to-Date

(000 net tons) 2011 2010 % Chg 2011 2010 % Chg

Canada……………………….. 563 685 -17.8% 1,436 1,815 -20.9%Mexico………………………… 352 256 37.5% 877 770 13.9%

Other W. Hemisphere……….. 170 130 30.8% 630 218 189.0%

European Union……………… 435 376 15.7% 1,035 840 23.2%

Other Europe*……………….. 237 118 100.8% 535 338 58.3%

Asia……………………………. 645 418 54.3% 1,674 1,110 50.8%

Oceania………………………. 43 66 -34.8% 193 195 -1.0%

Africa………………………….. 20 5 300.0% 47 11 327.3%

Total 2,465 2,054 20.0% 6,427 5,299 21.3%

Imports: Customs District

Atlantic Coast………………… 369 329 12.2% 849 722 17.6%

Gulf Coast/Mexican Border… 948 631 50.2% 2,752 1,609 71.0%

Pacific Coast…………………. 524 366 43.2% 1,225 1,017 20.5%

Gr Lakes/Canadian Border…. 602 717 -16.0% 1,545 1,896 -18.5%

Off Shore……………………… 22 12 83.3% 55 55 0.0%

Source: AISI; *includes Russia

Update #262

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Locker Associates Steel Track: Spot Prices

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Locker Associates Steel Track: Performance

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LOCKER ASSOCIATES is a business-consulting firm that specializes in enhancing thecompetitiveness of businesses and industries on behalf of unions, corporate and governmentclients. By combining expert business and financial analysis with a sensitivity to labor issues,the firm is uniquely qualified to help clients manage change by:

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Steel Industry Update #262

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