Steel Industry Update #270

8/3/2019 Steel Industry Update #270

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Email: [email protected] | Website: www.lockerassociates.com

Steel Industry Update/270 January 2012Locker 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, 2011

Month of November Year-to-Date

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

Raw Steel Production ............... 7,752 7,074 9.6% 86,987 81,402 6.9%

Capacity Utilization ................. 73.0 68.3 -- 74.4 70.5 --

Mill Shipments .......................... 7,405 6,549 13.1% 83,780 76,333 9.8%

Exports ..................................... 1,230 1,017 20.9% 12,253 11,076 10.6%

Total Imports............................. 2,121 1,786 18.8% 26,451 22,058 19.9%

Finished Steel Imports ............ 1,651 1,497 10.3% 20,258 17,352 16.7%

Apparent Steel Supply*............. 7,825 7,029 11.3% 91,784 82,609 11.1%

Imports as % of Supply*.......... 21.1 21.3 -- 22.1 21.0 --

Average Spot Price** ($/ton) ...... $778 $660 17.9% $874 $700 24.8%

Scrap Price# ($/gross ton)........... $405 $354 14.4% $437 $343 27.4%

Sources: AISI, SteelBenchmarker *Excl semi-finished imports **Avg price of 3 carbon products #shredded scrap

Table 2: U.S. Spot Prices for Selected Steel Products, January & Year-to-Date, 2012

Month of January Year-to-Date

($ per net ton) 2012 2011 % Chg 2012 2011 % Chg

Hot Rolled Band.... $728 $772 -5.7% $728 $772 -5.7%

Cold Rolled Coil....... 830 886 -6.3% 830 886 -6.3%

Coiled Plate.................. 950 890 6.7% 950 890 6.7%

Average Spot Price.... $836 $849 -1.6% $836 $849 -1.6%

OCTG (J55-SML)... $2,040 $1,751 16.5% $1,930 $1,748 10.4%

#1 Heavy Melt... $420 $425 -1.2% $420 $425 -1.2%

Shredded Scrap... 466 455 2.4% 466 440 5.9%#1 Busheling. 504 477 5.7% 504 466 8.2%

Sources: World Steel Dynamics, Spears & Associates, 1/12; OCTG is December, 2011 data


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Steel Industry Update/270

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Table 3: World Crude Steel Production, December & Year-to-Date, 2011

(000 metric tons) Month of December Year-to-Date

Region 2011 2010 % Chg 2011 2010 % Chg

European Union. 12,541 12,648 -1.0% 177,431 172,625 3.0%

Other Europe. 3,345 2,996 12.0% 37,181 31,895 17.0%

C.I.S. 9,318 9,210 1.0% 112,434 108,080 4.0%

North America 10,134 9,248 10.0% 118,927 111,406 7.0%South America... 3,795 3,441 10.0% 48,357 43,872 10.0%

Africa... 1,202 1,180 2.0% 13,966 16,261 -14.0%

Middle East. 1,718 1,658 4.0% 20,325 18,980 7.0%

Asia.. 74,581 74,039 1.0% 954,190 884,092 8.0%

Oceania...... 424 686 -38.0% 7,248 8,149 -11.0%

Total 117,058 115,105 2.0% 1,490,060 1,395,359 7.0%

Country

China....... 52,164 51,826 1.0% 683,265 627,506 9.0%

Japan... 8,397 9,172 -8.0% 107,595 109,599 -2.0%

United States.. 7,334 6,648 10.0% 86,247 80,495 7.0%

India(e). 6,150 5,743 7.0% 72,200 68,321 6.0%South Korea 5,950 5,548 7.0% 68,471 58,912 16.0%

Russia..... 5,886 5,711 3.0% 68,743 66,942 3.0%

Turkey.. 3,112 2,792 11.0% 34,103 29,143 17.0%

Germany... 3,025 3,177 -5.0% 44,288 43,830 1.0%

Ukraine.... 2,804 2,960 -5.0% 35,332 33,432 6.0%

Brazil.... 2,688 2,427 11.0% 35,162 32,926 7.0%

All Others.... 19,548 19,101 2.3% 254,654 244,253 4.3%

Source: World Steel Association, 1/12; e=estimate

Source: World Steel Association, 1/12; in million metric tons

Graph 1: World Crude Steel Production, November 2011


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Table 4: U.S. Steel Imports, November & YTD, 2011

(in 000 tons) Nov '11 Nov '10 % Chg YTD 11 YTD 10 % Chg

Japan 154 103 49.8% 1,844 1,338 37.8%EU 474 347 36.6% 4,055 3,937 3.0%

Canada 419 464 -9.7% 5,629 6,235 -9.7%

Brazil 183 124 47.5% 2,721 804 238.4%

Korea 193 153 26.0% 2,634 1,846 42.7%

Mexico 208 155 34.4% 2,700 2,605 3.7%

Russia 83 69 19.8% 1,323 1,306 1.3%

China 84 70 19.6% 1,152 797 44.5%

Australia 34 59 -42.1% 803 517 55.4%

South Africa 4 17 -74.1% 131 103 27.6%

Indonesia 6 2 -58.2% 50 29 70.7%

Turkey 24 37 -34.5% 651 561 16.1%

Ukraine 14 15 -4.5% 333 118 182.5%India 76 46 65.3% 745 749 -0.5%

Others 151 125 20.8% 1,667 1,113 49.8%

Total 2,107 1,786 18.0% 26,438 22,058 19.9%

Source: World Steel Associates, 1/12

Source: World Steel Association, 1/12

Graph 2: World Steel Capacity Utilization Ratio, November 2011


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Table 6: MEPS Global Crude Steel Production Forecast, 2012f

Region 2011(e) 2012(f)

European Union 177.7 184.5

Other Europe/CIS 151.4 159.9

North America 119.1 123.0

South America 48.7 51.5

Africa/Middle East 36.7 39.8

China 731.0 800.0

Japan 108.0 110.5

Other Asia/Oceania 192.1 200.9

World Total 1,564.7 1,670.0

Source: MEPS -- World Steel Outlook, 1/25/12; in million tonnes

Table 5: U.S. Steel Exports, November & YTD, 2011

(in 000 tons) Nov '11 Nov '10 % Chg YTD 11 YTD 10 % Chg

Canada 583,731 505,989 15.4% 6,157,896 6,209,865 -0.8%

Mexico 310,546 249,476 24.5% 3,124,611 2,384,635 31.0%

EU 90,022 63,276 42.3% 549,338 419,539 30.9%

Russia 609 701 -13.1% 7,934 8,824 -10.1%Turkey 603 751 -19.7% 30,217 19,363 56.1%

Brazil 26,477 20,563 28.8% 144,327 149,285 -3.3%

Venezuela 18,839 2,339 705.4% 75,296 59,989 25.5%

Ecuador 5,484 18,529 -70.4% 44,155 56,520 -21.9%

Argentina 805 1,877 -57.1% 13,597 14,156 -3.9%

Colombia 16,365 7,247 125.8% 110,341 103,234 6.9%

Trin & Tobago 246 372 -33.9% 16,789 15,634 7.4%

Peru 8,315 4,972 67.2% 113,200 92,436 22.5%

Chile 6,399 1,151 456.0% 32,850 38,354 -14.4%

Dom Republic 1,738 5,114 -66.0% 189,643 241,923 -21.6%

Others 160,241 134,454 19.2% 1,643,209 1,262,304 30.2%

Total 1,230,420 1,016,811 21.0% 12,253,403 11,076,061 10.6%Source: AIIS, 1/12

Steel Industry Update(ISSN 1063-4339) published 12 times/year by Locker Associates, Inc. Copyright 2012 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.


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Table 7: Turkish Steel Billet Exports, YTD 2011

Country 2011 2010

Saudi Arabia 707,429 718,676

Egypt 424,009 282,982

Syria 183,100 59,617UAE 161,469 836,729

Morocco 130,518 121,906

Italy 109,888 51,128

Bangladesh 91,670 76,534

Peru 54,375 217

Tunisia 49,821 89,750

Sudan 31,248 12,550

Source: Steelorbis.com, 1/6/12; in tonnes

Table 8: Indias Steel Production, November 2011

Producer Nov'11 Nov'10 % Chg Oct'11 MoM

SAIL 669 765 -12.5% 541 23.7%

RINL 241 194 24.2% 267 -9.7%

TATA Steel 443 443 0.0% 454 -2.4%

Total of 3 1,353 1,402 -3.5% 1,262 7.2%

Other Major Producers 1,299 1,165 11.5% 1,853 -29.9%Total for Big Ones 2,652 2,567 3.3% 3,115 -14.9%

Source: JPC 1/12; in 000 tonnes

Table 9: Severstal Financial Results, 3rd quarter 2011

(in US$ millions) Q3'11 Q2'11 % Chg 9M'11 9M'101 % Chg

Revenue $4,772 $4,383 8.9% $12,882 $9,847 30.8%

EBITDA 1,130 1,109 1.9% 3,173 2,364 34.2%

Profit from operations 922 890 3.6% 2,549 1,795 42.0%

Net profit/(loss) 429 602 -28.7% 1,550 -225 n/a

Source: Steel Guru, 12/29/11


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Table 12: US Scrap Industry Economic and Job Impact, by State, 2011

Source: Economic Impact Study US-based Scrap Recycling Industry Report 2011 by John Dunham & Associates

Table 10: US Scrap Industry Jobs and Generated Revenue, 2011

($ millions) Direct Supplier Induced Total

Jobs 137,640 132,490 189,010 459,140

Wages $9.2 $7.9 $9.1 $26.1

Econ Impact ($ mil) $32.8 $27.9 $29.9 $90.6

Source: Economic Impact Study US-based Scrap Recycling Industry Report 2011 by JohnDunham & Associates

Table 11: Economic Impact of US Scrap Recycling Exports, 2011

($ billions) Direct Supplier Induced Total

Jobs 51,768 44,239 65,924 161,931

Wages $3.3 $2.6 $3.2 $9.1

Econ Impact ($ bil) $11.0 $9.3 $10.4 $30.7

Source: Economic Impact Study US-based Scrap Recycling Industry Report 2011 by JohnDunham & Associates


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Table 12: World Production of Iron Ore, 2008-2010

Country (in mil tonnes) 2008 2009 2010

Sweden 23.8 17.7 25.3

Europe (excl CIS) 28.5 21.6 31.8

CIS 191.4 177.1 202.5

Europe Total 219.9 198.7 234.3Canada 33.4 33.0 37.5

USA 53.6 26.7 49.5

Brazil 346.0 305.0 375.0

Venezuela 21.5 14.9 14.0

Americas Total 482.9 407.3 509.2

Mauritania 11.2 11.4 11.3

South Africa 49.0 55.4 56.9

Africa Total 63.3 70.1 70.8

India 223.0 218.6 212.0

Asia (excl China) 262.7 259.2 262.6

China 301.2 222.7 315.4

Asia Total 563.9 481.9 578.0

Australia 349.8 394.1 432.8

Oceania Total 351.2 396.2 434.9

World Total 1,681.8 1,554.1 1,827.6

Source: UNCTAD 2011 as published in NSMR Bergsmannen 7/11

Table 13: Corporate Control in Iron Ore Mining, 2010

Entity CountryControlled

World Prod* Share %

Vale (Cia Vale do Rio Doce) Brazil 309.0 16.9%

Rio Tinto UK 181.0 9.9%

BHP Billiton Australia 149.0 8.2%

State of India India 56.1 3.1%

ArcelorMittal Luxemburg 49.7 2.7%

Anglo American UK 46.2 2.4%

Fortesque Metal Group Australia 38.8 2.1%

Cliffs Natural Resources US 37.4 2.0%

Metalloinvest Russia 37.0 2.0%

System Capital Management Ukraine 31.2 1.7%

Total of 10 Largest 935.0 51.0%

World Total 1,827.0 100.0%

Source: Raw Materials Data as published in NSMR Bergsmannen 7/11; *in million tonnes


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

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

(000 net tons) 2011 2010 % Chg 2011 2010 % ChgCanada.. 419 464 -9.7% 5,629 6,235 -9.7%

Mexico 208 155 34.2% 2,701 2,605 3.7%

Other W. Hemisphere.. 295 156 89.1% 3,138 1,066 194.4%

European Union 409 347 17.9% 3,990 3,937 1.3%

Other Europe*.. 131 129 1.6% 2,388 2,051 16.4%

Asia. 611 447 36.7% 7,542 5,444 38.5%

Oceania. 42 72 -41.7% 923 609 51.6%Africa.. 5 17 -70.6% 140 110 27.3%

Total 2,121 1,786 18.8% 26,451 22,058 19.9%

Imports: Customs District

Atlantic Coast 173 215 -19.5% 2,874 2,733 5.2%

Gulf Coast/Mexican Border 1,031 716 44.0% 11,895 7,634 55.8%

Pacific Coast. 295 234 26.1% 4,641 4,111 12.9%

Gr Lakes/Canadian Border. 612 604 1.3% 6,859 7,388 -7.2%

Off Shore 10 18 -44.4% 182 191 -4.7%

Source: AISI; *includes Russia

Update #270

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Locker Associates Steel Track: Spot Prices

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2010 6.9 6.9 7.8 7.7 8.0 7.8 7.5 7.3 7.3 7.2 7.1

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Locker Associates Steel Track: Performance

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2010 64% 71%73%74% 75%75%70%68%70% 67% 68%

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Email: [email protected] | Website: www.lockerassociates.com

Locker Associates, Inc.

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:

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 afirms market, financial and operating performance on behalf of a cooperative labor-management effort. Locker Associates also produces a widely read monthly newsletter, SteelIndustry Updatethat circulates throughout the U.S. and Canadian steel industry.

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IBT-Supervalu (2010): assist union and management to identify major operational problemsimpacting warehouse performance and provide recommendations for joint improvement

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