Steel & Scrap Market Overview

International Ferrous Scrap Trade

02 03 04 05 06 07 08 09 10 11 12 13 140

20

40

60

80

100

120

71.7

05 87.3

81 98.4

84

92.3

71

92.4

37

94.6

91 111.

748

93.6

04

96.0

56

103.

648

104.

500

94.5

76

95.5

00

Mill

ion

Met

ric T

ons

Year

World’s Largest Scrap Importers

3

Turkey

S. Korea

German

yIta

lyIndia

China

Taiwan

Spain

Belgium

USAAfri

ca0

5

10

15

20

2522.4

10.1

5

19.7

9.3

4.4

19.1

8

4.3

201220132014

Scrap Exporting NationsBy Ton (2012-2014)

United States Germany France Netherlands Romania United Kingdom

Belgium Russia Canada Japan 0

5

10

15

20

25

21.4

7.2

4.3

8.6

18.5

6.9

3.7

8.1

14.5

6.5

4.8

6.5

201220132014

Total US Steel Production 2010-2014

2010 2011 2012 2013 201476,000

78,000

80,000

82,000

84,000

86,000

88,000

90,000

Total 2014 US Steel Production88 Million Tons

Hot Iron33%

Scrap58%

Pig Iron5%

Imported DRI/HBI3%

Domestic Substitutes2%

2010-14 Scrap Production/Price Comparison

2010 2011 2012 2013 201462,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

$342

$457$470

$387

$438

$334

Total 2014 US Scrap Market66 Million Tons

US Total Scrap Exports by Country 18.5 million tons 2013

China 5%

Turkey 24%

India4%

South Korea11%Taiwan

17%

All Others 39%

China Turkey IndiaSouth KoreaTaiwan All Others

US TotalScrap Exports by Country 15.4 million tons 2014

TURKEY24%

TAIWAN18%

SOUTH KOREA11%

CANADA7%

EGYPT6%

CHINA5%

MEXICO5%

INDIA4%

THAILAND3%

KUWAIT3%

MALAYSIA3%

INDONESIA2%

VIETNAM2%

PAKISTAN2%

SAUDI ARABIA2%

PERU1%

ECUADOR1%

Comparison of US Scrap Metal Exports by Country (2013 vs 2014)

TURKEY

TAIW

AN

SOUTH

KOREA

CANADAEG

YPT

CHINA

MEXICO

INDIA

THAILA

ND

KUWAIT

MALAYS

IA

INDONESIA

VIETNAM

PAKISTAN

SAUDI A

RABIAPER

U

ECUADOR

ITALY

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

5,230,047

3,022,313

2,538,937

1,828,962

3,616,306

2,682,054

1,704,552

789,804

20132014

CFR East Asia Scrap Price Compared to Iron Ore and Chinese Domestic Scrap Price

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

Sep-11

Dec-11

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

Mar-15

0

100

200

300

400

500

600

700

800

0

50

100

150

200

250

HMS China domestic Delivered mill Jangsu (incl. 17% vat) $/t HMS 1/2 80:20 / East Asia import CFR $/t Iron Ore 62% $/t

Scrap PricesChicago vs. Turkey vs. Fe+Met Index

$0

$100

$200

$300

$400

$500

$600

$/ton

Chicago - Shredded Auto Scrap Turkey HMS Import CFR Fe+Met Index

Turkish Crude Steel Production Capacity (mmt) & Capacity Utilisation (%)

19.8

25.1 27

.7 32.0 34

.1 38.3

42.7 47

.1 49.0

50.4

35.5

72.2

83.4 84.680.5 78.6

68.071.0

76.073.0

70

0.0

20.0

10.0

10.0

30.0

50.0

30.0

40.0

60.0

70.0

80.0

90.0

0.0

20.0

40.0

50.0

60.0

2000 2005 2006 2007 2008 2009

Production

2010

CU %

* estimate14

2011 2012 2013*

Capacity

15

Turkey’s Total Billet and Slab Import (tonnes)

2007 2008 2009 2010 2011 2012 2013 20140

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Slab Billet

Turkey’s Scrap Import Sources in 2014

USA

UNITED KINGDOM

RUSSIAN FE

DERATIO

N

NETHER

LANDS

ROMANIA

BELGIUM

BULGARIA

GERMANY

FRANCE

ESTO

NIA

DENMARK

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

6,296,740

2,418,6842,325,144

1,805,157

5,164,622

2,532,269

2,047,294

1,271,664

3,990,293

2,807,966

2,125,577

1,490,898

Mexican Steel Production (2014 19 Million Tons)

20102011

20122013

2014

0

2

4

6

8

10

12

14

16

18

20

5.15 5 5.3 6

11.7 13 13 12.8 13BOFEAF

Comparison of exports to and from The US and Mexico

2010 2011 2012 2013 20140

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

440,000465,000

230,000

295,000

350,000

665,000

550,000

790,000

637,000

770,000

Mexico to the USUS to Mexico

Map of Mexican Steel Production

Thank you!

Hoffman Iron and Steel