8/6/2019 BS SteelMng Cement St Jul06
1/96
Bear Stearns does and seeks to do business with companies covered in its research reports. As a result, investors shouldbe aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Customers of BearStearns in the United States can receive independent, third-party research on the company or companies covered in thisreport, at no cost to them, where such research is available. Customers can access this independent research atwww.bearstearns.com/independentresearch or can call (800) 517-2327 to request a copy of this research. Investors shouldconsider this report as only a single factor in making their investment decision.
PLEASE SEE THE ADDENDUM AT THE END OF THIS REPORT FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATION.
Emerging Market
Equity Research
JULY 25,2006
GEM Steel, Mining & CementMonthly Review & OutlookCVRD, Mittal, PCU, Kazakhmys and Ternium Top Picks
TOP PICKS.Our list (ordered by market cap) includes: CVRD leading global share,high FCF, earnings visibility, strong volume growth/expansions; Mittal size/scale/diversification advantages, business momentum, upstream integration,
upside from M&A; PCU robust copper fundamentals, high dividends, scarcityvalue, M&A target; Kazakhmys (see below); and Ternium high FCF, low-costproducer, strong management, limited competition. All are rated Outperform.
SECTORSPOTLIGHT GLOBAL STEEL/IRON. Global steel output surged in June,with China up over 18% from a year ago to a new record, and ex-China showing itshighest growth rate since December 2002. Production gains result from increasedcapacity (mainly China), solid demand, inventory restocking, and notably the strongincentive from higher prices. High Chinese output remains a key risk factor forprices, and we think the discipline of global steel producers may again be challenged.While price momentum remains very strong in the second and third quarter, it looksincreasingly inevitable that some pricing gains will be given back later in the year.
COMPANY SPOTLIGHT KAZAKHMYS. On July 18, we initiated coverage ofKazakhmys, the worlds tenth-largest copper producer with an Outperform rating. Weare bullish on tight copper fundamentals (primarily on the supply side) and note themany company positives, including substantial reserves/growing output, low-costproduction, strong free cash flow, lack of price hedges, scarcity value for pure-playcopper equities, and solid positioning to be a regional consolidator.
VALUATION UPDATE.Steel stocks in our selected universe gained 2% on average inthe 30 days ended July 24; mining rose 8%, and cement/construction was up 4%.Trading volume fell 26% month on month, but is up 92% year on year. The averageEV/EBITDA was 10 bps lower at 5.0x.
Research Analysts:Daniel C. Altman, CFA Marina Rohe Paul J. Rosenberg(212) 272-5929 (212) 272-8578 (212) [email protected] [email protected] [email protected]
8/6/2019 BS SteelMng Cement St Jul06
2/96
Page 2 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Table of Contents Page
Top Picks Update...............................................................................................................................................................3
Sector Spotlight Global Steel/Iron: Rise Cause for Concern? .....................................................................................4
Company Spotlight Kazakhmys: Initiating Coverage with Outperform Rating...........................................................6
Sector Valuation Monthly Highlights...........................................................................................................................9
Sector Liquidity Monthly Highlights..........................................................................................................................10
Stock Performance Monthly Highlights .....................................................................................................................11
Selected Global Steel, Mining & Cement Comparable Sheet .........................................................................................12Global Steel & Mining Comparables...............................................................................................................................16
Latin/Global Steel Stock Charts ......................................................................................................................................17
Bloomberg Index Charts..................................................................................................................................................19
Latin/Global Mining Stock Charts...................................................................................................................................20
Latin Cement & Construction Stock Charts ....................................................................................................................23
ADR Short Interest ..........................................................................................................................................................24
Stock Performance vs. Domestic Index...........................................................................................................................26
Stock Performance vs. Bloomberg Industry Index..........................................................................................................29
Stock Performance vs. Domestic Currency .....................................................................................................................32
Stock Performance vs. Underlying Commodity..............................................................................................................35
Correlation Charts............................................................................................................................................................38
Holding Company Discounts & Spreads.........................................................................................................................41
Appendix I Monthly Industry Data
Industrial Production, by Country ..................................................................................................................................45
Leading Economic Indicators.........................................................................................................................................46
Global Steel Production...................................................................................................................................................47
U.S. Steel Production & Utilization ................................................................................................................................50
Brazilian Steel Production & Shipments ........................................................................................................................51
Global Steel Sheet Quarterly Production and Consumption...........................................................................................52
Global Steel Sheet Quarterly Net Exports ......................................................................................................................53
China Key Industry Trade Statistics............................................................................................................................54
China Import/Export Statistics .......................................................................................................................................56
Global/U.S. Steel Pricing................................................................................................................................................57Latin American Steel Pricing..........................................................................................................................................60
Brazilian Domestic Steel Pricing....................................................................................................................................61
Domestic Chinese Steel Pricing......................................................................................................................................62
Monthly U.S. Steel Imports: Value and Prices by Country and Product........................................................................63
Monthly U.S. Steel Exports: Value and Prices by Product ............................................................................................66
Global Commodity Prices and Exchanges Stocks..........................................................................................................67
China Raw Material & CVRD Iron Ore Prices ..............................................................................................................70
Natural Gas Prices ..........................................................................................................................................................70
Freight Rates...................................................................................................................................................................71
Chilean Copper and Molybdenum Production ...............................................................................................................72
Alumina Contract and Spot Prices..................................................................................................................................72
Commodity Price Assumptions Table ............................................................................................................................72Monthly Auto Production & Sales: South Korea/Brazil.................................................................................................73
Global Rig Count............................................................................................................................................................74
Rig Counts vs. WTI Price & Tenaris Top 4 Markets .....................................................................................................74
Selected OCTG Prices ....................................................................................................................................................74
U.S. Construction Spending by Sector/Seasonally Adjusted..........................................................................................75
Appendix II GEM WatchHighlights
Steel & Mining ...............................................................................................................................................................79
All pricing is as of the market close on July 24, 2006, unless otherwise indicated.
8/6/2019 BS SteelMng Cement St Jul06
3/96
BEAR, STEARNS & CO. INC. Page 3
Top Picks Update
We like CVRD, given its leading global market share, high FCF, good earnings
visibility/defensiveness, and strong volume growth/expansions. We see upside in
Mittal due to size/scale/diversification advantages, business momentum,
unparalleled global market reach, strong upstream integration, upside from M&A,
and turnaround potential/underutilized capacity. Despite near-term concerns, we
favor Southern Copper due to strong copper fundamentals, high dividend yield,
scarcity value, and its status as a potential M&A target. We also like Kazakhmys
due to the tight copper market, substantial copper reserves/growing output, low-cost
production, strong free cash flow, lack of price hedges, and solid positioning to be a
regional consolidator. We favorTernium as well, which offers high FCF, low-cost
production, experienced management, and limited domestic competition.
Exhibit 1. GEM Steel, Mining & Cement Sector: Top Picks (by Market Cap.) Key Investment Positives and Key Risk Factors
Company Ticker Rating/Target* Key Investment Positives Risks to Our Target Price
CVRD RIO Outperform ** Strong Volume Growth/Expansions ** Profit Taking for Commodity Equities
$31.50 ** High FCF/Margins ** Volume/Pricing Upside Dependent on China
** Earnings Visibility/Defensiveness ** Acquisitions
Mittal MT Outperform ** Size/Scale/Diversification/Market Reach ** Generous Acquisition Price/Terms for Arcelor
$45.00 ** Momentum in Results ** Integration Issues/Execution Risk
** Upside from M&A, Upstream Integration ** Steel Prices Look to Have Peaked
S. Copper PCU Outperform ** Robust Outlook for Copper Fundamentals ** Significant Volume Losses Due to Ongoing Strikes
$125.00 ** Stocks Pricing In Lower Than Expected Copper Prices ** 2Q Hedge Loss Could Exceed US$250 mn
** 10+% Dividend Yields, Potential M&A target ** Taxation Risk in Peru
Kazakhmys KAZ Outperform ** Substantial Reserves/Growing Output ** Kazakhstan Country Risk
$27.00 ** Low-Cost Production/Strong FCF ** Potential Conflicts of Interest for Management
** Positioned to Be Regional Consolidator ** Complex and Escalating Tax Program
Ternium TX Outperform ** High FCF/Low Cost Production ** Hugo Chavez Risk in Venezuela
$33.00 ** Experienced, Value-Added Management ** Low Float/Liquidity
** Limited Domestic Competition/High Mexican Prices ** Significant Non-Ownership of Assets
* Year-End 2006. Valuation methodology based on either P/E or EV/EBITDA and Sum-of-the-Parts.Source: Bear, Stearns & Co. Inc. estimates. Sector Rating: Market Weight.
We continue to see upside forUsiminas (Outperform; price target: US$43) due to its
high margins, dividends and FCF, its low valuation, and its exposure to the high-
priced Brazilian markets. We are positive on Buenaventura (Outperform; price
target: US$35) due to its attractive absolute and relative valuation, our positive
outlook for gold, and the underestimated contribution of the Cerro Verde copper
mine. We continue to like Posco (Outperform; price target: US$78), given its high
FCF, absolute/relative valuation, leading technology, access to the high-end steelmarket in China, and size/scale. We also like Bradespar (Outperform; price target:
US$41)due to the expected appreciation of CVRD, an excessive holding company
discount, transparent valuation and low reinvestment risk. Risks to our target prices
include lower commodity prices, weaker global demand, and financial-market
uncertainty.
TOP PICKS:CVRD,
MITTAL,PCU,
KAZAKHMYS,
TERNIUM
8/6/2019 BS SteelMng Cement St Jul06
4/96
Page 4 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Sector Spotlight Global Steel/Iron: Rise Cause for Concern?
Key Data Highlights from IISI June Report (released July 19):
June growth rate at 13%. Global crude steel production in June rose 13% year overyear, or 11.7 mmt, to 103.8 mmt. The growth rate was the highest since December2004 and up 250 bps from the revised May level. Output rose 2% on a month-on-
month basis (adjusting for the same number of days).
China still the main growth driver, though less than half. Production (previouslydisclosed) rose 18.5% from a year ago, or 5.7 mmt, to 36.6 mmt the fourth straightmonth of record production. China was 35% of the global total and was just underhalf of the growth for the first time since 2002. On a per-day basis, production grew5% month on month.
Ex-China output was much higher. Steel output ex-China grew 10% year overyear, or 6 mmt the highest growth rate since December 2002 and the fifth straightmonth of rising production (versus the 2% year-over-year decline in second-half2005 in the face of falling prices). Top gainers included Ukraine (+23%), the U.S.
(+17%), and the U.K. (+15%). Output also grew in the two other major producerregions, the E.U. (+12%) and Japan (+3%). Russia was up 13% from last year, whileSouth Korea rose 9%. Low-cost Brazil fell 4% (the 13th consecutive decline),affected by the CSN outage. Ex-China was flat month on month.
Pig iron growth slightly exceeds steel. May pig iron output grew a stronger 14%year over year to 73.5 mmt (+1% month on month) as growth is more weighted toChina, which has primarily integrated facilities (the pig iron/steel ratio was slightlylower month on month, implying a higher minimill proportion). China rose 22% froma year ago to 35.1 mmt and was 48% of the global total. Ex-China pig iron outputgrew 8%, slightly below the rise for steel.
Net exports from China set new record. Separately, preliminary data showed Chinaas a net exporter of steel/slab in June (3.6 mmt) for the sixth straight month. Themonthly net export figure broke the May record by almost 1 mmt and takes the first-half 2006 amount to 10.4 mmt (versus 2.4 mmt in first-half 2005 and net imports insecond-half 2005). We think the growth in net exports is resulting from highproduction levels (due to increased prices), export opportunities, and selling ahead ofVAT tax changes.
Apparent Chinese consumption rises less than production. Adjusting for netexports, apparent consumption of steel in China grew 7% year over year in June(versus 19% for production) - the data may be distorted by inventory destockingand/or double counting. For first-half 2006, apparent consumption is up 14% year
over year (versus 18% for production).
Bottom line
Global steel output is surging given increased industry capacity (mainly in China),
solid demand, inventory restocking, and the strong incentive from higher steel prices
(the global average is up ~US$100/mt year to date). High Chinese output is once
again a key risk factor for prices, and we think the discipline of global steel producers
may again be challenged as inventories rebuild and/or growth slows later in the year.
8/6/2019 BS SteelMng Cement St Jul06
5/96
BEAR, STEARNS & CO. INC. Page 5
While price momentum remains very strong in the second and third quarter, it looks
increasingly inevitable that some pricing gains will be given back later in the year.
This note was originally published in the July 20, 2006 Latin America Watch.
Pricing is as of market close July 19, 2006.
8/6/2019 BS SteelMng Cement St Jul06
6/96
Page 6 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Company Spotlight Kazakhmys: Initiating w/Outperform
On July 18, we initiated coverage of Kazakhmys, the worlds tenth-largest copper
producer at roughly 2.4% of global production, with an Outperform rating at the
previous days closing price of GBp1,156, or US$21.02/share.
Investment Positives
Bullish view on copper. Copper is benefiting from a very tight supply/demanddynamic, which has propelled exchange inventories to minimal levels (roughly three
days of consumption) and prices to historic highs. The most compelling story is on
the supply side, where output growth is being constrained by both structural issues
(declining grades, few new major ore discoveries, labor/equipment shortages,
water/power availability, etc.) as well as the byproduct of high
utilization/profitability (accidents, labor strikes, etc.). Meanwhile, new projects are
increasingly located in areas with higher political risk, much greater capital costs, and
longer buildout periods.
On the demand side, secular trends such as infrastructure development and
urbanization in developing countries underpin strong growth. Barring a major globalslowdown, we expect supply/demand tightness for the remainder of the decade. We
conservatively forecast copper prices to average US$3.00/lb in 2006, US$2.40/lb in
2007, and US$2.00/lb in 2008.
Long reserve life with growing output. Kazakhmys has proven and probable
reserves of 18 mmt of contained copper, placing it among the top ten worldwide. We
look for solid output growth, most notably from a large US$650 million, 160- to 170-
kmt greenfield project called Aktogay. Aktogay could be approved by September
2006 and begin production in 2009. With an average population density of
approximately 5.6 people per square kilometer, Kazakhstan is one of the most
sparsely populated countries in the world a key positive for mining given its highenvironmental impact.
Strong cash flow with acquisition growth opportunities. Kazakmhys is already
sitting on a net cash balance and is forecast to average US$1.2 billion in FCF during
2006E-2008E. As the largest domestic mining company, with an extensive track
record, experienced management, and existing infrastructure, we think it is well
positioned to acquire smaller mining assets in Kazakhstan. With few competitors, we
see a domestic acquisition strategy as likely additive to returns, supportive of
company growth, and providing diversification into other metals.
Low-cost producer. Kazakhmys benefits from low-cost labor in Kazakhstan, self-sufficiency in electricity (it owns its thermal power plants, which use coal extracted
from its own mines at 1 per KWh), and significant zinc, gold, and silver byproduct
revenues (about 20% of mining sales). Kazakhmys had a cash cost of 45/lb in 2005,
likely in the second quartile of the global cost curve (mostly behind producers which
have molybdenum as a byproduct).
Strategic location to supply key consumers. Kazakhmys is located in central Asia
and borders the northwest of China, which is a key copper consumer (about 25% of
world demand and 50% of the companys consolidated revenues). Kazakhmys
8/6/2019 BS SteelMng Cement St Jul06
7/96
BEAR, STEARNS & CO. INC. Page 7
estimates an average transportation cost of about US$15/mt to the China border,
which compares favorably to about US$50/mt from Chile to China. The company
also has exposure to Germany, the third-largest copper-consuming country, through
its fabricated products subsidiary.
Scarcity value. Kazakhmys is one of the few pure-play copper companies available
to investors this is especially the case if Phelps Dodge diversifies into nickel via
acquisition. Its shares are highly liquid (30-day ADTV of nearly US$70 million) andare listed on the London Stock Exchange. Although we believe Kazakhmys key
shareholders will pursue a domestic acquisition strategy, we think it could ultimately
become an M&A target for a larger, more diversified company if conditions permit.
Investment Risks
Commodity price/sentiment/forecasting risk. As a commodity producer with
limited diversification, the company remains highly levered to the copper price a
factor over which it has no control. While we think the shares are discounting a much
lower copper price, a major correction in the metal price could be an important
barrier for stock performance. The shares are also susceptible to top-down investor
concerns about global growth, emerging markets, and interest rates. This partlyaccounts for the ~20% drop in the shares off their highs. Separately, there is
forecasting risk in our estimates given the short company track record as a U.K.-
listed company (it began trading in October 2005), the lack of quarterly results, and
no regular conference calls.
Country risk. Although Kazakhstans debt is considered investment grade by the
key rating agencies, the country still experiences a relatively high inflation rate,
which could pressure costs (revenues are U.S. dollar-denominated, while costs are
35% local currency). In addition, several of its exploration regulations and tax laws
are fairly recent and subject to government interpretation. Recent Kazakh
government actions in the energy sector (against foreign operators) have raised someinvestor concerns about reprivitization risk. We think Kazakmhys, as a domestic
producer in the mining sector, will most likely be sheltered from this risk.
Potential conflicts of interest. The three key shareholders hold top management
positions in the company (chairman of the board, CEO, and CFO). This could create
a conflict of interest if they decide to purchase mining assets outside the company. In
March 2006, Vladimir Kim (chairman of the board and 40% owner) acquired a 25%
interest in a holding company for the mining business of Eurasia Natural Resources
(EKH). In consideration of the potential conflict of interest, Vladimir Kim offered a
call option to Kazakhmys (at a 10% premium to his offer price). We think
transactions done outside the company by its owners, if repeated, could create a realor perceived overhang for the shares.
Complex and escalating tax program. In addition to the 30% corporate rate,
Kazakhmys has a complex tax program based primarily on the IRR of the company
(in part using trailing/current copper prices and the profitability of the mine). The
level of taxation reduces the companys earnings visibility and affects the earnings
upside in a high copper price/profit environment. In 2005 the company had an
8/6/2019 BS SteelMng Cement St Jul06
8/96
Page 8 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
effective tax rate of 35%, expected to rise to around 38% in 2006E the maximum
level of taxation is seen in the low 40s.
Valuation
Upside to the target. Our end-2006 price target is US$27/share (GBp1,550), based
on 10x 2007E EPS (net of interest income) plus ~US$3/share of expected year-end
net cash. We expect cash on hand, after dividend payments, will be used to expand
copper output and make acquisitions, thus we prefer to value it separately.
The target multiple is similar to that used for other copper companies in our coverage
list. We believe strong growth, low-cost assets, high share liquidity, and a good
labor/environmental position offset country/ownership risk. Our target is roughly
13.5x our 2008E earnings, which assume a US$2/lb copper price. We look for a
nearly 4% estimated dividend yield based on the current share price. Key risks
include lower commodity pricing/volumes and financial-market uncertainty.
DCF gives us a similar price target. Our DCF analysis leads us to a similar
valuation, based on a WACC of 11.5% and a 5.0x EV/EBITDA multiple for the
terminal value. We use a long-term copper price of US$1.75/lb, less than half of thecurrent spot price, to reflect increased future supply. We think this estimate could be
conservative in light of the difficulty and high costs of developing major new
reserves.
Company Description
Kazakhmys is the world tenth-largest copper producer, with annual volumes of about
400 kmt representing 2.4% of the worlds copper production. Kazakhmys also has
lesser interests in zinc, gold, and silver. The company is incorporated in the U.K., but
its mining assets are located in Kazakhstan. In addition, the company has a
fabrication facility in Germany producing wire, tubes, bars, and flat copper products.
Kazakhmyss three top managers hold 67% of the company (Vladmir Kim 40%,Yong Keu Cha 16%, Oleg Novachuk 11%); the remainder is free float. The shares
trade solely on the London Stock Exchange (FTSE).
This note was originally published in the July 18, 2006 Global Emerging Markets
Watch. Pricing is as of market close July 17, 2006.
8/6/2019 BS SteelMng Cement St Jul06
9/96
BEAR, STEARNS & CO. INC. Page 9
Sector Valuation Monthly Highlights
The average price to adjusted earnings for 2007E is 7.9x (flat versus last month),
while the EV/EBITDA multiple is 5.0x (-10 bps). The highest five companies
have an average EV/EBITDA of 6.9x, while for the lowest five, it is only 3.4x.
We look for an average sector dividend yield of 4%, with Southern Copper
leading the way with a potential 14%. The average sector operating FCF yield is
15%, with all but two companies in double digits.
We look for average 2007E revenue and EBITDA growth of 7% and 4%,
respectively, due to higher iron ore and commodity prices and the expansion at
Cerro Verde. Meanwhile, we look for an average EBITDA margin of 39%, with
Cerro Verde (73%) and Antofagasta (71%) achieving the highest levels.
Exhibit 2. GEM Steel, Mining & Cement Sector: Valuation Rankings, 2007E
Revenue Growth '07E EBITDA Growth '07E EBITDA Margin '07E Net Debt/ EBITDA '07E
erro er e erro er e erro er e na tee
Arcelor Brasil % China Steel % Antofagasta % Cerro Verde NMrce or ras out ern opper aza mysTenaris % Ternium % Grupo Mexico % Buenaventura NMCSN % Tenaris % CVRD % Antofagasta NM
na tee aza mys enar sICA % Mittal % CSN % Posco .Buenaventura % CVRD % Tenaris % Grupo Mexico .
ern um er au ern um out ern opper .Mittal % CSN % Arcelor Brasil % Ternium .Gerdau SA % Cemex % Usiminas % Arcelor Brasil .
emex s m nas - uenaventura er au .Usiminas % Posco - % China Steel % Usiminas .Posco % Buenaventura - % Posco % CVRD .
rupo ex co - rupo ex co - emex tta .Southern Copper - % Southern Copper - % Gerdau SA % CSN .Kazakhmys - % Kazakhmys - % Mittal % ICA .
nto agasta - nto agasta - emex .
verage .
P/Adj. E '07E* EV/ EBITDA '07E Dividend Yield '07E FCF YLD '07E **
ICA . ICA . Southern Copper % Cerro Verde %enar s . enar s . rupo ex co rupo ex co
Cemex . Cemex . China Steel % ICA %CSN . CVRD-ON . Usiminas % Ternium %
nto agasta . uenaventura . rce or ras nto agastaChina Steel . CVRD-PN . CSN % Mittal %Kazakhmys . China Steel . Ternium % Posco %
uenaventura . . - Arcelor Brasil . Gerdau SA . Kazakhmys % Usiminas %CVRD-ON . Arcelor Brasil . Antofagasta % Arcelor Brasil %
er au . aza mys . - out ern opper Southern Copper . Southern Copper . Gerdau SA % Kazakhmys %Posco . Usiminas . Posco % CVRD-PN %
- . tta . tta emexUsiminas . Antofagasta . Buenaventura % CVRD-ON %
tta . osco . emex er auTernium . Grupo Mexico . Tenaris % China Steel %Grupo Mexico . Ternium . Cerro Verde % Buenaventura %
erro er e . erro er e . enar s
verage . .
Source: Bear, Stearns & Co. Inc. estimates. * Removes FX/Monetary Adjustment ** (EBITDA- Net Interest Expense - Working Capital Capex) / Market Capitalization.
VALUATION LEVELS
DOWN
8/6/2019 BS SteelMng Cement St Jul06
10/96
Page 10 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Sector Liquidity Monthly Highlights
Trading levels for the 30-day period ended July 24 fell 25% month over month,with only 10% of the stocks in the universe showing increased activity.
Volume was 96% higher than the average of the year-ago 30-day period, andover six times higher than the average of three years ago. CVRD had the most
liquid shares during the past month, followed by Mittal and Tenaris.
Mittal, China Steel, and Kumba Resources increased the most versus last month.Norilsk, Ternium and Mittal South Africa were among the top decliners.
Exhibit 3. GEM Steel, Mining & Cement Avg. Daily Trading Volume** (in US$ 000)
(A) (B) (C) (D)
Last 30-Days Previous 1 Year Ago 3 Years Ago A/B A/C A/D
CVRD 262,219 445,147 147,484 10,369 -41% 78% NM
Mittal Steel 215,255 112,540 38,835 65 91% NM NM
Tenaris 184,986 280,379 55,454 3,079 -34% 234% NM
Cemex 146,042 219,021 58,423 18,140 -33% 150% NM
Posco 144,448 176,572 98,336 37,613 -18% 47% 284%
Southern Copper 140,669 165,272 41,060 929 -15% 243% NM
Kazakhmys 65,769 66,399 NM NM -1% NM NM
Antofagasta 41,423 61,618 29,671 1,245 -33% 40% NM
Norilsk 40,626 96,562 27,957 4,602 -58% 45% NM
CSN 39,783 63,608 29,532 5,787 -37% 35% NM
Gerdau 33,371 56,386 17,763 3,249 -41% 88% NM
China Steel 31,852 28,448 45,775 73,413 12% -30% -57%
Usiminas 30,572 51,506 25,394 4,527 -41% 20% NM
Tata Iron & Steel 26,234 27,774 10,552 26,537 -6% 149% -1%
Grupo Mexico 18,688 25,928 13,831 361 -28% 35% NM
Mechel 14,175 22,284 14,154 NM -36% 0% NM
Buenaventura 13,835 25,149 6,348 3,953 -45% 118% 250%Arcelor Brasil 11,872 17,885 NM NM -34% NM NM
Bradespar 9,678 13,240 2,902 494 -27% 234% NM
ICA 7,057 9,955 5,163 396 -29% 37% NM
Kumba Resources 7,020 6,788 2,606 2,445 3% 169% 187%
Mittal South Africa 6,802 12,494 11,609 4,520 -46% -41% 50%
Ternium 5,059 9,818 NM NM -48% NM NM
Penoles 1,285 2,359 240 135 -46% NM NM
Acesita 1,093 1,464 1,913 913 -25% -43% 20%
Acindar 908 1,232 1,729 1,557 -26% -47% -42%
Siderar 851 1,274 1,002 154 -33% -15% NM
Cerro Verde 621 1,002 286 2 -38% 117% NM
Imsa 451 666 443 48 -32% 2% NMGCC 309 383 348 83 -19% -11% 274%
Average 50,098 66,772 25,512 7,870 -25% 96% 537%
Avg Top-5 190,590 246,732 79,706 13,853 -23% 139% NM
Avg Top-10 128,122 168,712 58,528 9,092 -24% 119% NM
Avg Bottom-10 2,860 4,312 2,534 1,025 -34% 13% 179%
--- % change versus ---
Source: Bloomberg. ** Combines all classes of local and ADR shares for each company.
SHARE LIQUIDITY
DOWN
8/6/2019 BS SteelMng Cement St Jul06
11/96
BEAR, STEARNS & CO. INC. Page 11
Stock Performance Monthly Highlights
For the 30-day period ended July 24, stocks in our selected global universe rose5% on average. Steel companies were up 2% during the period, mining gained8%, and cement/construction rose 4%.
Arcelor (+14%) was the biggest gainer among the steel universe over the pastmonth. Cerro Verde (+32%) and ICA (+15%) were the best performers in
mining and cement/construction, respectively.
U.S. Steel (-6%) was the worst-performing steel stock. Rio Tinto (-3%) and Fluor(-3%) were the laggards in the other two sectors.
Exhibit 4. Global Steel, Mining & Cement: Sector Performance June 23 July 24 & YTD
Price (US ) Mkt Cap (mn) Last -Days YTD % Ch. High % Ch. LowSteel
Arcelor . , 7 % % - % %Mittal South Africa 10.69 4,768 11% 10% -12% 44%Gerdau . ,7 5 % % - % %CSN .7 7, % % - % 7 %Nippon Steel .7 , % 5% - % 5 %
Tenaris 7. , 7 5% 5% - % %Usiminas 33.01 7,242 4% 16% -22% 120%Mittal . 5 , % % - % %
Arcelor Brasil 5. 5 , % % - 7% %Ternium . , 7 - % % - % %Posco . ,7 - % % - % %Nucor 5 . 5,7 7 - % 5 % - % %JFE Holdings 7.5 , - % % - 5% 7%China Steel . , - % 7% -7% 5%Mechel .5 ,7 -5% - % - 7% %U.S. Steel 5 . 7,5 - % 5% - % 7 %
Mining
Cerro Verde . , % % - % 5 %Norilsk .5 , 5 % % - % %
Grupo Mexico . 7, % % - % 7 %Southern Copper 5.7 , % % - % %Kumba Resources .55 5, % 5% - % 7 %Kazakhmys .5 , % % - % 5%BHP-Billiton 42.32 127,701 4% 27% -14% 45%Bradespar .5 , % % - 5% 77%
Anglo American .77 5 ,5 % % - 7% %Newmont 5 . , % - % - % %Buenaventura . , % -7% - 5% %CVRD . 5 , % % - % %
Antofagasta 7. 7, - % % - 5% %Rio Tinto . , 7 - % % - % 5 %
Cement/Construction
ICA . , 5% % - % 5 %Cemex . ,5 7 % % - 7% %Holcim 7 .5 7, % % - % 5%Lafarge .5 ,7 - % % - % %Fluor 5. 7,557 - % % - 7% %
Indexes
Mexican Bolsa , NA % % - % %Bovespa ,5 5 NA 7% 5% - % %Merval 5 NA 5% % - 5% %S&P 5 , NA % % -5% 7%Kospi . NA % % - % %
----52 Week----
Source: Bloomberg.
STOCKPERFORMANCE
UP
8/6/2019 BS SteelMng Cement St Jul06
12/96
8/6/2019 BS SteelMng Cement St Jul06
13/96
8/6/2019 BS SteelMng Cement St Jul06
14/96
8/6/2019 BS SteelMng Cement St Jul06
15/96
8/6/2019 BS SteelMng Cement St Jul06
16/96
8/6/2019 BS SteelMng Cement St Jul06
17/96
Page 17 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 10. Latin Steel Stock Charts, July 24, 2006
Ternium ADR - USD
$19
$22
$25
$28
$31
Jul-
06
Jul-
06
Jun-
06
May-
06
May-
06
Apr-
06
Mar-
06
Feb-
06
Feb-
06
CSN ADR - USD
$5
$14
$23
$32
$41
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Tenaris ADR - USD
$2
$14
$26
$38
$50
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Usiminas Local - USD
$0
$11
$22
$33
$44
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Arcelor Brasil Local - USD
$8
$11
$14
$17
$20
Jul-
06
Jun-
06
May-
06
May-
06
Apr-
06
Mar-
06
Feb-
06
Jan-
06
Dec-
05
Nov-
05
Gerdau ADR - USD
$0
$5
$10
$15
$20
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Siderar Local - USD
$0
$3
$6
$9
$12
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Acindar Local - USD
$0.00
$0.40
$0.80
$1.20
$1.60
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
18/96
Page 18 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 11. Global Steel Stock Charts, July 24, 2006
US Steel
10
27
44
61
78
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Tata Iron & Steel Local - USD
$0
$4
$8
$12
$16
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Mittal ADR - USD
$20
$26
$32
$38
$44
Jul-
06
May-
06
Mar-
06
Jan-
06
Nov-
05
Sep-
05
Jul-
05
May-
05
Mar-
05
Jan-
05
Arcelor Local - USD
$10
$21
$32
$43
$54
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Nucor
$5
$20
$35
$50
$65
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Posco ADR - USD
$20
$34
$48
$62
$76
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
China Steel Local - USD
$0.25
$0.50
$0.75
$1.00
$1.25
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Nippon Steel
$0.50
$1.50
$2.50
$3.50
$4.50
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
19/96
BEAR, STEARNS & CO. INC. Page 19
Exhibit 12. Bloomberg Index Charts, July 24, 2006
US Steel Index
40
120
200
280
360
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Asia Steel Index
90
140
190
240
290
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
World Mining Index
100
150
200
250
300
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
US Mining Index
55
90
125
160
195
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Japan Steel Index
150
450
750
1,050
1,350
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Europe Steel Index
65
125
185
245
305
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Asia Mining Index
90
160
230
300
370
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Europe Mining Index
65
135
205
275
345
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
20/96
Page 20 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 13. Latin Mining Stock Charts, July 24, 2006
CVRD ON ADR - USD
$0
$8
$16
$24
$32
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Buenaventura ADR - USD
$16
$20
$24
$28
$32
Jul-06
Apr-06
Dec-05
Aug-05
May-05
Jan-05
Sep-04
May-04
Feb-04
Southern Copper - USD
$10
$35
$60
$85
$110
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Bradespar Local - USD
$5
$15
$25
$35
$45
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
CVRD PN ADR - USD
$0
$7
$14
$21
$28
Jul-06
Apr-06
Dec-05
Aug-05
May-05
Jan-05
Sep-04
May-04
Feb-04
Antofagasta - USD
$2
$4
$6
$8
$10
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Grupo Mexico Local - USD
$0
$1
$2
$3
$4
Jul-06Apr-06
Dec-05
Aug-05
May-05
Jan-05
Sep-04
May-04
Feb-04
Cerro Verde Local - USD
$1.00
$3.50
$6.00
$8.50
$11.00
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04 Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
21/96
BEAR, STEARNS & CO. INC. Page 21
Exhibit 14. Global Mining Stock Charts, July 24, 2006
WMC Resources - Local
$0
$2
$4
$6
$8
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Alcoa
$10
$20
$30
$40
$50
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
BHP ADR
$8
$19
$30
$41
$52
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Rio Tinto ADR
$70
$115
$160
$205
$250
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Inco Limited
$17
$31
$45
$59
$73
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Alcan
$25
$34
$43
$52
$61
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Norilsk - Local
$20
$56
$92
$128
$164
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Anglo American - Local
$480
$720
$960
$1,200
$1,440
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
22/96
Page 22 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 15. Global Mining Stock Charts, July 24, 2006
Newmont
$21
$32
$43
$54
$65
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Placer Dome - Local
$7
$12
$17
$22
$27
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Phelps Dodge
$13
$36
$59
$82
$105
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Xstrata - Local
$3
$15
$27
$39
$51
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Barrick Gold
$13
$19
$25
$31
$37
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
FMG - Local
$0.00
$2.50
$5.00
$7.50
$10.00
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Freeport McMoran
$15
$31
$47
$63
$79
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Oct-
03
Kazakhmys - Local
$8
$13
$18
$23
$28
Jul-
06
Jun-
06
May-
06
Apr-
06
Mar-
06
Feb-
06
Jan-
06
Dec-
05
Nov-
05
Oct-
05
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
23/96
BEAR, STEARNS & CO. INC. Page 23
Exhibit 16. Latin Cement & Construction Stock Charts, July 24, 2006
Moctezuma Local - USD
$0.50
$1.00
$1.50
$2.00
$2.50
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
ICA ADR - USD
$10
$19
$28
$37
$46
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Consorcio ARA ADR - USD
$17
$27
$37
$47
$57
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Corporacion GEO ADR - USD
$0
$5
$10
$15
$20
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Cemex ADR - USD
$6
$14
$22
$30
$38
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Cementos Lima Local - USD
$0.50
$0.75
$1.00
$1.25
$1.50
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
GCC ADR - USD
$0
$1
$2
$3
$4
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Consorcio Hogar ADR - USD
$2
$3
$4
$5
$6
Jul-
06
Apr-
06
Dec-
05
Aug-
05
May-
05
Jan-
05
Sep-
04
May-
04
Feb-
04
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
24/96
Page 24 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 17. ADR Short Interest Ratio, July 2006
Buenaventura
0
1
2
3
4
J ul -03 Jan-04 Jul -04 Jan-05 J ul -05 Jan-06 J ul -06
Posco
0
2
4
6
8
J ul-03 Jan-04 Jul-04 Jan-05 J ul-05 Jan-06 Jul-06
CVRD ON
0
3
6
9
12
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Mittal
0
3
6
9
12
Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06
Tenaris
0
3
6
9
12
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Southern Copper
0
4
8
12
16
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Gerdau
0
3
6
9
12
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
CSN
0
3
6
9
12
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Down 0.2 m/m
Down 0.6 y/y
Up 1.1 m/m
Up 1.9 y/y
Up 1.1 m/m
Down 0.6 y/y
Up 0.5 m/m
Down 1.6 y/y
Up 0.5 m/m
Down 1.5 y/y
Up 0.1 m/m
Down 1.2 y/y
Up 0.5 m/m
Up 1.4 y/y
Down 0.4 m/m
Down 0.4 y/y
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
25/96
BEAR, STEARNS & CO. INC. Page 25
Exhibit 18. ADR Short Interest Ratio, July 2006
Phelps Dodge
0
2
4
6
8
J ul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Nucor
0
2
4
6
8
J ul-03 Jan-04 Jul-04 J an-05 Jul-05 Jan-06 J ul-06
Cemex
0
3
6
9
12
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
.
ICA
0
6
12
18
24
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
US Steel
0
3
6
9
12
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Newmont Mining
0
2
4
6
8
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Rio Tinto
0
5
10
15
20
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
BHP Billiton
0
2
4
6
8
Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06
Down 0.1 m/m
Down 0.4 y/y
Up 1.0 m/m
Down 4.4 y/y
Up 0.3 m/m
Down 2.7 y/y
Up 0.7 m/m
Down 0.9 y/y
Up 0.7 m/m
Down 1.2 y/y
Up 0.5 m/m
Down 0.5 y/y
Up 0.8 m/m
Down 0.8 y/y
Down 0.1 m/m
Down 1.8 y/y
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
26/96
Page 26 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 19. Stock Performance vs. Domestic Index, July 24, 2006
Usiminas Local (USD) vs Bovespa (USD)
$0
$11
$22
$33
$44
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3,000
7,500
12,000
16,500
21,000
Usiminas Bovespa
CSN ADR vs Bovespa (USD)
$0
$10
$20
$30
$40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3,000
7,500
12,000
16,500
21,000
CSN Bovespa
Arcelor Brasil Local (USD) vs Bovespa (USD)
$8
$11
$14
$17
$20
Jul-06Jun-06May-06Apr-06Mar-06Jan-06Dec-05
13,500
15,300
17,100
18,900
20,700
Arcelor Brasi l Bovespa
Gerdau ADR vs Bovespa (USD)
$0
$5
$10
$15
$20
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3,000
7,500
12,000
16,500
21,000
Gerdau Bovespa
Posco ADR vs Kospi (USD)
$20
$35
$50
$65
$80
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
0.50
0.80
1.10
1.40
1.70
Posco Kospi
China Steel (USD) vs TWSE (USD)
$0
$1
$1
$1
$1
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
110
150
190
230
270
China Steel TWSE
Nippon (USD) vs Nikkei 225 (USD)
$1
$2
$3
$4
$5
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
60
85
110
135
160
Nippon Nikkei 225
JFE (USD) vs Nikkei 225 (USD)
$10
$20
$30
$40
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
60
85
110
135
160
JFE Nikkei 225
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
27/96
BEAR, STEARNS & CO. INC. Page 27
Exhibit 20. Stock Performance vs. Domestic Index, July 24, 2006
US Steel vs S&P 500
$0
$20
$40
$60
$80
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
950
1,050
1,150
1,250
1,350US Steel S&P
Mittal ADR vs S&P 500
$20
$26
$32
$38
$44
Jul-06Apr-06Jan-06Oct-05Jul-05Apr-05Jan-05
1,100
1,160
1,220
1,280
1,340Mittal S&P
Ternium ADR vs Merval (USD)
$19
$22
$25
$28
$31
Jul-06Jun-06Jun-06May-06Apr-06Apr-06Mar-06Feb-06
450
500
550
600
650
Ternium Merval
Tenaris ADR vs Merval (USD)
$2
$14
$26
$38
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
210
320
430
540
650
Tenaris Merval
CVRD ADR vs Bovespa (USD)
$0
$8
$16
$24
$32
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3,000
7,500
12,000
16,500
21,000
CVRD Bovespa
BHP ADR vs ASX 200 (USD)
$10
$20
$30
$40
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
1,900
2,500
3,100
3,700
4,300
BHP ASX 200
RTP ADR vs FTSE 100 (USD)
$50
$100
$150
$200
$250
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2,250
2,600
2,950
3,300
3,650
RTP FTSE 100
Anglo American ADR vs FTSE 100 (USD)
$5
$10
$15
$20
$25
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2,250
2,600
2,950
3,300
3,650
Anglo American FTSE 100
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
28/96
Page 28 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 21. Stock Performance vs. Domestic Index, July 24, 2006
S. Copper ADR vs Lima Index (USD)
$10
$35
$60
$85
$110
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
300
1,000
1,700
2,400
3,100Southern Copper Lima Index
Grupo Mexico Local vs Bolsa (USD)
$0.20
$1.10
$2.00
$2.90
$3.80
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
500
900
1,300
1,700
2,100Grupo Mexico Bolsa
Antofagasta vs IPSA (USD)
$2
$4
$6
$8
$10
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
1
2
3
4
5
Antofagasta IPSA
Kazakhmys vs FTSE 100 (USD)
$7
$12
$17
$22
$27
Jul-06May-06Mar-06Dec-05Oct-05
2,800
3,000
3,200
3,400
3,600
Kazakhmys FTSE
Cerro Verde vs Lima Index (USD)
$0
$3
$6
$9
$12
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
300
1,000
1,700
2,400
3,100
Cerro Verde Lima Index
Cemex ADR vs Bolsa (ADR)
$4
$13
$22
$31
$40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
500
900
1300
1700
2100
Cemex Bolsa
ICA ADR vs Bolsa (USD)
$6
$16
$26
$36
$46
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
500
900
1,300
1,700
2,100ICA Bolsa
Buenaventura ADR vs Lima Index (USD)
$10
$16
$22
$28
$34
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
300
1,000
1,700
2,400
3,100
Buenaventura Lima Index
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
29/96
BEAR, STEARNS & CO. INC. Page 29
Exhibit 22. Stock Performance vs. Bloomberg Industry Index, July 24, 2006
Posco ADR vs Asia Steel Index
$20
$35
$50
$65
$80
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Posco Asia Stee l Index
CSN ADR vs US Steel Index
$0
$10
$20
$30
$40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
50
125
200
275
350
CSN US Steel Index
Usiminas Local (USD) vs US Steel Index
$4
$15
$26
$37
$48
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
50
125
200
275
350
Usiminas US Steel Index
Gerdau ADR vs US Steel Index
$0
$5
$10
$15
$20
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
50
125
200
275
350
Gerdau US Steel Index
China Steel Local vs Asia Steel Index
$0.50
$0.75
$1.00
$1.25
$1.50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
China Steel Asia Steel Index
Nippon Local vs Japan Steel Index
$1
$2
$3
$4
$5
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
400
600
800
1,000
1,200
Nippon Japan Steel Index
1
JFE Local vs Japan Steel Index
$15
$23
$31
$39
$47
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
400
600
800
1,000
1,200
JFE Japan Steel Index
Arcelor Brasil Local (USD) vs US Steel Index
$8
$11
$14
$17
$20
Jul-06Jun-06May-06Mar-06Feb-06Dec-05Nov-05
160
210
260
310
360
Arcelor Brasil US Steel Index
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
30/96
Page 30 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 23. Stock Performance vs. Bloomberg Industry Index, July 24, 2006
CVRD ADR vs World Mining Index
$2
$9
$16
$23
$30
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
CVRD ON World Mining Index
Mittal ADR vs US Steel Index
$20
$26
$32
$38
$44
Jul-06Apr-06Jan-06Oct-05Jul-05Apr-05Jan-05
130
190
250
310
370
Mittal US Steel Index
Tenaris ADR vs US Steel Index
$2
$14
$26
$38
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
50
130
210
290
370
Tenaris US Steel Index
Ternium ADR vs US Steel Index
$20
$23
$26
$29
$32
Jul-06Jun-06May-06May-06Apr-06Mar-06Feb-06
225
265
305
345
385
Ternium US Steel Index
BHP ADR vs World Mining Index
$10
$20
$30
$40
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
BHP World Mining Index
\
Anglo American ADR vs World Mining Index
$8
$12
$16
$20
$24
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Anglo American World Mining Index
US Steel vs US Steel Index
$15
$32
$49
$66
$83
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
50
130
210
290
370
US Steel US Steel Index
Rio Tinto ADR vs World Mining Index
$80
$125
$170
$215
$260
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Rio Tinto World Mining Index
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
31/96
BEAR, STEARNS & CO. INC. Page 31
Exhibit 24. Stock Performance vs. Bloomberg Industry Index, July 24, 2006
Cerro Verde (USD) vs World Mining Index
$0
$3
$6
$9
$12
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Cerro Verde World Mining Index
G. Mexico (USD) vs World Mining Index
$0
$1
$2
$3
$4
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Grupo Mexico World Mining Index
Kazakhmys (USD) vs World Mining Index
$5
$11
$17
$23
$29
Jul-06May-06Apr-06Feb-06Dec-05Oct-05
140
180
220
260
300
Kazakhmys World Mining Index
Antofagasta (USD) vs World Mining Index
$2
$4
$6
$8
$10
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Antofagasta World Mining Index
Buenaventura ADR vs World Mining Index
$15
$20
$25
$30
$35
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
Buenaventura World Mining Index
ICA vs US E&C Index
$5
$15
$25
$35
$45
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
ICA US E&C Index
Southern Copper vs World Mining Index
$15
$40
$65
$90
$115
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
150
200
250
300
PCU World Mining Index
Cemex vs World Bldg Materials Index
$10
$17
$24
$31
$38
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
100
135
170
205
240
Cemex World Bldg Materials Index
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
32/96
Page 32 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 25. Stock Performance vs. Domestic Currency, July 24, 2006
Nippon Local vs Japanese Yen
$1
$2
$3
$4
$5
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
90
100
110
120
130
/US$
Nippon Yen
CSN ADR vs Brazilian Real
$3
$12
$21
$30
$39
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2.0
2.5
3.0
3.5
4.0
R$/US$
CSN Real
Arcelor Brasil Local (USD) vs Brazilian Real
$8
$11
$14
$17
$20
Jul-06Jun-06May-06Apr-06Mar-06Jan-06Dec-05Nov-05
2.0
2.1
2.2
2.3
2.4
R$/U
S$
Arcelor Brasi l Real
Usiminas Local (USD) vs Brazilian Real
$0
$11
$22
$33
$44
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2.0
2.5
3.0
3.5
4.0
R$/US
$
Usiminas Real
Gerdau ADR vs Brazilian Real
$0
$5
$10
$15
$20
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2.0
2.5
3.0
3.5
4.0
R$/US
$
Gerdau Real
China Steel (USD) vs Taiwanese Dollar
$0.25
$0.50
$0.75
$1.00
$1.25
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
30.0
31.5
33.0
34.5
36.0
NT$/US$
China Steel NT$
Posco ADR vs Korean Won
$15
$31
$47
$63
$79
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
900
1,000
1,100
1,200
1,300
KRW/US$
Posco Won
JFE Local vs Japanese Yen
$10
$20
$30
$40
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
90
100
110
120
130
/US$
JFE Yen
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
33/96
BEAR, STEARNS & CO. INC. Page 33
Exhibit 26. Stock Performance vs. Domestic Currency, July 24, 2006
US Steel vs US$/Euro
$10
$28
$46
$64
$82
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
0.60
0.70
0.80
0.90
1.00
US
$/
US Steel US$/
Mittal ADR vs US$/Euro
$2
$14
$26
$38
$50
Jul-06Mar-06Dec-05Aug-05Apr-05Jan-05
0.70
0.75
0.80
0.85
0.90
US$/
Mittal US$/
Tenaris ADR vs Argentine Peso
$2
$14
$26
$38
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2.5
2.7
2.9
3.1
3.3
ARP
/US$
Tenaris Peso
CVRD ADR vs Brazilian Real
$0
$8
$16
$24
$32
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
2.0
2.5
3.0
3.5
4.0
R$/US$
CVRD Real
BHP vs Australian Dollar
$10
$20
$30
$40
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
0.5
0.6
0.7
0.8
0.9
AUD/US$
BHP AUD
Rio Tinto ADR vs British Pound
$50
$100
$150
$200
$250
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
1.4
1.6
1.8
2.0
2.2
US$/
CVRD Pound
Anglo America ADR vs British Pound
$5
$10
$15
$20
$25
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
1.4
1.6
1.8
2.0
2.2
US$/
Anglo Amer ican Pound
Ternium ADR vs Argentine Peso
$19
$22
$25
$28
$31
Jul-06Jun-06May-06May-06Apr-06Mar-06Feb-06
2.9
3.0
3.1
3.2
3.3
ARP/US$
Ternium Peso
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
34/96
Page 34 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 27. Stock Performance vs. Domestic Currency, July 24, 2006
Cemex ADR vs Mexican Peso
$4
$13
$22
$31
$40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
9.6
10.3
11.0
11.7
12.4
P$/US$
Cemex Peso
Southern Copper ADR vs Nuevo Sol
$10
$35
$60
$85
$110
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3.2
3.3
3.4
3.5
3.6
PEN/U
S$
Southern Copper Nuevo Sol
Grupo Mexico (USD) vs Mexican Peso
$0
$1
$2
$3
$4
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
9.6
10.3
11.0
11.7
12.4
P$/US$
Grupo Mexico Peso
Kazakhmys (USD) vs British Pound
$8
$13
$18
$23
$28
Jul-06May-06Apr-06Feb-06Dec-05Oct-05
1.6
1.7
1.8
1.9
2.0
US$
/
Kazakhmys Pound
Antofagasta vs Chilean Peso
$0
$3
$6
$9
$12
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
400
500
600
700
800
CLP/U
S$
Antofagasta Peso
Buenaventura ADR vs Nuevo Sol
$12
$18
$24
$30
$36
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3.2
3.3
3.4
3.5
3.6
PEN/US$
BVN Nuevo Sol
Cerro Verde vs Nuevo Sol
$0
$3
$6
$9
$12
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
3.20
3.30
3.40
3.50
3.60
PEN/US$
Cerro Verde Nuevo Sol
ICA ADR vs Mexican Peso
$8
$18
$28
$38
$48
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
9.6
10.3
11.0
11.7
12.4
P$/US$
ICA Peso
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
35/96
BEAR, STEARNS & CO. INC. Page 35
Exhibit 28. Stock Performance vs. Underlying Commodity, July 24, 2006
Arcelor Brasil Local vs. HR (Avg.) CSN ADR vs. HR (Avg.)
Usiminas Local (USD) vs. HR (Avg.)
China Steel Local (USD) vs. HR (Japan)
Gerdau ADR vs. Rebar (U.S.)
Posco ADR vs. HR (Japan)
Nippon vs. HR (Avg.) JFE vs. HR (Avg.)
0
10
20
30
40
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
U
S$
150
300
450
600
750
US
$/mt
CSN ADR HR (Avg.)
0
10
20
30
40
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
150
300
450
600
750
US$/mt
Usiminas HR (Avg.)
0
6
12
18
24
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
200
325
450
575
700
US$/mt
Gerdau ADR Rebar (U.S.)
8
11
14
17
20
Nov-05 Jan-06 Mar-06 May-06 Jul-06
U
S$
510
545
580
615
650
US
$/mt
Arcelor Brasil HR (Avg.)
12
28
44
60
76
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
150
300
450
600
750
US$/mt
Posco ADR HR (Japan)
0.25
0.50
0.75
1.00
1.25
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
150
300
450
600
750
US$/mt
China Steel HR (Japan)
1
2
3
4
5
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
U
S$
150
300
450
600
750
US
/mt
Nippon HR (Japan)
10
20
30
40
50
Sep-02 Jun-03 Mar-04 Dec-04 Sep-05 Jun-06
U
S$
150
300
450
600
750
US$/mt
JFE HR (Japan)
Source: Bloomberg; Bear, Stearns & Co. Inc.; CRU Monitor; Pipe Logix. Average HR Price of EU, US and Japan Export.
8/6/2019 BS SteelMng Cement St Jul06
36/96
Page 36 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 29. Stock Performance vs. Underlying Commodity/Spreads, July 24, 2006
Mittal ADR vs HR (Avg.) US Steel vs HR (Avg.)
Ternium vs. HR (Avg.) Tenaris vs. Casing
CVRD-P vs Fines (Carajas) BHP vs Fines (Carajas)
Anglo American vs Fines (Carajas)Rio Tinto vs Fines (Carajas)
9
21
33
45
57
Dec-04 Jun-05 Dec-05 Jun-06
US$
300
450
600
750
900
U
S$/mt
Mittal ADR HR (Avg.)
5
22
39
56
73
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
150
300
450
600
750
U
S$/mt
US Steel HR (Avg.)
19
22
25
28
31
Jan-06 Mar-06 May-06 Jul-06
U
S$
510
545
580
615
650
US
$/mt
Ternium HR (Avg.)
2
14
26
38
50
Dec-02 Dec-03 Dec-04 Dec-05
U
S$
650
900
1,150
1,400
1,650
US$/mt
Tenaris Casing
0
7
14
21
28
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
27
41
55
69
83
U
S$/mt
RIO-P Fines (Carajas)
7
17
27
37
47
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
27
41
55
69
83
US$/mt
BHP Fines (Carajas)
60
105
150
195
240
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
27
41
55
69
83
US$/mt
Rio Tinto Fines (Carajas)
5
10
15
20
25
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
27
41
55
69
83
US$/mt
Anglo AmericanFines (Carajas)
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
37/96
BEAR, STEARNS & CO. INC. Page 37
Exhibit 30. Stock Performance vs. Underlying Commodity/Spreads, July 24, 2006
Grupo Mexico vs Copper Southern Copper vs Copper
Antofagasta vs. Copper Kazakhmys vs. Copper
Cerro Verde vs. Copper BVN ADR vs. Gold
Antofagasta vs. Molybdenum PCU vs. Molybdenum
0
1
2
3
4
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
0
1
2
3
4
U
S$/lb
GMexico Copper
2
27
52
77
102
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
0
1
2
3
4
US$/lb
Southern Copper Copper
0
3
6
9
12
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
U
S$
0.20
1.20
2.20
3.20
4.20
US
$/lb
Antogafasta Copper
0
7
14
21
28
Oct-05 Dec-05 Feb-06 Apr-06 Jun-06
U
S$
0.20
1.20
2.20
3.20
4.20
US
$/lb
Kazakhmys Copper
0
3
6
9
12
Jul-01 Jul -02 Jul -03 Jul-04 Jul-05 Jul-06
U
S$
0.20
1.20
2.20
3.20
4.20
US
$/mt
Cerro Verde Copper
0
9
18
27
36
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
250
360
470
580
690
U
S$/oz
BVN ADR Gold
0
3
6
9
12
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
0
10
20
30
40
U
S$/lb
Antogafasta Moly
8
33
58
83
108
Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06
US$
0
10
20
30
40
U
S$/lb
Southern Copper Moly
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
38/96
Page 38 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 31. Correlation Charts, July 24, 2006
Arcelor Brasil Local (USD) vs Gerdau ADR
8
11
14
17
20
Jul-06Jun-06May-06Apr-06Mar-06Jan-06Dec-05
8
11
14
17
20Arcelor Brasil Gerdau
CSN ADR vs Usiminas Local (USD)
0
10
20
30
40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
0
11
22
33
44
CSN Usiminas
Gerdau ADR vs Nucor
0
5
10
15
20
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
10
25
40
55
70
Gerdau Nucor
CSN ADR vs Posco ADR
0
10
20
30
40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
10
27
44
61
78
CSN Posco
Mittal ADR vs Arcelor Local (USD)
20
26
32
38
44
Jul-06May-06Mar-06Dec-05Oct-05Aug-05May-05Mar-05
18
27
36
45
54
Mittal Arcelor
Posco ADR vs China Steel (USD)
14
30
46
62
78
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
0.60
0.75
0.90
1.05
1.20
Posco China Steel
Posco ADR vs Nippon (USD)
14
30
46
62
78
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
1
2
3
4
5
Posco Nippon
CSN ADR vs US Steel
0
10
20
30
40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
0
20
40
60
80
CSN US Steel
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
39/96
BEAR, STEARNS & CO. INC. Page 39
Exhibit 32. Correlation Charts, July 24, 2006
CVRD ADR vs Bradespar (USD)
$2
$9
$16
$23
$30
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$5
$15
$25
$35
$45
CVRD Bradespar
Ternium ADR vs Gerdau ADR
$19
$22
$25
$28
$31
Jul-06Jun-06May-06Mar-06Feb-06
$0
$5
$10
$15
$20
Ternium Gerdau
ICA ADR vs Fluor
$10
$19
$28
$37
$46
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$30
$50
$70
$90
$110
ICA Fluor
Cemex ADR vs Lafarge (USD)
$4
$13
$22
$31
$40
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$55
$75
$95
$115
$135
Cemex Lafarge
CVRD ADR vs BHP ADR
$2
$9
$16
$23
$30
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$5
$17
$29
$41
$53
CVRD BHP
CVRD ADR vs Kumba Resources (USD)
$2
$9
$16
$23
$30
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$2
$7
$12
$17
$22
CVRD Kumba
Tenaris ADR vs Grant Prideco
$2
$14
$26
$38
$50
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$5
$18
$31
$44
$57
Tenaris GP
CVRD ADR vs Rio Tinto ADR
$2
$9
$16
$23
$30
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$70
$115
$160
$205
$250
CVRD Rio Tinto
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
40/96
Page 40 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
Exhibit 33. Correlation Charts, July 24, 2006
Kazakhmys (USD) vs Phelps Dodge
$7
$12
$17
$22
$27
Jul-06Jun-06Apr-06Feb-06Jan-06Nov-05
$50
$65
$80
$95
$110
Kazakhmys PD
Grupo Mexico (USD) vs Southern Copper
$0
$1
$2
$3
$4
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$10
$35
$60
$85
$110
GMexico S. Copper
Antofagasta (USD) vs Kazakhmys (USD)
$2
$4
$6
$8
$10
Jul-06Jun-06Apr-06Feb-06Jan-06Nov-05
$0
$7
$14
$21
$28
Antofagasta Kazakhmys
G. Mexico (USD) vs Antofagasta (USD)
$0
$1
$2
$3
$4
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$2
$4
$6
$8
$10
GMexico Antofagasta
Cerro Verde vs Phelps Dodge
$0
$3
$6
$9
$12
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$10
$35
$60
$85
$110
Cerro Verde PD
Buenaventura ADR vs Newmont
$10
$17
$24
$31
$38
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$22
$33
$44
$55
$66
BVN Newmont
Grupo Mexico (USD) vs Phelps Dodge
$0
$1
$2
$3
$4
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$10
$35
$60
$85
$110
GMexico PD
Cerro Verde vs Buenaventura ADR
$0
$3
$6
$9
$12
Jul-06Feb-06Aug-05Mar-05Sep-04Apr-04Oct-03
$10
$17
$24
$31
$38
Cerro Verde BVN
Source: Bloomberg; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
41/96
BEAR, STEARNS & CO. INC. Page 41
Exhibit 34. Holding Company Discounts and Spreads, July 24, 2006
GMexico Discount to Estimated NAV
-48%
-39%
-30%
-21%
-12%
Mar-
05
May-
05
Jul-
05
Sep-
05
Nov-
05
Jan-
06
Mar-
06
May-
06
Jul-
06
Bradespar Discount to Estimated NAV
-40%
-34%
-28%
-22%
-16%
Mar-
05
May-
05
Jul-
05
Sep-
05
Nov-
05
Jan-
06
Mar-
06
May-
06
Jul-
06
Met Gerdau Discount to Estimated NAV
-33%
-26%
-19%
-12%
-5%
Mar-
05
May-
05
Jul-
05
Sep-
05
Nov-
05
Jan-
06
Mar-
06
May-
06
Jul-
06
RIO/RIO-P Discount
5%
10%
15%
20%
25%
Jul-
06
May-
06
Feb-
06
Dec-
05
Sep-
05
Jul-
05
Apr-
05
Jan-
05
Nov-
04
Aug-
04
Ternium/Siderar Spread
0.50
1.00
1.50
2.00
2.50
Jul-
06
Jul-
06
Jun-
06
May-
06
May-
06
Apr-
06
Mar-
06
Feb-
06
Feb-
06
Gerdau/GNA Spread
-0.10
0.20
0.50
0.80
1.10
Jul-
06
May-
06
Feb-
06
Dec-
05
Sep-
05
Jul-
05
Apr-
05
Jan-
05
Nov-
04
Aug-
04
Arcelor/Arcelor Brasil Spread
0.80
1.20
1.60
2.00
2.40
Jul-
06
Jun-
06
May-
06
May-
06
Apr-
06
Mar-
06
Feb-
06
Jan-
06
Dec-
05
Nov-
05
BVN/Newmont Spread
0.35
0.45
0.55
0.65
0.75
Jul-
06
May-
06
Feb-
06
Dec-
05
Sep-
05
Jul-
05
Apr-
05
Jan-
05
Nov-
04
Aug-
04 Source: Bloomberg; Company filings; Bear, Stearns & Co. Inc.
8/6/2019 BS SteelMng Cement St Jul06
42/96
Page 42 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
This page intentionally left blank.
8/6/2019 BS SteelMng Cement St Jul06
43/96
BEAR, STEARNS & CO. INC. Page 43
Appendix I Monthly Industry Data
8/6/2019 BS SteelMng Cement St Jul06
44/96
Page 44 GEM STEEL, MINING & CEMENT: MONTHLY REVIEW &OUTLOOK
This page intentionally left blank.
8/6/2019 BS SteelMng Cement St Jul06
45/96
BEAR, STEARNS & CO. INC. Page 45
Exhibit 35. Industrial Production by Country, (Y/Y % Change)
Mexico
-10%
-5%
0%
5%
10%
15%
Jun-06Dec-05Jun-05Dec-04Jun-04Dec-03Jun-03
.
United States
-4%
-2%
0%
2%
4%
6%
Jun-06Dec-05Jun-05Dec-04Jun-04Dec-03Jun-03
Japan
-10%
-5%
0%
5%
10%
15%
May-06Nov-05May-05Nov-04May-04Nov-03May-03
EU
-6%
-3%
0%
3%
6%