Steel Market Update UBS Presentation

UBS CONFERENCE CALL

SEPTEMBER 9, 2009

John Packard – Steel Market Update

Key HR Index Price Points

July 2008 = $1070 per short ton average

January 2009 = $510 per short ton average

June 2, 2009 = $380 per short ton average

September 9, 2009 = $540 per short ton average

Momentum is for higher prices

Comparison HR Indexes

Price Comparison Indexes

as of 9/9/2009 ($/ton) HR CR Galvanized Galvalume

Steel Market Update 540 650 725 928

CRU 531 649 673 NA

The Steel Index 548 648 702 NA

SteelBenchmarker 514 621 NA NA

Platts 540 635 NA NA

To get cwt (hundred weight) pricing divide by 20.

Our three legged stool

Foreign steelTight supply

Low service center inventories

SERVICE CENTER

INVENTORIES

From Excessive to Balanced

AISI Mill Shipments by end user

Service Centers/Processors

Construction

Automotive

Energy

Containers

Exports

Other

15.4%

12.6%3%

2.1%

28.7%

29%

9.2%

Other includes non-classified shipments, rail, mining, agricultural, military

Mill Shipment Reality

Service Centers

Toll Processors

Direct to OEM's65%

25%

10%

January 11, 2009 SMU Survey

August 27, 2009 SMU Survey

January vs. August Inventory

January – 59.3% had two months or less on hand

August – 80.2% had two months or less on hand

January – 26.3% had three months on hand

August – 16.2% had three months on hand

January – 14.4% had four months or more on hand

August – 3.7% had four months or more on hand

Earlier in August 83.6% reported they wanted 2

months or less inventory on the floor

DOMESTIC SUPPLY

Return from the debts of despair

Running (13)

AK Steel Ashland 1

AK Steel Middletown 0

ArcelorMittal Dofasco 2

ArcelorMittal Burns Harbor 1

ArcelorMittal Cleveland 0

ArcelorMittal Indiana Harbor E 1

ArcelorMittal Indiana Harbor W 0

Essar Algoma 1

Severstal Dearborn 1

Severstal Sparrows Point 1

Severstal Warren 0

US Steel Fairfield 1

US Steel Gary 2

US Steel Granite City 0

US Steel Great Lakes 0

US Steel Hamilton 0

US Steel Lake Erie* 0

US Steel Mon Valley 2

North American Blast Furnaces - Then

East Chicago West 30%

East Chicago East 30%

Burns Harbor 35%

Cleveland 0%

Riverdale 18%

Coatesville 75%

Steelton 80%

Conshohocken 35%

Weirton 90%

Georgetown 0%

Source: USW – Late 1st Quarter 2009

ArcelorMittal Operating Levels

Running (23) EAF

AK Steel Ashland 1

AK Steel Middletown 1

ArcelorMittal Dofasco 2 1

ArcelorMittal Burns Harbor 1

ArcelorMittal Cleveland 1

ArcelorMittal Indiana Harbor E 3

ArcelorMittal Indiana Harbor W 0

Essar Algoma 1

Severstal Dearborn 1

Severstal Sparrows Point 1

Severstal Warren 0

US Steel Fairfield 1

US Steel Gary 4

US Steel Granite City 2

US Steel Great Lakes 1

US Steel Hamilton 1

US Steel Lake Erie 0

US Steel Mon Valley 2

North American Blast Furnaces - Now

Tonnage Being Added

Since the low of the market in early 2nd Quarter the

domestic mills have brought back or repaired a

number of furnaces.

Over the past month – August and now September

the integrated mills have or are adding an

additional 29,000 tons of new melt per day.

The question is once up and running where will all

the steel go?

Mini-Mills & Electric Arc Furnaces

Running at low 40% for

first 4-6 months 2009

EAF’s running

intermittently with

reduced work weeks

Now running between

70-100% of capacity

(flat rolled)

Not automotive

FOREIGN STEEL

Too much risk…

Foreign Imports All Products

Foreign Imports 2007 = 33,244,000 short tons

Foreign Imports 2008 = 31,927,000 short tons

Foreign Imports 2009 (projected) = 14,000,000

short tons

At issue – pricing and lead times. U.S. prices have

been lower than foreign offers and with average 3

month lead time risk has been too high for U.S.

companies to purchase large lots of foreign steel.

CONCLUSION

More of the same until one leg falls