SteelSheetProductsMonitor2013Apr Web

April 2013

Page 1 of 20 © 2013 CRU International Limited confidential www.crugroup.com

Sheet prices move lower across key markets

With the exception of India, sheet prices have continued to fall for the second consecutive month as

strong production levels have pushed prices down in most regions.

Positive changes in China may be an early leading indicator

Sheet prices have now flattened in China as market sentiment has shifted while inventories have

stopped declining. 2013 Q2 activity will be supported by seasonal construction demand.

Steel sheet prices(1)

(early April) CRUspi sheet(9)

: 165.3 (-3.6)

CRUspi(8): 132.1 (+1.7) (per metric tonne, unless stated)

HR coil CR coil HDG coil EG coil

Local basis Local USD/t Local USD/t Local USD/t Local USD/t

USA(2)

- Midwest USD/st 601 662 709 782 763 841 823 907 - Gulf Coast USD/st 601 662 709 782 763 841 - - - West Coast USD/st 660 728 750 827 820 904 - - Germany EUR/t 496 646 590 768 612 797 637 829 France EUR/t 490 638 570 742 585 762 610 794 Italy EUR/t 472 614 548 713 551 717 581 756 Spain EUR/t 470 612 540 703 545 709 570 742 UK transactions GBP/t 405 619 460 703 490 749 515 787 Brazil, export

(3) USD/t - 575 - - - - - -

CIS export(4)

USD/t - 565 - 640 - - - - India - Mumbai

(5) INR/t 36,500 669 42,500 779 44,500 815 - -

- Delhi(5)

INR/t 36,950 677 42,500 779 44,500 815 - - Japan, export

(6) USD/t - 610 - 715 - 805 - -

Far East: non-CIS origin(7)

USD/t - 605 - 660 - 730 - - Far East: CIS origin

(7) USD/t - 600 - 650 - nom - -

China(8)

RMB/t 3,900 629 4,780 771 5,010 808 - - Notes: (1) Base prices, most common commercial quality, for new spot orders placed in the current month for forward delivery according to lead time, which will vary. A note on definitions is available from www.crugroup.com or by email. (2) FOB local mills. Local prices are $/s.ton. (3) FOB Brazil port. (4) FOB Black Sea port. (5) delivered. (6) FOB Japan port. (7) CFR East and South East Asian port. (8) ex-warehouse, Shanghai. Includes sales tax at 17%. (9) CRUspi is a weighted index of world steel sheet prices, April 1994 = 100. ForEx – US Dollar: €0.768; £0.654; ¥98.9; RMB6.20; INR54.58 Euro: £0.852; ¥128.7

http://www.cruspi.com/

http://www.steelpriceindex.com/

http://www.crumonitor.com/

mailto:[email protected]

http://www.cruspifutures.com/

April 2013 Steel sheet products www.crugroup.com

© 2013 CRU International Ltd confidential Page 2 of 20

Summary

Sheet prices move lower across most markets

Prices have weakened across most sheet markets for the second consecutive month as high production levels

have quickly limited any opportunity for mills to realize improved prices. As most regions experienced

stronger demand early in 2013 Q1, a strong production response served to reverse this price trend. Based on

CRU cost data, global mills took advantage of these trends to start the year with capacity utilisation running

up towards 92% on the quarter. Mills were able to push production rates higher as base costs (raw materials,

labour, etc.) were at the lowest level since 2010 Q2. Base costs into 2013 Q2, however, will increase by

13% as higher iron ore costs are finally realized by mills.

Weak sentiment is often to blame for the current bout of price weakness as continued political and fiscal

issues in Europe remain in the spotlight, especially after the banking fiasco in Cyprus. As personal and

business assets were seized from Cyprus banks, overall business activity, specifically that of some key CIS

sources of both supply and demand, may continue to be impacted by this sudden funding restraint. Weak

sentiment also stems from North American mills as they continue to compete very aggressively. Seasonal

demand in this market has been absent since the beginning of the year while flat rolled service centres have

continued to destock from heavy end-of-year buys in order to get inventories more in line with this weaker

demand environment. This intense competition was also seen in both the North East and South East Asian

markets. Indeed, producing mills in these markets have pushed prices lower in a bid to secure orders. In

Japan in particular, the continued race to debase the Yen has assisted exporters, though continued

competition from both China and South Korea have limited the inital success of this fiscal strategy.

Two positive areas are the Indian and Brazilian markets. While Indian prices rose slightly in April at the

start of the new fiscal year, this market will struggle to move higher after mills cleared discounted inventory

from their books. Brazil on the other hand, saw two rapid price increases on the back of continued domestic

demand gains as well as a drastic reduction of imports due to government policy. Very low export trading

activity in Brazil that followed these price increases is to blame for a slight reduction in April prices.

Trend change in China may boost prices

Sentiment in the Chinese market is now starting to turn

after the persistent weakness seen since the end of the

Chinese New Year. Chinese sheet prices have fallen due

to lacklustre demand and high production and inventories

after this holiday period. Over the past few weeks,

however, inventories have continued to decline as

stronger seasonal construction activity is now set to

stimulate sheet demand. With automotive demand set to

strengthen too, Chinese output may turn away from

external markets, allowing global prices to strengthen.

160

170

180

190

200

210

220

CRU steel price index (CRUspi)*

Steel sheet products

Index, April 1994 = 100

Data: CRU. Note: * weighted index of world steel sheet prices.


Page 3 of 20 © 2013 CRU International Ltd confidential

North America

Price becomes the weapon of choice to secure orders

Since the March 2013 edition of the Steel Sheet Products Monitor was published, sheet prices moved

higher at a measured pace, with higher scrap prices assisting mills in realising stronger finished steel

prices. Over the past couple of weeks, though, sheet prices have reversed course, along with scrap, and

are now back near the prior month’s assessment. CRU’s Apr 10 2013 price assessment has HR coil at

$601/s.ton, CR coil at $709/s.ton and HDG coil at $763/s.ton ($705/s.ton base plus a $58/s.ton coating

weight extra). Sheet prices have fallen over the past three weeks as buyers continue to only purchase

their immediate needs, while lead times remain near physical minimums of only 2-3 weeks for HR coil at

both EAF and integrated facilities.

As detailed in April’s Steel Sheet Products Market Outlook, destocking at service centres, on a limited

scale, is allowing buyers to minimize forward purchases, in combination with short mill lead times, and

utilize the producing mills as their warehouse. While flat rolled inventories at service centres have been

worked down to ideal levels, they could continue to move lower as buyers have yet to anticipate any

stimulus that would change their buying behaviour. While down-beat views are expected in this type of

market, the constant negativity exhibited by buyers in the trade press is becoming its own influence, while

some market players have yet to realize that these ‘anonymous sources’ are likely talking their own book.

Negative sentiment has recently been enhanced by the prospect of the 1.7 M s.ton Big River Steel

Company, though this potential facility will not be operational until 2016.

This negative sentiment has culminated into a declining market that is working to drive prices down, as

buyers are able to shop their tons around to multiple mills. While steel demand is relatively inelastic, as

lower prices do not produce higher demand, lower prices will allow an aggressive mill to secure tons for

their order book at the expense of mills that either take a stand or do not yet feel comfortable with these

lower prices. As sheet prices have pushed down to current levels, mills have been disciplined, as some

buyers are reported to be holding out, offering substantial volume for prices that are well below the

market. Perhaps this mill discipline is the first stage to creating an inflection point.

500

600

700

800

900

1,000

1,100

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2

HR coil CR coil HDG coil

US domestic prices, including

CRU's view of the current quarter

US, FOB mill, $/st

Data: CRU.

30

35

40

45

50

55

60

65

70

Service centre inventories have

been taken down to ideal levels

Days of supply, flat rolled sheet

Data: MSCI, CRU



Meanwhile, low sheet prices throughout the first quarter have yet to see a noticeable impact on sheet

import arrivals as estimates for 2013 Q1 sheet imports are only 2% below arrivals for 2012 Q4 and 6%

higher than import arrivals in 2012 Q1. What is happening on the import side is arrivals in 2013 Q2 are

set to be noticeably lower than year-ago levels as weaker than expected demand along with adequate

domestic supply will serve to abbreviate this normally strong seasonal period of imports.

Outlook: will seasonal construction become a demand driver?

The automotive market in North America continues to be a main driver of steel demand as March vehicle

sales in the USA came in at a SAAR rate of 15.3 million units, slightly below February’s 15.4 million

rate. However, sales YTD are up 6.3% from 2012 while inventory levels have fallen to 60 days of supply

from 65 days in February. As sales remain strong and inventory at the low end of ideal levels, the

automotive industry continues to support sheet demand.

While the automotive market continues to be a pillar of support for steel sheet, automakers are now

seeing evidence that continued gains in construction are slowly filtering through to provide support for

the automotive market. Indeed, continued year over year gains in both home construction and prices is

not only lifting household wealth, it is now starting to stimulate light truck sales to contractors. However,

until construction demand gains become more visible in mill order books, demand will remain limited.

Central & South America

Brazil’s production of flat steel plummets

Brazil’s demand remains strong as witnessed by its manufacturing PMI in expansion territory for its sixth

consecutive month. Furthermore, domestic automobile production maintained strong output, with over

319,000 vehicles produced in March, a figure 39% higher m/m and 3.4% higher y/y, according to Anfavea,

which indicated that domestic demand for steel sheet products remained firm. At the same time, production

disruptions at major producers limited supply into the market. Semi finished products were the worst

affected, with slab production decreasing in February by 12% y/y and 15% m/m to 360,000 t (see graph),

according to Brazil’s Steel Institute (IABr).

Brazilian mills are now focusing on their domestic customers to regain market share after imports were

drastically reduced following a series of measures from the Brazilian government, such as increased import

duties and the termination of tax benefits offered by some states. Exports have then plummeted as a

consequence of the low availability of domestic material. Slab exports dropped by almost 40% y/y to

380,000 t in February. Finished steel products faced a similar scenario with very low trading activity as prices

declined, following international trends. Export prices were lower by $5/t with HR coil falling to $575/t,

FOB while CR coil export prices fell to $670/t, FOB.

Outlook: Domestic market is likely to remain firm

Brazil’s demand for steel sheet products is likely to remain firm through 2013, as the government has

announced that it will maintain the current tax benefits on vehicle sales through the end of the year. However



competition will also be increased, as Gerdau is expected to commission its new flat rolling mill in the

coming weeks. Meanwhile, export activity is set to stay quiet in the short term, as prices in the main

international destinations are on a downward trend. Hence, Brazilians mills will continue to focus on the

more profitable domestic market.

Europe

Poor sentiment leads to further price declines

Steel sheet prices in Europe have continued the slow, measured decline seen since prices reached a

modest peak in February. HR coil fell by a further €9/t m/m in Germany to reach €496/t, with

downstream products seeing smaller declines. In Italy, HR coil was down by €4/t m/m to €472/t, although

here, downstream products saw slightly larger falls.

The continued absence of the usual seasonal uptick in prices has a number of causes. Firstly, end-use

demand remains poor throughout Europe. Automotive demand continues to be very slow, with European

passenger car registrations down by almost 10% y/y over the first two months of the year. Even the

recently successful German car industry saw a fall in production of 11% y/y in the first quarter of 2013,

as tighter household budgets and weaker export demand took their toll. The construction sector remains

weak due to credit problems and poor winter weather, and the weaker construction market is also

impacting negatively on demand for domestic appliances.

Intricately linked with poor end-use demand is the negative economic sentiment that currently pervades

Europe. The lack of surefootedness of policy makers has been a recurring theme throughout the

Eurozone crisis, and this was demonstrated once again by the imposition of a levy on small-scale

depositors at Cyprus’s banks, which was swiftly followed by a hurried rethink of this policy. The levy on

small scale bank deposits weakened confidence across Europe, with fears rising that any further bail-outs

would also impose a levy on savers.

300

350

400

450

500

550

600

650

Brazil's slab output plummets due

to disruptions at major producers

Brazilian slab production, '000 t

Data: Brazil Steel Institute (IABr)

500

550

600

650

700

750

800

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2

Brazilian export prices, including


Brazil, FOB port, $/t

Data: CRU.



As a result of weak demand and uncertain sentiment, steel sheet prices have fallen. Buying is particularly

sparse as purchases made late in 2012 or in January this year are proving sufficient in the current weak

demand environment. In Italy, for example, inventories are reportedly not only high but also, for material

ordered in January, expensive compared with current market prices. Overall, there is an expectation on

the part of customers that steel prices will fall further in the coming months. Nevertheless, steel

producers are generally reluctant to reduce prices further, as there is little hope that increased sales

volumes would result from a further fall in price. At the same time, margins have worsened compared to

2012 Q4 as the sharp increases in iron ore prices of a few months ago feed through into mills’ current

profitability calculations.

Developments at Ilva’s plant at Taranto continue to be watched closely by the market. The plant is

currently producing material at its No.3 and No.5 blast furnaces, with the No.1 furnace stopped. The

Italian high court is due to rule imminently on the legitimacy of the “Save Ilva” law passed by the

previous government, which allowed important facilities of national interest to continue to manufacture

and sell their products despite any intervention by the courts. If the law is ruled unconstitutional, the

plant may be forced to close until environmental improvements are carried out. This would tighten

supply, although even this level of potential capacity reduction may not result in much upward movement

of prices in the current depressed market conditions.

Outlook: market expected to weaken further amid poor demand

Sentiment remains poor in the market, and few participants are now expecting any rise in prices before

the summer holiday period. With Slovenia being talked up as a possible future flashpoint for the

Eurozone debt crisis, instability is set to remain, while continued austerity measures will keep sentiment

subdued and ensure that end-use demand for steel sheet products remains slow. Even the relatively

stronger German market will be affected, as the weak Yen provides fiercer competition from Japan for

German manufacturing exports in Asian markets, while poor demand persists in Europe. Therefore,

market weakness is set to remain in the near-term.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0Passenger car registrations

Data: ACEA.

EU27 passenger car registrations

are down 10% y/y in Jan-Feb 2013

EU27 new passenger car registrations, m units

400

500

600

700

800

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2


German domestic prices, including


Germany, parity point, €/t

Data: CRU.



CIS

Amid stable export demand, CIS mills could not avoid price declines

The downward correction in CIS steel sheet export prices continued into March. While demand in the

main export markets – Turkey, the MENA region and Europe – was stable, Russian and Ukrainian

producers still could not avoid up to $20/t m/m price reductions for HR coil to attract buyers. For CR

coil, demand was weaker and this eventually translated into deeper $30/t m/m fall in prices. The price

declines hardly affected the generally positive market sentiment, however, as producers’ main aim was to

get all April production volumes fully booked by the end of March. Amid growing export competition

and declining export sales in the beginning of the year (see chart), maintaining export market share

became one of the priorities for CIS mills. Among the positive developments we saw most recently was

increased demand from European customers who, after staying on the sidelines in January and February,

returned to the market in March and placed orders for CIS-origin steel sheet.

While the downward pressure clearly persists in export pricing, the domestic market situation appears to

be more uncertain. Traditionally at this time of the year, the seasonal revival in demand should be on the

doorstep, but the March cold weather had a negative effect on market sentiment as it has not allowed

traders to dispose of their steel stocks rapidly and therefore accelerated their offers for new production.

As a result, producers’ steel sheet prices remain largely unchanged from last month, with HR coil priced

at RUB21,600/t, CPT Central Russia.

Outlook: more discounts possible for CIS-origin steel sheet

The first offers for May production volumes for both domestic and export markets will be announced next

week. We expect CIS producers to try their best to keep prices stable; however, with competitive offers

from European and Chinese producers for CIS target markets, it will be a difficult task. Therefore we do

not reject the possibility of further downward correction in steel sheet export prices.

0

50

100

150

200

250

300

350

400

450

500HR sheet CR sheet

Data: CRU, GTIS.

Russian steel sheet exports

eased in February

Russian steel sheet exports, '000 t

400

500

600

700

800

900

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2

HR coil CR coil

CIS export prices, including


CIS, FOB Black Sea port, $/t

Data: CRU.



China

Is the spring downturn coming to an end?

The Chinese steel market stayed in a downward trajectory, with latest CFLP manufacturing PMI in steel

falling to 44.6 versus 58.9 in February. The March readings are especially depressed in new orders and

production indicators, posting 30% and 35% declines, respectively. Although we have seen higher

overall manufacturing PMI at 50.9 and better performance in downstream sectors such as automotive and

heavy machinery, it is not easy to consume the amount of output resumed in Q1 due to the overestimation

from domestic mills after the Chinese New Year holiday. Therefore, market inventories peaked in the

absence of enough domestic consumption to support higher output levels, at least in the immediate term.

Crude steel output in March remained above the 2 Mt/day level, according to preliminary figures from

CISA. Meanwhile, most flat product exports fell in February as export markets remained weak elsewhere

alongside increased protectionist measures. This quiet spell has resulted in a loss of confidence from

traders. As the traders purchased material and hoped for higher prices, they now need to clear some of

their stocks at a low price to retrieve capital. This action, accompanied by a relatively loose

supply/demand balance, has kept spot sheet prices falling.

Our latest assessments show that Chinese steel sheet prices fell by RMB200/t for HR coil to RMB3,900/t,

with CR coil down by RMB120/t to RMB4,780/tonne, and HDG coil down by RMB40/t to RMB5,010/t.

Pricing strategies were mixed from different steel mills, which further muddied the situation, forcing

some buyers to retain a wait-and-see attitude until the picture becomes clearer in April.

Outlook: demand and prices to recover in Q2

The latest statistics provided welcome news with signs of lower inventories, while spot prices have

stopped falling in the past week, and sentiment has been raised with the resumption of seasonal

construction on improved weather conditions. We continued to anticipate a seasonal recovery, supported

by our higher raw material price forecasts. Nevertheless, downside risk remains, as the construction

market will face more challenges due to government restrictions on real estate.

3,500

4,000

4,500

5,000

5,500

6,000

6,500

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2


China domestic prices, including


China, ex-warehouse, RMB/t

Data: CRU.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2008 2009 2010 2011 2012 2013

Import Export

CSteel sheet exports dropped as

overseas environment deteriorated

Chinese steel sheet trade, Mt

Data: NBS.



North East Asia

Competition intensifies

Regional sheet product producers continue to experience difficult market conditions this month, despite a

further uptick in manufacturing PMIs. Japanese mills are hungry for orders and saw intake volumes continue

to contract in February. Anecdotal evidence suggests domestic flat products demand remains weak, at least in

to comparison to that for long products. This is despite the fact that Japan saw its March manufacturing PMI

rise above 50 for the first time since May 2012. Mills here have responded to weak demand by cutting BOF

crude steel and steel sheet products output, with a corresponding fall in both sheet stock levels and stock-to-

shipment ratios, according to the latest data (see chart).

While sheet demand is not as strong as would normally be expected at this time of the year, it is firmer than

the last quarter of 2012. To that extent, downward price movements witnessed across East Asia in the last

few weeks have also been a function of excess supply. In the last month there has been a further escalation in

competitive intensity between Japanese, South Korean, Taiwanese and Chinese suppliers. While domestic

prices are largely unmoved on the month, the considerably weaker Japanese Yen has encouraged Japanese

exporters to respond to lower Chinese export prices into the region. Buyers are certainly expecting lower

prices, and for commodity grade HR coil, bids much above $600/t FOB are largely being rejected.

Japanese suppliers are also facing the prospect of having to reduce US dollar-denominated CR coil prices in

the face of more competitive pricing from mills in South Korea. Despite offers around $730/t CFR for CR

coil, counter bids even lower than this level are expected. Again, despite the hope offered by better PMI data,

the domestic South Korean supply/demand balance is weak, and mills are looking for a home for their

production in overseas markets. Many customers for North East Asian mills’ sheet exports are sitting on their

hands, however, observing falls in regional scrap prices and waiting for domestic Chinese sheet prices to

bottom out.

Outlook: price outlook bleaker

There are a number of reasons to expect improvement in

Japanese domestic sheet demand. Recently announced

QE measures look likely to drive further depreciation in

the yen in the short term, improving export prospects for

both domestic consumers of steel sheet and for steel

producers. Meanwhile, domestic inventories of HR, CR

and coated sheet products are not excessive in either

volume or months’ shipments terms. For these reasons,

we maintain the view that apparent consumption of steel

sheet will firm in Q2. Given ongoing supply availability

and lower scrap prices this may not, however, translate to

significant strengthening in prices.

1.0

1.2

1.4

1.6

1.8

2.0

2.2

0

1000

2000

3000

4000

5000

6000HR sheet

CR sheet

Coated sheet

Total sheet stock/shipments

Japanese sheet stocks are at

acceptable levels

LHS: stock level, kt; RHS: stock/shipments, months

Data: JISF.



South East Asia

Prices soften for the second consecutive month

Far East import prices of sheet products have softened for the second consecutive month due to sluggish

regional demand and oversupply in export markets, leading suppliers to slash their export prices in a bid

to increase their sales volumes. For instance, HR coil prices fell to $605/t by the first week in April, a

decline of $25/t from our month-ago assessment. Similarly, CR coil prices (for non-CIS origin material)

have also fallen by $25/t from month-ago levels, to $660/t (see chart). Behind these price falls, poor

market sentiment has remained a drag on demand, particularly in Malaysia where the forthcoming general

election has led to a halt in approvals of new projects and increased uncertainty around existing projects.

On the other hand, market sentiment has improved in the Philippines after the country’s credit status was

upgraded to investment grade for the first time in its history.

Meanwhile, Indonesia has implemented anti-dumping duties ranging from 7% to 55.6% on imports of CR

sheet from China, Japan, South Korea, Taiwan and Vietnam, effective from 19 March 2013. Nippon

Steel & Sumitomo Metal Corp (NSSMC), who’s supply now attracts 55.6% duties, has suspended its CR

sheet exports to Indonesia, and is now seeking the help of the Japan External Trade Organisation to

negotiate with the Indonesian government on reducing the anti-dumping duty. However, the company

has an option to export from its subsidiary, Siam United Steel in Thailand, in the short term. We judge

that this duty has now also given greater importance to NSSMC and PT Krakatau Steel’s announced joint

venture plan (51:49 respective holdings) to produce CR sheets in Indonesia.

Outlook: prices to stabilise

We believe these additional duties will impact Japanese auto producers in Indonesia in particular: these

customers did account for a large share of automotive grade Japanese CR sheet exports. Meanwhile, it is

estimated that Japanese cars enjoy around 90% market share in Indonesia, and the presence of Japanese

auto producers here has been on the rise. In terms of sheet prices, we anticipate these will firm next

month due to a seasonal uptick in demand, though this will then wane due to the onset of the rainy season.

-12%-10%-8%-6%-4%-2%0%2%4%6%8%

HRC CRC

HRC & CRC prices declined in the

second consecutive month

Far East HRC & CRC import prices, % m/m change

Data: CRU.

500

600

700

800

900

1,000

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2


Far East import prices, including


CFR East & South East Asia, $/t

Data: CRU.



India

After successive discounts, mills increase prices in April

The fiscal year-end figures for automotive sales show the poor health of this industry. Affected by high fuel

and financing costs as well as production strikes, cars sales in India have seen a y/y decline for the first time

in 10 years. Vehicle sales fell for the fifth consecutive month in March as demand for new cars remained

weak, despite incentive schemes offered by automotive companies. While passenger car sales were hit by

high fuel prices, weak industrial activity and high diesel costs have also limited commercial vehicle sales.

Demand for steel sheet products from other sectors has been weak as well. However, despite suppressed

demand, steel mills have attempted a price increase across all steel sheet products in the range of INR1,200-

1,500/t in April. According to steel mills, this increase was required to meet rising costs and reverse market

sentiment as year-end discounts due to low demand, high stocks and year-end sales pressure resulted in low

offer prices in March. Mills are not confident that the entire increase will be passed through, however, as

demand is low and customer enquiries are limited. Also, falling international offers are acting against the

price increases. With rising domestic prices and lower import offers, the price differential is closing. Chinese

offers are now at around $595/t CFR while import equivalent offers from domestic mills are at $570/t. Large

re-rollers who export substantial quantities are looking for offers from export markets as they can use import

licenses against the quantities exported, working to reduce the overall cost of imported materials. Falling

international prices have also resulted in declining export offers from Indian mills.

Outlook: mills not hopeful of another price increase next month

Growth in demand for steel sheet products appears unlikely in the coming months as none of the end use

sector has seen any major changes that can boost industrial activity. Threats from imported material are also

on the rise due to falling international prices. Though most of the mills offering non-alloy material will no-

longer be able to supply material in India due to the strict adherence of BIS standards, the threat from low cost

Chinese offers will continue to exist as they sell boron-added alloy grade materials. Domestic mills are

therefore not expecting the prices to go up any further next month. At best, if the entire proposed increase of

April is not accepted during the month, mills hope the remaining balance can be passed on in May.

25,000

30,000

35,000

40,000

45,000

50,000

55,000

10 Q3

10 Q4

11 Q1

11 Q2

11 Q3

11 Q4

12 Q1

12 Q2

12 Q3

12 Q4

13 Q1

13 Q2


Indian domestic prices, including


India, delivered, INR/t

Data: CRU.

0

20000

40000

60000

80000

100000

120000

140000

Automotive sales turn negative

first time in past ten years

MarutiSuzuki monthly sales remain subdued '000

Data: MarutiSuzuki India Ltd. website



Raw materials and slab

Key raw materials prices

Slab market developments

Responding to softening flat products prices, slab prices have also come under downward pressure

recently in major markets. The weak demand and poor market sentiments in slab importing regions have

also contributed to the recent price softening. Production at two major Brazilian slab producers has

recently been disrupted due to a fire and equipment failure, causing further tightening in the supply of

merchant slab. Looking at the trade data, in line with weak demand the total slab exports from Brazil also

declined by around 27% in the first two months of 2013 compared to the same period last year. Given the

weak demand in the export market, Brazilian merchant slab exports prices in April has declined to $528/t

FOB compared to $535/t FOB last month.

Similarly, CIS exports of total slab have also declined

by around 10% during the first two months of the

current year on y/y basis, a sign of weak global

demand. Slab market in the CIS region remained quiet

so far while prices have declined by $15/t in April,

reaching $510/t. However, the offer prices have

remained high reaching $560/t CFR Far East with

limited buyer response. Given the weak demand for

flat steel products, most buyers in the Far East market

have continued to follow the wait-and-see attitude.

Moving forward, we anticipate that merchant slab

prices are likely to recover soon due to the approaching

seasonal demand upturn.

100

120

140

160

180

200

220

240Chinese export price, FOB

Coke prices

Chinese export price*, FOB, index, January 2004 = 100

Data: CRU.

120

140

160

180

200

220

240

260Chicago, factory bundles, del.

US factories bundles prices

US factory bundles price, del. Chicago, index, January 2004 = 100

Data: CRU.

Global merchant slab prices

(USD/t)2013

Feb Mar Apr

North America

USA imp. CFR(1) 578 578 573

Europe

EU exp. FOB(2) nom nom nomCIS exp. FOB(3) 495 525 510

Far East

E & SE Asia imp. CFR(4) 535 550 525

Latin America

Brazil exp. FOB 520 535 528

Data: CRU. Notes: (1) Gulf Coast, (2) ARA port, (3) Black Sea port, (4) East & South East Asian port.



Industry news

Capacity expansions

US Steel, a major Pittsburgh, US-based steelmaker, is to remain in Slovakia for at least the next 5

years and maintain employment levels at 11,000, following environmental and energy-related

concessions that have been offered by the Slovak government. US Steel will use the concessions to

help offset the €388m ($500m) it needs to spend so that it can comply with EU rules by 2016.

South Korean steel producer Posco has announced plans to construct a continuous galvanising line in

the South Thailand district of Rayong, the centre of Thailand’s automotive industry. The facility is

expected to have a capacity of 400,000 t/y, be commissioned by the end of 2015 and supply

Thailand’s automobile industry and export to other Southeast Asian markets.

NS BlueScope Coated Products, a joint venture between Japan’s Nippon Steel & Sumitomo Metal

Corporation (NSSMC) and Australia’s BlueScope Steel, has officially been launched. The JV will

supply hot-dip galvanised sheets, painted sheets, and roll-formed building products to white goods

manufacturers and constructers in the Asean and US markets, and with the backup of 29 plants in 7

countries, NSSMC said that the JV will allow for quicker responses to rapidly expanding demand for

coated products in the building and construction sectors. Under the terms of the agreement, NSSMC

will pay BlueScope $540m for a 50% stake in its coated steel products business.

Bangkok Eastern Coil Centre, the Thai subsidiary of Nippon Steel Trading has announced that it

is to expand its capacity in order meet growing demand from Thailand’s automotive industry. The

company plans to increase monthly output by 2,000 t/m to total 38,000 t/m in early 2014, through the

addition of a range of equipment including slitters and levellers.

Mergers and acquisitions

Gerdau, a Brazilian steelmaker, has announced it has acquired the remaining stake of a joint venture

with Kalyani Steels of India. The terms of the sale were not announced. The facility, located in the

state of Andhra Pradesh, has a capacity of 300,000 t/y, and is predominately focused on producing

steel products for the automotive market.

Samuel, Son & Co., a Canadian steel processor and distributor, is to acquire the assets of

Wilkinson, a steel service company based in Western Canada. Wilkinson’s product offerings

include plate, bars, structurals, galvanising, painted and coated flat-rolled carbon steel products. The

acquisition is expected to close in late April 2013 following regulatory approval.

Uttam Galva Metallics, an Indian cold roller, is expected to soon begin negotiations to acquire a

mill owned by Global Steel Philippines. The hot-rolling mill is located in Iligan in the Southern

Philippines, has a capacity of 1.5 Mt/y and has been closed for some time.



Gross production and consumption of hot-rolled steel sheet

(1)

(Mt) 2011/10 2012 2012/11 2013 2013/12

y/y ch Q1 Q2 Q3 Q4 Year y/y ch Q1 y/y ch

North America Gross Production USA 11.5% 14.031 13.635 12.901 11.833 52.401 2.4% 12.890 -8.1% Canada 2.2% 1.662 1.667 1.652 1.741 6.723 6.4% 1.854 11.5% Mexico 8.8% 1.506 1.540 1.557 1.704 6.308 0.0% 1.747 16.0% Total 10.3% 17.200 16.843 16.111 15.278 65.431 2.5% 16.490 -4.1% Gross Consumption USA 12.2% 14.373 14.071 13.275 12.203 53.922 2.2% 13.260 -7.7% Canada -1.2% 1.555 1.543 1.546 1.669 6.314 7.0% 1.768 13.7% Mexico 10.6% 1.701 1.715 1.718 1.822 6.955 5.5% 1.880 10.5% Total 10.7% 17.628 17.329 16.539 15.695 67.191 3.0% 16.907 -4.1% Implied net exports 31.1% (0.428) (0.487) (0.428) (0.416) (1.760) 22.6% (0.417) -2.7% Latin America Gross Production -0.2% 3.853 3.986 3.836 3.637 15.313 0.8% 3.892 1.0% Gross Consumption -4.7% 4.115 4.174 4.172 3.969 16.429 3.5% 4.161 1.1% Implied net exports -52.3% (0.262) (0.187) (0.336) (0.332) (1.116) 62.0% (0.269) 2.9% Europe Gross Production Western Europe 0.2% 13.967 14.618 14.019 13.427 56.031 -11.9% 13.054 -6.5% - France -0.6% 1.605 1.626 1.508 1.400 6.140 -12.9% 1.567 -2.4% - Germany -2.8% 4.219 4.671 4.712 4.478 18.080 -8.2% 4.216 -0.1% - Italy 17.8% 2.055 2.028 1.910 1.635 7.628 -25.5% 1.274 -38.0% - Spain -7.1% 0.851 0.917 0.601 0.487 2.856 -17.0% 0.773 -9.1% - UK -5.5% 0.480 0.716 0.686 0.686 2.569 4.2% 0.557 15.9% Eastern Europe 13.4% 3.829 3.853 3.653 3.387 14.722 -3.6% 3.568 -6.8% - Poland 11.7% 0.442 0.409 0.405 0.314 1.569 -5.2% 0.440 -0.4% Total Europe 2.5% 17.796 18.471 17.672 16.815 70.753 -10.3% 16.622 -6.6% Gross Consumption Western Europe 1.7% 13.864 14.941 14.072 13.426 56.303 -15.0% 12.891 -7.0% - France -0.3% 1.783 1.857 1.457 1.082 6.179 -24.9% 1.531 -14.1% - Germany -1.7% 4.103 4.618 4.684 4.404 17.808 -12.2% 4.024 -1.9% - Italy 16.4% 2.192 2.158 2.296 1.779 8.425 -30.2% 1.374 -37.3% - Spain -2.4% 1.032 1.129 0.773 0.768 3.703 -6.3% 1.024 -0.8% - UK 2.9% 0.536 0.827 0.660 0.684 2.707 8.1% 0.574 7.1% Eastern Europe 11.7% 4.297 4.380 4.369 3.949 16.995 -0.7% 4.164 -3.1% - Poland 12.4% 0.727 0.659 0.554 0.621 2.562 -0.7% 0.685 -5.7% Total Europe 3.6% 18.161 19.321 18.441 17.375 73.298 -12.0% 17.055 -6.1% Implied net exports 26.8% (0.366) (0.850) (0.769) (0.560) (2.545) -42.7% (0.433) 18.5% CIS Gross Production -7.6% 7.351 6.577 6.807 6.263 26.998 -0.5% 6.427 -12.6% Gross Consumption -10.3% 5.906 5.012 5.424 5.119 21.461 7.0% 5.123 -13.3% Implied net exports 0.9% 1.445 1.565 1.383 1.144 5.537 -21.6% 1.304 -9.8% Asia Gross Production China 10.9% 47.083 50.338 48.396 50.381 196.198 8.0% 52.444 11.4% Japan -6.9% 10.836 10.616 11.081 10.562 43.095 2.5% 10.577 -2.4% Korea 11.1% 7.764 8.069 8.068 7.901 31.802 6.5% 6.722 -13.4% Taiwan 4.5% 2.499 2.657 2.447 2.852 10.456 7.6% 2.693 7.7% Asean 7.5% 1.377 1.377 1.377 1.377 5.508 -2.4% 1.407 2.1% Total 7.4% 69.559 73.058 71.369 73.073 287.059 6.8% 73.842 6.2% Gross Consumption China 13.8% 47.445 50.673 48.741 50.651 197.510 8.0% 52.747 11.2% Japan -6.1% 9.008 8.707 9.059 8.402 35.175 -1.1% 8.189 -9.1% Korea 0.4% 7.469 7.858 7.607 7.448 30.381 5.5% 6.537 -12.5% Taiwan -5.6% 1.970 2.015 1.895 2.322 8.201 7.8% 2.119 7.6% Asean 8.4% 3.323 3.211 3.423 3.442 13.399 3.6% 3.547 6.8% Total 8.3% 69.213 72.464 70.724 72.264 284.666 6.3% 73.139 5.7% Implied net exports -64.1% 0.346 0.594 0.644 0.808 2.392 121.1% 0.703 103.0% Other world Gross Production 3.5% 10.709 10.872 10.716 11.223 43.520 7.9% 10.587 -1.1% Gross Consumption -0.2% 12.247 12.336 12.164 12.784 49.531 11.8% 12.126 -1.0% Implied net exports -27.1% (1.539) (1.464) (1.448) (1.560) (6.011) 51.8% (1.539) -0.0% Total world

(2)

Gross Production 5.5% 126.467 129.807 126.511 126.289 509.074 3.0% 127.861 1.1% Gross Consumption 5.6% 127.270 130.637 127.464 127.205 512.576 3.2% 128.513 1.0% Data: CRU Note: (1) Hot-rolled sheet is defined as coil, sheet and strip less than 4.75mm thick. (2) Global production and consumption values may not be exactly equal due to differences in timing and reporting authority relating to trade data.



Gross production and consumption of cold-rolled steel sheet (1)

(Mt) 2011/10 2012 2012/11 2013 2013/12


North America Gross Production USA 7.7% 7.799 7.569 6.838 6.211 28.417 6.3% 7.148 -8.3% Canada 1.8% 0.761 0.799 0.780 0.801 3.141 15.0% 0.793 4.1% Mexico 8.8% 0.654 0.669 0.676 0.740 2.738 0.0% 0.758 16.0% Total 7.3% 9.214 9.036 8.294 7.751 34.296 6.5% 8.699 -5.6% Gross Consumption USA 7.3% 7.836 7.566 6.879 6.272 28.554 6.8% 7.210 -8.0% Canada -0.2% 0.824 0.878 0.857 0.888 3.447 15.3% 0.876 6.2% Mexico 1.6% 0.880 0.931 0.905 0.939 3.654 8.8% 0.968 10.0% Total 6.0% 9.540 9.375 8.641 8.099 35.655 7.8% 9.054 -5.1% Implied net exports -27.2% (0.326) (0.339) (0.346) (0.348) (1.359) 56.7% (0.355) 8.8% Latin America Gross Production 1.1% 2.134 2.388 2.374 2.384 9.280 3.7% 2.433 14.0% Gross Consumption -5.6% 2.521 2.707 2.792 2.722 10.742 6.2% 2.810 11.4% Implied net exports -37.3% (0.388) (0.318) (0.418) (0.338) (1.462) 25.0% (0.376) -2.9% Europe Gross Production Western Europe -2.5% 8.486 9.121 8.827 8.303 34.738 -9.9% 7.877 -7.2% - France -5.7% 1.172 1.187 1.101 1.022 4.482 -9.6% 1.144 -2.4% - Germany -3.5% 2.355 2.751 2.838 2.495 10.439 -7.8% 2.360 0.2% - Italy 15.3% 1.030 1.026 0.965 0.819 3.840 -18.8% 0.477 -53.7% - Spain -11.8% 0.591 0.633 0.522 0.493 2.239 -14.2% 0.585 -1.0% - UK 1.1% 0.421 0.628 0.601 0.601 2.252 4.2% 0.488 15.9% Eastern Europe 9.4% 1.711 1.730 1.590 1.476 6.508 -3.8% 1.587 -7.3% - Poland -3.4% 0.219 0.203 0.201 0.156 0.779 -5.2% 0.218 -0.4% Total Europe -0.9% 10.198 10.851 10.418 9.779 41.245 -9.0% 9.464 -7.2% Gross Consumption Western Europe -1.5% 8.249 8.884 8.624 8.104 33.862 -11.2% 7.604 -7.8% - France -4.0% 1.270 1.254 1.145 1.091 4.760 -11.3% 1.200 -5.5% - Germany -1.8% 2.221 2.630 2.757 2.362 9.970 -6.6% 2.255 1.6% - Italy 14.6% 1.056 0.986 1.020 0.877 3.938 -24.8% 0.579 -45.2% - Spain -8.3% 0.712 0.743 0.618 0.613 2.686 -15.4% 0.664 -6.7% - UK -0.2% 0.483 0.660 0.662 0.618 2.424 11.9% 0.507 4.9% Eastern Europe 9.6% 2.276 2.363 2.157 1.978 8.775 -1.5% 2.108 -7.4% - Poland 4.6% 0.359 0.388 0.347 0.287 1.381 -4.8% 0.340 -5.4% Total Europe 0.4% 10.524 11.248 10.782 10.083 42.636 -9.3% 9.713 -7.7% Implied net exports 52.1% (0.326) (0.397) (0.364) (0.303) (1.391) -19.1% (0.249) -23.9% CIS Gross Production 2.8% 2.895 2.913 3.020 2.836 11.664 1.7% 2.503 -13.5% Gross Consumption 10.0% 2.379 2.324 2.436 2.273 9.412 1.4% 1.906 -19.9% Implied net exports -19.4% 0.516 0.589 0.584 0.563 2.252 3.0% 0.597 15.5% Asia Gross Production China 12.8% 18.361 19.503 18.889 20.407 77.159 6.2% 19.246 4.8% Japan -8.5% 6.280 6.074 6.371 5.917 24.641 -0.4% 5.665 -9.8% Korea -0.1% 4.755 5.050 4.936 4.934 19.675 2.7% 4.644 -2.3% Taiwan -1.8% 1.238 1.397 1.285 1.388 5.308 1.2% 1.405 13.5% Asean -1.5% 1.149 1.149 1.149 1.149 4.595 1.7% 1.172 2.0% Total 4.8% 31.782 33.172 32.630 33.795 131.379 4.0% 32.131 1.1% Gross Consumption China 10.2% 18.685 19.476 19.114 20.312 77.588 5.3% 19.441 4.0% Japan -8.5% 5.257 5.105 5.317 5.013 20.692 3.2% 4.658 -11.4% Korea -1.1% 3.657 3.995 3.875 3.806 15.333 0.7% 3.475 -5.0% Taiwan -4.1% 0.769 0.880 0.793 0.860 3.301 -5.7% 0.885 15.1% Asean -1.9% 1.954 2.059 2.120 2.149 8.282 5.0% 2.151 10.1% Total 3.9% 30.322 31.515 31.218 32.140 125.195 4.0% 30.610 0.9% Implied net exports 26.6% 1.460 1.657 1.412 1.655 6.184 2.8% 1.522 4.2% Other world Gross Production 9.8% 4.897 5.420 5.629 5.485 21.431 13.3% 4.524 -7.6% Gross Consumption 10.8% 5.573 6.440 6.501 6.342 24.856 10.8% 5.386 -3.4% Implied net exports 16.7% (0.677) (1.020) (0.872) (0.857) (3.425) -2.6% (0.862) 27.4% Total world

(2)

Gross Production 4.1% 61.120 63.781 62.365 62.030 249.296 2.5% 59.754 -2.2% Gross Consumption 3.9% 60.860 63.609 62.370 61.658 248.497 2.6% 59.477 -2.3% Data: CRU Note: (1) Cold-rolled sheet is defined as cold reduced coil, including electrical sheet. (2) Global production and consumption values may not be exactly equal due to differences in timing and reporting authority relating to trade data.



Production and consumption of coated steel sheet (1)

(Mt) 2011/10 2012 2012/11 2013 2013/12


North America Production USA 10.6% 5.173 4.994 4.473 4.119 18.760 7.6% 4.731 -8.6% - of which HDG 18.6% 4.279 4.091 3.630 3.355 15.355 10.2% 3.938 -8.0% - of which EG -8.2% 0.369 0.355 0.309 0.310 1.343 -3.3% 0.328 -11.0% Canada 2.6% 0.603 0.656 0.646 0.652 2.557 21.3% 0.639 6.0% Mexico 8.8% 0.373 0.381 0.386 0.422 1.562 0.0% 0.433 16.0% Total 9.6% 6.149 6.032 5.505 5.193 22.879 8.4% 5.803 -5.6% Consumption USA 8.9% 5.332 5.293 4.730 4.398 19.753 11.0% 5.010 -6.0% - of which HDG 17.4% 4.424 4.390 3.872 3.583 16.269 13.5% 4.166 -5.8% - of which EG -13.1% 0.287 0.279 0.234 0.223 1.022 -2.8% 0.242 -15.7% Canada 13.1% 0.723 0.722 0.632 0.662 2.738 4.8% 0.641 -11.4% Mexico -10.4% 0.768 0.821 0.818 0.820 3.227 12.6% 0.840 9.5% Total 6.5% 6.822 6.836 6.180 5.880 25.718 10.5% 6.492 -4.8% Implied net exports -16.6% (0.673) (0.804) (0.675) (0.687) (2.839) 30.9% (0.689) 2.4% Latin America Production 9.1% 1.275 1.399 1.288 1.296 5.258 7.3% 1.313 3.0% Consumption -1.6% 1.797 1.877 1.881 1.725 7.279 8.4% 1.730 -3.7% Implied net exports -22.2% (0.521) (0.477) (0.593) (0.430) (2.021) 11.4% (0.417) -20.1% Europe Production Western Europe 0.9% 7.288 7.755 7.200 6.944 29.186 -11.1% 6.727 -7.7% - of which HDG 3.3% 5.562 5.908 5.456 5.308 22.234 -11.2% 5.065 -8.9% - of which EG 0.6% 0.868 0.937 0.908 0.841 3.554 -14.4% 0.822 -5.2% - France -2.7% 1.050 1.063 0.986 0.916 4.015 -9.6% 1.024 -2.4% - Germany -3.7% 1.879 2.317 2.310 2.124 8.630 -7.1% 1.884 0.3% - Italy 23.5% 0.918 0.901 0.842 0.740 3.401 -24.4% 0.611 -33.5% - Spain 8.4% 0.565 0.584 0.457 0.420 2.026 -18.8% 0.569 0.6% - UK -3.0% 0.277 0.398 0.378 0.378 1.431 4.2% 0.301 8.8% Eastern Europe 10.9% 1.194 1.187 1.092 1.012 4.485 -3.7% 1.076 -9.9% - Poland -0.4% 0.121 0.112 0.111 0.086 0.429 -5.2% 0.110 -8.7% Total Europe 2.1% 8.482 8.942 8.292 7.956 33.672 -10.1% 7.803 -8.0% Consumption Western Europe 4.6% 6.044 6.794 6.340 5.953 25.131 -17.4% 5.898 -2.4% - of which HDG 5.9% 4.629 5.163 4.819 4.596 19.206 -18.5% 4.517 -2.4% - of which EG -1.3% 0.620 0.747 0.712 0.644 2.723 -18.4% 0.664 7.1% - France 2.1% 1.029 0.942 0.851 0.763 3.586 -14.3% 0.879 -14.5% - Germany 4.7% 1.941 2.430 2.449 2.204 9.024 -9.6% 2.082 7.3% - Italy 10.5% 0.620 0.635 0.767 0.625 2.647 -41.3% 0.603 -2.7% - Spain 9.2% 0.860 0.892 0.749 0.609 3.110 -19.7% 0.800 -6.9% - UK -4.5% 0.551 0.672 0.592 0.608 2.423 7.4% 0.541 -1.8% Eastern Europe 6.3% 2.107 2.197 1.925 1.889 8.117 -3.7% 1.910 -9.4% - Poland 9.4% 0.530 0.614 0.496 0.436 2.077 -4.3% 0.470 -11.4% Total Europe 4.9% 8.151 8.991 8.265 7.842 33.248 -14.4% 7.807 -4.2% Implied net exports 324.9% 0.331 (0.049) 0.027 0.114 0.424 n.m. (0.005) n.m. CIS Production 9.8% 1.185 1.237 1.323 1.155 4.900 3.0% 0.999 -15.7% Consumption 20.1% 1.557 1.977 2.113 1.737 7.384 12.4% 1.492 -4.2% Implied net exports 59.6% (0.373) (0.740) (0.790) (0.581) (2.484) 37.4% (0.493) 32.3% Asia Production China 10.0% 10.409 12.226 11.536 11.238 45.409 21.7% 10.883 4.6% Japan -7.2% 3.777 3.629 3.823 3.610 14.840 -0.9% 3.540 -6.3% - of which HDG -5.5% 2.862 2.717 2.862 2.759 11.200 3.1% 2.736 -4.4% - of which EG -16.5% 0.485 0.501 0.529 0.461 1.977 -14.5% 0.411 -15.2% Korea -1.6% 2.384 2.640 2.507 2.552 10.082 7.7% 2.424 1.7% Taiwan 0.3% 0.659 0.692 0.613 0.646 2.610 -5.6% 0.628 -4.7% Asean 10.4% 1.053 1.053 1.053 1.053 4.213 1.5% 1.072 1.8% Total 3.8% 18.282 20.239 19.533 19.099 77.154 12.5% 18.547 1.4% Consumption China -3.4% 8.587 9.776 9.681 9.288 37.333 26.0% 9.123 6.2% Japan -2.1% 2.557 2.297 2.413 2.318 9.585 2.1% 2.356 -7.8% - of which HDG -2.2% 2.137 1.882 1.996 1.937 7.952 4.5% 1.981 -7.3% - of which EG 3.1% 0.191 0.203 0.183 0.165 0.742 -5.8% 0.167 -12.3% Korea 9.2% 1.281 1.541 1.342 1.386 5.551 -1.5% 1.217 -5.0% Taiwan -8.9% 0.214 0.237 0.163 0.217 0.830 -7.8% 0.188 -12.0% Asean 8.1% 2.164 2.418 2.413 2.455 9.450 8.8% 2.453 13.3% Total -0.4% 14.804 16.268 16.011 15.664 62.748 15.7% 15.338 3.6% Implied net exports 23.0% 3.478 3.971 3.521 3.435 14.406 0.4% 3.209 -7.7% Other world Production 7.5% 2.877 2.947 2.993 2.874 11.691 -0.9% 2.817 -2.1% Consumption 6.6% 3.620 3.840 3.865 3.708 15.033 -1.0% 3.622 0.1% Implied net exports 3.4% (0.743) (0.892) (0.873) (0.834) (3.343) -1.5% (0.805) 8.3% Total world

(2)

Production 4.8% 38.251 40.797 38.932 37.573 155.553 4.7% 37.282 -2.5% Consumption 3.6% 36.751 39.789 38.314 36.557 151.411 4.5% 36.481 -0.7% Data: CRU Note: (1) Coated sheet is defined as coil, sheet and strip applied with a metallic coating, including all tinmill products. (2) Global production and consumption values may not be exactly equal due to differences in timing and reporting authority relating to trade data.



Net consumption of steel sheet (1)

(Mt) 2011/10 2012 2012/11 2013 2013/12


Hot-Rolled Steel Sheet North America USA 17.8% 5.621 5.584 5.614 5.239 22.058 -3.4% 5.236 -6.8% Canada -4.4% 0.689 0.632 0.655 0.755 2.732 -2.5% 0.865 25.6% Mexico 12.2% 0.968 0.966 0.960 0.993 3.888 10.3% 1.031 6.4% Total 14.6% 7.278 7.182 7.230 6.988 28.678 -1.6% 7.132 -2.0% Latin America Total -16.8% 1.829 1.606 1.761 1.560 6.756 10.4% 1.711 -6.4% Western Europe Total 8.5% 4.342 4.700 4.156 4.098 17.296 -24.5% 4.045 -6.9% - France 12.5% 0.455 0.513 0.209 (0.076) 1.100 -57.8% 0.236 -48.2% - Germany 1.4% 1.458 1.515 1.486 1.585 6.044 -19.7% 1.374 -5.7% - Italy 16.7% 1.010 0.982 1.191 0.838 4.022 -39.2% 0.809 -19.9% - Spain 34.7% 0.361 0.412 0.182 0.210 1.165 18.6% 0.357 -1.0% - UK 73.4% 0.068 0.129 (0.008) 0.016 0.205 99.3% 0.032 -52.1% Eastern Europe Total 13.2% 2.389 2.452 2.589 2.296 9.725 1.6% 2.394 0.2% - Poland 23.3% 0.485 0.435 0.332 0.449 1.702 1.7% 0.444 -8.3% CIS Total -26.8% 2.691 1.775 2.066 1.976 8.508 16.2% 2.352 -12.6% E & SE Asia China 14.7% 27.035 28.896 27.674 27.994 111.599 9.0% 31.356 16.0% Japan 2.8% 2.023 1.956 1.977 1.814 7.769 -3.7% 1.872 -7.5% Other E & SE Asia 4.7% 4.845 4.663 4.760 4.927 19.195 10.8% 4.197 -13.4% Total 12.4% 33.902 35.515 34.411 34.735 138.564 8.4% 37.424 10.4% Other world

(2) Total -5.6% 7.217 6.760 6.395 6.968 27.340 13.5% 7.272 0.8%

World Total 7.3% 59.649 59.990 58.608 58.621 236.867 4.4% 62.330 4.5% Cold-Rolled Steel Sheet North America USA 2.9% 2.781 2.682 2.500 2.242 10.206 5.8% 2.591 -6.9% Canada -5.5% 0.238 0.241 0.230 0.256 0.965 2.7% 0.254 6.8% Mexico -3.6% 0.520 0.563 0.532 0.531 2.145 16.0% 0.550 5.9% Total 1.2% 3.539 3.485 3.262 3.029 13.316 7.1% 3.395 -4.1% Latin America Total -13.7% 1.358 1.373 1.489 1.414 5.634 0.6% 1.403 3.3% Western Europe Total -13.7% 1.245 1.304 1.382 1.215 5.146 -12.2% 0.911 -26.8% - France -8.2% 0.233 0.204 0.171 0.186 0.793 -19.2% 0.188 -19.3% - Germany 13.1% 0.358 0.339 0.475 0.264 1.437 -3.7% 0.388 8.1% - Italy -15.5% 0.165 0.111 0.202 0.158 0.636 -26.8% (0.014) -108.5% - Spain -40.0% 0.151 0.164 0.166 0.200 0.681 -3.6% 0.101 -33.1% - UK 5.5% 0.209 0.265 0.287 0.243 1.004 25.0% 0.208 -0.1% Eastern Europe Total 8.7% 1.096 1.191 1.087 0.987 4.361 1.3% 1.051 -4.1% - Poland 7.0% 0.239 0.277 0.237 0.202 0.955 -4.6% 0.231 -3.5% CIS Total 10.6% 1.235 1.131 1.160 1.160 4.685 0.1% 0.942 -23.7% E & SE Asia China 10.5% 8.465 7.472 7.787 9.278 33.002 -10.9% 8.756 3.4% Japan -11.8% 1.538 1.529 1.549 1.461 6.077 15.8% 1.178 -23.4% Other E & SE Asia -5.7% 2.312 2.610 2.682 2.621 10.226 -1.4% 2.446 5.8% Total 4.3% 12.316 11.611 12.018 13.361 49.306 -6.4% 12.380 0.5% Other world

(2) Total 12.8% 2.783 3.581 3.595 3.555 13.513 14.6% 2.654 -4.6%

World Total 2.8% 23.571 23.676 23.992 24.722 95.962 -1.4% 22.736 -3.5% Coated Steel Sheet

(1)

North America USA 8.9% 5.332 5.293 4.730 4.398 19.753 11.0% 5.010 -6.0% Canada 13.1% 0.723 0.722 0.632 0.662 2.738 4.8% 0.641 -11.4% Mexico -10.4% 0.768 0.821 0.818 0.820 3.227 12.6% 0.840 9.5% Total 6.5% 6.822 6.836 6.180 5.880 25.718 10.5% 6.492 -4.8% Latin America Total -1.6% 1.797 1.877 1.881 1.725 7.279 8.4% 1.730 -3.7% Western Europe Total 4.6% 6.044 6.794 6.340 5.953 25.131 -17.4% 5.898 -2.4% - France 2.1% 1.029 0.942 0.851 0.763 3.586 -14.3% 0.879 -14.5% - Germany 4.7% 1.941 2.430 2.449 2.204 9.024 -9.6% 2.082 7.3% - Italy 10.5% 0.620 0.635 0.767 0.625 2.647 -41.3% 0.603 -2.7% - Spain 9.2% 0.860 0.892 0.749 0.609 3.110 -19.7% 0.800 -6.9% - UK -4.5% 0.551 0.672 0.592 0.608 2.423 7.4% 0.541 -1.8% Eastern Europe Total 6.3% 2.107 2.197 1.925 1.889 8.117 -3.7% 1.910 -9.4% - Poland 9.4% 0.530 0.614 0.496 0.436 2.077 -4.3% 0.470 -11.4% CIS Total 20.1% 1.557 1.977 2.113 1.737 7.384 12.4% 1.492 -4.2% E & SE Asia China -3.4% 8.587 9.776 9.681 9.288 37.333 26.0% 9.123 6.2% Japan -2.1% 2.557 2.297 2.413 2.318 9.585 2.1% 2.356 -7.8% Other E & SE Asia 7.3% 3.659 4.196 3.917 4.058 15.831 4.0% 3.858 5.4% Total -0.4% 14.804 16.268 16.011 15.664 62.748 15.7% 15.338 3.6% Other world

(2) Total 6.6% 3.620 3.840 3.865 3.708 15.033 -1.0% 3.622 0.1%

World Total 3.6% 36.751 39.789 38.314 36.557 151.411 4.5% 36.481 -0.7% Total Steel Sheet North America 8.9% 17.639 17.503 16.672 15.898 67.712 4.4% 17.019 -3.5% Latin America -10.8% 4.984 4.855 5.131 4.700 19.669 6.7% 4.843 -2.8% Western Europe 3.8% 11.631 12.798 11.878 11.266 47.573 -19.7% 10.853 -6.7% Eastern Europe 9.6% 5.592 5.839 5.601 5.172 22.203 -0.5% 5.355 -4.2% CIS -5.8% 5.483 4.883 5.339 4.873 20.578 10.8% 4.787 -12.7% E & SE Asia 7.4% 61.022 63.395 62.440 63.761 250.618 6.8% 65.142 6.8% Other world 1.7% 13.620 14.180 13.855 14.231 55.887 9.4% 13.548 -0.5% World 5.1% 119.971 123.454 120.915 119.899 484.240 3.2% 121.546 1.3% Data: CRU Note: (1) Coated sheet is defined as coil, sheet and strip applied with a metallic coating, including all tinmill products.



Stock figures for USA, Germany, Japan, China & Brazil

2012 2012 2013 2013/12

APR NOV DEC JAN FEB MAR APR Y/y ch. (6)

USA (1)

Total carbon flat-rolled products End month stocks, '000 t 4,908 4,378 4,700 4,881 4,765 na na -2.2% Stock-to-shipment ratio, months 2.3 2.4 3.0 2.3 2.4 na na 3.3% Germany

(2)

Hot-rolled flat products End month stocks, '000 t 698 702 589 623 635 na na -4.4% Stock-to-shipment ratio, months 2.9 2.8 4.5 2.7 3.0 na na 0.7% Cold-rolled flat products End month stocks, '000 t 395 367 326 348 360 na na -8.2% Stock-to-shipment ratio, months 2.9 2.8 4.6 2.6 2.8 na na -7.4% Coated flat products End month stocks, '000 t 536 436 412 417 426 na na -19.2% Stock-to-shipment ratio, months 2.2 1.9 3.2 1.9 2.0 na na -12.8% Japan

(3)

Hot-rolled flat products End month stocks, '000 t 1,610 1,725 1,621 1,765 1,591 na na -4.7% Stock-to-shipment ratio, months 1.1 1.3 1.1 1.2 1.1 na na -15.6% Cold-rolled flat products End month stocks, '000 t 684 695 663 696 651 na na -11.4% Stock-to-shipment ratio, months 1.1 1.4 1.3 1.4 1.2 na na -8.4% Coated flat products End month stocks, '000 t 1,051 990 998 1,035 1,008 na na -5.5% Stock-to-shipment ratio, months 1.0 1.0 1.1 1.1 1.1 na na -0.2% China

(4)

Hot-rolled flat products End month stocks, '000 t 1392 912 766 854 873 952 1,059 -23.9% Cold-rolled flat products End month stocks, '000 t 563 531 495 500 501 533 536 -4.8% #DIV/0! Coated flat products End month stocks, '000 t 228 205 195 182 177 182 181 -20.6% Brazil

(5)

Total carbon flat-rolled products End month stocks, '000 t 1016 934 944 947 970 na na -2.8% Stock-to-shipment ratio, months 2.7 2.4 3.0 2.6 3.1 na na 9.4% Data: CRU, SSCI, BDS, Statistisches Bundesamt, JSEA, INDA. Note: Stock–to–shipment ratios are calculated by CRU as end month stocks divided by total shipments in that same month and are not adjusted for seasonality. Year-on-year changes are calculated as the difference between stock data for the latest month available and data for that same month a year ago. * estimated. (1) Service centres. (2) Stockists. (3) Mills & dealers. (4) Shanghai warehouses. (5) Stockists (INDA members only). (6) based on latest month’s data *subject to revision. (Italics) = estimate. Subscribers to www.crumonitor.com can access more detailed stock data from our website. Moreover, we update stock data, not only when we publish the Steel Sheet Products Monitor, but throughout the month as soon as new data is released – so check back regularly.

500

750

1,000

1,250

1,500

1,750

2,000

2,250HR sheet CR sheet

Coated sheet

Japanese mills' steel sheet

inventories

End-month stocks, '000 t

Data: CRU.

0.8

1.0

1.2

1.4

1.6

1.8

2.0HR sheet CR sheet

Coated sheet

Japanese mills' inventory-

shipment ratios

Stock-to-shipment ratio, months-on-hand

Data: CRU.

http://www.crumonitor.com/



CRU historical prices

2012 2013

Hot-rolled coil prices Q1 Q2 Q3 Q4 Year Q1 Q2

North America: USA (Midwest) FOB USD/st 721 660 626 620 657 617 601 - FOB USD/t 794 728 690 683 724 680 662 Western Europe: Germany FOB EUR/t 533 539 516 485 518 502 496 - FOB USD/t 693 694 645 624 664 661 646 France FOB EUR/t 528 532 492 470 505 493 490 Italy FOB EUR/t 505 513 490 465 493 483 472 Spain FOB EUR/t 505 518 493 462 495 482 470 UK FOB GBP/t 448 450 412 377 422 403 405 Far East imports: Non-CIS CFR USD/t 658 675 590 582 626 625 605 CIS CFR USD/t 645 658 570 568 610 618 600 Cold-rolled coil prices 2012 2013

Q1 Q2 Q3 Q4 Year Q1 Q2

North America: USA (Midwest) FOB USD/st 824 767 736 729 764 725 709 - FOB USD/t 909 845 811 804 842 799 782 Western Europe: Germany FOB EUR/t 617 630 610 576 608 592 590 - FOB USD/t 801 812 762 742 779 779 768 France FOB EUR/t 610 625 592 557 596 573 570 Italy FOB EUR/t 580 585 565 532 565 554 548 Spain FOB EUR/t 582 595 573 533 571 550 540 UK FOB GBP/t 522 517 485 437 490 460 460 Far East imports: Non-CIS CFR USD/t 733 737 643 638 688 687 660 CIS CFR USD/t 723 728 635 627 678 677 650 Hot-dipped galvanised coil prices 2012 2013

Q1 Q2 Q3 Q4 Year Q1 Q2

North America: USA (Midwest) FOB USD/st 888 824 796 779 822 782 763 - FOB USD/t 979 908 877 859 906 862 841 Western Europe: Germany FOB EUR/t 632 653 631 594 627 614 612 - FOB USD/t 821 841 788 764 803 808 797 France FOB EUR/t 627 642 607 573 612 588 585 Italy FOB EUR/t 580 586 568 547 570 564 551 Spain FOB EUR/t 592 608 580 538 580 555 545 UK FOB GBP/t 533 528 485 430 494 470 490 Far East imports: Non-CIS CFR USD/t 795 787 700 703 746 742 730 CIS CFR USD/t nom nom nom nom nom nom nom Data: CRU. Note: Prices shown are quarterly and annual averages. Those for the most recent quarter only take into account prices up to the current month. Refer to front page for notes and product definitions.



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Josh Spoores: +1 724 940 7100 ([email protected]) This issue was completed on April 10 2013. The next issue will be completed on May 8 2013. Subscription information Single user* electronic subscription (available via www.crugroup.com, email and print). For subscription enquiries, please telephone Customer Services on +44 20 7903 2147 or by email at [email protected] Please visit us online at www.crugroup.com

Legal information

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Economic indicators

2011 2010 2011 2012

Year Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

USA GDP (2) 1.8 2.8 2.4 1.8 1.9 1.6 2.0 2.4 2.1 2.6 1.6 Industrial production (1) 4.1 1.6 0.5 1.1 0.3 1.4 1.2 1.5 0.6 0.1 0.7 Total construction IP (1) -0.3 -0.2 0.0 0.2 0.1 -0.3 -0.7 7.3 1.0 1.4 1.5 Housing starts (000) (3) 612 580 542 583 573 614 678 715 736 774 904 CV production (M units) 5.5 1.36 1.27 1.32 1.21 1.44 1.49 1.47 1.45 1.55 1.52 Car production (M units) 3.44 0.72 0.67 0.87 0.79 0.88 0.91 1.06 1.03 1.03 1.01 Western Europe Eurozone GDP (2) 1.5 2.3 2.3 2.4 1.6 1.3 0.6 -0.1 -0.5 -0.6 -0.9 Germany industrial production (1) 8.0 1.7 2.9 2.3 0.9 1.8 -1.6 -0.4 0.0 0.9 -3.0 France industrial production (1) 1.7 -0.9 1.5 1.1 -0.5 0.0 -0.7 -0.5 -0.5 -0.2 -1.8 Italy industrial production (1) 0.2 0.9 0.7 -0.1 0.5 -1.8 -1.7 -2.3 -1.9 -0.5 -2.1 UK industrial production (1) -0.8 0.4 0.1 -0.1 -1.2 -0.2 -1.3 -0.2 -0.9 0.7 -1.9 Construction IP - Germany (1) 3.6 0.6 1.1 1.3 1.1 0.6 0.1 0.3 -1.8 0.1 -1.7 Construction IP - France (1) 0.1 -0.5 -1.1 0.3 0.5 0.7 0.5 0.0 0.4 0.1 -0.8 Construction IP - Italy (1) -3.1 -0.6 -0.1 -1.3 -0.8 -0.8 -0.7 -3.2 -1.7 -1.5 -1.3 Construction IP - UK (1) 2.5 2.9 -1.8 0.0 1.3 -0.2 0.1 -6.4 -2.8 -2.5 0.3 German housing permits (000) 228.4 52.9 49.8 50.7 57.9 59.1 60.7 49.0 64.9 64.1 61.4 French housing starts (000) 534.8 122.9 113.6 122.3 123.1 136.8 152.6 122.7 118.3 138.7 115.9 English housing starts (000) 110.7 29.0 20.7 29.4 30.0 28.1 23.3 23.8 23.5 27.9 23.1 Germany car output (M units) 5.76 1.28 1.42 1.45 1.41 1.46 1.44 1.48 1.28 1.35 1.26 France car output (M units) 1.98 0.43 0.50 0.53 0.51 0.43 0.52 0.50 0.42 0.40 0.38 Italy car output (M units) 0.49 0.14 0.13 0.15 0.12 0.13 0.09 0.11 0.11 0.08 0.07 UK car output (M units) 1.34 0.31 0.34 0.35 0.30 0.33 0.37 0.39 0.35 0.34 0.40 Japan GDP (2) -0.5 5.8 5.4 0.2 -1.7 -0.5 -0.1 3.3 4.0 0.4 0.4 Industrial production (1) -2.3 -1.0 -0.1 -1.5 -4.2 5.4 0.4 1.2 -2.0 -4.2 -1.9 Total construction IP (1) 1.0 -0.2 0.5 0.6 0.3 0.3 0.3 1.5 -0.1 0.9 1.0 Housing starts (000) 834.1 212.7 218.7 192.4 203.2 229.6 209.0 199.5 215.9 227.1 240.3 Car output (M units) 7.14 2.17 1.91 1.62 1.33 2.07 2.12 2.32 2.24 2.15 2.04 CV output (M units) 1.13 0.27 0.46 0.20 0.18 0.26 0.50 0.28 0.24 0.26 0.50 China GDP (2) 9.3 9.7 9.9 9.8 9.6 9.0 8.9 8.1 7.6 7.4 7.9 Industrial production (2) 13.8 13.5 13.3 14.8 13.9 13.8 12.8 11.6 9.5 9.1 10.0 Data: BAK Oxford, SMMT, Monthly Statistics of Japan, CRU, OECD. Notes: (1) % change on previous period. (2) % change y/y. (3) Seasonally adjusted annualised.

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