steel market update ubs presentation sept 9 2009
DESCRIPTION
TRANSCRIPT
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.
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
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
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 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.