TSI Benchmark Scrap Prices

TSI Supplementary Scrap Reference Prices: Turkish Imports

© The Steel Index 2015

Week ending February 06, 2015 (Week 06) Scrap Edition (Weekly)

Turkish Imports (CFR Iskenderun Port, Turkey) 1-week change 4-week change Low* High*

HMS 1/2 80:20, deep-sea (US$/tonne) 257 40 -13.5% 62 -19.4% 248 390

USA (Delivered US Midwest Mill)

Shredded (US$/long ton) 257 43 -14.3% 90 -25.9% 257 405

Taiwanese Imports (CFR Taiwan Port)

HMS 1/2 80:20 [containerized] (US$/tonne) 233 10 -4.1% 32 -12.1% 233 360

Indian Imports (CFR Indian Port - West Coast)

Shredded [containerized] (US$/tonne) 307 13 -4.1% 22 -6.7% 307 411

*past 12 months ** Price shown for Turkish imports is weekly average of TSI's daily index prices

TSI Benchmark Scrap Prices (US$/tonne) This Week’s Scrap Market: Turkey and the US

- TSI’s daily benchmark index for deep-sea Turkish imports of HMS #1&2 80:20 finished the week US$34/t lower from last Friday at US$248/tonne CFR Iskenderun port. Prices continued to slide this week, undoubtedly taking prompts from a US market in severe decline. Furthermore the current FX advantage held by European suppliers has enabled them to enter the market at a lower level. The US$2 fall today pales into insignificance compared to the recent trend of drastic daily drops and may well offer a sign of things to come. With such a dramatic fall in prices recently it has been suggested that the market may well stabilise as participants adapt to the new market conditions. That said sentiment in the Turkish scrap industry is undoubtedly still negative and a fall of –US$10 over the next 4-6 weeks has been intimated by a number of participants.

- TSI’s US Midwest shredded index fell US$43/long ton this week to finish at US$257/long ton (delivered mill). Over the last two weeks the market has suffered what can only be described as a capitulation, with TSI’s index dropping US$86/l.t. from January. Sell-side participants had little choice but to simply try to protect cash flow and worry about the consequences of the low pricing later. Some sales are also yet to be concluded, with buyers in no rush to secure material. Few saw such a deep correction coming, with participants citing the depressed iron ore and oil prices, along with the strong US dollar and increased steel imports as the main protagonists. Some mills were even heard to be buying no material for February. However this situation has been prevalent for a few months now, leaving some bemused as why the correction has been so sudden and severe. Something that is for sure is that the past couple of weeks will certainly live long in the memory for those involved in the scrap business.

This Week’s Scrap Market: Asia and India

- TSI’s index for containerized Taiwanese imports of HMS # 1&2 80:20fell US$10/t this week to US$233/tonne CFR Taiwan port. Negative sentiment is prevalent amongst mills as high inventories of scrap combined with poor domestic demand leaves little to be optimistic about. Trades from the US East coast were concluded into Korea this week at far lower levels than seen at the end of January on the back of drastic price falls in the US domestic market. With the Lunar new year holiday approaching a slowdown in ferrous markets is anticipated and it will be interesting to see the level at which the market settles once normal trading resumes.

- TSI’s containerized shredded index for Indian imports fell US$13/t toUS$307/tonne CFR Nhava Sheva port. With global scrap prices falling across the board, led by a capitulation in the US market, India was all too happy to follow suit. Trade was once again thin as cheaper local scrap and billets from China and Russia continued to provide a lower cost route to finished steel. Scant domestic demand in India has been a major driver for the negative market sentiment currently prevalent and it now seems all eyes on the budget presented on the 28th of this month.

TSI Benchmark Scrap Prices (US$/tonne)

Turkish Imports (CFR Marmara Port, Turkey) 1-week change 4-week change Low* High*

A3, short-sea (US$/tonne) 236 44 -15.7% 67 -22.1% 236 367

Turkish Imports (CFR Iskenderun Port, Turkey)

Shredded, deep-sea (US$/tonne) 265 23 -8.0% 60 -18.5% 265 393

Plate and Structural, deep-sea (US$/tonne) 260 33 -11.3% 69 -21.0% 260 399

*past 12 months

TSI Average Monthly Scrap Prices

Scrap – Steel Spreads

Average Monthly Scrap Spreads (US$/metric tonne)

Scrap Derivatives and News Headlines

© The Steel Index 2015

Aug Sep Oct Nov Dec Jan Feb MTD

Turkish Imports: HMS 1/2 80:20, deep-sea (US$/tonne) 385.35 374.09 336.04 309.15 313.67 311.90 256.60

USA: Shredded (US$/long ton) 382.00 379.00 354.25 330.00 336.00 334.25 257.00

Taiwanese Imports: HMS 1/2 80:20 [containerized] (US$/tonne) 350.00 333.20 298.75 288.25 283.20 255.25 233.00

Indian Imports: Shredded [containerized] (US$/tonne) 389.25 389.80 361.75 335.75 324.40 325.75 307.00

Turkish Imports: A3, short-sea (US$/tonne) 365.50 353.80 321.00 296.00 297.20 296.75 236.00

Turkish Imports: Shredded, deep-sea (US$/tonne) 390.25 373.80 337.75 313.50 319.00 312.50 265.00

Turkish Imports: Plate and Structural, deep-sea (US$/tonne) 396.25 378.40 342.50 317.00 323.00 317.00 260.00

Spread: US Shredded Scrap to US HRC (US$/metric tonne) Spreads: Turkish scrap imports to billet and rebar (US$/tonne)

Aug Sep Oct Nov Dec Jan Feb MTD

US HRC - US shredded scrap 371.95 361.98 367.61 384.33 350.33 314.41 349.80

Black Sea Billet Exports - Turkish HMS 1/2 80:20 scrap imports 129.40 125.91 132.21 123.60 84.53 81.85 n/a

Turkish Rebar - Turkish HMS 1/2 80:20 scrap imports 185.40 195.71 206.96 199.35 178.73 186.35 n/a

Scrap Prices and Forward Curve for Turkish Imports (US$/tonne) Platts Top Scrap News Headlines

February 06, 2015

- Scrap markets join the ‘historic low’ party- Chinese rebar export prices drop further but at slower rate - Scrap uncertainty keeps European rebar unchanged

© Platts 2015

Additional Scrap Market Data

© The Steel Index 2015

Turkish Imports by Origin (million tonnes) US Scrap Exports by Destination (million tonnes)

Indicative Freight Rates to Turkey (US$/tonne) Indicative Freight Rates to Asia (US$/tonne)

US Steel Mill Capacity Utilisation Rates Scrap – Iron Ore Fe Ratio

Exchange Rates

© The Steel Index 2015

Turkish Lira/US$ Exchange Rate Indian Rupee/US$ Exchange Rate

TSI Scrap Reference Product SpecificationsTurkish Imports

Material: Heavy Melt Scrap (HMS) 1 & 2, blended in an 80:20 Mix. ISRI codes 200-206 inclusive. HMS1 wrought iron and steelscrap ¼” and over in thickness. HMS2 wrought iron and steel scrap, black and galvanised 1/8” and over in thickness. Grades 205 and 206 to exclude cast iron and thin gauge materials.

Pricing Point: CFR Iskenderun port, TurkeyMinimum lot size: 5,000 metric tonnes. 1,000 metric tonnes as part of a mixed cargo.Timing: Loading within 30 working daysPayment: Cash/LOCCurrency/Units: US$ per metric tonne

US Domestic

Material: Shredded obsolete scrap. ISRI codes 210-212 inclusive. Homogenous iron and steel scrap, magnetically separated. Originating from automobiles, unprepared No.1 and No.2 steel, miscellaneous baling and sheet scrap. Average density 60 (50-70) pounds per cubic foot.

Pricing Point: Delivered US Midwest mill (Ohio, Illinois, Indiana and bordering vicinities) Minimum lot size: 1,000 long tonsTiming: Delivery within 30 working daysPayment: Cash/LOCCurrency/Units: US$ per long ton

Taiwanese Imports (Containerised)

Material: Heavy Melt Scrap (HMS) 1 & 2, blended in an 80:20 Mix. ISRI codes 200-206 inclusive. HMS1 wrought iron and steel scrap ¼” and over in thickness. HMS2 wrought iron and steel scrap, black and galvanised 1/8” and over in thickness. Grades 205 and 206 to exclude cast iron and thin gauge materials.

Pricing Point: CFR Kaohsiung Port, Taiwan Minimum lot size: 200 metric tonnesTransport: 20 foot shipping containerTiming: Loading within 30 working daysPayment: Cash/LOCCurrency/Units: US$ per metric tonne

Indian Imports (Containerised)

Material: Shredded obsolete scrap. ISRI codes 210-212 inclusive. Homogenous iron and steel scrap, magnetically separated. Originating from automobiles, unprepared No.1 and No.2 steel, miscellaneous baling and sheet scrap. Average density 60 (50-70) pounds per cubic foot.

Pricing Point: CFR Nhava Sheva port, India (West Coast)Minimum lot size: 200 metric tonnesTransport: 20 foot shipping containerTiming: Loading within 30 working daysPayment: Cash/LOCCurrency/Units: US$ per metric tonne

Contact The Steel Index

Sources: Platts, Freight Investor Services (FIS), Turk Stat.

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Transactions for the following specifications are normalised to the relevant reference productTurkish Imports

Material: Heavy Melt Scrap (HMS) 1 & 2, blended in an 70:30 Mix. ISRI codes 200-206 inclusive. HMS1 wrought iron and steel scrap ¼” and over in thickness. HMS2 wrought iron and steel scrap, black and galvanised 1/8” and over in thickness.Grades 205 and 206 to exclude cast iron and thin gauge materials.

Material: Heavy Melt Scrap (HMS) 1 & 2, blended in an 90:10 Mix. ISRI codes 200-206 inclusive. HMS1 wrought iron and steel scrap ¼” and over in thickness. HMS2 wrought iron and steel scrap, black and galvanised 1/8” and over in thickness. Grades 205 and 206 to exclude cast iron and thin gauge materials.

Material: Shredded obsolete scrap. ISRI codes 210-212 inclusive. Homogenous iron and steel scrap, magnetically separated. Originating from automobiles, unprepared no.1 & no. 2 steel, miscellaneous baling and sheet scrap. Average density 60 (50-70) pounds per cubic foot.

Material: Plate and Stuctural. ISRI codes 231, 232, 236 & 237. Cut structural and plate scrap, not less than ¼” in thickness, 5' in length and under, less than 24” in width. Phosphorus or sulphur not over 0.05%.

Material: Russian A3 scrap. Wrought iron and steel scrap ¼” and over in thickness

Material: Bonus grade scrap. ISRI codes 229, 230, 231, 232, 233, 236, 237, 238, 241, 249 and/or IRSI railroad ferrous scrap.

Minimum lot sizes:Deep-sea: 5,000 metric tonnes (1,000 metric tonnes as part of a mixed cargo)Short-sea: 1,000 metric tonnesBonus Grade: 1,000 metric tonnes (as part of a mixed cargo)

US Domestic

Material: Heavy Melt Scrap Number 1 (HMS). ISRI codes 200-202 inclusive. HMS1 wrought iron and steel scrap ¼” and over inthickness, not over 60 inches x 18 inches, prepared in a manner to ensure compact charging.

Material: Plate and Structural ISRI codes 231, 232, 236 & 237. Cut structural and plate scrap, not less than ¼” in thickness, 5' in length and under, less than 24” in width. Phosphorus or sulphur not over 0.05%.

Indian Imports (Containerised)

Material: Shredded obsolete scrap. ISRI code 210. Homogenous iron and steel scrap, magnetically separated. Originating from automobiles, unprepared No.1 and No.2 steel, miscellaneous baling and sheet scrap. Average density 50 pounds per cubic foot.

Material: Shredded obsolete scrap. ISRI code 211. Homogenous iron and steel scrap, magnetically separated. Originating from automobiles, unprepared No.1 and No.2 steel, miscellaneous baling and sheet scrap. Average density 70 pounds per cubic foot.

Material: Heavy Melt Scrap (HMS) 1 & 2, blended in an 80:20 Mix. ISRI codes 200-206 inclusive. HMS1 wrought iron and steel scrap ¼” and over in thickness. HMS2 wrought iron and steel scrap, black and galvanised 1/8” and over in thickness. Grades 205 and 206 to exclude cast iron and thin gauge materials.

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