Russian Steel Industry

Russian Steel Industry Review August 2008

RUSSIAN STEEL INDUSTRY AGENDA
Steel demand volume
Flat product demand
Flat product supply
Oligarch involvement
More CIS steel information
Opportunities …

STEEL DEMAND VOLUME
Russian steel market in 2007 amounted to ~39.9mt demand
Flat : long : tube mix was 48:29:23
Russian crude steel production was ~72mt [around 5.4% of world output]
Source: MCI assessments. Figures are for finished steel. Russian steel consumption 2007 39920 Total 9085 Tube 11690 Long 19145 Flat 000s t Product

FLAT PRODUCT DEMAND † Figures are Russian finished steel demand estimates for 2007. Source: MCI assessments. Source: MCI assessments. † : For corresponding Russian or other CIS steel long product figures, please contact MCI. 19145 Demand 9778 Export 3507 Import 25416 Production 000's t 2007 data 19145 Total 766 Other coated 383 Tin 2106 Galvanised 4212 Cold rolled 8615 Hot rolled 3063 Plate 000's t Product

FLAT PRODUCT SUPPLY Source: MCI estimates. NLMK data exclude semis for sale, and their cold rolled steel production figures include electrical steel. Plate is >10mm gauge. Figures are for 2007 net Russian supply only [i.e. with downstream production stripped out]. 25416 8877 12033 4506 Total 1622 -68 821 869 Others 700 200 0 500 Asha 937 0 0 937 Urals Steel 4618 3069 1549 0 NLMK 8181 2707 4474 1000 Severstal 9358 2969 5189 1200 MMK Total CR/Coated HRC Plate Supplier

OLIGARCH INVOLVEMENT (1) Cold rolling joint venture with Atakas in Turkey; stake in Fortescue Metals Group; Kazankovskaya coal mine; Bakal Ore, Belon Coal Magnitogorsk Iron & Steel Rashnikov Viktor Tagmet, Seversky, Sinarsky, Volzhsky pipe plants TMK Pumpyanskiy Dmitriy Dzerzhynsky Electric Steel Works, Izhorsk, Orlovsky Rolling Mill, Rouge Industries, Lucchini, Sparrows Point, Vorkutaugol, Vorgashorskaya Coal Mine, Kuzbassugol, Olkon Iron Ore, Karelskiy Okatysh, Vtorchermet Severstal Mordashov Alexei Serov Iron & Steel Works; stake in Kuzbassrazrezugol coal mine; Bogoslovsk Iron Ore Mine; JSC Metmash bearings / wheel plant; historic involvement with Trans-World Group UGMK Makhmudov Iskander DanSteel, VIZ-Stal, Stoilensky GOK iron ore mine, Altai Koks Novolipetsk Lisin Vladimir Azovstal, Yenakiyevski I&S, Khartsyzk T&P, Zaporizhkoks, Donetskkoks, Italy's Ferriera Valsider; Severny GOK and CGOK ore mines. SCM also acquired the Smart Group (see below) end-2007 System Capital Management Akhmetov Rinat NTMK, Zapsib, NKMK, Palini e Bertoli, Vitkovice Steel, Oregon Steel, Claymont Steel, Dneprovsk I&S, Ipsco Canada. Stakes in Evrazruda, Kachkanarsky (KGOK) and Vysokogorsky (VGOK) ore mines and in Dniprkoks; Raspadskaya, Yuzhkuzbassugol and Mezhdurechenskaya coal and in Highveld Steel & Vanadium in South Africa EvrazHolding Abramov Alexander Principal steel industry / related assets Company Surname First name

OLIGARCH INVOLVEMENT (2) Beloretsky Steel, Vyartsilya Steel, Bratskiy Ferroalloy Works, Izhstal; Southern Kuzbass and Razrez Tomusinsky / Olzherassky / Krasnogorsky Coal; Yakutugol and Elgaugol coal mines Mechel Zyuzin Igor Industrial Metallurgical Holding, Tulachermet, Uchastok Koksovy coal mine, Berezovskaya coal enrichment plant, Kruglogorsky ore mine KOKS Group Zubitski Boris Former large shareholder of Mechel [together with Igor Zyuzin] Mechel Yorikh Vladimir Zlatoust Metallurgical Works, Novosibirsk Metallurgical Works, Engels Pipe, Gurievsky Metallurgical Plant, Rostovsky Electric Metallurgical Plant, Nytva Metallurgical Plant, Volgograd Small Diameter Pipe Works Estar Holding Veremeenko Sergey Russky Ugol (Russian Coal), Estar Holding, Istil (acquired Jan 2008) Mirinvest Varshavsky Vadim Oskol, Urals Steel (formerly Nosta); Ribnita Steel Works in Moldova; Lebedinsk & Mikhailovsky ore mines, UralMetCom, Hamriyah Steel Metalloinvest / Gazmetal Usmanov Alisher 30% ownership stake with Usmanov (50%) and Anisimov (20%) Metalloinvest Skotch Andrei Vyksa Steel Works, Chusovoy, Almetyevsk Steel Works, Trubodetal, Shchelkovo Metallurgical Works, Troitckaya coal mine, Gubakha Coke UMC [OMK] Sedykh Anatoly Principal steel industry / related assets Company Surname First name

MORE CIS STEEL INFORMATION
MCI website http:// www.steelonthenet.com runs a free CIS news page at http:// www.steelonthenet.com/feeds/russia.php
We also publish a monthly report called ‘Memo from Moscow’ which covers topical CIS steel industry issues. This can be accessed free at http:// www.steelonthenet.com/moscow.html
Our representative in Moscow is also available for iron and steel sector research support †
† : A daily fee rate applies - please contact MCI.

OPPORTUNITIES …
Can MCI help you develop your presence in the Russian steel sector, or elsewhere in the CIS steel industry?
Can we help you with a steel feasibility study?
Or perhaps assist you with a due diligence appraisal?
If so please call us for a no obligation discussion …
Please contact: Andrzej Kotas, Managing Director, MCI Website: http:// www.steelonthenet.com Email: [email_address] Mobile: +44 (0) 775 149 0885

OPPORTUNITIES … For more steel information visit us: http:// www.steelonthenet.com

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Russian Steel Industry

by Andrzej Kotas on Jun 03, 2009

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Russian Steel Industry — Presentation Transcript