Uk Steel Industry Review

UK Steel Industry Review January 2008

UK STEEL INDUSTRY REVIEW AGENDA
Steel demand
Steel imports and exports
Trading partners
Scrap and semis trade flows
Competitiveness issues
Opportunities …

STEEL DEMAND
Finished steel market in the UK is ~13mt/year
Imports at 5-6 mt/year satisfy some 50% of this demand
Finished steel exports are ~4 mt/year
Source: MCI assessments. 13,380 12,526 Total steel 2,312 2,174 Other products 1,908 1,699 Hot rolled sections 462 419 Hot rolled bars in lengths 578 571 Rods and bars in coil 1,414 1,278 Reinforcing 1,018 1,027 Other coated 2,468 2,154 Galvanised 830 823 Cold rolled 912 830 HR plate lengths 1,478 1,551 HR coil and sheet lengths 2007 2006 000’s tonnes Year UK finished steel demand

STEEL IMPORTS AND EXPORTS Source: MCI assessments. 4,043 4,015 5,763 5,094 Total steel n/a n/a n/a n/a Other products 403 529 873 692 Hot rolled sections 485 433 251 197 Hot rolled bars in lengths 1,038 767 377 291 Rods and bars in coil 160 82 431 382 Reinforcing 639 586 399 460 Other coated 183 217 1,655 1,529 Galvanised 329 417 464 456 Cold rolled 543 570 629 521 HR plate lengths 263 414 683 566 HR coil and sheet lengths 2007 2006 2007 2006 Exports Imports 000s tonnes

TRADING PARTNERS
Biggest exporters into the UK are the larger countries in the Euro- zone
Germany is in lead import volume position
Significant steel import volumes from China
Source: MCI calculations. 11% China Far East 9% France 11% Belgium 17% Germany EU % imports Country Region

SCRAP AND SEMIS TRADE FLOWS Source: MCI estimates. Other semis are steel billets and slabs with >0.25% carbon content. 36 224 257 212 Other semis 2,463 1,635 500 651 Slabs 543 373 119 94 Billets 151 135 32 6 Ingots 5,595 7,426 204 161 Ferrous scrap 2007 2006 2007 2006 Exports Imports 000s tonnes

COMPETITIVENESS ISSUES
UK steelmaking disadvantaged by lack of local ore and coal, high energy and high labour costs; trade export statistics do reflect some distortions
Better for UK to import semis instead?
Downstream options a good option; less capex and closeness to steel market
Ferrous scrap related opportunities?

OPPORTUNITIES …
Can MCI help you develop your presence in the UK steel sector?
Can we provide an update of the slides above?
Help with more detailed product demand analysis?
Review of steel investment options / opportunities?
Review or optimisation of your entry strategy?
Please contact: Andrew 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

Uk Steel Industry Review

by Andrzej Kotas

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