Steel Trends in a Turbulent Market: Responses from The Steel Market Update Market Survey Feb 22, 2010.

1. Steel Trends in a Turbulent Market
(responses from our SMU Market Survey Feb 22, 2010)
UBS Conference Call (Postponed) – February 26, 2010
John Packard, Publisher

2. John Packard – Steel Market Update
• 31 years actively selling
flat rolled steel
• Newsletter developed
for active buyers &
sellers of flat rolled
steel
• Prices – Momentum –
Trends – Analysis
• SMU now in 2nd Year

3. February 2010 Forecast had 29.7%
forecasting growth

4. End of Feb. ‘10 many companies failing
to meet forecast – 43.5%

5. Failure to meet forecast comparison
January ‘10 to February ‘10
• Fail to meet forecast in • Fail to meet forecast in February
January – 38.7% – 43.5% - with one week to go

6. 73.1% of Mfg & SC are forecasting
some growth for March 2010

7. Mfg inventories appear balanced

8. Mfg moving away from building inventory
(reversal began in early February 2010 and continues)
Jan ‘10
Feb ‘10

9. Service Center Inventories “balanced”
(week of February 22, 2010)

10. Comparison of SC inventory build vs.
reduction January to late February
January 2010 S.C. survey February 22, 2010 responses

11. Only 23.7% plan on increasing
purchases over next 3 months

12. 29% of companies surveyed reported they
are buying foreign steel (mfg & sc combined)

13. More Mfg & SC plan on buying steel
over the next few months

14. Buyers seeing foreign as an option
End of December 2009 – 21% End of February 2010 – 35%

15. SMU Buyers Sentiment continues
pessimistic trend at -30% (as of 2/22/2010)
Updated: 2/3/2010
Steel Buyers Sentiment
100.0
75.0
50.0
25.0
0.0
-25.0
-50.0
-75.0
-100.0

16. SMU Buyers Sentiment with arrows
indicating when price cycle changed
Updated: 2/3/2010
Steel Buyers Sentiment
100.0
75.0
50.0
25.0
0.0
-25.0
-50.0
-75.0
-100.0

17. Pricing Momentum Continues to
Point to Higher Prices
•scrap
Why? •Iron ore While we
Cost
Increases worry about
supply
growth
•weather
Why? •Production
problems
Issues •Demand
growth?

18. SMU Indexes 4 Products: HR, CR,
Galvanized and Galvalume
Steel Market Update
2009 Monthly Pricing Average
1000
900
800
700
600
500 HRC
400
300 CRC
200
HDG
100
0 GLM

19. SMU Hot Roll Index
High, Low & Average (as of early February 2010)
Steel Market Update
HRC July 2009 to Current
650
$620
600 $600
$580
550
Low
500
High
450 Avg
400
350
300
7/1/2009 8/1/2009 9/1/2009 10/1/2009 11/1/2009 12/1/2009 1/1/2010 2/1/2010

20. SMU Hot Roll Index tends to Lead CRU
and other indexes

21. The UBS Conference
call has been moved to
Friday March 5, 2010
www.steelmarketupdate.com