WORLD STEEL DYNAMICS Big Picture Global economic news appears favorable. Economic activity continues to expand notwithstanding oil prices in the mid-high $60s. In China, the economy has shifted to an even faster growth rate in the past six months. In the USA, the economy is strong, with signs that non-residential construction may rise 10% or more this year. In Germany, business confidence is up sharply. In Japan, confidence is also up and capital spending by manufacturers is rising.
WORLD STEEL DYNAMICS The Odds for Non-Chinese Mills Steel shortage – 50% odds. High operating rate – 45% odds. Sizable oversupply outside of China – 5% odds.
WORLD STEEL DYNAMICS The Odds for Chinese Mills Steel shortage – 5% odds. High operating rate – 35% odds. Reduced operating rate in China – 60% odds.
WORLD STEEL DYNAMICS The USA mills are benefiting from a favorable supply/demand balance reflecting lagging steel production, relatively low imports of both steel products and semi-finished steel and good underlying demand. Based on the recent annualized steel production rate and the imports of semis, the USA mills at present have a shipment capability of only about 104 million net tons versus the shipment forecast requirement of 109+ million tons. This shortfall of steel deliveries is why hot-rolled band in the USA spot market is priced at the high level of about $615 per metric tonne, FOB the steel mill. USA – Sole Strong Region
WORLD STEEL DYNAMICS USA Crude Steel Production Difficulties?
WORLD STEEL DYNAMICS USA Steel Consumption/Shipment Outlook (million short tons)
WORLD STEEL DYNAMICS HRB and Other Items: Price Forecast
WORLD STEEL DYNAMICS The profit performance of the steels sheet- producing group, will probably be better than that for the long-products group. One reason is that the steel sheet segment of the industry has grown far more concentrated in recent years. Age of Profits
Improved Steel Cycle Portion of the Steel Cycle For World Spot Export Pricing Past 25 years Next 10 years Shake-out21%5% Bad times2525 Average times2530 Good times1230 Boom times1710 WORLD STEEL DYNAMICS
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WORLD STEEL DYNAMICS Register Now Steels New Game : Bigger Bets – Bigger Jackpots SSS XXI – United States Co-sponsored by World Steel Dynamics and AMM June 19-21, 2006 Sheraton Towers New York New York City, USA www.worldsteeldynamics.com
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