Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Adalet Kazımlı, International Trade Director, ERDEMİR Group, TURKEY FUTURE MADE OF STEEL

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 CONTENT

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 GENERAL OUTLOOK OF TURKISH STEEL MARKET

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 GDP Growth Rates (%) Source: Oxford Economics – TRG (Turkish Republic Government) Turkish GDP is expected to grow at above 4% per annum over the medium term

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Top Steel Producing Countries – Crude Steel (Mt) RankCountries Change % 1. China ,1 2. Japon ,4 3. USA ,5 4. India ,2 5. Rusia ,5 6. South Korea ,2 7. Germany ,6 8. Turkey ,3 9. Brazil 35 -1,4 10. Ukraine ,8 11. Italy ,2 Turkey was ranked 8th position among Top Steel Producing Countries in 2012 Source: ISPA

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Crude steel production capacity in Turkey Source :DCUD Turkish crude steel production is heavily dependent on imported scrap Turkish crude steel capacity increased 2,5 times in the last 10 years Only 3 integrated steel makers among 31 producers Turkey is the biggest scrap importer in the world (ca. 23 mtpy), local scrap supply is around 10 mtpy Crude steel production reached 35,9 mtpy, indicationg a capacity utilization rate of 72% Turkish Capacity Snapshot

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, GDP Index – CAGR (%) Finished Steel Cons. – CAGR (%) Finished Steel Consumption and GDP of Turkey Source: ISPA (Turkish Iron & Steel Producers Association), Oxford Economics

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Turkish flat steel production capacity Source :DCUD Flat steel production capacity has developed quickly since 2006 and Turkey became a net exporter of flat products as well as long products Turkish flat steel production capacity increased 5 fold since 2006 Flat steel production capacity is enough to meet local demand Apparent flat steel use is estimated to be 13,6 mt, whereas flat steel production remains at 9,0 mt in 2012 In 2012 Turkey imported about 6,5 mt flat rolled products

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Finished Steel Production/Consumption (Mt) Turkey Source: ISPA

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Steel Export of Turkey (Mt) Source: TSI

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Regional Distribution of Steel Export (Mt) – Turkey *Other: Brazil, Peru, Ethiopia, Turkmenistan, Nigeria etc. Source: TSI Turkey exports mainly to MENA and EU countries

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 ERDEMİR GROUP

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 ERENCO ERDEMİR Romania ERMADEN ERSEM Group Companies

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Group Companies Establishment Establishment of ERSEM and ERENCO Acquisition of İSDEMİR and ERD.Romania Acquisition of ERDEMİR Maden Privatization Flat steel production in İSDEMİR 1965

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 TOP STEEL PRODUCERS Specialized on domestic markets Having good relations with key customers Having proactive culture Authorized management structure Having control over its costs Quick and effective reaction ERDEMİR Was ranked to the category of the world's top steel producers by WSD in 2012 Source: WSD ERDEMİR – «World-Class Steel Producer»

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Liquid Steel Capacity (Mt) – ERDEMİR Group Since 2005, liquid steel capacity of the group increased by 70% to 9.1 Mt

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Finished Steel Capacity (Mt) – ERDEMİR Group The finished steel capacity of the group increased by 82% to 11.1 Mt

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Production Volume (Mt) – ERDEMİR Group «Erdemir Group is continously increasing its production volume» Long product portion decreased over time in line with İSDEMİRs conversion to Flat production

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013

2011 & 2012 Total Export Sales on Region Basis EXPORT TO EU DECREASED DUE TO LOW DEMAND

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, Export Distribution on Region Basis MENA49% MENA49% EU36% EU36% CIS + OTHER9% CIS + OTHER9% AMERICA & CANADA7% AMERICA & CANADA7%

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Products & Markets ERDEMİR is a regional steel hub between European and MENA markets with a diversified product portfolio Flat Products HRC Plate CRC HDG Tinplate Silicon Steel Long Products Wire rod Billet Domestic Markets Turkey Romania Export Markets EU EU Other Europe & CIS MENA USA

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 ERDEMİR Group Ports 16 million mt/year, loading/unloading capacity Jetty : 1670 m (8 Jetties) Draft : 20 m Max.Vessel Size : 200,000 (DWT). 16,3 million mt/year, loading/unloading capacity Jetty: 1530 m (5 Jetties) Draft: 19 m Max.Vessel Size : 200,000 (DWT) ERDEMIR Port ISDEMIR Port

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 EXPORT TO EUROPE

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Annual GDP Forecast for EU Markets Source: European Commission Italy & Spain negative France, Germany & UK slightly positive

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 EU (27) Apparent Steel Use, finished steel Source:worldsteel Mt% /1113/1214/ match point 2014 as % of 2007 WORLD European Union /27) France Germany Italy Poland Spain United Kingdom N.F.71.6 Recovery of the demand in main European markets is slow

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Outlook of European Union Economy Weak demand Imbalance due to country differentials Political & financial uncertainties Recovery of GDP expected in 2014 Steel Market Slowing down in demand Short term restocking in early 2013 Downtrend in EUR/USD parity Major steel mills reported losses in 2012 Mergers and acquisitions expected Pressure over the margins Doubt on positioning

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, Erdemir Export Targets to Europe 2012 Export Tonnage : Export Forecast : Advantages 1.Euro pricing via hedging 2.Alternative payment solutions 3.R&D studies with the clients 4.Improvement in logistics

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Logistics Advantages of Erdemir & Turkey Mainly by bulk vessels Short lead time to neighbour markets No inland handling in Turkey due to our own ports Combination possibilities for cost efficiency Container & barge delivery possibilities JIT – Just in time deliveries

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 DISCLAIMER Ereğli Demir Çelik Fabrikaları T.A.Ş. (Erdemir) may, when necessary, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments and opinions. Erdemir has made the necessary arrangements about the amounts and results of such information through its Disclosure Policy and has shared such policy with the public through the Erdemir website, in accordance with the Capital Markets Board regulations. As stated in related policy, information contained in forward-looking statements, whether verbal or written, should not include unrealistic assumptions or forecasts. It should be noted that, actual results could materially differ from estimates taking into account the fact that they are not based on historical facts but are driven from expectations, beliefs, plans, targets and other factors which are beyond the control of our Company. As a result, forward-looking statements should not be fully trusted or taken as granted. Forward-looking statements should be considered valid only considering the conditions prevailing at the time of the announcement. In cases where it is understood that forward-looking statements are no longer achievable, such matter will be announced to the public and the statements will be revised. However, the decision to make a revision is a result of a subjective evaluation. Therefore, it should be noted that, when a party is coming to a judgement based on estimates and forward-looking statements, our Company may not have made a revision at that particular time. Our Company makes no commitment to make regular revisions which would fully cover changes in every parameter. New factors may arise in the future which may not be possible to foresee at this moment in time.

Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9, 2013 Thank you for your attention…