The image part with relationship ID rId3 was not found in the file.

AMM – 10th Annual Pipe and Tube Conference

Raw Material Analysis: Procurement Trends

10th AMM Pipe and Tube Conference8th-9th March, 2017

Houston

Dhaval TrivediBorusan Mannesmann

The image part with relationship ID rId3 was not found in the file.

The image part with relationship ID rId3 was not found in the file.

Raw Material Analysis: Procurement Trends

AMM – 10th Annual Pipe and Tube Conference

Discussion Points…

• How have duties placed on imports of HRC from certain countries changed procurement strategies for welded pipe producers?

• Are there other sources of price competitive HRC available?

• How will this change price dynamics when it comes to welded vs seamless pipe?

• Will price changes be passed on to consumers of tube and pipe?

The image part with relationship ID rId3 was not found in the file.

The image part with relationship ID rId3 was not found in the file.

USA Steel and Steel Product Imports - 2016

AMM – 10th Annual Pipe and Tube Conference

US Department of Commerce reported…

• World’s Largest Steel Importer: 22.6 million metric tons

• Import Penetration Down to 29.9% in YTD 2016 from 34.7% in YTD 2015

• Top Three Import Sources: Canada, Brazil and South Korea

• Largest Producers: Nucor, US Steel and ArcelorMittal USA

• 116 Trade Remedies in effect against imports of Steel Mill Products

9.10

5.40 4.50

2.90

0.65

-

2.00

4.00

6.00

8.00

10.00

Flat Long Semi-Finished Pipe andTube

Stainless

2016 YTD - Steel Imports

40.30 35.46

22.60

-

10.00

20.00

30.00

40.00

50.00

2014 2015 2016

Steel Imports - Last Three Years

Data in Million Metric Tons, Data Resource: US Department of Commerce, Enforcement and Compliance Report December 2016

The image part with relationship ID rId2 was not found in the file.

The image part with relationship ID rId2 was not found in the file.

Global Trade Measures on Hot Rolled Steel - 2016

AMM – 10th Annual Pipe and Tube Conference

USA:August 3, 2016 –AD/CVD on 7 Countries

European Union:Oct 7, 2016 –Duties on Chinese HRC

India:March 23, 2016 –Safeguard Duties

Mexico:April 4, 2016 –Extended Import Duties

Brazil:Nov 21, 2016 –Anti-Subsidy Investigation launched against HRC from China

AustraliaNov 10, 2016 – Anti-Dumping Investigation launched

Turkey:Apr 20, 2016 – Anti-Dumping Investigation was withdrawn

Data Resource: AMM Research & Metal Bulletin Research

The image part with relationship ID rId2 was not found in the file.

The image part with relationship ID rId2 was not found in the file.

Top 10 Steel Producing Countries & Steel Consumption

AMM – 10th Annual Pipe and Tube Conference

Global Crude Steel production is approximately 1500 Million Metric Tons Annually.

804

105

89

79

71

70

43

33

32

23

672

63

80

96

40

56

39

21

34

3

98

35

-5.7

-27

25

10

0.3

11

-3.7

17

-50 50 150 250 350 450 550 650 750 850

China

Japan

India

USA

Russia

S Korea

Germany

Brazil

Turkey

UkraineNet Export Finished Steel Consumption Production

Data Resource: World Steel Association and Department of Commerce, US Government

Data is in Metric Tons for reporting year 2015

The image part with relationship ID rId2 was not found in the file.

Price Trends 2014-2016

The image part with relationship ID rId2 was not found in the file.

AMM – 10th Annual Pipe and Tube Conference

$143

$246

$359

$637

$37

$102

$270

$379

64%

66%

68%

70%

72%

74%

76%

78%

80%

$-

$100

$200

$300

$400

$500

$600

$700

$800

Jan-

2014

Feb-

2014

Mar

-201

4Ap

r-20

14M

ay-2

014

Jun-

2014

Jul-2

014

Aug-

2014

Sep-

2014

Oct

-201

4N

ov-2

014

Dec-

2014

Jan-

2015

Feb-

2015

Mar

-201

5Ap

r-20

15M

ay-2

015

Jun-

2015

Jul-2

015

Aug-

2015

Sep-

2015

Oct

-201

5N

ov-2

015

Dec-

2015

Jan-

2016

Feb-

2016

Mar

-201

6Ap

r-20

16M

ay-2

016

Jun-

2016

Jul-2

016

Aug-

2016

Sep-

2016

Oct

-201

6N

ov-2

016

Dec-

2016

Jan-

2017

Mill

Util

izat

ion

US

$/sh

ort t

on

#1 Busheling Scrap - Chicago HRC Midwest Iron Ore 62% Fe, CFR China

1st Grade Coke, FOB China Billet, FOB Turkey US Mill Utilization

Global Mill Utilization

Mar 15, 2016 – Preliminary Duties Announced in USA

Data Resource: AMM Research, Metal Bulletin Research, WSA and AISI

The image part with relationship ID rId2 was not found in the file.

HRC Price and OCTG Consumption 2015-2016

The image part with relationship ID rId2 was not found in the file.

AMM – 10th Annual Pipe and Tube Conference

0.79

0.20 0.19 0.37

4.40

13.20

13.90

6.60

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

13.00

14.00

$-

$100

$200

$300

$400

$500

$600

$700

OCTG Consumption (Million Tons) #1 Busheling Scrap - Chicago HRC Midwest Months of Supply

Mar 15, 2016 – Preliminary Duties Announced in USA

Data Resource: AMM Research, Metal Bulletin Research and OCTG Situation Report

The image part with relationship ID rId2 was not found in the file.

Notable Steel Import Trends for Last 6 Months

The image part with relationship ID rId2 was not found in the file.

AMM – 10th Annual Pipe and Tube Conference

Data Resource: US Department of Commerce, Enforcement and Compliance SIMA (Steel Import Monitor)

Product Country

Monthly Average Between

Nov 2016 & Jan 2017

Monthly Average Between Aug 2016

& Oct 2016

% Change

Blooms, Billets & Slabs World 50,857 7,890 545%Argentina 12,551 3,286 282%Canada 6,154 2,456 151%Korea 52,639 22,306 136%World 133,683 77,358 73%Canada 7,869 1,951 303%India 13,227 3,396 289%Greece 14,000 5,605 150%

Structural Pipe & Tube Korea 10,391 5,020 107%Hot Rolled Sheets Korea 13,570 70,499 -81%

Oil Country Goods

Line Pipe

The image part with relationship ID rId2 was not found in the file.

Major Steel Mills in USA

The image part with relationship ID rId2 was not found in the file.

AMM – 10th Annual Pipe and Tube Conference

Furnace Type

Annual Capacity (Million

Tons)

Notes

AK Steel BOF 8.20

ArcelorMittalBOF 21.60 Riverdale Idled, Hot Strip Mill in Indiana

Harbor Idled.EAF 0.88

Big River Steel* EAF 1.60 Start-up OperationNLMK EAF 0.80 Nucor EAF 14.80 SSAB EAF 2.50 Steel Dynamics EAF 6.40

United States Steel BOF 17.50 Fairfield Permanently Idled in Aug 2015, Granite City Temporarily Idled

The image part with relationship ID rId2 was not found in the file.

Thank you!

The image part with relationship ID rId2 was not found in the file.

AMM – 10th Annual Pipe and Tube Conference

Questions….???