commercial metals goldmansachs_12/04/08

Goldman Sachs4th Annual Global Steel CEO Forum

December 4, 2008

Goldman Sachs4th Annual Global Steel CEO ForumDecember 4, 2008

Vertical Integration

Product Diversification

Global Geographic Dispersion

CMC – Business Model


Current Market Conditions & OutlookGlobal Liquidity Crisis has Frozen the Steel MarketsVicious Downward Spiral of ConfidenceSupply, Including Inventories, Exceeds Apparent (or Willing) DemandMajor Focus is Inventory Reduction and Cash GenerationMajor Steel Production Cutbacks, 30-50% Depending on MarketsSharp Price Declines Appear to be EasingProject Delays, Cancellations More FrequentContract Cancellations, Market Claims, Price Renegotiations at Unprecedented Levels


North AmericaFerrous Scrap Prices, After Free Falling ($480/LT Drop July – November), Now StabilizingFerrous Scrap Flows Dramatic Slowing– Low Prices Impact Collection– Winter Approaching

U.S. Steel Mills Driving Down Inventories – Major Announced Production Cutbacks– Year End Impact

Rebar Fabrication Backlogs DecliningMany Small Jobs (200-700 Tons) Being Bid But Larger Jobs are ScarceService Centers Living Hand-to-Mouth; Buying from Mills’ Inventories


North AmericaRebar Imports Well Down– Only 20,000 MT Imported in November– Only 79,000 MT/Month Average YTD 2008

Latest Turkish Offers Approximately US $500/MT Houston Not Attractive– Long Lead Times– Must Commit to Larger Quantities– Volatility Scrap / Domestic Rebar Prices– Credit / Working Capital Constraints

Strengthening US$ and Low Freight Rates Not Attracting Imports


North AmericaOCTG Imports Starting to DeclineRaw Materials– Some Weaker– Some OK

Copper Prices – Always a Bell Weather– At $1.60 - $1.70 Per Pound– Reflects Lower Demand

China Starting to Buy Nonferrous Scrap Again –Positive Sign


Europe / Middle EastMill Production Cutbacks and Inventory Reduction Programs Will Continue into 2009Large Inventories Unsold Rebar in Middle East MarketsPolish Government Stimulus Package and EU Funds for Infrastructure a Positive for 2009Many Governments are Focusing on Infrastructure Spending in 2009 Which Will Benefit Long Steel Products


Reversal of Former Strategy to Control Overheating Economy / InflationTarget 8-9% GDP in 2009Fiscal Stimulus– US $590 Billion Infrastructure Spending– Focus Major Infrastructure Projects, Rail, Ports,

Highways– Focus Public Housing– Lowering Taxes (Including Income Taxes?)– Reducing Export Taxes

Monetary– Rapidly Cutting Interest Rates, Latest by 1.08%– Providing More Export Subsidies– Currency Now Depreciating to US$ (6.83-6.85)

China


ChinaSteel Mills Cut Back Production 30-50%Long Products Demand and Prices Improving Slightly – Flat Products Remain WeakSteel Mills Starting to Buy Imported ScrapSpot Iron Ore Prices now $70-73/MT (Bottom Mid November at $65/MT)Chinese Mills Only Buying on Spot Market – No One Buys at Benchmark (Contract) PricesLarge Inventory of Iron Ore at Ports (60-70 Million MT) Likely to Take One to Two Quarters to be Significantly Reduced


Summary – What Will Break the Cycle?Global Government Intervention Programs Must be EffectiveCredit / Liquidity Issues to EaseRestoration of ConfidenceDemand to Exceed Production Cutbacks / Inventory ReductionsClear Direction and Action from New U.S. President / Administration


Possible Capital / Infrastructure Stimulus in the U.S.China’s Impact Will be Critical– Infrastructure Spending– Stimulus to Domestic Consumption– Limited Steel Exports– Positive Signs After Chinese New Year

Summary – What Will Break the Cycle?


This written and verbal presentation may use financial statement measures considered non-GAAP financial measures

by the Securities and Exchange Commission (SEC). In compliance with the SEC’s Regulation G, we have

provided on our web site at

a reconciliation to the most comparable GAAP measure and other information that may be of interest to investors.

www.cmc.comwww.cmc.com

Non-GAAP Financial Measuresand Regulation G

Investor Information


Forward-Looking StatementsThis written and verbal presentation may contain forward-looking statements regarding the outlook for the Company's financial results including net earnings, product pricing and demand, production rates, interest rates, inventory levels, impact of acquisitions and general market conditions. These forward-looking statements generally can be identified by phrases such as the company or its management “expect,” “anticipates,”“believe,” “ought,” “should,” “likely,” “appears,” “projected,” “forecast,”“outlook,” “will” or other words or phrases of similar impact. There is inherent risk and uncertainty in any forward-looking statements. Variances will occur and some could be materially different from management's current opinion. Developments that could impact the Company's expectations include solvency of financial institutions and their ability or willingness to lend, extent of government intervention and its effect on capital markets, construction activity, difficulties or delays in the execution of construction contracts resulting in cost overruns or contract disputes, metals pricing over which the Company exerts little influence, interest rate changes, increased capacity and product availability from competing steel minimills and other steel suppliers including import quantities and pricing, court decisions, industry consolidation or changes in production capacity or utilization, the ability to integrate acquisitions into operations; global factors including political and military uncertainties, credit availability, currency fluctuations, energy and supply prices and decisions bygovernments impacting the level of steel imports and pace of overall economic activity, particularly China.

commercial metals goldmansachs_12/04/08

Economy & Finance

annual global steel

china steel mills

weak steel mills

reduced goldman sachs

annual currency

export subsidies goldman

chinese new year goldman

positive signgoldman