Coated Steels Market Tracker Galvanized Steel and Tinplate ...

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April 2013

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xz The US HDG market is fixed into a wait-and-see mode at the moment, with the mills' xlatest attempt at raising prices by $50/short ton clearly failing and further falls in prices z?xaxt least for the next month or so ? seen as being very likely.

zz European coated steel prices have this month fallen back to levels seen at the start of the year, following a brief upwards move in March. The falls have come largely on the back of falling input costs and fears regarding previously-seized material from Ilva's Taranto facility entering the market.

z Asian coated steel prices have also fallen this month and although we are anticipating further falls in the short term we believe tdemand outlook is better than the market perceives.

z The global tinplate market remains divided, with only markets in Asia offering sustained growth prospects at present. While US demand is steadily recovering, the EU remains characterized by structural overcapacity and weak demand levels.

GGlolobbaallhhoott--ddipipppeeddggaalvlvaannisiseeddssttrripippprriciceess ($/tonne)

xPrices are being pushed up by cost pressures but mills are struggling to achieve greater margins

Issue 171 April 2013 18 April 2013

Contents

Coated steel and substrate prices 2

North America

4

Europe

6

Asia

8

Tinplate

10

Demand indicators

12

1,200 Forecast

1,100

1,000

900

800

700

600

500

US domestic

400

German domestic

Chinese export 300

Chinese domestic

200 Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul 10 10 10 11 11 11 11 11 11 12 12 12 12 12 12 13 13 13 13

SoSouurcrec:e:MMeteatal Bl BuulllelteitninRReseesaearcrhch

"Galvanized Steel and Tinplate: Market Tracker is a quality product and an important source for our business intelligence"

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As well as the monthly issue, you'll also get all this data, downloadable into Excel: l Key regional statistics on production, shipment, trade and

inventories from 2007 l Historical prices for HDG products from 1999, and price series

from 2004 for ELG, raw materials and tinplate products l Key end-user and economic indicators relating to

investment, capacity and trade issues

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April 2013 Galvanized Steel and Tinplate Market Tracker3

Coated steel and substrate price analysis

Selected coated steel prices for this month (1)

USA domestic USA import (2)

Latin America export

Local Currency

$/ton $/ton

Local 800 -

HDG $/tonne 882 915 750

Europe import/export (4) Germany domestic (5)

France domestic Italy domestic UK domestic Turkey export CIS export (6)

Gulf region import c&f

/tonne /tonne /tonne ?/tonne

588

768

578

755

578

755

540

706

515

789

-

763

-

850

-

800

Japan domestic (7) Japan export (7)

South Korea domestic

South Korea export

China domestic China export (8) Iran import Indian domestic Indian export

?/tonne /tonne Rmb/tonne

Rs/tonne

135,000 -

1,000,000 -

4,898 -

45,250 -

1,376 850 892 810 792 683 795 829 803

Local 819 -

ELG $/tonne 902 -

-

821

593

775

-

-

580

758

-

-

-

-

-

-

-

-

150,000 -

890,000 -

5,520 -

1,528 794 785

892 722 -

Pre-painted coil

Local

$/tonne

868

957

-

-

-

-

669

875

686

897

700

915

674

881

-

-

-

-

-

-

-

-

165,000 -

1,100,000 -

5,880 -

1,681 -

982 -

950 830

-

Tinplate (3)

Local

$/tonne

1,197

1,320

-

-

-

1,2.00

933

1,220

980

1,281

980

1,281

960

1,255

691

1,059

-

-

-

960

-

1,100

115,000

1,325,000 -

7,350 -

1,172 1,190 1,183 1,180 1,188 930

-

Notes (1) fob or ex-mill prices except where stated, including coating extras (2) thin gauge cif Gulf Port (3) 0.21mm basis (4) HDG/ELG are import, tinplate is export (5) European HDG prices include base coating extras. (6) CIS export material from the Black Sea. (7) Tex report for HDG. (8) Base price excludes coating extras. Import prices are cif basis; '-' denotes products that are either not produced/exported or n/a not enough business has taken place to accurately gauge prices.We have taken a price, which we feel most accurately represents a median transaction price. However, usually business takes place within a range of the value allocated.

Historical and forecast coated steel market prices

USA Domestic Import

L. America Export

HDG prices ($/tonne)

Europe Turkey

CIS

Domestic Export Export

Persian Gulf Import c&f

Aug 12

875

900

721

765

790

1,038

1,068

Sep 12

877

900

691

772

785

1,122

1,152

Oct 12

825

900

663

770

785

1,122

1,152

Nov 12

815

1,009

765

724

760

1,095

850

Dec 12

870

910

765

750

778

845

845

Jan 13

871

915

750

781

760

835

775

Feb 13

882

915

750

777

785

850

800

Mar 13

904

915

770

763

785

852

800

Apr 13

882

915

750

755

763

820

775

May 13

871

915

740

752

763

808

775

Jun 13

871

915

740

739

763

808

775

Jul 13

882

915

750

739

763

820

775

Source: Metal Bulletin Research Notes (1) fob or ex-mill except where stated (2) thin gauge cif Gulf Port (3) basis 0.21mm basis (4) Exports are fob Antwerp (5) CIS Export material from the Black Sea. Import prices are cif delivered.

We have taken a price, which we feel most accurately represents a median transaction price. However, usually business takes place within a

range of the value allocated. Prices are based on most common grade, excl. extras.

Japan Export

823 818 818 780 845 840 850 850 850 825 800 775

USA Domestic

1,400 1,350 1,330 1,320 1,320 1,310 1,310 1,310 1,320 1,320 1,320 1,320

Latin America Export

1,260 1,245 1,240 1,240 1,240 1,210 1,220 1,220 1,200 1,200 1,200 1,200

Tinplate prices ($/tonne)

Europe

CIS

Japan South Korea

Export

Export Export

Export

1,340

1,180

1,430

1,265

1,340

1,190

1,450

1,300

1,300

1,200

1,370

1,300

1,260

1,120

1,300

1,275

1,200

1,000

1,240

1,280

1,100

1,040

1,269

880

1,100

1,040

1,302

880

1,200

950

1,140

1,180

1,220

960

1,190

1,180

1,220

960

1,190

1,180

1,250

970

1,210

1,200

1,250

990

1,210

1,200

MBR's global raw material prices

Tin prices

LME

LME

cash

3-m

$/t

$/t

Zinc prices

LME

LME

cash

3-m

$/t

$/t

Jan 12

21,461

21,502

1,981

1,995

Feb 12

24,343

24,395

2,058

2,076

Mar 12

23,016

23,059

2,035

2,049

Apr 12

21,795

21,845

1,988

1,994

May 12

20,371

20,389

1,930

1,934

Jun 12

19,263

19,251

1,856

1,857

Jul 12

18,631

18,634

1,851

1,855

Aug 12

18,645

18,645

1,814

1,833

Sep 12

20,697

20,658

2,002

2,031

Oct 12

21,321

21,300

1,912

1,950

Nov 12

20,700

20,685

1,904

1,934

Dec 12

22,844

22,844

2,038

2,066

Jan 13

24,674

24,653

2,031

2,055

Feb 13

24,326

24,334

2,129

2,151

Mar 13

23,337

23,359

1,936

1,962

Apr 13

22,849

22,860

1,854

1,889

% change comparisons:

Year-on-year

5%

5%

-7%

-5%

Month-on-month

--120.01%%

-2.1%

-4.2%

-3.8%

Source: LME, Metal Bulletin Research, * prices are an average of weekly prices between Coated Steel Monthly publications

Hot rolled coil prices*

US

EU avg

Japan

domestic

domestic

export

$/t

/t

$/t

757

466

607

776

542

638

753

546

644

722

545

646

717

532

646

690

525

632

640

518

628

678

508

616

691

498

560

630

488

533

690

472

547

725

462

556

716

486

563

705

502

574

695

513

628

664

499

638

-8%

-8%

-1%

-4.5%

-2.7%

1.6%

Cold rolled coil prices*

US

EU avg

Japan

domestic

domestic

export

$/t

/t

$/t

911

556

761

930

662

799

892

638

806

858

606

809

856

643

798

803

612

783

780

604

757

819

588

755

827

587

721

771

579

716

785

560

729

800

545

735

800

550

742

793

575

733

794

585

740

772

584

735

-10% -2.8%

-4% -0.2%

-9% -0.7%

Metal Bulletin Research

4Galvanized Steel and Tinplate Market TrackerApril 2013

American Market Highlights

l Oversupply and falling scrap prices put downward pressure on prices l Buyers stay on sidelines waiting to see how low prices fall l All eyes are on the sale of ThyssenKrupp's Calvert mill

$/tonne

Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Market Outlook

US domestic HDG prices

1100 1000 900 800 700 600

Source: Metal Bulletin Research

Metal Bulletin Research

The US HDG is fixed into a wait-and-see mode with the mills' latest attempt at raising prices by $50/short ton clearly failing and further falls in prices ? at least for the next month or so ? seen as being very likely. We believe that this is largely supply driven. Underlying demand continues to slowly improve with even the largest laggard, non-residential construction, coming slightly off of its lows, with further modest improvement

expected as warmer temperatures help the building season kick in. Even with import activity remaining fairly light, the market remains in overcapacity. With this, plus falling scrap prices in April and most likely down in May as well, we do not believe there will be much scope for price increases in the near term.

US HDG mills give back price gains with further fall back likely A combination of an oversupplied market, falling scrap prices and general economic uncertainty is exerting strong downward pressure upon the US HDG market, causing domestic mills to give back just about all the gains they had achieved in the past year or so, despite four or five price hike attempts. As of mid-April, base prices for G-90 HDG sheet had fallen back to $680-$720/ short ton, down from $720-$740/ton in March. This brings them more or less back to where they had been this time last year despite approximately 11 price gyrations over the past 12 months.

Officially, extras have remained steady in the past month on weak zinc pricing. We have heard of some discounting of extras prices, however, especially on large volume orders and this has brought some HDG transaction prices down even further.

Despite gradual increases in end-user demand in the USA, we believe that HDG prices could fall even further in the near term, especially if scrap prices fall again in May. There are, however, several factors that could affect our hypothesis e.g. if the lagging construction market comes back faster than anticipated and if there is any rationalization of US coated steel production capacity. In the meantime, buyers remain very cautious. It is also possible that the mills could try to establish a floor with yet another price hike announcement, but MBR does not believe that attempt would be any more successful than the previous five.

Buyers remain on the sidelines waiting for prices to bottom out With their inventory levels already at a very lean 2.3 months of supply on hand as of the end of March, distributors find themselves in the middle of a tightrope act. They largely remain on the

NAFTA passenger car and LCV production (M units), Automotive production in the NAFTA region is expected to continue its rebound this year, with output expected to be the highest in ten years

USA net imports of coated steel (`000 tonnes) Although the USA is a net importer of coated steels, new facilities may not necessarily be needed should TK's Calvert mill ramp up

18 16 14 12 10 8 6 4 2 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f

Source: OICA, Metal Bulletin Research

3,000 2,500 2,000 1,500 1,000

500 0

Source: AISI, Metal Bulletin Research

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