Goldman Sachs
4th Annual
Global Steel CEO Forum
December 4, 2008
China
§Steel Mills Cut Back Production 30-50%
§Long Products Demand and Prices Improving Slightly – Flat Products Remain Weak
§Steel Mills Starting to Buy Imported Scrap
§Spot 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) Prices
§Large Inventory of Iron Ore at Ports (60-70 Million MT) Likely to Take One to Two Quarters to be Significantly Reduced