Products:

Our flat rolled steelworks can produce discrete plate in thickness from 3/16 to 4½ inches and coil in thickness from 1/10 to ¾ inches. Widths for discrete plate and coil range from 48 inches to 120 inches and 40 inches to 120 inches, respectively. Discrete plate may either be sold directly to customers or further processed at our heat treat facility. Coil may be sold either directly to our customers or further processed at our cut-to-length and tubular facilities. We have also expanded our value-added product lines to include blasted and painted, quenched and tempered, and normalized plate products.

We estimate the North American plate market in sizes that we produce was approximately 14 million tons in 2006. The North American production of plate in those same sizes was approximately 12 million tons and we believe we are the leading producer.

We are a major supplier in the energy tubular markets in the U.S. and Canada, shipping over 1.1 million tons in 2006. Over 80% of our tubular shipments in 2006 were energy related, as classified by casing and tubing, large and small diameter line pipe. Our primary source of material for ERW tubular production is coil produced by our flat rolled steelworks. Additional requirements are sourced externally, with approximately 30% of the 2.0 million tons consumed in our pipe and cut-to-length lines purchased from third parties in 2006. Our primary source for seamless tubular production is solid round billets produced by our Koppel, Pennsylvania steelworks acquired in the NSG transaction. We produce OCTG and small diameter line pipe in both seamless and ERW pipe in both carbon and alloy grades.

Our energy tubular products consist of three major components — oil and gas well casing and tubing, small diameter line pipe and large diameter line pipe. OCTG consists of casing and tubing which are used in the exploration and production of oil and natural gas from well sites. Line pipe is used in the gathering, transmission and distribution of extracted oil and natural gas. We have developed a strong network of distributors and customers within the North American OCTG market. We estimate the North American market for OCTG to be 6.2 million tons and our share of this market to be 12% based on our shipments in 2006. Major competitors in the North American OCTG market are Tenaris, Lone Star Steel Company, United States Steel Corporation and a high percentage of imports, primarily from China.

Large diameter pipe, a subset of line pipe, is defined as pipe 16” and greater. Large diameter pipe is used in transporting oil and gas across long distances. Demand for large diameter pipe is generally driven by the need to transmit production from newly developed reserves, the need to meet demand greater than the current oil and gas delivery system capacity or replacement needs related to existing large diameter lines.

We produce large diameter pipe at our Regina facility, using our own coil, allowing us full control of the production process. Our Western Canadian location provides us with a freight advantage in the northern part of North America. In addition, we are able to compete effectively elsewhere in North America. Our competitors in the North American large diameter pipe market are Berg Steel Pipe Corporation, Oregon Steel Mills Inc, American Cast Iron Pipe Company, Jindal, Durabond and Stupp Corporation.

Our industrial pipe including hollow structural product (HSS) and standard pipe is produced at various tubular facilities. IPSCO has a small share of the North American industrial pipe market, which is supplied by numerous producers.

As previously noted, a portion of the coil produced at our steelworks is used at our cut-to-length facilities. Three of our facilities (Houston, St. Paul and Toronto) have temper leveled cut-to-length lines, which produce product with superior flatness, surface quality, higher strength, and other qualities needed in certain manufacturing processes, all without heat treatment.

During 2006, we had approximately 700 customers purchasing our products, primarily in the service center, distribution, energy, agricultural equipment, transportation equipment, heavy machinery and construction industries. Seventy percent of our sales were made to U.S. customers. Our wide assortment of plate product widths, lengths, thicknesses and grades are used by end customers to manufacture construction and farm equipment, rail cars, barges, ships, storage tanks, bridges, structural poles, wind towers, offshore platforms, marine equipment, large diameter pipe and many other products.

Raw Materials:

Significant variable costs of steel mill production are steel scrap, alloys, electricity and natural gas. The most significant variable cost for our pipe mills and coil processing facilities is the cost of hot rolled coils.

Scrap metal is the primary raw material input for mini-mill producers. Scrap metal prices can increase or decrease significantly depending on market conditions. In 2006, our average cost per ton of consumed steel scrap, used at all of our steel mills was $193 compared to $173 in 2005.

We are vertically integrated through General Scrap Partnership, a Canadian scrap metal operation owned by IPSCO, with 14 collection sites, five of which include shredders. This Partnership processes approximately 400,000 tons per year of ferrous scrap. We also cultivate strong business relationships with most major scrap yards and brokers.

Alloys are consumed in the production of specialty grade steels, which are used to produce finished products with desired strength, hardness and abrasion characteristics. Specialty grade steel products typically command higher selling prices. Alloys were approximately 10% of the cost of steel produced in our own steel mills in 2006.

Electricity and natural gas are a significant variable cost for IPSCO representing 10% of our total steel mill product cost in 2006. We have long-term electricity contracts for our mills in Mobile, Montpelier, and Regina that extend to April 2011, December 2016 and December 2018, respectively. We are currently negotiating for a long-term contract for our Koppel facility. All of our contracts establish a fixed rate for our electrical usage subject to adjustments as provided in the individual agreements. For natural gas, we utilize forward purchase contracts and hedging programs for consumption in the normal course of business covering a four-year period to smooth price volatility. These programs help mitigate significant increases in spot prices.

Product Development:

We continually evaluate new ways to add value to our product lines. With focused development from our research personnel and product development engineers based on input from our customer base and sales force, we have expanded our plate and pipe product lines to include certain niche or specialty steels and advanced energy pipe, which have replaced a portion of our commodity grade products.

We operate a newly constructed modern research unit specifically dedicated to accelerate development of the Company’s capability to produce large diameter pipe suited for frontier climates, as well as high-end grades of plate. Known as the Frontier Pipe Research Unit, it will also be committed to conducting research related to other energy tubular products such as OCTG for frontier environments and other advanced energy sector steel products.