(NLMK) – Duferco Joint Venture Presentation - Rustocks

Semi-finished product strategy
Volatility of finished steel sales is lower
than that of slabs on a long-term basis
Global slab supply is expected to grow
faster than finished product
The 2 nd phase of the NLMK Technical
Upgrading Program is focused on increasing
production of slabs for JV purposes
NLMK slab supply to JV companies will grow
to 3.6 mln TPY by 2012
USD/t
Steel price volatility *
NLMK-JV COOPERATION
60%
50%
40%
30%
Standard deviation to
average period price ratio:
slab 42.7%
HR 38.1%
CR 33.9%
14 000
12 000
14 000
12 000
12 400
2 300
,000 MT
20%
10%
0%
-10%
-20%
-30%
-40%
2001Q1 2001Q4 2002Q3 2003Q2 2004Q1 2004Q4 2005Q3 2006Q2
Slab HR coil CR coil
* Slab – CIS export, FOB Baltic/Black Sea port, coils – nominal period
average base prices, fob parity point EU.
Source: CRU, MB
10 000
8 000
6 000
4 000
2 000
0
10 000
8 000
6 000
4 000
8 890
1 900
5 790
4 900
1 900
9 200
1 690
5 940
6 015
1 850
1 570
6 500
6 400
3 600
1 200
2 000
3 600
2 595
1 200 1 800
1 570
2 800
0
2007E 2007E 2009E 2009E 2012E 2012E
NLMK slabs to external sales
External slabs to JV
NLMK 6000slabs internal consumption
NLMK slabs for JV
NLMK slabs to JV
JV Internal slabs
-18-