© Metal Expert Iran steel export: perspectives and competitiveness in MENA 3 rd Iran Steel Export Perspectives Conference September 7, 2016, Dubai, UAE Yuliya Filali Ansary, Editor MENA and Turkish market Metal Expert

© Metal Expert 1.Iran’s exports on growth track 2.MENA remains promising market for billets and longs 3.Competitiveness of Iranian suppliers in MENA and alternative outlets Contents

© Metal Expert 1.Iran’s exports on growth track

© Metal Expert Iranian steel exports will top 30% of total production Iran’s steel production and exports * – year ended March 20 Note: in million t Source: IMIDRO

© Metal Expert Iran’s exports are still highly consolidated Four months of the current Iranian year (March 20 – July 20, 2016) * – MSC including subsidiaries Source: IMIDRO Total exports: 2.1 million t Mobarakeh Steel Company* (MSC) Khouzestan Steel Company (KSC) Esfahan Steel Company (ESCO) Khorasan Steel Company Iran Alloy Steel Company Khouzestan Oxin Steel

© Metal Expert Billet remains most promising export product 3.8 million t of steel exported during the previous Iranian year (ended March 20, 2016)

© Metal Expert 2.MENA remains promising market for billets and longs

© Metal Expert Longs consumption is growing, but rates are slowing down Note: in million t

© Metal Expert GCC and Turkey were MENA's major long products consumers in 2015 Total: 68 million t

© Metal Expert MENA consumption growth is slower than expected before oil price collapse +3.3 million t +5% 71.3 million t of total consumption Change in long products consumption (2017/2015) Note: in million t

© Metal Expert Billet spot market growth peaked in 2015 Growth rates of long and billet consumption in MENA for 2015/2014

© Metal Expert Margin of Turkey’s rebar producers is unsustainable Note: in $/t

© Metal Expert Share of billet as feedstock for longs production stops growing

© Metal Expert Billet spot market will increase by 1.1 million t in 2016 Note: in million t

© Metal Expert CIS suppliers account for a half of MENA's spot billet shipments Total: 17.8 million t in 2015

© Metal Expert Spot billet shipments in 2015, by consuming country Total: 17.8 million t

© Metal Expert 3.Competitiveness of Iranian suppliers in MENA and alternative outlets

© Metal Expert How do buyers find competitive offers?

© Metal Expert GCC case: square billet production cost of main suppliers Note: in $/t

© Metal Expert Turkey case: square billet production cost of main suppliers Note: in $/t

© Metal Expert Thailand case: square billet production cost of suppliers Note: in $/t

© Metal Expert Conclusions  Demand for billet remains generally strong in MENA, but varies depending on sales destination  MENA’s billet consumption will grow by only 1.1 million t in 2016  Turkey and GCC will remain major billet consumers in the Middle East, but the role of Egypt is increasing  Chinese speculative price policy based on futures will leave space for alternative billet suppliers in the region  Suppliers from China are not following cheap-export strategy any more  Iran producers are quite competitive in traditional and alternative markets in terms of production cost

© Metal Expert The most up-to-date, comprehensive, reliable and useful data on Middle East long product markets Data structure and periodicity  cost analysis and suppliers' margins (updated monthly);  capacity database includes current facilities and ongoing projects with estimated date of implementation (updated quarterly);  market structure analysis by country: supply and consumption (updated quarterly). Annual subscription cost: $3500 Subscribers will receive  statistical packages, updated monthly and quarterly in Excel;  quarterly analytical report with summary of key factors and trends, which influencing regional markets. Subscription, trials: Metal Expert has great pleasure to present its new product – MENA Billet & Longs. Datastream

© Metal Expert Thank you for your attention! Yuliya Filali Ansary Editor MENA and Turkish market Metal Expert Tel.: (ext. 456)