Steel Industry Overview Régulo Salinas Cancún, México October 2007

2 Global Steel Industry Resumed its Growth After Decades of Stagnation and Low Profitability World Crude Steel Production Sources: IISI, World Steel in Figures 2007; Geographic Information Systems Production Volume (Million tons) , Production per Capita (Kg / Capita) Compound Annual Growth Rate (Average % for 5 year periods) 06* * 2006/2005

3 China has Been the Main Driver Behind Growth, Changing the Industry Structure 11% 10% 9% 34% 13% 4% 3% 16% North America CIS Japan Other China EU 25 Central & South America India 1,244 Million Tonnes 19% 22% 16% 5% 11% 3% 23% 1% India North America USSR Western Europe China Other Japan Central & South America World Crude Steel Production 644 Million Tonnes Source: IISI, World Steel in Figures 1976,

4 The Other Driver Behind Growth & Profitability has been Industry Consolidation Source: Bloomberg, Completed Deals Number of Steel Industry M & A’sAmount (US$ Billions)

5 Global Steel Price Cycle Shows Two Eras * Constant dollars (July 2007) ** 2006 cost plus iron-ore price increase (9.5% abril 07) Supply Driven Privatization Cost Based Demand Driven Consolidation Price Based Source: CRU / WSD HRC US*HRC Europe*China HRC Estimated Costs (w/o General Expenses) Asian Crisis Russian Crisis Steel Crisis China + Global GDP Sep ’07 = 573 (USA) US$ / ton ** HRC CIS*

6 Growing Regional Steel Concentration Source: IISI Top 5 producer’s share in 2006 production * Million tonnes per year Total US / Canada110 * Total Latin America63 Total Others Asia105 Total Europe166 Total China349 Total Japan112 Total CIS 113

7 Global Concentration Lagging Behind Other Metals, Suppliers and Key Customers 81% 66% 49% 40% 38% 28% 20% Iron OreNickelAluminaAluminumCopperZincSteel Sources:Morgan Stanley Research, 16 Feb 2007 IISI, World Steel in Figures 2006 JD Power Industry Concentration, Top 5 Producers (%) 72% Automotive Top 7

8 Impact Of Industry Consolidation will Become More Apparent in Coming Years  Scale economies and synergies  Better balanced steel inventories  Optimization of Cost / Production / Logistics  Global production / Local customer service  Optimal plant location  Optimal use of resources — capital, physical, labor  Faster response to market volatility and trends  Better balance with suppliers and customers  Increased competition among large, efficient producers Tactical Level Strategic Level

9 Mexico’s Steel Demand e** * Compound Average Growth Rate Source: Canacero Imports / ASC 23% Production Imports Apparent Steel Consumption ** 2007: Jan-July annualized CAGR*: ’96-’07e: 6.4% Mexico’s Apparent Steel Consumtion (MM tons)

10 Mexican Steel Imports * * 2007: Jan-July annualized Source: Canacero Flat Products Long Products Total Steel Products Imports (Million tons)

11 Mexican Market Structure 50% 37% 13% Steel Products Demand in Mexico 2007* (%) Flat Products Long Products * Seamless pipe, structural shapes, rails, Etc. ** January – July annualized Other **

12 Raw Steel Production in Mexico 2006 Raw Steel Production 16.3 million tons Source: Canacero Ahmsa 21% Sicartsa (Mittal) 5% Other 24% Mittal Steel Lazaro Cardenas 24% Ternium Hylsa 20% Tamsa 6%

13 Automotive Domestic appliances Motors Containers Metallic furniture Machinery & equipment Other Mexican Commercial Market Structure Steel Mills Imports Service Centers Traders / Retailers Construction Industrial Consumers Agriculture and others

14 WSD 2006 World Cost Curve (Hot Rolled Band Operating Costs before overhead) Source: World Steel Dynamics Efficient, low cost operations

15 U.S. Forecasted Price Upturn to be Reflected in Mexico US HRC Price Actual: CRU September 07 Projections: CRU Quarterly Oct 07 GFMS September 07 US$ / ton E 03 AJOE 04 AJOE 05 AJOE 06 AJOE 07 AJOE 08 AJ Forecast CRU GFMS

16 Positive Domestic Economic Perspectives (%) Mexico’s GDP Manufacturing GDP Construction Basic metals industry Metallic products, machinery & equipment Inflation (Dec-Dec) Interest Rate (28 days) Exchange Rate (Dec, $/dollar) Source: Harbor Intelligence, August 2007

17 Total Economic Perspectives Source: Harbor Intelligence, August 2007

18 Economic Perspectives by Sector Source: Harbor Intelligence, August 2007

19 Economic Perspectives in Manufacturing Source: Harbor Intelligence, August 2007