1. European Steel Plate Market Chances and Challenges Dr. Günter Luxenburger Chief Sales Officer DILLINGER HÜTTE 2.3.2015International Steel Plate Conference - Frankfurt1

2. Short profile of Dillinger Hütte Group Trends and developments in the steel market Specific view to the quarto plate market / Linepipe market Other important external conditions 2.3.2015International Steel Plate Conference - Frankfurt2

3. Dillinger Hütte and Saarstahl – leading companies with their products SHS-Stahl-Holding-Saar Saarstahl - Germany Dillinger Hütte - Germany Dillinger France Long products Heavy forgings Quarto plates Pig Iron production: Up to 5 Mio t/a Pig Iron production: Up to 5 Mio t/a 2.3.2015International Steel Plate Conference - Frankfurt3

4. Stand 17.03.2014 2.3.2015International Steel Plate Conference - Frankfurt4

5. Key data of Dillinger Hütte Group Plate capacity:2.300 kt/a Dillinger Germany:1.500 kt/a Dillinger France: 800 kt/a Focus on:- thick, large, heavy plates - stringent specifications - top services Employees in the group:7.600 Dillinger Germany5.300 Dillinger France 600 (using slabs of DH) 2.3.2015International Steel Plate Conference - Frankfurt5

6. Trends and developments in the steel market Short overview about Dillinger Hütte Group Specific view to the quarto plate market Other important external conditions 2.3.2015International Steel Plate Conference - Frankfurt6

7. GDP Forecasts (IMF: January 2015) Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt7

8. Source: European Commission, Markit, IFO 2.3.2015International Steel Plate Conference - Frankfurt8

9. Worldwide production of crude steel Average growth rates (% per annum) YearsGrowth 2000-145,1 % 1975-001,2 % 1950-755,4 % I. II. III. II. III. 2011:1,537 Mio t 2012:1,559 Mio t 2013:1,649 Mio t 2014:1,662 Mio t I. *) Estimation Source: Worldsteel, WV, DH calculations Development: 1950 - 2014 [mio mt] +5,1 % +1,2 % +5,4 % Outlook 2015:1,730 Mio t* Outlook 2016:1,773 Mio t* 2.3.2015International Steel Plate Conference - Frankfurt9

10. Quelle: Eurofer Konjunkturkommission, Feb. 15 Steel Market EU 2.3.2015International Steel Plate Conference - Frankfurt10

11. Apparent Consumption, Finished Steel (in Mill. t, change in % to the previous year) e=estimated, f=forecast, Source: own calculations 2.3.2015International Steel Plate Conference - Frankfurt11

12. China: Light Growth in 2015 – Further high Export Volumes Stahl-Zentrum Market Supply Rolled Steel (Mio t) Export Steel Mill Products (Mio t) Alloyed unalloyed Forecast 2015: 723 Mio. t, + 1,5 % 2.3.2015International Steel Plate Conference - Frankfurt12

13. Specific view to the quarto plate market Activity of Dillinger Hütte Group Trends and developments in the steel market Other external conditions 2.3.2015International Steel Plate Conference - Frankfurt13

14. General Trend Quarto Plate – Situation not new! -Mild improvement of demand in Europe for 2014 and 2015 -However overcapacity in Europe and worldwide will remain in next years -Increasing protectionism worldwide -Structural changes observed: Trend to self sufficiency in consuming markets (more local content) Delocalization of customers / demand High competition Price pressure Low profitability 2.3.2015International Steel Plate Conference - Frankfurt14

15. Actual trends in the QP-market  Positive: –Weak € makes European producers more competitive in Export markets – Weak € makes European customers more competitive in their export markets –Low oil and gas prices helps some countries (also Europe) to support the economy –General expectation for infrastructure spendings due to Junker‘s plan 2.3.2015International Steel Plate Conference - Frankfurt15

16. Actual Trends in the QP- Market  Negative: –Slow down in China in steel consumption  export pressure – high imports to Europe for specific product – commodity quarto plate extremely increased, mainly by China! –Low oil and gas prices will reduce investments for linepipe, offshore and petrochemical plants in short term Question: how oil price will develop in the next quarters?! 2.3.2015International Steel Plate Conference - Frankfurt16

17. Fair Trade Actions on EU-level New action started: Intensive monitoring of European plate mills (volume, pricing, injury of the European plate industry) Successful action against tricky B alloying against the rules of the EN- standards in order to apply VAT-rebate for Chinese mills New action against Cr as alloying element to bypass again the existing rules of WCO/EN10020/EN10025 New action to sensibilise authorities and end-users 2.3.2015International Steel Plate Conference - Frankfurt17

18. Imports of Quartoplate from 3rd countries into EU 28 by selected countries of origin in 2009 : 2010 : 2011 : 2012 : 2013 : 2014 17.02.2015 * = Serbia/Monten. probably thick / wide cut-to-length plate 1.000 t.p.m. Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt18

19. Total 3rd Country Imports of Quarto Plate into EU 28 - per quarter 1.000 t.p.m. Imports Q4/2014 = Oct.-Dec. 2014; Prior Surv.2 *) = Q1/15 = January 2014 % variations y-o-y *) = up to year 2012 = import licences 17.02.2015 *) +40,3 % Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt19

20. 17.02.2015 Consumption / Market Supply in kt / month - 2,9% Q4/14 = Oct./Nov. 2014 +2,3% + 5,0 % - 0,2 % Quartoplate excl. pipe plate - Apparent Consumption / Market Supply EU 28 Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt20

21. Quartoplate Deliveries of Eurofer mills into EU 28 1.000 t.p.m. per year -2,9% updated: 11.02.2015 -3,6% Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt21

22. Difference between Eurofer and EU 27: MRM, Huta Batory, Huta Pokoj, Palini & Bertoli, Marcegaglia, F.I.L., Stomana plus stainless steel production at Eurofer mills. Eurofer Q4/2014 = Oct.-Dec. 2014; EU28 Q4/14 = Oct./Nov. 2014 % variation y-o-y Total Production Quarto Plate EU 28 and Eurofer 1.000 t.p.m. + 18,7% + 8,5% -6,3% -10,8% + 23,4 % + 8,1 % - 3,9 % - 9,6 % +3,8% +4,3% Updated : 11.02.2015 EU 28 = 1-11/14 Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt22

23. 04.02.2015 stockpiling: 28 months Stock variation in kt Inventory in kt Q4/14 = End of December 2014 *) = extrapolated from statistical figures for the German market; inventory at end of period; partly estimated de-stocking 18 months Development of inventory *) of Quarto Plate at EU stockholder / SSC accumulated investory increase: 1,35 million tons or 50 % from beginning of 2006 till Q2/08 Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt23

24. 83,9 % 90,2 % 86,7 % 52,9 % 65,3 % 70,6 % 67,8 % 61,5 % Capacity Utilization Quarto Plate of Eurofer mills*) Q4/2014 = October-December 2014 *) = Situation November 2013 Percent updated: 11.02.2015 64,1 % Stahl-Zentrum 2.3.2015International Steel Plate Conference - Frankfurt24

25. Consumer segments for QP - 2013 vs 2012: mixed picture *** 2014 *** ** *** **** *** 2015 **** Yellow goods Heavy machinery Shipbuilding Offshore Oil & Gas Linepipe Wind-Energy Pressure Equipment Trend ? ? Construction ******* European total consumption forecast +2 % +2,3 % 2.3.2015International Steel Plate Conference - Frankfurt25

26. Quo vadis – plate market: 1. plate consumption slowly further recovering in Europe, but still far under existing capacity 2. Sales for non line pipe plates – in EU: slight improvement expected 3. Demand for shipbuilding plates  recovery in Asia in progress 4. Demand for line pipe plates recovered in 2014  uncertainty in 2015 5. Stock inventories in reasonable conditions  continuous buying activity over the year in Europe to be expected 6. Prices too low compared to cost situation  price hikes as soon as the market allows it! 2.3.2015International Steel Plate Conference - Frankfurt26

27. Other important external conditions Specific view to the quarto plate market Short overview about Dillinger Hütte Group Trends and developments in the steel market 2.3.2015International Steel Plate Conference - Frankfurt27

28. Remaining Competitive in a Challenging Climate - frame conditions in EU have to be supportive, reliable and stable for the (steel) - industry  EU administration and national governments bear a high responsibility! - keep steel (consuming) industry in the EU – keep the jobs in EU! - yes: to fair trade - no: to unfair trade, dumping or unfair trade barriers! - the steel companies in EU have still a lot of chances by marketing innovative and customer oriented products & services! - adjusting capacities is an issue not only in Europe – a general political solution is not realistic. Solution will take time! - The best performer will win the race! 2.3.2015International Steel Plate Conference - Frankfurt28

29. Do you recognize „DILLINGER“ ?! 2.3.2015International Steel Plate Conference - Frankfurt29