1. Structure of Presentation Where are we Now? Influences in 2006 Forecasts for 2006 Managing Volatility/Risk SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

2. An Industry in Transition Long Term Changes Companies Consolidate Consumption Growth Shifts Capital markets Costs and Prices – cycles to continue SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

3. Linked Price Cycles Scrap Commodity steels Iron ore, coke, coal Quality steels Sentiment SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

4. Today’s Market Binge Buying and Hangover November 2005: US and EU: stocks returning to normal; prices rising in US Asia: stocks rising; prices sliding Price collapse from March SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

5. Near Term Influences on the Steel Price in 2006 SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

6. Long Term Influences on the Steel Price in 2006 SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

7. Chinese Production Mill t SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

8. China Engine of Global Steel Economy? Growing Consumption gap? … exports… plant closures ? Fragmented industry Inefficient Capital intensive SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

9. Strong growth Raw materials availability Growth in infrastructure Low kg/head consumption CIBERT Russia Brazil India Cons kg/head Source: IISI, SBB Estimates SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

10. Real GDP Growth (% change) 2004 2005e2006e Middle East5.5 5.4 5.0 China9.5 9.0 8.5 India7.3 7.1 6.3 U.A.E.8.5 5.6 4.2 Turkey8.9 5.0 5.0 Newly Industrialised Asian Economies 3 5.6 4.0 4.7 Major Advanced Economies 1 3.2 2.5 2.6 ASEAN 4 2 5.8 4.9 5.4 SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

11. Global Capacity Utilization 89.2% 87.1% Mill t 79% SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

12. Nascent Global Companies Posco Shougang Bluescope Mechel JFE Nippon Tata Global Essar CMC Baosteel Evraz ThyssenKrupp More Global Companies US Steel Ternium Gerdau Duferco Mittal Severstal Arcelor SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

13. Higher Iron Ore Prices WinnersLosers $/t Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

14. Volatile Scrap ($/t) Source: SBB SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

15. More Reactive to Sentiment “US sets the tune” Changeable Spot Prices - Expectations - Inventories - International trade Sentiment SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

16. Trade Flows in 2006 Japan to export more globally Ukrainian exports to rise Russian exports may decline US imports to rise EU exports stable China: exports to rise? SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

17. Turnaround in Imports SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

18. 4th Quarter of 2005 US and EU: Stocks back to normal: Prices rising in US; Europe…? Asia: Stocks rising Prices weakening SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

19. Price Outlook 2006: HRC $/t Source: Steel Business Briefing Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

20. Price Outlook 2006: Rebar $/t Source: Steel Business Briefing Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

21. Price Outlook 2006: HRC $/t Source: Steel Business Briefing Global Forecast N. American Forecast European Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

22. Source: Steel Business Briefing Eu $/t Forecast Price Outlook 2006: HRC $/t & Euro/t European Average 190 240 290 340 390 440 490 540 590 640 690 740 790 1998Nov 2005Dec 2006 Eu Euro/t Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

23. Price Outlook 2006: Rebar $/t Global Forecast Source: Steel Business Briefing N. American Forecast European Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

24. Source: Steel Business Briefing Price Outlook 2006: Beams $/t World Average SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

25. Source: Steel Business Briefing Price Outlook 2006: Beams $/t Global Forecast N. American Forecast European Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

26. Source: Steel Business Briefing Eu $/t Forecast Price Outlook 2006: Beams $/t & EUR/t European Average Eu Euro/t Forecast SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

27. Contract prices : 2006 Fewer multi-year deals Up to 5-15% rise in 2006 (if Q4 stabilises) Impacts on financial results Linkage to raw materials SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner

28. Managing Volatility/Risk Risks in 2006: China; volatile scrap, excessive stocks, sentiment, lack of transparency …… Managing risk: Hedging: OTC, surcharges, indexation, LME?, active exchanges More Annual Contracts Managing Capacity SBB Presentation 19-11-05 at MEsteel-SBB Dubai Dinner