1. Session 3. Export / import challenges “Critical points of logistics in the steel supply chain” Bart-Luc Olde Hanter, Sales & Marketing Director NewTide Chartering BV, Rotterdam – The Netherlands

2. Introduction NewTide NewTide is a young and ambitious maritime service provider located in the dynamic city center of Rotterdam, Europe’s main port Currently we have the exclusive commercial management over a modern multipurpose fleet of dry cargo vessels ranging between 2.000 – 10.000dwt By operating transparent NewTide strives to achieve clean logistical and shipping solutions by using our assets and network Our focus will be on dry cargo, (break)bulk and projects not limited to the full Atlantic, Mediterranean, Baltic and Black Sea

3. A chain is as strong as the weakest link Critical points of logistics in the steel supply chain

4. Focus on shipping Market developments Effects of the Emission control area’s (ECA’s) regulations Focus on logistics Logistics after the crisis: Lean and mean? Lsp’s: necessary evil or necessary partner? Critical points of logistics in the steel supply chain

5. Shipping – market developments Reduced shipbuilding capacity Increased scrapping of vessels Increased number of distressed vessels Freight rates historically low ever since September 2008 Currently freight rates seem to increase “Green-Shipping” is becoming of more importance Fuel efficiency is getting more important Reallocating of tonnage due to ECA’s in 2015 High fuel prices possibly to increase further due to ECA’s Increasing demand for (green) vessels is expected

6. The table is expressing the sulphur percentage allowed in fuels in a time bar; the red line is the bar applicable for Baltic and North Sea “Green shipping” is becoming more important

7. The below figure is showing where the current ECA’s are located

8. Fuel price development Baltic dry index

9. The search for improving margins by steel producers has lead to a shift from a steel production driven sellers market to a customer oriented buyers market What are the consequences for logistics? Changing steel logistics environment 20072014

10. Logistics after the crisis: Lean and mean? Although total crude steel production worldwide picked up this didn’t result in large international trade flows but in general more regional flows Steel logistics has changed and is still changing We still see only small lots max 5.000 ton Predominantly handling, hardly storage Multiple forwarding and shipping companies fighting the same cargo which resulted en still causes a pricing battle => concessions on quality High fixed and operating costs Very low market prices

11. Characteristics of a customer oriented market Shift from Ex-works To DAP/DDP logistic concepts Shall the logistics ambition of steel producers follow through?

12. Characteristics of a production driven market Steel producers focus on output maximisation Goal: max output => lower production costs => higher margins Players and their influence in logistical processes: Traders + Distributors / Steel Service Centers + Steel producers +/– End consumer -/- Consequences: Large quantity stockholding caused by trade Logistics is not that important, marginal costs Damage to steel (coils) is a matter of insurance Asset based lsp’s are a “necessary evil” Characteristics of a customer oriented market Steel producers focus on customer satisfaction & service Two goals: Increasing margins + customer satisfaction Players and their influence in logistics: Traders +/- Distributors / Steel Service Centers +/- Steel producers ++ End consumer + Consequences: Logistics is getting more important, implementation of total supply chain management and Just In Time concepts Focus on damage control, cost savings and risk reduction Asset based lsp’s have become “necessary partners” for success

13. Questions Are shippers really interested in sustainable logistical solutions? Will the customer satisfaction approach prevail over production maximization once the markets pick up? Will Steel producers implement total supply chain management from raw materials to finished products? Roberto Re Commercial Director of Metinvest Western Europe “ I think that this is a time to select and develop partnerships … to provide efficient logistics and guarantee uninterrupted service and technical support” (Metal Expert interview 21-01-2013)

14. Partnerships are critical points in the steel supply chain! A partnership implies: Trust (by transparency) Long term vision Stability Information exchange, understand each others pains & gains Developing logistical concepts together The next step towards customer satisfaction Working together on operational excellence and creating competitive advantages in order to strengthen the chain!

15. We cannot direct the wind but we can adjust our sails… NewTide – “Turn the tide”