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Outlook for 2007 As Seen Through the Eyes of the Buyers

Outlook for 2007 As Seen Through the Eyes of the Buyers. Tom Stundza Executive Editor Purchasing Magazine Steel Manufacturers Association Annual Board of Directors Meeting Pointe Hilton Tapatio Cliffs Phoenix, Arizona February 16, 2007.

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Outlook for 2007 As Seen Through the Eyes of the Buyers

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  1. Outlook for 2007As Seen Through the Eyes of the Buyers Tom Stundza Executive Editor Purchasing Magazine Steel Manufacturers Association Annual Board of Directors Meeting Pointe Hilton Tapatio CliffsPhoenix, ArizonaFebruary 16, 2007

  2. 2007, the year of the pigbad ‘feng shui’ for steelIt’s a year of fire & water – two elements that don’t mix

  3. Gross domestic product(annual, % change from year before*) * Chained 2000 dollars 2007: Watch for slow growth

  4. Gross domestic product(quarterly, annualized rate, $, trillions*) * Chained 2000 dollars Trending up, gradually

  5. Purchasing managers’ index(monthly, diffusion index) Less than 50 = falling; greater than 50 = rising Business Conditions 61.1

  6. Buying plans index(monthly, diffusion index) Less than 50 = falling; greater than 50 = rising 90-day purchasing plans 69.4

  7. Steel buying plans index(monthly, diffusion index) Less than 50 = falling; greater than 50 = rising 30-day purchasing plans 62.5

  8. Steel buying plans (monthly, % expanding buys) 30-day purchasing plans 40%

  9. Purchasing price index(monthly, 100 = January 1992) 177.3

  10. Steel prices-paid index(monthly, diffusion index) Less than 50 = lower; greater than 50 = higher 59.5

  11. Steel price indexes(monthly, 100 = January 1992) stainless carbon

  12. Forecasts of key indicators(U.S., % change) ‘04 ‘05 ’06 ’07 old ’07 new Gross domestic product4.2 3.53.4 2.4 2.7 GDP price index 2.8 3.02.9 2.1 2.1 Consumer price index 2.7 3.43.2 2.0 1.9 Consumer spending 3.9 3.53.2 2.9 3.1 Capital spending 5.9 6.87.4 5.7 5.3 Industrial production 2.53.2 4.0 2.6 2.4 Residential starts 4.94.6(13.0) (16.4) (15.0) Motor vehicle sales 1.80.0(13.0) (2.4) (2.4) Blue Chip Economic Indicators

  13. Energy prices-paid index(monthly, diffusion index) Less than 50 = lower; greater than 50 = higher 69.7

  14. Industrial production index(monthly, seasonally adjusted, 100 = 2002) 2006: Still strong after all these months

  15. Capacity use, manufacturing(monthly, seasonally adjusted, % capacity) 2006: Robust production year 80.4

  16. Durable goods output(monthly, seasonally adjusted, $ billions) 2006: Rebound is evident 212

  17. Motor vehicle sales(annual, millions of cars, trucks, SUVs) 2006-2007: Why assembly is sliding 16.3

  18. Appliance shipments(annual, millions of cars, trucks, SUVs) 2007: Why steel demand will slip 76

  19. Office furniture shipments(annual, $ billions) 2007: A possible sales growth arena 11.8

  20. Machinery shipments(annual, $ billions) 2007: A possible sales growth arena 338

  21. Housing market index(monthly, diffusion) Less than 50 = falling; greater than 50 = rising 35

  22. Purchasing managers’ indexes(monthly, diffusion index) Less than 50 = falling; greater than 50 = rising Stock-Building Plans 29.5

  23. Steel marketplace update(annual, million net tons, rounded) ‘03‘04‘05‘06 Mills to U.S. buyers 97 104 94110 Net imports 18 28 2537 Inventory change 2 (2) 3(4) Apparent supply 114 134 116151 Calculated use * 79 95 87112 * Supply x metalworking activity calculated by Federal Reserve Board

  24. Service center steel inventories(monthly, U.S., million tons) 16.5

  25. U.S. steel consumption(annual, million net tons) 2006: strongest year this decade 100

  26. Steel mill product imports(annual, million net tons) 2007: huge slippage unlikely 32

  27. Thank you for your attention • Questions? Tom Stundza Executive Editor, Purchasing magazine, Purchasing. COM and Purchasingdata.com Author, Steel Flash Report, Energy Flash Report, Chemicals Flash Report Author & Narrator, MetalsWatch! audiotapes 225 Wyman Street Waltham, MA 02451–1209 Phone: 781-734-8207 Fax: 781-290-3207 Mobile: 617-448-7474 E-mail: stundza@reedbusiness.com

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