The 14 th Annual Waterways Symposium. Presented by: Jim Scharner The David J. Joseph Company November 2017

Transcription

1 The 14 th Annual Waterways Symposium Presented by: Jim Scharner The David J. Joseph Company November 2017

2 Certain statements made in this presentation are forward-looking statements that involve uncertainties. These forward-looking statements reflect The David J. Joseph Company's best judgment based on current information, and although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future trends, and actual trends may vary materially from the projections discussed in this presentation. Factors that might cause actual trends to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) prevailing steel prices and changes in the supply and cost of raw materials, including pig iron and scrap steel; (2) availability and cost of electricity and natural gas; (3) market demand for steel products; (4) competitive pressure on sales and pricing; (5) uncertainties surrounding the global economy, including the severe economic downturn in construction markets and excess world capacity for steel production; (6) fluctuations in currency conversion rates; (7) significant changes in laws or government regulations affecting environmental compliance; and, (8) the cyclical nature of the steel industry. Copyright 2017 The David J. Joseph Company All rights reserved. No part of this publication may be reproduced or transmitted in any form by any means, electronic, or mechanical, including photocopy, recording or any information storage or retrieval system, without permission in writing from The David J. Joseph Company.

3 Agenda Overview of Nucor and DJJ Where we use the river system Drivers for the steel and scrap markets Challenges and opportunities

4 Nucor Today

5 Nucor Product Offerings Business Segments

6 Raw Materials Production Capacity Product Direct Reduced Iron (DRI) Ferrous Scrap Processing Total Scrap & Raw Material Annual Tons 4.5 Million 5.2 Million 9.7 Million

7 Nucor Steel Mills Largest Steel Producer in U.S. Nucor operates 25 steel mills that produce steel by recycling scrap in an Electric Arc Furnace (EAF) EAFs produce 66% of the steel made in the U.S. (only 6% of Chinese steel) EAFs use one-quarter the energy of blast furnaces to produce a ton of steel Largest Recycler in North America Recycled 17,600,000 tons of scrap in 2016

8 Steel Mill Production Capacity NUCOR is the Largest Producer of Steel in the United States 26.7 Million Tons and Growing

9 Steel Products Production Capacity 4.7 Million Tons and Growing

10 Nucor Locations: US Waterways

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17 The DJJ Family of Companies 17

18 Agencies, District Offices, and Recycling Group Locations 18

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21 Selected Major Consumers Located on the Inland Waterway System and East Coast GERDAU St. Paul, MN U.S. STEEL Gary, IN ARCELORMITTAL USA BAR Indiana Harbor, IN ARCELORMITTAL USA PLATE Burns Harbor, IN ARCELORMITTAL USA Burns Harbor, IN NLMK-INDIANA Portage, IN RG STEEL Steubenville, OH ALLEGHENY LUDLUM STEEL Brackenridge, PA ARCELORMITTAL USA Indiana Harbor, IN GERDAU Sayreville, NJ SSAB NORTH AMERICA Montpelier, IA GALLATIN STEEL Ghent, KY KEYSTONE STEEL & WIRE Peoria, IL STEEL OF WEST VIRGINIA Huntington, WV US STEEL Granite City, IL NUCOR STEEL Hertford NC NUCOR-YAMATO STEEL Blytheville, AR AK STEEL Ashland, KY GERDAU Ft. Smith, AR ARCELORMITTAL USA Georgetown SC NUCOR STEEL Berkeley SC SEVERSTAL COLUMBUS Columbus, MS NUCOR STEEL Decatur, AL NUCOR STEEL Tuscaloosa, AL GERDAU Beaumont, TX ARCELORMITTAL USA LaPlace, LA SSAB NORTH AMERICA Axis, AL NUCOR STEEL Hickman, AR

22 Selected Barge Suppliers Located on the Inland Waterway System and East Coast

23 Agenda Overview of Nucor and DJJ Where we use the river system Drivers for the steel and scrap markets Challenges and opportunities

24 U.S. Steel Operating Rate operating rate 24

25 US Steel Capacity Production and Utilization Evraz

26 U.S. Steel Operating Rate operating rate 26

27 US Auto Sales - SAAR

28 US New Home Sales

29 US GDP (2009 USD) & Forecast

30 US GDP with Recessions Top 5 Longest Periods Between Recessions: 120 Months Mar 91 Mar Months Feb 61 Dec Months Jul 09 - Ongoing 92 Months Dec 82 Jul Months Nov 01 Dec Months 120 Months 73 Months 100+ Months and Counting

31 Chinese Steel Production and Exports

32 US Steel Imports by Country Origin

33 Shred and Iron Ore Price

34 Current Scrap Price Forecast Trend

35 US Steel Production Forecast 2018 Service Centers Construction Automotive OCTG Machinery/Industrial Equipment Electrical Equipment Appliances

36 Agenda Overview of Nucor and DJJ Where we use the river system Drivers for the steel and scrap markets Challenges and opportunities

37 DJJ Barges 4,000 3,500 3,000 2,500 2,000 1,500 1,

38 Lock & Dam System Choke Point of the US Waterways When locks are down or in reduced readiness status: 1. Increased inland waterway transit times 2. Supply chain interruptions 3. Added inventory costs

39 Mississippi River Southwest Pass Continuous maintenance dredging needed Shoaling resulting in draft reductions from 47 ft. to 44 ft. or less Recent high water period May to July Every 1 ft. of draft restriction results in approx. 2,000 to 2,500 metric tons of reduced cargo capacity

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