2013 ArcelorMittal USA Fact Book Overview and table of contents The 2013 ArcelorMittal Table of contents USA Fact Book was I. Executive summary . .Page 3 developed by II. Overview of US steel industry. .Page 4 ArcelorMittal USA to Key facts . Page 4 serve as a resource to all History . Page 5 stakeholders. Published annually, the fact book III. US steel industry statistics. .Page 6 will provide background IV. Overview of ArcelorMittal USA . Page. 12 material on the domestic About ArcelorMittal USA . Page 12 steel industry as a whole Our history . Page. 12 and ArcelorMittal USA, US operations . Page 14 Steelmaking process and products . Page 16 including the Leadership . Page 20 opportunities and Overview of company benefits . Page. 22 challenges facing the industry and business, V. Challenges and opportunities facing ArcelorMittal USA. Page 26 while highlighting key VI. ArcelorMittal USA statistics . .Page 30 statistics about the industry and company. VII. Map of ArcelorMittal USA locations . Page 39 ArcelorMittal USA communications team William Steers Mary Beth Holdford Heather Ross General Manager, Communications Manager, External Communications Senior Specialist, External & Corporate Responsibility ArcelorMittal USA Communications ArcelorMittal Americas +1 330 659 9121 ArcelorMittal USA +1 312 899 3817 [email protected] +1 312 899 3692 [email protected] [email protected] Cover photo: This photo shows the hot The information included in the 2013 Fact Book is accurate to the best of our current knowledge as strip mill at AM/NS Calvert, a 50/50 joint reported to the individuals responsible for compiling the material. venture between ArcelorMittal and Nippon Steel & Sumitomo Metal Corporation (NSSMC) located in Calvert, Alabama. The joint venture partners reached agreement with former owner ThyssenKrupp in Nov. 2013. The $1.55 billion sale was finalized in Feb. 2014. AM/NS Calvert is one of the most modern steel finishing facilities in the world. Overview and table of contents | 2013 ArcelorMittal USA Fact Book I. Executive summary The 2013 ArcelorMittal USA Fact Book 28 mining, flat, long, tailored blanks and provides an in-depth look at the U.S. steel tubular operations across 14 states. industry and the challenges and opportunities Additionally, ArcelorMittal employs more than facing our business, the industry, employees 1,200 at our global research and and other stakeholders. It is updated annually development center in East Chicago and sales and serves as a resource for all stakeholders. and corporate offices throughout the U.S. In 2013, ArcelorMittal USA produced more than Steel is essential to our everyday lives. It’s in 16.2 million tons of raw steel with the the tools we use around the house, the majority of steel shipments serving the appliances we depend on, and the cars we automotive, distribution/service center and drive that continue to become safer and more energy markets. fuel efficient. Steel is also the future. It’s the key ingredient to revitalizing the nation’s The year 2013 marked the first full year of infrastructure, constructing stronger and operation under the new collective bargaining more sustainable homes and buildings, and agreement reached with the United enhancing our aging power grid. Steelworkers union in September 2012. Like any negotiation, the new contract represents According to the American Iron and Steel compromise for both parties and serves as a Institute (AISI), the U.S. steel industry platform for achieving a business that is operates more than 100 steelmaking and sustainable throughout the cycle. production facilities, producing 95 million tons of steel shipments valued at $75 billion In an effort to continue to produce Safe in 2013. Domestic steel mills employ nearly Sustainable Steel for years to come, 91,000 while the industry employs 152,900, ArcelorMittal continues to focus on directly or indirectly supporting more than enhancing performance, processes and one million U.S. jobs. efficiencies within our business, specifically in the areas of health and safety, fixed costs, With our headquarters in Chicago, innovation and workforce development. ArcelorMittal USA is one of the largest steelmakers in North America, capturing More about the challenges and opportunities approximately 20 percent of total U.S. raw facing ArcelorMittal USA are outlined in steel capacity and employing more than Section V. on pages 26-29. 20,000 hardworking men and women at 2013 ArcelorMittal USA Fact Book | Executive summary | 3 II. Overview of US steel industry Source: AISI Key facts Steel is sustainable: • Steel is the most recycled material in the Steel is the backbone of our nation. Steel world – more than aluminum, copper, connected both sides of our continent paper, glass and plastic combined. In North through the railroads, bridged once America alone, more than 84 million tons insurmountable gaps over rivers and valleys, of steel are recycled or exported for and made it possible to build skyscrapers recycling each year. more than 100 stories tall. • Today, 97 percent of steel by-products can Steel is essential to our everyday lives as well. be re-used and the recycling rate for steel It’s in the tools we use around the house, the itself is 88 percent, far surpassing other appliances we depend on, and the cars we materials. drive that continue to become safer and more fuel efficient. • Recycling rates for autos are often near or more than 100 percent, as older Steel is also the future. It’s the key ingredient vehicles being recycled are often heavier to revitalizing the nation’s infrastructure, than new cars, which are lighter and constructing stronger and more sustainable more fuel-efficient through the use of homes and buildings, and enhancing our aging advanced high-strength steels. power grid. • Through recycling, the steel industry saves The following facts further illustrate the the energy needed to power 20 million importance of this high-tech, innovative and homes for one year. globally competitive industry: • The steel industry is the only significant Steel is an economic driver: industry in the U.S. that reduced its total • The U.S. steel industry operates more than energy consumption while increasing its 100 steelmaking and production facilities, production from 1990 to 2012. producing 95 million tons in steel • According to the U.S. EPA’s Sector shipments valued at $75 billion in 2013. Performance Report, the domestic steel • While steel mills employ less than 91,000 sector is recognized as having the today, the industry directly employs steepest decline of total air emissions 152,900 people in the United States, and among nine manufacturing sectors directly or indirectly supports more than studied. one million U.S. jobs. • Steel is the only material that reduces • Labor productivity for the U.S. steel greenhouse gas emissions in all phases of industry has improved five-fold since the an automobile’s life: manufacturing, early 1980s, when the average steel mill driving and end-of-life. produced one ton of steel for 10.1 worker • Since 1990, the industry has reduced hours. The 2013 average was 2.0 worker energy intensity by 28 percent and CO2 hours per ton, with many facilities emissions by 35 percent per ton of steel producing a ton of steel in less than one shipped. worker hour. Steel is an industry leader: Steel is critical to different markets: • The North American steel industry is • Because of steel’s broad range of committed to the highest safety and health applications – including renewable energy standards. Since 2005, U.S. steel producers infrastructure, machinery and equipment, have achieved a reduction of 50 percent in defense, transportation and infrastructure both the total OSHA recordable injury and – it’s vital to our economy and national illness and lost workday case rates, while security. reaching record levels of productivity. • In construction, steel is the material of choice because of its superior performance, affordability and environmentally friendly profile. • Steel is the main material used in delivering renewable energies such as solar, tidal and wind. 4 | Overview of US steel industry | 2013 ArcelorMittal USA Fact Book History Global financial crisis (2008-2011) • After a strong first half in 2008, the global The long decline (1975-2000) financial crisis hit in late third quarter, • Flat U.S. and global demand due to end of placing significant strain on the steel postwar, European boom; slow growth in industry. Industry capacity utilization rates third world countries and post-89 collapse fell to record lows, hitting 33.5 percent in in the Commonwealth of Independent the last week of 2008. States (CIS) • Record low production levels resulted in • New entrants and steady growth in North significant layoffs by integrated steel American Free Trade Agreement (NAFTA) producers in 2009. mini-mill sector • While 2010 gave way to a slow and • Excess staffing and high fixed costs progressive recovery, capacity utilization • Value destruction and weakening balance continued to hover around 70 percent. sheets for NAFTA integrated producers • In 2011, the industry continued to see measured improvement, with capacity The bankruptcy crisis (2001-2002) utilization around 75 percent. The • Businesses being managed for cash in weak restructuring of the industry that took markets – inadequate or inappropriate place between 2003 and 2004 better maintenance and investment positioned the industry to sustain the crisis. • Cascading bankruptcies (13 of 17 NAFTA integrated flat-rolled producers) Slow and cautious recovery (2012 – present) Restructuring and recovery (2003-2004) • Most major markets saw demand increase • Emergence of new players with different in 2012, with a notable eight percent business model and union relationships increase in the U.S. and the broader NAFTA • Shedding of legacy costs and market supported by strength in the strengthening of balance sheets manufacturing sector – specifically autos, • Globalization energy and heavy equipment. • Significant turnover in leadership and • In 2013, the market for steel in the U.S.