2012 ArcelorMittal USA Fact Book Overview and table of contents The 2012 ArcelorMittal Table of contents USA Fact Book was I. Executive summary . .Page 3 developed by ArcelorMittal II. Overview of US steel industry. .Page 4 USA to serve as a resource Key facts . Page 4 to all stakeholders. History . Page 5 Published annually, the fact book will provide III. US steel industry statistics. .Page 6 background material on the IV. Overview of ArcelorMittal USA . Page. 12 domestic steel industry as About ArcelorMittal USA . Page 12 a whole and ArcelorMittal Our history . Page. 12 US operations . Page 14 USA, including the Steelmaking process and products . Page 16 opportunities and Leadership . Page 20 challenges facing the Overview of company benefits . Page. 22 industry and business, while V. ArcelorMittal USA statistics . .Page 26 highlighting key statistics about the industry and VI. Map of ArcelorMittal USA locations . Page 35 company. 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] The information included in the 2012 Fact Book is accurate to the best of our current knowledge as reported to the individuals responsible for compiling the material. Overview and table of contents | 2012 ArcelorMittal USA Fact Book I. Executive summary The 2012 ArcelorMittal USA Fact Book According to the American Iron and Steel provides an in-depth look at the U.S. steel Institute (AISI) every job in the U.S. steel industry and the challenges and opportunities industry supports seven jobs in the nation’s facing our business, the industry, employees economy. The steel industry directly employs and other stakeholders. It is updated annually 153,700 people in the United States, directly and serves as a resource for all stakeholders. or indirectly supporting more than one million U.S. jobs. Last year the steel industry Steel is used everywhere, from the cars we produced shipments valued at $75 billion. drive, to the buildings we work in, to the armored vehicles that protect our soldiers ArcelorMittal USA is one of the largest overseas, truly making steel the “fabric of steelmakers in North America, employing modern life” as we say at ArcelorMittal. more than 18,000 hardworking men and women at 26 operations across the United The American steel industry is playing a States making a broad range of flat, long and significant role in leading manufacturing’s tubular products serving the automotive, post-recession resurgence. Steel is the most construction, pipe and tube, appliance, prevalent material in the economy, and the container and machinery markets. steel industry purchases a wide variety of energy, materials and services from other industries that create a favorable ripple effect, magnifying the positive impact the steel industry has on our manufacturing landscape. 2012 ArcelorMittal USA Fact Book | Executive summary | 3 II. Overview of US steel industry Key facts • Steel is the main material used in delivering renewable energy – solar, tidal and wind. Source: American Iron and Steel Institute (AISI) • Advanced steel solutions provide the Steel is an essential part of the quality of life lightness and strength automakers need to that Americans enjoy. It’s in the cars we drive create sustainable mobility solutions that and the buildings where we live and work. It’s minimize emissions across the entire life in the appliances, tools and equipment we use cycle of the vehicle and ensure the safety daily. Steel supports the modern world in of the user, all at a lower cost than more ways than we realize. competing materials. Steel also plays a critical role in shaping the • In construction, steel is the material of future of our country – through innovation choice because of its superior and technology, economic security and performance, affordability and stability, national security and the well-being environmentally friendly profile. of the middle class that underpins our Steel is sustainable: economic strength. • Steel is the most recycled material in the The following facts about our industry world – more than aluminum, copper, further illustrate the importance of this high paper, glass and plastic combined. In North tech, innovative and globally competitive America alone, more than 80 million tons industry: of steel are recycled or exported for Steel is an economic driver: recycling each year. • The U.S. steel industry operates more than • Today, 97 percent of steel byproducts can 100 steelmaking and production facilities, be reused and the overall recycling rate of producing 96 million tons in steel steel is 92 percent, far surpassing other shipments valued at $75 billion. materials. • The industry directly employs 153,700 • Through new steelmaking technologies and people in the United States, and it directly employee innovation, the U.S. steel or indirectly supports more than 1.1 million industry reduced energy intensity by 27 domestic jobs. percent and CO2 emissions by 33 percent • Labor productivity for the U.S. steel per ton of steel shipped since 1990. industry has improved five-fold since the • Steel is the only material that reduces early 1980s, when the average steel mill greenhouse gas emissions in all phases of produced one ton of steel for 10.1 worker an automobile’s life: manufacturing, driving hours. The 2011 average is 2.1 worker and end-of-life. hours per ton, still well off the world-class Steel is an industry leader: benchmark of one worker hour per ton. • According to the U.S. EPA’s Sector • Productivity of U.S. steel producers has Performance Report, the domestic steel improved an average of 5.7 percent per sector is recognized as having the steepest year, surpassing the 3.9 percent growth in decline of total air emissions among nine U.S. manufacturing labor productivity over manufacturing sectors studied. the same period. • The North American steel industry is Steel is critical to different markets: committed to the highest safety and health • Because of steel’s broad range of standards. Since 2005, U.S. steel producers applications – including renewable energy have achieved a reduction of 50 percent in infrastructure, machinery and equipment, both the total OSHA recordable injury and defense, transportation and infrastructure illness and lost workday case rates, while – the industry is vital to our nation’s reaching record levels of productivity. economic and national security. 4 | Overview of US steel industry | 2012 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 3Q placing • Flat U.S. and global demand due to end of significant strain on the steel industry. postwar, European boom; slow growth in Industry capacity utilization rates fell to third world countries and post-89 collapse record lows, hitting 33.5 percent in the last in the Commonwealth of Independent 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 • While there has been improvement in many management U.S. key markets served, downside risk and • China boom and surge in commodity cost pressures still exist. Industry capacity markets utilization is hovering around 78 percent • Strong profit recovery in 2004 and has not returned to pre-recession Stabilization (2005-2007) levels, primarily due to weakness in construction. • Recurrent challenges of inventory-driven • In 2013, the steel sector expects to see booms and busts, but adjustments are gradual progress in comparison to 2012, made relatively quickly with the market experiencing improvement • Improved financial returns for NAFTA steel in steel demand. producers 2012 ArcelorMittal USA Fact Book | Overview of US steel industry | 5 III. US steel industry statistics US domestic steel shipments: U.S. steel producers shipped 96 million tons in 2012, an increase of