3Q2012 Results

Baoshan Iron & Steel Co.,Ltd.

October 2012

The following presentation distributed herewith includes forward-looking statements. All statements, other than statements of historical facts, that address activities, events

or developments that Baoshan Iron & Steel Co.,Ltd.(Baosteel) expects or anticipates will or may occur in the future are forward-looking statements.

Baosteel’s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, competition and other risks and factors beyond our control.

Disclaimer

I. Operation Results

II. Industry Dynamics

III.Company Outlook

� Production and Sales

7.0%

7.1%

7.1%

5.0%

QoQunit：：：：million tons 3Q2011 2Q2012 3Q2012 YoY

Crude steel output 6.79 5.42 5.69 -16.2%

Sales of finished products 6.61 5.49 5.88 -11.0%

including：：：：domestic 5.86 4.92 5.27 -10.1%

export 0.75 0.57 0.61 -18.7%

� Sales Breakdown of Finished Products in Q3

Note：BNA included，unit：million tons

2%0.10Stainless steel

Sales %

HRC 1.77 30%

Plate 0.45 8%

CRC 2.84 47%

Tube 0.39 7%

Others 0.44 7%

Total 5.99 100%

↓↓↓↓6.0 ppts-6.4%-15.2%1.9-20.0%1.80.44Others

↑↑↑↑0.01 ppts1.8%-70.1%1.4-69.6%1.40.10Stainless steel

unit：：：：million tons

billion YuanSales Revenue YoY Cost YoY

Gross

marginYoY

CRC 2.33 12.9 -11.3% 11.3 -17.4% 12.0% ↑↑↑↑6.5 ppts

HRC 2.16 8.3 -14.1% 7.8 -14.4% 6.0% ↑↑↑↑0.3 ppts

Plate 0.45 2.1 -38.3% 2.5 -32.0% -20.4% ↓↓↓↓11.1 ppts

Tube 0.39 2.7 -7.4% 2.5 -7.6% 6.4% ↑↑↑↑0.2 ppts

Total 5.88 29.1 -27.4% 27.4 -29.8% 5.9% ↑↑↑↑3.2 ppts

� Gross Profit in Q3--Products

� Income Statement Summary

↓↓↓↓14.1ppts

↓↓↓↓0.09ppts

↓↓↓↓1.71ppts

-4.4%

-5.3%

QoQunit：：：：billion Yuan 3Q2011 2Q2012 3Q2012 YoY

Revenue 56.18 50.68 47.99 -14.6%

Cost 54.95 49.36 47.21 -14.1%

Gross profit 3.04 4.13 3.09

Gross margin％％％％ 5.41 8.14 6.43 ↑↑↑↑1.02ppts

Operating profit 1.32 1.54 1.42

Operating margin％％％％ 2.35 3.05 2.96 ↑↑↑↑0.61ppts

Net profit 1.24 8.39 1.18

Net profit margin％％％％ 2.21 16.55 2.46 ↑↑↑↑0.25ppts

↑↑↑↑1.09 ppts

↓↓↓↓0.46 ppts

17.7%

0.6%

-85.4%

QoQunit：：：：Yuan 3Q2011 2Q2012 3Q2012 YoY

EPS 0.07 0.48 0.07 0.0%

BVPS 6.04 6.43 6.47 7.1%

Net CFO per share 0.02 0.17 0.20 900.0%

Gross margin%

(accumulated)8.16 7.82 7.36 ↓↓↓↓0.8 ppts

ROE (weighted)%

(accumulated)6.02 8.73 9.82 ↑↑↑↑3.8 ppts

� Financial Highlights

Financial index unit 2011201120112011----12121212----31313131 2012201220122012----9999----30303030 Change

Solvency

Total debts/

total assets％％％％ 50.90 47.15 ↓↓↓↓3.75 ppts

Current ratio 0.80 0.99 23.8%

Quick ratio 0.42 0.62 47.6%

Financial index unitJan-

Sep,2011

Jan-

Sep,2012Change

Liquidity

Days of receivables day 6.8 18.1 166.2%

Days of inventories day 74.8 73.0 -2.4%

Cash conversion

cycleday 50.2 53.6 6.8%

� Solvency and Liquidity

I. Operation Results

II. Industry Dynamics

III.Company Outlook

� Macro Economy

• GDP up 7.4% YoY in Q3, lowest level in

the past 14 quarters, economy growth

continued to decrease.

• GDP up 7.7% YoY in Q1 to Q3, domestic

economy tends to be stable.

• CPI up 1.9% YoY in Sep as expected.

• CPI growth rate below 2%, inflation

pressure released.

Data source: National Bureau of Statistics

GDP growth, YoY(%)

68101214

1Q20

073Q

2007

1Q20

083Q

2008

1Q20

093Q

2009

1Q20

103Q

2010

1Q20

113Q

2011

1Q20

123Q

2012

CPI growth, YoY(%)

6.1

5.5

4.2 4.14.5

3.23.6

3.43.0

2.21.8

2.0 1.9

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Sep-

2011

Oct Nov Dec Jan-

2012

Feb Mar Apr May Jun Jul Aug Sep

� Demand and Supply Analysis--Supply(Crude Steel)

• Crude steel output was 0.54 billion tons in Jan-Sep.

• Output up 1.7% YoY in Jan-Sep, growth rate slowed down.

Data source: Wind

0.18

0.22

0.28

0.35

0.42

0.49 0.50

0.57

0.63

0.68

0.54

0.1

0.3

0.5

0.7

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jan-

Sep,2012

0

5

10

15

20

25

30

Output(billion tons) YoY,Ytd,%

� Demand and Supply Analysis--Import & Export

• Steel import 10.5 million tons, down 12% YoY and export 40.9 million tons,

up 10% YoY in Jan-Sep.

• Export and net export rebounded in Sep.

Data source: Wind

Monthly net export

1.0

0.50.4

-0.2-0.3-0.20.1

0.50.6

1.2

1.6

1.9

1.61.4

1.7

2.8

3.6

4.2

3.2

1.51.71.7

1.51.51.51.5

3.43.43.5

3.13.2

2.82.92.6

3.0

2.52.8

2.2

3.83.5

3.94.1

3.13.0

4.0

-1-1-1-1000011112222333344445555

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12

million tons ..

� Demand and Supply Analysis--Demand(Infrastructure)

• FAI 25.7 trillion Yuan in Jan-Sep, up 20.5% YoY.• 344 billion Yuan invested in railway in Jan-Sep, down 13% YoY.• 72.7 billion Yuan invested in Sep, up 92.7% YoY and 52.7% MoM.

Data source: Wind

FAIFAIFAIFAI

14.4

18.3

29.1 28.8

27.2

24.3

26.6

30.4

24.523.8

20.5

25.8

0

5000

10000

15000

20000

25000

30000

35000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jan to

Sep,2012

billion yuan

10

15

20

25

30

35

Year YoY(%)

� Demand and Supply Analysis--Demand(Real Estate)

• Real estate investment growth was stable in Q3, sales volumn rose slightly.• In Jan-Sep, Social housing new start was 7.2 million units, 97% of annual plan with 4.8 million units finished (annual plan 5 million), and 960 billion Yuan invested.

Data source: Wind

Investment (billion Yuan, left)

Growth Ytd, YoY (%, right)

200

300

400

500

600

700

800

Mar-10 Jul-10 Nov-10 Apr-11 Aug-11 Dec-11 May-12 Sep-12

10

15

20

25

30

35

40

0.00

0.05

0.10

0.15

0.20

0.25

Mar-10 Jul-10 Nov-10 Apr-11 Aug-11 Dec-11 May-12 Sep-12

New start area (billion square meters)

Sales area (billion square meters)

� Demand and Supply Analysis--Demand(Automobile)

• Output and sales were 14.12 million and 14.09 million units, up 4.98% and

3.37% YoY respectively in Jan-Sep.

• New stimulus policies in progress（sales to the countryside, energy-saving

subsidy etc.）.

Data source: Wind

Output

35.20

14.1112.56

27.32

22.02

5.21

48.30

32.44

0.84

4.98

0

5

10

15

20

2003 2006 2009 Jan-Sep,2012

million

0

10

20

30

40

50

output YoY%

Sales

34.21

15.5013.54

25.1321.84

6.70

46.15

32.37

2.45 3.37

0

5

10

15

20

2003 2006 2009 Jan-Sep,2012

million

0

10

20

30

40

50

sales YoY%

� Demand and Supply Analysis--Demand(Home Appliance)

• Home appliance outperformed in Q3 than H1.

• Sales to the countryside 573 million units and sales volumn was 154 billion

Yuan in Jan-Sep, up 12.1% and 21.6% YoY respectively.

Data source: Wind

Home Appliance Output

15.1%

25.4%

7.7%

13.7%

8.0%

-4.6% 0.3%1.4%

-5%

0%

5%

10%

15%

20%

25%

30%

TV washing

machine

refrigerator air-conditioner

Sep,YoY Jan-Sep,YoY

� Demand and Supply Analysis--Demand(Machinery)

• Industry growth was lowing down.

• Benefit from credit loosening and new projects, industry growth tends to be

stable.

Data source: CMIF

Machinery industry growth,YoY

11.9%12.0%11.9%12.2%11.9%12.1%13.3%11.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Jan-Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2010 2011 2012

� Demand and Supply Analysis--Demand(Ship Building)

• Completion, new order and carrying order were :41.6, 15.4 and 120

million tonnages, down 18%, 47% and 28% YoY respectively in

Jan-Sep.

• Shipping market depressed, profitability in downtrend.

Data source: wind

Ship-building completion

5.494.80

5.926.48 6.75

10.33

5.42

4.425.21

0

2

4

6

8

10

12

14

16

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

In million tonnage .

2007 2008 2009

2010 2011 2012

� Steel Inventory

• Destocking continued, but was slowing down.

• Social inventory was 12.3 million tons by 2 Nov, lowest level since 2010.

Unit:

million tons

10-28-

2011

8-31-

2012

9-28-

2012

11-2-

2012 MoM YoY

Rebar 5.66 5.91 4.99 4.93 -1.2% -12.9%

Wire 1.12 1.39 1.06 1.15 8.5% 2.7%

HRC 4.57 3.90 3.52 3.26 -7.4% -28.7%

CRC 1.53 1.66 1.62 1.62 0.0% 5.9%

Plate 1.46 1.48 1.35 1.38 2.2% -5.5%

Long product 6.78 7.30 6.05 6.08 0.5% -10.3%

Flat product 7.56 7.03 6.49 6.26 -3.5% -17.2%

Total 14.34 14.33 12.54 12.34 -1.6% -13.9%

Data source: Mysteel

� Iron Ore Inventory

• Port inventory decreased from Sep, close to 90 million tons recently.

• India iron ore inventory continued to decrease sharply.• Iron ore inventory in downward trend, 88.5 million tons in 25 main ports by 2 Nov.

Data source: Mysteel

Iron ore port inventory

5

8

11

14

17

20

23

26

29

32

35

38

41

44

Jan-10 Apr-10 Jul-10 Nov-10 Feb-11 Jun-11 Sep-11 Dec-11 Apr-12 Jul-12 Oct-12

million tons

Australian Brazil India

� Raw Material Cost

• Imported Iron ore 550 million tons in Jan-Sep, up 8.4% YoY and average price was $135/t, down 18.8%

YoY.

• Platts dropped to $88.5/t on 6 Sep, lowest level in the past 3 years, after that rose to $120/t by the end of

Oct.

• Coke price picked up with the rebound of steel market, but slowed down recently.

62626262%%%%粉矿粉矿粉矿粉矿PlattsPlattsPlattsPlatts指数价格走势指数价格走势指数价格走势指数价格走势（（（（CFRCFRCFRCFR,,,,美元美元美元美元////干吨干吨干吨干吨））））

2010-7-16, 116

2010-4-20, 186

2011-10-28, 116.75

2011-9-7, 183

2011-2-16，，，，193

2011-3-15, 165

133.5

10-9, 120.25

9-6, 88.5

146.9

169.5

131.1

80

100

120

140

160

180

200

1

月

2

月

3

月

4

月

5

月

6

月7

月8

月9

月1

0

月1

1

月1

2

月2010年2011年2012年2010年指数年均价2011年指数年均价2012年指数年均价

Data source: Mysteel

Platts(62%Fe)

2010

2011

2010 average

2011 average

2012

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

焦炭价格焦炭价格焦炭价格焦炭价格1000

1200

1400

1600

1800

2000

2200

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12废钢价格废钢价格废钢价格废钢价格2400

2800

3200

3600

4000

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12

Coke price

Scrap price

� Steel Price

Unit:

Yuan/ton28 Oct,2011 28 Sep,2012 2 Nov,2012 MoM YoY

HRC 4380 3700 3930 6.2% -10.3%

CRC 5250 4530 4600 1.5% -12.4%

Plate 4450 3600 3660 1.7% -17.8%

Wire 4320 3570 3500 -2.0% -19.0%

Rebar 4420 3780 3850 1.9% -12.9%

Data source: Mysteel

• According to CISA, 36 of 80 median-large size steel makers lost money in

Jan-Sep. 42 steel makers lost money in Sep.

• Steel price picked up in the past 2 months and became stable by the end

of Oct. The rebound was limited after entering the weak season in winter.

� Market Trend

Data source: Mysteel

2500

2900

3300

3700

4100

4500

4900

5300

5700

6100

6500

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12热轧3.0冷轧1.0螺纹20Ⅲ级 300040005000600070008000900010000

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12冷轧1.0镀锌1.0彩涂0.476硅钢600HR3.0

CR1.0Rebar20III

CR1.0Galvanized1.0Prepainted0.476Silicon600

I. Operation Results

II. Industry Dynamics

III.Company Outlook

2012 Plan Q1-Q3 ResultCompletion

Ratio

Iron (million tons) 22.79 16.70 73.3%

Steel (million tons) 23.98 17.48 72.9%

Sales (million tons) 23.46 17.39 74.1%

Revenue (billion Yuan) 19.60 14.61 74.5%

Cost (billion Yuan) 18.00 13.51 75.1%

� Q1-Q3 Results

� Stock Buyback Update

• The company’s initial buyback was on 21 Sep.

• Buyback was 242.57 million stocks, about 1.4% of the company’s total stocks

and paid 1.12 billion Yuan by 1 Nov.

33.3%1.123.35 Trade Volumn

(billion Yuan)

33.2%0.240.73 Quantity

(billion)

%BuybackToatal

21,Sep – 1,Nov

� Purchase of Zhanjiang Steel’s Stake

• Investment in Zhanjiang project was approved by the general

shareholders’ meeting on 17 Sep, 2012.

• The company decided to purchase 71.8% stake hold by Guangzhou

SASAC in Zhangjiang Steel.

• Purchasing price: 4.98 billion Yuan (6.93*71.8%).

*Zhanjiang Steel net asset value is 6.93 billion Yuan.

• Stake delivery date: 1 Nov, 2012.

� Disposal of Luojing Assets

Disposal Principle

• Considering the industry restructuring of Luojing area, production has been

shut down.

• The company decided to sell Corex assets to Baosteel Group.

• The company will sell the land and affiliated buildings etc. of Luojing area

to Baosteel Group. (pending further approval)

• Other manufacturing facilities are pending feasibility study of moving to

Zhanjiang Steel.

Corex Assets Pricing

• Book value：2.77 billion Yuan.

• Selling price：2.73 billion Yuan (impairment loss of 37 million Yuan).

• Payment: Cash.

• Delivery Date：1 Nov, 2012.

� Investment in East-West pipeline project

• Board of Directors authorized the company to invest in the east-west

pipeline project in August.

• Total length of the pipeline is over 5000 km and designed annual

transmission quantity of natural gas is 30 billion cubic meter.

• Gas source from mid-east countries. Project is estimated to be put into

operation in 2015.

• Total investment of the project is 116 billion Yuan and a joint venture is

founded with 62.5 billion Yuan, in which Baosteel will invest 8 billion Yuan,

another subsidiary of Baosteel Group (Huabao Investment) will invest 2

billion Yuan.

• Project IRR: 10%.