B. S. Shetty, Al Ghurair Iron & Steel

Steel Markets in the Middle East

DisclaimerAl Ghurair Iron & Steel L.L.C. (AGIS) has prepared this document to provide general information on The Middle East Economy with relevance to the Steel Industry.

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Contents1 Global Steel Industry2 MENA Steel Industry3 Recap4 Al Ghurair Iron & Steel

1) Global Steel Industry

Global Steel Production

Jan

Feb M

ar A

pr M

ay Ju

n Ju

l A

ug Sep

Oct

Nov

Dec

80

90

100

110

120

130

140

mts

(m

il)

Source: World Steel, AGIS Internal Analysis

Year Mts (bn) Growth2009 1.22 -7.9 %2010 1.40 14.3 %2011 1.49 6.5 %2012 1.51 1.6 %

2009 – 2012CAGR – 7.3%

Production Growth (2012/11)

Source: World Steel, AGIS Internal Analysis

(10,000) (5,000) - 5,000 10,000 15,000 20,000 25,000 MT (

000)

Asia with the highest growth, driven primarily by ChinaMiddle East, with the next highest growth

World Population & Steel Demand

Source: UN, WSA, AGIS Internal Analysis

- 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 Population (10,000)Correlation of 83.9%

2.5%

CAGR

1.6%

Population Forecast

0.0

2,000,000,000.0

4,000,000,000.0

6,000,000,000.0

8,000,000,000.0

10,000,000,000.0

12,000,000,000.0 Oceania

N. America

S. America

Europe

China

RO Asia

Africa

MENA

Source: UN

0.7%

0.5%

0.3%

0.0%

0.3%

0.3%

1.6%

0.8%The biggest population growth in Africa & MENAHence the biggest steel growth can also be from theseregions

Oil Price & Steel Demand

Correlation of 92.6 %

Source: Inflation Data, EIA, AGIS Internal Analysis

$0 $20 $40 $60 $80 $100 $120 $140

- 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 Oil Price ($/barrel)

Oil Price Forecast (per barrel)

1990199319961999200220052008201120132016201920222025202820312034$0.00

$50.00$100.00$150.00$200.00$250.00

High priceRef-er-enceLow price

Source: Energy International Association

World Oil Reserves

Middle East752.9175

51.2%

Other Americas236.962099

16.1%

OECD Americas206.46614.0%

Africa123.609112

8.4%

Non-OECD Europe/Eura-

sia99.84864

6.8%

Asia40.251465

2.7%

OECD Europe11.121124

0.8%

Source: Energy International Association

(Billion Barrels)

Global GDP & Steel Demand

- 20,000,000,000 40,000,000,000 60,000,000,000 80,000,000,000 100,000,000,000 120,000,000,000 140,000,000,000 160,000,000,000

- 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 GDP in US$ Trillion Crude Steel Use (million mts)

Source: International Monetary Fund, World Economic Outlook

Correlation of 93.9%

Global GDP Forecast

- 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 OceaniaN. Amer-icaS. Amer-icaEuropeChinaRO AsiaAfricaMENA

9%2%5%4%5%6%17%25%

Biggest Growth expected from MENA, followed by Africa

Source: IMF, World Bank, The Conference Board

2) MENA Steel Industry

MENA Crude Steel Production

Source: WSA, SteelConsult

May, 2008=100

MENA Steel Forecast

Source: MBR, A Market Review Strategic Outlook for MENA Steel Industry to 2020

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Long Demand Long Output Flat DemandLong CAGRDem 5.3%Supp 5.6%Flat CAGRDem 5.0%Supp 6.6%

Construction Projects in MENA

Source: BMI

Government Expenditure in GCC

Source: IMF, AGIS Research

Historical Flat Demand in MENA

19971998

19992000

20012002

20032004

20052006

20072008

20092010

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Other

Iraq

Egypt

U.A.E.

Saudi

Iran

Turkey

Source: Metal Bulletin, Middle East & North Africa Steel Markets to 2020

8.6%

9.3%

11.3%

30.2%

6.6%

12.4%

9.4%

Historical Flat Supply in MENA

19971998

19992000

20012002

20032004

20052006

20072008

20092010

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Other

Algeria

Egypt

Saudi

Iran

Turkey

Source: Metal Bulletin, Middle East & North Africa Steel Markets to 2020

16.7%

10.0%

16.3%

51.2%

10.0%

7.9%

1) Political Stability (Syria, Egypt etc.)2) Trade Sanctions (Libya, Iran)3) Dumping from other countriesMENA Steel Industry1) Fastest growth in steel production2) Increase in MENA population3) Concentration of Oil & price increase3) Highest GDP growth 4) Planned infrastructure spending5) Excess demand over supply

Recap (MENA Steel Demand Drivers)

Al Ghurair Iron & Steel

First Cold Rolling & Galvanizing Complex in UAE

Commissioned in 2008 Completing 4 years operation at full capacityStrategic Alliance with Nippon Steel Corporation

Second largest steel maker in terms of capacity No. 1 in terms of quality

Introduction

350k tpa Pickling Line

250k tpa Cold Rolled Mill

200k tpa Hot Dipped

Galvanized

Finished Goods

400,000 TPY CGL400,000 TPYCRM500,000 TPYPickling Line

Phase 2

Production Lines

AGIS

SupremeQuality

QuickDelivery

Technical Support at Arm’s Length

PreferredBrand

Efficient Inventory Usage

Customized Solutions

Our Competitive Advantages

B. S. ShettyAl Ghurair Iron & Steel LLC+9712 659-3400+9712 550-0939bs.shetty@agis.ae