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Meeting the World’s Metals Needs Bill Scotting – Executive Vice President, Head of Strategy

Meeting the World’s Metals Needs Bill Scotting – Executive Vice President, Head of Strategy. FINEX ’10 Conference London, 27 th October 2010. Disclaimer. Forward-Looking Statements

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Meeting the World’s Metals Needs Bill Scotting – Executive Vice President, Head of Strategy

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  1. Meeting the World’s Metals NeedsBill Scotting – Executive Vice President, Head of Strategy FINEX ’10 Conference London, 27th October 2010

  2. Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “target” or similar expressions. Although ArcelorMittal’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal’s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the “SEC”) made or to be made by ArcelorMittal, including ArcelorMittal’s Annual Report on Form 20-F for the year ended December 31, 2009 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. FINEX '10 Conference

  3. Contents • Historical context • Promising medium term outlook • Meeting the challenges of demand FINEX '10 Conference

  4. Four phases of global steel since 1900 Global crude steel production (kt) Post war rebuild Industrialisation of US and parts of Europe Saturation of demand in developed world Industrialisation of China and developing world 0.4% CAGR (1973-1998) 3.0% CAGR (1900-1945) 5.8% CAGR (1950-1973) 6.3% CAGR (1998-2007) FINEX '10 Conference Source: Worldsteel; ArcelorMittal Corporate Strategy

  5. Recent “pre-crisis” growth phase was not just a China phenomenon Apparent crude steel consumption, million tonnes 1330 CAGR 8.1% • Developing world added about half as much additional demand as China • Relatively sluggish growth in developed world (despite credit bubble) 53 412 CAGR 4.8% 975 10.3% 847 279 4.9% Developing world 242 490 2.9% 437 -2.2% Developed world 467 428 13.4% 23.3% 259 China 138 2000 2003 2007 FINEX '10 Conference Sources: Worldsteel Steel Statistical Yearbook 2008; ArcelorMittal Corporate Strategy

  6. Increasing and more volatile pricing 1990-2009 Raw materials price index (1990 real values*****) Indexed at 1990 =100 *1990-2003 McCloskey, 2004-2009 CITI Investment Research, 2010 SBB **1990-2003 McCloskey, 2004-2009 CITI Investment Research, 2010 UBS ***1990-2001 minerals.nsw.gov, 2002-2009 CITI Investment Research, 2010 UBS ****1990-1999 WSD, 2000-2010 SBB *****Use USA CPI as deflator Source: CITI group, McCloskey, NSW gov, WSD, SBB, www.inflationdata.com, UBS, ArcelorMittal Corporate strategy team analysis FINEX '10 Conference

  7. 250 900 800 200 700 150 600 100 500 50 400 0 300 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Indian Iron Ore 63% Fe dry - China import CFR (USD/t) - LHS HRC - China domestic Shanghai (USD/t) - RHS Price-cost squeeze risks for steel industry Iron ore spot price and steel price in China FINEX '10 Conference Source: SBB

  8. OECD China 25% 20% 15% 10% 5% 0% 2006 2007 2008 2009 2010 -5% -10% -15% -20% Industrial production has rebounded strongly… Global industrial production (y-on-y) FINEX '10 Conference Source: Global Insight, WSA and ArcelorMittal estimates

  9. …As has apparent steel consumption Apparent crude steel consumption, Jan 2008 = 100 FINEX '10 Conference Source: Worldsteel, Trade database

  10. 100%= 0.84 0.71 0.77 1.23 25% Developed World** 50% 50% 55% 27% 29% Developing world 41% 44% 48% 16% 9% China 6% 2000 1980 1990 2009 The world steel market has shifted Steel market structure (%, bn tonnes*) * Apparent consumption of crude steel ** US, Canada, EU-15, Japan, S Korea, Taiwan, Australia, NZ Sources: WSA and ArcelorMittal estimates FINEX '10 Conference

  11. Contents • Historical context • Promising medium term outlook • Meeting the challenges of demand FINEX '10 Conference

  12. Average Population (billion) Average GDP (PPP, $ trillion) 7.2 6.5 82 1.38 5.7 13 1.3 China 1.2 56 5 30 43 4.8 4.2 19 3 Developing world 3.6 14 39 32 26 Developed world 1 0.96 0.95 1990-99 2000-09 2010-19 1990-99 2000-09 2010-19 Developing markets and China account for ~85% global population and an increasing share of world GDP FINEX '10 Conference Source: Global Insight

  13. Rising urbanization in developing countries Increase 2009-19 (millions) Urban population (million) +500 2,877 2,344 +165 712 1,911 547 China 358 1420 +275 1145 Developing world 923 Developed world +54 745 630 691 1990-1999 2000-2009 2010-2019 FINEX '10 Conference Source: Global Insight

  14. Steel is changing our world FINEX '10 Conference

  15. Chinese steel consumption is following same pattern as developed world followed earlier Crude steel production, kg/capita S. Korea Japan Germany China France US India FINEX '10 Conference Sources: Worldsteel; www.populstat.info; ArcelorMittal Corporate Strategy team analysis

  16. Outside China there is also significant, broad-based growth in steel consumption Steel consumption per capita 2009 (kg) • Developing world ex-China: • Over 4 billion people • Large populations in MENA, CIS, Brazil, parts of SE Asia • Many of these countries are well on industrialisation and urbanization growth path • Over 400m tonnes steel consumption • 6% CAGR 1997-2007 • Developed world: • Ca. 1bn people • Low population growth • Post-industrial service based economies • Declining steel consumption 398 290 74 48 India Other developing world China Developed World* FINEX '10 Conference * US, Canada, EU-15, Japan, Korea, Taiwan Sources: WSA, www.populstat.info; ArcelorMittal Corporate Strategy team estimates and analysis

  17. Steel consumption is forecast to continue to grow strongly beyond 2014 in the developing world Apparent crude steel consumption, Indexed CAGR 3.1% CAGR ’08-’19 CAGR 3.8% 150 CAGR 4.5% 0.2% 130 100 4.8% Developed world* Developing world 5.8% China FINEX '10 Conference *EU15, US, Canada, Japan, South Korea, Taiwan, Australia and New Zealand Sources: Worldsteel; base steel demand scenario, CCM/Corporate Strategy demand model (Feb 2010)

  18. Leading to significant demand growth for raw materials and requiring a supply response Raw material consumption forecast, Indexed Iron ore Metallurgical coal 165 159 100 100 2009 2019 2019 2009 FINEX '10 Conference Sources: ArcelorMittal Corporate Strategy team analysis

  19. Contents • Historical context • Promising medium term outlook • Meeting the challenges of demand FINEX '10 Conference

  20. Challenges for the mining sector • Physical supply • Quality requirements • Infrastructure • People • Pricing stability FINEX '10 Conference

  21. Significant project pipeline New Iron ore supply projections 2010-14 (from 2010 reports), mt FINEX '10 Conference Source: CITI group, Macquarie Research, Credit Suisse, FIL Investments, Standard Chartered, Goldman Sachs, ArcelorMittal Corporate Strategy team analysis

  22. Broad range of outcomes for scenarios Scenarios for displacement of Chinese high cost supply by 2014 relative to 2008 570 China Iron Ore demand growth 440 330 600 500 375 New low cost Iron Ore supply to China* FINEX '10 Conference *Includes Chinese domestic projects Source: ArcelorMittal Corporate Strategy team analysis

  23. Declining average ore quality in China China’s iron ore requirement & domestic supply (Mt) and apparent quality (%Fe) China Domestic iron ore requirement at 63% Fe quality (LHS) China ROM iron ore production (LHS) Iron ore Quality in China (RHS) FINEX '10 Conference Source: Mysteel, WSO, UNCTAD, AM Corp. Strategy team analysis

  24. Changing Mineralogy FINEX '10 Conference

  25. Larger Blast Furnaces changing quality needs Index implication Coke quality requirement by BF volume size Lower, better Higher, Stronger Higher, Stronger Lower, better * Ash content: residual after burning, the less the better M40: crushing strength, the higher the more strength CSR: coke strength after reaction, the higher the more strength CRI: coke reactivity index Source: China Metal Association, China Metallurgy Newspaper FINEX '10 Conference

  26. Coal absorbing Chinese rail capacity Share of railway cargo used for transporting coal, China, % FINEX '10 Conference Source: China Railway Bureau 2009 Year Book, Railway Mid/long-term Planning by NDRC, SX coal, ArcelorMittal Corporate Strategy team analysis

  27. Australian coal infrastructure debottlenecking Queensland coal infrastructure projection (m tonnes) NSW coal infrastructure projection (m tonnes) FINEX '10 Conference Source: ABARE, ArcelorMittal Corporate Strategy team analysis

  28. People and skills to meet the needs FINEX '10 Conference

  29. Domestic Capacity Imports Cumulative capacity Steep cost curve leads to high price volatility at the margin 2009 cash cost curve for iron ore* - CIF into China ($/tonne) • Ability of seaborne supply to meet China and ex-China import demand is key to medium term market dynamics • This drives requirement for Chinese domestic production to fill the supply/demand gap FINEX '10 Conference * Chinese iron ore production is re-evaluated to 63% Fe content Source: SBB, Mysteel, WSD, ArcelorMittal Corporate Strategy team analysis

  30. Summary • Strong period of growth over past decade • Supply constraints contributed to volatile pricing • Medium term outlook fundamentally strong • Meeting demand implies challenges to be met FINEX '10 Conference

  31. Thank You/Q&A FINEX '10 Conference

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