COMPANHIA SIDERÚRGICA DE TUBARÃO

1. COMPANHIA SIDERÚRGICA DE TUBARÃO SCENARIO FOR THE BRAZILIAN STEELMAKING INDUSTRY ASSOCIAÇÃO BRASILEIRA DE METALURGIA E MATERIAIS - ABM 2nd International Meeting on Ironmaking 1st International Symposium on Iron Ore Vitória/ES - Brazil – September 13th, 2004 José Armando Campos CST

2. GDP - PROJECTIONS % Source: Average Market Expectations – BACEN, as of July 30, 2004

3. GDP - PROJECTIONS The variation of 4.2% in the 1H04/1H03, shows that it is possible to have, in 2004, an economic growth greater than the projected number. The dynamic recently generated in the industry will make the 2005 growth larger than the projected number due to a greater carry-over % Source: Market Average Expectations – BACEN, as of July 30, 2004

4. Transformation + 7.3% Agriculture + 5.7 % Construction + 2.0 % Industry + 4.2 % + 2.0 % Industrial Services Public Services Services + 2.8 % Mineral Extraction - 2.9 % ECONOMY – 1st Semester 2004 COMPARED TO THE 1ST SEMESTER 2003 Sectors Sub-Sectors GDP + 4.2% • Greatest 1st semester growth since 2000. • Growth in all sectors. • In terms of demand the biggest growth were in exports, which had a 17.8% increase. The indirect steel exports increased 33.5%(1H04/1H03). • Automobile production in the 1st semester went up by 15% compared to the same period in 2003. Source: IBGE, Anfavea, others

5. ECONOMY – 2nd Quarter 2004 COMPARED TO THE 2ND QUARTER 2003 • It was the greatest GDP growth (5.7%) since the 3rd quarter of 1996. • The Industrial Sector grew 6.6%. • The Sub-sector Transformation Industry had the highest growth rate pushed by: - durable goods – highlight to automotive vehicles - capital goods – highlight to machines and equipment RESUMING OF INVESTIMENTS (growth of 11.7%) • The Construction Sector grew 6.7%, after 5 successive quarters in decrease. Source: IBGE, others

6. INDUSTRIAL PRODUCTION (January 2003 = 100) • 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: IBGE

7. INDUSTRY - GENERAL % CAPACITY UTILIZATION 82,2 CNI

8. STEEL CONSUMPTION x GDP 4.7% per year Steel Consumption Elasticity - Income 2.1 Index Number: 1990=100 GDP 2.3% per year Fonte: Instituto Brasileiro de Siderurgia – IBS

9. APPARENT CONSUMPTION EVOLUTION OF THE PARTICIPATION OF THE MAIN FINAL CONSUMER SECTORS % Construction Industry Automotive Industry Capital Goods, Machines and Equipment (incl. Agricultural) Household and Commercial Appliances Source: IBS

10. DOMESTIC SALES January ~ June total domestic sales when comparing 04/03 shows an increase of 11% (flat and long). Source: IBS

11. EXPORTS Exports reached 7.5 mt between January and July 2004; 4.5% greater than the same period in 2003. Between January and July/2004 semi-finished products represented 52% of our exports, flat products 28%, long products 15% and others 5%. 2003 2004 Jan ~ July Asia 36.1% Asia 45.5% North Am. 25.6% * 4.2% * 3.5% North Am. 21.6% Europe 10.4% Europe 10.7% Latin Am. 23.4% Latin Am. 19.0% (*) Middle East, Africa, Oceania Source: IBS

12. EXPORTS Steel exports currently represent 42% of total production of finished and semi-finished products. About 55% of the exports correspond to semi-finished products. Finished products exports surpass the level of 5.5 million tons/year for nearly all types of products.

13. Flat Products Long Products Total DOMESTIC STEEL DEMAND - FORECAST GDP projection scenarios applied to the equation resulting from the regression analysis give the following demands for steel products: mt PROJECTION Source: IBS

14. EVOLUTION AND PRODUCTION CAPACITY x PRODUCTION x APPARENT CONSUMPTION CRUDE STEEL 000’ tones Capacity 43,9 39,8 38,7 36,1 34,7 34,1 32,9 33,0 29,9 28,3 28,9 Production 31,1 Consumption 26,2 26,7 26,0 22,3 25,0 25,1 24,0 22,2 20,5 20,6 19,1 18,5 17,7 17,0 15,6 13,3 12,0 6,0 5,5 Projection 5,4 1970 19751980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: Does not include the new plants in the Northeast planned for export. The present investment program will allow the sector to meet growth demands as well as to keep exports.

15. INVESTMENTS Investment projects in the sector show a commitment to the internal market by meeting the increase in demand US$ 7.4 bi shall be invested between 2004 and 2008 Installed capacity will increase from 34 to 44 million t/year Average annual forecast growth of the internal demand for steel between 1.2 and 1.4 million tons of products. Production capacity in the sector will remain above the internal demand for all types of products.

16. PROGRAMMED INVESTMENTS PROGRAM 2004/2008 INSTALLED COMPANIES SOURCE OF THE INVESTMENTS Total: US$ 7.4 billion 106US$ Own Resources50.6% 2500 2.137 2000 1.733 1.533 1.511 1500 1000 501 500 0 Domestic Currency24.6% Foreign Currency24.8% 2004 2005 2006 2007 2008 Source: IBS

17. INVESTMENTS Projection 2004 ~2008 – US$ 7.4 billion Sectors Applications Specials Steel 0.7 Reduction 25.9% Raw Materials Treatment and Energy 24.5% 3.6 Long Products 7.4 Rolling 12.6% Other 18.0% Flat Products Steelmaking 7.8% 3.1 Casting 6.5% ** * (*) Environment = 2,5% (**) Modernization/Automation/Research = 2,2% US$ billion Source: IBS Source: IBS

18. INVESTMENTS IN THE REDUCTION AREA EVOLUTION OF THE PROJECTED INSTALLED CAPACITY mt Sinter Plants Blast Furnaces SOL included Coke Plants Source: IBS

19. INVESTMENTS Investments in Brazilian Steel Industry State Control Private Control US$ million Projection + US$ 7.4 bi US$ 13.0 bi Source: IBS

20. PRICES – RAW MATERIALS x INFLATION Prices Variation – R$/t (Base January 2002 = 100) 350 Pig Iron 300 Scrap 250 Iron Ore 200 Electric Power 150 IGP-M 100 50 sept/02 sept/03 jul/02 jul/03 may/02 may/03 may/04 jan/02 jan/03 jan/04 nov/02 nov/03 mar/02 mar/03 mar/04 jun/04

21. COMPANHIA SIDERÚRGICA DE TUBARÃO SCENARIO FOR THE BRAZILIAN STEELMAKING INDUSTRY ASSOCIAÇÃO BRASILEIRA DE METALURGIA E MATERIAIS - ABM 2nd International Meeting on Ironmaking 1st International Symposium on Iron Ore Vitória/ES - Brazil – September 13th, 2004 José Armando Campos CST