Steel Market Outlook

AM/NS Calvert

Topics for Discussion

• ArcelorMittal Overview

• Key Economic Indicators

• Key Steel Consuming Markets

• Steel Consumption Trends

• Global Steel Outlook

• Questions

8/22/20161

The world’s leading steel and mining company

• ArcelorMittal is the world's leading steel and mining company, with around 222,000 employees in more than 60 countries. ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks.

• An industrial presence in 19 countries exposes the company to all major markets, from emerging to mature.

• ArcelorMittal values geographical breadth, product diversity and raw materials security. Around 38% of our steel is produced in the Americas, 47% in Europe and 15% in other countries such as Kazakhstan, South Africa and Ukraine.

Underpinning all our operations is a philosophy to produce safe, sustainable steel2

Top Steel-Producing Companies (2015)millions of metric tons

18.8

19.6

20.4

21.6

25.7

26.3

28.5

29.8

32.5

34.2

34.9

41.9

46.4

47.7

97.1

0 20 40 60 80 100 120

Maanshan

Nucor

Hyundai

Shandong

Wuhan

Tata Steel

Shougang

JFE Steel

Ansteel

Shagang

Baosteel

POSCO

Nippon/Sumitomo

Hesteel

ArcelorMittal

3

* Includes share of production

ArcelorMittal Mining – portfolio

Key assets and projects

USA Iron Ore

Mexico Iron Ore

LiberiaIron Ore 85%

Brazil Iron Ore

Canada AMMC 85%

Bosnia Iron Ore

51%

USA Coal

Ukraine Iron Ore95.13%

Kazakhstan Coal

Kazakhstan Iron Ore

Iron ore mine

Coal mine

CanadaBaffinland 50%

4

Geographically diversified mining assets

5

2015 R&D spend of $227m (~1/3 for automotive sector)

• Over 1,300 full time researchers

• Working on all process and development needs

• Expanding worldwide network of laboratories (currently 12 labs in Europe, North America, and South America)

• Key challenges fully aligned with the group strategy: geography, value chain, product differentiation

58% Product

36%Process

6%

Exploratory

General industry10%

Construction

Plates and specialities13%

10%

Others7%

60%Automotive

R&D budget spending by need

Global R&D key facts and figures

8/22/2016 6

Strong track record of successful integration

Arbed

Aceralia

Usinor

Aristain

UCIN

Sacilor

Usinor

Ugine

Aceralia

Arbed

Belgo

Bremen

Sidmar

Velasco

Cockerill/EkoStahl

Sibalsa

Trinidad

Sidbec

Hamburg

Hochfeld

Ruhrort

Inland

Unimetal

Jones & Laughlin

Youngstown Sheet & Tube

Bethlehem

Lukens

J&L

Republic

Acme

LTV

ISG

Alfasid

Karmet

Sidex

Novahut

Hunedoara

PHS

BH Steel

Iscor

LNM

Ispat Intl

Bethlehem

Kryvorizhstal

Belgo

CST

Arcelor Brazil

Dofasco

Weirton Steel

GeorgetownKorf Group

National Steel

Hunan Valin

Acindar

Acesita SonasidHuta Warsawa

The ArcelorM

ittal Orbit

Economic indicators

8

U.S. Gross Domestic Product (GDP)Real GDP Growth vs. Prior Years 2000-2015, Forecast 2016-2017Source: U.S. Department of Commerce; June 2016 Blue Chip for 2016-2017 forecasts.

4.1%

1.0%1.8%

2.8%

3.8%3.3%

2.7%1.8%

-0.3%

-2.8%

2.5%

1.6%2.2%

1.7%2.4%2.4%

1.9%2.3%

-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%5.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017%

Ann

ual G

DP

Gro

wth

Real GDP growth has fallen below 2% in each of the last three quarters, measuring 0.9% in Q415, 0.8% in 1Q16 and 1.2% in 2Q16 (advance estimate). Growth in PCE climbed to 4.2% in 2Q16 from 1.6% in 1Q16, while nonresidential fixed investment growth was negative for the 3rd consecutive quarter as investment fell in nonresidential structures (-7.9%) and equipment (-3.5%).

The June 2016 Blue Chip consensus 2016 full year GDP growth is forecast at 1.9%, close to the average rate seen in the U.S. economy for the past several years. Consumer spending is expected to drive much of the growth, with job gains expected to continue and the unemployment rate to improve.

2017 full year GDP growth is forecast at 2.3% with growth driven largely by the same sectors as in 2016, though nonresidential fixed investment and industrial production are expected to make larger contributions, improving upon their 2016 softness.

8

9

Industrial Production Index (IP)Percent Change in Index vs. Prior Years 2000-2015, Forecast 2016-2017Source: U.S. Federal Reserve Board; base year for index 2012: June 2016 Blue Chip for 2016-2017 forecasts.

4.0%

-3.3%

0.2%1.3%

2.3%3.2%

2.2%2.7%

-3.5%

-11.4%

5.7%

3.0%2.8%1.9%

3.7%

1.3%

-0.5%

2.3%

-12.0%-10.0%

-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017%

Ann

ual G

row

th

IP declined by 1.0% in 2Q16, following a 1.8% drop in 1Q16. Mining (which includes crude oil and natural gas production) declined significantly (-15.9%) during the period. Manufacturing output (NAICS basis) fell 0.8%.

The 2016 forecast for IP is -0.5% as the mining sector will decline further, offsetting marginal gains posted in manufacturing. Weak global conditions and prior appreciation of the U.S. dollar will limit exports.

IP is seen returning to growth in 2017 at 2.3% as headwinds slowly dissipate for the manufacturing and upstream energy sectors.

9

The ArcelorM

ittal Orbit

Key steel markets

11

Automotive

• Pent-up demand from the recession is exhausted on the retail side of the market. Replacement is now the biggest driver of retail sales.

• The average age of vehicles on the road is now over 11.5 years. The fleet is old and needs to be replaced.

• There is still some pent up demand left on the fleet side of the market. Fleet sales are now increasing as a percent of total sales.

• As the housing market improves demand for pickup trucks is improving.

• Low gasoline prices are also increasing demand for trucks.

• Trucks achieved record market share in 2015 at 57%. Through 2016 trucks are running at 61% market share.

• Although the rate of increase will slow as long as demographics & economics remain positive sales will continue to increase, unless there is a change in lifestyle and behavior. There is no peak in sales until we go into a recession.

Source: LMC & AM USA Marketing

15

12.6

8.5

11.813.1

15.4 16.1 16.9 17.5 17.9 18.1 18.3

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

North America Auto Production(millions of units)

16.1

13.2

10.411.6

12.714.4

15.6 16.417.4 17.4 17.7 17.9 18.1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

US Auto Sales (millions of units)

Building constructionSome growth in private construction

• Economic conditions continue to support steady improvement in 2016, but not robust recovery.

• The residential construction recovery that began in 2012 should continue its momentum in 2016 & 2017 prompted by improving labor markets, demographics, affordability, and mortgage availability. Homeownership rates remain historically low; however, growth in multifamily construction is expected to slow in 2016.

• The non-residential construction sector weakened in 2015, however market fundamentals suggest return to modest growth across both commercial and institutional sectors in 2016 & 2017.

• Growth in the residential sector should continue to provide a catalyst for growth in several nonresidential segments in 2016 & 2017.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Squa

re fo

otag

e (0

00)

Residential (1 & 2 family dwellings)Non-Residential

* Non-building structures (e.g. infrastructure) not included

12Source: McGraw-Hill (Dodge)*

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

2,400

2,500

2,600

4,500

5,000

5,500

6,000

6,500

4,768

201620152014201320122011

2,328

4,754

InventoryShipments

Service Center Monthly Shipments and Inventory

2.0

2.4

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

201620152014201320122011

10-Year AverageMOH

Months on Hand

U.S. Service Center Data: Carbon Flat Roll Shipments, Inventory, and Months-on-Hand: Source: MSCI

Shipments Inventory

Steel markets direction in 2017

Auto

Residential Construction

Non-residential Construction

Machinery

Appliance

Infrastructure

Energy

Steel Inventories

Source: AMUSA analysis

• There is no expectation that we will see robust growth any time soon. Steel markets are still slowly recovering from the recession.

• Auto growth is in Mexico in 2017. USA market is flat.

• Non-res construction will add about 1 million tons of demand in 2016.

• Energy activity will continue to be soft but recovers off the bottom in 2017.

• Steel inventories will add some demand in 2016 but will end low in 2016 and will be rebuilt in 2017.

USA apparent steel consumption

Short tons (in millions)

% change

2013 106 1%

2014 118 12%*

2015 106 -11%

2016 105 -1%

2017 108 3%

*About 3 million tons of the 2014 increase was an inventory overbuild due to a late year surge in imports.

The ArcelorM

ittal Orbit

Steel consumption trends and global markets

Weekly US raw steel production Capacity utilization

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

201520142013201220112010

Weekly Utilization

Source: American Iron & Steel Institute

As of 8/13/2016:72.1%

USA Apparent Steel Consumptionmillion of short tons

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

8/22/2016

1953 – 22%1957 – 22%1973 – 23%1981 – 27%2009 – 41%

Drop in ASC in select recessions

Source: AISI, AM Marketing

USA imports and shipments

19

6.4 6.0 7.2

8.4 8.7 9.3 9.7 8.2 7.3

6.3 6.4 6.2

-20%

-10%

0%

10%

20%

30%

40%

50%

-

2

4

6

8

10

12

3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd

2013 2014 2015 2016

Q-Y

-Q %

incr

ease

Mill

ion

net t

ons

Finished imports

24.5 23.6 23.9

24.9 25.3

23.8

22.0 22.0 22.2

20.1

21.5

23.0

-20%

-10%

0%

10%

20%

30%

40%

50%

18 19 20 21 22 23 24 25 26

3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd

2013 2014 2015 2016

Domestic shipments

Imports market share

2015 & 2016Q1 - 34%Q2 - 30%Q3 - 27%Q4 - 26%Q1 – 25%Q2 – 23%

Source: American Iron & Steel Institute

Trade Cases

20

Global steel consumption

21Source: World Steel Association – Short Range Outlook (April 2016)

1,4941,4881,500

1,5431,532

1,4421,416

1,312

1,1521,2291,225

1,139

0.4%-0.8%

6.2%

1.9%

13.9%

-6.3%

9.2%

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

2017

F

% Change Y/YASC

2016

F

2015

-2.8%

2014

0.7%

2013

2012

2011

7.9%

2010

2009

2008

0.3%

2007

2006

% Change Y/YASC

WSA - Global Apparent Steel Consumption million metric tons

WSA - Global ASC Growth Forecast by Region % Change Y/Y

2016F

Global -0.8%

China -4.0%

C&S America* -6.0%

CIS -7.4%

EU28 1.4%

NAFTA 3.2%

1.7%

0.4%

4.6%

2017F

3.2%

-3.0%

2.6%

* Central and South America

22

Summary

• Industrial markets continue to be soft but should improve in 2017

• Auto continues to be strong but is nearing its peak

• Housing and construction remain solid

• Energy market will increase after contracting for a few years

• Trade issues will continue to evolve

23

Contact ArcelorMittal USA

usa.arcelormittal.com

@ArcelorMittalUS

@ArcelorMittalUSA

ArcelorMittal USA

Questions?