Coke Industry Overview 1 Coke Metallurgical Coke Met

Coke Industry Overview 1

Coke Metallurgical Coke (Met coke) • Coke is formed when the coking coal is heated in at temperature up to 1150 C. • It is a solid carbonaceous material obtained from destructive distillation of low ash and low sulphur Bituminous coal Grades of coke : Grade Blast Furnace Size +70 mm Usage Cupola furnaces for melting of pig Iron to produce different castings Applications of Met coke 1. Iron Foundries: Melting iron for casting 2. Steel Foundries Providing additional carbon content to the molten metal Foundry Nut Breeze 20 -80 mm 10 -25 mm 10 mm Blast furnaces as a reduction agent to reduce Iron ore in different grades of steel products. Alloy industries as a reduction agent By Sinter plants, Cement Industries most of them have integrated plant - Key consumer of LAM coke in India 3. Chemical Plants: like soda ash and calcium carbide 4. Pig Iron: It is used as a source of heat and as a chemical reducing agent - Key consumer after steel foundries of LAM coke in India An essential raw-material for Steel and Soda ash plants 2

Prices – Coking Coal & Met Coke Coking Coal / MET Coke Prices 3, 000 Met Coke mania = Chinese stimulus 2, 500 2, 000 1, 500 1, 000 500 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 - Coking Coal MET Coke Sale price Chinese stimulus led to sharp increase in met coke prices • The capacity cut policy led to a sharp contraction of domestic coal supply, which raised coking coal prices and bolstered coke prices • Coke futures prices climbed from 558 yuan/t in early last year to 2, 201 yuan/t, thanks to the supply shortage impacted by strict de-capacity campaign and good demand from downstream sectors. Prices stabilizing post the Chinese met coke mania 3

The Indian Market (1) ISPs are the largest consumers of MET Coke Some of the major buyers in the open market are Consumption & Growth of LAM • Essar Steel Integrated Steel Plants 76% Foundaries Ferro Alloys 5% 12% 8% 4% 5% Others 8% Consumption Share • Hindustan Zinc • Nirma • Tata Chemicals 4% • MTC Group Growth India is a net Importer of MET coke • India currently imports 3 -4 MT of Met Coke from countries like Australia, China and Japan • Anti-Dumping Import Duty of $25. 2 / tonne from China & Australia in Nov’ 16 Domestic Production • In India, the merchant metallurgical coke capacities are largely situated in western India, logistics and proximity to a large consumer market being the primary factors contributing to this skewed concentration Opportunity for domestic producers to substitute imports & gain growth market share 4

The Indian Market (2) Coke Demand in Open market from steel producers Crude Steel Production in India 103 Million Tonne (FY 18) *Steel produced by BOF method uses Coke as RM, 75% of world steel production (Assuming same ratio in India) Raw material(Value) Consumed to produce steel 14% 24% EAF technology uses Scrap steel as RM 3% Iron ore 4% Coal/Coke Production through BOF 77. 5 Million Tonne Production through EAF 26 Million Tonne HR zinc other 55% 57% is produced by non ISP *Source: JSW steel AR Coke Consumed by Non ISP, @ 0. 6 Tonne coke for 1 Tonne of steel Production through Non ISP 44. 2 Million Tonne # BOF: Blast oxygen furnace EAF : Electric Arc Furnace Coke consumed 26. Million Tonne *Source: Steel Ministry, India, World Steel Organization, Industry Significant Open market purchases imply a a large and growing demand from Merchant Coke producers 5

Manufacturing Process Incoming coking coal Crushing of coal Screening coal for oversize The Stamping process results in High grading of coke Stamping Coal Storage Lam Coke Screening Cutting of Coke size Discharging and quenching with water Charging in to oven Conversion to produce 1 tonne Key Inputs: Coking Coal 1. 3 Met Coke • Energy/Gas • Water 1 Relatively simple production process; Easy to monitor the process 6

INDIA POSITION ON COKE • Seller Driven Market • India hardly produces Coking Coal • India has low capacity to Coke Oven – 30% COKING COAL GLOBAL SHORTAGE FINISHED COKE GLOBAL SHORTAGE

Coke Demand-Supply Forecast (Approx. ) Million Tons 2019 2025 2030 Steel 110 200 300 Coking Coal Imports 46 60 80 Imported Coke 3 5 10 Shortage of Coke for New Coke Oven 4 15 30 India imports 3 to 4 Million Met Coke every year

WORLD STEEL INDUSTRY – TOP 10 STEEL PRODUCING NATIONS 8 3 7 1 Turkey Germany 33. 2 Mt India 42. 1 Mt China 822. 7 Mt 808. 4 Mt 95. 6 Mt 2 10 Japan 104. 8 Mt Ukraine 24. 2 Mt USA 78. 6 Mt Russia S. Korea 68. 6 Mt 4 70. 8 Mt 5 Brazil 30. 2 Mt 6 9 GLOBAL CRUDE STEEL PRODUCTION 2016 : 1628 MILLION MT UP BY 0. 8% COMPARED TO YEAR 2015 Source: WORLD STEEL ASSOCIATION

GLOBAL SEA BORNE MET COAL & COKE EXPORT / IMPORT TRADE OTHERS RUSSIA / UKRAINE POLAND KAZAKHSTAN CANADA EUROPE EGYPT JAPAN CHINA TURKEY USA MONGOLIA INDIA VIETNAM INDONESIA COLOMBIA BRAZIL ARGENTINA MOZAMBIQUE S. AFRICA AUSTRALIA NEW ZEALAND

INDIA – IMPORTS BY TYPE OF COAL / COKE In Million Tonnes Coal Type Source: IHS Mc. Closkey Coal 2013 - 2014 – 2015 -2016 -2017 -2018 2019 - 2020 (Till July) Coking Coal 36 41 45 42 14. 2 60 Non Coking Coal 137 185 164 151 49. 7 227 Anthracite Coal 1 1 0. 5 4 PCI Coal 2 3 3. 5 4. 6 2. 2 6 Met Coke 3 3 3. 1 3. 3 1. 2 6 Pet Coke 3 6 10. 4 14. 1 4. 2 7 Total Coal & COKE 182 239 227 216 72 310

COKE & COAL – INDIAN PERSPECTIVE About 1628 Million MT of Steel was produced world-wide in 2016 & India ranked 3 rd producing about 95. 6 Million MT as per World Steel Association Figures. India presently consumes about 46 Million MT of Imported Coking Coal & about 2. 7 Million MT of Imported Met Coke annually. As per ICMW Estimates, by year 2020, India would require about 60 Million MT of Coal & about 6 Million MT of Coke annually. But at present, 2. 5 % Import Duty on Coking Coal & Clean Energy Cess of Rs 400 per MT is affecting Industry Margins significantly. India imposed Anti-dumping Duty on Coke Imports from China & Australia @ $25. 20/t $16. 29/t from 25 th Nov 16 for next 5 years while 5% duty for Coke from other origin. But since India does not have enough Coking Coal or Coke Making Capacity to cater to growing Demand, India has to rely heavily on Imports of good quality Coal & Coke. In the long term, these are Scarce Commodities & face major Supply Constraints. Hence, India being highly deficient in Coking Coal & Met Coke should see growing Demand in view of consistent growth in Indian Steel, Pig Iron & Ferro Alloys sectors. Also, abundant domestic Iron Ore Resources lends confidence to long term growth of Steel , Met Coke & Coking Coal Business in India.

COKE BUYERS IN EUROPE WITH ESTIMATED ANNUAL DEMAND ( 2017 -18 ) ARCELOR MITTAL 2. 0 MMTPA TATA EUROPE 1. 0 MMTPA THYSSENKRUPP 1. 0 MMTPA EVRAZ / UK STEEL 0. 5 MMTPA TURKEY / SSAB 0. 5 MMTPA US STEEL EUROPE 0. 7 MMTPA DILLINGEN 0. 3 MMTPA METINVEST 0. 5 MMTPA SEVERSTAL 0. 5 MMTPA OTHERS 1. 0 MMTPA TOTAL 8. 0 MMTPA

COKE BUYERS IN USA WITH ESTIMATED ANNUAL DEMAND ( 2017 -18 ) US Steel / Stelco 0. 5 MMT Arcelor Mittal 0. 7 MMT Nucor Corpn 0. 5 MMT A K Steel REP 0. 3 MMT Evraz Group 0. 5 MMT Esmark / WP 0. 5 MMT TOTAL 3. 0 MMT

JAPANESE STEEL MILLS BUYING COKE Nippon Steel ( Muroran, Kimitsu, Nagoya, Yawata, Oita) Import: 0. 40 Mt Kawasaki Steel JFE Steel Aichi Steel / ( Kawasaki, Fukuyama, Sumitomo Metals Chiba, Mizushima) Japan Steel / Import: 0. 40 Mt Tanaka Chobai Import: 0. 40 Mt Nisshin Steel Kobe Steel (Kure) (Kakogawa, Kobe) Import: 0. 20 Mt

BRAZIL MARKET Arcelor Mittal Brazil / Acesita Timoteo 0. 50 AP RR Gerdau 0. 50 Thyssenkrupp / CSAPA / Belgo Mineira Joao MA 0. 50 AM AC CE RN PB PI PE TO RO Coke Demand 2017 -18 IN Million MT AL SE BA MT Acominas 0. 50 GO Usiminas 0. 30 MG ES MS RJ SP COSIPA 0. 30 PR SC RS CSN 0. 70 Aperam / CST / Sinobras 0. 30

MAJOR GLOBAL CUSTOMERS FOR MET COAL & COKE: BRAZIL / ARGENTINA INDIA EUROPE / USA TURKEY / IRAN / PAKISTAN JAPAN CSN ARCELOR MITTAL JFE STEEL ERDEMIR USIMINAS ESMARK / SEVERSTAL NIPPON STEEL ATAKAS ACOMINAS WHEELING PITTSBURGH MITSUBISHI PAKISTAN STEEL VISA SUN COKE / GUJARAT NRE / APARANT / SIMPLEX COKE/ USHA MARTIN COSIPA US STEEL / AK STEEL / THYSSENKRUPP MITSUI ISTEMIR TATA METALIKS / MESCO / LANCO BELGO / ACESITA TATA CORUS SANSEI KHER-DEMIR SLR / ADHUNIK / KALYANI / OTHERS SIDERAR / OTHERS MID CONTINENT NAKAYAMA ESFAHAN STEEL - IRAN TATA STEEL / SAIL / RINL / NINL / ESSAR / JSW – ISPAT / JSPL SAURASHTRA FUELS / BENGAL ENERGY / JSPL / KIRLOSKAR / BHUSHAN STEEL / ELECTRO STEEL

IMPORTED COAL / COKE USERS IN INDIA IN MAJOR PORTS SAURASHTRA FUELS GUJARAT NRE ELECTROMELT MAHASHAKTI CARBON EDGE BLA COKE SIMPLEX COKE BALAJI NARAYANI TATA CHEMICALS NAVNAGAR COKE HINDUSTHAN COAL BHATIA COKE VASUDHA UDYOG ARIHANT TRADE JINDAL SV IMPEX USHA MARTIN TATA METALIKS TATA STEEL NEO METALIKS SREE METALIKS KABRA BENGAL ENERGY HOOGHLY MET COKE MUNDRA KANDLA MUKUND APARANT SISCOL SUCHETAN MUMBAI DHAMRA PARADIP VIZAG MORMUGAO MANGALORE JSW – ISPAT KALYANI KIRLOSKAR USHA ISPAT S I LTD TATA RINL JAISWAL JSPL SISCOL SUNFLAG COROMANDEL COKE CHENNAI KUDREMUKH VSL HALDIA JSW SISCOL LANCO SATAVAHANA KALYANI SJK ECL ENNORE COKE KAJARIA TAYO CONCAST RASHMI DPL NINL VISA JINDAL IMFA TATA SAIL BENGAL ENERGY TAYO NBFA IMIL NR INTL KABRA VASVI CONCAST FACOR ADHUNIK JAI BALAJI IDCOL SARAOGI SWATI VISA MSP KIW UMIL ROHIT RASHMI ECL BHUSHAN MESCO

MET COKE CFR INDIA PRICE TREND IN $ / MT 450 400 412 365 350 300 250 200 345 275 252 215 PRICE IN $ PER MT 150 100 130 50 0 YEAR 2011 YEAR 2012 YEAR 2013 YEAR 2014 YEAR 2015 YEAR 2016 SPOT PRICE SEP 17 AV. MET COKE PRICE IN $ / MT

SENSITIVITY ANALYSIS – CONVERTED COKE FROM COKING COAL

GLOBAL OUTLOOK FOR MET COKE China Largest Producer of Met Coke for 2 decade, now produces 70% of Global Coke. The World Coke Industry is being dominated primarily by Asia and China. Coke Production in Europe is down for last 5 -6 years due to lack of demand from Steel arising out of the subdued economic activity in the Euro Zone Countries. As US Coke Plants are under environmental pressure, there have been shut down of a few old Coke Plants in Australia due to several reasons. India is one of the major Importers of Met Coke, followed by Germany, Japan & Brazil. Columbia, Poland & Ukraine are prime Exporters of Met Coke along with China. Coke Prices usually follow Coking Coal Price Trends having a direct co-relation. In most other Countries, Coke Production set to decline in the long-term due to lower integrated Steel Production, Environmental Reasons, poor markets for Coke & Steel. Countries where Coke Production has potential for rise in future are Korea, Taiwan, developing Asian Economies, Brazil, Colombia, Germany, Iran, Turkey etc. As global economies are shutting down coke plant on A/c of Environmental Crises.

GLOBAL MET COKE MARKET – CURRENT SCENARIO & FUTURE OUTLOOK No representation or warranty is made as to the accuracy, completeness or reliability of information & views expressed here which have been derived from publicly available sources & not independently verified. This presentation should not be relied upon as a recommendation or forecast & not to be held responsible for any loss or damage arising from the use of information.