Baoshan Iron & Steel Co.,Ltd.

2011 Full Year Results

April 2012

Disclaimer

The following presentation distributed herewith includes forward-looking statements. All statements, other than statements of historical facts, that address activities, events

or developments that Baoshan Iron & Steel Co.,Ltd.(Baosteel) expects or anticipates will or may occur in the future are forward-looking statements.

Baosteel’s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, competition and other risks and factors beyond our control.

I. Operation Results

II. Industry Dynamics

III.Company Outlook

� Production and Sales

unit：：：：million tons 2009 2010 2011 YoY

Crude steel output 23.86 26.45 26.64 0.72%

Sales of finished products 22.43 25.26 25.80 2.14%

including：：：：domestic 20.72 22.93 23.06 0.57%

export 1.71 2.33 2.74 17.60%

� Sales Breakdown of Finished Products

Note：BNA included，unit：million tons

unit：：：：million tons

billion YuanSales Revenue YoY Cost YoY

Gross

marginYoY

CRC 9.53 59.0 3.5% 51.7 18.3% 12.33% ↓↓↓↓11.02 ppts

HRC 8.30 38.8 11.4% 34.6 19.4% 10.86% ↓↓↓↓6.04 ppts

Plate 2.32 11.7 16.4% 12.8 25.0% -8.86% ↓↓↓↓7.48 ppts

Tube 1.50 10.8 6.7% 9.8 7.7% 9.45% ↓↓↓↓0.82 ppts

Stainless steel 1.35 18.0 2.0% 17.8 3.5% 1.37% ↓↓↓↓1.40 ppts

Special steel 0.96 11.2 14.4% 11.3 15.1% -0.91% ↓↓↓↓0.68 ppts

Others 1.84 8.8 12.9% 8.8 13.9% 0.00% ↓↓↓↓0.86 ppts

Total 25.80 158.4 7.5% 146.8 15.8% 7.33% ↓↓↓↓6.67 ppts

� Gross Profit--Products

� Domestic Market Share

50%

39%

29%26% 26%

24%22%

19%17%

6%

0%

10%

20%

30%

40%

50%

60%

Auto sheet

High-strength machinery steel

Home appliances sheet

Tin plate

Packaging steel

Oil exploration tube

Boiler tube

Silicon steel

HFW pipe

Ship plate

� Income Statement Summary

unit：：：：billion Yuan 2009 2010 2011 YoY

Revenue 148.53 202.41 222.86 10.10%

Cost 142.12 186.59 214.64 15.03%

Gross profit 14.07 24.33 19.61

Gross margin％％％％ 9.47 12.02 8.80 ↓↓↓↓3.22 ppts

Operating profit 7.25 16.67 8.84

Operating margin％％％％ 4.88 8.24 3.97 ↓↓↓↓4.27 ppts

Net profit 5.82 12.89 7.36

Net profit margin％％％％ 3.92 6.37 3.30 ↓↓↓↓3.07 ppts

� Dividend Distribution

unit 2008 2009 2010 2011

Dividend per share Yuan 0.18 0.20 0.30 0.20

Dividend/Unconsolidated net income % 62.1 69.0 45.8 69.2

Dividend/Consolidated net income % 46.0 60.2 40.8 47.6

Note: 2011 dividend is subject to approval of shareholders’ meeting.

unit：：：：Yuan 2009 2010 2011 YoY

EPS 0.33 0.74 0.42 -43.24%

BVPS 5.43 5.98 6.08 1.67%

Net CFO per share 1.37 1.08 0.69 -36.11%

Gross margin% 9.43 13.25 8.75 ↓↓↓↓4.50 ppts

ROE (weighted)% 6.27 12.95 7.02 ↓↓↓↓5.93 ppts

� Financial Highlights

Financial index unit 2010-12-31 2011-12-31 Change

Solvency

Total debts/

total assets％％％％ 48.47 50.89 ↑↑↑↑2.42 ppts

Current ratio 0.94 0.80 ↓↓↓↓0.14

Quick ratio 0.42 0.42 0

Financial index unit 2010-12-31 2011-12-31 Change

Liquidity

Days of receivables day 5.6 8.4 50.0%

Days of inventories day 70.7 74.9 5.9%

Cash conversion

cycleday 41.4 51.1 23.4%

� Solvency and Liquidity

� 2011 Accomplishments

Improve Product Profitability

• Auto sheet sales 4.55 million tons, maintaining market share of 50%.

Reduce Cost

• Optimize coal mix and alloy mix to reduce the cost.

Improve Customer Service Ability

• Build customer-oriented sales mechanism.

• Strengthen customer technical support and cooperation.

� 2011 Accomplishments

Environment Protection

• Issue the first 《Green Purchasing Guideline》 in domestic steel industry.

Capex

• Capex is 16.6 billion Yuan in 2011.

I. Operation Results

II. Industry Dynamics

III.Company Outlook

� Macro Economy-International

2011：

• Developed economies still shadowed in the crisis.

• Domestic demand of emerging economies grew fast.

• Development of main emerging economies slowed down.

2012：

• High possibility of sovereign debt degrading in euro-zone.

• Risk of double-dip recession increases.

• Global economy growth slows down to about 3%.

� Macro Economy-Domestic

• GDP up 9.2% in 2011, down 1.2 ppts

YoY due to government macro control.

• GDP growth target is 7.5% in 2012.

Data source: wind

• CPI up 5.4% in 2011, 1.4 ppts above

the target.

• 2H2011 CPI slowed down, targeting 4%

in 2012.

GDP growth, YoY(%)

8.3

9.1

10 10.1

11.3

12.7

14.2

9.69.2

10.4

9.2

7.56810121416

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(E)

CPI growth, YoY(%)

4.9 4.9

5.4 5.35.5

6.4 6.56.2 6.1

5.5

4.2 4.1

3

4

5

6

7

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

� Demand and Supply Analysis--Supply(Crude Steel)

• Crude steel output still grew fast in 2011.

• Daily output peaked nearly 2 million tons in June, while gradually decreased in H2. The lowest level was 1.66 million tons in November.

• 28 million tons capacity was eliminated in 2011, environment compliance will be the main criteria in 2012.

• Output growth is expected to slow down to 6% in 2012.

Data resource: CISA

Unit: million tons 2009 2010 2011 YoY 2012E

Output 568568568568 627627627627 683683683683 8.9%8.9%8.9%8.9% 720720720720

Net export 3333 27272727 35353535 22.2%22.2%22.2%22.2% 35353535

Apparent

Consumption 565565565565 599599599599 648648648648 5.5%5.5%5.5%5.5% 690690690690

� Demand and Supply Analysis--Import & Export

• Export 48.9 million tons in 2011, up 15.1% YoY.

• Export and import are expected 50 and 15 million tons respectively in 2012.

Data resource: Wind, MIIT

Monthly net export

24.5

45.843.8

7.0

26.1

33.335.0

5

15

25

35

45

2006 2007 2008 2009 2010 2011 2012（（（（E））））

million tons ..

� Demand and Supply Analysis--Demand(Infrastructure)

• FAI 30.2 trillion Yuan in 2011, up 23.8% YoY, growth is expected to slow down

in the future.

• Ministry of railways plans 500 billion Yuan FAI in 2012.

FAIFAIFAIFAI

14.4

18.3

29.1 28.8

27.2

24.3

26.6

30.4

24.523.8

25.8

0

5000

10000

15000

20000

25000

30000

35000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

billion yuan

10

15

20

25

30

35

Year YoY(%)

Data source: wind

� Demand and Supply Analysis--Demand(Real Estate)

• Due to government policy, growth in housing investment, new start area and

sales slowed down.

• Major loosening is unlikely for real estate and monetary policy in 2012.

• 7 million set social housing project forms the major source of demand.

Investment

500

1500

2500

3500

4500

5500

6500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

billion yuan ..

0

0.5

1

1.5

2

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

billion square m

eters ...

New start area Sales area

Data source: wind

� Demand and Supply Analysis—Demand(Automobile)

• Growth significantly slowed down in 2011.

• Growth will be lower than previous years, expected 8% in 2012.

• Smaller size, lightweight cars, and rigid demand in second and third tier cities

still ensure room for growth, but at a lower rate.

Data source: wind

Output

35.20

14.1112.56

27.32

22.02

5.21

48.30

32.44

0.84

0.00

5.00

10.00

15.00

20.00

2003 2005 2007 2009 2011

million

0.00

10.00

20.00

30.00

40.00

50.00

output YoY%

Sales

34.21

15.5013.54

25.1321.84

6.70

46.15

32.37

2.45

0.00

5.00

10.00

15.00

20.00

2003 2005 2007 2009 2011

million

0.00

10.00

20.00

30.00

40.00

50.00

sales YoY%

� Demand and Supply Analysis--Demand(Home Appliance)

• Industry growth is stable.

• Demand growth is expected to slow down in 2012 with expiration of subsidy

policies .

• Air-conditioner is expected to grow 10%, refrigerator and washing machine

0-5% in 2012.

Output

0

50

100

150

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

In millions

washing machine refrigerator air-conditioner TV

Data source: wind

� Demand and Supply Analysis--Demand(Machinery)

• Machinery industry has peaked out.

• In the sub-industries：construction machinery and railway equipment

downward, ship building in deep recession, import substitution and nuclear

power equipment upward, coal mining equipment flat.

• Growth rate is expected 15% in 2012.

Machinery industry growth,YoY

26.21% 25.93% 25.62%25.06%

26.42%26.43%27.08%26.95%27.71%29.11%

29.07%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Jan-Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2009 2010 2011

Data source: CMIF

� Demand and Supply Analysis--Demand(Ship Building)

• Completion, new order and carrying order were :77, 36 and 150

million tonnages respectively in 2011, new order down 52% YoY,

carrying order down 24% YoY.

• Over-supply in ship plates will continue. Industry still in

depression, growth rate is expected -5% in 2012.

Data source: wind

Ship-building completion

6.15

3.08

7.40

5.99

7.147.87

8.62

5.53

10.14

6.507.23

14.90

0

2

4

6

8

10

12

14

16

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

In million tonnage

2006 2007 2008

2009 2010 2011

� Steel Inventory

• Year end inventory down 2.6% YoY.

• Inventory climbed to historical peak of 19 million tons in Feb. 2012, mostly

long product.

• Downward trend in the end of Q1.

Unit:

million tons

3-30-

2012

2-24-

2012

1-29-

2012

12-30-

2011

YoY

Change %

Rebar 8.07 8.45 6.66 4.86 0.45 10.2%

Wire 2.19 2.51 1.78 1.12 -0.08 -3.9%

HRC 4.42 4.66 4.30 4.03 -0.78 -16.3%

CRC 1.70 1.71 1.58 1.49 0.02 1.5%

Plate 1.51 1.60 1.52 1.39 0.02 1.3%

Long product 10.26 10.96 8.44 5.98 0.40 7.2%

Flat product 7.63 7.98 7.40 6.91 -0.74 -9.7%

Total 17.89 18.94 15.84 12.90 -0.34 -2.6%

Data source: Mysteel

� Iron Ore Inventory

• Iron ore port inventory up 29.3% in 2011.

• Inventory remains a high level in 2012, 98 million tons in 25 main ports

by 30th Mar.

Data source: Mysteel

Iron ore port inventory

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Jan-10 Mar-10 May-10 Jul-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12

million tons

Australian Brazil India

� Raw Material Cost

• Iron ore price peaked at 190 USD/ton in 3Q2011, dropped to 120 USD/ton in Q4.

• In 2011, import 686 million tons, average price 164 USD/ton.

• Iron ore price is expected lower in 2012.

62%粉矿62%粉矿62%粉矿62%粉矿PlattsPlattsPlattsPlatts价格指数价格指数价格指数价格指数（（（（美元/干吨美元/干吨美元/干吨美元/干吨））））

2010-7-16, 1162010-7-16, 1162010-7-16, 1162010-7-16, 116

2010-4-20, 1862010-4-20, 1862010-4-20, 1862010-4-20, 186

2011-10-27,2011-10-27,2011-10-27,2011-10-27,120120120120

2011-9-7, 1832011-9-7, 1832011-9-7, 1832011-9-7, 1832011-3-15, 1652011-3-15, 1652011-3-15, 1652011-3-15, 1652011-2-15, 1932011-2-15, 1932011-2-15, 1932011-2-15, 193

100

110

120

130

140

150

160

170

180

190

200

1

月

2

月

3

月

4

月

5

月

6

月7

月8

月9

月1

0月1

1月1

2月2010年2011年

焦炭价格焦炭价格焦炭价格焦炭价格1500

1600

1700

1800

1900

2000

2100

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

Data source: Mysteel

Coke price

废钢价格废钢价格废钢价格废钢价格

2700

2900

3100

3300

3500

3700

3900

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12Scrap price

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2010

2011

Platts(62%Fe)

� Steel Price

Unit:

Yuan/ton30-Mar MoM% YoY%

Average

2011YoY%

HRC 4330 0.7 -7.1 4718 9.6

CRC 5240 -0.2 -5.1 5467 -2.7

Plate 4440 2.1 -8.5 4803 9.9

Wire 4180 4.8 -8.5 4699 11.8

Rebar 4350 0.2 -11.0 4919 15.0

Data source: Mysteel

• In 2011, steel price declined after rise at first, with more fluctuation of long

product.

• Macro economic growth slows down in 2012. Steel consumption growth is

expected low. High cost and low profit remain, industry gross margin is

expected 2-3%.

� Market Trend

3000

3400

3800

4200

4600

5000

5400

5800

6200

6600

Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12热轧3.0冷轧1.0螺纹20Ⅲ级

Data source: Mysteel

300040005000600070008000900010000

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12冷轧1.0镀锌1.0彩涂0.476硅钢600HR3.0

CR1.0

Rebar20III

CR1.0

Galvanized1.0

Prepainted0.476

Silicon600

I. Operation Results

II. Industry Dynamics

III.Company Outlook

� 2012 Company Outlook

2012 Plan Highlights

• Production: iron -23.25 million tons,

steel-25.25 million tons；

• Sales: 24.25 million tons；

• Total revenue: 216 billion Yuan;

• Cost: 196 billion Yuan.

• Promote synergy of production, sales and

research;

• Optimize product inventory management;

• Improve manufacturing process to reduce

the cost;

• Promote customer technical service

system and customer oriented marketing.

• General operating target：sales revenue 216 billion Yuan; Number One

and Only One products sales 11.6 million tons ; maintain outperformance in

the sector.

Unit: million tons 2011 % 2012E %

HRC 6.82 26% 6.67 27%

Plate 2.32 9% 1.86 8%

CRC 11.38 44% 11.56 47%

Tube 1.50 6% 1.88 8%

Others 1.84 7% 2.06 9%

Stainless steel 1.35 5% 0.36 1%

Special steel 0.96 4% 0.24 1%

Total 26.18 100% 24.64 100%

� 2012 Planned Sales

Note：BNA included;

Main changes in 2012 planned sales:

（1）Stainless and special steel assets sale completed on 1st April,

which only includes Q1 sales;

（2）Increase from new production line in Meishan Iron&Steel.

� Stainless & Special Steel Asset Sale Impact

9.58Profit

22.69

22.50

Including：：：：Cash

Installment

billion Yuan

Base Price 45.19

Including：：：：land appreciation 7.54

• Asset sale profit 9.58 billion Yuan.

• Cash inflow and loan decrease will

reduce financial expenses by 1.4 billion

Yuan.

• Improve profitability of the company (sold

assets loss 1.54 billion Yuan in 2011).

Note：Since sale completed on 1st April, 2012, the impact won’t be reflected in 2011 full year

and 1Q2012 financial reports.

Before the sale

20.921.547.4Net Profit（（（（ billion Yuan））））

2011 Impact %

Output（（（（million tons）））） 26.0 -4.00 -15.38

Total Asset（（（（billion Yuan）））） 231.1 2.76 1.20

Revenue（（（（ billion Yuan）））） 222.9 -3.13 -1.40

� CAPEX

• Company CAPEX is planned 12.74 billion Yuan in 2012. Including: Meishan

Iron&Steel product and technical optimization, oriented silicon steel 2nd phase

project, new refining facility in steel making mill, etc.

13.9

18.2

22.5

28.7

17.8

14.0

16.6

12.74

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2005 2006 2007 2008 2009 2010 2011 2012E

billion Yuan

3Q20131.80.1Oriented silicon steel 2nd

phase project

4Q20141.0GI2030 GI unit project

2Q20130.70.2Silicon

steel

High standard non-oriented

silicon steel production line

4Q20121.1Power plant unit project

2H20124.90.5TubeLubao tube project

June/201211.54.0HRCMeishan product

optimization

CompletionInvestment

（（（（billion Yuan））））

Designed Capacity

（（（（million tons））））ProductProject

� Major Expansion Projects