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VIEWS: 193 PAGES: 16

									                                                              MORGAN            STANLEY              RESEARCH
                                                              NORTH         AMERICA


                                                              Morgan Stanley & Co. Incorporated   Mark Liinamaa
                                                                                                  Mark.Liinamaa@morganstanley.com
                                                                                                  +1 (1)212 761 3537

                                                                                                  Evan L Kurtz, CFA
                                                                                                  Evan.Kurtz@morganstanley.com
                                                                                                  +1 (1)212 761 7583

                                                                                                  Paretosh Misra, Ph.D
April 18, 2010                                                                                    Paretosh.Misra@morganstanley.com
                                                                                                  +1 (1)212 761 3590


Metals & Mining Call                                                                              Wes Sconce
                                                                                                  Wes.Sconce@morganstanley.com
                                                                                                  +1 (1)212 761 6004

Demand Concerns Dictate
                                                              Recent Reports
Sector Direction                                              Title                                                                  Date
                                                              Coal: Nat Gas a Near-term Risk – and Buying                Mar 15, 2010
                                                              Opportunity
Shares sold off in the first week of earnings season,
we think due to new concerns over the pace of                 Consol Energy Inc: Gas Acquisition Alters Value             Mar 15, 2010
                                                              Proposition
recovery, as well as uncertainty in the financial
sector. AA delivered an in line result to kick-off earnings   Americas Gold: Miners Living Up to Their Part                Mar 7, 2010
season, but the market was rattled by a $546mn                of the Bargain
sequential decline in revenue. We are less concerned,         Cliffs Natural Resources: Lifting Estimates on               Mar 3, 2010
as our analysis suggests normalized “purchase and             Higher Iron Ore and Coking Coal Prices

re-sell” aluminum and disclosed lost can sheet volumes
                                                              Steel: Fundamentals Tracking Favorably;                     Feb 24, 2010
accounted for ~94% of the decline. Similarly, response        Near-term Trading Opportunity
to an above consensus 1Q from GE was dampened by
                                                              US Steel Corporation: Expectations Resetting                 Jan 28, 2010
lower than expected order rates and no growth in              After Q1 Guidance: Worth A Look
backlog. Our GE analyst Scott Davis (GE: 1Q Mostly
Good…, Apr 16, 2010), thinks this will prove a timing         Global Metals Playbook - 1Q10: Gathering                    Jan 13, 2010
                                                              Momentum
issue. He believes energy orders will begin to inflect
upward in 2H10, and late cycle businesses are set up for      Nonferrous Metals & Mining: Revising Estimates              Jan 12, 2010
                                                              for AA and FCX on Metal Price Outlook
an “exceptional” 2011-12. We believe AA will also
benefit from this trend as it is still running most           Arch Coal Inc.: Perceived Shortcomings                      Jan 11, 2010
downstream businesses well below capacity.                    Becoming Strengths; OW

                                                              Cloud Peak Energy Inc.: Thermal Coal Value                  Dec 30, 2009
The recent sell-off across the group has lowered the          Play; Bullish PRB; Overweight
expectations bar in the sector. In this report, we provide
previews for several companies reporting soon.                Alcoa Inc.: Recovery, Execution Upside:                    Dec 21, 2009
                                                              Moving to Overweight
Steel: Debate on steel price direction continues.
                                                              Americas Gold: Mature Bull Favors                           Dec 17, 2009
Slowing scrap momentum affected US steel futures,             “Steady-State” Producers
which declined for the first time since November ‘09. On
                                                              Consol Energy Inc: Gas Segment Growth                        Dec 9, 2009
a positive note, iron ore prices continue to rise on strong   May Be Key to Upside
demand and a Chinese ban on low-grade iron imports.
Metals: Industry data continues to be strong. A $22/T
increase in spot premiums in Europe helped aluminum
breach $1.10/lb. March Chinese industrial data showed
strong domestic demand and copper imports were only
4% lower than the all-time peak of June 2009.
Coal: The US coal sector, in our view, is a 2011 story.       Morgan Stanley does and seeks to do business with
Nonetheless, volatility around quarterly earnings is          companies covered in Morgan Stanley Research. As
normal in this sector. We think any earnings misses will      a result, investors should be aware that the firm may
be driven by lower volumes and higher costs (due              have a conflict of interest that could affect the
primarily to adverse weather). The two key debates            objectivity of Morgan Stanley Research. Investors
                                                              should consider Morgan Stanley Research as only a
heading into the quarter are 1) who has 2010 met              single factor in making their investment decision.
volume upside to benefit from current price strength and
                                                              For analyst certification and other important
2) timing of improvement in US thermal coal markets.          disclosures, refer to the Disclosure Section,
                                                              located at the end of this report.
                                                                                                                                                                                                                                                                MORGAN         STANLEY      RESEARCH

                                                                                                                                                                                                                                                                April 18, 2010
                                                                                                                                                                                                                                                                Metals & Mining Call




Steel                                                                                                                                                                                                                                                           US Steel (4/27/10 BTO)

                                                                                                                                                                                                                                                                MS Estimates: 1Q10 ($1.50); 2Q10 $0.37
KEY INDICATORS
                                                                                                                                                                                                                                                                Consensus Estimates: 1Q10 ($1.46); 2Q10 $0.58
US Industry Operating Rates Rise
After a break in the upward trend last week, US operating rates                                                                                                                                                                                                 Company Q4 Guidance: Overall: operating loss in Q1, but a
rose to 71.6% from 70.8%.                                                                                                                                                                                                                                       loss; Flat-rolled: higher, USSE: flat, Tubular: lower, but
                                                                                                                                                                                                                                                                profitable
Prices Trend Higher China, Futures Fall in US
US HRC futures fell for the first since November. They
                                                                                                                                                                                                                                                                •    Management provided an improved outlook in their 10-K
declined 1.4% to at $690/s.t. Chinese HRC climbed 2.9% to
                                                                                                                                                                                                                                                                     mid-quarter, indicating that conditions were tracking well
RMB 4,570/t ($669/t).
                                                                                                                                                                                                                                                                     early on. A bullish presentation at our conference
Exhibit 1                                                                                                                                                                                                                                                            reinforces this view.
Daily US and Chinese HRC Prices
                                                                                                                                                                                                                                                                •    Cost-push steel price increases should drive earnings
            5,000                     Shanghai HRC Price (RMB/t)                                                                                 Front Month US HRC ($/s. ton)                                                              750                      higher at backwards integrated US Steel. We see upside
                                                                                                                                                                                                                                            700                      risk to Q1 and Q2 Street estimates.
            4,500
                                                                                                                                                                                                                                            650
                                                                                                                                                                                                                                                                •    The trade is arguably crowded, but after the recent
                                                                                                                                                                                                                                                  $/short ton




            4,000                                                                                                                                                                                                                           600
    RMB/t




                                                                                                                                                                                                                                            550                      pullback, we think the bar is now low enough to minimize
            3,500                                                                                                                                                                                                                           500                      downside risk into quarter.
                                                                                                                                                                                                                                            450
            3,000
                                                                                                                                                                                                                                            400

            2,500                                                                                                                                                                                                                           350
                                                                                                                                                                                                                                                                Nucor (4/22/10 BTO)
                    1/5/09
                             2/4/09
                                      2/24/09
                                                3/16/09
                                                          4/3/09
                                                                   4/24/09
                                                                             5/15/09
                                                                                       6/8/09
                                                                                                6/26/09
                                                                                                          7/17/09
                                                                                                                    8/6/09
                                                                                                                             8/26/09
                                                                                                                                       9/15/09
                                                                                                                                                 10/16/09
                                                                                                                                                            11/5/09
                                                                                                                                                                      11/25/09
                                                                                                                                                                                 12/15/09
                                                                                                                                                                                            1/5/10
                                                                                                                                                                                                     1/25/10
                                                                                                                                                                                                               2/12/10
                                                                                                                                                                                                                         3/4/10
                                                                                                                                                                                                                                  3/24/10




                                                                                                                                                                                                                                                                MS Estimates: 1Q10 $0.05; 2Q10 $0.34
                                                                                                                                                                                                                                                                Consensus Estimates: 1Q10 $0.13; 2Q10 $0.40
Source: Bloomberg, Morgan Stanley Research

                                                                                                                                                                                                                                                                Company Q1 Guidance: ($0.05) - $0.05
1Q10 Earnings Preview

AK Steel (4/20/10 BTO)                                                                                                                                                                                                                                          •    When the company released the Q1 guidance range in
                                                                                                                                                                                                                                                                     early March, the LIFO impact and Trinidad downtime
MS Estimates: 1Q10 $0.21; 2Q10 $0.37                                                                                                                                                                                                                                 impact should have been fully included in the numbers.
Consensus Estimates: 1Q10 $0.24; 2Q10 $0.34
                                                                                                                                                                                                                                                                •    We expect the Trinidad DRI facility to be an incremental
                                                                                                                                                                                                                                                                     positive in Q2.
Company Q1 Guidance: EBIT/t of $35 (which is in line with
our $0.21 estimate)                                                                                                                                                                                                                                             •    While LIFO should prove to be drag in Q1, we do not
                                                                                                                                                                                                                                                                     expect the LIFO to have an incremental impact in the Q2.
•           When the company guided to $35/t, they were assuming a
                                                                                                                                                                                                                                                                •    We expect the company to point to wider metal margins in
            30% iron ore pellets increase. It has become clear that
                                                                                                                                                                                                                                                                     Q2 as steel prices have a chance to catch up with higher
            pellets could increase more than 100% this year, which
                                                                                                                                                                                                                                                                     costs.
            could impact the first quarter result since the company
            accrues for the higher cost.                                                                                                                                                                                                                        •    We expect the company to provide a qualitative outlook for
                                                                                                                                                                                                                                                                     a sequential improvement, but lacking the detail to affirm
•           We believe higher iron ore costs and potentially higher
                                                                                                                                                                                                                                                                     the Street estimate. As a result, we do not expect the
            coking coal costs, due to the Massey accident, puts the Q2
                                                                                                                                                                                                                                                                     quarter to move the stock much.
            Street estimate of $0.34 at risk.

•           The stock has underperformed in recent weeks, likely
            indicating that the market is well aware of the cost issues
            facing the company. However, we think the odds of a
            positive surprise are low.




                                                                                                                                                                                                                                                                                                                                2
                                                                                               MORGAN                                         STANLEY                     RESEARCH

                                                                                               April 18, 2010
                                                                                               Metals & Mining Call




Exhibit 2
Cutting our 1Q10 Nucor Estimate to Reflect Recent
                                                                                               Metals
Guidance
($ Millions, Except Per Share Data)
                                                                                               KEY INDICATORS
                               1Q2010 Est.           FY2010 Est.           FY2011 Est.
                              Old       New         Old         New       Old       New
                                                                                               LME had yet another strong week
Steel Volumes                 3,933     4,925       16,820      18,216    17,923    20,076     LME prices were up, with copper rising 0.5%, aluminum rising
Blended Price                   647      647          671          715      736          804   3.4%, zinc rising 5.5%, and nickel rising 9.3%. Inventories were
Sales                         3,785     4,568       16,609      18,884    19,299    22,905
                                                                                               mostly down with copper falling 0.5%, aluminum falling 0.3%,
    Steel                     2,544     3,184       11,297      12,993    13,207    16,119
    Steel Products              718      842         2,878       3,453     3,244     3,984     nickel falling 2.5% but zinc rose a modest 0.1%.
    Raw Materials               476      494         2,089       2,170     2,496     2,529
    Other                        48          48       345          268      352          273   Shanghai inventories went up
Gross Margin                   8.3%      6.7%        10.7%        9.3%     14.0%     12.4%     Shanghai prices were up with copper rising 0.1%, and
SG&A % of Sales                3.5%      3.5%         3.5%        3.5%      3.5%      3.5%     aluminum rising 2.1%. Copper inventories rose 9.6% and
Operating Profit                163          76      1,189       1,098     2,018     2,037     aluminum rose 3.0%.
    Steel                       275      192         1,491       1,421     2,283     2,316
    Steel Products               (39)        (43)         (8)      (29)      80           68
    Raw Materials                17          17        81           82       79           78   Continued evidence of physical market tightness help
    Corporate & Other            (65)        (65)     (275)       (275)     (316)     (316)    aluminum breach $1.10 level. European spot premiums rose
    LIFO Credit (Charge)         (25)        (25)     (100)       (100)     (108)     (109)
EBIT Margin                    4.3%      1.7%         7.2%        5.8%     10.5%      8.9%
                                                                                               $22.5 to $150/T – the highest level since May 2007 – indicating
                                                                                               continued physical market tightness. 3-month contango
Net Interest Expense             (34)        (34)     (135)       (140)     (116)     (132)    remains well above 3-month LIBOR, suggesting financing
Taxes                            45          15       369          335      666          667
Tax Rate                        35%      35%          35%          35%      35%          35%   deals remain attractive. Alcoa’s in line earnings and mostly
Net Income                       74          17       645          583     1,276     1,278     unchanged (except aerospace) outlook on various end markets
EPS (Pro Forma)               $0.23     $0.05        $2.05       $1.85     $4.05     $4.05
                                                                                               was not enough to demonstrate an urgency to buy and shares
EPS (As Reported)             $0.23     $0.05        $2.05       $1.85     $4.05     $4.05     fell 5% despite aluminum rising to $1.10.
Source: Company Documents, Morgan Stanley Research
                                                                                               Chinese March Data Indicates Strong Industrial
                                                                                               Production. Chinese industrial production grew 18.1% in
Steel Dynamics (4/19/10 ATC)                                                                   March and GDP grew 11.9% in 1Q10. March copper imports
                                                                                               were only 4% below the all-time peak of June 2009, despite
MS Estimates: 1Q10 $0.30; 2Q10 $0.45                                                           SHFE-LME price arbitrage remaining closed during March.
Consensus Estimates: 1Q10 $0.25; 2Q10 $0.36                                                    Aluminum imports also recovered to 95 kt from 64 kt in Feb. At
                                                                                               the LME, copper tested $3.65/lb, but has been unable to move
Company 14 Guidance: $0.22 - $0.27                                                             higher and underperformed aluminum this week.
                                                                                               Exhibit 3
•       Q1 guidance was announced on March 9, so we are not                                    March Copper Imports Were Close To June 2009
        expecting any major earnings surprises.                                                All-time Peak; Aluminum Imports Also Recovered
•       We believe the company could provide an outlook that                                                          600
                                                                                                                                          Copper
        leads to upwards 2Q revisions. As FIFO reporter STLD                                                          500                 Aluminum
        metal margins should expand in the current rising price
        environment as low scrap purchase costs are matched                                                           400

        against higher prices.
                                                                                                 Copper Imports, kt




                                                                                                                      300


                                                                                                                      200


                                                                                                                      100


                                                                                                                      -
                                                                                                                                               May-08




                                                                                                                                                                                                     May-09
                                                                                                                                     Mar-08




                                                                                                                                                                                            Mar-09




                                                                                                                                                                                                                                                  Mar-10
                                                                                                                            Jan-08




                                                                                                                                                        Jul-08




                                                                                                                                                                                   Jan-09




                                                                                                                                                                                                              Jul-09




                                                                                                                                                                                                                                         Jan-10
                                                                                                                                                                 Sep-08

                                                                                                                                                                          Nov-08




                                                                                                                                                                                                                       Sep-09

                                                                                                                                                                                                                                Nov-09




                                                                                               Source: Bloomberg, Morgan Stanley Research




                                                                                                                                                                                                                                                           3
                                                                                  MORGAN         STANLEY     RESEARCH

                                                                                  April 18, 2010
                                                                                  Metals & Mining Call




Exhibit 4                                                                         2011 EV/EBITDA approaches 4x as FCX builds cash over the
LME Inventories Mostly Declined                                                   next 12 months.
                                           Copper    Aluminum      Zinc  Nickel
                   2009 Market Size, kT 17,917          35,020  10,516   1,264
                             Inventory, T 509,400    4,565,000 547,000 151,242    We believe the key to upside for the shares is re-introducing
            Change in Inventory, WoW%       -0.5%        -0.3%    0.1%   -2.5%
     Inventory as weeks of Consumption        1.5           6.8     2.7     6.2   volume growth plans. We estimate FCX can increase volume
                   Canceled Warrants, T 16,075         273,500  15,000   5,802    to ~4.6 bn lbs/year by 2012–13, consistent with pre-downturn
    Canceled Warrants/Mkt Size, x1000        0.90         7.81    1.43    4.59
 Trailing 13 week Inventory Chg, T/week    (1,237)      (1,535)  4,527    (827)   plans. We do not expect FCX’s production to grow
  Inventory Chg rate/Market Size, x1000     (0.07)       (0.04)   0.43   (0.65)   meaningfully in the near term.
Source: Bloomberg, Morgan Stanley Research



Freeport McMoran (4/21/10 BTO)                                                    Century Aluminum (4/27/10 ATC)

MS Estimates: $1.80                                                               MS Estimates: $0.24
Consensus Estimates: $1.87                                                        Consensus Estimates: $0.20


Our $1.80 estimate is based on 890 mn lbs of copper and 490                       We believe CENX shares will likely remain a function of the
koz of gold, as per the guidance given in the last earnings                       aluminum price. In March, as aluminum gained 8.9%, CENX
conference call. As the company has beaten its production                         outperformed AA by 6%, while short interest declined 10%
guidance by an average 9% in the last 4 quarters, we believe a                    (versus a 23% rise for AA). This suggests investor preference
beat relative to our estimates is possible. In 4Q09, FCX                          for CENX shares to play an aluminum rally.
produced 989 mn lbs of copper and 551 koz of gold at 0.62 $/lb.
We do not expect a boost from provisional pricing, however.                       We estimate 1Q10 EPS at $0.24 v/s consensus $0.20. We
The average 1Q10 LME copper price of $3.30/lb was below the                       have modeled 3.6c/lb or 11% sequential increase in cash costs,
4Q09 quarter-end price of $3.34/lb at which 391 mn lbs of                         a 12c/lb sequential increase in 1-month lagged aluminum price,
copper sales were provisionally priced. As a result, we expect                    and near flat shipments.
a modest (<$0.05) negative provisional pricing adjustment in                      Growth in Iceland is a key long-term upside for CENX shares.
1Q10 earnings from 4Q09 sales.                                                    We expect major construction at Helguvik to resume in
                                                                                  mid-2010 with the first hot metal ~2 years from the restart. We
Exhibit 5                                                                         expect further updates during the earnings call. Press reports
FCX Beat Their Production Guidance in Every                                       suggest that Century’s operations were unaffected by the
Quarter in 2009                                                                   recent volcanic eruption in the country.
                                Guidance                Actual      Variance
        1Q09                        990                 1,020          3.0%
        2Q09                        955                 1,102        15.4%
        3Q09                        910                 1,000          9.9%
        4Q09                        915                   989          8.1%
        2009                      3,770                 4,111          9.0%
Source: Company data, Morgan Stanley Research



Management made its last two dividend increase
announcements with their earnings releases, and this could be
a near-term catalyst. At the current copper price of $3.52/lb,
the company can be net cash by 2011. Update on progress at
Tenke would be the other key takeaway from the conference
call.

The shares appear reasonably valued at spot copper prices
and 2010 production guidance. Over time, valuation becomes
compelling under our copper price view due to strong cash flow.




                                                                                                                                               4
                                                                     MORGAN         STANLEY      RESEARCH

                                                                     April 18, 2010
                                                                     Metals & Mining Call




Coal                                                                   gas. However, supply concerns have likely inflated spot
                                                                       CAPP prices, which we think will moderate further before
                                                                       significant switching takes place. We estimate utility coal
KEY INDICATORS (prices as of Thursday’s close)
                                                                       inventories currently stand at ~176 mmt.
US thermal coal prices (versus last week)
                                                                     • Production: We believe any lift in thermal coal production
12M fwd CAPP (NYMEX) @ $64.22 (+2%)
                                                                       guidance will be viewed negatively by the market; this is
12M fwd PRB (NYMEX) @ $13.47 (flat)
                                                                       particularly the case in the PRB. The consensus is bearish
Natural Gas Spot (NYMEX) @ $3.99 (+2%)
                                                                       on the PRB producers but we believe the miners will hold the
International coal prices (versus last week)                           line on committing additional tonnage and preserve what is in
Australian thermal @ $99 (flat)                                        our view a positive 2011-12 pricing story.
Hard coking coal spot @ $250/t fob Australia
                                                                     • Contract pricing: Following a stronger than normal winter
1Q10 coal earnings kick off next week with ACI, BTU and PCX            burn, coal contract request-for-proposals have picked up of
reporting results. The US coal sector, in our view, remains a          late. We understand PRB term contracts have been signed
2011 story, and the two key debates heading into the quarter           recently at ~$13.50-14.00/t, and CAPP contract offers have
are 1) the sustainability of US met coal exports and 2) timing for     been made at $65-70/t.
an improvement in domestic thermal coal markets.
                                                                     • Exports: Eastern US coal exports remain out of the money,
                                                                       but improving Asian demand has led to at least one export
Will the market look beyond a 1Q earnings miss? We think
                                                                       PRB contract for CLD. A sustained bid for US thermal coal
any misses will be driven primarily by lower volumes and higher
                                                                       exports is a longer-term bull case development, in our view.
costs (due primarily to adverse weather). CLD reported 1Q
production declined 5% and shares underperformed (they are           • Regulatory issues: Appalachian surface mine permits are
the only US company that reports production figures ahead of           still highly restricted, and there is some concern that the MEE
results), suggesting volume shortfalls may not be fully priced in.     mine disaster in April will lead to further regulations and
However, for producers with met coal exposure, we think risk to        higher costs (i.e. a Miner Act “II”). Eastern US cost pressure
1Q results may be largely offset by favorable outlooks and             is a key underpinning of our preference for low-cost (PRB,
upward revisions to met volumes and pricing.                           Illinois Basin, NAPP) thermal producers.

Exhibit 6                                                            1Q10 MET COAL THEMES
1Q10 MS versus Consensus EPS and EBITDA Ests.
                      1Q10e EPS                                      • Crossover met coal: Appalachian miners have pointed to
    FactSet Consensus      Morgan Stanley Estimates                    significant met volume growth as high quality thermal coal
  Low    Median    High        MSe        vs. Cons                     crosses over into high-vol met markets. Pricing in these
                                                                       markets is very opaque and contracts are predominantly
 ($0.01) $0.07    $0.13      $0.05         (31%)
                                                                       short-term in nature. We believe the market for marginal met
 $0.35    $0.41   $0.54      $0.43           6%
                                                                       coals is currently near ~$100/short ton fob mine. CNX
 ($0.72) ($0.42) ($0.30)     ($0.54)        28%
                                                                       recently sold Northern App met products at $80/t. During
                    1Q10e EBITDA                                       4Q09, ACI sold hi-vol/PCI at $74/t and PCX sold hi-vol “B”
    FactSet Consensus      Morgan Stanley Estimates                    grades at $86/t.
   Low   Median    High      MSe          vs. Cons
                                                                     • Hard coking coal contracts: quarterly or annual?
   116     142     148       131            (8%)
                                                                       A key question for US producers is whether to follow BHP’s
   296     304     338       303            (0%)                       lead in seeking quarterly-priced export contracts instead of
    2       30      36        44            47%                        more traditional, annual terms. In general, we believe
Source: Morgan Stanley Research                                        investors would prefer quarterly terms that leave upside to
                                                                       rising spot markets. Key US producers of premium hard
1Q10 THERMAL COAL THEMES                                               coking coal include WLT, CNX, ANR, MEE and CLF.

• Utility stockpiles: With nat gas at $4/Mcf entering the            • Hard coking coal pricing: With spot prices currently at
  shoulder season, there is some concern that coal-to-gas              $250/t, we expect BHP to seek a +20% increase in next
  switching will lead to higher coal stockpiles. At spot CAPP          quarter’s benchmark contract price. CNX is the only US
  prices, we estimate 20-30 mmtpy of coal is at risk to cheap          producer that has provided an update on its export met




                                                                                                                                     5
                                                                                                             MORGAN                                 STANLEY               RESEARCH

                                                                                                             April 18, 2010
                                                                                                             Metals & Mining Call




                       contracts post BHP’s 1Q settlements, securing annual terms                            publicly traded companies. Arch posted the second largest
                       on benchmark grade coal at ~$230/metric tonne fob port for                            gain, up 0.16 mmt or 33%.
                       the fiscal year beginning April 1 – this sets the low-water
                       market for US producers, in our view.                                                 Exhibit 9
                                                                                                             1Q10 Hampton Roads Exports +9% Sequentially
1Q10 Production Outlook                                                                                      Publicly-traded company exports increased 18%
                                                                                                                                        12
Preliminary EIA estimates show total US coal production                                                                                       ANR           ACI          CNX     MEE     PCX          BTU      Other
increased 2% in 1Q10 from 4Q09. However, EIA estimates                                                                                  10
often vary from actual results, which are reported after all




                                                                                                                 Export Volumes (mmt)
mines report production statistics to the Mine Safety and Health                                                                        8

Administration.
                                                                                                                                        6
Exhibit 7
EIA: Total US Coal Production +2% in 1Q10                                                                                               4
(mmt)                                    APP   CAPP   NAPP SAPP   PRB   Illinois CO/UT LIGNITE OTHER TOTAL
1Q09 act                                  95    55      34   6    121       26     13     18      8   281
                                                                                                                                        2
2Q09 act                                  84    47      32   5    113       27     12     17     10   263
3Q09 act                                  81    46      30   5    121       25     13     19      9   269
4Q09 act                                  81    44      32   5    115       25     11     18      9   260                               0
1Q10 (EIA)                                87    49      32   6    115       25     13     18      9   267




                                                                                                                                             1Q08



                                                                                                                                                     2Q08



                                                                                                                                                                  3Q08



                                                                                                                                                                          4Q08



                                                                                                                                                                                 1Q09



                                                                                                                                                                                        2Q09



                                                                                                                                                                                               3Q09



                                                                                                                                                                                                        4Q09



                                                                                                                                                                                                                 1Q10
Seq Chg.                                 7%    12%     0%  10%    0%      (3)%    14%    1%     (3)%  2%

Source: EIA, Morgan Stanley Research
                                                                                                             Note: BTU has no Appalachian mining operations, but actively trades Eastern coal
                                                                                                             Source: T. Parker Host data via Doyle Trading Consultants, Morgan Stanley Research
Central App: The EIA has overestimated CAPP production by
7 mmt in each of the past two quarters, which would point to a                                               Arch (4/19/10 BTO)
5% decline versus the EIA’s current +12% estimate. Massey
suggested that 1Q volumes were below expectations due to                                                     MS Estimates: 1Q10 $0.05; 2Q10 $0.24
weather-related mining and rail issues, but did not quantify the                                             Consensus Estimates: 1Q10 $0.07; 2Q10 $0.20
impact. On the other hand, CSX reported 1Q coal volumes
increased 9% sequentially.                                                                                   Company 2010 Guidance:
                                                                                                             $0.50-1.00 EPS
Exhibit 8                                                                                                    145-155 mmt sales (excluding pass-through tons)
PRB, Colorado/Utah Loadings Improved in 1Q10                                                                 4-5 mmt of met coal sales
                                  25%
                                           PRB        CO/UT                                                  •                          1Q is expected to be the weakest quarter in 2010
 UP Coal Loadings (Seq Chg, %)




                                  20%

                                                                                                             •
                                  15%
                                                                                                                                        We think ACI may lift guidance on improved demand for
                                  10%
                                   5%                                                                                                   high-vol met coal and stronger PRB pricing; we have lifted
                                   0%                                                                                                   2010 estimates to reflect this.
                                  (5%)
                                 (10%)                                                                       •                          Central App/Met: Mt. Laurel 1Q production increased 24%
                                 (15%)                                                                                                  seq., which should benefit CAPP costs. Arch has ~3 mmt
                                 (20%)
                                               2Q09           3Q09             4Q09            1Q10
                                                                                                                                        of potential upside to current met production forecast of
                                                                                                                                        4-5 mmt; we have modeled 5.8 mmt in 2010.
Source: Union Pacific, Morgan Stanley Research
                                                                                                             •                          Western Bit: We expect segment EBITDA to ease from a
We think PRB shipments ran flat in 1Q, in-line with EIA                                                                                 strong 4Q that benefited from no longwall moves. ACI had
estimates. Union Pacific rail loadings increased 4%, but CLD,                                                                           one LW move in Q1, and reported production from 3 of its
which accounts for 1/5 of the PRB market, reported its 1Q10                                                                             4 mines was 3% below our estimate, with the largest mine
volumes fell 5%. The EIA’s sharp increase in Western Bit                                                                                yet to report. We will be looking for an update on Arch’s
(Colorado/Utah) seems reasonable given that Peabody’s                                                                                   progress in securing terms for 9 mmt of below-market
Twentymile mine had an extended longwall move in Q4.                                                                                    Western bit contracts that roll off at the end of 2010.

                                                                                                             •                          PRB: Investors called into question Arch’s discipline when
Producers will likely show higher met volumes in 1Q.
                                                                                                                                        they committed 5 mmt of 2010 PRB at $10/t in Q4. Arch
Hampton Roads exports, which consist primarily of met coal,
increased 9% in 1Q, including an 18% increase in exports from



                                                                                                                                                                                                                        6
                                                                                        MORGAN            STANLEY           RESEARCH

                                                                                        April 18, 2010
                                                                                        Metals & Mining Call




      has the most open PRB tonnage - contracting strategy and                                mmt met and 9-10 mmt thermal – we believe these
      production guidance will be key elements in the quarter.                                projections could prove conservative.

•     When Arch last updated guidance, PRB spot prices were                             •     Growth projects: BTU plans to lift Australian capacity by
      $10/t and the Company projected 4-5 mmt of met coal                                     8.5 mmtpy (including 5.5 mmt of met coal) by 2014. We
      sales. Since then, PRB spot prices have risen to $11.50/t                               also will look for an update on the 8.0 mmtpy Bear Run
      (which affects 15-20 mmtpy of ACI contracts tied to index                               mine in the Illinois Basin, currently expected in 2H10.
      pricing), and high-vol met coal markets have tightened
                                                                                        •     M&A: The conference call we expect will focus greatly on
      substantially.
                                                                                              Peabody’s current bid for Australian PCI producer
Exhibit 10                                                                                    Macarthur Coal, whose board recently approved a five-day
ACI Quarterly Summary                                                                         due diligence period following Peabody’s AUD$16/shr
Arch Coal                   1Q09     2Q09      3Q09     4Q09    1Q10e   Seq.     YoY
CAPP EBITDA ($ mm)          64.2     30.3      39.2     37.3     39.5    6%     (38%)         offer. The current bid is neutral to valuation assuming a
  Volumes (mmt)              3.5      2.7       3.0      3.0      3.0   (0%)    (15%)         6.0x 2011 EV/EBITDA multiple.
  Price ($/t)             $63.47   $60.66    $62.44   $61.70   $64.17    4%       1%
  Cash Cost ($/t)         $45.22   $49.26    $49.32   $49.31   $50.99    3%      13%
  Cash Margin ($/t)       $18.25   $11.40    $13.12   $12.39   $13.18    6%     (28%)
                                                                                              In addition, we expect Peabody to provide insights into the
PRB EBITDA ($ mm)           60.1     43.0      47.8     73.2     77.8    6%      29%
  Volumes (mmt)             23.1     21.3      21.5     30.1     29.5   (2%)     28%
                                                                                              nature of its preliminary discussions with Coal of India to
  Price ($/t)             $13.25   $12.56    $12.26   $11.85   $11.97    1%     (10%)         explore potential ventures or other supply agreements.
  Cash Cost ($/t)         $10.65   $10.54    $10.04    $9.42    $9.33   (1%)    (12%)
  Cash Margin ($/t)        $2.60    $2.02     $2.22    $2.43    $2.64    9%       1%    Exhibit 4
WBit EBITDA ($ mm)          10.7     13.4      38.2     45.8     34.8   (24%)   225%    BTU Quarterly Summary
 Volumes (mmt)               4.0      3.5       4.6      4.8      4.3   (10%)     8%
 Price ($/t)              $28.11   $29.93    $29.08   $29.08   $29.00    (0%)     3%    Peabody                   1Q09     2Q09     3Q09     4Q09     1Q10e     Seq    YOY
 Cash Cost ($/t)          $25.40   $26.06    $20.70   $19.47   $20.85     7%    (18%)   Tons Sold (mmt)           59.6     59.5     63.5     61.2      60.2     (2%)    1%
 Cash Margin ($/t)         $2.71    $3.87     $8.38    $9.61    $8.15   (15%)   201%      Western US              40.8     38.7     42.0     38.6      38.8      1%    (5%)
                                                                                          Eastern US               7.8      8.3      7.9      7.8      7.3      (7%)   (7%)
Core EBITDA                135.0     86.8     125.2    156.3    152.2   (3%)    13%       Australia                4.5      5.1      6.5      6.4      5.6     (13%)   24%
Revenues                   681.0    554.6     615.0    725.5    707.5    (2%)     4%      Trading & Brokerage      6.5      7.4      7.1      8.4      8.5       1%    31%
Cost of Sales              547.1    467.5     489.3    566.8    555.3    (2%)     1%
                                                                                        Aust Met (mmt)             0.8      1.1      2.7      2.4      1.9     (21%)   138%
SG&A                        25.1     21.6      24.0     27.0     26.0    (4%)     4%
                                                                                        Aust Thermal (mmt)         3.7      4.0      3.8      4.0      3.7      (8%)   (0%)
EBITDA (Recurring)         115.0     78.8     120.6    144.3    131.2    (9%)    14%
DD&A                        73.0     68.5      71.5     88.5     87.5    (1%)    20%    Realization ($/t)         $24.41   $22.46   $26.16   $25.23   $24.77   (2%)      1%
Net Interest Expense        13.6     20.2      29.4     35.1     35.0    (0%)   158%      Western US              $16.03   $16.40   $16.28   $16.55   $16.80    2%       5%
Diluted EPS (Recurring)    $0.23   ($0.09)    $0.16    $0.11    $0.05   (57%)   (79%)     Eastern US              $40.02   $40.72   $41.72   $41.73   $41.00   (2%)      2%
                                                                                          Australia               $81.11   $61.81   $82.29   $74.00   $73.75   (0%)     (9%)
Source: Company data, Morgan Stanley Research
                                                                                          Trading & Brokerage     $19.00    $6.54   $15.90   $12.64   $15.00   19%     (21%)

Peabody (4/22/10 BTO)                                                                   Margin ($/t)              $6.27     $6.75    $6.80   $7.04    $6.62    (6%)     6%
                                                                                         Western US               $4.50     $3.91    $4.97   $4.58     $4.41   (4%)    (2%)
                                                                                         Eastern US               $8.79    $8.61     $8.75   $9.51    $8.65    (9%)    (2%)
MS Estimates: 1Q10 $0.43; 2Q10 $0.84                                                     Australia                $17.95   $25.22   $16.27   $18.89   $19.28    2%      7%

Consensus Estimates: 1Q10 $0.40; 2Q10 $0.81                                             EBITDA ($ mm)              325      324      341      297      303       2%     (7%)
                                                                                          US Mining                250      225      276      252      234      (7%)    (7%)
                                                                                          Australia                 83      125      108      119      108      (9%)    30%
                                                                                          Trading & Brokerage       66       36       44       48       50       4%    (24%)
Company 2010 Guidance:                                                                    Resource Management        5       6        3        3        8      178%     67%
185-195 mmt US sales, 133 mmt in PRB                                                      Corporate & Other        (78)     (68)     (90)    (124)     (96)    (23%)    23%

12.5-13.0 mmt Australian thermal sales                                                  Total Revenues            1460     1341     1667     1554     1496     (4%)      2%
                                                                                        Total COGS                1087      975     1261     1158     1128     (3%)      4%
7.5-8.5 mmt Australian met sales                                                        SG&A                       47        46       55       60       60      0%      27%
                                                                                        DD&A                       97       102      108      100      105      5%       8%
•     We have cut 1Q estimates modestly and now see EBITDA                              Net Interest Expense       48        47       50       48       47     (2%)     (3%)
                                                                                        Income Tax Expense         30        30       35       23       21     (7%)    (29%)
      in-line with 4Q09, matching Peabody’s guidance provided                           Diluted EPS (Recurring)   $0.51    $0.50    $0.49    $0.43    $0.43    (1%)    (15%)
      in January. We think stronger Asia Pacific pricing in 1Q                          Source: Company data, Morgan Stanley Research
      will be offset by lower volumes due to heavy storms.

•     Australia: The majority of Peabody’s export contracts roll
      off in 2Q and pricing should materially improve. We expect
      BTU to update investors on their met coal contract position
      post BHP’s 1Q settlement at $200/t. We assume BTU will
      sell on a mix of annual and quarterly-priced contracts. BTU
      has not yet provided 2011 total production guidance, but
      has suggested unpriced export tonnage includes 9-10




                                                                                                                                                                           7
                                                                                                     MORGAN         STANLEY          RESEARCH

                                                                                                     April 18, 2010
                                                                                                     Metals & Mining Call




Patriot (4/23/10 BTO)                                                                                Morgan Stanley is currently acting as financial advisor to Comcast
                                                                                                     Corporation ("Comcast") with respect to its proposed formation of a
MS Estimates: 1Q10 $(0.54); 2Q10 $(0.34)                                                             joint venture with General Electric Co. ("GE") consisting of the NBC
Consensus Estimates: 1Q10 $(0.42); 2Q10 $(0.32)                                                      Universal businesses and Comcast’s cable networks, regional sports
                                                                                                     networks and certain digital properties and certain unconsolidated
Company 2010 Guidance:                                                                               investments. Morgan Stanley is also providing financing in connection
33-35 mmt sales (as of 4Q release, 2/2/2010)                                                         with this transaction. The proposed transaction is subject to regulatory
+7 mmt of met coal sales (as of 3/15/2010)                                                           approvals and other customary closing conditions. Comcast has
                                                                                                     agreed to pay fees to Morgan Stanley for its financial services,
•     We expect 1Q to be Patriot’s weakest quarter in 2010 as
                                                                                                     including transaction fees and financing fees that are contingent upon
      export met coal contract repricing will not take effect until
                                                                                                     the consummation of the proposed transaction. Please refer to the
      2Q. In addition, 1Q will be impacted by previously
                                                                                                     notes at the end of the report. Morgan Stanley is acting as financial
      announced operational issues at the Federal mine.
                                                                                                     advisor to General Electric Co., (“GE”) in relation to GE’s framework
•     We have lifted 2010-12 estimates by $0.11/shr to reflect                                       agreement with Mubadala Development Company (“Mubadala”) on a
      increased met coal sales volumes.                                                              global partnership encompassing a broad range of strategic initiatives,
                                                                                                     including commercial finance, clean energy research and development,
•     Met coal sales guidance: In March, Patriot announced it
                                                                                                     aviation, industry and corporate learning, as announced on July 22,
      had reached an agreement to sell 1.5 mmt of met coal over
                                                                                                     2008. In addition, Mubadala plans to become one of GE’s top ten
      a one-year period starting April 1, and that 2010 met coal
                                                                                                     institutional investors through the open market, as conditions allow.
      shipments would be over 7 mmt. We now model 2010 met
                                                                                                     Implementation of the framework agreement is subject to negotiation of
      coal sales volumes at 7.8 mmt.
                                                                                                     definitive documents and receipt of required regulatory approvals. GE
•     Met coal growth update: Patriot has not yet committed to                                       has agreed to pay fees to Morgan Stanley for its financial services,
      advancing the Black Oak and 2 Gas high-vol met projects,                                       including transaction fees that are subject to the consummation of the
      but we believe current met coal fundamentals increase the                                      proposed partnership.
      likelihood that PCX will do so. We assume Black Oak (1.25
      mmt) and 2 Gas (0.75 mmt) come online by 2011.                                                 Morgan Stanley is currently acting as financial advisor to General
Exhibit 5
                                                                                                     Electric Capital Corporation in connection with the proposed sale by it
PCX Quarterly Summary                                                                                or its affiliates of some or all of the share capital of GE Capital
Patriot Coal                      1Q09      2Q09      3Q09      4Q09     1Q10e      Seq      YOY     (Thailand) Limited, Krungsriayudhya Card Co., Ltd.,Tesco Card
Appalachia EBITDA ($ mm)          69.5      68.6      76.6      76.6      64.6     (16%)     (7%)
  Volumes (mmt)                    6.6       6.5       6.1       6.6       6.3      (4%)     (5%)
                                                                                                     Services Limited, General Card Services Limited and Total Services
  Thermal                          5.2       5.5       4.7       5.0       4.5      (9%)    (13%)    Solutions Plc to Bank of Ayudhya Plc as announced on July 10, 2009.
  Metallurgical                    1.4       1.0       1.5       1.6       1.8       9%      25%
  Pricing ($/t)                  $68.30    $63.88    $69.76    $65.38    $68.48      5%       0%     The proposed transaction is subject to regulatory approvals, the
  Operating Cost ($/t)           $58.50    $56.52    $59.22    $54.42    $59.21      9%       1%
  Operating Margin ($/t)          $9.80     $7.36    $10.54    $10.96     $9.27    (15%)     (5%)    approval of Bank of Ayudhya Plc shareholders and other customary
  Other Segment EBITDA ($ mm)      4.4      20.8      12.0       4.4       6.3      43%      42%
                                                                                                     closing conditions. This report and the information provided herein is
Illinois Basin EBITDA ($ mm)       3.0       3.9       0.0       1.6       3.8     141%      26%
    Volumes (mmt)                  1.8       1.8       1.7       1.7       1.8      7%       (1%)    not intended to (i) provide voting advice, (ii) serve as an endorsement
    Pricing ($/t)                $38.14    $39.50    $38.55    $37.85    $39.00     3%        2%
                                                                                                     of the proposed transaction, or (iii) result in the procurement,
    Operating Cost ($/t)         $36.47    $37.31    $38.52    $36.91    $36.88    (0%)       1%
    Operating Margin ($/t)        $1.67     $2.19     $0.03     $0.94     $2.13    126%      27%     withholding or revocation of a proxy or any other action by a security
Past Mining Costs ($ mm)          37.8      34.2      40.0      38.7      42.5      10%      12%     holder. Please refer to the notes at the end of this report.
Revenues                          528.9     507.0     506.2     503.2     509.0       1%      (4%)
Cost of Sales                     494.2     468.7     469.5     460.6     483.1       5%      (2%)
SG&A                               12.9      11.4      11.3      13.2      12.0      (9%)     (7%)
EBITDA                             21.8      26.9      25.4      29.4      13.9     (53%)    (36%)
DD&A                               55.0      50.4      50.4      49.6      50.0       1%      (9%)
Net Interest Expense                5.1       3.3       6.9       6.1       5.6      (8%)     10%
Income Tax Expense                  0.0       0.0       0.0       0.0       0.0       NM       NM
Net Income (Recurring)            (44.7)    (34.4)    (41.2)    (38.2)    (49.2)     29%      10%
EPS (Recurring)                  ($0.57)   ($0.43)   ($0.45)   ($0.42)   ($0.54)     29%      (6%)
Sales Contract Accretion          (76.8)    (61.7)    (94.0)    (45.9)    (30.0)    (35%)    (61%)
Extraordinary Expense (Income)     (0.0)     (4.0)     (0.0)     (3.1)      0.0    (100%)   (100%)
Net Income (Reported)              32.1      31.4      52.8      10.9     (19.2)   (277%)   (160%)
EPS (Reported)                    $0.41     $0.39     $0.58     $0.12    ($0.21)   (277%)   (151%)


Source: Company data, Morgan Stanley Research




                                                                                                                                                                             8
                                                                                                  MORGAN         STANLEY   RESEARCH

                                                                                                  April 18, 2010
                                                                                                  Metals & Mining Call




Exhibit 13
Metals & Mining Catalyst Calendar (April)
                                                                                                        EPS Forecast
                                                                                                                                  Other Catalysts
Date          Day         Region         Catalyst                                       Company        MS       Cons.
                                                                                                                              (Specific Day Unknown)
01-Apr-10     Thursday    Global         LME-registered warehouse rents increase
                          N. America     US ISM (10am)
                          N. America     Construction Spending (10am)
                          Asia ex-Jp     China PMI
                          N. America     Motor Vehicle Sales
02-Apr-10     Friday
03-Apr-10     04-Apr-10   Saturday     Sunday

05-Apr-10     Monday      N. America     Weekly Steel Production
06-Apr-10     Tuesday
07-Apr-10     Wednesday   N. America     Earnings Release (ATC)                           SCHN        $0.45      $0.50
08-Apr-10     Thursday
09-Apr-10     Friday
10-Apr-10     11-Apr-10   Saturday     Sunday

12-Apr-10     Monday      N. America     Earnings Release (ATC)                            AA         $0.08      $0.11
                          N. America     Weekly Steel Production
                          Asia ex-Jp     China Trade Data
13-Apr-10     Tuesday     N. America     US Coal Trade Data (February)
14-Apr-10     Wednesday
15-Apr-10     Thursday    N. America     Industrial Production (9:15am)
                          Asia ex-Jp     China Steel Production Data
16-Apr-10     Friday
17-Apr-10     18-Apr-10   Saturday     Sunday

19-Apr-10     Monday      N. America     Weekly Steel Production
                          Asia ex-Jp     China Metals Production Data
                          N. America     Earnings Release (BTO)                            ACI        $0.05      $0.07
20-Apr-10     Tuesday     Asia ex-Jp     China Coal Imports (Mar total, approx. date)
                          Global         World Steel Ass'n: Crude Steel Production
                          N. America     Earnings Release (BTO)                            AKS        $0.21      $0.24
21-Apr-10     Wednesday   N. America     Earnings Release (ATC)                            FCX        $1.80      $1.87
22-Apr-10     Thursday    N. America     EIA Electric Power Flash (Feb Inventories)
                          N. America     Earnings Release (BTO)                            BTU        $0.43      $0.40
23-Apr-10     Friday      N. America     Durable Goods (8:30am)
                          N. America     Earnings Release (BTO)                            PCX        ($0.54)   ($0.42)
24-Apr-10     25-Apr-10   Saturday     Sunday

26-Apr-10     Monday      Asia ex-Jp     China Coal Imports (Mar. by Grade, approx.)
                          N. America     Weekly Steel Production
27-Apr-10     Tuesday     N. America     Census Bureau: US Steel Imports (10am)
                          N. America     Earnings Release (BTO)                             X         ($1.50)   ($1.46)
                          N. America     Earnings Release (ATC)                           CENX        $0.24      $0.19
28-Apr-10     Wednesday   N. America     Earnings Release (ATC)                            WLT        $0.94      $0.92
29-Apr-10     Thursday    N. America     Earnings Release (BTO)                            CNX        $0.80      $0.79
30-Apr-10     Friday      N. America     Chicago PMI (9:45am)

Source: Company data, Morgan Stanley Research




                                                                                                                                                       9
                                                                                                                 MORGAN                 STANLEY                     RESEARCH

                                                                                                                 April 18, 2010
                                                                                                                 Metals & Mining Call




Exhibit 14                                                                                                       Exhibit 15
Last Seven Days’ Performance                                                                                     Year-to Date Performance
                                      S&P 500                                                                                                                       S&P 500
                                 KOL ETF                                                                                                                            KOL ETF
                                                      CAPP Coal Spot                                                                                                   CAPP Coal Spot
                                                       Nat Gas Spot                                                         Nat Gas Spot
                                                        Arch                                                                                                                                  Patriot
                                      Patriot                                                                                                                                      Walter
  COAL                             Peabody
                                                                                                                    COAL                                                    Arch
                               Walter                                                                                                                                       Alpha
                                Cloud                                                                                                                                Cloud
                            Alpha                                                                                                                                Peabody
                        Consol                                                                                                              Consol

 -20%      -15%        -10%        -5%        0%            5%         10%   15%     20%                            -60%       -40%          -20%           0%           20%                40%         60%   80%
                                 Metals Index                                                                                                                        Metals Index
                                                         Aluminum
                      Absolute Performance (Last 7 Calendar Days, %)                                                                                                  Aluminum
                                                                                                                                         Absolute Performance (Last 7 Calendar Days, %)
                                                     Copper                                                                                                         Copper
  METALS                                                                                                            METALS
                                     Alcoa                                                                                                                       Freeport
                               Century                                                                                                         Century
                           Freeport                                                                                                          Alcoa

 -20%      -15%        -10%     Steel Index
                                   -5%          0%          5%         10%   15%     20%                            -60%       -40%          -20%           0%              Steel
                                                                                                                                                                            20% Index 40%               60%   80%
                                             7 Calendar Days, %)
                   Absolute Performance (LastSchnitzer                                                                                 Absolute Performance (Last 7 Calendar Days, %)
                                                                                                                                                                                    Cliffs Nat. Res.
                                         CMC                                                                                                                              Schnitzer
                          Steel Dynamics                                                                                                                             US Steel
 STEEL                         Nucor                                                                                STEEL                                        AK Steel
                        AK Steel                                                                                                                       CMC
                  Cliffs Nat. Res.                                                                                                         Steel Dynamics
                      US Steel                                                                                                                     Nucor

 -20%     -15%         -10%          -5%        0%        5%
                                                      Precious Index10%      15%     20%                            -60%       -40%          -20%          0% Precious Index
                                                                                                                                                                     20%                    40%         60%   80%

                                                     Gold                                                                                                          Gold
                  Absolute Performance (Last 7 Calendar Days, %)                                                                   Absolute Performance (Last 7 Calendar Days, %)
                                                     USD/EUR                                                                                  USD/EUR
                               Goldcorp                                                                                                                               Newmont
  GOLD                        Newmont                                                                                 GOLD                           Barrick
                              Kinross                                                                                                           Goldcorp
                            Barrick                                                                                                             Kinross

 (20%)    (15%)        (10%)         (5%)       0%          5%         10%   15%    20%                             (60%)      (40%)         (20%)         0%               20%             40%         60%   80%
                  Absolute Performance (Last 7 Calendar Days, %)                                                                           Absolute Performance (Year to Date, %)

Note: Commodity prices as of Thursday’s close, Equities and FX as of Friday’s close                              Note: Commodity prices as of Thursday’s close, Equities and FX as of Friday’s close
Source: FactSet, Bloomberg, Morgan Stanley Research                                                              Source: FactSet, Bloomberg, Morgan Stanley Research




Exhibit 16
Price Target Methodology & Key Risks
Ticker       Price Target                                         Valuation Methodology                                                                                 Key Risks

                                Based on 7.0x 2011e EBITDA, slightly below Peabody's average historical multiple       Risks to our price target include weaker than expected Chinese thermal and met coal
BTU               $54           and at a premium to US producers, which we believe is warranted given the              imports, delayed ramp up of key Australian port and mine expansions, weakness in natural
                                Company's growth potential in Australia and US.                                        gas prices and a more modest recovery in US industrial electricity demand.
                                Based on 6.7x 2011e EBITDA and supported by our DCF and Residual Income                Risks to our price target include: More modest recovery in US industrial electricity demand;
                                valuations. Our target multiple represents a premium to both current peer valuations   weakening demand for US high-vol met coal; slower recovery in mine operating rates;
ACI               $32           as well as our target/fair value multiples on the peer group, and is consistent with   lackluster demand for PRB coal; weak natural gas prices; extended Western Bit longwall
                                Arch's historical trading range.                                                       mine outages; carbon legislation
                                Based on 5.5x 2011e EBITDA and supported by our DCF and Residual Income
                                                                                                                       Risks to our price target include: more modest recovery in US industrial electricity
                                valuations. Our target multiple reflects an adequate discount to peers that, in our
CLD               $19           view, reflects Cloud's ownership overhang, pure-play PRB status and limited near-
                                                                                                                       demand, rising mining and LBA-reserve costs, delays or changes to the in PRB coal
                                                                                                                       leasing process, rail disruptions, and carbon legislation
                                term volume growth expectations

                                Our $62 price target is based on 5.2x EV/EBITDA multiple on our 2011 estimate.         As a high beta name, the stock is vulnerable to a broad market sell-off. Overcapacity in
X                 $62           This multiple is a slight premium to the 5-year median forward EV/EBITDA multiple      the US market could limit pricing. Imports may tick up as struggling international
                                of 4.8x, but we think appropriate given US Steels suprior raw material position.       competitors attempt to dump steel.

                                Based on 5x 2011e EBITDA (this multiple is consistent with the average historical
                                                                                                                       Risks to our price target include a weaker than expected pickup in manufacturing demand,
STLD              $20           forward multiple for STLD shares), averaged with a DCF analysis, assuming a
                                                                                                                       and a potential resurgance of imports.
                                WACC of 9.7% and a long-term growth rate of 3%.
                                Based on 13x our normalized EPS estimate of $1.70, implying a 4.7% RoA, 50bp            Key risks include the rate of US and global economic growth, potential ali price weakness,
AA                $22           higher than the last 15-year average to give credit for restructuring, capital spending continued cost inflation, a weak USD, idled capacity restarts, and greater-than-expected
                                and cost cutting.                                                                       aluminum production in China.
                                                                                                                      Deflationary concerns dominate investor consideration of gold; broad preference for direct
                                Our $46 Price Target for ABX is based on 13x one-year-forward P/CF multiple,
                                                                                                                      over equity exposure to gold; gold price profile significantly lower than our base case; key
ABX               $46           consistent with ABX’s historical average trading multiple, applied to 2010e cash flow
                                                                                                                      projects required to maintain production outlook are delayed; operating costs rise more
                                from operations per share (CFPS), of $3.60.
                                                                                                                      than expected.

Source: Morgan Stanley Research




                                                                                                                                                                                                                    10
                                                                                                                       MORGAN              STANLEY             RESEARCH

                                                                                                                       April 18, 2010
                                                                                                                       Metals & Mining Call




Exhibit 17
North American Metals & Mining Comps Table
                                                             Price                     MS EPS                           Cons EPS                             MS PE                           Cons PE
North America Metals & Mining             Stock Rating
                                                           4/16/2010        2010        2011        2012      2010        2011         2012    2010           2011        2012    2010        2011          2012
  Non-ferrous                                                                                                                                  13.6           11.8         9.5    14.8         12.4         11.0
AA      Alcoa                              Overweight        $13.91        $0.90        $1.40      $1.70     $0.77        $1.15       $1.27    15.5           10.0         8.2    18.0         12.1         10.9
CENX Century Aluminum                     Equal-Weight       $15.14        $1.00        $0.95      $1.40     $0.94        $0.97       $1.23    15.2           15.9        10.8    16.1         15.7         12.3
FCX     Freeport-McMoran                  Equal-Weight       $81.18        $8.00        $8.50      $8.55     $7.84        $8.79       $8.25    10.1            9.6         9.5    10.4          9.2          9.8
  Gold                                                                                                                                         21.9           21.4        20.7    22.4         18.3         19.4
ABX     Barrick Gold                       Overweight        $39.11        $2.80        $2.70      $2.50     $2.71        $2.91       $2.46    14.0           14.5        15.7    14.4         13.4         15.9
GG      Goldcorp Inc.                     Equal-Weight       $38.94        $1.25        $1.30      $1.50     $1.19        $1.68       $1.76    31.1           30.1        26.0    32.6         23.2         22.1
KGC Kinross Gold Corp.                    Equal-Weight       $17.69        $0.65        $0.70      $0.80     $0.66        $0.75       $0.78    27.2           25.1        22.1    27.0         23.5         22.8
NEM Newmont Mining                        Equal-Weight       $52.15        $3.40        $3.30      $2.75     $3.39        $3.99       $3.13    15.3           15.8        19.0    15.4         13.1         16.7
  Coal                                                                                                                                         15.2           12.2         7.5    16.7         12.6          9.3
ANR     Alpha Natural Res.                Equal-Weight       $50.11        $3.41        $4.94       $6.38     $3.27       $4.75        $5.59   14.7           10.2         7.8    15.3         10.6          9.0
ACI     Arch Coal                          Overweight        $26.00       $1.04 e      $2.58 e     $3.88 e    $0.85       $1.99        $2.67   25.1           10.1         6.7    30.6         13.1          9.7
CLD     Cloud Peak                         Overweight        $16.00        $1.10        $1.25       $1.79    $1.11        $1.27        $1.65   14.6           12.8         8.9    14.5         12.6          9.7
CNX     Consol Energy                     Equal-Weight       $42.67        $3.51        $5.10       $7.26     $3.15       $4.52        $5.60   12.2            8.4         5.9    13.6          9.4          7.6
PCX     Patriot                           Underweight        $21.90       ($1.31) e    $0.83 e     $2.42 e   ($0.95)      $0.94        $2.10    NM            26.4         9.0     NM          23.3         10.4
BTU     Peabody                            Overweight        $46.02       $3.32 e      $4.82 e     $6.77 e    $3.03       $4.37        $4.90   13.9            9.5         6.8    15.2         10.5          9.4
WLT Walter Industries                     Equal-Weight       $93.43        $8.68       $11.19      $12.86    $8.62       $10.80       $10.41   10.8            8.3         7.3    10.8          8.6          9.0
  Steel & Ferrous                                                                                                                              19.6            8.9         7.4    16.7         10.7          8.7
AKS     AK Steel                          Equal-Weight       $21.60        $1.50         $3.05      $4.10     $1.44       $2.20        $2.71   14.4            7.1         5.3    15.0          9.8          8.0
CLF     Cliffs Natural Resources          Equal-Weight       $70.24        $9.55        $11.67     $12.41     $7.46       $9.12       $10.91    7.4            6.0         5.7     9.4          7.7          6.4
CMC Commercial Metals                     Equal-Weight       $15.59        ($0.05)       $2.10      $2.95    ($1.46)      $1.24        $2.10    NM             7.4         5.3     NM          12.5          7.4
NUE     Nucor                             Equal-Weight       $45.64        $2.05         $4.05      $5.30     $1.82       $3.75       $4.60    22.3           11.3         8.6    25.0         12.2          9.9
SCHN Schnitzer Steel                      Underweight        $56.54        $2.45         $4.15      $4.60     $2.72       $4.28        $5.24   23.1           13.6        12.3    20.8         13.2         10.8
STLD Steel Dynamics                        Overweight        $17.52        $1.70         $2.15       NA       $1.33       $2.01        $2.41   10.3            8.2         NA     13.1          8.7          7.3
X       US Steel                           Overweight        $59.81         $1.50        $7.00      $8.50     $0.87       $5.67        $5.37   40.0            8.5         7.0     NM          10.6         11.1

                                                                                      MS EBITDA                        Cons EBITDA                    MS Current EV/EBITDA             Cons Current EV/EBITDA
North America Metals & Mining            Stock Rating     Current EV
                                                                             2010       2011        2012      2010        2011         2012    2010           2011         2012   2010          2011        2012
  Non-ferrous                                                                                                                                   7.4            6.8          5.6    8.6           7.7          6.5
AA      Alcoa                             Overweight         30,790         4172        5124        5451     3081         3749        4080      7.4            6.0          5.6   10.0           8.2          7.5
CENX Century Aluminum                    Equal-Weight         1,950          199         200         300      177          189        271       9.8            9.7          6.5   11.0          10.3          7.2
FCX     Freeport-McMoran                 Equal-Weight        44,234         9099        9387        9461     9247         9845        9515      4.9            4.7          4.7    4.8           4.5          4.6
  Gold                                                                                                                                          9.4            9.3          9.0   10.0           8.9          9.4
ABX     Barrick Gold                      Overweight         42,739         5302        5195        5175     5194         5336        5025      8.1            8.2          8.3    8.2           8.0          8.5
GG      Goldcorp Inc.                    Equal-Weight        28,730         2023        2178        2391     1907         2385        2428     14.2           13.2         12.0   15.1          12.0         11.8
KGC Kinross Gold Corp.                   Equal-Weight        12,594         1340        1305        1389     1209         1278        1203      9.4            9.7          9.1   10.4           9.9         10.5
NEM Newmont Mining                       Equal-Weight        29,158         5059        4704        4327     4678         4975        4303      5.8            6.2          6.7    6.2           5.9          6.8
  Coal                                                                                                                                          7.8            5.5          4.4    8.6           6.0          5.1
ANR     Alpha Natural Res.               Equal-Weight         6,866         1025        1287        1539      984         1224        1457      6.7            5.3          4.5    7.0           5.6          4.7
ACI     Arch Coal                         Overweight          6,028        700 e       1,045 e     1,368 e    667          912        1108      8.6            5.8          4.4    9.0           6.6          5.4
CLD     Cloud Peak                        Overweight          1,345          265         283         344      269          290         323      5.1            4.8          3.9    5.0           4.6          4.2
CNX     Consol Energy                    Equal-Weight        10,915         1728        2190        2777     1520         2028        2417      6.3            5.0          3.9    7.2           5.4          4.5
PCX     Patriot                           Underweight         2,885        210 e        444 e       628 e     173          381         557     13.7            6.5          4.6   16.7           7.6          5.2
BTU     Peabody                           Overweight         14,752       1,954 e      2,526 e     3,249 e   1720         2241        2502      7.5            5.8          4.5    8.6           6.6          5.9
WLT Walter Industries                    Equal-Weight         5,341          814        1017        1131      770          929         891      6.6            5.3          4.7    6.9           5.7          6.0
  Steel & Ferrous                                                                                                                               8.2            5.1          4.6   10.5           5.8          5.0
AKS     AK Steel                         Equal-Weight         3,707          652         913         990      480          628         725      5.7            4.1          3.7    7.7           5.9          5.1
CLF     Cliffs Natural Resources         Equal-Weight         9,871         2058        2458        2570     1703         2203        2382      4.8            4.0          3.8    5.8           4.5          4.1
CMC Commercial Metals                    Equal-Weight         2,571          245         639         792      125          459         620     10.5            4.0          3.2   20.6           5.6          4.1
NUE     Nucor                            Equal-Weight        15,413         1680        2508        2944     1606         2620        3028      9.2            6.1          5.2    9.6           5.9          5.1
SCHN Schnitzer Steel                      Underweight         1,658          171         247         266      184          258         301      9.7            6.7          6.2    9.0           6.4          5.5
STLD Steel Dynamics                       Overweight          6,128          961        1135          NA      873         1140        1361      6.4            5.4          NA     7.0           5.4          4.5
X       US Steel                          Overweight         14,062         1232        2544        2769     1008         2081        2229     11.4            5.5          5.1   14.0           6.8          6.3
Enterprise value and MS EBITDA estimates shown are adjusted for pension and OPEB
                                          Net Debt to       P/Tang.                   MS FCF/Shr                       Cons FCF/Shr                       MS FCF Yield                    Cons FCF Yield
North America Metals & Mining
                                         Cap, 2009YE     Book 4Q09e          2010        2011       2012      2010        2011         2012    2010          2011         2012     2010       2011          2012
  Non-ferrous                                                                                                                                   6%            11%         11%      11%         12%          14%
AA      Alcoa                               35% e              1.9         $0.36        $1.79      $1.52     $1.56        $2.17       $2.30     3%            13%         11%      11%         16%          17%
CENX Century Aluminum                         9%               1.3          $1.26       $1.41      $1.98     $1.28        $0.82       $1.87     8%             9%         13%       8%          5%          12%
FCX     Freeport-McMoran                    45% e              6.6         $5.67        $8.25      $7.94     $9.64       $11.09       $9.75     7%            10%         10%      12%         14%          12%
  Gold                                                                                                                                          3%             3%          3%       4%          5%           3%
ABX     Barrick Gold                         20%               4.0         $0.34        $0.70       $2.73     $1.18       $1.82       $1.32     1%             2%          7%       3%          5%           3%
GG      Goldcorp Inc.                        0% e              1.9         ($0.02)      $0.85       $1.47    ($0.05)      $0.71       $0.48    (0%)            2%          4%      (0%)         2%           1%
KGC Kinross Gold Corp.                        1%               2.8         $1.06        $0.35      ($0.86)   $0.47        $0.67       $0.40     6%             2%         (5%)      3%          4%           2%
NEM Newmont Mining                           11%               2.4         $2.32        $2.74       $2.64     $5.20       $5.74       $3.21     4%             5%          5%      10%         11%           6%
  Coal                                                                                                                                          7%             8%         12%       3%          9%          11%
ANR     Alpha Natural Res.                   10%               3.3         $3.68        $5.37       $6.88    $3.01        $5.39       $7.72     7%            11%         14%       6%         11%          15%
ACI     Arch Coal                            45%               2.1        $2.25 e      $2.90 e     $2.48 e    $1.90       $2.80       $3.59     9%            11%         10%       7%         11%          14%
CLD     Cloud Peak                          45% e              2.3         $0.92       ($0.21)      $0.72     $1.19       $0.85       $0.28     6%            (1%)         5%       7%          5%           2%
CNX     Consol Energy                        30%               4.4         $3.64        $4.53       $6.47    ($4.46)      $3.19       $5.85     9%            11%         15%     (10%)         7%          14%
PCX     Patriot                              16%               2.1        ($0.12) e    $0.78 e     $2.52 e    $0.26       $1.98       $3.63    (1%)            4%         12%       1%          9%          17%
BTU     Peabody                              32%               3.3        $4.16 e      $5.74 e     $7.76 e    $2.16       $3.49       $3.40     9%            12%         17%       5%          8%           7%
WLT Walter Industries                         4%              22.9         $8.04       $10.94      $12.69    $6.83        $9.10       $9.00     9%            12%         14%       7%         10%          10%
  Steel & Ferrous                                                                                                                               1%             8%         13%       1%         10%          17%
AKS     AK Steel                             14%               2.8         $0.63         $4.06      $4.25     $0.40       $2.75       $3.72     3%            19%         20%       2%         13%          17%
CLF     Cliffs Natural Resources              1%               3.9         $7.67        $11.37     $11.57    $8.48       $10.62        NA      11%            16%         16%      12%         15%           NA
CMC Commercial Metals                       35% e              1.2         ($1.24)      ($1.03)     $1.97    ($1.25)      $1.30        NA      (8%)           (7%)        13%      (8%)         8%           NA
NUE     Nucor                                10%               3.1         $1.06         $3.56      $4.73     $1.95       $3.18        NA       2%             8%         10%       4%          7%           NA
SCHN Schnitzer Steel                          7%               2.8         ($1.18)       $2.08      $3.65    ($3.19)      $0.84        NA      (2%)            4%          6%      (6%)         1%           NA
STLD Steel Dynamics                         50% e              5.8         $1.26         $1.32       NA       $1.93       $2.39        NA       7%             8%          NA      11%         14%           NA
X       US Steel                            30% e              3.1         ($3.90)       $5.56      $6.66    ($3.33)      $6.16        NA      (7%)            9%         11%      (6%)        10%           NA

Source: FactSet, Morgan Stanley Research




                                                                                                                                                                                                                11
                                                                                                                                          MORGAN                    STANLEY                     RESEARCH

                                                                                                                                          April 18, 2010
                                                                                                                                          Metals & Mining Call




Exhibit 18
Commodity Price and Inventory Charts
                       Aluminum Exchange Inventories      Aluminum          Copper Exchange Inventories        Copper      Nickel LME Inventories    Nickel    Zinc LME Inventories     Zinc      CAPP Prompt       CAPP 1 Yr Fwd            PRB Coal             Nat Gas       Chinese Coke        Gold      Moly      Platinum
  Last 18 Months                 207.8%                      8.1%                     220.7%                   41.8%               170.0%            101.9%          229.7%            66.0%        (35.3%)            (27.1%)                (25.3%)             (40.8%)          #DIV/0!         38.6%    (41.5%)      67.3%
  Last 12 Months                  31.7%                     64.7%                      42.3%                   71.9%                43.2%            134.0%           55.4%            70.8%         27.0%              13.4%                   3.9%                8.0%            55.6%          30.1%    120.9%       42.1%
  Last 6 Months                   4.3%                      30.7%                      59.4%                   27.2%                24.5%             47.2%           27.2%            20.4%         11.6%               4.1%                  25.0%              (10.2%)           16.7%           9.1%     35.8%       26.4%
  Last 3 Months                   1.8%                       5.7%                      10.2%                    5.6%               (6.0%)             45.4%           11.9%            (4.0%)         7.6%              (0.1%)                 14.7%              (28.7%)           6.1%            1.4%     16.1%        6.5%

 $1.30                  Aluminum LME Spot ($/lb)                 $1.10         6,000,000              Aluminum Exchange Inventories (MT)                      $90               Central App Prompt NYMEX Coal Spot ($/ton)                       $1,300                              Gold ($/oz)                      $1,159
                                                                                                        from bottom, LME, Comex, SME)
                                                                               5,000,000                                                                      $80                                                                                $1,200
 $1.10
                                                                                                                                                                                                                                                 $1,100
                                                                               4,000,000                                                                      $70
 $0.90                                                                                                                                                                                                                              $58.08       $1,000
                                                                               3,000,000                                                                      $60
                                                                                                                                                                                                                                                   $900
 $0.70
                                                                               2,000,000                                                                      $50
                                                                                                                                                                                                                                                   $800

 $0.50                                                                         1,000,000                                                                      $40                                                                                  $700
    Oct-08    Jan-09     Apr-09    Jul-09    Oct-09     Jan-10    Apr-10                 Oct-08    Jan-09    Apr-09     Jul-09   Oct-09     Jan-10   Apr-10     Oct-08       Jan-09    Apr-09      Jul-09     Oct-09      Jan-10      Apr-10            Oct-08     Jan-09    Apr-09      Jul-09    Oct-09    Jan-10     Apr-10

 $4.00                    Copper LME Spot ($/lb)                 $3.57         1,000,000              Copper Exchange Inventories (MT)                        $90                                                                                $40                             Molybdenum ($/lb)
                                                                                                                                                                             Central App 1 Year Future NYMEX Coal Spot ($/ton)
                                                                                                       from bottom, LME, Comex, SME)
 $3.50
                                                                                 750,000                                                                      $80                                                                                $32
 $3.00
                                                                                                                                                              $70                                                                   $64.22       $24
                                                                                                                                                                                                                                                                                                                      $18.00
 $2.50                                                                           500,000
                                                                                                                                                              $60                                                                                $16
 $2.00
                                                                                 250,000
 $1.50                                                                                                                                                        $50                                                                                 $8

 $1.00                                                                                   0                                                                    $40                                                                                 $0
    Oct-08    Jan-09     Apr-09    Jul-09    Oct-09     Jan-10    Apr-10                 Oct-08    Jan-09    Apr-09     Jul-09   Oct-09     Jan-10   Apr-10     Oct-08       Jan-09    Apr-09      Jul-09     Oct-09      Jan-10      Apr-10       Oct-08        Jan-09     Apr-09      Jul-09     Oct-09   Jan-10      Apr-10

 $14.00                        Nickel LME Spot ($/lb)                          200,000                        Nickel LME Inventories (MT)                     $18                      Powder River Basin Coal Spot ($/ton)                      $600
                                                                 $12.11                                                                                                                                                                                          Chinese 2nd Grade Coke for Export FOB ($/tonne)
 $12.00                                                                                                                                                       $16                                                                                $500
                                                                               150,000
 $10.00                                                                                                                                                       $14                                                                                $400                                                                  $350
                                                                               100,000                                                                                                                                              $11.41
  $8.00                                                                                                                                                       $12                                                                                $300

  $6.00                                                                         50,000
                                                                                                                                                              $10                                                                                $200

  $4.00                                                                              0                                                                         $8                                                                                $100
     Oct-08    Jan-09     Apr-09    Jul-09   Oct-09     Jan-10     Apr-10           Oct-08        Jan-09    Apr-09    Jul-09     Oct-09     Jan-10   Apr-10     Oct-08       Jan-09    Apr-09      Jul-09     Oct-09      Jan-10      Apr-10        Oct-08       Jan-09     Apr-09      Jul-09     Oct-09   Jan-10      Apr-10

 $1.20                         Zinc LME Spot ($/lb)                $1.09       600,000                        Zinc LME Inventories (MT)                       $8.00                                                                              $1,900                               Platinum ($/oz)                 $1,719
                                                                                                                                                                                        Nat Gas (NYMEX, $/mmBtu)

                                                                               500,000
 $1.00                                                                                                                                                                                                                                           $1,600
                                                                                                                                                              $6.00
                                                                               400,000
 $0.80                                                                                                                                                                                                                                           $1,300
                                                                               300,000
                                                                                                                                                              $4.00
 $0.60                                                                                                                                                                                                                                           $1,000
                                                                               200,000                                                                                                                                              $3.99

 $0.40                                                                         100,000                                                                        $2.00                                                                                $700
    Oct-08    Jan-09     Apr-09    Jul-09    Oct-09     Jan-10    Apr-10            Oct-08        Jan-09    Apr-09    Jul-09     Oct-09     Jan-10   Apr-10         Oct-08    Jan-09    Apr-09      Jul-09     Oct-09     Jan-10      Apr-10            Oct-08     Jan-09    Apr-09      Jul-09    Oct-09    Jan-10     Apr-10


Note: Prices as of Thursday’s close
Source: Bloomberg, Morgan Stanley Research




                                                                                                                                                                                                                                                                      12
                                                                               MORGAN         STANLEY         RESEARCH

                                                                               April 18, 2010
                                                                               Metals & Mining Call




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Corp., Newmont Mining Corp., Peabody Energy Corp., Steel Dynamics, US Steel Corporation.
Morgan Stanley & Co. Incorporated makes a market in the securities of AK Steel Holding Corp., Alcoa Inc., Alpha Natural Resources, Inc., Arch Coal
Inc., Century Aluminum, Cliffs Natural Resources, Cloud Peak Energy Inc., Commercial Metals Company, Consol Energy Inc, Freeport-McMoRan,
Newmont Mining Corp., Nucor Corporation, Patriot Coal Corporation, Peabody Energy Corp., Schnitzer Steel Industries, Steel Dynamics, US Steel
Corporation, Walter Energy Inc..
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(as of March 31, 2010)
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                                                                                              Metals & Mining Call




                              Coverage Universe    Investment Banking Clients (IBC)
                                             % of                   % of % of Rating
Stock Rating Category            Count       Total     Count Total IBC Category
Overweight/Buy                   1042           41%            325         43%           31%
Equal-weight/Hold                1095           43%            348         46%           32%
Not-Rated/Hold                       15           1%              4          1%          27%
Underweight/Sell                   373          15%             87         11%           23%
Total                            2,525                         764

Data include common stock and ADRs currently assigned ratings. An investor's decision to buy or sell a stock should depend on individual
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Europe - MSCI Europe; Japan - TOPIX; Asia - relevant MSCI country index.
.
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                                                                                             April 18, 2010
                                                                                             Metals & Mining Call




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                                                                                       MORGAN    STANLEY            RESEARCH




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Industry Coverage:Nonferrous Metals & Mining

Company (Ticker)                              Rating (as of) Price* (04/16/2010)


Mark Liinamaa
Alcoa Inc. (AA.N)                            O (12/21/2009)                   $13.91
Century Aluminum (CENX.O)                    E (01/21/2009)                   $15.14
Cliffs Natural Resources (CLF.N)             E (07/12/2007)                   $70.24
Freeport-McMoRan (FCX.N)                     E (01/21/2009)                   $81.18

Stock Ratings are subject to change. Please see latest research for each company.
* Historical prices are not split adjusted.




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