World Steel Industry


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world steel industry review including estimate of 2008 global steel demand (by region, by end-use, by form, by product), 2009 demand forecast, outline of selected producer strategies, list of industry issues

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World Steel Industry

  1. 1. World Steel Industry June 2009
  2. 2. WORLD STEEL INDUSTRY AGENDA <ul><li>Global steel demand </li></ul><ul><ul><li>By region </li></ul></ul><ul><ul><li>By end-use </li></ul></ul><ul><ul><li>By form </li></ul></ul><ul><ul><li>By product </li></ul></ul><ul><li>Demand forecast </li></ul><ul><li>Steel supply </li></ul><ul><li>Industry issues </li></ul><ul><li>Opportunities … </li></ul>
  3. 3. GLOBAL STEEL DEMAND Demand by Region † Figures are 2008 estimates in millions of metric tonnes of finished steel products. Assessments cover all steels and thus include ~25 mt world consumption of stainless steel [20mt flat + 5mt long]. Note – all figures in this report are to be treated as indicative estimates supplied by Metals Consulting International Limited [‘MCI’] rather than as precise or definitive assessments. For further clarification or support please contact us by email [email_address] . 1195 World 693 Asia & Oceania 68 Middle East / Africa 43 C & S America 130 NAFTA 50 CIS 29 Other Europe 182 EU (27) Demand, mt World Region
  4. 4. GLOBAL STEEL DEMAND Demand by End-Use Figures are MCI estimates of 2008 world steel consumption, in millions metric tonnes. Transport includes approx. 90m cars @ 950 kg/car [flat steel products 640kg/car + long products 190kg/car + yield loss and parts supply] thus ~85mt just for light passenger vehicles (heavy and light trucks, buses, rail wagons etc represent additional steel demand) . Appliances (white goods) amount to ~400m units at roughly 120-140kg steel (including yield loss) per appliance unit. Figures above include demand across other steel segments including consumption of engineering steel or special bar quality steel of ~46mt (SBQ), and fasteners demand at around ~21mt. 1195 Total 45 Other 20 Shipbuilding 40 Oil and gas 40 Fabrication 55 Appliances 135 Transport 285 Machinery 575 Construction Demand, mt End Use
  5. 5. GLOBAL STEEL DEMAND Demand by Form Demand estimates above exclude certain products not in flat / long / tubular form that are made from semi-finished steel . These include steel wheels produced from ingots or continuous cast rounds (mostly for rail transport), for which world demand currently amounts to ~5 million units [3.5m forged wheels; 1.5m cast wheels]. At ~350kg/wheel this segment accounts for ~2mt steel demand. Figures are MCI estimates for 2008 in millions metric tonnes finished steel products. 1195 Total 120 Tube 520 Long 555 Flat Demand, mt Form
  6. 6. GLOBAL STEEL DEMAND Demand by Product – Flat Products Figures are 2008 estimates, and include electrical steel (silicon steel) demand of ~11 mt and tin mill product demand of ~13mt. 555 Total 132 Coated flat products 117 Cold rolled steel 196 Hot rolled coil & sheet 110 Plate Demand, mt Product
  7. 7. GLOBAL STEEL DEMAND Demand by Product – Long Products Figures are 2008 estimates. Heavy / light section cut-off is 80mm. Demand assessments include ~160mt rebar [excluding bar-in-coil] within bar, and include demand for other downstream products (e.g. wire, wire rope) obtained by further processing. Heavy sections figures include rail demand of ~10 mt/year. 520 Total 150 Rod 280 Bar 46 Light sections 44 Heavy sections Demand, mt Product
  8. 8. GLOBAL STEEL DEMAND Demand by Product – Tubes Figures are 2008 estimates of world demand. Welded tube estimate includes large diameter pipe (LDP) consumption of approximately 18mt. 120 Total 37 Seamless 83 Welded Demand, mt Product
  9. 9. DEMAND FORECAST World steel demand in 2009 and 2010 <ul><li>2008 world finished steel demand ~1195 mt </li></ul><ul><li>Level of full year 2009 consumption: </li></ul><ul><ul><li>Will be lower due to the credit crisis </li></ul></ul><ul><ul><li>Will be critically dependent on construction sector – thus infrastructure spending e.g. in China </li></ul></ul><ul><ul><li>Is assessed by MCI at ~1060mt </li></ul></ul><ul><ul><li>This is an average of recent IISI / OECD forecasts </li></ul></ul><ul><li>Recovery expected in 2010 </li></ul><ul><li>MCI tentative 2010 demand forecast is ~ 1175 mt – if China stimulus progresses as planned † </li></ul>† : China’s fiscal stimulus package is a $585 billion increase in spending on transportation construction [roads, rail], earthquake reconstruction, rural infrastructure modernisation projects, environmental protection, housing, indigenous innovation [technological capabilities] and healthcare / education. Geared largely to steel intensive building and construction, MCI appraise this package as one of the most important factors shaping the future recovery of Chinese / world steel demand in 2009 and 2010.
  10. 10. STEEL SUPPLY Top 5 producers / development options Outputs are 2008 crude steel production figures [source: IISI]. Development paths are MCI’s own estimates of possible development paths. Please note that these development options have been elaborated by MCI without consultation with the steelmakers. For more analysis similar to that above (with MCI’s compliments) visit us at: Organic [especially export oriented] volume growth 29 Baosteel Acquisition of the Vietnamese Steel Corporation; regional jv's with Asian partner(s) 31 POSCO Merger with Nippon Steel 34 JFE Consolidation of Japanese industry 36 Nippon Steel Rationalisation of high cost inland sites [Chicago area, USA; France, Germany] 116 ArcelorMittal Business development path Output mt Producer
  11. 11. INDUSTRY ISSUES Some current topics for discussion <ul><li>Globalisation </li></ul><ul><li>Q: How does ArcelorMittal get to 250 mt? </li></ul><ul><li>A: Emphasis on demand side not supply side – construction markets especially </li></ul><ul><li>CO2 </li></ul><ul><li>Q: How to respond to increasing environmental and emissions costs? </li></ul><ul><li>A: Increasing geographic polarisation between melting and rolling of steel </li></ul><ul><li>Technology </li></ul><ul><li>Q: What will the next technology leap comprise? </li></ul><ul><li>A: More ‘near net shape’ casting including technology licensing e.g. of Castrip ® </li></ul><ul><li>China </li></ul><ul><li>Q: What are the main problems or allegations? </li></ul><ul><li>A: Direct and indirect subsidies; capacity expansion during time of stagnant world steel demand; increasing international adoption of trade barriers as a result, to the detriment of the industry worldwide </li></ul>
  12. 12. OPPORTUNITIES … <ul><li>Can MCI help your firm develop a presence in the international steel sector? </li></ul><ul><li>Can we help you raise funds for investment? </li></ul><ul><li>Or assist you perhaps with a strategic appraisal of your business? </li></ul><ul><li>If so please contact us for a no obligation discussion … </li></ul>Please contact: Andrzej Kotas, Managing Director, MCI Website: http:// Email: [email_address] Mobile: +44 (0) 775 149 0885
  13. 13. OPPORTUNITIES … For more steel information visit us: http://