GLOBAL MARKET SITUATION            66 TH IREPAS MEETING                                            London                 ...
Table of Contents•   Macroeconomic situation•   Steel and long products consumption•   Rebars market.•   International pri...
• Macroeconomic situation•   Steel and long products consumption•   Rebars market.•   International price situation.•   Su...
Macroeconomic situation              Global economic activity shows signs of strengthening in the              coming mont...
Macroeconomic situation. Advanced economies        In advanced economies, leading indicators suggest economic        activ...
Macroeconomic situation. E & D economies      Leading indicators suggest strengthening of economic activity in      Russia...
Macroeconomic situation      Global economic growth in 2012 will be lower but we see already      signs of improvement in ...
Construction sector evolution  Construction industry remains as main tractor for long products. In  2011 construction rema...
• Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & ...
Steel consumption situation         World finished steel consumption is sustaining a consistent uptrend         since 2009...
Long products market      World long products consumption is showing a stronger pace of      growth and is gaining share i...
Long products by area      Asian markets are supporting a consistent long-term in longs.      Markets in South America and...
Long products by areas – 2011VS 2010  In 2011 long products recovered in Europe and North America  from very low levels. A...
Long products per product      Reinforcing bars are the big winners in long product mix evolution      and sections are th...
Long products by product – 2011 vs 2010  Reinforcing bars performed well thanks to construction activity in  emerging mark...
Long products by product. Sections – 2011 vs 2010  Offshore activity helped sections market recovery in North  America. CI...
Long products by product. Merchant bars – 2011 vs 2010  Improvement of industrial production in different areas lifted tot...
Long products by product. Rebars – 2011 vs 2010  Good construction activity in emerging and developing countries  powered ...
Long products by product. Wire rod – 2011 vs 2010  Industrial production showed improvement almost everywhere. As  a resul...
Long products . Sections vs Rebars      Reinforcing bars keep gaining share against sections in      construction. In tota...
• Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & ...
Rebars market per area  World reinforcing bars market growth is supported mainly from  emerging and developing economies. ...
Rebars consumption vs production per area      Reinforcing bar producers in almost all main markets are adjusting      the...
Rebar consumption per capita      Consumption per capita has always potential to grow in      developing countries. Countr...
• Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & ...
Reinforcing bars, wire rod and billet FOB price  Long term price lines for the three products show an accelerating  uptren...
Reinforcing bars CFR price and spread     After the market drop in 2009 prices are recovering nicely due to     increasing...
Reinforcing bars spread     Spread is lagging behind price increases. Rebar producers will     probably take actions to im...
•   Macroeconomic situation•   Steel and long products consumption•   Rebars market.•   International price situation.• Su...
Summary & Outlook       After the slowdown caused by European sovereign debt storm        in Q311, global economy shows s...
Thank you for your attention                               31
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Kim Marti's presentation at SteelOrbis Spring '12 Conference & 66th IREPAS Meeting

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Kim Marti's presentation on Global Steel Market Situation at SteelOrbis Spring '12 Conference & 66th IREPAS Meeting

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Kim Marti's presentation at SteelOrbis Spring '12 Conference & 66th IREPAS Meeting

  1. 1. GLOBAL MARKET SITUATION 66 TH IREPAS MEETING London April 2012Kim MartíCelsa International Commercial DirectorCELSA GROUP
  2. 2. Table of Contents• Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & Outlook 2
  3. 3. • Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & Outlook 3
  4. 4. Macroeconomic situation Global economic activity shows signs of strengthening in the coming month despite it is still suffering the negative effects of the eurozone crisis. Financial markets have improved on signs of stabilization of global economy % World GDP 5,2 3 3,8 3,3 3,9 -0,7 2008 2009 2010 2011 2012(f) 2013(f)Source: IMF, World Economic Outlook, Update January 2012, Worldsteel monthly monitor March 2012 4
  5. 5. Macroeconomic situation. Advanced economies In advanced economies, leading indicators suggest economic activity in US and Japan is gaining traction. Economic sentiment showed clear signs of stabilization in EU and business confidence indicators turned up in Germany. 5 4 % GDP 3,0 3 2,2 2 1,9 2 1,8 1,8 1,7 1,6 1,6 1,5 1,6 1,2 0,8 0,9 1 0,6 0,3 0 -0,5 -1 -0,9 -2 USA UE DE UK JAP ALL ADV 2011 1,8 1,6 3,0 0,9 -0,9 1,6 2012 1,8 -0,5 0,3 0,6 1,7 1,2 2013 2,2 0,8 1,5 2 1,6 1,9 2011 2012 2013Source: IMF, World Economic Outlook, Update January 2012, Worldsteel monthly monitor March 2012 5
  6. 6. Macroeconomic situation. E & D economies Leading indicators suggest strengthening of economic activity in Russia and upturn and India. For Brazil and China, they point to growth below long-term trend for the first half 2012. Industrial production shows improving momentum in most of emerging world. 10 9,2 8,8 % GDP 9 8,3 8,2 8 7 6,2 5,9 6 5,4 5 4,1 4,1 4 3,5 3,5 3,6 3,3 3,5 3,2 3,1 3,2 3 2,3 2 1 0 BRAZIL RUSSIA CHINA TURKEY MENA E&D 2011 4,1 4,1 9,2 8,3 3,1 6,2 2012 3,5 3,3 8,2 2,3 3,2 5,4 2013 3,5 3,5 8,8 3,2 3,6 5,9 2011 2012 2013Source: IMF, World Economic Outlook, Update January 2012, Worldsteel monthly monitor March 2012 6
  7. 7. Macroeconomic situation Global economic growth in 2012 will be lower but we see already signs of improvement in sentiment, specially in US, and also a positive change in momentum almost everywhere. Financial markets have improved although risks persist in Europe. 9 8 7,3 % GDP 7 6,2 5,9 6 5,4 5,2 5 3,8 3,9 4 3,2 3,3 3 1,9 2 1,6 1,2 1 0 2010 2011 2012 2013 ADV ECONOMIES 3,2 1,6 1,2 1,9 E&D ECONOMIES 7,3 6,2 5,4 5,9 TOTAL WORLD 5,2 3,8 3,3 3,9 ADV ECONOMIES E&D ECONOMIES TOTAL WORLDSource: IMF, World Economic Outlook, Update January 2012, Worldsteel monthly monitor March 2012 7
  8. 8. Construction sector evolution Construction industry remains as main tractor for long products. In 2011 construction remained depressed in EU, showed some pickup in NAFTA , significant performance in South America and strong momentum in emerging Asia Index 100=2005
  9. 9. • Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & Outlook 9
  10. 10. Steel consumption situation World finished steel consumption is sustaining a consistent uptrend since 2009 and is forecasted to continue into 2012. 1.600 1472 1398 1.400 1220 1312 1.200 1149 646 1.000 621 587 Millions tonnes 660 487 800 600 127 134 145 111 113 400 447 551 598 200 643 681 0 2008 2009 2010 2011 f 2012f China BRI World excl. BricSource: worldsteel 10
  11. 11. Long products market World long products consumption is showing a stronger pace of growth and is gaining share in total steel consumption. 700 600 701 648 500 573 581 Millions tonnes 400 300 200 100 0 2008 2009 2010 2011 fSource: Estimation 11
  12. 12. Long products by area Asian markets are supporting a consistent long-term in longs. Markets in South America and Mena countries are also contributing to this growth. 800 700 31 600 30 36 Million tons 42 106 27 99 500 80 131 80 400 300 330 330 400 439 475 200 100 25 24 88 71 20 0 23 54 21 2007 57 2008 68 2009 2010 2011 Other World East& Se Asia Cis Eu-25 North AmericaSource: Estimation 12
  13. 13. Long products by areas – 2011VS 2010 In 2011 long products recovered in Europe and North America from very low levels. Asia and other areas kept growing at good pace for a total growth of 9% 20% 18% 16% 14% 12% 10% 8% 12% 6% 4% 10% 9% 2% 4% 6% 2,0% 0% North America CIS Europe Other World E & SE Asia Total World 13
  14. 14. Long products per product Reinforcing bars are the big winners in long product mix evolution and sections are the clear losers. 800 700 600 500 285 264 Millions tonnes 400 194 220 234 244 Rebars Wire Rod 300 Sections 139 148 153 Merchant Bars 200 155 168 188 53 57 51 100 39 44 47 132 141 0 154 143 2006 172 181 2007 2008 2009 2010 2011Source: Estimation 14
  15. 15. Long products by product – 2011 vs 2010 Reinforcing bars performed well thanks to construction activity in emerging markets. Improvement in industrial activity fueled wire rod remarkable growing pace. 14% 12% 10% 8% 6% 11% 4% 10% 7% 9% 2% 5% 0% Sections Merchant bars Wire Rod Rebars Long Products 15
  16. 16. Long products by product. Sections – 2011 vs 2010 Offshore activity helped sections market recovery in North America. CIS recovered but from a low level and Asia also helped on the total 7% growth SECTIONS 30% 25% 20% 15% 28% 10% 5% 6% 10% 0% CIS 7% North 1% -3% Europe -5% America Other World E & SE Asia Total World 16
  17. 17. Long products by product. Merchant bars – 2011 vs 2010 Improvement of industrial production in different areas lifted total consumption of merchant bars up to 5%. Market drop in Europe prevented global stronger growth. MERCHANT BARS 14% 12% 10% 8% 13% 6% 4% 9% 2% 3% 5% 5% 0% North -2% CIS & America Other World Turkey Europe E & SE Asia -3% Total World -4% 17
  18. 18. Long products by product. Rebars – 2011 vs 2010 Good construction activity in emerging and developing countries powered a remarkable 10% growth in reinforcing bars world consumption. North America was still suffering of very poor business conditions in construction sector REBARS 15% 10% 14% 5% 12% 10% 8% 3% 0% -4% North CIS & America Europe Turkey Other World E & SE Asia Total World -5% 18
  19. 19. Long products by product. Wire rod – 2011 vs 2010 Industrial production showed improvement almost everywhere. As a result, wire rod market growth showed stronger pace amongst all long products, up to 11% WIRE ROD 14% 12% 10% 8% 6% 13% 4% 11% 5% 6% 2% 5% 0% 1% North America CIS & Turkey Europe Other World E & SE Asia Total World 19
  20. 20. Long products . Sections vs Rebars Reinforcing bars keep gaining share against sections in construction. In total, world market share of sections has been pushed well below 20%. 350 300 250 200 234 Million to ns 150 244 258 285 100 50 51 0 39 21,7% 44 2008 16,1 % 48 2009 17,2 % 2010 16,8% 2011 Rebars Sections Sections vs RebarsSource: Estimation 20
  21. 21. • Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & Outlook 21
  22. 22. Rebars market per area World reinforcing bars market growth is supported mainly from emerging and developing economies. Reinforcing bars consumption is consistently moving from advanced to developing countries. 300 258 285 250 234 244 61 57 57 200 63 Millions tonnes 150 129 151 180 100 161 50 10 20 17 12 11 18 0 8 13 20 10 13 9 Cis Other World East&Se Asia Europe N America Source: Estimation 22
  23. 23. Rebars consumption vs production per area Reinforcing bar producers in almost all main markets are adjusting their production to demand in their regional markets. Consumption vs. Production (Million tons) 149 149 140,0 Millions tonnes 120,0 100,0 80,0 60,0 40,0 20,0 5 13 5 10 9 9 0,0 14 11 USA EU-15 4 13 4 SOUTH KOREA 6 CHINA CIS & EE BRAZIL TURKEY Production ConsumptionSource: Estimation 23
  24. 24. Rebar consumption per capita Consumption per capita has always potential to grow in developing countries. Countries in CIS&EE and also in South America show good prospects for future growth Consumption per capita (kg) 120 111 100 98 91 99 80 69 78 60 73 62 40 29 33 40 21 19 27 17 23 23 20 27 27 20 0 14 14 18 19 USA EU-15 China CIS & EE Brazil Turkey 2008 2009 2010 2011Source: Estimation 24
  25. 25. • Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & Outlook 25
  26. 26. Reinforcing bars, wire rod and billet FOB price Long term price lines for the three products show an accelerating uptrend on higher lows, well above long term moving average. 900 800 700 USD (fob) 600 500 400 300 200 100 01 02 03 04 05 06 07 08 09 010 011 03/12 Rebars 195 230 295 450 385 490 630 870 480 600 650 680 Mesh 195 245 290 500 385 500 600 870 490 610 660 690 Billets 165 195 260 380 330 430 580 820 430 560 600 620 26
  27. 27. Reinforcing bars CFR price and spread After the market drop in 2009 prices are recovering nicely due to increasing demand, but strength in raw materials is keeping margins very tight for rebar producers. 1000 900 800 700 Usd /T 600 500 400 300 200 100 0 01 02 03 04 05 06 07 08 09 10 11 03/12 Rebar 210 250 315 455 415 520 660 900 500 620 650 680 Scrap 85 115 155 255 210 265 340 450 300 375 410 435 Spread 125 135 160 200 205 255 320 450 200 245 240 245 Rebar Scrap SpreadSource: IREPAS 27
  28. 28. Reinforcing bars spread Spread is lagging behind price increases. Rebar producers will probably take actions to improve the margins they need. 1000 70% 870 900 60% 60% 800 54% 680 700 51% 49% 49% 660 50% 650 50% 48% 620 Usd /T 600 44% 520 500 40% 40% 40% 500 455 37% 36% 415 30% 400 315 300 250 20% 210 200 10% 100 0 0% 01 02 03 04 05 06 07 08 09 10 11 03/12 Rebar % SpreadSource: IREPAS 28
  29. 29. • Macroeconomic situation• Steel and long products consumption• Rebars market.• International price situation.• Summary & Outlook 29
  30. 30. Summary & Outlook  After the slowdown caused by European sovereign debt storm in Q311, global economy shows signs of improvement for coming months. Major advanced economies signal stronger activity and, although some emerging economies may grow slower than previous forecast, all indicators suggest performance of world economy will improve.  Long product consumption kept growing supported by markets in Asia, Mena and South America. Reinforcing bars grew stronger than long products average, clearly taking share from sections. Renewed momentum in industrial production helped wire rod to be the best performer. Signs point to market continuing in the same trend.  Long term price trend for long products and Reinforcing bars in particular is up. Marketing policies are strictly pursuing margin and profit. Mills located in slowest areas are monitoring regional markets, in order to maintain levels of production in accordance with demand.  As consequence of general improving demand, raw materials cost and margin pressures, price levels will continue to move up although volatility and short term change in price direction will be present in the trade. 30
  31. 31. Thank you for your attention 31

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