Importance Of Supply Chain Efficiency During Steel Market Change Metal Bulletin Events

1. Importance of Supply Chain Efficiency during Steel
Market Changes .
Nasser M. Zaky – Ezz Steel – Egypt
September 2010

2. Contents
September 2010
Insert your Company
Logo here
1.Global Steel Market Changes.
2.Global Crude Steel Production Trends.
3.How have needs changed over the past two years?.
4.How logistics management support steel makers during
steel market changes?.
5.Conclusions.

3. Global Steel Market Changes
June 2010
Source: Metal Bulletin
647
192
400

4. Global Steel Market Changes(continued)
June 2010
Source: SBB Steel Prices

5. Global Steel Market Changes(continued)
June 2010
Source: Metal Bulletin
1174
622

6. Global Steel Market Changes(continued)
June 2010
Source: Metal Bulletin

7. Global Steel Market Changes
June 2010
Source: Metal Bulletin
1100
404
738
663

8. Global Crude Steel Production Trends
June 2010
Source : World Steel

9. June 2010
 The first six months of 2010 was 706 mmt, 27.9% higher in
comparison with the same period of 2009
 The first six months of 2010 increased by 7.2% compared to
2007.
 Asia and the Middle East showed increased crude steel
production compared to the first six months of 2007.
 Crude steel production in the EU, CIS, US and Canada is still
more than 15% below 2007 levels.
Global Crude Steel Production Trends

10. World Steel Capacity Utilization Ratio
June 2010
Source : World Steel

11. June 2010 Crude Steel Production Compared With June 2009 (mmt)
Country Jun-09 Jun-10 Change %
China 49.0 53.8 + 9
Japan 6.0 9.4 + 35.9%
South Korea 3.7 4.8 + 21.9
Germany 1.8 3.9 + 53.4
Italy 1.5 2.3 + 32.8
France 1.0 1.5 + 31.4
Turkey 2.2 2.5 + 13.8
Russia 5.1 5.4 + 6
Brazilian 1.5 2.9 + 46.8
June 2010

12. June 2010
How have needs changed over the past two years?
Information, Product, Services, Funds, and Knowledge flows
Supply + Cash Flow Demand
Suppliers Steel Makers Customers
Supply Chain Interfaces and operates in global marketplace :

13. Customers Needs Changes – Global Automotive.
June 2010
Source: www.worldometers.info

14. June 2010
Customers Needs Changes – Construction Market.

15.  Overall, world construction spending growth have slowed to
less than 1% last year to reach $4.8 trillion (£3.4 trillion).
 This will be the lowest rate of growth since 2002, where the
world construction spending growth was between 3% and
6%.
June 2010
Customers Needs Changes – Construction Market.

16. Logistics Needs Changes – Maritime Transport of Dry Bulk.
June 2010

17. June 2010
Logistics Needs Changes – Maritime Transport of Goods.

18. June 2010
Gross Weight of Seaborne Goods handled In EU-27 main ports

19. How Logistics Support Steel Makers During Steel Market Changes ?
1.Internal supply chain (hidden supply chain):
Internal supply chain is the design which link all internal
members in a way follow each item step by step from
inception to demise and it’s crucial for the following:
 Organizing the flow of incoming materials.
 Recycling and selling of all generated by-products .
It will lead to smooth operation, improve efficiency and
finally production cost reduction.
As an example for applying integrated internal supply
chain June 2010

20. Mixing of steel
metals with slag
Status before
June 2010
Status after
Processed
Slag
Recovered steel
metal from slagAccumulation
of Slag

21. June 2010
Accumulation of scrap
dust
Accumulation
of scrap dust
Separated valuable metals
Separated ferrous scrap.
Scrap dust after screening
Status before Status after

22. June 2010
Results of Applying Integrated Internal Supply Chain Design.

23. June 2010
Results of Applying Integrated Internal Supply Chain Design.

24. 2- External Supply Chain : Supply chain drivers are :
Facilities .
Inventory.
Transportation .
Information.
Sourcing.
Pricing.
Note: Inventory is the most important driver affected the
efficiency of steel makers during market changes.
June 2010
How Logistics Support Steel Makers During Steel Market Changes?

25.  Market status :
1-Market collapse:
Steel makers generate losses equal to the price change
multiplied with the level of inventory.
2-Market Peak:
Steel makers generate profits equal to the price change
multiplied with the level of inventory.
June 2010
Impact of Inventory Management In Steel Making Efficiency

26. 1. The global steel market is cyclical with no firm rules about timing of
each cycle and regularity is not a part of the process.
2. Understanding of the interfaces between supply chain
managements is crucial to have integration between all members.
3. Supply chain integration is maximizing supply chain overall value
through:
Cost reduction.
Demand enhancement.
Increasing ability to respond quickly and accurately to market
change
June 2010
Conclusions:

27. 4. Firms must evaluate the risks and potential profits awaiting them
in global market to optimize the opportunities and overcome the
challenges.
5. Efficiency firstly achieved through internal supply chain (hidden
supply chain).
6. All supply chain players must define carefully the level of inventory
and where it is held which optimize overall supply chain value.
7. As we efficiently managed the inventory levels and then cash to
cash cycle as we become stronger in front of market changes.
June 2010
Conclusions

28. June 2010
Address : 44km katamia Road, Ain Sokhna Road, Suez, Egypt
Telephone : +2 062 325 0361/63/70
Fax : +2 062 325 0362
E- Mail : n.zaky@ezzsteel.com, nasserzaky@yahoo.com
Website : www.ezzsteel.com