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@ SMR GmbH
Steel & Metals Market Research
Reutte, October 2013
This study was exclusively prepared for IMOA.
It may not be copied, published or disclosed to third parties without the permission of SMR GmbH.
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 1
IMOA recently completed the latest update of its regular end use analysis. The Mo market perspectives for the next decade remain promising: the demand for Mo will reach more than 430,000 t by 2022; the market will grow by more than 3% in the period 2012 – 2022.
The fastest growing region will be Rest of the World (India, Africa, Middle East) with 4.8% p.a., followed by China with 4.2% p.a. Europe and America will both grow below 3% in the next decade. After two years with limited growth in 2012 and 2013, the global Mo demand will gain momentum from 2014 on.
First Use Structure
Almost 322,000 t of Mo (including Mo in scrap) was consumed in 2012
compared to around 318,000 t in the previous year, which corresponds to a
1% market growth. The first use structure only slightly changed within this time
frame, with the largest first use sectors being Engineering Steels (36%),
Stainless Steels (26%) and Tool and High Speed Steels (combined 11%).
Engineering Steels36%
Stainless Steels26%
Tool Steels11%
Chemicals10%
Foundries8%
Nickel Alloys
5%
Mo Metal4%
Total First Use
321,600 t
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 2
In 2012 the market developed somewhat better than expected in the last issue
of this report, particularly due to strong deliveries in the for the oil and gas
segment (including pipeline deliveries for Chinese gas pipelines) which
prevented a negative growth.
Mo in Scrap
101,330
51,030
18,140
29,040
19,710
6,07011,700
15,970
33,540
17,8403,370
4,550
8,990230
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Engineering Steels
Stainless Steel Tool Steel Chemicals Foundries Nickel Alloys Mo-Metal
Mo
Un
its
[ t
on
ne
s ]
Mo in Scrap
Primary Mo
Scrap Ratio:
14%
Scrap Ratio:
40%
Scrap Ratio:
50% Scrap Ratio:
11%Scrap Ratio:
19%Scrap Ratio:
60%
Total Scrap Ratio:
26%
Total Mo in Scrap:
~84,500 kt
Scrap Ratio:
2%
Almost 85,000 t of the total Mo consumption came from Mo units in scrap. Approximately 26% of all Mo units in Mo containing production worldwide originated from scrap in 2012 compared to 25 % in 2011.
However, the scrap ratio in Mo containing materials varies significantly: the content is around 60% in nickel based alloys including superalloys and 50% in tool and high speed steels, while in engineering steels (mainly from revert scrap) and Mo-Metal it is lower. In case of Mo-Metal, the use of scrap for own production has just started in 2012. Before that, Mo-Metal scrap was completely used in production of steel types – particularly at nickel alloy producers.
Nevertheless, volume-wise, most of the Mo in scrap came from stainless steel, tool steels and engineering steels.
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 3
Primary Molybdenum (excl. Mo in Scrap)
Engineering Steels43%
Stainless Steels22%
Chemicals12%
Foundries8%
Tool Steels8%
Mo-Metal5%
Super Alloys3%
Total First Use
237,000 t
Excluding the Mo in scrap, the demand in 2012 remained relatively stable at
237,000 t. Construction engineering steels accounted for 43% of Mo use,
followed by stainless steel (22%) and chemicals (12%).
Compared to the Mo consumption including Mo from scrap, there are quite
substantial differences: engineering steels have a higher share in primary Mo
use than in Mo including scrap, due to the low portion of Mo coming from
scrap. In case of stainless steel, it is the opposite: mills are looking for high Mo
scrap ratios. Thus, the level of primary Mo use in stainless steel is lower than
the total Mo use including scrap (22 % compared to 26 % share in total use).
Mo first use in engineering steels grew by 3% in 2012, while the rest of the
segments remained stagnant (stainless steel) or even declined (all others).
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 4
Regional Comparison
America55%
China39%
ROW6%
Europe26%
America15%
China36%
Other Asia15%
ROW8% Europe
21%
America21%
China31%
Other Asia16%
ROW11%
Mo ProductionOre/Concentrate
241,000 tPrimary Mo
Mo First UsePrimary Mo Use at Mills and in
Metal / Chemical Production
237,000 tPrimary Mo
Mo End UseConsumption in End Use Segments at
Fabricators and Consumers
322,000 tPrimary Mo
and Mo from Scrap
From a regional point of view, there are several differences in the Mo supply
chain from production to end use.
The production (here related to the stage of ore/concentrate production) is
mainly split between two regions: America (USA, Canada, Mexico, Peru and
Chile) and China, with China already accounting for 39% of total production in
2012.
The regional first use shows regions where Mo (excluding Mo in scrap) is
employed for melting. China has substantially increased its share in the last
five years to 36% now. Europe, although not a producing region, is ranking
second with 26%.
China’s lower share in end use than in first use has two main reasons. Firstly,
China has a high share of primary material used in production (first use), but a
low share of scrap compared to other countries. Secondly, China became an
exporter for some Mo containing products such as equipment, mechanical
engineering and tools in the last years. Europe is a net exporter of Mo
containing products, while America is a net importer.
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 5
Enduse Structure
The chart below shows the end use industries for Mo containing steels, alloys and chemicals.
Oil and Gas (incl. Catalysts,
Ref inery)
20%
Chemical/Petrochemical14%
Automotive13%
Mechanical Engineering
13%
Process Industry (excl. CPI)8%
Other Transportation8%
Power Generation7%
Building / Construction
6%
Aerospace & Defence4%
Electronics & Medical2%
Others* 5%
Total End Use
321,600 t
The five largest end use segments in 2012 were:
Oil and gas
Chemical / petrochemical
Automotive
Mechanical engineering
Process industry (excluding CPI)
Compared to the last issue, the volume assigned to the oil and gas segment is
substantially larger now, which is, however, not only caused by a stronger
market. A major take-away from SMI’s report on CRAs in oil & gas was that
some sub-segments have been under-estimated in the previous report
(particularly the demand for OCTG). On the other hand, CPI was most likely
over-estimated in the previous reports. Thus, the quantities for Mo in stainless
and engineering steel have been re-adjusted accordingly in this issue.
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 6
The oil and gas market including refineries and refinery catalysts was the
largest segment with a share of 20% in all Mo end uses. Total demand in oil
and gas has reached almost 64,000 t last year. Major applications were:
OCTG products especially alloy engineering steels (16,600 t), refinery
catalysts (18,200 t), flowlines including gas pipelines (9,500 t) and topside
processing equipment (8,100 t).
Chemical process industry (CPI) including petrochemical equipment is again
ranking second with around 14% of all end uses (~45,200 t). Stainless steel
applications (such as 316, Duplex and 6-Mo grades) are dominant in this
segment with a tonnage of ~30,000 t. The main products are pipes and tubes
as well as tanks, columns, vessels and similar equipment.
Automotive is the third largest sector with 13% share (43,000 t), defending its
position despite a falling Mo use in the European market. The main passenger
car applications for Mo are power train applications (12,400 t) including clutch,
gear and tools, followed by engine and exhaust parts (9,400 t) including
crankshafts, piston rods and exhaust systems. Chassis parts and transport
containers are the most important elements in trucks and buses.
In the field of mechanical engineering, Mo use reached ~41,500 t. Mo
containing alloy steel is used primarily in heavy machinery, printing, wood
working, recycling, milling and for bearings, while alloy tools steels are used for
tools and moulds.
All other segments account individually for less than 10%: process industry
(excluding CPI), other transportation (shipbuilding, railway, offshore vehicles
and cranes), power generation (fossil power, nuclear, wind energy, other
renewable), architecture, building and construction, aerospace and defense,
consumer goods, electronics and medical (with a high Mo-Metal share).
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 7
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
ChemicalsCast IronMo-MetalATS / HSSSuper AlloysStainless SteelConstructional Eng. Steel
Mo
Use
in t
* incl. Pigments, Coatings and Lubricants
Total End Use
321,600 t
Summing up, it can be said that Mo has a well balanced and stable end use
structure compared to many other raw materials. The split between capital
goods and consumer products is approx. 75:25. It includes late, mid- and early
cyclic industries. This healthy structure ensures sustainable future growth and
limits recession risks as well.
Nevertheless, substitution risks will always remain an issue, as Mo is a
comparatively expensive material and only used where it is absolutely
necessary.
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 8
Forecast to 2022
Growth Potential for Mo (incl. Mo in Scrap) until 2022
200,000
250,000
300,000
350,000
400,000
450,000
Mo
Inp
ut in
t (
Mo
Co
nte
nt)
End Use 2000-2007
End Use 2007-2012
Forecast 2013-2022
ACTUAL FORECAST
Crisis and
Post-CrisisGR (07-12):
4.2% p.a.
China GrowthGR (00-07):
4.5% p.a.
ForecastGR (12-22):
3.3% p.a.
As mentioned before, Mo (including Mo in Scrap) will grow by 3.3% p.a. to around 433,000 t in 2022.
Compared to the previous forecast, the Mo demand has been revised (up) due to a higher basic value in 2012. In the previous forecast, a negative growth has been expected for 2012.
The following graph shows the development in the Mo first uses until 2022. Chemicals and foundries will grow below the average, while the other segments (stainless steel, engineering steels, nickel alloys, tool steels, Mo-Metal) will increase above 3.3% p.a. The low growth of chemical applications is connected with the limited growth of refinery catalysts (longer lifetime expected, no substantial growth of refinery capacities and petrol production worldwide).
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 9
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Mo-Metal Nickel AlloysFoundries Tool SteelChemicals Stainless SteelEngineering Steels
3,5 %
3,5 %
3,3 %
3,8 %
1,0%
3,5 %
4,5 %
GR in %
in m
etr
ic t
Average Growth: 3.3% p.a.
The following end use segments are expected to grow above the average by 2022:
Mechanical engineering
Other transportation
Consumer goods / electronics / medical equipment
Power generation
Process industry
Building/construction
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 10
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%G
row
th 2
012-2
022 in
%
Mo Use in t (2012)
Average Growth - All Segments
*) incl. Mo in Scrap
Oth
erT
ran
sp
ort
ati
on
Me
ch
an
ical E
ng
inee
rin
g
Po
we
r G
en
era
tio
n
Ae
ros
pac
e /
De
fen
se
Ch
em
ica
l / P
etr
oc
he
mic
al
Ind
us
try
Bu
ild
ing
& C
on
str
uc
tio
n
Co
ns
um
er G
oo
ds /
Me
d. /
Ele
ctr
.
Pro
ce
ss In
du
str
y
Au
tom
oti
ve
Oth
ers
O/G
:
Exp
lora
tio
n/ P
rod
./ P
rocessin
g
O/G
:Refi
nery
/
Cata
lysts
Total
Oil & Gas
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 11
Regional Demand (incl. Mo in Scrap)
The charts above compare the regional consumption of Mo on an end use
basis in 2012 and ten years later in 2022.
It is estimated that China (4.2% p.a.) and ROW including Russia, India, Africa
and the Middle East (4.8% p.a.) will grow above the average by 2022, with
some growth deceleration for China starting with 2018.
However, today, China’s potential lies in higher Mo use in certain high end
applications such as aerospace as well as in process equipment, oil and gas,
automotive and other transport.
ROW consists of emerging countries with low Mo use today. The per capita Mo
consumption here will improve in the next years from its current low 13 gram
(compared to the world average of 46 grams) to ~20 gr.
Europe, America and Other Asia with a high share of industrialized countries
will also grow by 2 – 3% per year until 2022. Even though Europe’s share in
total demand will decline, its Mo consumption will increase volume-wise from
68,000 t in 2012 to over 80,000 t in 2022 which corresponds to a 2.2%
average annual growth.
End Use Analysis 2012 – Executive Summary Abstract
© SMR – Steel & Metals Market Research 2013 Page 12
Additional Mo Units Used by 2022
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
China Americas Other World Other Asia Europe
Mo
Un
its
in t
Incl. Mo in Scrap
2022 vs. 2012
+44%
+28%
+56%
+19%
+30%
ROW
WORLD
+ 111 kt
+ 35%
The graph above shows the increase in Mo consumption by region over a 10-year period and can be less misleading than the average annual growth rate figures.
Even Europe, which has a low average annual growth rate, is expected to consume 20% more Mo (or almost 15,000 t) than in 2012. Other regions will increase by 30 to 60% by 2012, with China being the clear leader. Its extra-volume will amount to over 40,000 t which is 44 % more than its consumption in 2012.