Current and Future Trends in the Chinese Stainless Steel

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Current and Future Trends in theChinese Stainless Steel Market

Joint seminar“Reassessing the Outlook for Lead, Zinc, Copper and Nickel in China”

Peter Kaumanns

1Joint Seminar Lisbon, 28 September, 2011

International Stainless Steel Forum, Brussels

Lisbon, 28 September 2011, Altis Hotel

The Global Stainless Steel MarketRegional movesChina’s role– Leadership in volumes– Leadership in market balance– Leadership in market transparency– Leadership in responsibility vs. society and


environment

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The Global Stainless Steel MarketRegional and qualitative movesChina’s role– Leadership in volumes– Leadership in market balance– Leadership in market transparency– Leadership in responsibility vs. society and


environment

Apparent Stainless Steel Use: Cold Rolled Flat Products

16,000

18,0001,000 mtpa ± mill t

6,000

8,000

10,000

12,000

14,000

+4.7

+1.7

14%

32% 37%

30%


0

2,000

4,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Others Americas W.-Europe China Other AsiaSource: CRU

+0.5-0.3

-0.330%

20%

17%

11%

3

6,0001,000 mtpa ± 1,000 t

Apparent Stainless Steel Use: Long Products, Hot Finished

2,000

3,000

4,000

5,000

+1,334

+361

11%

34%33%

29%


0

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Others Americas W-Europe China Other AsiaSource: SMR

-25

+83835%

18%24%11%

+64

Stainless Steel Shipments: Cold Rolled Flat Products

16000

18000

1,000 mtpa ± mill t

6000

8000

10000

12000

14000

16000

0 4

+5.5

+1.3

5%39% 37%

32%


0

2000

4000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Others Americas W-Europe China Other AsiaSource: CRU

-0.4

-0.436%

18%

20%

9% +0.2

4

6,0001,000 mtpa

+361

± 1,000 t

Stainless Steel Shipments: Long Products, Hot Finished

2,000

3,000

4,000

5,000

+1,334

+361

9%

42%37%

34%


0

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Others Americas W-Europe China Other AsiaSource: SMR

-25

+839%41%

9%

25%

5%

The Global Stainless Steel MarketRegional and qualitative movesChina’s role– Leadership in volumes– Leadership in market balance– Leadership in consolidation– Leadership in market transparency


– Leadership in responsibility vs. society and environment

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Global Stainless Steel Production:China’s Market Share

8,000

9,000

40

451,000 tons %

2 000

3,000

4,000

5,000

6,000

7,000

10

15

20

25

30

35


0

1,000

2,000

0

5

10

China 948 1,327 1,323 1,701 1,635 1,870 1,729 1,973 1,972 1,889 1,653 1,430 1,769 2,298 2,502 2,236 2,607 2,862 2,844 2,943 3,076 3,129

World 6,612 7,165 7,062 7,520 7,584 7,462 5,878 6,913 7,376 7,421 6,277 4,856 4,832 6,029 7,022 6,700 7,624 8,022 7,394 7,645 8,396 8,053

Share 14.3 18.5 18.7 22.6 21.6 25.8 29.4 28.5 26.7 25.4 26.3 29.4 36.6 38.1 35.6 33.4 34.2 35.7 38.5 38.5 36.6 38.9

Q1' 2006

Q2 Q3 Q4 Q1' 2007

Q2 Q3 Q4 Q1' 2008

Q2 Q3 Q4 Q1' 2009

Q2 Q3 Q4 Q1' 2010

Q2 Q3 Q4 Q1' 2011

Q2

3,000,000

3,500,000tonnes

Chinese Stainless Crude Steel ProductionSource: CSSC

1 000 000

1,500,000

2,000,000

2,500,000

CrNi

Cr


0

500,000

1,000,000

I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II

2004 2005 2006 2007 2008 2009 2010 ´11

CrMn

CrNi

6

Stainless Steel Export Champions 2010

626,499

611,897

France

Spain

1,196,477

1,113,086

1,081,351

961,031

812,551

Skorea

Italy

Japan

Germany

Finland


1,499,854

1,234,206

1,230,025

0 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000 1,750,000

(Belgium)

Taiwan

China

tons

Stainless Steel Export Champions First Half Year 2011

72 031

59,195

51,104

Fi l d

France

Spain

106 942

101,976

98,796

91,586

85,586

72,031

Taiwan

Skorea

Italy

Japan

Germany

Finland


167,610

144,537

106,942

0 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000

China

(Belgium)

Taiwan

Tons per month

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The Global Stainless Steel MarketRegional and qualitative movesChina’s role– Leadership in volumes– Leadership in volumes

– Leadership in market balance

– Leadership in consolidation

– Leadership in market transparency


p p y


Chinese Stainless Steel ApparentUse: Growth Rates 2001 - 2010

80

100± % vs. previous year

Growth of apparent stainless steel use: average 2001 – 2010: 24%

20

40

60

80


-20

0

20

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

8

Chinese Stainless Steel Apparent Use vs.Chinese Stainless Crude Steel Production:Growth Rates 2001 - 2010

80


Apparent stainless steel use: average 2001 – 2010: +24%Stainless crude steel production: average 2001 – 2010: +37%

20

40

60

80


-20

0

20

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Creating Over-CapacityUncontrolled growth – Private ownership– Public ownership

Countermeasures– Restrict permissions– Tighten credits– Closing of non-productive/outdated capacities


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Having Over-CapacityResults of over-capacity – Toughest competition– Lowest profitability

Countermeasures– Doing nothing: forget profitability!– Consolidation of supply– Closing of non-productive/outdated capacities


– Try to export

Chinese Foreign TradeStainless Steel (Total)

200,000

250,000Export Import Balance

tonnes

0

50,000

100,000

150,000

200,000


-150,000

-100,000

-50,000

2006 2007 2008 2009 2010 2011

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Chinese Exports of Selected GoodsWith Stainless Steel Contents

Item Unit 2000 2005 2006 2007 2008 2009 2010 2011 1HY

Welded tubes Tons 4,101 44,995 87,090 105,819 20,342 42,364 80,300 43,081, , , , , , , ,

Kitchen utensils Tons 195,344 297,742 335,710 324,199 303,445 284,678 356,839 162,789

Sink, wash basins Tons 3,813 21,650 31,958 43,415 54,681 49,319 74,849 40,584

Cutlery Tons 142,399 286,132 306,152 357,477 341,569 306,302 354,609 174,234

Scissor Tons 27,582 56,001 58,573 67,985 70,624 65,318 77,875 41,161

19Joint Seminar Lisbon, 28 September, 2011Source: China Customs House

Dish washers 1,000 units 32 767 1,076 1,611 1,860 1,800 2,524 1,260

Washing machines 1,000 units 425 4,050 5,453 8,195 9,230 8,444 11,869 6,074

Micro wave ovens 1,000 units 8,368 42,238 46,412 51,469 48,540 44,868 53,081 24,007

Mid Term Growth Aspects

Beijing Antaike some weeks ago released two figures:figures:

China’s stainless steel capacity in 2015: ~ 20 million tonsChina’s apparent stainless steel use 2015: ~ 15 million tonsSince then: several new announcements for more


stainless capacity – some plus 3 million tonsHow to fill the gap of now some 7 million tons crude steel equivalent surplus capacity?

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Chinese Stainless Steel Real Demand: Growth Rates 2005 - 2012


Growth of apparent stainless steel use: average 2005 – 20112: 9.7%

5

10

15


0

5

2005 2006 2007 2008 2009 2010 2011 2012

Source: ISSF Stock Cycle Review






p p y


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p p y


Chinese Stainless Crude Steel Production 1HY 2011:3 Sources = 3 Different Numbers

24Joint Seminar Lisbon, 28 September, 2011Source: Heinz H. Pariser

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p p y







p p y


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ConclusionChina without any doubt is today world champion in terms of stainless steel pmarket size, production and export –However there is still a long way to go for China to become the real world market LEADERLEADER in


real world market LEADERLEADER in stainless steel and tough times appear ahead

Contact::


Peter KaumannsRue Colonel Bourg 120B-1040 Brussels, BelgiumPhone +32 2 7028 910Fax +32 2 7028 912email [email protected]

Documents

Current and Future Trends in the Chinese Stainless Steel