India FAI (rhs)

Report
A Decade of “Pain” to follow a
Decade of “Gain?”
CANACERO
September 11, 2013
Four Mega-Trends Will
Determine the Outlook
 Slower demand growth, economic uncertainty, overcapacity and
increased competition are likely to result in a difficult environment
for the steel industry through 2015-2017 and perhaps beyond.
Chinese steel demand growth an increasingly important
“wildcard.”
 End of steel’s “Age of Metallics”
 “Flattened” cost curve exacerbating the competition for the last
tonne and delaying output cuts by steel mills. Currency
weakness in Developing World ex-China adding a new wrinkle.
 Is anyone prepared for the massive avalanche of Chinese steel
scrap in the decade ahead, along with the accompanying
ramifications on the global industry structure?
Unbalanced Global Steel
Demand & Output
Fixed Asset Investment =
Key Driver of Steel Demand
China versus United States in 2010: Economic Indices versus Apparent Steel Consumption
China
United States
% of ASC ASC/GDP
mt/bil.USD
bil.USD % of GDP
ASC
Ratio: China/USA
bil.USD
% of GDP
ASC
% of ASC ASC/GDP
mt/bil.USD
Gross Fixed Capital Formation
2,877
48.7%
563
93.4%
0.1957
1,756
12.0%
68
74.7%
Non Residential
GFCF
ASC
0.0387
1.64
8.28
8.10
2,049
34.6%
413
68.5%
0.2016
1,366
9.3%
51
56.0%
0.0373
1.50
Commercial and Health Care
23
0.4%
3
0.5%
0.1281
92.8
0.6%
4
4.4%
0.0431
0.25
0.75
Industrial Equipment
286
4.8%
90
14.9%
0.3151
160.7
1.1%
3
3.3%
0.0187
1.78
30.00
Information Processing
28
0.5%
3
0.5%
0.1053
600.1
4.1%
1
1.1%
0.0017
0.05
3.00
M anufacturing
888
15.0%
175
29.0%
0.1970
41.8
0.3%
16
17.6%
0.3828
21.25
10.94
M ining Exploration, Shafts and Wel
115
1.9%
23
3.8%
0.1999
105.8
0.7%
4
4.4%
0.0378
1.09
5.75
Power and Communication
153
2.6%
26
4.3%
0.1700
84.1
0.6%
7
7.7%
0.0832
1.82
3.71
Transportation
332
5.6%
71
11.8%
0.2142
113
0.8%
11
12.1%
0.0973
2.93
6.45
Other Equipment
223
3.8%
22
3.6%
0.0985
167.2
1.1%
5
5.5%
0.0299
1.34
4.40
Residential
829
14.0%
150
24.9%
0.1810
390
2.7%
17
18.7%
0.0436
2.12
8.82
Housing- all but social
652
11.0%
120
19.9%
0.1840
126.6
0.9%
12
13.2%
0.0948
5.15
10.00
Social housing
34
0.6%
5
0.8%
0.1471
Other structures
143
2.4%
25
4.1%
0.1754
263.8
1.8%
5
5.5%
0.0%
0.0190
0.54
5.00
Household consumption
2,158
36.5%
38
6.3%
0.0176
10,350
70.6%
24
26.4%
0.0023
0.21
1.58
Auto and parts
300
5.1%
20
3.3%
0.0667
343
2.3%
18
19.8%
0.0525
0.87
1.11
Appliance and furnishings
94
1.6%
12
2.0%
0.1277
260
1.8%
3
3.3%
0.0115
0.36
4.00
Others
1,764
29.8%
6
1.0%
0.0034
9,747
66.5%
3
3.3%
0.0%
0.0003
0.18
2.00
Government consumption
693
11.7%
1
0.2%
0.0014
3,005
20.5%
1
1.1%
0.0%
0.0003
0.23
1.00
Net export
186
3.1%
1
0.2%
0.0054
-452
-3.1%
-2
-2.2%
0.0044
-0.41
-0.50
5,914
1,341
115
4,410
450
86
100.0%
603
100.0%
0.1020
14,660 100.0%
311
6
47,138
293
19
91
100.0%
0.0062
0.40
4.31
19.17
0.09
1.54
4.45
6.63
Total GDP or ASC
Population Million persons
Total rebar consumption ( mil.t)
GDP per capita (US$ / person)
ASC per capita (kg / person)
Rebar Consu. per capita (kg / person)
*: Detailed Chinese GFCF figures are based on FAI figures reduced by 30% to made them comparable with reported GFCF as a share of GDP.
Source: WSD estimates, preliminary
Chinese Steel Intensity for
FAI and Household Consumption
0.1000
0.0075
0.0070
0.0900
0.0065
Steel intensity of GFCF on real
GDP base (left axis)
0.0800
0.0060
0.0055
0.0700
Intensity of consumption and net
export on real GDP base (right axis)
0.0050
0.0600
0.0045
0.0040
0.0500
0.0035
0.0400
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
5
2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e
0.0030
Don’t Underestimate the
Power of the “FAI Flywheel”
6
Global FAI vs. Apparent
Steel Consumption
12,000
11,625
1,450.00
11,250
1,400.00
10,875
1,350.00
10,500
1,300.00
10,125
1,250.00
9,750
1,200.00
9,375
1,150.00
9,000
1,100.00
8,625
1,050.00
8,250
1,000.00
Apparent Consumption of
Steel Products (Right)
7,875
Apparent Consumption of Stel Products (million metric tonnes)
Fixed Asset Investment (billion USD)
1,500.00
Fixed Asset
Investment (Left)
950.00
Source: IMF, OECD, WSD Estimates
2012e Q4
2012e Q3
2012e Q2
2012e Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
2010 Q1
2009 Q4
2009 Q3
2009 Q2
2009 Q1
2008 Q4
2008 Q3
2008 Q2
2008 Q1
2007 Q4
2007 Q3
2007 Q2
2007 Q1
2006 Q4
2006 Q3
2006 Q2
2006 Q1
2005 Q4
2005 Q3
2005 Q2
2005 Q1
2004 Q4
2004 Q3
2004 Q2
900.00
2004 Q1
7,500
7
2012e Q4
2012e Q3
2012e Q2
2012e Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
2010 Q1
6,000
2009 Q4
2009 Q3
2009 Q2
2009 Q1
2008 Q4
2008 Q3
2008 Q2
2008 Q1
2007 Q4
2007 Q3
8,250
2007 Q2
2007 Q1
2006 Q4
2006 Q3
2006 Q2
2006 Q1
2005 Q4
2005 Q3
2005 Q2
2005 Q1
2004 Q4
2004 Q3
2004 Q2
8,500
Fixed Asset
Investment (Left)
8,000
475.00
7,750
450.00
7,500
425.00
7,250
400.00
7,000
375.00
6,750
350.00
6,500
325.00
6,250
300.00
Apparent Consumption
of Steel Products (Right)
275.00
5,750
250.00
5,500
225.00
Apparent Consumption of Stel Products (million metric tonnes)
2004 Q1
Fixed Asset Investment (billion USD)
Advanced Countries FAI v. ASC
(Absolute Figures)
525.00
500.00
8
2012e Q4
2012e Q3
2012e Q2
2012e Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
2010 Q1
1,800
2009 Q4
2009 Q3
2009 Q2
2009 Q1
2008 Q4
2008 Q3
2008 Q2
2008 Q1
2007 Q4
2007 Q3
2007 Q2
2007 Q1
2006 Q4
2006 Q3
2006 Q2
2006 Q1
2005 Q4
2,800
2005 Q3
2005 Q2
2005 Q1
2004 Q4
2004 Q3
2004 Q2
2,900
Fixed Asset
Investment (Left)
2,700
350.00
2,600
340.00
2,500
330.00
2,400
320.00
2,300
310.00
2,200
300.00
2,100
290.00
2,000
280.00
1,900
270.00
Apparent Consumption of
Steel Products (Right)
260.00
1,700
250.00
1,600
240.00
9
Apparent Consumption of Stel Products (million metric tonnes)
2004 Q1
Fixed Asset Investment (billion USD)
Developing World
ex-China FAI vs. ASC
370.00
360.00
2012e Q4
2012e Q3
2012e Q2
2012e Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
2010 Q1
2009 Q4
2009 Q3
2009 Q2
2009 Q1
2008 Q4
2008 Q3
2008 Q2
2008 Q1
2007 Q4
$1,800
2007 Q3
2007 Q2
2007 Q1
$600
2006 Q4
$700
2006 Q3
2006 Q2
2006 Q1
2005 Q4
2005 Q3
2005 Q2
2005 Q1
2004 Q4
2004 Q3
2004 Q2
$2,000
700
$1,900
670
Steel Products Apparent
Consumption (Right)
$1,700
610
$1,600
580
$1,500
550
$1,400
520
$1,300
490
$1,200
460
$1,100
430
$1,000
400
$900
370
$800
340
Fixed Asset
Investment (Left)
310
280
$500
250
10
Apparent Consumption of Stel Products (million metric tonnes)
2004 Q1
Fixed Asset Investment (billion USD)
China FAI v. ASC
(Absolute Figures)
640
Chinese Construction Market
“House of Cards?”
Chinese Construction Market
“House of Cards?”
China FAI Long-Term Outlook
Increased consumption (and reduced FAI) as a share of GDP likely to mean
much slower steel demand growth (outright contraction??)
13
India v. China
Minimizing Potential
Indian GDP Components 2008-2012
Consumer
GDP
Price
Savings Investment
(% y/y) Inflation (%GDP) (%GDP)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
3.9%
4.6%
6.9%
7.7%
9.0%
9.4%
10.1%
6.2%
5.0%
11.2%
7.7%
4.0%
4.0%
3.8%
4.3%
3.8%
3.8%
4.2%
6.2%
6.4%
8.3%
10.9%
12.0%
8.9%
9.3%
Source: IMF, WSD Estimates
23.3%
22.9%
25.3%
27.6%
31.4%
32.9%
34.2%
37.0%
32.2%
34.9%
33.7%
31.9%
29.8%
24.2%
22.6%
23.9%
26.1%
31.2%
34.2%
35.3%
37.7%
34.6%
37.0%
36.9%
35.3%
34.9%
Investment
(% Change y/y)
Steel
Demand
(% y/y)
-3.1%
10.7%
16.6%
28.8%
19.4%
12.7%
17.7%
-2.4%
12.2%
11.0%
3.1%
2.8%
0.7%
4.1%
6.6%
4.2%
51.2%
6.8%
12.9%
0.4%
26.4%
4.1%
9.2%
0.3%
India v. China
Minimizing Potential
700
60.0%
600
50.0%
500
400
30.0%
300
20.0%
200
10.0%
100
0
0.0%
2001
2002
2003
China Steel Dmnd
2004
2005
2006
India Steel Demand
2007
2008
2009
China FAI (rhs)
2010
2011
India FAI (rhs)
% GDP
Million Tonnes
40.0%
India v. China
Minimizing Potential
60.0%
160
140
50.0%
120
40.0%
30.0%
80
60
20.0%
40
10.0%
20
0.0%
0
2001
2002
2003
2004
2005
India Steel Dmnd @ China Growth Rate
2006
2007
India Steel Demand
2008
2009
2010
China FAI (rhs)
2011
India FAI (rhs)
% GDP
Million Tonnes
100
Global Steel in the Decade Ahead:
Continued Slow Growth
17
Four Mega-Trends Will
Determine the Outlook
 Slower demand growth, economic uncertainty, overcapacity and
increased competition are likely to result in a difficult environment
for the steel industry through 2015-2017 and perhaps beyond.
Chinese steel demand growth an increasingly important
“wildcard.”
 End of steel’s “Age of Metallics”
 “Flattened” cost curve exacerbating the competition for the last
tonne and delaying output cuts by steel mills. Currency
weakness in Developing World ex-China adding a new wrinkle.
 Is anyone prepared for the massive avalanche of Chinese steel
scrap in the decade ahead, along with the accompanying
ramifications on the global industry structure?
Global Steel Production & Methodology:
China Driving the “Bus”
1200
166
1000
151
800
267
136
209
600
300
140
+31%
400
+19%
690
289
183
164
104
527
152
444
200
+43%
182
181
209
147
183
0
2003
2007
2009
2013f
39
44
49
2003
2007
2009
BOF
80
2013f
EAF
China
Advanced
Developing
China’s prodigious and rapid growth via the BF/Integrated route
changed the landscape of global steel production
19
Global Iron Ore Demand
∆ = 697 Million tonnes
2750
Δ= 307 Million Tonnes
2500
Δ= 703 Million Tonnes
2250
2000
519
445
1750
409
409
408
397
1500
407
416
365
442
398
1250
414
409
396
1000
309
357
439
750
500
432
874
925
2009
2010
1,010
1,047
2011
2012
1,125
1,177
1,211
2013
2015
2020
751
250
341
0
2003
2007
China
Advanced
Developing
Global iron ore demand has increased 703 million tonnes since 2003,
of which China has accounted for 669 million tonnes (95%).
20
Chinese Iron Ore Supply
1200
1000
361
323
Million Metric Tonnes
800
264
600
368
306
305
323
284
400
628
209
193
200
149
0
70
142
92
161
111
148
208
275
326
383
619
687
735
444
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Imports
Production
Domestic production has increased 7.7% CAGR since 2000, while imports have
grown 22% CAGR and account for 61% of the total requirement.
21
Iron Ore Price and Demand
1300
$230
Average Annual Price of Iron Ore
Delivered to Hebei Province
$210
1100
$190
1000
$170
900
$150
800
$130
Iron Ore Price Trendline
700
$110
600
$90
Chinese Iron Ore
Demand
500
$70
2015
2014
2013
2012
2011
2010
2009
2008
2007
$30
2006
300
2005
$50
2004
400
2003
USD per Tonne
Million Metric Tonnes
1200
While Chinese demand increased 198% (14.6% CAGR) since 2003,
the price of ore delivered to China has increased 293% (18.7% CAGR).
22
Capacity Expansion Pipeline
Running Away from Demand
2013 Upcoming Iron Ore Projects
(million tonnes)
Region
Project Status
Gross Capacity
CIS
Closed, reopen/plans
Feasibility
North America
Construction
Feasibility
Operating, exp/constr
Operating, exp/plans
Oceania
Conceptual
Construction
Feasibility
Operating, exp/constr
Operating, exp/feasib
South America
Conceptual
Construction
Feasibility
Operating, exp/constr
Operating, exp/plans
Prefeasibility
Operating
3.5
3.5
7.5
5.0
2.5
32.0
7.0
3.0
8.0
14.0
137.8
15.0
63.0
15.0
1.8
43.0
147.5
10.0
19.5
19.5
42.0
4.1
50.0
2.4
Under Construction/Operating
Conceptual/Prefeasibility/Feasibility
Operating Expansion-Planning Stage
Closed-Reopen Plans
Grand Total
147.2
158.0
18.1
5.0
328.3
Construction
Europe
Source: UNCTAD & WSD estimates
2014 Upcoming Iron Ore Projects
(million tonnes)
Region
Project Status
Europe
Gross Capacity
Conceptual
Feasibility
Operating, exp/constr
Operating, exp/plans
South America
Operating, exp/plans
Feasibility
Operating, exp/constr
9.5
2
7.5
112.8
15
80.8
14
3
61.3
10
24
27.3
Under Construction/Operating
Conceptual/Prefeasibility/Feasibility
Operating Expansion-Planning Stage
Closed-Reopen Plans
Grand Total
41.3
119.8
13.0
9.5
183.6
Closed, reopen/plans
Closed, reopen/plans
Oceania
Source: UNCTAD & WSD estimates
23
Chinese Domestic Iron ore
Production Cost
Chinese Iron Ore Cost Curve
(Normalized to 62% Fe)
$180
$160
$140
Dollars per tonne
$120
$100
$80
$60
$40
$20
Source: WSD World Iron Ore Cost Curve
500
450
400
350
300
250
200
150
100
50
0
$0
Cumulative Capacity (Million Tonnes)
Chinese “high-cost” production may amount to only ~75 million tonnes –
figure that is easily displaced by lower-cost imported material
a 24
Global Iron ore
Production Cost
World Iron Ore Cost Curve
(normalized 62% Fe)
$180
The cost curve database includes for nonChina, 45 operating and 10 planned mines
with a total capacity of 864 million tonnes,
FOB the port of export; and for China, 45
individual mines, 10 steel-mill-weighted
average cost mines and 21 provincial
composite cost mines,FOB mine. The
combined capacity of all the Chinese
mines is 438 million tonnes.
$160
$140
Dollars per tonne
$120
$100
$80
$60
$40
$20
Source: WSD World Iron Ore Cost Curve
1,400
1,200
1,000
800
600
400
200
0
$0
Cumulative Capacity (Million Tonnes)
Chinese “high-cost” production may amount to only ~75 million tonnes –
figure that is easily displaced by lower-cost imported material
a
25
Four Mega-Trends Will
Determine the Outlook
 Slower demand growth, economic uncertainty, overcapacity and
increased competition are likely to result in a difficult environment
for the steel industry through 2015-2017 and perhaps beyond.
Chinese steel demand growth an increasingly important
“wildcard.”
 End of steel’s “Age of Metallics”
 “Flattened” cost curve exacerbating the competition for the last
tonne and delaying output cuts by steel mills. Currency
weakness in Developing World ex-China adding a new wrinkle.
 Is anyone prepared for the massive avalanche of Chinese steel
scrap in the decade ahead, along with the accompanying
ramifications on the global industry structure?
Wide Disparities between the
“Haves” & “Have Nots”
Pig Iron / Hot Metal Average Production Cost by Region
700
600
500
Energy Credit
Energy
Other
300
Labor
200
Scrap
Iron Ore
100
Coal/Coke
0
Global Average
USA Integrated
Latin America
South Korea
Japan
India
Western Europe
Eastern Europe
CIS
China
Brazil
-100
Australia
$ per tonne
400
Despite rising I.O. and coal costs, Indian producers are well-positioned to
remain among the lowest cost well into the future
27
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Percent
Stronger US Dollar to Have
Numerous Ramifications
USA Trade-Weighted Dollar Value
130
6
years
120
10
years
6
years
Source: Bloomberg
7
years
110
9
years
WSD
estimate
100
90
80
28
WSD’s World Cost Curve for
Hot-rolled Band (Including overhead)
$850
$800
August 2011
$750
$700
August 2012
USD per Metric Tonne
$650
$600
August 2012
$550
$500
$450
$400
$350
$300
0
50
100
150
200
250
300
350
400
450
500
550
600
650
Cumulative Capacity (million metric tonnes)
Flattening of the cost curve promotes increased competition and delays production cutbacks
29
when the price plummets below the marginal cost of the high-cost producer
World ex-China
Hot-rolled Band (Including overhead)
$900
$850
$800
August 2011
$750
USD per Metric Tonne
$700
$650
August 2012
$600
August 2013
$550
$500
$450
$400
$350
$300
0
50
100
150
200
250
300
350
400
450
500
Cumulative Capacity (million metric tonnes)
WSD’s World Cost Curve has flattened substantially
since the peak cost period in July 2011.
30
China
Hot-rolled Band (Including overhead)
$750
August 2011
$700
USD per Metric Tonne
$650
$600
August 2012
$550
August 2013
$500
$450
$400
0
20
40
60
80
100
120
140
160
Cumulative Capacity (million metric tonnes)
Despite a decline in costs from recent peaks,
Chinese producers remain in a difficult position
31
Four Mega-Trends Will
Determine the Outlook
 Slower demand growth, economic uncertainty, overcapacity and
increased competition are likely to result in a difficult environment
for the steel industry through 2015-2017 and perhaps beyond.
Chinese steel demand growth an increasingly important
“wildcard.”
 End of steel’s “Age of Metallics”
 “Flattened” cost curve exacerbating the competition for the last
tonne and delaying output cuts by steel mills. Currency
weakness in Developing World ex-China adding a new wrinkle.
 Is anyone prepared for the massive avalanche of Chinese steel
scrap in the decade ahead, along with the accompanying
ramifications on the global industry structure?
Chinese Scrap Overload
33
Steelmakers’ Metallics
34
Global Steel Scrap Demand
800
1.20
700
1.00
Obsolete Scrap
Usage Ratio (RHS)
600
0.80
500
Obsolete Scrap Requirement (LHS)
400
0.60
300
New Scrap Usage (LHS)
0.40
200
0.20
100
Home Scrap Usage (LHS)
0
0.00
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Obsolete steel scrap demand was 358 million tonnes in 2011 and the recovery rate was the highest on record. In 2012, the
obsolete scrap requirement was flat at 358 million tonnes implying a 0.94 recovery rate from the obsolete scrap reservoir
35 that
is on average 10-40 years old.
Global Steel Scrap Supply
Global Scrap Reservoir 1940-2010
12000
China
10000
million metric tonnes
8000
Developing World ex-China
6000
4000
Advanced Economies
2000
0
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Advanced and Industrialized Developing Economies have been the dominant source of steel
36
scrap supply [growth] in the past 30+ years
Global Steel Scrap:
Price versus Recovery Ratio
500
450
2012
2011
2008
400
Shredded Scrap USD per Gross Ton
350
2010
300
2007
2004
250
2005
2006
2009
200
150
2003
2000
100
2002
2001
50
0.950
0.925
0.900
0.875
0.850
0.825
0.800
0.775
0.750
0.725
0.700
0
Ratio: Trade Adjusted Obsolete Scrap Usage to Average Reservoir 10 -40 years old
WSD analysis indicates that the obsolete scrap recovery rate and the price of shredded scrap price
37
are highly correlated with a 0.90 coefficient of correlation.
2013 Metallics Requirements
Global Metallics Balance Summary: 2013
(million metric tonnes)
Total
Metallics Pig Iron DRI/HBI
Req'
Total
Scrap
Req'
Obsolete
Scrap
Iron
Ore
Req'
Advanced Countries
Japan
Western Europe
United States
Small Cap. Adv.
551
130
164
112
145
266
83
74
35
73
5.6
0.1
2.0
2.2
1.3
280
47
87
75
70
213
174
26
54
52
42
48
398
137
105
45
109
China
953
706
1.7
245
68
1,125
Developing World Ex-China
Africa
Brazil
CIS
Eastern Europe
Developing Asia
India
Latin America
Turkey
MENA
447
8
42
134
16
27
101
37
40
40
174
4
21
73
6
2
45
9
11
3
67.1
1.2
0.2
3.2
0.0
3.1
23.9
10.1
0.3
25.0
206
3
21
58
10
22
32
18
29
12
107
1
13
33
6
11
8
9
22
3
409
10
33
144
9
7
110
33
16
46
1,951
1,146
74.4
730
349
1,931
World Total
38
2025 Metallics Requirements
Total
Metallics Pig Iron DRI/HBI
Req'
Advanced Countries
Japan
Western Europe
United States
Small Cap. Adv.
China
Developing World Ex-China
Africa
Brazil
CIS
Eastern Europe
Developing Asia
India
Latin America
Turkey
MENA
World Total
Total
Scrap
Req'
Obsolete
Scrap
Iron
Ore
Req'
665
146
197
143
179
310
100
85
35
90
17.2
0.2
3.2
11.3
2.7
338
46
108
96
87
213
202
22
65
66
50
48
470
162
119
56
134
1,045
760
21.6
263
67
1,240
606
12
54
154
21
49
145
55
42
75
249
5
35
90
6
18
63
12
12
9
108.3
2.0
0.3
0.9
0.0
4.7
36.5
16.5
0.5
46.8
249
5
18
63
15
26
46
27
30
19
123
3
8
38
10
12
12
15
21
4
608
12
53
177
10
38
160
48
17
93
2,316
1,319
147.1
850
392
2,319
39
Chinese Obsolete Scrap:
Supply-Demand Balance
250
200
Million Metric Tonnes
Obsolete Scrap
Reservoir 10-40 Years
Old
150
2025: +150million
2020: +67million
100
2015: +12 million
50
Obsolete Scrap
Demand
Shift: Scrap Deficit to Scrap Surplus
0
2012 Demand and Reservoir: 63 million tonnes and 57 million tonnes
2025 Demand and Reservoir: 67 million tonnes and 220 million tonnes
40
Chinese Obsolete Scrap:
Increase BOF Scrap Ratio from 14.5% to 20%
250
200
Million Metric Tonnes
Obsolete Scrap
Reservoir 10-40 Years
Old
2025:
+119
million
150
2020: +51 million
100
Obsolete Scrap
Demand
50
Shift: Scrap Deficit to Scrap Surplus
0
2012 Demand and Reservoir: 63 million tonnes and 57 million tonnes
2025 Demand and Reservoir: 101million tonnes and 220 million tonnes
41
Chinese Obsolete Scrap:
Increase both EAF share of crude steel production
to 20% of all Chinese production
250
200
Million Metric Tonnes
Obsolete Scrap
Reservoir 10-40 Years
Old
2025:
+117
million
150
2020: +47 million
100
Obsolete Scrap
Demand
50
Shift: Scrap Deficit to Scrap Surplus
0
2012 Demand and Reservoir: 63 million tonnes and 57 million tonnes
2025 Demand and Reservoir: 103 million tonnes and 220 million tonnes
42
Chinese Obsolete Scrap:
Increase both EAF and BOF related consumption
250
200
Million Metric Tonnes
Obsolete Scrap
Reservoir 10-40 Years
Old
2025:+89
million
150
2020: +32
million
100
Obsolete Scrap
Demand
50
Shift: Scrap Deficit to Scrap Surplus
0
2012 Demand and Reservoir: 63 million tonnes and 57 million tonnes
2025 Demand and Reservoir: 131 million tonnes and 220 million tonnes
43
Chinese Obsolete Scrap:
Are you ready for arrival?
30000
25000
20000
China
15000
10000
Developing World ex-China
5000
Advanced Countries
0
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2013 Demand and Annual Reservoir: 68 million tonnes and 57 million tonnes
2035 Chinese Annual Reservoir: 400 million tonnes
44
Thank You
45

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