european steel plate market outlook. meeting consumers needsx

download report

Transcript european steel plate market outlook. meeting consumers needsx

European steel plate market outlook.
Meeting consumers needs.
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-1-
AGENDA
 NLMK EUROPE PLATE OVERVIEW
 EU PLATE MARKET OUTLOOK
- NEGATIVE FACTORS
- POSITIVE FACTORS
 EU PLATE MARKET TRENDS
- SSC/END USERS
- SEGMENTS
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-2-
NLMK Organisation
Annual production capacity
ca 15 mt / year
of steel
RAW MATERIAL PRODUCTION
100% self-sufficiency in raw materials
65% self-sufficiency in energy supply
IRON ORE, SINTER ORE, LIMESTONE
LONG PRODUCTS
FLAT PRODUCTS
ELECTRO-TECHNICAL
STEEL
No 1 Worldwide supplier of
commercial slab
SLABS
NLMK EUROPE PLATE
NLMK EUROPE STRIP
NLMK USA
-3-
NLMK Europe Plate
CLABECQ
Excellent surface quality
and flatness & narrow
thickness tolerances
Specialized in thin
&wide
New Q&T line
VERONA
Own steelmaking
Unique combination
forging/rolling
Niche product - Ingots
DANSTEEL
Optimum logistics
facilities
Short JIT delivery time
- Fast truck option
- Add-on Service
Almost unlimited
normalization capacity
New 4200 mm rolling
line
-4-
EUROPEAN STEEL MARKET OVERVIEW
NEGATIVE FACTORS
Constant fall down of Steel prices coupled with excess steelmaking capacity creating unfavourable
market condition in European region.
Since 06/14 until now the price has dropped ca. 50% due to the number of factors.
Factors effected on price
evaluation:
• Oil&gas price dropped down
(from 120 usd/barrel to 30
usd/barrel);
• Chinese, other non-EU
countries export increase
into EU;
• General weak activities in
different segments (offshore
oil&gas, storage tanks, line
pipe, yellow goods);
• Global political instability.
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-5-
EUROPEAN STEEL MARKET OVERVIEW
NEGATIVE FACTORS
EXCESSIVE 3RD COUNTRIES IMPORTS DUMPING THREATS
Source: Eurofer,
« Wirtschaftsvereinigung Stahl »
•
Last and current year we can observed closure of milestones in EU
steel industry as TATA and Reiner Brach (work until end March)
due to unability to compete in circumstances we faced in steel
business. From our point of view it is expected new closures in the
coming years unless we take immediate actions.
•
Eurofer has asked EU Commission to open antidumping process
against China long time ago but process itself takes long term to
be implemented (no 100% guarantee).
•
For instance same case in the USA and Canada was implemented
successfully in very short time not only against one country.
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-6-
EUROPEAN STEEL MARKET OVERVIEW
POSITIVE FACTORS
 Inevitable recovery after long stagnation
 Yet moderate but growing GDP in EU
Winter 2016 forecast GDP growth
2015
2016
2017
EURO area
1.6
1.7
1.9
EU
1.9
1.9
2.0
 Active/promising segments – Wind foundation,
shipbuilding, pressure vessel, construction (bridge
building, house building, automotive, etc)
 European steel consumers for some
specific projects choose EU origin vs.
import material
Source: EWEA,
http://ec.europa.eu/economy_finance/publications/.
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-7-
EUROPEAN STEEL MARKET OVERVIEW
SWEDEN/FINLAND – ROBUST
ECONOMIC GROWTH;
BELGUM/LUX AND ITALYMODERATE ECONOMY GROWTH;
SPAIN – POSITIVE RAPID GROWTH
AFTER STAGNATION;
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-8-
EUROPEAN STEEL MARKET OVERVIEW
Stockholders
End-User
IN WESTERN EUROPE WE CAN OBSERVE INTENTION IN FOCUSING DISTRIBUTION (SALES
TO END-USERS INSTEAD OF STOCKHOLDERS) VIA END-USERS INSTEAD OF STOCKISTS
BENEFITS:
• NOT SO LOW PRICES;
• TAILOR MADE DIMENSIONS;
• LOWER COMPETITIONS
CHALLENGES, WORKING WITH END-USERS:
• RISKS COUPLED WITH LACK OF CASH FLOW;
• LONGER PAYMENT TERMS;
• STORAGE/HANDLING;
• DELIVERY ISSUES
Evgeniy Sarkits, Sales Director
NLMK DanSteel
-9-
EUROPEAN STEEL MARKET OVERVIEW
Segment
Influencing factors
Wind foundation
EU politics on Green energy, Wind energy has overtaken hydro as the
third largest source of power generation in the EU with a 15.6% share of
total power capacity.
€26.4 billion was invested in Europe in 2015 to finance wind energy
development. This was 40% more than the total investment in 2014*.
2012-2015- investments increased steadily. According to EU climate and
Energy package (Dec,2008) in 2020 a share of at least 30% of final energy
consumption consist of renewable energy.
Shipbuilding
EU shipyards are set to build more than 24 new cruise vessels, worth a
total of more than €12bn, between 2012 and 2016.*
Increase in demand for passenger ships and other non-cargo carrying
vessels in 2015**All main shipyards in Europe are fully booked until
2019-2020 (including).
Pressure vessels
Despite on very pessimistic forecast in oil/gas price evaluation, we can
state that all main players/countries have no plans to reduce oil/gas
production plan in the near future which leads to stabile demand in this
segment. There is increasing demand for bulk storage of CNG and LPG for
cars or LNG for remote gas distribution and bunker fuel for ship;
Replacement needs in conventional power generation.
Construction
Spending on renewance of EU infrastructure, expectation on further
investments, namely in Scandinavia +5% increase in Investments in 2016
in Sweden, +2% in NO and DK***, Finland (building boom expectation),
UK, Germany, Netherland.
Evgeniy Sarkits, Sales Director
NLMK DanSteel
Potential
* EWEA
**Ships and maritime Equipment
Association, Ship-technology.com
***Statistics Sweden, Statistics Denmark
and Statistics Norway
- 10 -
EUROPEAN STEEL MARKET OVERVIEW
Segment
Influencing factors
Yellow Goods
Rising competition from countries with low-cost production. Strong decline
in minning commodity prices and mining output. As a result strong
cuttings in investments for mining equipment in EU, major minning
production moving to Asia
(Mining mashines)
Off shore oil/gas
Oil Prices in free fall, now below 35$ per barrel coming from 67$ per
barrel in May 2015 and 120$ in June 2014. As a result calm on a market.
Big projects are postponed/canceled.
Line Pipes
‘Awful’ Demand & high stocks. Oil companies postponing investments
Potential
Shifting demand to polyethylene pipes
Evgeniy Sarkits, Sales Director
NLMK DanSteel
- 11 -
EUROPEAN STEEL MARKET OVERVIEW
WE CAN ADMIT THAT IN THE FEW PAST YEARS CUSTOMERS NEEDS IN WESTERN EUROPE COUNTRIES HAVE BEEN SIGNIFICANTLY
REVISED. PREVIOUSLY, CLIENTS MAINLY WERE FOCUSING ON STANDARD GRADES (S235, S355, GRADES A-A36, P235, P265)
WITHOUT ANY SPECIAL REQUIREMENTS.
BUT NOW HIGHER GRADES (MIN S355 WITH SPECIAL REQUIREMENTS/APPROVALS, S420, S460, S500, GRADES EH36,DH40, FH40
AND SO ON) ARE IN DEMAND.
HOWEVER, EASTERN EUROPE COUNTRIES STILL ARE UNPRETENTIOUS IN THEIR NEEDS BUT FOCUSED IN LOW PRICES.
Segment
Clients needs
Wind foundation
Work on specific needs, shapes, sizes, Add on services
Shipbuilding
High delivery performance, new grades
EU long term strategy on key leadership role for Shipbuilding industry. As a result stress on
R&D and innovations, creating one of a type products, shipyards are asked to create tailor
made ships or complex high-tech vessels*
Pressure vessels
New high quality grades, appropriate pre sale technical support
Construction
Great delivery performance and fast track option, quality of products and wide product
range, competitive pricing
Need for eco-innovations and environmental friendly tools for infrastructure
development.
New approaches to critical infrastructure*
Evgeniy Sarkits, Sales Director
* Sources: https://buildingradar.com/construction-blog/european-construction-market-forecast/
NLMK DanSteel
- 12 -
EUROPEAN STEEL MARKET OVERVIEW
QUESTIONS?
Evgeniy Sarkits, Sales Director
NLMK DanSteel
- 13 -
THANK YOU FOR ATTENTION!
Evgeniy Sarkits, Sales Director
NLMK DanSteel
- 14 -