Transcript No Slide Title

Hanoi, 16_19 May 2005
DANIELI
THE RELIABLE
INNOVATIVE
TEAM
IN THE METALS
INDUSTRY
Franco Alzetta, Member of the Board - Danieli & C. Spa
THE STEEL CYCLE
IN THE NEXT DECADE
ACCORDING TO DANIELI
Commodity prices 1804-2004
Co ld
Wa r
20%
War of
1812
WW I
16%
Price change
12%
Easy credit
speculative
boom
8%
Post
Cold war
Devolution
WW II
Korea
US industrial
Revolution
Civil War
South Asia
commodity
demand
Overheating
gold surplus
Easy credit
speculative
boom
4%
0
- 4%
- 8%
Source: Barry Bannister & Marc Faber Limited
2004
1994
1984
1974
1964
1954
1944
1934
1924
1914
1904
1894
1884
1874
1864
1854
1844
1834
1824
1804
1814
18241844
1854
1864
1874
1884
1894
1904
1914
19241944
1954
1964
1974
1984
1994
2004
1804
1809
1814
1819
1824
1829
1834
1839
1844
1849
1854
1859
1864
1869
1874
1879
1884
1889
1894
1899
1904
1909
1914
1919
1924
1929
1934
1939
1944
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
1834
1934
1814
1804
- 12%
All Commodities
Metals and metal products
Fuels & Energy
Agricultural products
Changing lifestyles
Big countries such as China, Russia, India and Brazil are
changing their life style and consequently they are consuming
and will consume more and more
Average steel & raw material prices in the next decade
WSD estimate
as of Feb 01
WSD estimate
as of May 05
% change
Steel slab
Hot rolled band
Cold rolled coil
Galvanized coil
Plate
Rebar
Wire Rod
219
286
398
503
339
244
257
382
462
555
623
509
342
361
74
61
39
24
50
40
40
Iron ore sinter feed, FOB
Iron ore pellets, FOB
27
40
36
66
33
65
Steel scrap #1HM, delivered
Steel scrap automotive, delivered
Pig iron, FOB
DRI (HBI), FOB
117
140
136
132
182
261
253
239
55
86
86
81
Product
Source: World Steel Dynamics estimates
World hot rolled band export price
World hot rolled band export price vs. U.K. Brent crude oil price
650
60
U.K. Brent crude oil price
(Right scale)
50
Hot-rolled band Export price
(Left scale)
450
40
350
30
250
20
150
10
50
0
57
60
65
70
75
80
85
90
95
00
05
USD per barrel
USD per metric tonne
550
World hot rolled band export price
700
1.4
600
1.3
US $ per Euro
(Right scale)
USD per metric tonne
Hot-rolled band Export price
500
1.2
400
1.1
300
1.0
200
0.9
100
0.8
99
Source: World Steel Dynamics
00
01
02
03
04
05
USD per metric tonne
World hot rolled band export price vs. USD per Euro
What else?
> The price of steel slabs is expected to remain high
or even increase in the world market. Slabs will be
in thight supply in the decade ahead
> Pig iron prices are also expected to be on the high
side
> This situation will make new winners and losers
emerge
> The EAF-based minimill seems to be a good
businnes to be in
Consumption forecasts
World steel consumption is pratically over
1.000 Mio ton, about 300 of which in China.
Year
Steel demand
Flat products
Long products
(*) Conservative estimate
2005
1,000
480
470
2015
1,350 (*)
700
650
China region metallics requirements
500
FORECAST
400
Million tonnes
Pig Iron
300
Home scrap
SSS
HMS
200
New scrap
Obsolete
scrap
100
0
1975
1980
Source: World Steel Dynamics
1985
1990
1995
2000
2005
2010
2015
Consumption will follow traditional growth curve
1400
1200
Fe: kg / capita
1000
800
600
400
200
0
0
5
10
15
20
25
GDP – US$ ‘000 / capita
Source: SBB – China Metals Trade & Industry
30
35
40
Chinese Net exports to peak in 2006
40
M. tonnes
30
20
10
0
-10
-20
2003
2004
Source: SBB – China Metals Trade & Industry
2005
2006
Net Semi Imports
2007
2008
Net Finished Imports
The largest economies - Now
12000
10000
8000
6000
4000
2000
0
USA
Japan
GDP USD Billion
Germany
UK
France
China
Italy
The largest economies - 2025
20000
16000
12000
8000
4000
0
USA
China
GDP USD Billion
Japan
India Germany UK
Russia France Brazil
Italy
The largest economies - 2050
50000
40000
30000
20000
10000
0
China
USA
GDP USD Billion
India
Japan
Brazil Russia
UK Germany France
Italy
Danieli in South East Asia
KOREA
JAPAN
TAIWAN
VIETNAM
PHILIPPINES
THAILAND
MALAYSIA
Australia
Indonesia
Japan
Korea
Malaysia
Myanmar
Philippines
Singapore
Taiwan
Thailand
Vietnam
SMK
CCM-L
4
2
1
4
1
1
3
3
2
2
4
3
4
5
1
20
4
1
CCM-F
1
2
3
RM-L
3
6
2
1
9
2
2
3
11
9
5
RM-F
SPL
23
2
53
16
3
4
17
3
5
OTHERS
10
47
36
3
2
2
19
5
Total installations = 386
(Since 1975)
INDONESIA
SINGAPORE
AUSTRALIA
Danieli in Vietnam
HOA PHAT
SONG DA
SSE
TISCO
VSC
SSC
Conclusions
Danieli aims to continue in supporting
our Asian Customers through:
• Innovative technologies (Innovaction)
• Improved timing Service (e-Service)
Customer interaction
Web-based services
Graphical navigation through the Customer’s fleet
Plant bill of material and recommended maintenance part lists
RfQs and orders issue
Order/Quote status and shipment
Inventory availability
Live O&M workshops and technical forum
Technical documentation up/downloading
B2B integration with Customer’s ERP system
Benefits for the Customer
Control on the supplier activities and response time
Availability of information
Time saving and complexity reduction in RfQs and purchase orders issue
Additional discount
Around the clock services
Thank you