Transcript flat products in the middle east region

Flat Steel Products in MENA
3rd Iran Steel Export Perspectives Conference
On September-6, 2016
By
Abu Husain
Disclaimer
Al Ghurair Iron & Steel L.L.C. (AGIS) has prepared this document to provide general
information on The Middle East Economy with relevance to the Steel Industry.
AGIS has based the information in this document on primary and secondary researches
and analyses. The information obtained from third party sources are all referenced in
the relevant slides.
AGIS or the presenter do not express or imply any warranty pertaining to the accuracy or
completeness of the information contained in this document or of any estimates,
forecasts, numbers and assumptions in the presentation. All conclusions are subject to
limitations such as time constraints, accuracy and easy availability of third party
information.
No party shall be entitled to rely upon this document or any part thereof and any use of
this presentation requires written permission of AGIS. Under no circumstances shall any
party be entitled to assert any right, claim or other entitlement against AGIS or the
presenter as a result, or on the basis of this document.
Neither AGIS nor the presenter accept any liability of any nature to anyone, to whom the
contents of this document or any part thereof is shared with. This document should be
construed in light of the accompanying narrations presented at the pertaining
conference.
Agenda
Global Steel Production
Steel Consumption & Outlook
GCC Projects
ME Flat Steel
Al Ghurair Iron & Steel (AGIS)
Global Steel Production
1,600
Production (mts 000)
1,400
Growth %
20.0%
15.0%
1,200
1,000
800
600
10.0%
5.0%
Source : www.worldsteel.org, AGIS analysis
Has peaked in 2014
2006-16 CAGR 2.7%
0.0%
400
200
Recovery since GEC
-5.0%
-10.0%
Global Production by Region
Mts (Millions)
06
16
D
11% 10% -1%
1,800
EU
1,600
Other Europe 2%
2%
1,400
CIS
10%
6% -3%
1,200
N.America
11%
7% -4%
1,000
S. America
4%
2% -1%
Africa
1%
1% -1%
M. East
1%
2%
800
600
0%
1%
400
Asia
200
-
Oceania
13 14 15 16
12
11
10
09
06 07 08
Source : www.worldsteel.org, AGIS analysis
53% 69% 15%
1%
0%
0%
Mts (millions)
Apparent Steel Use (Crude Steel)
3,500
EU
0.2%
3,000
Other Europe
4.9%
2,500
CIS
-1.0%
N.America
0.4%
S.America
4.0%
1,500
Africa
3.8%
1,000
Middle East
6.5%
Asia
5.7%
Oceania
0.7%
2,000
500
-
Source : Steel Statistical Year Book, World Steel Association, AGIS Analyses
Global Steel Overcapacity
2.3Bn Mts by 2017
Source : OECD
Implications of overcapacity

Pressure on pricing

Falling NP

Bankruptcies

Increase in Consolidations
Short Range Outlook
for global ASU
2015 (Act)
2016 (Ant)
2017 (f/c)
2016 Growth
2017 Growth
8.0
1,000
Asia makes up for 2/3rd
ASU
2016 Winners
 Africa (3.8%)
 NAFTA (3.2%)
 Other Europe (3.0%)
4.0
800
2.0
600
0.0
%
Mts (Millions)
6.0
-2.0
400
-4.0
-6.0
200
-8.0
0
-10.0
CIS
Source : WSA
C&S.
America
Asia
EU 28
and
Oceania
Middle NAFTA Africa Other
East
Europe
2017 Expectation
 Africa (6.4%)
 ME (3.9%)
China
 -4.0% in 2016
 -3.0% in 2017
MENA Budget Balance
$ Bn
Deficit
As
GDP%
Oil prices down 60% from 2014 Peak
Regional Hydrocarbon earnings down $320Bn Y-o-Y
Regional Deficit reached $150bn in 2015 (8% of GDP)
Could go over $400Bn from 2015-17
Source : HSBC Estimates
Gulf Projects Index
 Oman - $3Bn Power
Project
 $396m Projects in
the UAE
 $4.4bn on-hold in
KSA
Source : MEED Projects
Gulf Projects Change % YoY
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
-15.00%
Iran
Source : MEED Projects
Oman Kuwait Bahrain
UAE
GCC
Saudi
Arabia
Qatar
Iraq
ME Contracts Award ($ mil)
Source : MEED Projects
Drop from >$25Bn last year and $12bn in Jun to $8.3bn in Jul
No. of contracts decreasing from 51 to 45
UAE at top with 27 contracts worth $2Bn
KSA has the largest contract for $1.3Bn in Power Sector
Chinese Factor
GDP Growth Rate %
Positive
Retail Trade –
Steady Growth
People’s Bank of
China intervention
Source : MENA Steel Market Forecast, Metal Expert
Chinese Factor
GDP Growth Rate %
Positive
Negative
Retail Trade –
Steady Growth
Industrial Profits
on decline
People’s Bank of
China intervention
 Stock Market
Down
Real Estate Down
Source : MENA Steel Market Forecast, Metal Expert
Al Ghurair Iron & Steel (AGIS)
2008
2009
2010
2011
2016
Commenced
Operations
Attained
Full Capacity
ISO
Certification
JV with
Nippon Steel
Doubling
Capacity
AGIS Production Lines
350k HRC
350k TPA
Pickling
50k CRFH
Skin
Pass
4th Acid
Tank
250k HRP
100k HRPO
350k TPA
CR Mill
200k CRFH
50k CRFH
Sale to Market
200k TPA
CGL-1
200k HDG
200k TPA
CGL-2
200k HDG
Abu Bucker Husain
Al Ghurair Iron & Steel LLC
+9712 659-3400
+9712 550-0939
[email protected]