Stainless Steels: which challenges lie ahead?

Transcription

1 Stainless Steels: which challenges lie ahead? Stainless Steel World Conference Maastricht 29 November 2011 Pascal PAYET-GASPARD Secretary General ISSF 1

2 Agenda Which growth, which markets? The industry and its environment The energy challenge Sustainable case studies Conclusions 2

3 Agenda Which growth, which markets? The industry and its environment The energy challenge Sustainable case studies Conclusions 3

4 A faster growth since 1980 than most metallic materials 600 Long term evolution of the world consumption of stainless steel and substitutes CAGR ,0 % Historically, stainless steel growth was much stronger than carbon steel growth, a fact that led to the perception that stainless steel was «different» and immune to the woes of «ordinary» steel Galvanized Steel 4,6 % 300 4,0 % Stainless Steel 200 Aluminium 2,3 % 100 Carbon Steel Source: ISSF, Laplace Conseil 4

5 However, since 2006, stainless steel has under-performed Recent evolution of the world consumption of stainless steel and substitutes 200 Recession started two years earlier for stainless steel and was much deeper; 2010 recovery is much stronger Galvanized steel Aluminium Carbon Steel CAGR ,6 % 5,6 % 5,3 % 5,0 % Stainless Steel Source: ISSF, Laplace Conseil 5

6 Prices : the explanation? Price Index 100 for year Nickel(LM E C ash) Alum inium (LM E C ash) C opper(lm E C ash) Zinc(LM E C ash) Steel/CRC/N.Europe domestic E x-w orks Steel/HDG/N.Europe domestic E x-w orks St St/C R 304/N.Europe dom estic delivered(2b,2m m ) St St/CR 430/CRU Monthly (2B,2m m ) M a n u fa ctu re o f p lastics in primary forms M anufacture of rubber products M a n u fa ctu re o f g lass and glass products M anufacture of ready-m ixed concrete 0 Source: ISSF

7 China accounts for all the growth since World Stainless Steel production (Million tonnes of crude steel) CAGR Total +5% % Other Countries China +34 % 15 Other Asia +2 % 10 North America 0 % 5 Europe 0 % Source: ISSF, Laplace Conseil 7

8 Since 2000 most of the stainless growth is attributable to S200 & S Stainless steel production by grade (Million tonnes of crude steel) CAGR ,0 % 30 28,4 % 25 S S400 6,2 % S300 2,5 % 5 S300 has declined in all region of the world outside China Source: ISSF, Laplace Conseil 8

9 Stainless Crude Steel Production 2008, 2009 and 2010p by Categories % EuroAfrica Americas Asia Cr CrMn CrNi others/non classified World Provided by ISSF 9

10 Stainless Crude Steel Production 2010 p by grades Mo containing grades: 2.4 mio t 8.4% CrMn steels: 13.6 % CrNi steels: 55.2 % Duplex: 0.8 % Provided by ISSF Cr steels : 29.9 % Not adding up to 100%: Other grades, non classified 10

11 Agenda Which growth, which markets? The industry and its environment The energy challenge Sustainable case studies Conclusions 11

12 Raw materials prices and volatility have increased In addition, very significant increase in volatility after 2004 Nickel X C Steel Scrap X 2,5 200 Chromium Source: ISSF, Laplace Conseil 12

13 and conversion margins have been squeezed Evolution of transformation margin of stainless steel (Price less raw materials) /t /t /t

14 What have been the producers reactions? Cut costs, improve productivity by using latest technologies (all) Close inefficient mills (Europe-Americas) Look for cheaper raw materials : Nickel Pig Iron (China) Backward integration (Asia) Integrate into distribution to better control downward supply chain (Europe, Asia, Americas) Move to higher value added products or margins: 400 series, duplex, 316 etc 14

15 What have been the producers reactions? But The stainless steel market is a commodity market for more than 85 % of its volume Raw materials costs are representing the largest share of final prices Overcapacity is present in all regions Technology improvements are easily accessible to all No significant consolidation of the industry in the last decade Overall good news for the customers but not for the shareholders 15

16 Prelimary conclusions Emerging countries represent an enormous market potential, more in India than elsewhere In China growth rates will slow down In developed economies, new markets related to sustainability will emerge. Competition between materials will be fierce on prices, quality and service CrNi alloys will remain the workhorse of the industry The industry faces low returns and over capacities that have to be solved on a regional basis 16

17 Agenda Which growth, which markets? The industry and its environment The energy challenge Sustainable case studies Conclusions 17

18 Sustainability and Energy Sustainability and Energy will be the new challenges for the coming decades Sustainability with the objectives of improving life conditions (People) reducing impact on the environment (Planet) reducing the Life Cycle Costs (Profit) Energy with the objectives of reducing Green House Gases but still allowing for growth in emerging countries 18

19 Energy: 2008 primary energy sources Source: Special Report on Renewable Energy Sources and Climate Change Mitigation / ipcc 19

20 Energy: CO2 Emissions scenarios Current policies scenario: includes measures that have been already taken New policies scenario: includes further commitments by governments Source: world energy outlook 2010 from the IEA 20

21 Energy: 2030 energy demand Forecasts (before Fukushima) 12.1 Bt CO Bt CO2 35 Bt CO Bt CO2 48 Bt CO %/y Total ,0 1391,7 709,1 1426,0 3769,5 2614, %/y Total 3285,7 809,5 4428, %/y Total %/y Total ,0 4142,9 956,0 857,1 4889,0 5000,0 Renewable Nuclear Coal Gas ,3 2941,0 3404,8 3561,0 3190,5 Oil 4076,0 4250,0 4571,4 5009,0 4261,9 0 IEA 2007 IEA 450 SHELL Blueprint IEA Reference SHELL Scramble 21 Soure: IEA WEO 2009 Executive summary, Shell Energy scenario 2050, BP Statistical review 21

22 Energy: green energy costs Source: Special Report on Renewable Energy Sources and Climate Change Mitigation / ipcc 22

23 Energy: potential for stainless steels Stainless steels have a large potential in energies sources like Biomass Biofuels Geothermal Ocean Carbon Capture Storage To a lesser extent in Solar Wind The increased share of Renewable Energies (RE) in the total energy mix represents a large potential market for stainless steels Due to its costs, the share of RE depends on the governement policies and resource allocations 23

24 Agenda Which growth, which markets? The industry and its environment The energy challenge Sustainable case studies Conclusions 24

25 Sustainability: Life Cycle Costing In taking the long term view stainless steels are always the winners Source : Outokumpu ISSF Chrysler Building 25

26 Sustainability: Life Cycle Costing Total length: 350 m; Width of the deck: 26,8 m 26

27 Sustainability: Safety in Tunnels High corrosion resistance, ability to function at high temperatures,durability, low or no maintenance requirements are key issues for which Stainless Steels have the essential properties FIRES IN ROAD TUNNELS FIRES IN TRAIN TUNNELS Mont Blanc (F/I) dead 450 mill Tauern (A) dead 50 mill St. Gotthard (CH) dead??? mill King s Cross (GB) dead??? mill Baku (AZE) dead??? mill Eurotunnel (F/GB) dead 450 mill Kaprun (A) dead 1,5 mill /month 27

28 Green energy: Wave&Tidal Projects and ideas Wavegen TM : pilot plant 100 kw 1.5 MW (depending on wave height) Seawater environment which requires the use of stainless steels (turbine, rebar?, ) 28

29 Sustainability: Green energy One of the world s largest biogas parks in Saxony-Anhalt, Germany Central elements: 16 fermenters 120,000 tons of liquid manure and maize; 15 million cubic meters of biomethane production Majority Stainless Steel: EN /AISI 304 Source: WELtec BioPower GmbH 29

30 Sustainability: Energy saving Zero net energy high-rise building (71 floors) Overall energy demand reduced by 65% by energy saving design* Energy production by a mix of integrated photovoltaics and wind * The most original features are the aerodynamic shape of the building and the horizontal funnellike openings equipped with wind turbines. Directing the airflow towards the turbines leads to a production of wind energy 15 times higher than stand alone wind turbines * Material selection not available Pearl River Tower of the China National Tobacco Corp. (opening 2011) Guangzhou Source (the architects): 30

31 Conclusions: a bright future!! Despite current difficulties shared by many heavy industries, the stainless steel industry has a bright future: Potential growth in emerging countries is enormous In the perspective of sustainability, stainless steels are unmatched compared to other materials New renewable energies offer a large potential to new markets The industry should profit from these opportunities : to be more innovative to be more proactive against competitive materials to restructure itself and improve its long term sustainability 31

32 Thank you for your attention! 32