Global Flat Steel Market Performance Abu Dhabi, September 10, 2014

Transcription

1 Global Flat Steel Market Performance Abu Dhabi, September 10, 2014 Jean-Martin Van der Hoeven, Chief Marketing Officer, ArcelorMittal Europe Flat Products The ArcelorMittal Orbit

2 Progress and growth in the flat steel industry Resolution in the Eurozone crisis: impact on demand Emerging Economy and coated steel Tightening regulation and industry standards Remedy to overcapacity

3 Progress and growth in the flat steel industry Resolution in the Eurozone crisis: impact on demand Emerging Economy and coated steel Tightening regulation and industry standards Remedy to overcapacity

4 Progress and growth in the flat steel industry More opportunities than obstacles!... Obstacles Geopolitical crises (Ukraine, Iraq, Libya) impacting the confidence Overcapacity in steelmaking and in distribution affecting the profitability Strengthening environmental constraints Uncertainty on raw material cost Opacity of the final market due to complex supply chain (distribution, first transformation...) Financial weakness of some customers Opportunities Demography and need for equipment Reshuffling of the gas sourcing (LNG terminals Middle East Europe) Contribution of steel to environmental challenges Further consolidation and footprint optimization Product innovation R&D partnerships to develop new solutions European Commission Action Plan for a competitive and sustainable steel industry in Europe launched in June 2013 IT communication in the steel business

5 Progress and growth in the flat steel industry Resolution in the Eurozone crisis: impact on demand Emerging Economy and coated steel Tightening regulation and industry standards Remedy to overcapacity

6 Resolution in the Eurozone crisis: impact on demand (1/4) Europe hardly takes off from the 2010 reference Construction share in GDP (2013) United States 3.5 European Union 5.1 Industry share in GDP (2013) United States 18.0 European Union 19.2 Evolution of flat products on EU 28 (2004=100) Coated products have resisted better than other flat products

7 Resolution in the Eurozone crisis: impact on demand (2/4) More focus on value Defense of European Industry focused on Innovation and Environment Steel consumption: still way to get back to the pre-global storm The product portfolio has been enriched

8 Resolution in the Eurozone crisis: impact on demand (3/4) More focus on value HAV product-services becomes a key success factor

9 Resolution in the Eurozone crisis: impact on demand (4/4) More focus on value Innovative marketing to be boosted-up directly towards end-using segments

10 Progress and growth in the flat steel industry Resolution in the Eurozone crisis: impact on demand Emerging Economy and coated steel Tightening regulation and industry standards Remedy to overcapacity

11 Emerging Economy and coated steel (1/2) Construction & Auto support the growth of coated products

12 Emerging Economy and coated steel (2/2) Solid perspective of growth in the Middle East demography acceleration of steel consumption rebuilding of Iraq and opening doors in Iran other areas many ambitious projects in Construction & Energy in the next years. development of an industrial network to assure the reconversion from Oil & Gas to other segments («Saudiisation, Emiratisation») Europe has a role to play to turn the image of material to high tech solutions in front of abundant presence of Asian players taking the Middle East for a dumping ground ArcelorMittal is present through Jubail as well as our local distributor DSTC, ArcelorMittal project teams and ArcelorMittal International network.

13 Progress and growth in the flat steel industry Resolution in the Eurozone crisis: impact on demand Emerging Economy and coated steel Tightening regulation and industry standards Remedy to overcapacity

14 Tightening regulation and industry standards Energy efficiency in Construction Global Energy Efficiency «Factor 4» objective Divide by 4 Energy consumption in buildings (-3%/year) between 1990 & 2050 Applied for new buildings as well as for renovation (strong need for building refurbishment) Housing regulation Average energy consumption (kmh/m²/y) "New" buildings "Old" buildings Erected Erected after refurbishment > 2020 <2000 > < <100 Thermal regulation for new buildings: EU directive 2020 = «near Zero Energy consumption» Specific measures per country, with the same final target EU sets ambitious energy efficiency objectives for the construction market

15 Tightening regulation and industry standards Environment & construction Environmental performances of products and buildings standards LCA for buildings to be considered in new regulation EU directive sets a target of 70% recycling, reuse or recovery of construction and demolition wastes for 2020 Building certification scheme throughout labels are developing rapidly Favour «best in class» practices to go beyond standards Consider environmental, but also health and comfort criteria Offer «green value» to developers and customers EU LCA standards for global environmental assessment are now implemented

16 Tightening regulation and industry standards Recycling at end of Life of buildings In EU standards «module D» methodology has been introduced to take into account benefits of recycling at end of life Reminder - EU Standard content: Module A = Components manufacturing Module B = Building erection Module C= Building use phase Module D = Recycling at end of life Steel has strong environmental cards when recycling end of life is considered

17 Tightening regulation and industry standards Steel solutions in construction Steel facade and roofing steel are offering «best in class» thermal insulation solutions with optimal environmental impacts (low at production/ high in performance) Use of steel sunbreakers provides protection from the sun to reduce solar heat entering a building & allows substantial energy savings Complete and flexible building retrofiting solutions, even when buildings are occupied High strength steel frame houses are consuming 30% less material and energy than a brick or block one during the full life cycle (Modules A to D) Steel solutions are fully answering construction market trends & demands

18 Tightening regulation and industry standards Green Solutions in construction Our solutions are improving environmental construction footprint «Nspired by nature» pre painted: A new generation of coating systems Longer durabiity Free of chromates and heavy metals Granite Magnelis metallic coating: Unique combination of Zn+Al+Mg Longer durabiity with thinner coating Self-healing effects on edges and perforation Amstrong high strength steels Enabling lighter and more competitive solutions Our «green solutions» are designed to meet the most demanding requirements

19 Tightening regulation and industry standards Oil & Gas Environmental Challenges drives new opportunities and innovations CO 2 storage and transportation Increasing safety standards for more challenging oil extraction: Deeper, colder, more corrosive Shift towards high quality steels to increase the life cycle and reduce maintenance of installations. Using CO 2 to replace natural gas for Enhanced Oil recovery eg Masdar project with Emirates steel Development of cleaner steels with high toughness at low temperature, sour service steels, cladded steels. Implementation of high weldable & corrosion-resistance steels like Magnelis and special weathering resistant steels New steels & steel applications will support the increasing challenges to extract oil and gas safely out of less accessible fields

20 Tightening regulation and industry standards Renewable Energy enabled by steel Europe push for renewable energy sources to reduce its CO 2 emissions: 20% of all energy from renewable sources - binding target 2020* Each EU country required to achieve its specific target Onshore wind and PV solar technologies close to grid parity (=cost of energy close to the cost produced by conventional sources, i.e.coal, gas) Wind power: the most steelintensive power generation method (90 to 250 t / MW) Solar farms structures: steel and aluminium Constant innovation to decrease the cost of renewable technologies & make them economically viable Supported by innovation in steel: Higher strength steels for new designs of towers Research on high weldable & corrosion-resistance steels for offshore wind Special coated steels (Magnelis ) for solar support structures Out of turbines in Europe, we delivered steel for more than *Distributed between each EU member state

21 Tightening regulation and industry standards Getting to lower energy cost with innovative steel solutions Siemens bolted Highrise tower 140m Higher strength steels for lighter structures (S460MC) Magnelis replaces batch galvanised steel in solar support structures Highly weldable and corrosionresistant steels for offshore structures (in Research) Our steel solutions contribute to reducing the cost of renewable energy

22 Progress and growth in the flat steel industry Resolution in the Eurozone crisis: impact on demand Emerging Economy and coated steel Tightening regulation and industry standards Remedy to overcapacity

23 Remedy to overcapacity Improvement step-by-step in Europe being threatened by the international unbalance Global steel capacities growing faster than demand Source WSA Source WSA Rationalization in Europe Still some on-going projects Kt HRM CRM HDG EG OC Closure Mothballing Total

24 Remedy to overcapacity Scope of responsability of European steel producers Secure the profitability to generate innovative steel solutions Support the environmental challenges with performing processes and products Responsible social behavior in terms of safety and skill management Support the ethical control of the European Institutions to defend the free market Promote the emergence of labels and standards Steel Action Plan shared with the European Commission Identification of regulatory cost impact (20-30% of the Ebitda) Combat the VAT fraud Develop the Susteel label in Construction Assessment of the impact on Steel industry of European initiatives (regulation in terms of state aid in the domain of Energy and R&D or in terms of protection of trade secrets) Stimulation of the sustainable energy refurbishment of buildings + development of Eurocodes specific to steel as a preferred reference in EU public contracts. Car 2020 program promoting high tech steel solutions in the Auto segment New energy plan suggesting a diversification of Energy supply Free Trade Agreements negotiation with North America (Canada Europe TA and Transatlantic Trade and Investment Partnership with USA) and ASEAN countries (Malaysia, Thailand, Vietnam) Process of modernization of the trade defense instruments Proposal to reinforce the national inspection of waste shipments to prevent from illegal exports of waste (including scrap)

25 Our steel the fabric of life Through innovation, steel remains the material of choice