Nickel a bright future and great value

Transcription

1 Nickel a bright future and great value Richard Matheson General Manager Asia 27 th October 2015 The Nickel Institute does not present forecasts or comments on nickel markets, prices or supply/demand. The Nickel Institute does promote the long term use of nickel to contribute to a sustainable future.

2 NI mission and goals Mission Promote and support the use of nickel in appropriate applications Market Development: H&E Public Policy: Science (NiPERA): Build the nickel brand. Grow and defend markets for new and existing nickel applications. Promote sound science, risk management, and socio-economic benefit as the basis for public policy and regulation. Undertake science relevant to human health and environment. 2

3 Member companies Vale Canada Limited PT Vale Indonesia Tbk Vale Japan Limited Approximately 85% of worldwide nickel production outside China 3

4 Nickel in use Today, nickel-containing materials are used in virtually every aspect of our lives including food processing, water supply, buildings, energy production, transport, electronic components, medicine, chemical production and heavy engineering.

5 Nickel use 2014 First Use Foundry 3% Other 4% Cu Base 1% Plating 8% Ni Base 9% End Use Alloy 8% Stainless 67% Non-Allocated 0% Metal Goods 18% Transport 15% Tubular Products 15% Electro & Electronics 11% Building & Construction 11% Engineering 30% Stainless steel is the biggest market for nickel by far 5

6 Examples critical but hidden use 6

7 Examples critical but hidden use 7

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10 Regional nickel consumption 2014 China is the biggest market for nickel by far 10

11 Stainless steel demand Demand for stainless steel driven by China 11

12 Stainless steel demand Nickel demand has grown by 4.2% Surge in 200 series (1-3% of Ni compared with 8-11% in 300 series) Cr Mn Growth Rate 14.9% Austentitic Growth Rate Source: H Pariser 400 Ferritic Growth Rate 5.7% Ferritic Austenitic Cr Mn Growth is driven by nickel bearing austenitics 12

13 Population growth Population growth from 7.3 now to 9.7 billion by 2050 and 11.2 by 2100 Main growth in Asia (60% of world population) and Africa (16%) but also in North America 80% of population in developing countries, China and India each represent nearly 20% of global population By 2050 global population will be 50% higher than today

14 Urbanisation Proportion of world population urbanised 1950, 30% of population 2014, 54% of population 2050, 60% projected 90% of the increase between now and 2050 will take place in Asia and Africa In China 300 million more people are expected to be urbanisedby 2050 In India 400 million more people are expected to be urbanisedby % of Indian population equivalent of more than 800 million people will be urbanised by 2050 To accommodate this enormous change the current Indian government has allocated USD 1.2 billion in this year s budget to examine a Smart Cities program for execution in 100 Indian cities Source World Urbanization Prospects

15 The 21 st Century 2050 buildings More construction About 1/3 of global energy consumption will be related to buildings About 2/3 of energy used in buildings will be related to heating (space and water) Lots of potential energy savings

16 The 21 st Century 2050 food & water Food consumption will not only increase in total amounts, but also food quality and processing Substantial increase in water use to be expected for agriculture domestic and industrial uses

17 Water service pipes for smart cities an example of nickel s contribution to the future Access to water and sanitation, urbanization, industrialization, and higher living standards combine to increase the demand for water in cities By 2050 global water demand is projected to increase by 55%, resulting from urbanization in developing countries If we continue, the world will only have 60% of the water it needs by 2030 So the world is projected to face a 40% global water deficit under a businessas-usual scenario Source: United Nations World Water Development Report

18 How nickel can solve some urbanisation issues for water Non-revenue water (the water that leaks out of the system) 25 30% non-revenue water in most parts of the world Some areas with more than 50% Need for additional water supply Need for additional water treatment Need for additional electricity Need for additional chemicals Need for additional infrastructure Need for additional dams and reservoirs Tokyo and Taipei point to a solution 18

19 Examples from Tokyo & Taipei Leakage reduction project Source: Bureau of Waterworks, Tokyo Metropolitan Government 19

20 Leakage reduction with stainless steel 20

21 Leakage of different pipes in Taipei Poly Butylene pipes account for 3% of length but 28% of leaks Water mains, 5% SSP, 4% Other, 2% GIP, 1% CIP, 1% Service pipes, 95% LP, 11% PB, 28% PVC, 53% Analysis of leakage cases in Taipei 21

22 Taipei reduced leakage rate Reduction from 27% non revenue water to 17%, after 35% implementation of stainless steel service pipe Non revenue water % '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Source: Taipei Water Department 22

23 City of Taipei Water Works Results Leakage in 2005: 365 million m3 (27%) Leakage in 2014: 219 million m3 (16.7%) Reduction by 146 million m3 / year (price/m3: NT$ or US$ ) 146 million m3 x US $ /m3 = $22-34 million / year About 60,000 repair cases in last six years Drought in 2002: 1377 mm rain fall over reservoir Drought in 2014: 1201 mm rain fall over reservoir Impact: no water shortage in 2014, surplus to other utility and storage 23

24 City of Tokyo Water Works Results Leakage in 1994: 175 million m3 (9.9%) Leakage in 2013: 33 million m3 (2.2%) Reduction by 142 million m3 / year (price per m3: 206 or US $1.70) 142 million m3 x $1.70/m3 = $241 million / year Repair cases in 1994: 48,000 / year Repair cases in 2013: 10,000 / year 38,000 repair cases x $ 2,000 / case = $76 million / year Impact between $200 and $300 million / year 24

25 Final Cost/Benefit Analysis - Tokyo 1.5 Disadvantage Advantage USD millions/year 25

26 Megatrends: long term outlook Long-term outlook is positive for materials based on expected population growth leading to increased need for, everything: Focus on sustainability Society needs solutions to manage the expected demands and enable us to meet these challenges Nickel ispartoftheanswerforall theoldapplicationsplus: New and adapted technologies Smart solutions Energy savings Increased demand for raw materials

27 Reference For more information about Megatrends and nickel s place in solutions to the challenges confronting the future of mankind please see our publication: Nickel in Tomorrow s World This and other vital information about nickel can be found at our website: Data from the Nickel Institute 27

28 Head winds Source: SMR Perception of cost 28

29 Current value of nickel containing materials 120 Raw Material Prices Since 2011: Ferrochrome & Nickel Indexed Price Development, Jan 2011= HC FeCr (EU, Spot) down 28.7% vs Jan '11 LME Nickel down 61.3% vs Jan '11 US$ 0.89 per lb US$ 9,911 per t Heinz H. Pariser

30 Current value of nickel containing materials 140 Stainless Price Development EU / China: Grades 304 vs 430 cold-rolled Indexed Price Development, Jan 2011= Grade 430 EU: down 30.2% vs Jan '11 China: down 44.1% vs Jan '11 Grade 304 EU: down 39.5% vs Jan '11 China: down 49.6% vs Jan '11 Heinz H. Pariser

31 Current value of nickel containing materials 2,500 Stainless Price Development Gap between 304 / 430 Declining Jan Feb 2014: Mar Sept 2014 Oct 2014 since Price Differential , in US$ per t 2,000 1,500 1, China Europe Price differential cut by half as Ni prices loose 45% Short-lived Ni price recovery - increase in price differential Faltering Ni prices induce another cut in price differential, but partially off-set by also declining 430 / FeCr prices Heinz H. Pariser

32 Thank you 32