METAL RECYCLING ASSOCIATION OF INDIA 2 ND ANNUAL CONFERENCE MUMBAI FEB, 2015 JOURNEY INTO INDIA S STAINLESS INDUSTRY

Transcription

1 METAL RECYCLING ASSOCIATION OF INDIA 2 ND ANNUAL CONFERENCE MUMBAI FEB, 2015 JOURNEY INTO INDIA S STAINLESS INDUSTRY

2 MRAI FEB 05 06, 2015 ACKNOWLEDGEMENT

3 MRAI FEB 05-06, 2015 ABOUT NI- MET METALS WHY INDIA IS SO IMPORTANT VARIOUS FORMS OF NICKEL AS A RAW MATERIAL INDIA S INFRA- STRUCTURE DEVELOPMENT INDIA S IMPORT OF STAINLESS RAW MATERIALS WHY STAINLESS SCRAP IS IMPORTANT? INDIA S IMPORT DUTY STRUCTURE INDIA S STAINLESS PRODUCTION CONCLUSION

4 NI-MET METALS INC. LONDON PITTSBURG USA FLORIDA 2939 Portland Drive, Suite 300, Oakville, Ontario, L6H 5S4, Canada (T) CANADA INDIA U.A.E THAILAND CHINA

5 NI-MET PRODUCTS STAINLESS RAW MATERIALS OTHER BASE METALS SS 400 MO NI CR FE V SCRAP METALS AL ZN CU PB & FERRO ALLOYS AL BRONZE CU BR

6 WHY INDIA IS SO IMPORTANT? INDIA POPULATION OF 1.3 BILLION 4/500 MILLION MIDDLE CLASS MAJORITY AGE 30 TO SS/CAPITA CONSUMPTION KG, INDIA: 2.1 CANADA: 7.2 USA: 6.5 EU: 9.4 WORLD AVERAGE: 5 KG HIGH GROWTH PROSPECTS FROM BURGEONING MIDDLE CLASS INDIAN GOVERNMENT S THRUST TO AFFORDABLE HOUSING, INFRASTRUCTURE EXPANSION: METRO PROJECTS AND RAILWAY CONVERSION TO STAINLESS STEEL COACHES 2008 STAINLESS MELT OUTPUT M TONS 2014 STAINLESS MELT OUTPUT M TONS 2016 FORCASTED BY AN ANALYST STAINLESS MELT OUTPUT: 3.70 M TONS

7 DOING BUSINESS WITH INDIA ADVANTAGES HIGH GROWTH AND DEMAND IN COMING YEARS NEW INFRASTRUCTURE DEVELOPMENTS WILL FURTHER ASSIST PORTS/RAIL/ROAD SECURED PAYMENT TERMS NEW PRODUCTION FACILITIES STATE OF THE ART TECHNOLOGICALLY ADVANCED BUT CURRENTLY PRODUCING STEEL CAN BE RAMPED UP TO PRODUCE STAINLESS

8 DOING BUSINESS WITH INDIA CHALLENGES CULTURAL DIFFERENCES INDIA S BUREACRATIC SYSTEM PSIC REQUIREMENTS LOGISTICS AND TRANSPORTATION HURDLES LONGER VOYAGE TIME FROM N.A INADEQUATE INFRASTRUCTURE AT PORTS WHICH ARE IMPROVING NON MECHANICAL HANDLING OF MATERIAL,LESS AUTOMATION & MORE DEPENDENCE ON MANUAL LABOUR HIGH COST OF FINANCE CORPORATE INTEREST 12% P.A. OR HIGHER

9 MRAI FEB 05-06, 2015 VARIOUS FORMS OF NICKEL AS A RAW MATERIAL

10 MRAI FEB 05-06, 2015 PRIMARY NICKEL AS A RAW MATERIAL FOR STAINLESS STEEL PRODUCTION FULL PLATE CATHODES CUT 4 x 4 CATHODES BRIQUETTES

11 MRAI FEB 05-06, 2015 FERRO NICKEL AS A RAW MATERIAL FOR STAINLESS PRODUCTION FERRO NICKEL GRANULES FERRO NICKEL INGOTS

12 MRAI FEB 05-06, 2015 NICKEL IN SCRAP AS A RAW MATERIAL FOR STAINLESS PRODUCTION STAINLESS 304/316 MELTING GRADE SOLIDS HRB BALES LOOSE BRIQUETTES

13 MRAI FEB 05-06, 2015 NICKEL IN SCRAP AS A RAW MATERIAL FOR STAINLESS PRODUCTION STAINLESS 304/316 MELTING GRADE TURNINGS

14 MRAI FEB 05-06, 2015 INDIA S INFRASTRUCTURE DEVELOPMENT

15 TRANSPORTATION OLD WAYS

16 TRANSPORTATION MODERN WAYS

17 MRAI FEB 05-06, 2015 INDIAN PORTS - FACTS COAST LINE KMS TOTAL CARGO HANDLED IS 561 MILLION TONNES IN MAJOR PORTS VESSEL TRAFFIC: 21,251 IN CONTAINER TRAFFIC: 6.86 MILLION TEUs IN

18 PORTS OF INDIA MAJOR SEA PORTS

19 12 MAJOR PORTS Kandla Port Gujarat Marmagao Port - Goa Nhava Sheva- Maharashtra Vizag Port - Andhra Pradesh Mumbai Port Cochin Port Kerala Panambur Port Karnataka Haldia Port West Bengal Paradip Port - Orissa Chennai Port Port Blair Andaman Tuticorin Port Tamil Nadu

20 INDIA S ARSHIYA FTZ WAREHOUSES 165 Acres State-of-Art Facility 24 km from JNPT Port featuring : 24x7 On-Site Custom Clearance House State-of-the-Art Infrastructure, Equipment & Facilities Connectivity to our Pan-India Rail Network accelerating distribution through aggregation at strategic locations Similar warehouses in new Delhi, Kolkata and Chennai areas All warehouses are free trade zones

21 INDIA S ARSHIYA FTZ WAREHOUSE Warehouse External View Container Yard Warehouse Internal View Custom Office Entry Docking Area Warehouse External View Warehouse Stuffing at Container Yard Container Yard

22 INDIA S ARSHIYA FTZ WAREHOUSE Cargo storage inside Warehouse Racking System inside Warehouse Marshalling Area Server Room Electrical Sub-Station Temp. Controlled Area CCTV Cameras

23 MRAI FEB 05-06, 2015 INDIA S IMPORT OF STANLESS RAW MATERIALS

24 AVERAGE 5 ( ) YEARS IMPORTS NICKEL CATHODES - TOP 10 COUNTRIES % % TOTAL: % % % % 3% % 5892% 2% Russian Fed. Australia Norway Canada Finland United Kingdom Japan South Africa China, P.R. Ni-Met Sales : AVG :1,400 MT NICKEL YTD : 660 MT

25 AVERAGE 5 ( )YEARS IMPORTS FERRO NICKEL - TOP 10 COUNTRIES % % % % 6% 309 2% 371 2% 262 2% TOTAL: 16,880 MT % % Japan Greece Macedonia Colombia New Caledonia Brazil Korea, Rep. Russian Fed. United Arab Emirates Ni-Met Sales : AVG: 600 MT NICKEL YTD:3,310 MT NICKEL

26 AVERAGE 5 YEARS ( ) IMPORTS SS SCRAP- TOP 10 COUNTRIES % % 6% % % % TOTAL: 294,986 MT % % % % Netherlands United Kingdom United States Malaysia United Arab Emirates Thailand Korea, Rep. Singapore South Africa Ni-Met Sales : 2013: 25,791 MT 2014-YTD:19,600 MT

27 SOURCE: INSG TOTAL NICKEL UNITS IMPORTS INTO INDIA LAST 5 YEARS 160, , , ,642 55,434 80,000 40,000-63,414 58,269 56,455 21,837 23,060 32,535 49,279 30,818 24,232 18,483 9,760 6,326 47,390 36,676 17,949 23,635 24, Primary Nickel Nickel in Ferro & Oxide Nickel in Scrap

28 MRAI FEB 05-06, 2015 WHY STAINLESS SCRAP IS MORE IMPORTANT?

29 MRAI FEB 05-06, 2015 WHY STAINLESS SCRAP IS MORE IMPORTANT? SS SCRAP UTILIZATION RATIO IN INDIA IS AVERAGING TO ABOUT 52% FINISHED STAINLESS WILL COST AT LEAST RS 10 PER KILO LESS IF 70% S.U.R. IS MAINTAINED S.A.I.L, A PERENIAL PRIMARY ROUTE PRODUCER IS STARTING SCRAP IMPORTS SS SCRAP CONSUMPTION TO GROW IN INDIA WITH FEW EUROPEAN MELTSHOPS CLOSING MORE SCRAP AVAILABILITY REGULAR & SUSTAINABLE DEMAND IN INDIA SCRAP IMPORTS IS VITAL SINCE INDIA S DOMESTIC ARISINGS & REVERTS ARE INADEQUATE

30 MRAI FEB 05-06, 2015 INDIA S IMPORT DUTY STRUCTURE CURRENT EFFECTIVE IMPORT DUTY ON SCRAP, FERRO NICKEL & PRIMARY NICKEL IS SAME 2.61% NET ADVANTAGE OF FERRO NICKEL IS FREE IRON BUT SCRAP IMPORTS IS EQUALLY ESSENTIAL TO PRODUCE COMPETETIVELY

31 MRAI FEB 05-06, 2015 INDIA S STAINLESS PRODUCTION

32 MRAI FEB 05-06, 2015 INDIA S STAINLESS MELT OUTPUT (IN KT) LAST 6 YEARS Austenitic (300 Series) Ferritic (400 Series) CrMn (200 Series) Total FORECAST Austenitic (300 Series) Ferritic (400 Series) CrMn (200 Series) Total

33 INDIA S STAINLESS OUTPUT BREAKDOWN AUSTENETIC / FERRITIC/ SUR LAST 5 YEARS SS MELT OUTPUT (KT) AUSTENITIC ( 300 SERIES) FERRETIC ( 400 SERIES) CR/MN ( 200 SERIES) AUSTENITIC RATIO 16.45% 16.68% 17.67% 16.84% 17.84% TOTAL NI UNIT IMPORTS (KT) TOTAL NI UNITS CONSUMED (KT) NICKEL IN SCRAP(KT) SCRAP RATIO (SUR) 49.00% 51.00% 50.50% 52.00% 52.25% SOURCE: CITI RESEARCH

34 MRAI FEB 05-06, 2015 STAINLESS OUTPUT V/S. SUR COMPARISON KT SUR % KT SUR % KT SUR % KT SUR % KT SUR % INDIA CHINA USA EU JAPAN S.KOREA TAIWAN Figures are projected KT-STAINLESS STEEL SCRAP MELTING OUTPUT IN KT SUR% = SCRAP UTILIZATION RATIO

35 MRAI FEB 05-06, 2015 MAJOR INDIAN NICKEL BEARING STAINLESS RAW MATERIAL CONSUMERS

36 MRAI FEB 05-06, 2015 CONCLUSION SS SCRAP DEMAND & SUPPLY DICTATES PRICES MORE SO THAN NI & Mo PRICES NICKEL & ALL OTHER METALS HAVE BECOME MORE SPECULATIVE COMMODITIES FINANCIAL MARKETS PLAY LARGER ROLE THAN FUNDAMENTALS SS SCRAP CONSUMPTION TO GROW IN INDIA & U.S & REDUCE IN EUROPE INDIA WILL HAVE TO PAY HIGHER Ni UNIT PRICES THAN REST OF THE CONSUMING MARKETS IRRATIC BUYING IN U.S. BUT REGULAR & SUSTAINABLE DEMAND IN INDIA STAINLESS RAW MATERIALS WILL REMAIN ESSENTIAL IMPORT COMMODITIES FOR GROWING INDIAN MARKETS

37 MRAI FEB 05-06, 2015 CONTACT 2939 PORTLAND DRIVE, SUITE 300 OAKVILLE, ONTARIO, L6H 5S4 CANADA (T) EXCLUSIVE AGENTS FOR INDIA METCO MARKETING (INDIA) PVT LTD 104, NIRAJ INDUSTRIAL ESTATE, OFF. MAHAKALI CAVES ROAD ANDHERI EAST, MUMBAI (T)

38 MRAI FEB 05-06, 2015 ANY QUESTIONS