Changing World of Stainless Steel Scrap. Paul Gielen, Sales Manager CRONIMET Group 7 th Asian Stainless Steel Conference 25./27.

Transcription

1 Changing World of Stainless Steel Scrap Paul Gielen, Sales Manager CRONIMET Group 7 th Asian Stainless Steel Conference 25./27. June 2012

2 Disclaimer This presentation is provided to you for information purposes only and is not intended as an offer to enter into any transaction. The information contained in it is not necessarily complete and its accuracy cannot be guaranteed. To the extent permitted by applicable law, none of CRONIMET Group accepts any liability whatsoever for any direct or consequential loss arising from any use of this presentation or its contents, including for negligence. Copyright protection exists in this presentation. The contents of this presentation are strictly confidential and it may not be disclosed, reproduced, distributed or published by any person for any purpose without our written consent. Further information is available on request. Copyright CRONIMET Holding GmbH

3 Let s talk about... 1 Stainless Steel Scrap Production 2 3 Regions of Stainless Steel Production What is Stainless Steel Scrap? 4 The Nickel Price and its Influence on the Scrap Price 5 Conclusion and Impact on Scrap Processors 3

4 1 Stainless Steel Scrap Production 4

5 in Mio. t Stainless Steel Consumption 1950 s till now in Mio. mt Cum. Stainless Products Cum. Scrap Consumption Scrap Reserve ,9 6,4 32,5 81,2 17,9 63,3 157,1 41,6 115,5 213,7 58,9 154,8 284,8 82,4 202, Consumption Austenitic Stainless Steel 120 Scrap Reserve Reclaimed Scrap Consumption

6 Stainless Steel Scrap Dynamics Revert Scrap 4. Blended Scrap How much Ni units available for blending? 1. Revert Scrap ~11% of Crude prod. 3 months until remelting 2. First-Use Scrap 5 25 % of STS market volume 6 months 3. End-Use Scrap Stimulated by Ni price Recycling Rate ~70% ~27 years of average equipment use before scraping Source: SMR 06/2012 6

7 Stainless Steel Scrap Dynamics Reclaimed Scrap 4. Blended Scrap How much Ni units available for blending? 1. Revert Scrap ~11% of Crude prod. 3 months until remelting 2. First-Use Scrap 5 25 % of STS market volume 6 months 3. End-Use Scrap Stimulated by Ni price Recycling Rate ~70% ~27 years of average equipment use before scraping 304 scrap is the most important material; >50% of all STS is melted from scrap Source: SMR 06/2012 7

8 Austenitic Production versus Austenitic Scrap Availability Austenitic Scrap Availability (incl. Revert Scrap) Source: SMR Summary, 12/2011 8

9 Forecast Stainless Steel Scrap Availability - in 000 mt Scrap Consumption Scrap Availability Forecast America American Market Forecast ( in '000 mt ) Scrap Consumption Scrap Availability Forecast Europe European Market Forecast ( in '000 mt ) Forecast Asia Asian Market Forecast ( in '000 mt ) Scrap Consumption Scrap Availability

10 Conclusion Growing scrap mine, only in Europe /USA Europe will become a net exporter of scrap Logistical issues USA is and will remain net scrap exporter China will become a scrap mine, but not until the next decade adjusting and timing new scrap yards... 10

11 2 Regions of Stainless Steel Production 11

12 Stainless Steel Production 1980 till now - per Region Source: SMR Summary, 12/

13 Stainless Steel Production 2011 per region Production per grade in 000 mt series 300 series 400 series America Europe China Other Asia India Others Source: SMR Summary, 12/

14 Austenitic Stainless Steel Production 1980 till now 300series share declined continuously substitution mainly by Ferritics Source: SMR Summary, 12/

15 Stainless Steel Scrap Ratio per Region 304 Scrap Ratio Summary per Region % 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Europe America China Other Asia Others Source: SMR

16 Impact on Scrap Consumption Traditional scrap consuming areas are not increasing their production (consumption) China s stainless production is growing; but with low Stainless Steel Scrap Ratio Average consumption of Stainless Steel Scrap is coming down 16

17 3 What is Stainless Steel Scrap? 17

18 Example of a 304 Scrap Blend - Europe 18/8-scrap 50 % 18/10-scrap 5 % Shredder 5 % Bundles 15 % Ferro-Chrome 5 % Chrome Steel 10 % Low Alloy 5 % NCT/High Alloy 5 % 100 % 18

19 Changes at Stainless Steel Mills Stainless Steel Scrap New technology has changed Stainless Steel Scrap from nonblended to blended scrap Handsampling to trial melts Trial melts blended scrap Learning curve New consumers New rules Availability and prices will impact blends 19

20 Different Purchase Strategies - Asia versus Europe Security of supply (Asia) vs. "just-in-time" (Europe) Asia Europe long term contract contra cyclical purchases No financial limitations to stock policy participations in raw material deposits with the following aims: - security of supply - independence from raw material producers monthly contracts with short preliminary lead time "just-in-time"-purchases Zero stock policy generally no participations in raw material deposits 20

21 Conclusion New areas have a different approach to the market Stainless Steel Scrap as raw material From long-term business to spot business 21

22 4 The Nickel Price and its Influence on the Scrap Price 22

23 Mrz 01 Jun 01 Sep 01 Dez 01 Mrz 02 Jun 02 Sep 02 Dez 02 Mrz 03 Jun 03 Sep 03 Dez 03 Mrz 04 Jun 04 Sep 04 Dez 04 Mrz 05 Jun 05 Sep 05 Dez 05 Mrz 06 Jun 06 Sep 06 Dez 06 Mrz 07 Jun 07 Sep 07 Dez 07 Mrz 08 Jun 08 Sep 08 Dez 08 Mrz 09 Jun 09 Sep 09 Dez 09 Mrz 10 Jun 10 Sep 10 Dez 10 Mrz 11 Jun 11 Sep 11 Dez 11 Mrz 12 Nickel Price Overview March 2001 till now Gap between Highest and Lowest Nickel on monthly basis (USD) USD

24 Scrap Model Circle of Recycling Reclaimed Scrap Scrap Processor CRONIMET Collectors, Traders Steelworks: Melting Primary Raw Material Reclaimed Scrap Ingots, Coils, Sheets etc. Consumer Fabrication Finished Products 24

25 Impact on Scrap Availability Ni volatility introduces speculation in Ni containing scrap No steady flow of material $/mt Ni 70 $/mt in scrap 70$ / $ ROI 42% 25

26 5 Conclusion and Impact on Scrap Processors 26

27 Conclusion Shortage of scrap in new Asia (China) Need for import from Western World Longer pipe-line Scrap definition will reduce availability Ni speculation causes discontinue supply chain Behaviour to scrap as raw material is different in new markets MORE VOLATILE SCRAP MARKET - VOLUMES AND PRICES 27

28 The CRONIMET Group Our Story of Success >>> System provider for the industrial production of stainless steel & market leader with an overall market share of 13% Foundation of CRONIMET Ferrolegierungen mbh in Karlsruhe Entry into the American market: Foundation of CRONIMET Corporation USA Tonnage exceeding 1 Million for the first time Entry into the Chinese market: Foundation of a Representative office in Shanghai Opening of yard in China (Baoshan/Shanghai) Joint Venture with Pure Iron (Armenia) for the production of FeMo and Mo- Metal Foundation of CRONIMET Mining GmbH Foundation of CRONIMET Chrome S.A. (South Africa) Acquisition of majority share of the Zangezur Copper Molybdenum Combine CJSC (ZCMC) in Armenia 28

29 The CRONIMET Group Worldwide. 29

30 The CRONIMET Group Worldwide No. of employees in the entire Group: Subsidiaries, partnerships and representative offices: > 56 on 4 continents Annual Sales in tons Annual Business volume in billion USD (f) 30

31 Thanks for your attention!