Robert Davis Hickman, Williams & Company. Steel Founders Society of America March 23, 2011

Transcription

1 Robert Davis Hickman, Williams & Company Steel Founders Society of America March 23, 2011

2 Three area s of interest World Production of Ferroalloys High Carbon Ferro Chromium Ferro Molybdenum

3 Globally, North America is a minor factor in the production of ferroalloys. The North American producers account for only 1.47% of all ferroalloy and specialty alloy production. Over 80% of the ferroalloys that are consumed in the United States are imported.

4 % of World Market % of World Market (1.20% US) % of World Market (0.6% US)

5 Former CIS 19.2% Africa 20.5% Others 2.1% N. America 1.7% U.S. 3.6% S. America 5.6% Europe 17.4% Asia 29.8%

6 World Production of Ferroalloys 26,300,000 MT produced in 2004 North America 0.9% U.S. 1.2% Other 5% South America 6% Africa 17% Europe 11% CIS 20% Asia 39%

7 World Production of Ferroalloys 36,100,000 MT produced in 2008 North America 0.9% U.S. 0.6% Other 5% South America 5% Africa 12% Europe 6% CIS 14% Asia 56%

8 World Production of Ferroalloys Percent of Total Production by Country Asia Africa CIS Europe South America U.S.

9 Africa, World Production Metric Tons 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 South Africa Zimbabwe 2,000,000 1,500,000 1,000, ,

10 Former CIS, World Production Metric Tons 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, ,000 Kazakhstan Russia Ukraine 600, , ,

11 Europe, World Production Metric Tons 900, , , , , ,000 Norway Finland France 300, , ,

12 America's World Production Metric Tons 1,400,000 1,200,000 1,000, , ,000 Canada Mexico United States Brazil 400, ,

13 "Other" countries, World Production Metric Tons 1,200,000 1,000, , ,000 Australia India 400, ,

14 Asia, World Production Metric Tons 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 China Japan Korea 6,000,000 4,000,000 2,000,

15 Largest Producers, by Geographic Location, Metric Tons 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000, ,000,000 4,000,000 2,000,000 0 S. Africa Ukraine Norway Brazil India China

16 NORWAY INDIA Ferro Manganese 215,000 Metric Tons Ferro Silicon 210,000 Metric Tons Silico Manganese 200,000 Metric Tons Ferro Chromium 750,000 Metric Tons Ferro Manganese 170,000 Metric Tons Silico Manganese 90,000 Metric Tons

17 BRAZIL UKRAINE Silico Manganese 350,000 Metric Tons Ferro Manganese 340,000 Metric Tons Ferro Chromium 196,000 Metric Tons Silico Manganese 894,400 Metric Tons Ferro Manganese 362,400 Metric Tons (BF) Ferro Silicon 152,800 Metric Tons

18 SOUTH AFRICA Ferro Chromium 3,100,000 Metric Tons Ferro Manganese 610,000 Metric Tons Silico Manganese 260,000 Metric Tons CHINA Ferro Silicon 4,900,000 Metric Tons Silico Manganese 4,500,000 Metric Tons Ferro Manganese 2,100,000 Metric Tons 600,000 Metric Tons (BF) Ferro Chromium 1,400,000 Metric Tons

19 Ferro Chromium 7,840,000 Metric Tons Silico Manganese 7,460,000 Metric Tons Ferro Silicon 7,320,000 Metric Tons Ferro Manganese 5,698,000 Metric Tons

20 Chromite Ore Mining World Producers Consumption / Importers to U.S.

21 World Resources of Chromite Ore are greater than 12 Billion Tons of shipping grade ore. Sufficient supply to meet demand for centuries. About 95% of the worlds Chromite resources are geographically concentrated in Kazakhstan and South Africa.

22 Country (Units are in million metric tons) India Kazakhstan South Africa Other Total One active chromite mine in the U.S. (North Western U.S.) In 2008, 94% of Chromite Ore was smelted in electric arc furnaces to produce Ferro Chrome for the metallurgical industry.

23 In 2008, the United States consumed about 10% of the worlds chromite ore production. Forms were chromite ore, chromium chemicals, Ferro Chromium alloys, chromium metal and stainless steel. In 2010, the United States consumed only about 2% of the worlds chromite ore production.

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25 The major Ferro Chromium producing countries are: South Africa 3.1 million Metric Tons China 1.4 million Metric Tons Kazakhstan 1.2 million Metric Tons India 750,000 Metric Tons Russia 530,000 Metric Tons Zimbabwe 150,000 Metric Tons

26 Ferro Chrome Producers Metric Tons 3,500,000 3,000,000 2,500,000 2,000,000 1,500, ,000, ,000 0

27 U.S. production of Ferro Chrome halted in One plant in Marietta Ohio, that made Nitrided Ferro Chrome. South African Chrome is typically a charge chrome (48 to 52% Cr). Other producers vary in Cr C Si ratios.

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29 China s role as a chromium consumer grew along with its stainless steel producing industry. China s stainless steel production exceeded that of the U.S. in By 2008, China s stainless steel production was 335% greater than that of the United States.

30 In 2008 Carbon and HSLA Steel Stainless & Heat Resistant Other Alloy Steel Super Alloys Other Total 5,730 MT 199,000 MT 14,400 MT 7,790 MT 29,500 MT 257,000 MT

31 Metric Tons HCFeCr Imported into North America 500, , , , , , , , ,000 50,

32 Metric Tons of HCFeCr sold by DLA 160, , , , ,000 80,000 61,500 60,000 40,000 29,357 17,766 25,819 20,

33 Imports plus DLA Sales of HcFeCr 600, , , , , , , , ,999 Imported DLA Total 200, ,

34 Source: Ryan s Notes

35 Metric Tons HCFeCr Imported into U.S., Plus DLA Sales 250, , , , ,000 0

36 2006 Importers, HcFeCr 454,581 Metric Tons South Africa Kazakhstan Russia Zimbabwe DLA 13% 13% 42% 10% 22%

37 2008 Importers of HCFeCr 498,775 Metric Tons South Africa Kazakhstan Russia Zimbabwe DLA India 12% 6% 7% 44% 8% 23%

38 2010 Importers of HCFeCr 479,520 Metric Tons South Africa Kazakhstan Russia Zimbabwe DLA India Albania Turkey Sweden 4% 5% 3% 2% 2% 2% 7% 51% 24%

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40 World Mine Production Metric Tons of Contained Mo 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20, ,000 0 Source: Indexmundi.com

41 World Mine Production Metric Tons of contained Mo 90,000 80,000 70,000 60,000 50,000 40,000 30, ,000 10,000 0 China United States Chile Peru Canada Source: indexmundi.com

42 Mine Production, Top 5 Countries 217,644 Metric Tons of Mo 90,000 81,000 80,000 70,000 60,000 55,900 50,000 40,000 33, ,000 20,000 10,000 16,721 7,724 0 China United States Chile Peru Canada Source: Indexmundi.com

43 Source: Thompson Creek

44 Ferro Moly Production in Metric Ton Units 90,000 80,000 70,000 60,000 50,000 40,000 30, ,000 10,000 0 China Chile United States Source USGS 2010

45 Millions lbs Mo Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Net Exports/Imports from China China export quotas imposed Net Exports Net Imports -10 Source: International Molybdenum Association (IMOA). Net exports = exports minus imports.

46 Mo, millions lbs World demand projections assuming historical 4% average growth rate Actual Demand Projected Demand % Growth (per annum) Year Source: Thompson Creek

47 Source: SMR GmbH

48 Main Driver: Oil Exploration and Development Increased demand for production: drilling and pipelines Remote sources: deeper drilling, longer pipelines High-sulfur fuels including heavy oils and tar sands: corrosive Nuclear power resurgence New and retrofit of coal fired power plants to super critical operating levels Natural gas and oil fired plants Wind energy Source: Thompson Creek

49 Main Driver: Capital Projects A. Chemical Processing Petrochemical Desalinization Pulp & paper Food processing Pharmaceutical B. Architectural C. Power Generation: Nuclear, Coal, and Gas Source : Thompson Creek

50 Approx. % Mo Tool Steel 1-5% High Speed Steel 5-9% Foundry/Cast Iron up to 15% Moly Metal 99.5% Super alloys 4-16% Chemicals - Catalysts 8-20% - Lubricants up to 15% - Other 1-3% Source: Thompson Creek

51 A. Moly is a metal for developed economies Rapid industrialization results in shift of consumption to China, Korea, India, Brazil, and Russia B. Industrial and Regulatory requirements demand better steels CO2 reduction - Coal fired power plant, new & retrofits Tighter environmental standards Tougher sulfur emission standards results in new generation of desulfurization catalysts with increased molybdenum loading. Fuel economy stronger and lighter steels improve power efficiency in automobiles and trucks Source: Thompson Creek

52 Short-term: Recovery underway Demand supported by new uses and continued energy/infrastructure investment Supply constrained: Development of major new mines delayed by financial crisis Medium term: price strength anticipated as world economy continues to grow Source: Thompson Creek

53 For future questions: Robert Davis