Philippe RICHARD, International Chromium Development Association. Chrome Makes it Stainless!

Transcription

1 Philippe RICHARD, International Chromium Development Association Chrome Makes it Stainless!

2 ICDA: Competition / Antitrust Policy Statement and Guidelines The activities of the ICDA are not and shall not be intended to restrain competition or to inflict prejudice or harm on consumers. The inherent purpose and objectives of the ICDA are to promote free competition and to provide benefit to consumers. In connection with membership and participation in the ICDA and related activities, there shall be no discussion, communication or disclosure among Members or Guests which are actual or potential competitors of any of the following individual company information: prices, discounts or terms or conditions of sale of products or services, pricing methods, profits, profit margins or production cost data, production plans, market shares, distribution, volumes, sales territories or markets, allocation of territories or customers ( Business Sensitive Information ). The ICDA, its constituent bodies and all related social and other activities shall not be used for the purpose of bringing about or attempting to bring about, any understanding or agreement, whether written or oral, formal or informal, express or implicit between and among actual or potential competitors with regard to matters concerning their Business Sensitive Information. The ICDA and each Member and Guest, in relation to the activities of the Association, shall be expected to use their best reasonable judgement to respect and comply with the letter and spirit of the Antitrust Laws and this Policy Statement. ICDA Members are permitted to bring legal advisers to ICDA meetings and events (at Members own costs). In order to minimize risk for the ICDA and its Members and Guests and consistent with the ICDA By-Laws, any behaviour inconsistent with this Policy will be dealt with in an appropriate manner by the ICDA Council and may result in suspension or termination of attendance privileges or membership. 2

3 Metallurgical grade Cr : 42-46% 2014 Chrome usage Chromite 95.7% 1.5% 0.2% 2.5% Foundry sands Cr : % Refractory grade Cr : 30-40% Chemical grade Cr : % Sodium dichromate Leather tanning 32% Molds for casting Refractory bricks, Mortars Cement kiln Fiberglass furnace Magnesia Cr bricks & others Plating 20% Chrome metal 20% Pigments 15% Wood preservation 9% source ICDA 3

4 2014 Chrome usage Chromite Stainless steel: 73% 95.7% Metallurgical grade Cr : 42-46% 94.5% 2.0% 3.5% 3.0% Carbon & Engineering & Tool & HSS steels: 24% Foundries & castings: 2% Speciality alloys: 1% Ch. Cr %Cr:48-55% %C:4-7.5% HC FeCr %Cr:58-65% %C: 4-8% MC FeCr %Cr 55-70% %C: >2% LC FeCr %Cr 60-70% %C: <0.1% FeSiCr 100% 38% 62% 100% Stainless steel Carbon & Engineering & Tool & HSS steels Foundries & castings Speciality alloys12 Stainless Steel is the key driver of Chrome alloy demand! Source ICDA 4

5 Functions of Chrome in alloying of steel Increase Toughness, carbide forming Tool & HSS, Creep and Wear Resistant steels Increase Hardness Penetrability Case Hardening, Quenched & Tempered steels 60% of all alloy steels contain Cr Scale Resistance Heat Resisting steels A self-repairing passive layer with Cr (min 10.5% Cr) in presence of O 2 "makes it stainless 100% of stainless steels contain Cr Stainless steels

6 World Chrome ore resources (by country) The world resources of chrome ore are sufficient to meet conceivable demand for centuries ( >12,000 MT) Since 50 years production was around 700MT China has no Cr ore resources Others countries: Afghanistan, Albania, Australia, Canada, Cuba, Indonesia, Iran, Madagascar, Oman,, Pakistan, Philippines, Sudan, Vietnam India 0.9% Turkey Russia 0.5% 0.9% Finland 1.6% Kazakhstan 5.0% Zimbabwe 12.0% Brazil 0.2% Others 6.9% South Africa 72.0% Source: USGS, Roskill, BRGM, ICDA

7 Regional share of stainless steel production Europe Americas Asia (excl.china) China Chinese Stainless steel data Q1 2015: Rest of the world SS factories rely heavily on distributors in China: Distributors is the main sales channel for China s SS factories, nearly 63% of the products is sold to stockist. Source: ISSF

8 Stainless steel family grades MT est. Global Stainless Steel Market 18.9% 11% 5% 11% 2% Breakdown by end use 22.1% 2014 est. 5% 15% Consumer goods Catering 15% 15% 15% 9% 9% 9% 1.1% 1.3% 9% 0.9% Appliances Food processing Process industry 28% 28% 8% 8% ABC Transporta on Other applica ons 53.7% The growth of these market are on going in many country Process industry (oil & gas, chemical industry, seawater treatment, pipes / tubes, water & wine tanks, solar water heater, etc., and Transportation: development is on going Source: ISSF, SMR What about ABC and Automotive (excluding exhaust system)?

9 ? Do You realize the change of the last 30/40 years in different worldwide city having some positive development of household equipment, energy, transportation Los Angeles, Hong Kong, Shenzhen, Shanghai, Panama, Kuala Lumpur, Fortaleza, Dubai, Sydney, Singapore,

10 Automotive car body and chassis parts Comparison of stainless yield strength vs. elongation of grade used for automotive structure application. % Deep drawing 301M, 301LN, 201LN (2B) Elongation at fracture A IF Isotropic Phosphorus 6xxx (T4) Bake hardening 5xxx 6xxx (T6) Aluminium Micro alloyed DP Micro alloyed (hot rolled) Stainless steels TRIP Carbon steels CP Martensitic steel 301M 301LN (C1000) Martensitic stainless MAX N/mm² Yield strength Rp0,2 MnB It is easy to produce a safe car and likewise to produce an environmentally adapted car. Cars built with high strength stainless materials weigh less, thus enabling increased fuel economy.

11 Challenge ahead, the drive to achieve 1/ There are ideas which are already working very well in some parts of the world, but which may not yet have been spread to other markets. 2/ Stainless steel remains very good product and there are still many applications in which it could become indispensable. 3/ It will require innovative and creative thinking among the various marketing specialists from stainless producers to find ways in which we can boost the demand for stainless steel so that we can better utilize the available production capacity Ferrochrome and stainless steel are highly correlated!

12 Chrome ore Overview in

13 Global chrome ore production by region % -19.6% +6.6% -34.4% +1.6% Global chrome ore and concentrate production : 29MT in 2014, down 4.2% from 2013 (30.3MT) 13

14 World s top 20 chrome ore companies Production capacity 2014 (in tonnes)

15 Global chrome ore production The top 5 Chrome ore producing countries 2014 remained the same in term of volumes Rest of the World 15% South Africa +12.3%, Kazakhstan +12%, Finland +5.7% increased their output Finland 4% Turkey 6% India 6% Kazakhstan 15% 2014 South Africa 54% India and Turkey lost some ground: o - 25% due to the mining licence renewal issue in Odisha which left several mines inactive. o - 30% due to enhanced safety checks by authorities and reduction of imports by China Other countries exported to China only in 2014 (trade data): o o o o Albania 3 rd largest Cr ore supplier (550kt) Iran 4 th largest Cr ore supplier (490kt) Oman 5 th largest Cr ore supplier (480kt) Pakistan 6 th largest Cr ore supplier (340kt)

16 18,000,000 16,000,000 14,000,000 South Africa's chrome ore produc on and trade South Africa s chrome ore production and trade Cr ore production Cr UG2 production Cr exports 12,000,000 Cr consumption (in tonnes) 10,000,000 8,000,000 6,000,000 4,000,000 2,000, Source: ICDA, official customs data At nearly 15 million tonnes, SA s overall output showed a very marginal decrease in SA s conventional chrome ore production expanded in 2014, reaching 12.9 MT up 12.3% YoY UG2 concentrate production fell by around 1.4 MT, down 31.5% due to the 5-month strike in SA s platinum industry. SA s exports decreased by 15% mainly due to UG2. But ferrochrome production in South Africa increased by around 0.75 MT, up 23.4% from 2013, pulling chrome ore demand. 16

17 Kazakhstan s chrome ore production and trade ,000,000 Cr ore produc on 5,000,000 4,500,000 Chrome ore exports 4,500,000 4,000,000 4,000,000 3,500,000 3,500,000 3,000,000 3,000,000 2,500,000 2,500,000 2,000,000 2,000,000 1,500,000 1,500,000 1,000,000 1,000, , , t Source: ICDA, official customs data t Source: ICDA, official customs data Chrome ore production increased by 12% to MT. Kazakhstan s chrome ore exports represented roughly 30% of its production, it was closer to 23% in Main purchasers are Russia and China. Kazakhstan Chrome Ore Produc on and Exports (in tonnes) In 2014, Kazakhstan s ferrochrome production showed a slight growth of 0.2%. 17

18 India's chrome ore produc on and trade India s chrome ore production and trade 4,000,000 3,500,000 3,000,000 2,500,000 Cr ore production Cr imports Cr exports Cr consumption 2,000,000 1,500,000 1,000, , Source: ICDA, official customs data Chrome ore production decreased by 25% in 2014 YoY to 1.9 MT, due to the mining licence renewal issue in Odisha which left several mines inactive. India s chrome ore exports continued to fall in 2014, down 48% from In 2014, India s ferrochrome production is down 17%, reducing chrome ore consumption. 18

19 China's chrome ore produc on and trade ,000,000 12,000,000 10,000,000 China s chrome ore demand Cr ore production Cr imports (in tonnes) 8,000,000 6,000,000 Cr consumption 4,000,000 2,000, Oman 5% China's chrome ore and concentrate imports by origin in 2014 (source: customs data) Iran 5% Rest of the World 15% Source: ICDA, official customs data Marginal Cr ore production, China consumed 32% of global chrome ore production. (40% in 2013) China s chrome ore imports reached 9.4 MT in 2014 Imports were down 22.4 % from 2013 due to low FeCr tender prices. Stocks in China decreased, current level under 1.8 MT, a multi-year low level Q1 imports are of 2,280kt ( 2,573kt in Q1 2014) Turkey 14% South Africa 61% 19

20 Global chrome ore trade flows in 2014 (in 000 tonnes) Russia 554 USA 167 Europe 90 Albania Turkey 1.7 Mt 128 Iran Pakistan 944 Kazakhstan 4.5 Mt Oman India 1.9 Mt China Japan 49 Latin Americ a Madagascar Australia South Africa 16 Mt In 2014: Cr ore global trade was down 22%

21 Ferrochrome overview in

22 World s top 20 ferrochrome companies Production capacity 2014 (in,000 tonnes) 6 are South African (prod. capacity 4,700 kt), 8 are Chinese (prod.capacity 2,500 kt) , a record number of producing countries: 30 countries produced 4Mt of Fe Cr 21 years later the opposite was the case! Glencore & Merafe ENRC Samancor Xinganglian Yildirim Group Outokumpu Hernic Mintal Group Tata Steel & Tata KZN Sichuan Tianyi ASA Metals Sichuan Ehui Tisco Wanbang IMFA IFML Shanxi Jiang Zimasco Sichuan Mingda FACOR Inner Mongolia Kehan

23 12,000,000 10,000,000 Global ferrochrome production by region % -19.6% - 1.4% (in tonnes) 8,000,000 6,000, % 4,000,000 2,000, % Source: ICDA Global ferrochrome production : 11.8 MT in 2014 up 9 % from

24 Global Ferrochrome production Ferrochrome Produc on Country Breakdown 2013 Top 5 ferrochrome producing countries 2014 Ferrochrome Produc on Country Breakdown Finland 4% Rest of the World 9% Finland 4% Rest of the World 9% India 9% Kazakhstan 11% 2013 China 37% India 7% Kazakhstan 10% 2014 China 36% South Africa 30% South Africa 34% China s production expanded by 7.4% to a record 4.28 million tonnes SA s FeCr output surged by 23.4% to a record 3.98 million tonnes from 3.3 million tonnes, slowly bridging the gap with China. Kazakhstan produced roughly the same amount of material

25 Low and Medium carbon ferrochrome 550,500 tonnes % 2013 Production LC/MC FeCr produc on breakdown by LC/MC FeCr production breakdown Germany 4% country Rest of the world 8% Top Top LC/MC FeCr impor importing countries Rest of the World 9% 646,300 tonnes 2014 Production Kazakhstan 5% South Africa 8% Russia 33% China 42% USA 16% Asia & Australia 32% Western Europe incl. Turkey 43% Source: ICDA Source: ICDA China and Russia are the main producers holding a combined 75% of the global output. Western Europe incl. Turkey and Asia & Australia both account for 75% of global imports. 25

26 China s ferrochrome demand & supply China's ferrochrome produc on and consump on profile China s production reached 4.28 MT in However the rate of growth slowed in the end of There were production cuts for environmental reasons and declining profitability. (in tonnes) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 Fe Cr production Fe Cr imports Fe Cr exports Fe Cr consumption 1,000, Source: ICDA, official customs data Trade-wise, China s HC FeCr imports reached 2.06 Mt up 12% supported by the weakening currencies of its suppliers, the abolishment of a tariff on HC FeCr imports, 2015 HC FeCr production by the 1 st 5 months: 1466 kt (1675kt in 2014) HC FeCr import from Jan to Apr 2015 is 904 kt 26

27 Global HC FeCr trade flows in 2014 (in 000 tonnes) Finland 440 Kt 45 USA Turke S.Korea China y Europe Kazakhstan 1.1 Mt India 800 Kt Japan , South Africa 3.9 Mt Source: ICDA, based on official customs data for 2014

28 Few additional thoughts in conclusion Chrome ore in 2015: Will Chinese Cr ore imports remain as high or will they favour importing ferrochrome? How will progress other important Cr-producing countries like Iran, Albania, Pakistan, Oman? UG2 output should return to pre-strike levels, but China imports less chrome, what will be the impact on UG2? Ferrochrome in 2015: SA is still plagued with power supply issues which may weigh on SA s FeCr output. What about the Chinese market: production cuts due to rising costs, environmental issues, low tender price or not from stainless steel producers, and a higher dependency on overseas FeCr? Stainless steel in 2015: US stainless steel production is expected to continue growing due to strong demand. What about Europe? Early signs of Q seem to show the contrary? Can China continue to increase its stainless steel production and export, especially with the EU Commission anti-dumping case. Will stainless steel production in India start to grow in 2015 given the current low per capita consumption? Hope that global stainless steel production will grow in future! 28

29 Upcoming conference: 2015 Abu-Dhabi, UAE 3-5 November 2015 Reasons to attend conferences: To listen expert speakers! To learn To network To meet old Friends and make New Ones

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