Refractories Market Trends Alison Saxby. IM22 Vancouver 2 April 2014

Transcription

1 Refractories Market Trends Alison Saxby IM22 Vancouver 2 April 2014

2 Disclaimer The statements in this presentation represent the considered views of Roskill Information Services Ltd. It includes certain statements that may be deemed "forward-looking statements. All statements in this presentation, other than statements of historical facts, that address future market developments, government actions and events, are forward-looking statements. Although Roskill Information Services Ltd. believes the outcomes expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include changes in general economic, market or business conditions. While Roskill Information Services Ltd. has made every reasonable effort to ensure the veracity of the information presented it cannot expressly guarantee the accuracy and reliability of the estimates, forecasts and conclusions contained herein. Accordingly, the statements in the presentation should be used for general guidance only.

3 Presentation Outline Setting the scene the refractories industry today Refractories markets Iron and steel industry Cement Glass Overall outlook for refractories

4 Setting the scene

5 Major trends in the global refractories industry over the last decade Consolidation of refractory companies, and globalisation Vertical integration Environmental aspects recycling, CO 2 emissions Dramatic expansion of Chinese domestic refractory industry, mainly driven by the requirements of its steel and construction industries. Rising raw material costs Decrease in specific refractory consumption Move from shaped refractories to monolithics worst global economic recession, even deeper than the Wall Street Crash or Great Depression in the Thirties. More prolonged than first predicted. Source: Roskill

6 Reduction in specific consumption of refractories Shyam Group commissioning its steel plant at Jamuria, West Bengal In Source: Dr Richard Flook, Mosman Resources

7 Refractory production( 1000t) % Monolithic Trend 2 is move to monolithics, using Japan as an example 100 4,000 3,000 Total Refractory % Monolithic , , Unshaped Refractory Source: Dr Richard Flook, Mosman Resources

8 The Iron and steel industry dominates refractory consumption Refractories End Uses market share (2013) % Non-ferrous metals 4.5 Glass 2.5 Ceramics 2 Chemicals 3.5 Other 1.5 Cement and Lime 13 Iron & steel 73 Source: Roskill

9 Refractory production has grown over the last decade to 38.6Mt in 2013 Production of refractories by region and country, 2002 to 2013 (000t) China Europe USA Japan Russia India Latin America Others Source: Roskill estimates Source: Roskill

10 Not all is rosy in the Chinese refractory industry.. MIIT describes the Chinese refractory industry as large but not strong Issues affecting the industry are: Inefficient mining, poor environmental and restoration practices High specific consumption Low industry concentration Low profitability Source: Dr Richard Flook, Mosman Resources Source: Roskill

11 Iron & Steel Industry

12 Crude steel production by region (000t) ,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , , Asia European Union (28) North America CIS South America and Caribbean Other Europe Middle East North Africa Sub-Saharan Africa Oceania Source: Roskill

13 Varying opinions as to the growth rate in crude steel production Source: THS, Roskill

14 Varying opinions as to the growth rate in world crude steel production Source: THS, Roskill

15 And finally Roskill s forecast, CAGR of 3.3% from 2013 to 2020 World production of steel and forecast until 2020 (000t) Forecast period Oceania European Union (28) CIS Other Europe North Africa Asia North America South America and Caribbean Middle East Sub-Saharan Africa Source: Roskill

16 Cement industry

17 World cement production has tripled between 1993 and ,500 Global production of Portland cement (Mt) 2,000 1,500 1, Source: USGS and Roskill

18 China now dominates world cement production with a 58% share (Mt) Cement producing countries >50Mt in 2012 (Mt) 2007 to ,000 2,500 2,000 1,500 1, China India USA Brazil Iran Vietnam Russia Turkey Japan Source: USGS

19 Glass industry

20 Global glass output has grown by 5.5% AAGR between 2008 and 2012 World: Estimated production of glass by region and type, 2012 (000t) 120, ,000 80,000 60,000 40,000 20,000 0 Asia Europe N. America CIS Middle East S America Africa Container Flat Fibreglass Other Oceania Source: Roskill Soda Ash Global Markets Industry and Outlook 2014

21 Chinese glass production has risen; 40% of the global total in 2012 Chinese glass production by type (000t) 70,000 60,000 50,000 40,000 30,000 20,000 10, Flat glass Container glass Fibreglass Note: Flat glass: plain glass in cases each weighing 50kg each; China also produces substantial amounts of other glass products, eg glass tableware Source: Roskill Soda Ash Global Markets Industry and Outlook 2014

22 Trends in the container glass industry future relies on beer and wine Container glass - growth in its use has slowed because of competition. Asian production now accounts for 34% of the total. Growth driven by China, but also India and Thailand EU second largest producing region concentrated ownership Competition from aluminium and PET; Overall glass share of the packaging market has declined but the general increase in the use of packaging has offset this to some degree. Aluminium is the main competitor in the beverage sector in cans. Improvement in recycling rates Source: Roskill

23 Flat glass industry trends - > 95% made using the Float process Over 80% of production is carried out in China, USA and Europe Growing sector; Over 380 float glass lines in production, under construction or planned Consolidation: Production dominated by four companies accounting for roughly half of world output Nippon Sheet Glass/Pilkington, Asahi Glass, Saint-Gobain and Guardian. Source: Roskill

24 Summary of trends

25 Further major ongoing changes this decade Continued decrease in specific refractory consumption Continued shift from shaped products to monolithics Slower growth in the steel industry in China Slower construction growth Increasing cost of energy Increased sustainable mining costs in China increase cost of raw material prices, especially in China due to cost increases and trend to exports of higher performance materials Source: Roskill

26 Economic changes going forward Slowdown in BRIC economies Recovery of USA, Japan & Europe simultaneous growth predicted in H first time since 2010 Slower growth in China, but more stable and better quality depends on pace and priority of reforms Rising global interest rates Turmoil in some important emerging markets including the CIVETS and MINTS (elections in Turkey, South Africa, Indonesia, Nigeria, India, Brazil, Source: Roskill

27 What does this mean for refractory growth rates? Steel industry Steel industry will remain the main driver of growth rates with crude steel forecast to grow at a CAGR of 3.3% to reach 1,974Mt by Refractories for steel will see the highest growth in Asia, particularly China Demand for steel refractories is expected to grow at a lower rate to steel output, averaging 2.8%py to reach 34.2Mt in Cement Industry Consumption of refractories for cement and lime production is estimated at 5.0Mt in Cement production worldwide is expected to average growth of 4.5%py to 2020, taking output to around 5,260Mt. Demand for cement refractories will therefore be concentrated in the Asian region, with global use forecast to average 4%py to reach 6.6Mt in Overall growth rate Between 2013 and 2020, overall demand for refractories is forecast to grow at a CAGR of 3.1% to reach 47.9Mt. Source: Roskill

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