The Influence of Indonesian Ban On China and Global Nickel Supply/Demand. Jiang Xinfang SHANGHAI TSINGSHAN MINING INVESEMENT CO.

Transcription

1 The Influence of Indonesian Ban On China and Global Nickel Supply/Demand Jiang Xinfang SHANGHAI TSINGSHAN MINING INVESEMENT CO., LTD April 2014

2 CONTENT 1. NPI s Demand in China 2. NPI s Supply in China 3. Global Nickel Supply/Demand Balance

3 1. NPI s Demand in China

4 million tonnes Chinese Stainless Steel s Production s 300s China SS production Chinese Stainless Steel s production was 19.5 million ton in 2013, among which 300- series was 9.16million ton, accounting for 47% of the total production, while 200-series was 5.4million ton and accounting for 28% in The total nickel consumption for stainless steel in 2013 was around 800,000 ton.

5 China New Stainless Steel Capacity in 2014 NO. PROVINCE COMPANY INTEGRATION OPERATION DATE CAPACITY OUTPUT PRODUCT 1 Shanxi Tisco N Nov ,000 1, s 2 Fujian Tsingshan Decent Nickel Industry Y Jun ,500 1, s, 300s 3 Fujian Fuxin Stainless Steel N Jan s 4 Shandong Shengyang Jinhui Y June , s 5 Guangxi Beihai Chengde Y Feb s TOTAL ('000 tonnes) 4,720 2,750 Stainless steel production will be increased by 2,750,000 ton, while 800,00ton surplus capacity will be eliminated in The estimated stainless steel production will be around 21,500,000 ton, increased by 10%, including 9,700,000 ton of 300-series and 6,500,000 ton of 200-series. The overall nickel consumption for stainless steel in 2014 will be around 860,000 ton.

6 Nickel Consumption in Stainless Steel and NPI s Production '000 ton % 60% 50% 40% 30% ? 20% 10% f NPI Production ? Ni demond in China SS NPI ratio 25% 26% 28% 40% 46% 54% 65%? 0% Nickel consumed in stainless steel was around 800,000 ton nickel in 2013, of which 65% was NPI as 520,000 ton. Nickel demand in Stainless steel in 2014 is estimated as 860,000 ton in 2014, increasing by 60,000 ton. If we assume the same NPI ratio as 65%, the NPI potential demand will be 560,000 ton.

7 2. NPI s Supply in China

8 NPI Production Capacity in China Inner Mongolia Liaoning Guangxi Hebei Shandong Henan Jiangsu Fujian Guangdong 000t Capacity per month Jan., 2014 Inner Mongolia Liaoning Jiangsu Shandong Fujian Others TOTAL China has a very big NPI production capacity, while the capacity utilization in Jan. is less than 65%.

9 NPI Production in China kt Low Grade NPI Middle Grade NPI High Grade NPI NPI s production in 2013 was 520,000 ton, of which 65,000 ton was produced by Tsingshan.

10 New NPI Projects in 2014 Province Plant Equipment Process INNER MONGLIA Operation Time Estimated Capcity Huade-hualin 33000*2 submerged arc furnace + non rotary kiln ,000 Macrolink 33000*4 RKEF ,557 Yatai Steel 33000*2 RKEF ,690 Jien Nickel 45000*2 RKEF ,768 Zhuozi mountain Chengxinde 30000*2 RKEF ,000 Hebei Niejin 33000*4 RKEF ,557 Jiangsu Suqian Xiangxiang 33000*3 RKEF ,000 Shandong Yichen 33000*4 RKEF ,835 Guangdong Yichuan 36000*2 RKEF ,614 Fujian E united Group 33000*4 RKEF ,126 Liande 33000*2 RKEF ,000 Hubei Sino Nickel 33000*2 RKEF ,563 Anyang Steel Minyuan Henan 18000*2 RKEF ,000 Special Steel Guangxi Huahui 33000*2 RKEF ,563 Physical Quantity(T) 656,273 TOTAL Nickel Metal(T) 72,190 The NPI capacity added in 2014 will be over 70,000 ton. The existing surplus will be further intensified, while the ore supply is still pending.

11 High & Medium Grade Ore Available from Philippines in 2014 Grade AREA Shipping Time Vessels /month Max. Vessels /year TOTAL QUANTITY Zambales NOV.-next JULY PALAWAN DEC.-next June High SURIGAO APR.-NOV OTHERS APR.-NOV TOTAL Zambales NOV.-next JULY PALAWAN DEC.-next June Medium SURIGAO APR.-NOV OTHERS APR.-NOV TOTAL Max. quantity estimated in 2014 : High-grade (Ni Content 1.8%): about 205 shipments, 10,250,000 ton. Medium-grade (Ni Content: about 1.5%): about 181 shipments, 9,050,000 ton.

12 Nickel Ore Stock in Major NPI Plants Group Stocks(kt) Annual Capacity (kt) Annual Consumption (kt) On average, stocks of main NPI producers will be depleted in 6 months. Consumption Period Tsingshan Xinhai Technology Jiangsu Delong Suqian Xiangxiang Chengde Jin haihui Baotong Nickel Shandong Lutai Macrolink Sichuan Dayang Beigang Nieye Jiyuan Shandong Xinyang TOTAL

13 Nickel Ore Stock in Chinese Ports MAIN PORTS AND PLANTS PLANTS High Grade PORTS Medium Grade Tianjin & Inner Mongolia Area Jiangsu & Shandong Area Macrolink Fangcheng Area Luyuan Area (Baosteel-desheng) Tieshan Area Yingkou Area Tsingshan Plants TOTAL 1, Nickel ore stocks in China in Feb., 2014: high-grade, 25,300,000 ton; medium grade: 1,500,000 ton. Based on the average monthly consumption in 2013 as 3.5M ton, the existing stock will be depleted in 7 months.

14 Theoretical NPI Production from Ore Available Max. Quantity from Philippines Stocks in China (by FEB. 2014) TOTAL High-Grade Medium Grade Low-Grade Million ton Ni ton 110, , ,000 Million ton Ni ton 83,000 14,000 97,000 Million ton Ni ton 137,000 16, ,000 Total Ni ton 640,000 1)The available high grade ore will be around 35.3 M ton, which will be produced into high grade NPI as 390,000 ton Ni. 2)The available medium grade ore will be around 10.5 M ton, which will be produced into medium grade NPI as 97,000 ton of Ni. 3) Deduct 8 M ton for pig iron, the low grade ore available for low grade NPI will be 29 M ton, which will be produced as 153,000 ton Ni. 4)If all the existing stock and max. quantity from Philippines was depleted in 2014, theoretically 640,000 ton Ni will be produced, which will meet the potential NPI demand (560,000 ton ) if the NPI ratio maintain unchanged in 2014.

15 The total NPI production in 2014 could be roughly predicated as 370,000 ton, based on existing Q1 data, gradually decreasing production in Q2 and Q3 due to cost disadvantage comparing with other stainless steel raw material, and Q4 production up to monthly ore available from Philippines. Kt Monthly NPI Production Forecast Jan-2014 Feb-2014 Mar-2014 Apr-2014 May-2014 Jun-2014 Jul-2014 Aug-2014 Sep-2014 Oct-2014 Nov-2014 Dec-2014 Source:Antaike, Tsingshan Group Low Grade NPI High&Middle Grade NPI

16 3. Global Nickel Supply & Demand Balance

17 Nickel Demand in 2014 stainless steel production by area('000t) Year Year Year Year 000t F 2015F USA Japan Europe Korea Taiwan India China Other Total Total Ex-China % change yoy -0.90% 0.22% 3.31% 3.81% Wold Ni Demand China Ni Demand Wold Ni Demand Ex-China ,038 1,082 Change y-o-y Source:Macquarie Research, Tsingshan Group Based on world stainless steel production forecast in 2014, the global and Chine nickel consumption are estimated as around 1.9 M ton and 860,000 ton respectively.

18 Supply Coming from New Projects Ex-China 000't finished NI F 2015F Vale Norilsk Nickel BHP Billion QNI Xstrata Anglo American Sumitomo MM Eramet Indonesian NPI Cubaniquel Sherritt Ambatovy Pamco Minara/Glencore Aneka Tambang Larco SNNC Votorantim Cunico Others Disruption allawance Total World (Ex-Chinese ) Change t y-o-y Chinese NPI Jinchuan Nickel Other Chinese Total World Change t y-o-y Source:Macquarie Research, Tsingshan Group

19 Global Nickel Supply/Demand Balance Forecast Global Nickel Supply/Demand 2014f 2015f Global Nickel Supply Surplus in 2013(a) 178kt -26kt Increasing Supply Chinese NPI Decreasing Production (b) Chinese other Ni Production (c) -149kt (= ) 11kt (= ) -221kt (= ) 15kt (= ) Global Increasing Ni ex-china (d) 34kt 131kt Increasing Demand Stainless Steel in China (e) 55kt 60kt Global Demand ex-china (f) 45kt 44kt Balance (=a+b+c+d)-(e+f) -26kt -205kt Remark:1) Global Nickel Supply Surplus in 2013 : 178kt(source:Macquarie research) 2) Assume Chinese stainless steel production increase as 7% in Global nickel supply and demand will be balanced in There will be a shortage as 200,000 ton in 2015 if the ban continues in 2015.