Lu Ping Assistant to President, Director of Marketing Department Baosteel Stainless Steel Co., Ltd. China - Driving Forces for Further Growth
Outline 1 New Change in China's Stainless Steel Market 1.1 China's Stainless Steel Market Stepped in Maturity 1.2 China's Stainless Steel Industry Has Entered the Stage of Development Transition 1.3 New Driving Force of Further Development of China's Stainless Steel Industry 2 Development of Baosteel Stainless 2.1 Brief of Baosteel Stainless 2.2 Current Situation of Baosteel Stainless 2.3 Development Strategy of Baosteel Stainless
1.1 China's stainless steel market stepped in maturity Environmental protection Finance&insurance Logistics Farm machinery Information tech. Communication industry Life Cycle of China's Steel Market Tourism Media Manufacturing Iron&Steel industry Mining industry Production&Sales volume, Profitability New energy Genetic engineering Introduction Growth Maturity Recession
1.1 China's stainless steel market stepped in maturity Life Cycle of China's Stainless Steel Market Volume Process Competition Growth Introduction Maturity Recession SS market in developed countries SS market in China Time 1980 1990 2000 2007 2010 2020 2030
1.2 China's stainless steel industry has entered the stage of development transition The consumption and production of China's SS turns to growing steadily from growing rapidly Growth rate presents like "normal distribution" average growth: 6% (especial capacity) average growth: more than 30% Production growth rate Consumption growth rate average growth: 10%
1.2 China's stainless steel industry has entered the stage of development transition Concentration of China's stainless steel industry needs to be further enhanced Private company: 760, 17 The capacity of top 3 stainless steel companies only accounts for about 45% 39% State owned company: 760 State 39% owned 4 company: 840, 44% Joint venture&wholly foerign-owned company : 320, 17% 2 Source: 51bxg including 23 companies with crude steel capacity over 200,000 ton/y
1.2 China's stainless steel industry has entered the stage of development transition Process Cost-Saving Brought by Industrialisation of Nickel Iron Structural optimization of stainless steel raw materials Alloy yield was low and hard to decarburization, needed to use expensive low-carbon alloy Usage of low-carbon alloy droped a lot, usage of high&media carbon alloy rise gradually, raw material cost reduced obviously Large-scale and development of casting technology reducd the cost by 10%-15% Cost reduced greatly
1.2 China's stainless steel industry has entered the stage of development transition Nickel Iron Has Become the Core Source of Nickel Consumption in China 145.6 47% 411,200MT 68.1%
1.2 China's stainless steel industry has entered the stage of development transition Structure of NPI Production Distribution of NPI Producers 0'000MT 280,000MT 70%
1.2 China's stainless steel industry has entered the stage of development transition NPI application in stainless steel Application change of different NPI
1.2 China's stainless steel industry has entered the stage of development transition Low production cost model--direct delivery of liquid nickel-iron Rotary kiln Liquid NPI from submerged arc furnace Hot delivery(desiliconization) melting +refining Hot rolling Cold rolling Advantages: Enerngy conservation&emission reduction Cost reduction
1.3 New Driving Force for Further Development of China's Stainless Steel Industry Structure of SS Consumption in Downstream Industries in China
1.3 New Driving Force for Further Development of China's Stainless Steel Industry Driving Force for SS in Civil Sector - Improvement of Living Standard In developed region, the demand for high-end stainless steel products rises
1.3 New Driving Force for Further Development of China's Stainless Steel Industry Driving force for stainless steel in Civil Sector - Improvement of Living Standard In rural region of middle and west China, demand for low-end stainless steel products rises
1.3 New Driving Force for Further Development of China's Stainless Steel Industry Driving force for stainless steel in Industrial Sector - Development of Manufacturing
1.3 New Driving Force for Further Development of China's Stainless Steel Industry Driven by Export Growth - Direct Export Export Import
1.3 New Driving Force for Further Development of China's Stainless Steel Industry Driven by Export Growth - Indirect Export Time Export Import Net Export Jan. 23.47 0.37 23.10 Feb. 12.08 0.40 11.68 Mar. 23.75 0.44 23.31 Total 59.30 1.21 58.10
Forecast of China's stainless steel capacity and apparent consumption 0'000MT 1700 1600 Production Apparent consumption 5.26% 1650 3.13% 1500 1400 1300 1430 5.15% 1320 5.6% 6.29% 1480 2.07% 3.57% 6.06% 2012e 2013e 2014e 2015e
2.1 Brief of Baosteel Stainless Company Transformation 2012 2011 2009 Baosteel Stainless Steel Co., Ltd Baosteel Desheng Stainless Steel Co., Ltd Baosteel Stainless Steel Business Unit 2005 Baosteel Stainless Steel Branch 1998 1996 1995 1957 1949 1938 Baosteel Group Shanghai No.1 Iron&Steel Co., Ltd. Ningbo Baoxin Stainless Steel Co., Ltd Shanghai No.1 Iron&Steel (Group) Co., Ltd Shanghai No.1 Iron&Steel Company Shanghai Iron&Steel Factory No.1 Plant Nichia Steel Works Wusong Plant
2.2 Current Situation of Baosteel Stainless Production Bases & Capacity Crude SS capacity 1.5million mt/y, Hot rolled SS 1.28million mt/y Cold rolled SS 0.33million mt/y Shanghai Headquarters Baosteel Desheng Ningbo Baoxin Crude SS capacity 1.2million mt/y Cold rolled SS 0.6million mt/y, SS welded pipe 10k mt/y
2.2 Current Situation of Baosteel Stainless Change in Product Structure
2.2 Current Situation of Baosteel Stainless Jinan Baosteel Steel Processing&Distribution Co., Ltd. Domestic Sales & Service Network Shenyang Baosteel Steel Products Trading Co., Ltd. Changchun Baosteel Steel Products Trading Co., Ltd. Tianjin Baosteel Northern Trading Co., Ltd. Qingdao Bao-mit Steel Distribution Co., Ltd. Chengdu Baosteel Westen Trading Co., Ltd. Shanghai Baosteel Stainless Steel Trading Co., Ltd Ninbo Baosteel Stainless Steel Processing&Distribution Co., Ltd. Foshan Baosteel Steel Processing&Distribution Co., Ltd. Jieyang Baosteel Stainless Steel Trading Co., Ltd. Wuhan Baosteel Central China Trading Co., Ltd.
2.2 Current Situation of Baosteel Stainless Overseas Sales & Service Network Baosteel Europe GMBH Detroit Office Houston Office Baosteel Italia Distribution Center SPA Baosteel America INC. Seoul Office Baosteel Stainless Steel CO., LTD. Howa Trading CO., LTD. Baosteel Espana S.L. Baosteel Middle East Vietnam Representative FZA India Representative Office Office Thailand Representative Office Brazil Office Baosteel Singapore PTE LTD Bao Australia PTY LTD.
2.3 Development Strategy of Baosteel Stainless Brand Strategy Reputation Recognition Popularity A Global Brand with Market Reputation and Leading Service Quality Beauty
2.3 Development Strategy of Baosteel Stainless Sustainable Operation Sustainable Development Products & Services Ecotype high quality stainless steel bases, greenery area in headquarter is 830,000m 2, Ningbo Baoxin is 230,000m 2, coverage rate is around 30%. Circular Economy & Economized Economy Environmental indicators improve year by year, wastewater discharge meets the standard, industrial water recycling rate is over 95%, comprehensive utilization of solid waste like slag reaches over 99%.
2.3 Development Strategy of Baosteel Stainless Social Responsibility Common Development of Enterprise and Employees Visit living-alone old people Social welfare activities
END Thank You!