Russian Steel Market Developments

Transcription

1 Russian Steel Market Developments OECD Steel Committee Russian Steel Consortium Yuri Mishin, Metalloinvest Paris, 5-6 December, 2013

2 Russian economics indicators GDP 6% 3% 0% -3% -6% -9% 5,2% -7,8% 4,5% 4,3% Industrial production 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% 3,4% 2,4% 3,7% 4,1% 4,2% 1,8% 3,0% 3,1% 3,3% E 2014F 2015F 2016F Actual data Forecast April 2013 Forecast September ,6% -9,3% 8,2% 4,7% 2,6% 2,0% 3,4% 3,4% 3,0% 0,7% 2,2% 2,3% 2,0% E 2014F 2015F 2016F Actual data Forecast April 2013 Forecast September 2013 Russian economy has been slowing in GDP growth in 2013 is expected to be 1,8%; industrial output will increase only by 0,7%; and capital investment growth will be 2.5% y-on-y. Main hurdles are thought to be a worsening external markets and low investments on the background of shrinking incomes in main production sectors. Fixed assets investments 15% 10% 5% 0% -5% 10,8% 9,5% 6,3% 6,6% 6,6% 7,2% 7,6% 4,6% -10% -15% -13,5% 2,5% 3,9% 5,6% 6,0% E 2014F 2015F 2016F Actual data Forecast April 2013 Forecast September 2013 Sources: Ministry of Economic Development of the Russian Federation 2

3 Steel production and consumption in Russia Crude steel produstion Finished products balance % 90 Mln.t % 30% 32% 30% 29% 31% % 63% 63% 65% 69% 55% E 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% E EAF share BOF share Exports Imports Production Production Apparent consumption For the first time since 2009 crude steel production in 2013 is expected to decreases by 2 million t y-on-y or by abt 3% Domestic steel use in 2013 is expected to show no growth, remaining at the level of mln. tones Import of steel will stay at the previous year level Export of steel products is set to drop in 2013 by approximately 10% Mln.t Sources: Worldsteel, Russian Steel, Metal-Expert 3

4 Russian steel use by sectors Sectors Steel use in 2013, mln t Growth rate 13/12 CAGR Automotive 1,1-19% -6% White goods and home appliances 1,6 7% 13% Machinery 2,7-11% 8% Hardware 4,8-2% 0% Construction 16,7 6% 4% Pipes & tubes 11,3 5% 7% Other 6,1-3% 8% Total steel use 44,3 mln t Developed oil and gas sector provides relatively high share pipes and tubes Other Automotive White goods and home appliances 6% 3% 3% 14% 38% Construction sector accounts only for 38% of total steel use but it is expected to grow due to strong domestic demand for the new houses and Machinery Hardware Pipes & tubes 11% 25% commercial property Significant reduction of steel consumption in Machine building and Automotive sectors Construction Sources: Matal-Expert, Russian Federal State Statistics Service, The Ministry of Industry and Trade of the Russian Federation 4

5 Russian steel use by products in 2013 Products Mln t Growth rates 2013/2012 Construction longs 12,5 6% Machinery/Engineering longs 1,9-11% Other longs 1,4 6% Hot rolled flat products 4,5-6% Cold rolled coils 2,6-4% Coated products 5,2 0% Large diameter pipes 1,7-6% Other pipes & tubes 9,7 7% Hardware 4,8-2% Positive growth in consumption of long products and pipes & tubes Significant decrease in consumption of SBQ, flat products, Large diameter pipes. Sources: Matal-Expert, Russian Federal State Statistics Service, The Ministry of Industry and Trade of the Russian Federation 5

6 Investments in Russian metallurgy Russian metallurgical companies investments dynamics, billion RR Base scenario Optimistic scenario E 2014F 2015F In , some 1,45 trillion roubles were invested in Russian steel industry. A significant portion of these was aimed at environment protection and energy efficiency improvements. Steel investments are highly dependent upon market conditions Sources: Russian Steel, The Ministry of Industry and Trade of the Russian Federation 6

7 Development of Russian steel industry Key projects 2000 OHF replacement by EAF at Severstal, MMK, Mechel, Ural Steel etc. Construction of new mini-mills in Tumen region, Nizhnie Sergi and Kaluga-Vorsino 2013E 13% 27% (NLMK), Shakhty (Estar), Novorossisk (Novorosmetal), Balakovo (Severstal) etc. 29% 3 % 60% OHF BOF EAF Closures Several steel mills were closed after the world financial crisis and due to overcapacity Crude steel production shops at Krasny Sulin and NMZ Kuzmina was closed. 68% OHF BOF EAF Amurmetal and Zlatoust are currently in Continuous casting <50% Continuous casting > 85% bankruptcy situation Sources: Russian Steel, Chermet 7

8 40 Steel scrap demand Scrap generation/consumption balance in Russia, million mt E 2014F 2015F 2016F 2017F 2018F 2019F 2020F Scrap consumption in Russia Volumes of scrap collection (optimistic scenario) Volumes of scrap collection (pessimistic scenario) In , scrap demand will overcome domestic collection due to new EAFs start-ups As sources of scrap imports are limited, a shortage of scrap my be an issue In September 2013 scrap export tax was reduced 2.5% to 12.5% in line with WTO Accession Protocol Sources: Steel Strategy 2020, Metal-expert, Russian Steel 8

9 Development of GHG emissions regulation The Russian President s Decree on GHG Emissions Reduction: GHG emissions in 2020 must not exceed 75% of 1990 level An action plans on GHG emissions limitation for carbon intensive sectors shall be developed within 6 months period. 9

10 Thank You! 10