Outlook for Stainless Steel Scrap in the Asian Market 2014

Transcription

1 Outlook for Stainless Steel Scrap in the Asian Market

2 Content 目錄 Part 1. HSKU who we are and what we do 1. 興固不銹鋼的簡介 Part 2. Stainless Steel Scrap Outlook in Asia 年亞洲廢不銹鋼市場的展望 Part 3. Conclusion 3. 總結 2

3 3

4 APPROX. 15,000mt in Nickel Terms/

5 Aerial View of Main Processing Yard 5

6 Content 目錄 Part 1. HSKU who we are and what we do 1. 興固不銹鋼的簡介 Part 2. Stainless Steel Scrap Outlook in Asia 年亞洲廢不銹鋼市場的展望 Part 3. Conclusion 3. 總結 6

7 Avg Nickel Discount 90% 7

8 Main Events during Time Block A: Golden Years! The 1- The Golden years of World and China's Stainless sector. Both increase of demand and buildout of Stainless mills. Result :- Because of the number of stainless mills being build inside china and ramp up around the world, Nickel was in shortage and nickel started to rise to multiyear high also pushing the scrap discount closer to Nickel with discounts near 100% Then What happen:- Low Nickel Pig Iron was produced inside china and mills started to test the product and use it for production of 200 series. and Meaning Extra Nickel Units for the Mills. 8

9 Main Events during Time Block B: Produced + Financial Crsis! Mid NPI 1- As Nickel Increases, Mills and NPI producers seeks for more breakthroughs in Nickel Pig Iron, Especially in minizing the impurities contents so it can be used for 300 series production and higher nickel content. Result :- NPI produced in EAF was produced with approx. 3%~4% hence, even more nickel units for the stainless mill to choose from. Pushing Scrap discount to approx. more industrial Average of approx. 90% Then What happen:- Financial Crisis happened. And coupled with new nickel units and demand suddenly disapper both nickel price and Scrap Discount Fell like a stone. 9

10 Main Events during Time Block C: The Pig Farm Stocking up Nickel! 1- As Nickel falls below USD$20,000/mt and below NPI producer's costs, forced the mills to start using scrap again.. Result :- Nickel fell below USD$18,000/mt which was considered at the time to be the break point of the costs of both Low and Mid NPI. Hence, with the release of QE1 and China's own lending explosion, Even Pig Farmers inside China started to Buy Nickel. Then What happen:- Nickel Price recovered to more stable prices and scrap discounts stable of above 90% Discount rate. 10

11 Main Events during Time Block D: RKEF NPI Produced and Over production of NPI & Stainless products. 1- As Nickel moves up, Pig farmers starts to sell their inventory and then market was back to normal supply and demand. Yet, NPI producers with aim to reduce costs, High NPI was produced using RKEF Methodes. Result :- RKEF NPI have a cost advantage over Scrap, hence, the nickel Discount in Scrap fell below 85%. With unlimited supply of nickel ore from Indonesia, creating oversupply of Nickel Units inside China. Nickel once again fell to close to NPI Producer's cost of production USD$13,000/mt 11

12 Main Events during Time Block E: Indonesia Nickel Ore Ban! 1- Indonesia Ore Ban. And from as of writing of the report, in mid April the Ban is still in force. This will give support to the nickel price and assist Stainless Scrap Discount to return to average discount of 90%. Result :- Reduced Nickel Units from the High % NPI. Will force the scrap demand and in turn the scrap discount rate should return to the average and maybe even higher. Future:- Nickel discounts in scrap are attractive to the stainless mills again and without the competition from the High % NPI, Scrap discounts will return to closer to raw material. 12

13 Indonesia Ore Ban will create a shortage of CHEAP Nickel Units. This will create an increase Demand for Scrap in Asia. And so would the nickel discount in Scrap Nickel? 13

14 Part 3. Conclusion 總結 1- Looks like 2014 will be another recording stainless steel production year over 40Million Mt. 2- So As Mills continuously searching to find the cheapest discounts of raw material in to their melts. 3- And Without the competition of High Nickel NPI inside China due the Indonesia Ore Ban, meaning less cheaper nickel units to compete. 4- Stainless Scrap Discount currently still below average. 5- My Guess:- Stainless scrap will be purchased by the mill heavily till the discount recovers to closer to above average and maybe near raw material pricing. Which will result a big demand for Stainless Scrap till NPI starts to be produced from Indonesia. 14

15 Advantage of Using Scrap 1- There is always a discount Against raw material 2- Reducing Energy 56% (ISRI) Vegas Yang 楊耀賢 vegasyang@hsku.com No. 166 of Sec. 1 Chang-He Road, Tainan, Taiwan 台灣台南市長和路 1 段 166 號 3- Assist in Recycling and a greener environment 廢不銹鋼的優勢 1 鎳總有折扣對原料 2 - 降低能耗 56%(ISRI) 3 - 協助資源回收及環境綠化 15