STI/SPFA 2009 Fall Conference

Transcription

1 STI/SPFA 2009 Fall Conference Scott Draudt 9/24/09 The Outokumpu Group

2 Corporate History & Ownership Consolidation of Swedish Special Steels industry s Avesta AB Merger 1992, BS plc own 40%, gradually increased to 51% Nationalisation (1960 s) British Steel Stainless Merger 2001, initial exchange ratio ASAB shareholders 45%, Outokumpu 55%. Outokumpu group acquire 100% in Finnish mining/base metals company, green-field investment in stainless steel production 1975 (Kemi chrome mine).

3 Outokumpu Stainless Production in Finland, Sweden, the UK & North America A total of about 8,900 employees in 30 countries USA New Castle, IN Richburg, SC Wildwood, FA Schaumburg, IL UK Sheffield Sweden Avesta Degerfors Torshälla Långshyttan Fagersta Örnsköldsvik Finland Kemi Tornio Pietarsaari Sorsakoski Other countries Distribution Sales Co s

4 Jindal Stainless Allegheny (ATI) AK Steel YUSCO Shanxi 2008 Top Global Producers T K Stainless ArcelorMittal Stainless POSCO Outokumpu Stainless Acerinox in '000 tons

5 Not all steel is stainless - global steel production Stainless steel ~28 Mtpa Top 5 global stainless steel producers By slab capacity E Thyssen- Krupp ArcelorM ittal , Acerinox Outokumpu POSCO , Carbon steel ~1 200 Mtpa Source: CRU, Outokumpu

6 Global Stainless Demand from 2007 to 2009 F 5% 0% -5% -10% -15% -20% -25% -30% North America Europe China Pacific Rim Others Total World Change 07 to 08-17% -6% -5% -9% -4% -8% Change 08 to 09-28% -25% 5% -22% -13% -15%

7 US Apparent Consumption Q1 Q2 Q3 Q4 total total Q1 Q2 Total Plate (coil and cut) US Industry (USIS) US Imports US Exports Apparent Consumption (USAC) Sheet and Strip US Industry (USIS) US Imports US Exports Apparent Consumption (USAC) ssina data

8 Stainless steel a contemporary material with excellent green credentials Corrosion-resistant High-strength Hygienic Aesthetic Low life-cycle costs Fully recyclable Catering & Household 34% Welded tubes 5% Main end use segments Other 5% Construction 15% Transport 16% Industrial equipment 25% Source: CRU, February 2007, for all CR stainless steel flat products 2006

9 Current stainless steel markets Current disarray in the financial markets will create turbulence as funding for projects becomes tighter. Weak Dollar End-user demand, demand for special grades and projects, and demand for standard grades are expected to remain at reasonable levels Distributor inventories for standard products are below normal levels due to uncertainty in surcharges and slower turns Lead times have normalized

10 US Stainless steel market update Projects and Special Grades sales are flat Plate Mill Plate demand is soft but ok. The Sheet business (new orders to mills) is weak. The Bar business activity is soft.

11 Bright Spots US government policy & economic factors are creating a major push for clean air, clean water and alternative fuels in North America. These technologies will require significant quantities of stainless plate over the next 20 years. Flue gas desulphurization (FGD) Water desalination and transmission Nuclear energy Bio fuels (agricultural and cellulose) Canadian petroleum tar sands Construction and Liquid Natural Gas (LNG) There is high potential for Duplex and special grades in these product areas complementing the core offering of tailor-made standards in traditional process industry applications.

12 Increased demand of duplex Index (1988 = 100) Other DX LDX Year

13 Applications Pressure vessels Storage tanks Ethanol and bio-diesel Bridges Water engineering, water gates Desalination Potable water distribution in progress Wineries Food processing Dairy in progress Transportation Nuclear as general construction material

14 Raw Material Price Trends USD/t USD/lb LME cash, daily Nickel Molybdenum Mo oxideeurope, Metal Bulletin, daily USD/lb USD/t 2 1,5 1 0,5 Ferrochrome Quarterly Contract price, Metal Bulletin Steel scrap HMS 1&2 fob Rotterdam, Metal Bulletin, daily

15 Raw Material Trends Reported Monthly in Outokumpu s Market Matters A monthly newsletter published by Outokumpu and ed to customers. Contains recently published data and indices affecting the stainless steel industry including raw material pricing trends for Nickel, Moly, Ferrochrome, and Scrap. Also includes metal news, global economic matters, US economic matters, and world views. ed around the 15th of each month. To subscribe to Market Matters, visit or Maureen Meeker at maureen.meeker@outokumpu.com.

16 Thanks!