steel long products market 70th irepas meeting · 2015. 12. 28. · summary & outlook 2013...

Franc Cardona

Director Marketing & International Affairs, CELSA Group

Steel Long Products Market

70th IREPAS Meeting

Barcelona

March 31st, 2014

Table of Contents

2

• Construction sector overview

• Steel and long products consumption

• Rebars market.

• International price situation.

• Summary & Outlook

Construction sector overview

Global urbanization expected to reach 59.9% by 2030, being 52.1%

in 2011, and population living in urban areas is projected to gain 1.35

billion, passing from 3.63 billion in 2011 to 4.98 billion in 2030.

Global Construction expected to rise by $6.3 trillion or over 70% to

$15 trillion by 2025 compared to $8.7 trillion in 2012, with almost 60%

of all global growth in construction will be in just three countries:

China, India and the United States, while western Europe will remain

5% smaller by 2025 than the 2007 peak

Global growth in construction spending close to 5% in 2014 and

2015, with cautious recovery in EU –construction activity in EU is

forecast to rise 1.5% in 2014 and by close to 2.5% in 2015

Sources: UN, Global Construction Perspectives, Oxford Economics, IHS, and Eurofer

4



• Rebars market.



5

Global Steel Consumption Situation (Mt)

Source: worldsteel

Global steel consumption growth of 3,1% in 2013, confirming

sustained growth since 2009. Expected growth in 2014 of 3,3%

551.443 587.570 641.200 660.060 699.660 720.650

299.886372.860

396.911 390.228384.060 390.471

58.853

60.98861.856 63.222 64.305 69.018

230.588

278.908

302.727 316.761327.047

343.108

1.140.770

1.300.326

1.402.694 1.430.2711.475.072

1.523.247

2009 2010 2011 2012 2013F 2014F

Apparent Steel Use, finished steel products (Mt)

China Developed Economies MENA Others World

6

Global Long Products Consumption (Mt)

Source: Estimation

573 581 645

708 757

818

2008 2009 2010 2011 2012 2013

Long products consumption growing faster, with 8,1% annual

growth in 2013, and already at 143% of pre-crisis levels (2007-

2008)

7Source: Estimation

Long Products Consumption, by Region (Mt)

Asian markets clearly driving global consumption in the last years,

accounting for 70% of total longs consumption

48 53 55 49 4725 30 31 34 33

400439

475 516573

27

3439

42

44

82

89

108

116

121

2009 2010 2011 2012 2013

European Union North America East+ & SE Asia CIS + Other EU + Turkey Other world

8

Long Products by Regions, Growth 2012-2013 (%)

-4,2%-1,9%

11,1%

3,8% 4,4%

8,1%

European Union North America East+ & SE Asia CIS + Other EU + Turkey

Other world TOTAL

Overall 8,1% global growth with significant differences among

regions, and worse than expected in some –EU and North America

Source: Estimation

9

Long Products Consumption, by Product (Mt)

Source: Estimation

250 260 290 317 349

155 168188

205220

3944

47

48

51

143170

182

187

198

2009 2010 2011 2012 2013

Reinforcing bar Wire rod Sections Merchant bar

The trend of change in the product mix remains reasonably stable,

with reinforcing bars gaining market share and accounting for 43%

of total longs consumption in 2013, while wire rod accounted for

27%, merchant bars for 24%, and sections for 6%

10

-6,2%

4,8%

12,4%

8,2%7,0%

10,1%


Other world TOTAL

Long Products by Regions: Rebars Growth 2012-2013 (%)

Impressive overall 10,1% annual growth, with significant strength in

the majority of the regions and with European Union heavily

influenced by severe declines in consumption in Spain, Portugal

and Italy

Source: Estimation

11

Long Products by Regions: Sections Growth 2012-2013 (%)

1,7%

9,7% 9,6%

-0,5%

3,2%

6,3%


Other world TOTAL

Significant growth in Asian countries, North America, particularly

in the USA, and also in Turkey

Source: Estimation

12

Long Products by Regions: Merchant Bar Growth 2012-2013 (%)

-0,2%

-14,3%

9,1%

-7,2%

5,3% 5,9%


Other world TOTAL

Great differences among regions, with reasonable overall growth

influenced by performance in Asian countries. Noticeable sharp

decrease in USA and CIS.

Source: Estimation

13

Long Products by Regions: Wire Rod Growth 2012-2013 (%)

-6,2%

-3,0%

9,2% 8,3%9,1%

7,3%


Other world TOTAL

European Union, Mexico and Canada have seen significant drop in

consumption, while other regions, such as Africa, have had

noticeable growth

Source: Estimation

14



• Rebars market.



15

Rebars Consumption, by Regions (Mt)

14 12 12 11 108 10 9 10 10

152 162183

209235

1316

19

21

23

6260

66

66

71

2009 2010 2011 2012 2013

European Union North America East+ & SE Asia CIS + Other EU + Turkey Other world

Developing economies driving global reinforcing bars

consumption, with China accounting for 57% of total consumption

Source: Estimation

16Source: Estimation

Rebars consumption vs production per area 2012

Having a reasonably balanced regional supply and demand should

remain a priority for reinforcing bar producers

10,1 14,1

203,1

15,0 17,5

89,2

10,3 10,1

202,6

13,2 9,4

103,5

North America European Union China CIS & Other non-EU

Turkey RoW

Production Consumption

17



• Rebars market.



100

200

300

400

500

600

700

800

900

03 04 05 06 07 08 09 10 11 12 03/13 09/13 03/14

Rebars 295 450 385 490 630 870 480 600 650 600 600 585 565

WR Mesh 290 500 385 500 600 870 490 610 660 610 610 595 570

Billets 260 380 330 430 580 820 430 560 600 535 525 515 510

US

D (

fo

b)

18

Reinforcing bars, wire rod and billet FOB price

Slight trend downwards in the latest months, paired with

tightening price differentials due to a relatively stronger raw

materials

Source: Estimation

19

0

100

200

300

400

500

600

700

800

900

03 04 05 06 07 08 09 10 11 12 13 14-Q1

Rebar 315 455 415 520 660 900 500 620 650 620 605 585

Scrap 155 255 210 265 340 450 300 375 410 395 385 360

Spread 160 200 205 255 320 450 200 245 240 225 220 225

Rebar Scrap Spread

Reinforcing bars CFR price and spread

Usd

/T

Continuation of downward trend in prices with very tight margins

not matching global demand growth

Source: Estimation

20



• Rebars market.



21

Summary & Outlook

2013 ended with significant global growth in longs consumption,

although worse than expected for some regions

2014 expected to maintain the global growth trend in consumption,

including cautious recovery in EU construction sector and

strengthening of USA growth driven by housing market

Long term fundamentals for longs remain solid, with emerging

economies expected to continue to drive longs demand, to support

their urbanization and economic development, and with China growth

softening perceived as major risk for global consumption growth

Margins for longs still in a thigh situation, with balancing supply and

demand in markets fundamental, and having production capacity

growing faster than demand a major challenge

22

Thank you for your attention !

steel long products market 70th irepas meeting · 2015. 12. 28. · summary & outlook 2013...

Documents