EXPORT POTENTIAL OF STEEL BILLETS AND REBARS IN

MENA REGION

PRESENTED BY-SOOBIAN AHMED

10-MIB-40

COMPANY PROFILEo Hindustan Steel Private Limited was set up on January 19,

1954. Steel Authority of India Limited - A Maharatna Ranked 21st largest Steel Producer with 13.8 MTPA 85.82% of Equity is owned by Government of India. NET SALES 2008-09 : Rs 43,204 2009-10 : Rs 40,551 2010-11 : Rs 42,719 EPS 2008-09 : Rs 14.94 2009-10 : Rs 16.35 2010-11 : Rs 11.87

MAIN ACTIVITIESIt produces both basic and special steels for domestic construction, engineering, power, railway, automotive and defence industry for sale in domestic and international markets. SAIL produces iron and steel at five integrated plants and three special steel plants.

SAIL's Consultancy Division (SAILCON) at New Delhi offers services and consultancy to clients world-wide.

SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies for the steel industry.

SAIL-ITD is an ISO 9001:2000 accredited unit of SAIL engaged in export of Mild steel products and import of raw material.

TASK ASSINGNED

To study Global Steel Scenario To study Steel Billet and Rebar Pricing pattern and

Competitors. To study the major Exporters of Steel Billets and Rebar in

MENA region. To study the MENA as a potential Market for Steel Billets

and Rebars.

METHODOLOGY Desk Research/Secondary Research

WORLD STEEL SCENARIO

IN 2010 WORLD PRODUCED 1413.6 Million Tonne of steel out of which 626.7 million Tonnes was produced by China followed by Japan ,US, Russia and India.

PRODUCT AND REGION

EU C.I.S. North America South America Africa Asia Oceania0

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Steel Billet Production (‘000 MT)

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STEEL BILLET PRODUCTION (‘000 MT)

C.I.S.

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EXPORTS OF BILLETS AND SEMIS (000' MT)

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Major Billet Exporting Nations('000 MT)

Turkey RussiaUkraineIndia

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Imports of Billets and Semis(000’ MT)

2006-07

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CO-RELATION BETWEEN TURKEY SCRAP AND BILLET PRICE IS 0.649346

Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 110

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Turkey Scrap and Billet Price Comparison $/FOB/T

ScrapBillet

ANALYSIS AND FINDINGS ◦ Region wise Asia has overtaken CIS as the largest billet

producer in 2010. But still CIS is the largest exporter of Billets.

◦ Increase in the cost of manufacturing due to increased prices of coal and coking coke has resulted in fall in output of CIS Steel makers.

◦ The demand has also fallen due to uprising in Middle East a major market for CIS producers.Low profit margin for manufacturers of CIS on Billets as compared to more profit margin on Flat steel product is also a reason for fall in billet production.

◦ MENA region Uprising and Low construction has also affected the demand for billet.

◦ Political unrest in Middle East and North Africa has compounded the problem as many of the captive export markets for Black Sea based and Turkish mills have suddenly vanished creating a vacuum, forcing them to find alternate destinations.

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Production of Concrete Reinforcing Bars (000' MT)

2006-072007-082008-092009-10

Mar/10 Apr/10 May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 Jan/11 Feb/11 Mar/11 Apr/110

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World Average Rebar Price

Production of Concrete Reinforcing Bars (000' MT)

2006-07 2007-08 2008-09 2009-10

Asia 108034 122490 115628 139038

World 147082 164884 158675 166761

Asia share (in %) 73.45154 74.28859 72.87096 83.37561

2006-07 2007-08 2008-09 2009-100

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Asia World

STEEL CONSUMPTION IN MENA REGION

*ASU (mmt) Growth rate2009(est.) 2010(f) 2011(f) 2009(est.) 2010(f) 2011(f)

Middle East, 40.7 44.7 48.4 -8.00% 10.00% 8.20%IRAN 16.3 16.6 17.5 4.60% 1.80% 5.50%SAUDI ARABIA 7.6 9.3 10 -13.10% 22.20% 7.90%U.A.E 6 6.9 7.4 -38.60% 16.40% 6.50%

ASU* (mmt) Growth rate(as%age)2009 (est.)2010(f)2010(f) 2009 (est.)2010(f) 2010(f)

AFRICA(TOTAL) 26.4 28.7 31.3 9.60% 8.60% 9.30%

Algeria 4.4 4.8 5.3 35.40% 10.10% 9.20%Egypt 9.2 9.5 10.1 40.00% 3.60% 6.20%Morocco 1.9 2.1 2.3 24.30% 8.20% 10.40%

*ASU-APPARENT STEEL CONSUMPTION

ANALYSIS AND FINDINGS Asia is the Major producer of Rebar, producing 83

% of World production. China is producing more than 3/4th of Asia’s production.

Rebar being a finished product, it’s demand depend on the rate of infrastructural development.

Demand for rebar will be high in MENA region due to high construction rate.

MENA HAS HUGE POTENTIAL BCZ…..

MENA region has the highest construction rate and the most promising region after BRIC.

Low domestic production : HADID in Saudi Arabia, LISCO in Libya, QASCO in Qatar, EZZ Steel in Egypt, SONASID in Morocco, ESI in UAE , Arcelor Mittal in Algeria are Major steel producers.

There is a Huge deficit in Domestic production and Domestic Demand.

MAJOR INFRASTRUCTURAL PROJECT IN MENA REGION

FOOTBALL WORLDCUP 2022 :QATAR is looking to spend $70-billion on infrastructure to host the FIFA World Cup

DUBAI IS BIDDING FOR 2024 OLYMPICS

$4.3trn to be spent on MENA construction sector to 2020

A report, sponsored by PricewaterhouseCoopers and carried out by Global Construction Perspectives and Oxford Economics, predicts a total of $4.3 trillion is forecast to be spent on construction in the Middle East and North Africa region over the next decade, representing growth of 80 percent.

King Abdullah Economic City - Seaport Budget: $5bn 

Masdar City - Phase 1 – Abu Dhabi Budget: $1.6bn

King Abdullah Financial Centre - 28 Buildings Budget: $2.91 billion 

Princess Norah UniversityBudget: $2.67 billion 

Prince Talal Bin Waleed Of Saudi Arabia has recently announced construction of World Tallest Building in Jeddah Costing US $ 1.2 bn.

Mena Holding Group, a Kuwait-based construction company, plans a $24.2 billion satellite city in Egypt.“The Ayaat City will be built on an area of 1.9 million sq m in 6 October City, about 38km southwest of Cairo, and will cost about 140 billion Egyptian pounds ($24.2 billion) over 20 years.

In Qatar major infrastructure projects would include the $9 billion New Doha International Airport, the $7 billion New Doha Port project, the $13 billion Qatar-Bahrain Causeway, as well as a handful of power and water plants.

The Government in Algeria recently approved a plan that will be implemented by 2014 for the construction of popular homes, schools, hospitals, roads and railways involving an investment of 286 US billion dollars.

THANK YOU!!!