uk-damstahl report april 2017 · • outokumpu set the surcharge for type 304 (1.4301) to 1,452...

Damstahl Stainless Steel Report No. 111 – April 20171 © Damstahl 2017. Damstahl - a member of the NEUMO-Ehrenberg-Group

DamstahlStainless Steel Report #111

April 2017


Stainless Steel at a Glance 3

European Industry News / PMI Status 7

Relevant Issues in Damstahl-Land 10

Imports all Damstahl Countries 11

Germany 13

The Netherlands 17

Denmark 21

Sweden 25

Norway 29

Slovenia 33

Finland 37

Raw Materials 41

Focus of the Month 46

Reflection of the Month by Markus Moll 53

Contents


Stainless Steel at a Glance

Market: Good times are back and more to come

• 2017 started on a quite strong level in almost all stainless steel playgrounds. Despite all political irritations caused by the Brexit, the new US administration or the deteriorating relationship with Turkey, most industry segments are upbeat for 2017.

• All EU economies have bottomed out in the latter half of 2016 and growth expectations have been upgraded in all countries for 2017

• The first ‘shock’ about the election of President Trump in the US and his anti-globalisation views has gone by, and industry leaders in- and outside the US expressed that they do not expect any drastic changes in the trade relationships, as the US industry would be the biggest loser in the end.

• The PMI’s (Purchasing Manager Indices) are up in all major markets world-wide indicating further momentum around the globe.

• China has virtually left the CRC market now, but is very aggressive in HR products. Thus, CRC base prices are stable or rising, whilst HRC prices (for 304) are under pressure at the moment.

Alloy Surcharge:

• Contrary to the expectations of most market participants the alloy surcharge in April rose again, moving to the highest level since March 2012 for type 304 and to a 30-month-high for type 316.

• Outokumpu set the surcharge for type 304 (1.4301) to 1,452 EUR/t in April 2017 up from 1,404 EUR/t in March 2017. The surcharge for type 316 (1.4401/1.4404) was raised from 1,926 EUR/t in March 2017 to 2,021 EUR/t in April 2017.



Building & Construction:

• The extremely cold January took its toll: For January 2017 the statistical office of the European Union EUROSTAT reports production in the construction sector to have decreased by 6.2% yoy in the euro area and by 3.3% yoy in the EU28.

• The decline in the euro area was mainly due to civil engineering falling by 8.2% yoy and building construction going down by 5.9% yoy. In the EU28 the decrease in production was caused by civil engineering falling by 5.7% yoy and building construction declining by 2.8% yoy.

• Highest increases were seen in: Hungary +18.3% yoySweden +10.0% yoy

• Largest decreases were recorded in: Belgium -18.0% yoySlovakia -17.2% yoySpain -13.1% yoy

Consumer Goods:

• The German electronics industry was off to a good start in 2017, as order intake increased by 7.0% yoy. Domestic orders improved by 7.1% while orders from abroad increased by 6.9%, supported by a strong increase in demand from the euro area (+14.5% yoy).

• This strong increase also reflects in the branch revenues, improving from 13.9 bn. EUR in January 2016 to 14.5 bn. EUR in January 2017.

• In spite of global economic and political uncertainty the business climate in the German electronics industry continues its 6-month-upward trend.



Automotive:

• The European Automobile Manufacturers’ Association (ACEA) saw new passenger car registrations increasing only modestly in February 2017 by around 2.2% yoy totalling 1,078,490 units.

• In the first two months of the year 2,248,022 new passenger car registrations were recorded in Europe, corresponding to an increase of around 6.2% when set against the same period a year earlier. The increase was mainly due to the double-digit growth of 10.2% yoy in January.

• Among the major markets only Italy and Spain saw increasing demand during the month, while France, Germany and the UK saw a decline:

Italy +6.2%Spain +0.2%France - 2.9%Germany - 4.5%United Kingdom - 2.3%

• Especially the new EU member states (+15.9% yoy) positively contributed to the results of the region.



Process Industry:

• According to the German engineering association VDMA, order intake in mechanical and plant engineering in February remained overall at the previous year’s level as domestic demand could not build upon the good demand seen in January 2017.

• Demand from abroad, however, rose again, mainly due to increasing orders from the euro area.

• The three-month comparison from December 2016 to February 2017 set against December 2015 to February 2016 shows a decline in orders of around 3% due to domestic orders increasing by 3% and orders from abroad dropping by 6%.


European Industry News / PMI Status

• European Industry News

• Where do we stand in the Business Cycle? – PMI Status


European Industry News

• Finnish steel maker Outokumpu announced to have signed an agreement with Spanish long steel producer Sidenor to manufacture and distribute the company’s range of high machinability stainless round bars. Earlier this year Outokumpu signed an exclusive agreement with distributor IMS to distribute Outokumpu’shigh machinability stainless round bars in the Benelux region.

• Acciai Speciali Terni aims to increase its annual stainless steel tube production to 90,000 t by 2018 up from the current 65,000 t. Around 70% of the stainless tube production is ferritic and the rest austenitic. The tubes will be solely used in the automotive industry. In terms of crude steel Acciai Speciali Terni plans to produce 1,400,000 t this year of which around 600,000 t will be transformed into cold-rolled coils.

• For 2017, Switzerland-based steel producer Schmolz + Bickenbach expects stronger sales volumes comparable to 2016 at an EBITDA between 160 and 200 mill EUR. The company’s key end-user sectors such as the automotive industry will most likely continue its growth path and also in the oil and gas industry the demand is expected to pick up again. The mechanical and plant engineering industry, however, is expected to continue its sideways movement.

• The Slovenian Steel Group recently published its initial report of unaudited consolidated operating results. Key financial figures can be seen in the table below:

Positive outlook at European stainless steel mills

FY 2016 FY 2015 Variation

[ '% ]

Turnover 843 665 27%

EBITDA 127 64 100%

EBIT 69 35 96%

EAT 51 11 379%

Slovenian Steel Group

Financials[in mill. EUR]


30

35

40

45

50

55

60

65

Ind

ex

of

50

= ‘

Bre

ak

Ev

en

Po

int’

EU USA China

Where do we Stand in the Business Cycle?

PMI Status February 2016

The European Union outperforms the USA and China


Relevant Issues in Damstahl-Land

• Flat Product Imports 2016 vs. 2015

• Long Product Imports 2016 vs. 2015

• Relevant Issues, Imports and Market Volume Index by country

Germany

The Netherlands

Denmark

Sweden

Norway

Slovenia

Finland


14,0%

-4,0%

10,0%

2,0%

6,0%

6,0%

3,0%

-6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16%

Finland

Slovenia

Norway

Sweden

Denmark

The Netherlands

Germany

Stainless Steel Flat Product* Imports 2016 vs. 2015

Source: SMR - Steel & Metals Market Research Analysis

Only decline for Slovenia - double-digit growth for Norway and FinlandPeriod: January – December

* Hot rolled sheet & plate, Cold rolled sheet, Welded tubes (round), Welded tubes (square)


36,3%

9,4%

18,1%

-0,9%

1,4%

3,8%

-2,7%

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40%

Finland

Slovenia

Norway

Sweden

Denmark

The Netherlands

Germany

Stainless Steel Long Product* Imports 2016 vs. 2015

Source: SMR - Steel & Metals Market Research Analysis

Decreases only in Germany and SwedenPeriod: January - December

* Round bars, Non circular bars, Forged bars, Profiles, Seamless tubes (incl. Hollow bars)



Germany:

• The German stainless steel market saw healthy activity in March, even though it was on a somewhat lower level than in the first two months of the year. In general, the demand at end users is on a good level. Stocks at distributors are still on sufficient to low levels for most commodity stainless products. But increasing sales volumes might lead to a (modest) increase in stock levels amid lengthening delivery times by European mills into the summer.

• After a quite competitive situation in the German market early 2016 where some EU mills were aggressively striving to increase market shares, this situation might have ceased and the EU mills put margin ahead of volumes at the moment. Thus base prices are solid at the moment.

• Damstahl Germany is proud to announce now having stainless steel bars in EN 1.4435 (316L), EN 1.4539 (904L) as well as EN 1.4542 (17-4PH) in stock. For more information please visit www.damstahl.de.

• Revenues of filling and packaging manufacturer Krones in 2016 totalled 3,391.3 mill EUR, corresponding to an increase of 6.9% on the 2015 revenues of 3,173.5 mill EUR. Adjusted for acquisitions, the revenue growth came in at 4.2%. Krones’ EAT improved 8.2%, from 156.3 mill EUR in 2015 to 169.1 mill EUR in 2016. For 2017 the company expects consolidated revenue to grow by 4%, earnings to rise further and the EBT margin to remain stable at 7.0% this year.


Imports by Product

Source: SMR – Steel & Metals Market Research Analysis

Imports of Stainless Steel Products into Germany

2% uptick in overall imports, only stainless steel bar product imports went downCRR = Coils for re-rolling are not counted in total

Products

2016 2017

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

[tonnes]

HR Sheet & Plate 42,013 41,127 26,315 48,252 43,629 38,775 38,657 29,527 52,869 38,743 39,383 39,469 40,304

therefrom CRR (Finland-Sweden) 18,703 20,013 10,113 26,406 21,602 17,604 18,236 11,682 29,471 18,816 17,391 15,968 17,180

HR Sheet & Plate real 23,310 21,114 16,202 21,846 22,027 21,171 20,421 17,845 23,398 19,927 21,992 23,501 23,124

CR Sheet 68,527 69,816 64,024 61,871 55,117 89,155 62,532 60,628 73,797 73,290 74,870 57,746 77,033

Round Bars 12,628 14,230 11,335 12,964 12,920 14,054 14,536 8,709 12,953 13,028 13,546 11,407 11,986

Non-circular Bars 3,683 3,801 4,335 4,401 3,917 4,293 4,333 2,664 3,903 4,363 4,875 3,527 3,932

Forged Bars 1,494 1,319 1,277 1,252 1,155 1,378 1,619 976 1,193 1,596 1,399 1,059 1,345

Profiles 693 658 632 573 690 640 540 485 622 654 904 489 914

Seamless Tubes* 2,892 2,735 2,350 3,161 2,697 2,665 3,736 1,763 2,122 2,612 2,733 2,270 2,972

Welded Tubes (round) 8,040 9,618 8,105 9,705 8,997 10,841 9,539 7,386 10,914 10,170 9,641 7,958 8,435

Welded Tubes (square) 3,004 4,633 3,634 2,955 3,218 6,156 4,438 3,842 3,926 5,290 4,750 2,927 3,508

All Products 124,271 127,924 111,894 118,728 110,738 150,353 121,694 104,298 132,828 130,930 134,710 110,884 133,249

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 470,602 478,759 2%

therefrom CRR (Finland-Sweden) 223,353 226,005 1%

HR Sheet & Plate real 247,249 252,754 2%

CR Sheet 781,349 811,373 4%

Round Bars 156,839 152,310 -3%

Non-circular Bars 52,888 48,095 -9%

Forged Bars 16,464 15,717 -5%

Profiles 7,543 7,580 0%

Seamless Tubes* 28,839 31,736 10%

Welded Tubes (round) 108,883 110,914 2%

Welded Tubes (square) 47,953 48,773 2%

All Products 1,448,007 1,479,252 2%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into Germany

Spanish deliveries to Germany face a steep decline while Italy, Finland, France and Belgium grow further

* HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes

** Excl. CRR

Country of Origin

2015 2016 Change 2017

Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 2015-2016 January

[tonnes] [%] [tonnes]

ITALY 66,214 69,144 64,189 65,065 264,612 66,237 79,067 72,212 75,810 293,326 11% 24,625

FINLAND** 58,478 70,158 67,549 68,258 264,443 67,700 66,247 75,359 62,599 271,905 3% 25,589

FRANCE 56,047 60,299 54,518 54,593 225,457 63,464 62,602 51,843 59,027 236,936 5% 18,966

BELGIUM 50,735 45,587 39,306 40,283 175,911 46,257 46,198 44,190 48,193 184,838 5% 19,317

SPAIN 47,555 38,753 35,430 33,737 155,475 33,681 33,869 27,534 27,225 122,309 -21% 11,272

SWEDEN** 13,353 15,280 17,450 14,456 60,538 15,377 20,132 13,105 18,916 67,531 12% 5,111

NETHERLANDS 13,066 12,319 14,643 8,451 48,479 10,268 9,371 12,969 11,898 44,506 -8% 5,259

INDIA 9,625 10,473 13,404 9,300 42,802 8,980 6,722 7,568 7,178 30,448 -29% 2,931

SLOVENIA 6,483 11,081 9,258 7,848 34,670 9,422 10,252 8,758 7,500 35,932 4% 2,286

CZECH REPUBLIC 3,270 8,992 8,146 6,085 26,493 5,610 9,358 5,983 7,655 28,606 8% 2,080

AUSTRIA 5,912 5,971 5,146 5,548 22,577 4,938 5,587 5,492 5,554 21,571 -4% 1,860

SOUTH AFRICA 3,775 4,035 7,564 4,321 19,695 3,594 1,632 3,980 2,681 11,887 -40% 1,056

U S A 4,113 3,852 3,779 1,972 13,716 1,732 2,267 1,886 2,068 7,953 -42% 1,088

UKRAINE 3,612 3,550 2,906 2,705 12,773 2,727 2,993 4,949 3,825 14,494 13% 1,058

SWITZERLAND 3,180 3,447 2,968 2,833 12,428 2,862 3,212 2,801 3,000 11,875 -4% 1,077

POLAND 2,678 2,646 3,646 2,954 11,924 2,558 3,602 4,523 3,643 14,326 20% 1,603

CHINA 4,098 1,616 1,525 1,307 8,546 1,916 1,318 1,959 11,372 16,565 94% 1,137

SOUTH KOREA 2,013 1,582 2,766 1,871 8,232 3,172 3,033 1,964 3,252 11,421 39% 1,092

UNITED KINGDOM 2,044 2,250 1,729 1,044 7,067 1,286 1,330 1,217 2,408 6,241 -12% 1,163

LUXEMBOURG 1,449 1,794 1,765 2,000 7,008 1,494 1,821 1,984 2,216 7,515 7% 746

TURKEY 66 650 3,440 2,263 6,419 1,561 1,814 653 1,019 5,047 -21% 855

TAIWAN 1,496 843 1,530 1,666 5,535 4,203 2,419 4,683 3,999 15,304 176% 1,015

JAPAN 779 715 913 969 3,376 827 1,239 462 1,004 3,532 5% 313

PORTUGAL 597 984 801 640 3,022 993 1,096 945 820 3,854 28% 464

MALAYSIA 24 549 835 711 2,119 928 990 547 2,261 4,726 123% 772

DENMARK 425 308 249 235 1,217 424 438 352 276 1,490 22% 198

THAILAND 186 44 378 426 1,034 1,283 436 408 563 2,690 160% 143

OTHERS 477 567 828 567 2,439 595 775 493 561 2,424 -1% 173

TOTAL 361,750 377,489 366,661 342,108 1,448,007 364,089 379,819 358,820 376,524 1,479,252 2% 133,249

**excl. CRR


50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

Ø 2011

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

Germany - Stainless Steel Market Volume Index*

Source: SMR - Steel & Metals Market Research Analysis*Data based on country-reported trade figures and estimated production volumes

Both long and flat products continued their upward trend in early 2017

Trend Lines

2011 2012 2013 2014 2015 2016

Jan

2017



The Netherlands:

• Due to the longer delivery times and higher prices of stainless steel products the demand for stainless steel bars and tubes is on a constantly good level. European mills do have long delivery times and filled order books.

• The Dutch industry is also coming into a stable growing situation. As always the Dutch market is strongly influenced by the export situation. The export market is slightly growing so more and more the industry is optimistic about the future.

• Oil and gas industry is one of the examples that there are still problems in certain industry segments. Due to the low oil prices the situation remains difficult and no larger investments are planned at this point.

• Dutch specialty chemicals, paints and coatings producer AkzoNobel also rejected the second unsolicited, non-binding and conditional takeover proposal from the US-based competitor company PPC Industries. According to AkzoNobel the offer fundamentally undervalues the company and a merger would be bad for its employees. Also the takeover would likely face antitrust concerns. AkzoNobel said it prefers to remain independent and has plans to spin off its chemicals division, which will be revealed in the course of the company’s independent business plan on April 19th.


Imports by Product


Imports of Stainless Steel Products into the Netherlands

Imports of forged bars and seamless tubes declined while all other product forms saw increases

Products

2016

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

[tonnes]

HR Sheet & Plate 3,269 2,486 2,280 2,055 2,198 2,622 3,003 2,030 1,578 4,266 2,945 2,965

CR Sheet 15,802 14,894 15,934 14,368 12,247 13,612 13,883 11,347 11,075 16,606 15,398 18,096

Round Bars 1,606 2,156 1,526 1,611 1,920 1,245 2,118 1,586 1,747 1,841 2,115 1,456

Non-circular Bars 489 455 371 375 303 368 401 335 491 535 377 344

Forged Bars 229 182 176 130 170 137 135 109 181 157 190 96

Profiles 168 186 235 182 173 185 219 215 429 363 269 265

Seamless Tubes* 747 660 524 634 705 615 649 337 709 600 619 680

Welded Tubes (round) 2,233 2,147 2,094 2,200 2,147 1,388 3,433 2,743 2,168 1,370 1,543 1,205

Welded Tubes (square) 1,209 1,551 1,110 1,091 636 1,095 756 869 669 1,004 990 814

All Products 25,752 24,717 24,250 22,646 20,499 21,267 24,597 19,571 19,047 26,742 24,446 25,921

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 28,941 31,697 10%

CR Sheet 167,864 173,262 3%

Round Bars 19,799 20,927 6%

Non-circular Bars 4,375 4,844 11%

Forged Bars 2,003 1,892 -6%

Profiles 1,967 2,889 47%

Seamless Tubes* 8,495 7,479 -12%



All Products 263,884 279,455 6%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into the Netherlands

South Africa, India and Taiwan strongly improve their delivery volumes to the Netherlands


** TOTAL = Excl. Finland = Imports to Terneuzen (from Finland) not included in Total

Country of Origin

2015 2016 Change

Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 2015-2016

[tonnes] [%]

FINLAND 138,962 161,204 126,993 134,272 561,431 147,244 150,287 144,859 142,893 585,283 4%

ITALY 10,515 9,814 10,295 11,954 42,578 12,868 12,974 9,106 10,476 45,424 7%

GERMANY 8,436 11,516 11,814 8,666 40,432 9,010 10,524 9,690 8,774 37,998 -6%

BELGIUM 5,398 14,067 12,585 7,519 39,569 8,441 7,788 9,265 9,038 34,532 -13%

SOUTH KOREA 7,986 8,459 9,549 8,202 34,196 7,927 6,734 3,983 7,944 26,588 -22%

SOUTH AFRICA 2,334 6,692 7,412 8,356 24,794 9,523 5,659 7,517 12,496 35,195 42%

INDIA 3,153 2,591 5,128 4,392 15,264 3,926 3,037 5,956 6,409 19,328 27%

FRANCE 2,402 3,063 4,441 4,716 14,622 3,313 3,801 2,490 4,038 13,642 -7%

U S A 718 1,632 5,197 1,749 9,296 1,289 113 213 242 1,857 -80%

SWEDEN 3,054 1,993 1,829 2,113 8,989 2,698 2,631 2,057 3,206 10,592 18%

TAIWAN 1,588 1,394 2,144 2,360 7,486 3,087 2,130 3,177 5,206 13,600 82%

VIETNAM 2,648 525 658 1,471 5,302 2,723 2,140 975 730 6,568 24%

JAPAN 176 1,713 2,242 553 4,684 1,120 1,085 873 872 3,950 -16%

SPAIN 580 948 595 721 2,844 514 688 373 469 2,044 -28%

CHINA 1,068 514 555 563 2,700 1,673 1,782 3,076 1,219 7,750 187%

THAILAND 595 21 525 1,140 2,281 1,866 200 917 643 3,626 59%

SLOVENIA 502 297 252 449 1,500 611 379 305 184 1,479 -1%

UNITED KINGDOM 303 315 339 440 1,397 437 445 421 393 1,696 21%

TURKEY 359 54 237 732 1,382 1,721 921 1,109 2,842 6,593 377%

OTHERS 830 906 1,182 1,650 4,568 1,972 1,381 1,712 1,928 6,993 53%

TOTAL** 52,645 66,514 76,979 67,746 263,884 74,719 64,412 63,215 77,109 279,455 6%

**excl. Finland


0%

50%

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200%

250%

300%

350%

Ø 2011

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

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Feb

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Feb

Apr

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[Ø 2

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Flat Products

Long Products

Netherlands – Stainless Steel Market Volume Index*


After a volatile development flat and long products end the year below their starting point in 2016

2011 2012 2013 2014

Trend Lines

2015 2016



Denmark:

• Q1/17 turned out to be at an all-time high level in terms of volume for first quarters in the Danish stainless steel market. Heavy investments into maintenance works in the offshore segments positively influenced the good results. Price increases due to the higher alloy surcharge in April had no or no major effect on the purchasing behaviour of market participants yet.

• Net turnover of Danish pump manufacturer Grundfos reached 24,700 mill DKK in full year 2016, slightly decreasing by 0.5% yoy (2015: 24,800 mill DKK). Grundfos EBITDA improved from 1,925 mill DKK in 2015 to 2,237 mill DKK in 2016 (+16% yoy). Also the company’s EAT increased by around 14% to 1,676 mill DKK in 2016 (2015: 1,473 mill DKK). According to a company’s statement the market in HY1/16 was challenging but then sales regained momentum in HY2/16.

• Arla Foods announced to distribute a total of 124 mill EUR as supplementary payment to the farmer-owners, which corresponds to one eurocent per kilo of milk supplied by each farmer. Arla Foods’ revenue declined from 10,262 mill EUR in 2015 to 9,567 mill EUR in 2016 (-6.8% yoy). The company’s EBIT significantly improved to 505 mill EUR in 2016, up by 26.3% on the company’s 2015 EBIT of 400 mill EUR. Total EAT of the company in 2016 grew by 20.7% to 356 mill EUR, up from 295 mill EUR in 2015.


Imports by Product


Imports of Stainless Steel Products into Denmark

High import increases at cold rolled sheets and welded tube rounds lead to an overall increase of 5%

Products

2016


[tonnes]

HR Sheet & Plate 778 1,115 981 683 1,283 1,574 1,393 1,221 1,155 1,288 1,337 821

CR Sheet 4,197 4,696 4,186 5,067 4,745 5,316 4,168 4,356 5,363 4,091 5,537 4,088

Round Bars 1,186 1,254 1,177 1,218 1,347 1,517 1,284 1,019 1,313 1,227 1,427 1,383


Forged Bars 154 148 150 249 161 358 150 184 129 220 155 55

Profiles 87 106 163 102 135 117 173 129 194 194 106 125

Seamless Tubes* 137 100 204 229 129 113 80 128 164 167 164 101

Welded Tubes (round) 939 1,230 1,342 1,120 1,370 1,721 1,775 1,007 1,443 1,326 1,532 1,079

Welded Tubes (square) 300 748 677 474 834 679 904 641 737 461 1,010 596

All Products 7,937 9,548 8,984 9,316 10,157 11,516 10,059 8,831 10,635 9,270 11,380 8,368

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 14,751 13,629 -8%

CR Sheet 50,845 55,810 10%

Round Bars 15,485 15,352 -1%


Forged Bars 2,211 2,113 -4%

Profiles 1,378 1,631 18%



Welded Tubes (square) 8,719 8,061 -8%

All Products 110,606 116,001 5%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into Denmark

Denmark’s main suppliers face strong competition from uprising Taiwan (+108% yoy)


Country of Origin

2015 2016 Change


[tonnes] [%]

ITALY 7,643 7,835 6,121 6,392 27,991 6,276 7,214 6,922 7,002 27,414 -2%

GERMANY 5,105 5,398 4,739 3,491 18,733 4,724 5,302 3,951 3,862 17,839 -5%

SWEDEN 3,329 3,669 2,541 3,282 12,821 2,975 2,770 3,111 2,575 11,431 -11%

FINLAND 2,569 3,182 2,635 3,663 12,049 2,818 3,509 2,735 2,930 11,992 0%

FRANCE 1,683 2,020 1,608 1,654 6,965 1,412 1,639 2,148 1,806 7,005 1%

TAIWAN 1,313 1,580 972 2,857 6,722 2,612 4,688 3,115 3,558 13,973 108%

BELGIUM 1,159 1,450 1,365 1,619 5,593 1,794 1,568 2,219 1,934 7,515 34%

SPAIN 784 844 799 991 3,418 1,182 1,189 914 1,245 4,530 33%

INDIA 664 725 709 742 2,840 579 714 974 1,118 3,385 19%

CHINA 534 451 856 719 2,560 140 290 561 988 1,979 -23%

MALAYSIA 192 512 961 447 2,112 - - 4 - 4 -100%

SOUTH AFRICA 154 562 948 401 2,065 - 242 1,162 576 1,980 -4%

NETHERLANDS 602 538 431 405 1,976 542 772 440 427 2,181 10%

U S A 235 187 243 204 869 32 10 25 - 67 -92%

NORWAY 301 233 171 66 771 33 50 220 138 441 -43%

POLAND 87 241 211 215 754 208 227 184 232 851 13%

UNITED KINGDOM 145 182 127 144 598 808 411 352 289 1,860 211%

SLOVAKIA 107 53 163 52 375 69 50 9 3 131 -65%

TURKEY 21 82 74 127 304 82 78 76 28 264 -13%

VIETNAM 82 59 - 50 191 - - - - - -100%

ESTONIA 36 28 39 45 148 46 41 54 40 181 22%

PORTUGAL 18 38 33 53 142 21 65 15 7 108 -24%

SLOVENIA 94 11 13 8 126 10 8 50 38 106 -16%

SINGAPORE 65 - - 40 105 18 - - - 18 -83%

OTHERS 72 83 112 111 378 88 152 284 222 746 97%

TOTAL 26,994 29,963 25,871 27,778 110,606 26,469 30,989 29,525 29,018 116,001 5%


Denmark – Stainless Steel Market Volume Index*


While flat products recovered at the end of the year, long products dropped again

20%

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160%

180%

Ø 2011

Feb

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Jun

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2011 2012 2013 2014

Trend Lines

2015 2016



Sweden:

• The first quarter of the year in the Swedish market for stainless steel can be summarised as very good. Strong end user demand in combination with gradually rising prices has proven to be a good recipe. Due to quite a few public holidays Q/2/17, will probably be more demanding. The general outlook in the Swedish market is still very positive for the rest of the year.

• Alfa Laval posted revenues in 2016 of around 35,634 mill SEK down by 10% on the company’s 2015 revenues of 39,746 mill SEK. Also the company’s order intake declined by 14% to 32,060 mill SEK in 2016 (2015: 37,098 mill SEK). The company’s main segment was heat transfer, accounting for 44% of Alfa Laval’s invoicing in 2016, followed by fluid handling with 24% and separation with 19%. Alfa Laval’s EAT amounted to 2,312 mill SEK, corresponding to a decline of 40% on the company’s EAT of 3,861 mill SEK in 2015.

• Bravida, supplier of installation and service for electrical, heating & plumbing and ventilation, announced to have acquired Norwegian installation and services company Oras. Oras counts 700 employees, generating annual revenues of around 1.2 mill SEK. The 122 mill SEK acquisition is expected to have a marginally negative impact on the company’s EBIT in 2017.


Imports by Product


Imports of Stainless Steel Products into Sweden

Overall Swedish imports marginally improved by around 1%

Products

2016


[tonnes]

HR Sheet & Plate 1,140 1,185 949 1,005 1,004 1,376 612 1,134 1,108 1,397 1,046 929

CR Sheet 5,682 6,669 6,252 5,963 6,734 6,238 4,300 6,279 6,691 7,529 5,852 4,757

Round Bars 768 1,067 1,060 1,087 1,147 1,067 909 828 965 1,108 1,406 1,184


Forged Bars 41 33 172 68 75 57 14 40 34 39 34 45

Profiles 107 129 128 70 212 159 411 206 190 268 263 124

Seamless Tubes* 236 104 264 199 230 211 48 180 207 120 222 86

Welded Tubes (round) 527 629 703 852 920 759 758 953 881 966 1,037 880

Welded Tubes (square) 193 416 331 326 349 272 189 161 291 368 260 117

All Products 8,860 10,548 10,094 9,842 10,814 10,410 7,476 9,962 10,571 12,011 10,354 8,365

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 11,549 12,885 12%

CR Sheet 74,713 72,946 -2%

Round Bars 13,581 12,596 -7%


Forged Bars 554 652 18%

Profiles 1,719 2,267 32%




All Products 117,910 119,307 1%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into Sweden

Finland further strengthened its position as main supplier to Sweden while Spanish and Italian deliveries declined


Country of Origin

2015 2016 Change


[tonnes] [%]

FINLAND 9,014 9,232 7,303 6,679 32,228 9,678 11,170 7,753 6,309 34,910 8%

SPAIN 6,179 4,970 6,394 5,741 23,284 5,172 4,486 5,568 5,881 21,107 -9%

ITALY 4,180 4,116 3,224 3,495 15,015 3,279 3,588 3,463 4,295 14,625 -3%

DENMARK 3,095 3,027 2,708 3,241 12,071 3,614 4,632 3,712 4,572 16,530 37%

GERMANY 2,777 3,000 2,762 2,871 11,410 2,760 2,888 2,396 2,617 10,661 -7%

FRANCE 1,997 1,766 2,069 1,493 7,325 1,427 952 1,042 1,057 4,478 -39%

SOUTH AFRICA 484 1,783 3,190 1,076 6,533 630 850 1,409 2,465 5,354 -18%

UNITED KINGDOM 346 441 541 569 1,897 846 623 496 300 2,265 19%

NORWAY 847 273 201 76 1,397 66 89 114 144 413 -70%

INDIA 280 285 233 351 1,149 392 388 221 224 1,225 7%

JAPAN 190 294 304 156 944 175 146 31 94 446 -53%

NETHERLANDS 176 186 170 170 702 194 164 173 187 718 2%

TURKEY 73 121 186 204 584 105 38 49 67 259 -56%

POLAND 49 71 119 226 465 225 222 197 283 927 99%

TAIWAN 174 75 86 91 426 419 50 49 110 628 47%

AUSTRIA 149 55 55 82 341 61 146 113 111 431 26%

LUXEMBOURG 51 97 90 97 335 119 95 82 312 608 81%

SLOVENIA 40 112 64 94 310 68 85 58 111 322 4%

SWITZERLAND 121 78 42 60 301 76 68 55 81 280 -7%

AUSTRALIA - - 204 - 204 - - - - - -100%

OTHERS 213 251 177 348 989 196 386 1,028 1,510 3,120 215%

TOTAL 30,435 30,233 30,122 27,120 117,910 29,502 31,066 28,009 30,730 119,307 1%


Sweden – Stainless Steel Market Volume Index*


Flat and long products strongly recovered in the last two months of the year after nosediving in October

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Ø 2011

Feb

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2011 2012 2013 2014

Trend Lines

2015 2016



Norway:

• The Norwegian offshore market finally came out of hibernation in March as several new projectswere given the green light which is expected to create around 9,000 new jobs. Also the fish breeding and processing industry is in a very good shape, especially the exports are booming. The positive development has brought back optimism that the market will soon be on a more prosperous and steady level.

• Aker Solutions agreed to buy oil-services provider Reinertsen, the third-largest maintenance and modifications supplier offshore Norway with about 700 employees generating annual revenues of around 800 mill NOK. The purchase price is labelled at 212.5 mill NOK. Besides key maintenance and modifications contracts with Statoil the company's order backlog contains other smaller subsea service and engineering contracts. The acquisition is subject to approval by the Norwegian competition authorities.

• Statoil announced plans to invest 19.8 bn. NOK in Norwegian offshore projects whereof 15.7 bn. NOK will be committed to the Njord field (halted in 2016) and 4.1 bn. NOK to the Bauge field. Both projects are expected to come on stream at the end of 2020.


Imports by Product


Imports of Stainless Steel Products into Norway

Strong import increases at all product forms besides bar products

Products

2016 2017

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

[tonnes] [tonnes]

HR Sheet & Plate 744 679 759 769 729 715 371 474 631 666 583 471 834 485

CR Sheet 1,490 1,596 1,095 1,337 1,231 1,598 930 1,231 942 1,403 1,232 1,161 1,427 1,295

Rolled Bars 324 425 319 290 491 298 244 390 436 375 266 316 285 251

Forged Bars 52 51 39 38 39 81 38 20 25 61 138 79 85 33

Profiles 56 86 138 151 158 126 91 253 175 196 112 88 130 126

Seamless Tubes* 151 148 97 245 244 756 661 675 352 593 834 446 343 174

Welded Tubes (round) 548 566 528 588 490 700 281 525 722 480 541 520 712 729

All Products 3,365 3,551 2,975 3,418 3,382 4,274 2,616 3,568 3,283 3,774 3,706 3,081 3,816 3,093

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 6,320 7,591 20%

CR Sheet 14,360 15,246 6%

Rolled Bars 4,351 4,174 -4%

Forged Bars 1,146 661 -42%

Profiles 1,224 1,630 33%

Seamless Tubes* 3,155 5,202 65%


All Products 36,642 40,993 12%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into Norway

In spite of the oil price slump in 2016 stainless steel imports to Norway improved by 12% yoy. Especially umbilical tubes (super duplex seamless tubes from Sandvik Czech republic) have increased strongly in the second half of 2016


Country of Origin

2015 2016 Change 2017

Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 2015-2016 Jan Feb

[tonnes] [%] [tonnes]

SWEDEN 3,488 2,690 2,325 2,887 11,390 3,014 3,436 2,570 2,928 11,948 5% 1,182 865

FINLAND 2,119 2,148 1,754 2,158 8,179 2,240 2,506 1,900 2,237 8,883 9% 648 499

TAIWAN 1,307 660 647 638 3,252 838 1,161 935 1,022 3,956 22% 552 521

GERMANY 715 705 784 653 2,857 1,056 716 741 643 3,156 10% 332 226

ITALY 404 512 521 516 1,953 597 618 506 461 2,182 12% 236 394

DENMARK 512 561 294 456 1,823 496 286 240 375 1,397 -23% 227 168

FRANCE 444 569 313 404 1,730 438 481 337 213 1,469 -15% 95 85

SPAIN 273 287 204 87 851 221 221 129 195 766 -10% 33 36

JAPAN 131 430 75 67 703 46 180 21 30 277 -61% 47 72

UNITED KINGDOM 280 120 134 156 690 128 54 107 128 417 -40% 45 21

CHINA 319 127 121 59 626 74 65 86 86 311 -50% 42 12

BELGIUM-LUXEMBOURG 103 65 108 238 514 270 131 98 287 786 53% 96 8

CZECH REPUBLIC 303 114 2 89 508 56 548 1,362 1,473 3,439 577% 96 42

INDIA 138 165 111 89 503 132 167 149 187 635 26% 23 76

NETHERLANDS 68 74 109 110 361 100 103 77 58 338 -6% 35 16

POLAND 99 18 44 32 193 44 68 38 64 214 11% 51 3

SOUTH KOREA - 6 - 95 101 - 5 1 3 9 -91% - -

AUSTRIA 34 26 28 12 100 38 168 65 37 308 208% - 5

OTHERS 45 69 136 58 308 103 160 105 134 502 63% 76 44

TOTAL 10,782 9,346 7,710 8,804 36,642 9,891 11,074 9,467 10,561 40,993 12% 3,816 3,093


Norway – Stainless Steel Market Volume Index*


Flat and long products were off to a good start into 2017

20%

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Ø 2011

Feb

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2011 2012 2013 2014

Trend Lines

2015 2016



Slovenia:

• Contrary to the economic upturn in Slovenia the country’s domestic stainless steel market was cooling down in March. The price competition intensified alongside weakening orders from end users. It seems that some market participants are cautiously watching what happens in the market and yet do not want to increase their inventories.

• For the full year 2016 Slovenian white goods manufacturer Gorenje reports revenues of 1,258 mill EUR up by 2.7% set against the 2015 revenue of 1,225 mill EUR. EBITDA in 2016 totalled 87.2 mill EUR up from 80.1 mill EUR in 2015 (+8.8% yoy). Gorenje’s EBIT improved from 34.4 mill EUR in 2015 to 40.2 mill EUR in 2016, corresponding to an increase of 16.9% yoy. The company also moved back to profit in 2016, posting an EAT of 8.0 mill EUR (2015: -8.0 mill EUR).

• SIJ Acroni and SIJ Metal Ravne signed a five-year syndicated loan valued at 240 mill EUR to refinance the existing loan portfolio and ensure long-term financing for investment programs. Seven banks joined the transaction as a consortium comprised of NLB d.d., European Bank for Reconstruction and Development (EBRD), SKB d.d., Nova KBM d.d., ERSTE AG and Addiko Bank d.d. and the UniCredit Group.


Imports by Product


Imports of Stainless Steel Products into Slovenia

Heavily declining imports of hot rolled sheet and plate products drag down the overall imports by around 2%

Products

2016


[tonnes]

HR Sheet & Plate 2,672 3,423 3,939 3,344 3,493 3,433 3,141 2,043 2,506 3,088 2,589 3,937

CR Sheet 1,699 1,765 2,201 1,752 1,705 1,338 1,400 1,567 1,418 1,418 1,639 1,275

Round Bars 613 779 680 801 812 809 946 1,044 747 689 481 465


Forged Bars 32 38 38 42 30 65 41 27 49 38 26 54

Profiles 29 64 94 121 100 73 70 64 110 77 110 29

Seamless Tubes* 143 125 68 91 96 152 160 119 92 102 156 154

Welded Tubes (round) 305 471 494 676 518 654 726 672 713 417 492 372


All Products 5,744 6,847 7,794 7,124 6,989 6,763 6,723 5,685 5,913 6,118 5,785 6,618

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 10,131 4,465 -56%

CR Sheet 23,349 26,960 15%

Round Bars 4,475 4,973 11%

Non-circular Bars 552 606 10%


Profiles 475 313 -34%

Seamless Tubes* 340 434 28%



All Products 44,134 43,208 -2%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into Slovenia

Italy’s deliveries to Slovenia decline by just over 21% while German deliveries improve by 39%


Country of Origin

2015 2016 Change


[tonnes] [%]

ITALY 6,418 8,030 6,052 7,131 27,631 5,423 5,332 5,143 5,999 21,897 -21%

GERMANY 1,212 1,235 1,423 1,046 4,916 1,956 1,951 1,529 1,392 6,828 39%

AUSTRIA 675 629 641 611 2,556 645 717 714 606 2,682 5%

SOUTH KOREA 518 686 1,067 59 2,330 395 1,477 177 187 2,236 -4%

FRANCE 393 386 341 285 1,405 345 361 273 326 1,305 -7%

POLAND 188 233 247 266 934 451 622 630 766 2,469 164%

HUNGARY 262 166 285 160 873 176 144 66 285 671 -23%

FINLAND 155 163 311 235 864 365 534 408 338 1,645 90%

NETHERLANDS 127 147 163 137 574 146 194 184 147 671 17%

TURKEY 51 85 141 191 468 240 192 144 305 881 88%

INDIA 24 91 104 238 457 159 29 106 24 318 -30%

TAIWAN 127 - - 63 190 69 - - - 69 -64%

SWITZERLAND 64 44 38 42 188 43 44 25 31 143 -24%

SWEDEN 42 25 86 24 177 22 78 123 153 376 112%

SOUTH AFRICA - 57 40 - 97 - - - - - -100%

BULGARIA 67 23 3 - 93 - 22 - - 22 -76%

OTHERS 117 62 63 139 381 106 147 97 645 995 161%

TOTAL 10,440 12,062 11,005 10,627 44,134 10,541 11,844 9,619 11,204 43,208 -2%


Slovenia – Stainless Steel Market Volume Index*


The end of the year brought some recovery for long and flat products

0%

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Ø 2011

Feb

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2011 2012 2013 2014

Trend Lines

2015 2016



Finland:

• After a strong start into March 2017 the Finnish stainless steel market calmed down again. Even the announcement of the again higher alloy surcharges for April did not boost the market activity. Competition amongst distributors remains tough and due to the somewhat lower demand the price battle continues.

• Stalatube, hollow sections, profiles and components manufacturer, financially marked the second most successful year in the company’s history. Revenues in 2016 reached 76 mill EUR (2015: 72 mill EUR) and Stalatube’s EAT was over 6 mill EUR (2015: -4.7 mill EUR). According to a company’s statement the strong year was mainly due to the upward trend in the market prices of volume products and successful sales of special products and solutions.


Imports by Product


Imports of Stainless Steel Products into Finland

Strong overall increase in imports as declines were only seen at low-volume products

Products

2016


[tonnes]

HR Sheet & Plate 2,672 3,423 3,939 3,344 3,493 3,433 3,141 2,043 2,506 3,088 2,589 3,937

CR Sheet 1,699 1,765 2,201 1,752 1,705 1,338 1,400 1,567 1,418 1,418 1,639 1,275

Round Bars 613 779 680 801 812 809 946 1,044 747 689 481 465


Forged Bars 32 38 38 42 30 65 41 27 49 38 26 54

Profiles 29 64 94 121 100 73 70 64 110 77 110 29

Seamless Tubes* 143 125 68 91 96 152 160 119 92 102 156 154

Welded Tubes (round) 305 471 494 676 518 654 726 672 713 417 492 372


All Products 5,744 6,847 7,794 7,124 6,989 6,763 6,723 5,685 5,913 6,118 5,785 6,618

Products

2015 2016 Change

FY FY FY

[tonnes] [%]

HR Sheet & Plate 31,241 37,608 20%

CR Sheet 18,804 19,177 2%

Round Bars 5,491 8,866 61%

Non-circular Bars 1,545 1,519 -2%


Profiles 846 941 11%




All Products 66,702 78,103 17%

*incl. Hollow Bars


Imports by Country


Imports of Stainless Steel Products* into Finland

Spain almost tripled its deliveries to Finland and also Belgium, France, Germany and China grow double-digits


Country of Origin

2015 2016 Change


[tonnes] [%]

SWEDEN 5,616 5,741 6,038 5,992 23,387 6,830 6,277 4,897 4,594 22,598 -3%

ITALY 2,187 2,580 2,255 2,211 9,233 2,203 2,824 2,716 2,309 10,052 9%

BELGIUM 1,609 1,647 1,892 1,372 6,520 2,518 1,410 1,432 1,796 7,156 10%

FRANCE 1,068 1,448 1,608 1,311 5,435 1,861 1,670 1,168 1,604 6,303 16%

GERMANY 1,022 1,209 1,222 1,202 4,655 1,194 1,566 1,723 2,105 6,588 42%

CHINA 1,921 779 1,390 563 4,653 1,062 2,276 1,298 1,071 5,707 23%

SPAIN 1,314 761 1,074 692 3,841 2,297 2,857 3,401 2,308 10,863 183%

U S A 484 1,480 1,070 269 3,303 720 8 1 2 731 -78%

SLOVENIA 306 334 271 228 1,139 270 229 289 185 973 -15%

NETHERLANDS 189 245 269 211 914 299 260 289 294 1,142 25%

SOUTH AFRICA 117 161 378 77 733 46 20 - 71 137 -81%

DENMARK 140 124 102 115 481 189 388 320 366 1,263 163%

LUXEMBOURG 82 35 143 68 328 100 145 39 78 362 10%

INDIA 52 124 49 101 326 96 72 74 99 341 5%

POLAND 67 77 116 61 321 140 157 190 250 737 130%

UNITED KINGDOM 81 65 72 89 307 156 69 31 20 276 -10%

ESTONIA 42 40 108 85 275 101 143 89 155 488 77%

PORTUGAL 23 85 43 55 206 45 73 61 63 242 17%

AUSTRIA 33 30 32 49 144 36 46 38 50 170 18%

CZECH REPUBLIC 41 39 34 24 138 30 48 15 2 95 -31%

OTHERS 38 149 90 86 363 192 338 250 1,099 1,879 418%

TOTAL 16,432 17,153 18,256 14,861 66,702 20,385 20,876 18,321 18,521 78,103 17%


0%

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Ø 2011

Feb

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Apr

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Dec

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Flat Products

Long Products

Finland – Stainless Steel Market Volume Index*


Flat products ended the year on a very low level

2011 2012 2013 2014

Trend Lines

2015 2016


Raw Materials

Nickel

Chrome

Molybdenum

Scrap


Raw Materials

Nickel:

After rallying in February prices again drop below 10,000 USD/t in March

LME:

• Class I nickel prices nosedived in early March after recovering to around 11,000 USD/t towards the end of February. Nickel stocks at the London Metal Exchange (LME) moved to over 384,000 t in February but then again dropped to around 378,000 t in March. At the same time stocks at the Shanghai Futures Exchange (SHFE) declined from 89,000 t in February to 83,500 t in March, adding up to global stocks of around 461,500 t (February 2017: 473,000 t).

• The restart of nickel ore exports from Indonesia for low-grade ore of less than 1.7% nickel will most likely speed up the ferro-nickel and nickel pig iron plant start ups in the country. Companies are only allowed to export the ore if they can demonstrate the physical construction of smelters. The driving force behind the relaxation of the export law is the Indonesian government, which is dependent on the tax revenue as much as the companies, that need to make money to further finance smelter construction.

• Indonesia’s nickel smelting capacity is expected to climb from around 200,000 tpy in 2016 to around 280,000 t in 2017.

• On the other hand Ni ore exports from the Philippines are falling and the ore quality getting worse. Thus the Ni price weakness could be temporary if the Chinese stainless steel production remains in growth mode as in Q1/17.


Raw Materials

Chrome:

Benchmark prices react to the spot market

• The European charge and high-carbon ferrochrome benchmark price agreed between mills and South African ferrochrome smelters has dropped to around 1.54 USD/lb for Q2/17, falling by around 0.11 USD/lb from the long time high of 1.65 USD/lb in Q1/17. The reduction reflects in the decline in global spot prices since the price soared by 0.55 USD/lb in Q1/17.

• Towards the end of March ferrochrome prices rose again, supported by a tightening availability. Further strengthening of spot prices could result in a smaller reduction for the next benchmark prices.

• Also low-carbon ferrochrome prices in Europe have gathered strength as availability tightened due to increased demand in China. Until now, the market for low-carbon ferrochrome was largely unaffected from the strong price increases of high-carbon ferrochrome in late 2016


Raw Materials

Molybdenum:

Molybdenum prices surge towards the end of Q1/17

• As material remains genuinely tight in Europe prices for ferro-molybdenum climbed to around 22.00 USD/kg in March, up from 17.00 USD/kg at the beginning of the year. Increasing demand from the steel industry alongside disrupted supply from ferro-molybdenum producers will keep the market supply tight in 2017.

• Amidst lower prices many primary molybdenum operations had suspended or curtailed production. Freeport McMoRan reduced its production by 14% in 2016, mainly from the Climax and Henderson primary molybdenum mines in the USA. Also nine major Chinese producers planned to reduce molybdenum production by 10% last year.

• A release of stockpile material from either China or the USA could slow price increases on the short term but will not result in significant price drops on the long run.


Raw Materials

18-8 Scrap:

Dried up supply and reduced demand in a quiet market

• Prices for type 304 solid scrap improved to around 1,200 EUR/t in late February but since then declined to around 1,100 EUR/t towards the end of March. The decline came after a fall in mill demand and Class I nickel prices moving to lower levels. Prices for type 304 turnings traded at around 1,000 EUR/t, corresponding to a rebate of around 10% of the solid scrap price.


The end of Globalisation?

Focus of the Month


Trump I: Winners and Losers - CountriesThe US economy will get a short term boost, but the risk of several ‘bursting bubbles’ will increase after 2019

Source: SMR GmbH

by CountriesShort Term Long Term

2017/18/19 >2020

Winners

• USA • Israel

• Taiwan • United Kingdom

• Israel • Canada

• United Kingdom• Russia? (remains to be seen)

Losers

• Mexico (80%) • USA

• Canada (75%)

• Vietnam (20%)

• Japan (20%)

• China (20%)

• South Korea (15%)

• Brazil (15%)

• Thailand (10%)

• Germany (10%)


Trump II: Winners and Losers - Industry and Products (in USA)‘Trumpism’ is basically good for Stainless Steel

Source: SMR GmbH

By Industry and ProductsShort Term Long Term

2017/18/19 >2020

Winners

• Automotive • Trucks

• Trucks • Construction Machinery

• Construction Machinery • Infrastructure Building

• Infrastructure Building • White Goods / HCV*

• Commercial Building • Power Generation / Energy

• Residential Building • Water Supply / Treatment

• White Goods / HCV* • Pumps / Valves / Flanges ...

• Petrochemicals • Fasteners, Springs ...

• Oil & Gas

• Power Generation / Energy

• Water Supply / Treatment

• Pumps / Valves / Flanges ...

• Fasteners, Springs ...

• Cement

Losers

• Pharmaceuticals / Medical • (US Consumers)

• Renewable Energy • Renewable Energy

• Agriculture • Automotive

• Electronics • Commercial Building

• Aerospace • Residential Building

• White Goods

• Catering

• Petrochemicals

• Oil & Gas

*Heating, cooling, ventilation


Offshoring: Imports* of Stainless containing ProductsIn case of severe protectionism, about 1 mill tonnes of stainless steels are at risk in the form of ‘indirect imports’

Source: SMR GmbH

*excl. Canada, Mexico

-

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['0

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es

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Appliances

Cutlery

Exhaust Systems

Sinks

Heat Exchangers

Fasteners

Tube, Pipe, Accessoires

Wire & Wire Products

Long Term Growth Rate:+7% p.a.

+/- 0% in 2016

Appliances

Cutlery

Exhaust Systems

Sinks

Heat Exchangers

Fasteners

Tube, Pipe, Accessoires

Wire & Wire Products


Offshoring: Imports of Stainless containing ProductsBy Value: China, Mexico and Europe would be the most negatively affected

Source: SMR GmbH

-

10.000

20.000

30.000

40.000

50.000

60.000

70.000

[mil

l U

SD

]

Others

Taiwan

Korea

Canada

Japan

Damstahl Land

Other Europe

Mexico

China


Direct Imports of Stainless Steel Products to the USATotal stainless imports to the USA amounted to 670 kt in 2016 (-5% yoy)

Source: SMR GmbH

USA670kt

65

-7%Damstahl Land

175

+4% Other Europe

Taiwan

85

+1%Korea

55

-58%

China

65

+7%

India

% Change to 2015

[´000 tonnes]Only values >50 kt shown

75

+12%

Mexico115

+1%


Exchange Rates to the USDAll currencies depreciated against the ‘Greenback’ with the exception of the Russian ruble

Source: SMR GmbH

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Jan

-15

Feb

-15

Mar-

15

Ap

r-15

May-1

5

Ju

n-1

5

Ju

l-15

Au

g-1

5

Sep

-15

Oct-

15

No

v-1

5

Dec-1

5

Jan

-16

Feb

-16

Mar-

16

Ap

r-16

May-1

6

Ju

n-1

6

Ju

l-16

Au

g-1

6

Sep

-16

Oct-

16

No

v-1

6

Dec-1

6

Jan

-17

Feb

-17

Mar-

17

[In

de

x]

CNY JPY EUR INR

KRW MXN RUB

Trump‘s ecomic stimulus measurements will mostlikely make the USD even stronger, drive all domestic costs up, attracting more imports, leading to more protectionism until... the bubble will burst. Just look to Brazil for reference.


Reflection of the Month

Quote:

Most stainless steel industries have bottomed out by now and it is safe to say

that we are entering into a growth period in the overall business cycle.

Consumer spending is robust and even project activity in the CPI (Chemical

Process Industry) is back in growth mode. Automotive is robust and Building &

Construction will be stimulated by low interest rates and various governmental

packages to increase employment. Only the energy sector will have to wait a bit

for a sustainable uptick. We see good things coming in 2017.

Markus Moll, Managing Director of SMR GmbH

uk-damstahl report april 2017 · • outokumpu set the surcharge for type 304 (1.4301) to 1,452...

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