Pricing in long product and square billet
market of the MENA region.
Competitiveness of the main suppliers
MENA Billet Imp...
The content
1) Regional trade flows and benchmarks
2) Influencing factors in MENA long product markets
3) Future pricing i...
MENA longs import in 2014
Rebar and billets are MENA's main trade flows
© Metal Expert
Turkey; 5
1
1
CIS; 8
1
1
2
1
3
1
1
...
MENA ferrous scrap import in 2014
© Metal Expert
Turkey dominates in scrap import
7
2
4
2
4
3
0
2
4
6
8
10
12
14
16
18
20
...
The key regional benchmarks:
o Turkey, rebar, FOB
o CIS, billets, FOB
o Turkey, scrap, CFR
© Metal Expert
Influencing factors in MENA long products
markets
I. Tremendous changes in raw materials
II. Competition stiffens in the r...
© Metal Expert
o Turkish mills lose their competiveness
o Turkey can no longer receive stable margin
I. Tremendous changes...
0
50
100
150
200
250
0
100
200
300
400
500
600
Jan.13
Mar.13
May.13
Jul.13
Sep.13
Nov.13
Jan.14
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May.14
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Sep.1...
-10
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Jan.13
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May.13
Jul.13
Sep.13
Nov.13
Jan.14
Mar.14
May.14
Jul.14
Sep.14
Nov.14
Jan.15
Mar....
© Metal Expert
o MENA's import of Chinese longs & billets more
than doubled
o New capacities will be nominally enough to
r...
-20
-10
0
10
20
30
40
50
60
Jan.13
Apr.13
Jul.13
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Apr.14
Jul.14
Oct.14
Jan.15
Apr.15
$/t
High margins stimula...
0
1
2
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4
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2013 2014
© Metal Expert
MENA's import of Chinese longs & billets more
than doubled
Plus 3 million t
Million...
64
46
18
0
10
20
30
40
50
60
70
Consumption Current capacity utilization:
72%
Import
18
© Metal Expert
Million t
New capac...
© Metal Expert
o Iraq's rebar import shrank by 800,000 t
o Yemen's rebar import of 700,000 t vanished
About 1.5 million t ...
350
400
450
500
550
600
650 Jan.13
Mar.13
May.13
Jul.13
Sep.13
Nov.13
Jan.14
Mar.14
May.14
Jul.14
Sep.14
Nov.14
Jan.15
Mar...
© Metal Expert
o New local capacities may cover 5.2 million t of
MENA's billets demand
o CIS billets suppliers undercut Tu...
© Metal Expert
2014 2016
Total 8.6 3.4
Turkey 3 1.3
GCC 1.2 -1.8
North Africa 3.4 4.3
Iran 0 -1.7
Iraq 0 -0.4
Other 1 1.7
...
340
360
380
400
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460
480
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520
540
Jun.14
Jul.14
Aug.14
Sep.14
Oct.14
Nov.14
Dec.14
Jan.15
Feb.15
Mar.15
Apr.15
M...
© Metal Expert
New steelmaking capacity 1,650
New rollings capacity 500
Current steelmaking surplus 505
Billet surplus 1,6...
© Metal Expert
Future pricing in MENA
o Iron ore/scrap imbalance will lead to sudden collapses in scrap
prices (as at the ...
Metal Expert provides exclusive data in
monthly report World Steel Markets
- [NEW] Rebar output by producer in Turkey
- Fe...
Thank you for your attention
Appendix.
New steel melting and rolling capacities in
MENA
Company Country Launch of new EAF, 000' t per
year
Launch of new long-rolling mills, 000' t
per year
Status
Egyptian Steel...
of 24

Pricing in billet market of MENA

Pricing in long product and square billet market of the MENA region. Competitiveness of the main suppliers
Published on: Mar 4, 2016
Published in: Marketing      
Source: www.slideshare.net


Transcripts - Pricing in billet market of MENA

  • 1. Pricing in long product and square billet market of the MENA region. Competitiveness of the main suppliers MENA Billet Import Conference 20 May, 2015, Dubai, UAE Andrey Pupchenko, Deputy Managing Director, Metal Expert
  • 2. The content 1) Regional trade flows and benchmarks 2) Influencing factors in MENA long product markets 3) Future pricing in MENA
  • 3. MENA longs import in 2014 Rebar and billets are MENA's main trade flows © Metal Expert Turkey; 5 1 1 CIS; 8 1 1 2 1 3 1 1 1 1 0 2 4 6 8 10 12 rebar billets wire rod structurals others milliontonnes others China CIS Turkey
  • 4. MENA ferrous scrap import in 2014 © Metal Expert Turkey dominates in scrap import 7 2 4 2 4 3 0 2 4 6 8 10 12 14 16 18 20 Turkey other MENA milliontonnes others Eastern Europe CIS North America Western Europe
  • 5. The key regional benchmarks: o Turkey, rebar, FOB o CIS, billets, FOB o Turkey, scrap, CFR © Metal Expert
  • 6. Influencing factors in MENA long products markets I. Tremendous changes in raw materials II. Competition stiffens in the region III. Billet market is changing © Metal Expert
  • 7. © Metal Expert o Turkish mills lose their competiveness o Turkey can no longer receive stable margin I. Tremendous changes in raw materials
  • 8. 0 50 100 150 200 250 0 100 200 300 400 500 600 Jan.13 Mar.13 May.13 Jul.13 Sep.13 Nov.13 Jan.14 Mar.14 May.14 Jul.14 Sep.14 Nov.14 Jan.15 Mar.15 May.15 $/t © Metal Expert UAE billets market/Cost of billets Turkish mills lose their competiveness The average difference in costs doubled Turkish billet (EAF steel/scrap) Chinese billet (BOF steel) Source: World Steel Markets, Metal Expert estimates
  • 9. -10 0 10 20 30 40 50 60 70 Jan.13 Mar.13 May.13 Jul.13 Sep.13 Nov.13 Jan.14 Mar.14 May.14 Jul.14 Sep.14 Nov.14 Jan.15 Mar.15 May.15 $/t © Metal Expert Turkey can no longer receive stable margin export market domestic market Margin of Turkish rebar Source: World Steel Markets, Metal Expert estimates
  • 10. © Metal Expert o MENA's import of Chinese longs & billets more than doubled o New capacities will be nominally enough to replace MENA's longs import in 2016 o About 1.5 million t of rebar import lost due to warfare II. Competition stiffens in the region
  • 11. -20 -10 0 10 20 30 40 50 60 Jan.13 Apr.13 Jul.13 Oct.13 Jan.14 Apr.14 Jul.14 Oct.14 Jan.15 Apr.15 $/t High margins stimulated China to keep output in 2014 Margin of Chinese suppliers for domestic market for export Source: World Steel Markets, Metal Expert estimates © Metal Expert
  • 12. 0 1 2 3 4 5 6 2013 2014 © Metal Expert MENA's import of Chinese longs & billets more than doubled Plus 3 million t Million t
  • 13. 64 46 18 0 10 20 30 40 50 60 70 Consumption Current capacity utilization: 72% Import 18 © Metal Expert Million t New capacities will be nominally enough to replace MENA's longs import in 2016 Source: World Steel Markets, Metal Expert estimates
  • 14. © Metal Expert o Iraq's rebar import shrank by 800,000 t o Yemen's rebar import of 700,000 t vanished About 1.5 million t of rebar import lost due to warfare
  • 15. 350 400 450 500 550 600 650 Jan.13 Mar.13 May.13 Jul.13 Sep.13 Nov.13 Jan.14 Mar.14 May.14 Jul.14 Sep.14 Nov.14 Jan.15 Mar.15 May.15 $/t UAE rebar market/Cost of rebar EAF-based mills using DRI have the lowest cost © Metal Expert Turkish EAF (steel/scrap) EAF using steel/DRI Re-rolled from imported billets Source: World Steel Markets, Metal Expert estimates
  • 16. © Metal Expert o New local capacities may cover 5.2 million t of MENA's billets demand o CIS billets suppliers undercut Turkish EAF-mills o Iran may be able to export around 1.7 million t of billets III. Billet market is changing
  • 17. © Metal Expert 2014 2016 Total 8.6 3.4 Turkey 3 1.3 GCC 1.2 -1.8 North Africa 3.4 4.3 Iran 0 -1.7 Iraq 0 -0.4 Other 1 1.7 Billet demand estimated by Metal Expert (on the assumption of 100% rolling capacity utilization); Million t New local capacities may cover 5.2 million t of MENA's billets demand Source: World Steel Markets, Metal Expert estimates
  • 18. 340 360 380 400 420 440 460 480 500 520 540 Jun.14 Jul.14 Aug.14 Sep.14 Oct.14 Nov.14 Dec.14 Jan.15 Feb.15 Mar.15 Apr.15 May.15 $/t © Metal Expert CIS billets suppliers undercut Turkish EAF-mills CIS billet prices Turkey billet costs Comparison of import price and local cost of billets in Turkey Source: World Steel Markets, Metal Expert estimates
  • 19. © Metal Expert New steelmaking capacity 1,650 New rollings capacity 500 Current steelmaking surplus 505 Billet surplus 1,655 Note: 000' t Iran may be able to export around 1.7 million t of billets
  • 20. © Metal Expert Future pricing in MENA o Iron ore/scrap imbalance will lead to sudden collapses in scrap prices (as at the end of January 2015) o Low margins of Turkish rebar exports will open opportunities for newcomers in longs and billets segments o Increase in billets export from Iran will expand its consumption in the region and will destroy strong correlation in prices between scrap and billets
  • 21. Metal Expert provides exclusive data in monthly report World Steel Markets - [NEW] Rebar output by producer in Turkey - Ferrous scrap inventory at Turkish mills (actual for the time of publishing – every mid-month) - Margin assessment (market price minus estimated costs) for main export destinations and domestic deliveries - Comparison of in-house billet production cost (using imported scrap) and prices for billet imports from CIS - The forecasts of ferrous scrap consumption and prices for the next three months Subscription department +38 056 239 88 50, +38 056 370 12 06, +38 056 370 12 07 subscriptions@metalexpert-group.com
  • 22. Thank you for your attention
  • 23. Appendix. New steel melting and rolling capacities in MENA
  • 24. Company Country Launch of new EAF, 000' t per year Launch of new long-rolling mills, 000' t per year Status Egyptian Steel LLC (Alexandria) Egypt new billet import 300 (wire rod) launched in H2 2014 Kuwaiti United Steel Industrial Company Kuwait self-sufficiency 450 launched in H2 2014 Abbas Steel Group Pakistan 284 100 launched in H2 2014 Yolbulan Bastug Metalurji Turkey self-sufficiency; to decrease billets sales 1200 (830+450) launched in H2 2014 Kardemir Turkey 1200 imported billet replacement launched in H2 2014 Beshay Steel Egypt 650 700 launched in H2 2014 Sharq Sohar Steel Rolling Mill Oman 600 500 launched in H2 2014 Jindal Shadeed Iron and Steel Oman 2000 1400 (since mid-2015) launched in H2 2014 Emirates Steel Industries UAE 700 imported billet replacement launched in H2 2014 Arab Steel Company(Al-Tuwairqi Group) Saudi Arabia 1900 imported billet replacement launched in H2 2014 Taybah Steel (Watani Steel I) Saudi Arabia 250 250 launched in H2 2014 Pan Kingdom Investment Ltd Co Saudi Arabia self-sufficiency 500 launched in H2 2014 Koc Group Turkey 200 launched in H2 2014 Tosyali Holding Algeria new billet import 400 (wire rod) to be launched in Q1 2015 Mass Iraq Iron and Steel Industry Co. Iraq 1000 650 to be launched in Q2 2015 Syria Metal Industries (SMI) Syria self-sufficiency 600 to be launched in Q2 2015 Arfa Iron & Steel Iran self-sufficiency 500 the launch rearranged to Q2 2015 Al Fozan Group (INTER STEEL) UAE new billet import 900 to be launched in Q3 2015 Libyan Iron and Steel Company (LISCO) Libya new billet import 800 to be launched in Q3 2015 Al-Raki for Trading & Industry (Phase I) Saudi Arabia 200 imported billet replacement to be launched in Q3 2015 Al-Raki for Trading & Industry (Phase II) Saudi Arabia 200 imported billet replacement unconfirmed Egyptian Steel LLC (Beni Suef ) Egypt 850 530 (rebar) to be launched in Q3 2015 Al-Qaryan Steel Company Saudi Arabia 310 imported billet replacement to be launched in Q3 2015 Al-Yamamah Steel Industries Saudi Arabia 1000 imported billet replacement to be launched in Q3 2015 Kardemir Haddecilik Turkey around 720 imported billet replacement installation till August 2015 Kardemir Turkey self-sufficiency 700 (wire rod) to be launched in Q2 2016 Egyptian Steel LLC (Al Ain Al Sokhna) Egypt 850 530 (rebar) to be launched in Q3 2016 MIDHCO Iran 1000 for current capacities unconfirmed; to be launched in Q3 2015 Muscat Steel Oman partial billet import 200 enters market in 2016 Moon Iron & Steel Co. (MISCO) Oman 1200 700 in the second half of 2016 (approved) Taybah Steel (Watani Steel II) Saudi Arabia 1500 1500 constuction begun at the end of 2014 Al-Yamamah Steel Industries Saudi Arabia self-sufficiency 750 (rebar) postponed Khorasan Steel Complex Iran 650 imported billet replacement unconfirmed Yazd Rolling Mill Iran partial self-sufficiency 420 postponed Kfoury Metals Lebanon new billet import 350 postponed Mukalla Iron and Steel Yemen new billet import (300) 460 shutdown Jordan Steel Jordan sutdown (360) switch over imported billets shutdown South Steel Complex Iran self-sufficiency 300 postponed Source: World Steel Markets, Metal Expert estimates © Metal Expert

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