Damstahl Stainless Steel Report #100 February 2016...Damstahl - a member of the...

Damstahl Stainless Steel Report No. 104 - June 2016 1

© Damstahl 2016. Damstahl - a member of the NEUMO-Ehrenberg-Group

Damstahl

Stainless Steel Report #104

June 2016



Intro by Peter Sjödahl 3

Stainless Steel at a Glance 4

European Industry News / PMI Status 8

Relevant Issues in Damstahl-Land 11

Imports all Damstahl Countries 12

Germany 14

the Netherlands 18

Denmark 22

Sweden 26

Norway 30

Slovenia 34

Finland 38

Raw Materials 42

Focus of the Month 47

Reflection of the Month by Markus Moll 55

Contents





HY2/16 outlook becomes more positive

After big challenges in the Swedish market for stainless steel during the last

18 months we can now see a small increase in demand. The end-users have a

bit more to do, and some larger projects have started to move again. A couple

of structural changes among the distributors during the last few years have

created new opportunities for us at Damstahl. We see this very positively, and

look forward to the rest of 2016.

Peter Sjödahl, Managing Director, Damstahl AB, Sweden


© Damstahl 2016. Damstahl - a member of the NEUMO-Ehrenberg-Group Damstahl - a member of the NEUMO-Ehrenberg-Group

Damstahl Stainless Steel Report No. 104 - June 2016

© Damstahl 2016. Damstahl - a member of the NEUMO-Ehrenberg-Group 4

Stainless Steel at a Glance

Market: Surprise, Surprise

• After a long period of stock trimming throughout the stainless steel supply chain, distributors regained

confidence that the lowest pricing is behind us. Many distributors (especially outside Germany) gave

up their absence from the markets and placed orders at the mills again instead of master distributors.

Additionally healthy demand from some end-user sectors created positive momentum.

• According to some market participants mill delivery times started to stretch out with dates in

November 2016 or longer and having the base prices rising alongside a stabilising alloy surcharge.

The market seems to have built a solid fundament for future improvement.

• Macroeconomic indicators point to a stronger rest of the year in Europe. Also prices for oil have been

rising steadily since February, ending May just above the 50 USD/bbl mark.

Alloy Surcharge:

• The price development in the raw material markets indicates that the bottom has been passed at the

end of February. June’s monthly alloy surcharges for stainless steel products rose again heading

towards the highest level in 2016.

• Outokumpu increased the surcharges for type 304 (1.4301) to 941 EUR/t (+7% mom), up from 880

EUR/t in May. For type 316, the June surcharges were increased to 1,289 EUR/t (+10% mom), up

from 1,172 EUR/t in May.






Building & Construction:

• For March 2016 the European statistical office Eurostat reports production in construction

dropping by 1.4% yoy in the EU28 and 0.5% yoy in the euro area compared to March 2015. In

the EU28 the decline was mainly due to civil engineering falling by 7.5% yoy while building

construction marginally grew by 0.1% yoy. The decrease in the euro area was mainly due to civil

engineering going down by 2.9% yoy and building construction growing by a small 0.1% yoy.

Highest increases were seen in: Sweden (+16.4%)

Netherlands (+ 6.3%)

Germany (+ 1.0%)

Largest decreases were recorded in: Slovenia (-36.7%)

Hungary (-33.9%)

Poland (-14.9%)

Consumer Goods:

• The German Association representing the Appliance industry (ZVEI) reports an increase in

exports of the German electronics industry for Q1/16 of 2.8% yoy at 43.3 bn EUR up from 42.1

bn EUR in Q1/15.

Strongest importer of German electronic goods in Q1/16 were the USA with 3.9 bn EUR (+3.2%

yoy) and China with 3.7 bn EUR (+2.5% yoy).

Exports to the Eurozone in Q1/16 improved by 1.3% yoy to 13.3 bn EUR set against 13.1 bn

EUR in Q1/15. Declines were reported for exports to Brazil, Russia, Mexico and Malaysia.






Automotive:

Car sales forecast revised upwards

• The European Automobile Manufacturers’ Association (ACEA) revised its 2016 forecast for

automotive sales upwards to 5% from its initial forecast of 2% predicted in January. Despite a

strong increase in sales the number of car registrations is still below the pre-crisis level of 15.5

million units.

The European passenger car market recorded growth for the 32nd consecutive month in April

2016, when new passenger car registrations increased by around 9.1% yoy, totalling 1,273,733

units, representing the highest result in volume terms since April 2008.

Top 3 growth countries were:

Spain +21.2%

Italy +11.5%

Germany + 8.4%

For April 2016 only Switzerland reported a decline in new car registrations (-1.0% yoy).






Process Industry:

• According to the German engineering association VDMA the order intake in the German mechanical

engineering industry increased by 3% yoy in April 2016. Domestic orders improved by 11% yoy while

international orders declined by around 1%.

The industry is marked by the large-scale systems business and there is no clear growth trend visible

yet, which continues to fuel strong fluctuations in year-on-year comparisons.

For the three-month-period ending April an increase in orders of 10% yoy compared to the same

three month of 2015 is reported for the German mechanical engineering industry. Domestic orders

improved by 6% yoy while international orders grew by 12% yoy.

There is a trend indicating that reduced CAPEX in upstream Oil & Gas is now compensated by

downstream investments into petrochemical sectors.





European Industry News / PMI Status

• European Industry News

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





European Industry News

• Sandvik Materials Technology invested in a new tube pickling line for hot flow processes in Sandviken,

Sweden. The investment totalled 54 mill. EUR but no details about the capacity were given yet. The 6,000

square meter facility is expected to be commissioned by the end of 2017.

• For Q1/16 Schmolz + Bickenbach reports a decline in sales of 21% to 604 mill. EUR, down from 766 mill.

EUR in Q1/15. Sales volume in Q1/16 fell by around 5% to 461 kt (Q1/15: 483 kt). The company’s EBITDA

fell from 55 mill. EUR in Q1/15 to 22 mill. EUR in Q1/16 (-60% yoy). Schmolz + Bickenbach’s EAT improved

from a minus of 122 mill. EUR (incl. impairment losses from discontinued operations) in Q1/15 to a minus of

24 mill. EUR in Q1/16.

• Outokumpu is considering issuing a 7.5 % fixed-rate bond to be used for the pre-payment of financial

indebtedness with a maturity of five years hoping to rise about 200 mill. EUR. The group’s net debt at the

end of Q1/16 was 1.55 bn EUR with the aim to reduce it to 1.20 bn EUR by the end of 2017. Outokumpu

also implemented a share buyback programme between May 13th and May 27th 2016 to purchase two million

of its own shares, which then will be used in an incentive scheme for employees.

First signs of an upswing in results





30

35

40

45

50

55

60

65

Ind

ex o

f 5

0 =

‘Bre

ak E

ven

Po

int’

EU USA China

Where do we Stand in the Business Cycle?

PMI Status May 2016

All regions are back to expansion, but especially China runs danger to fall back to contraction territory again





Relevant Issues in Damstahl-Land

• Flat Product Imports

• Long Product Import

• Relevant Issues, Imports and Market Volume Index by country

Germany

The Netherlands

Denmark

Sweden

Norway

Slovenia

Finland





Stainless Steel Flat Product Imports 2016 vs. 2015

Increase in entire Damstahl-Land – the Netherlands lead the way

Period: January – February (Denmark, Sweden, Slovenia, Finland)

Period: January – March (Germany, the Netherlands)

Period: January – April (Norway)

Source: SMR - Steel & Metals Market Research Analysis

16%

4%

8%

6%

7%

46%

3%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Finland

Slovenia

Norway

Sweden

Denmark

Netherlands

Germany





Stainless Steel Long Product Imports 2016 vs. 2015


34%

15%

-33%

-13%

-5%

20%

-7%

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

Finland

Slovenia

Norway

Sweden

Denmark

Netherlands

Germany

Mixed picture – Strong increases in Finland, the Netherlands and Slovenia / heavy decline in Norway

Period: January – February (Denmark, Sweden, Slovenia, Finland)

Period: January – March (Germany, the Netherlands)

Period: January – April (Norway)






Germany:

• End-user demand was stable in May 2016 in most segments and also prices somewhat recovered

with the increase of the alloy surcharge and the rise in base prices. Market participants see profit

margins slowly improving but inventories are still on sufficient levels. Still some distributors do not

yet trust the newly won momentum in the price development, and only cautiously restock.

• The German economy expanded by 0.7% in Q1/16, showing a solid growth path, but due to a

tough external environment it was only gradually improving. Building and construction was

supported by a mild winter and higher investments in construction segments. For the full year 2016

the German GDP is expected to be on par with last year at 1.7%.





Imports of Stainless Steel Products into Germany

Increased imports only for cold rolled sheets, forged bars and profiles

CRR = Coils for re-rolling are not counted in total

Imports by Product

Source: SMR – Steel & Metals Market Research Analysis

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

HR Sheet & Plate 30.482 40.680 44.344 37.076 45.664 38.756 49.700 38.878 34.562 42.013 41.127 26.315

therefrom CRR (Finland-Sweden) 11.418 18.050 22.049 14.817 25.345 19.867 25.054 20.001 17.739 18.703 20.013 10.113

HR Sheet & Plate real 19.064 22.630 22.295 22.259 20.319 18.889 24.646 18.877 16.823 23.310 21.114 16.202

CR Sheet 66.332 66.877 72.873 78.347 52.988 71.377 69.715 66.234 45.457 68.527 69.816 64.024

Round Bars 14.225 13.308 13.542 14.529 9.158 13.138 13.236 13.779 9.429 12.628 14.230 11.335

Non-circular Bars 4.605 4.214 4.909 5.589 3.530 4.368 4.841 5.100 2.826 3.683 3.801 4.335

Forged Bars 1.568 1.215 1.352 1.701 1.288 1.342 1.573 1.751 999 1.494 1.319 1.277

Profiles 860 707 642 743 595 617 703 471 405 693 658 632

Seamless Tubes 2.818 2.481 2.467 2.447 1.887 1.816 2.317 2.515 1.750 2.892 2.735 2.350

Welded Tubes (round) 9.897 8.354 8.024 11.921 6.184 10.203 9.966 9.750 6.852 8.040 9.618 8.105

Welded Tubes (square) 4.790 3.659 3.781 4.906 2.590 3.929 4.580 3.904 3.609 3.004 4.633 3.634

All Products 124.159 123.445 129.885 142.442 98.539 125.679 131.577 122.381 88.150 124.271 127.924 111.894

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 470.602 110.460 109.455 -1%

therefrom CRR (Finland-Sweden) 223.353 49.013 48.829 0%

HR Sheet & Plate real 247.249 61.447 60.626 -1%

CR Sheet 781.349 191.149 202.367 6%

Round Bars 156.839 42.495 38.193 -10%

Non-circular Bars 52.888 12.906 11.819 -8%

Forged Bars 16.464 3.675 4.090 11%

Profiles 7.543 1.800 1.983 10%

Seamless Tubes 28.839 8.341 7.977 -4%

Welded Tubes (round) 108.883 27.732 25.763 -7%

Welded Tubes (square) 47.953 12.205 11.271 -8%

All Products 1.448.007 361.750 364.089 1%

Products

[tonnes]

Products

2015 2016

[tonnes]





Imports by Country

Imports of Stainless Steel Products* into Germany

Italy‘s deliveries still on last year‘s level – Double digit growth for Finland and France


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

** Excl. CRR

Change

Q1 Q2 Q3 Q4 TOTAL ytd Q1 ytd 2015-2016

[ % ]

ITALY 66.214 69.144 64.189 65.065 264.612 66.214 66.237 66.237 0%

FINLAND* 58.478 70.158 67.549 68.258 264.443 58.478 67.700 67.700 16%

FRANCE 56.047 60.299 54.518 54.593 225.457 56.047 63.464 63.464 13%

BELGIUM 50.735 45.587 39.306 40.283 175.911 50.735 46.257 46.257 -9%

SPAIN 47.555 38.753 35.430 33.737 155.475 47.555 33.681 33.681 -29%

SWEDEN* 13.353 15.280 17.450 14.456 60.538 13.353 15.377 15.377 15%

NETHERLANDS 13.066 12.319 14.643 8.451 48.479 13.066 10.268 10.268 -21%

INDIA 9.625 10.473 13.404 9.300 42.802 9.625 8.980 8.980 -7%

SLOVENIA 6.483 11.081 9.258 7.848 34.670 6.483 9.422 9.422 45%

CZECH REPUBLIC 3.270 8.992 8.146 6.085 26.493 3.270 5.610 5.610 72%

AUSTRIA 5.912 5.971 5.146 5.548 22.577 5.912 4.938 4.938 -16%

SOUTH AFRICA 3.775 4.035 7.564 4.321 19.695 3.775 3.594 3.594 -5%

U S A 4.113 3.852 3.779 1.972 13.716 4.113 1.732 1.732 -58%

UKRAINE 3.612 3.550 2.906 2.705 12.773 3.612 2.727 2.727 -25%

SWITZERLAND 3.180 3.447 2.968 2.833 12.428 3.180 2.862 2.862 -10%

POLAND 2.678 2.646 3.646 2.954 11.924 2.678 2.558 2.558 -4%

CHINA 4.098 1.616 1.525 1.307 8.546 4.098 1.907 1.907 -53%

SOUTH KOREA 2.013 1.582 2.766 1.871 8.232 2.013 3.172 3.172 58%

UNITED KINGDOM 2.044 2.250 1.729 1.044 7.067 2.044 1.286 1.286 -37%

LUXEMBOURG 1.449 1.794 1.765 2.000 7.008 1.449 1.494 1.494 3%

TURKEY 66 650 3.440 2.263 6.419 66 1.561 1.561 n.a.

TAIWAN 1.496 843 1.530 1.666 5.535 1.496 4.203 4.203 181%

JAPAN 779 715 913 969 3.376 779 827 827 6%

PORTUGAL 597 984 801 640 3.022 597 993 993 66%

MALAYSIA 24 549 835 711 2.119 24 928 928 n.a.

DENMARK 425 308 249 235 1.217 425 424 424 0%

THAILAND 186 44 378 426 1.034 186 1.283 1.283 590%

OTHERS 66.691 69.711 65.017 65.632 267.051 66.691 66.841 66.841 0%

TOTAL 361.750 377.489 366.661 342.108 1.448.007 361.750 364.089 364.089 1%

Country of Origin

2015 2016

[ tonnes ]





50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

Ø 2

01

1

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

Apr

Ju

n

Aug

Oct

De

c

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

Germany - Stainless Steel Market Volume Index*

Flat products dip on a high level while long products show a slight downward movement


*Data based on country-reported trade figures and estimated production volumes

Trend

Lines

2011 2012 2013 2014 2015

Ma

r

2016






The Netherlands:

• Towards the end of May the Dutch market saw demand increasing for stainless steel products.

Stock levels at service centres are tending lower levels amid rising alloy surcharges and base

prices compared to Q1/16. Some European mills are reported to offer delivery dates in November

or even longer delivery times to Dutch traders. Building and construction as well as the food

industry are improving, although bigger projects are still yet to come.

• In general the Dutch economy situation is improving which also reflects in lower unemployment

figures and a larger number of job offers.

• Dutch oil & gas giant Royal Dutch Shell announced to further limit spending and to draw back its

business from up to ten countries this year. Shell plans to divest up to 10% of its assets to save

around 4.5 bn USD. Royal Dutch Shell is currently active in more than 70 countries but wants to

focus on 13 nations including Brazil, Australia (natural gas) and the USA (shale gas). According to

the company’s recent financial statement, Royal Dutch Shell had to cope with a 89% drop in its

EAT from 4,430 mill. USD in Q1/15 to only 484 mill. USD in Q1/16.

• Stainless steel rebar has been chosen for the construction of the spill basin at the 12 bill. m³

liquefied natural gas (LNG) Gate Terminal in Maasvlakte/Rotterdam. Outokumpu will supply the

stainless steel rebars in grade 304LN (1.4311).





Imports by Product

Imports of Stainless Steel Products into the Netherlands

Double-digit percentage growth at all product forms but seamless tubes (-7% yoy)


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

HR Sheet & Plate 1.442 1.966 1.737 2.763 1.811 5.493 4.178 1.969 1.751 3.269 2.486 2.280

CR Sheet 10.400 16.291 17.950 17.569 16.331 14.482 15.849 12.281 14.720 15.802 14.894 15.934

Round Bars 1.141 1.584 1.874 1.867 1.642 2.279 2.094 2.120 1.100 1.606 2.156 1.526

Non-circular Bars 276 344 252 495 241 608 405 380 255 489 455 371

Forged Bars 86 91 183 144 120 356 126 292 116 229 182 176

Profiles 178 191 193 213 151 159 215 212 125 168 186 235

Seamless Tubes 737 430 1.031 490 574 971 777 768 635 747 660 524

Welded Tubes (round) 2.150 1.396 1.642 1.950 1.756 1.546 1.702 2.148 1.008 2.233 2.147 2.094

Welded Tubes (square) 1.019 1.043 887 1.525 576 867 1.095 1.065 360 1.209 1.551 1.110

All Products 17.429 23.336 25.749 27.016 23.202 26.761 26.441 21.235 20.070 25.752 24.717 24.250

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 28.941 5.831 8.035 38%

CR Sheet 167.864 31.991 46.630 46%

Round Bars 19.799 4.098 5.288 29%

Non-circular Bars 4.375 1.119 1.315 18%

Forged Bars 2.003 489 587 20%

Profiles 1.967 330 589 78%

Seamless Tubes 8.495 2.082 1.931 -7%

Welded Tubes (round) 19.383 4.085 6.474 58%

Welded Tubes (square) 11.057 2.620 3.870 48%

All Products 263.884 52.645 74.719 42%

[tonnes]

Products

Products

2015 2016

[tonnes]





Imports by Country

Imports of Stainless Steel Products* into the Netherlands

Strongly improved deliveries in Q1/16 for South Africa, Belgium and Italy



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

Change

Q1 Q2 Q3 Q4 TOTAL ytd Q1 ytd 2015-2016

[ % ]

FINLAND 138.962 161.204 126.993 134.272 561.431 138.962 147.244 147.244 6%

ITALY 10.515 9.814 10.295 11.954 42.578 10.515 12.868 12.868 22%

GERMANY 8.436 11.516 11.814 8.666 40.432 8.436 9.010 9.010 7%

BELGIUM 5.398 14.067 12.585 7.519 39.569 5.398 8.441 8.441 56%

SOUTH KOREA 7.986 8.459 9.549 8.202 34.196 7.986 7.927 7.927 -1%

SOUTH AFRICA 2.334 6.692 7.412 8.356 24.794 2.334 9.523 9.523 308%

INDIA 3.153 2.591 5.128 4.392 15.264 3.153 3.926 3.926 25%

FRANCE 2.402 3.063 4.441 4.716 14.622 2.402 3.313 3.313 38%

U S A 718 1.632 5.197 1.749 9.296 718 1.289 1.289 80%

SWEDEN 3.054 1.993 1.829 2.113 8.989 3.054 2.698 2.698 -12%

TAIWAN 1.588 1.394 2.144 2.360 7.486 1.588 3.087 3.087 94%

VIETNAM 2.648 525 658 1.471 5.302 2.648 2.723 2.723 3%

JAPAN 176 1.713 2.242 553 4.684 176 1.120 1.120 536%

SPAIN 580 948 595 721 2.844 580 514 514 -11%

CHINA 1.068 514 555 563 2.700 1.068 1.674 1.674 57%

THAILAND 595 21 525 1.140 2.281 595 1.866 1.866 214%

SLOVENIA 502 297 252 449 1.500 502 611 611 22%

UNITED KINGDOM 303 315 339 440 1.397 303 437 437 44%

TURKEY 359 54 237 732 1.382 359 1.721 1.721 379%

OTHERS 830 906 1.182 1.650 4.568 830 1.971 1.971 137%

TOTAL** 52.645 66.514 76.979 67.746 263.884 52.645 74.719 74.719 42%

Country of Origin

2015 2016

[ tonnes ]





0%

50%

100%

150%

200%

250%

300%

350%

Ø 2

01

1

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

Apr

Ju

n

Aug

Oct

De

c

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

Ap

r

Ju

n

Aug

Oct

De

c

Feb

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

Netherlands – Stainless Steel Market Volume Index*

Contrasting development of long products and flat products in Q1/16



2011 2012 2013 2014

Trend

Lines

2015

Ma

r

2016






Denmark:

• Due to a positive contribution of exports, higher construction activity and bigger household

consumption the Danish economy reported a 0.6% growth in its GDP for Q1/16 set against Q1/15.

In spite of the good result the Danish government slashed its estimate for economic growth from

1.9% in December 2015 to only 1.1% at the end of May, as for the remainder of the year the

economy is expected to only show slow growth.

• Vestas Wind Systems reported that it is revising its forecasts after a decision in the USA on tax

credits for renewable energy companies. The current tax credit framework was extended by

another five years which according to Vestas CEO Anders Runevad enables the company to look

at a very good and stable market until 2020. The company will comment on the full effect of the

decision after Q2/16 or Q3/16.

• Arla Foods announced to sell its juice subsidiary Rynkeby Foods A/S to Germany based Eckes

Granini Group GmbH. Rynkeby Foods A/S was founded in 1934 and has been fully owned by

Arla Foods since 1998. Based in Ringe, Denmark, Rynkeby Foods A/S counts 200 employees

generating annual revenues of around 130 mill. EUR. Further terms and conditions of the

transaction were not disclosed.





Imports by Product

Imports of Stainless Steel Products into Denmark

Strong increases at cold rolled sheet imports lead to a total import growth of 5%


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

HR Sheet & Plate 1.320 1.398 771 1.327 1.290 1.404 1.217 2.002 1.484 666 778 1.115

CR Sheet 4.237 4.660 5.320 4.685 3.874 3.571 4.490 5.178 4.417 3.352 4.197 4.696

Round Bars 1.405 1.193 1.353 1.613 1.542 808 1.223 1.271 1.424 990 1.186 1.254


Forged Bars 135 211 205 268 173 205 168 201 181 153 154 148

Profiles 102 84 91 177 165 113 130 127 139 72 87 106

Seamless Tubes 152 121 130 328 194 63 86 133 99 115 137 100

Welded Tubes (round) 1.461 1.097 1.177 1.275 1.125 654 1.261 1.266 1.267 902 939 1.230

Welded Tubes (square) 1.303 935 597 602 516 362 810 997 487 488 300 748

All Products 10.273 9.810 9.757 10.396 9.008 7.271 9.592 11.326 9.639 6.813 7.937 9.548

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 14.751 1.872 1.893 1%

CR Sheet 50.845 7.061 8.893 26%

Round Bars 15.485 2.663 2.440 -8%

Non-circular Bars 1.500 203 310 53%

Forged Bars 2.211 311 302 -3%

Profiles 1.378 178 193 8%

Seamless Tubes 1.732 311 237 -24%


Welded Tubes (square) 8.719 1.622 1.048 -35%

All Products 110.606 16.721 17.485 5%

Products

[tonnes]

2015 2016

Products

[tonnes]





Imports by Country

Imports of Stainless Steel Products* into Denmark

Decline in deliveries from Italy and Germany; Sweden still at previous year’s level



Change

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

[ % ]

ITALY 1.853 2.855 7.643 7.835 6.121 6.392 27.991 4.708 1.748 2.302 4.050 -14%

GERMANY 1.741 1.688 5.105 5.398 4.739 3.491 18.733 3.429 1.474 1.602 3.076 -10%

SWEDEN 1.065 1.103 3.329 3.669 2.541 3.282 12.821 2.168 1.077 1.096 2.173 0%

FINLAND 869 507 2.569 3.182 2.635 3.663 12.049 1.376 791 984 1.775 29%

FRANCE 551 533 1.683 2.020 1.608 1.654 6.965 1.084 440 448 888 -18%

TAIWAN 518 437 1.313 1.580 972 2.857 6.722 955 611 1.066 1.677 76%

BELGIUM 210 413 1.159 1.450 1.365 1.619 5.593 623 800 518 1.318 112%

SPAIN 210 224 784 844 799 991 3.418 434 317 499 816 88%

INDIA 262 213 664 725 709 742 2.840 475 241 147 388 -18%

CHINA 80 109 534 451 856 719 2.560 189 28 78 106 -44%

MALAYSIA - 62 192 512 961 447 2.112 62 - - - -100%

SOUTH AFRICA - 57 154 562 948 401 2.065 57 - - - -100%

NETHERLANDS 127 291 602 538 431 405 1.976 418 138 179 317 -24%

U S A - 71 235 187 243 204 869 71 1 15 16 -77%

NORWAY 112 83 301 233 171 66 771 195 12 13 25 -87%

POLAND 51 20 87 241 211 215 754 71 54 90 144 103%

UNITED KINGDOM 31 23 145 182 127 144 598 54 110 419 529 880%

SLOVAKIA 106 - 107 53 163 52 375 106 5 25 30 -72%

TURKEY - 9 21 82 74 127 304 9 22 17 39 333%

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

ESTONIA 8 15 36 28 39 45 148 23 14 18 32 39%

PORTUGAL 3 8 18 38 33 53 142 11 8 10 18 64%

SLOVENIA 44 27 94 11 13 8 126 71 7 - 7 -90%

SINGAPORE - - 65 - - 40 105 - 18 - 18 n.a.

OTHERS 25 25 72 83 112 111 378 50 21 22 43 -14%

TOTAL 7.866 8.855 26.994 29.963 25.871 27.778 110.606 16.721 7.937 9.548 17.485 5%

Country of Origin

[ tonnes ]

2015 2016





Denmark – Stainless Steel Market Volume Index*

Upward trend for both flat and long products in early 2016



20%

40%

60%

80%

100%

120%

140%

160%

180%

Ø 2

01

1

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

Dec

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

2011 2012 2013 2014

Trend

Lines

2015 2016






Sweden:

• The improvement seen in 2016 so far in the Swedish stainless steel market continues step by step.

Demand in most of the segments is considered good, especially the automotive industry for both

trucks and cars as well as the building and construction industry are performing well. And, having

stainless steel prices on the most stable level since quite a while the market will soon go into the

summer holiday period that lasts until mid August.

• The long-running very solid economic growth streak of Sweden’s economy continued also in

Q1/16. According to the statistical office Sweden’s GDP grew by 4.2% yoy from Q1/15 after

expanding by 4.9% yoy in Q4/15.

• Swedish Bravida acquired installation and service company Björnberg Group in Stockholm, a

provider of heating and plumbing with a workforce of 170 employees and annual revenues of

290 mill. SEK. After approval from the Swedish Competition Authority the ownership is expected to

be assumed by July 1st 2016.





Imports by Product

Imports of Stainless Steel Products into Sweden

Overall import increase by 3% yoy mainly due to cold rolled sheets rising by 9% and hot rolled sheets and plates by 16%



HR Sheet & Plate 1.368 941 740 920 598 1.454 1.174 824 742 791 1.140 1.185

CR Sheet 6.808 6.222 5.549 7.467 5.373 7.617 7.195 7.021 5.904 4.260 5.682 6.669

Round Bars 1.379 1.094 1.121 1.338 1.189 657 1.102 1.476 1.068 783 768 1.067


Forged Bars 46 52 41 37 44 33 47 44 42 40 41 33

Profiles 143 110 224 53 215 80 128 122 289 104 107 129

Seamless Tubes 275 261 130 170 140 160 202 234 167 180 236 104

Welded Tubes (round) 1.000 912 982 719 652 358 532 680 536 379 527 629

Welded Tubes (square) 248 212 154 242 308 126 196 321 206 201 193 416

All Products 11.565 9.991 9.108 11.134 8.740 10.600 10.782 10.984 9.184 6.952 8.860 10.548

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 11.549 1.997 2.325 16%

CR Sheet 74.713 11.297 12.351 9%

Round Bars 13.581 2.374 1.835 -23%

Non-circular Bars 2.326 238 482 103%

Forged Bars 554 128 74 -42%

Profiles 1.719 251 236 -6%

Seamless Tubes 2.340 421 340 -19%


Welded Tubes (square) 2.665 451 609 35%

All Products 117.910 18.870 19.408 3%

[tonnes]

Products

Products

2015 2016

[tonnes]





Imports by Country

Imports of Stainless Steel Products* into Sweden

Reduced imports from Spain and Italy – Increase in deliveries from Finland, Denmark and Germany



Change


[ % ]

FINLAND 2.720 2.639 9.014 9.232 7.303 6.679 32.228 5.359 2.994 3.754 6.748 26%

SPAIN 2.020 2.124 6.179 4.970 6.394 5.741 23.284 4.144 1.769 1.586 3.355 -19%

ITALY 1.206 1.337 4.180 4.116 3.224 3.495 15.015 2.543 804 1.149 1.953 -23%

DENMARK 940 1.015 3.095 3.027 2.708 3.241 12.071 1.955 1.113 1.137 2.250 15%

GERMANY 727 886 2.777 3.000 2.762 2.871 11.410 1.613 688 1.200 1.888 17%

FRANCE 439 748 1.997 1.766 2.069 1.493 7.325 1.187 442 612 1.054 -11%

SOUTH AFRICA 64 305 484 1.783 3.190 1.076 6.533 369 148 172 320 -13%

UNITED KINGDOM 89 141 346 441 541 569 1.897 230 180 347 527 129%

NORWAY 277 258 847 273 201 76 1.397 535 42 11 53 -90%

INDIA 88 86 280 285 233 351 1.149 174 158 44 202 16%

JAPAN 81 29 190 294 304 156 944 110 28 65 93 -15%

NETHERLANDS 49 57 176 186 170 170 702 106 64 68 132 25%

TURKEY 22 38 73 121 186 204 584 60 67 2 69 15%

POLAND 22 16 49 71 119 226 465 38 73 71 144 279%

TAIWAN 49 62 174 75 86 91 426 111 108 136 244 120%

AUSTRIA 43 40 149 55 55 82 341 83 27 15 42 -49%

LUXEMBOURG - - 51 97 90 97 335 - 44 50 94 n.a.

SLOVENIA - 23 40 112 64 94 310 23 22 24 46 100%

SWITZERLAND 74 8 121 78 42 60 301 82 18 50 68 -17%

AUSTRALIA - - - - 204 - 204 - - - - n.a.

OTHERS 60 88 213 251 177 348 989 148 71 55 126 -15%

TOTAL 8.970 9.900 30.435 30.233 30.122 27.120 117.910 18.870 8.860 10.548 19.408 3%

Country of Origin

2015 2016

[ tonnes ]





Sweden – Stainless Steel Market Volume Index*

Flat products stabilised at a low level, long products dip after a strong start into 2016



40%

60%

80%

100%

120%

140%

160%

180%

200%

Ø 2

01

1

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Jun

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

2011 2012 2013 2014

Trend

Lines

2015 2016






Norway:

• The stainless steel market in Norway is still suffering from the fact, that the offshore industry was

not able to come back to normal activity levels, even though oil prices recovered to above 50

USD/bbl since the long-time low in February. In general the industry is still characterised by

downsizing and layoffs, having only the building and construction industry to perform at a steady

activity level and the fishing industry performing very good.

• Statoil announced to have acquired JX Nippon’s 45% equity share in the UK licence for the gas

and condensate field Utgard spanning the United Kingdom-Norway median line, increasing its

holding to 100%. The company will also take over the operatorship. Earlier in October 2015 and

December 2015 Statoil already acquired the licence stakes from First Oil and Talisman Sinopec.

Statoil further announced to have awarded Rosenberg WorleyParsons a contract for the fabrication

of three bridges and two flare towers valued at around 600 mill. NOK. Delivery is scheduled for

2018 (one flare tower and one bridge) and 2019 for the remaining equipment.

• Yara International reportedly completed the sale of its European CO2 business and its remaining

34% stake in the Yara Praxair Holding AS joint venture to USA-based Praxair for 300 mill. EUR.

The divestment will generate an estimated post-tax gain of 150 mill. EUR.

• The Former Scana Steel Stavanger in Jorpeland has been re-launched as ‘NOMAC’ (Norwegian

Material Centre of Expertise AS) providing stainless and engineering steel forgings and castings to

the oil and gas industry, marine industry, construction machinery and special steel distributors.





Imports by Product

Imports of Stainless Steel Products into Norway

Only improved imports for hot rolled sheets and plates and cold rolled sheets


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

HR Sheet & Plate 414 531 156 271 584 812 437 404 744 679 759 769

CR Sheet 1.051 1.349 717 1.143 1.565 1.225 1.531 828 1.490 1.596 1.095 1.337

Rolled Bars 293 358 268 400 415 309 330 294 324 425 319 290

Forged Bars 66 106 154 72 36 73 98 73 52 51 39 38

Profiles 197 90 78 55 90 91 89 69 56 86 138 151

Seamless Tubes 259 397 194 189 218 193 283 146 151 148 97 245

Welded Tubes (round) 563 623 300 268 537 506 671 342 548 566 528 588

All Products 2.843 3.454 1.867 2.398 3.445 3.209 3.439 2.156 3.365 3.551 2.975 3.418

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 6.320 2.711 2.951 9%

CR Sheet 14.360 4.951 5.518 11%

Rolled Bars 4.351 1.684 1.358 -19%

Forged Bars 1.146 468 180 -62%

Profiles 1.224 465 431 -7%

Seamless Tubes 3.155 1.276 641 -50%


All Products 36.642 13.831 13.309 -4%

Products

Products

[tonnes]

[tonnes]

2015 2016





Imports by Country

Imports of Stainless Steel Products* into Norway

Germany (+32% yoy) now part of Top 3 due to Taiwan’s deliveries getting cut by 30% yoy



Change

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

[ % ]

SWEDEN 3.488 1.078 2.690 2.325 2.887 11.390 4.566 3.014 1.207 4.221 -8%

FINLAND 2.119 569 2.148 1.754 2.158 8.179 2.688 2.240 863 3.103 15%

TAIWAN 1.307 249 660 647 638 3.252 1.556 838 256 1.094 -30%

GERMANY 715 234 705 784 653 2.857 949 1.056 198 1.254 32%

ITALY 404 73 512 521 516 1.953 477 597 251 848 78%

DENMARK 512 207 561 294 456 1.823 719 496 90 586 -18%

FRANCE 444 230 569 313 404 1.730 674 438 148 586 -13%

SPAIN 273 54 287 204 87 851 327 221 119 340 4%

JAPAN 131 36 430 75 67 703 167 46 90 136 -19%

UNITED KINGDOM 280 32 120 134 156 690 312 128 6 134 -57%

CHINA 319 14 127 121 59 626 333 74 17 91 -73%

BELGIUM-LUXEMBOURG 103 35 65 108 238 514 138 270 6 276 100%

CZECH REPUBLIC 303 111 114 2 89 508 414 56 32 88 -79%

INDIA 138 78 165 111 89 503 216 132 38 170 -21%

NETHERLANDS 68 24 74 109 110 361 92 100 27 127 38%

POLAND 99 2 18 44 32 193 101 44 12 56 -45%

SOUTH KOREA - 1 6 - 95 101 1 - - - -100%

AUSTRIA 34 1 26 28 12 100 35 38 - 38 9%

OTHERS 45 21 69 136 58 308 66 103 58 161 144%

TOTAL 10.782 3.049 9.346 7.710 8.804 36.642 13.831 9.891 3.418 13.309 -4%

[ tonnes ]

Country of Origin

2015 2016





Norway – Stainless Steel Market Volume Index*

After a good start into 2016 long and flat products maintain their long term downward trend



20%

40%

60%

80%

100%

120%

140%

160%

Ø 2

01

1

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Apr

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

2011 2012 2013 2014

Trend

Lines

2015 2016






Slovenia:

• The Slovenian stainless steel market somewhat cooled down from its very strong performance in

Q1/16. Distributors keep their inventories low and recently became somewhat hesitant with

restocking as they do not yet trust in a stable price development. In-spite of this scepticism, end-

user activity remained on a robust level in most industry segments.

• Slovenia's economy expanded by 2.5% yoy in Q1/16, boosted by growing exports which were up

by 5.3%. Slovenia’s tourism industry benefits currently from the tense situation in the near east,

including Turkey. This leads to a healthy stainless demand from the catering sector and hotels.





Imports by Product

Imports of Stainless Steel Products into Slovenia

Decline in imports of hot rolled sheets & plates, profiles as well as welded square tubes.

For all other product forms double digit import increase



HR Sheet & Plate 963 1.297 1.527 718 826 517 635 1.012 663 212 290 330

CR Sheet 1.601 1.383 2.044 2.309 2.540 1.077 2.804 2.316 2.044 1.717 2.298 2.562

Round Bars 350 410 405 342 397 226 427 491 439 213 523 413


Forged Bars 11 15 13 10 15 9 11 13 14 9 16 9

Profiles 70 49 36 35 41 21 26 34 34 23 24 22

Seamless Tubes 32 29 32 28 26 24 39 33 24 26 42 27



All Products 3.455 3.657 4.381 4.024 4.405 2.165 4.435 4.376 3.633 2.618 3.544 3.812

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 10.131 1.761 620 -65%

CR Sheet 23.349 3.514 4.860 38%

Round Bars 4.475 775 936 21%

Non-circular Bars 552 72 96 33%

Forged Bars 142 22 25 14%

Profiles 475 106 46 -57%

Seamless Tubes 340 47 69 47%

Welded Tubes (round) 2.846 411 461 12%

Welded Tubes (square) 1.824 277 243 -12%

All Products 44.134 6.985 7.356 5%

[tonnes]

Products

Products

2015 2016

[tonnes]





Imports by Country

Imports of Stainless Steel Products* into Slovenia

Germany doubles deliveries to Slovenia in early 2016



Change


[ % ]

ITALY 1.858 2.425 6.418 8.030 6.052 7.131 27.631 4.283 1.741 1.984 3.725 -13%

GERMANY 311 378 1.212 1.235 1.423 1.046 4.916 689 583 876 1.459 112%

AUSTRIA 205 212 675 629 641 611 2.556 417 183 209 392 -6%

SOUTH KOREA 420 78 518 686 1.067 59 2.330 498 360 25 385 -23%

FRANCE 119 176 393 386 341 285 1.405 295 151 118 269 -9%

POLAND 68 63 188 233 247 266 934 131 129 164 293 124%

HUNGARY 81 154 262 166 285 160 873 235 34 56 90 -62%

FINLAND 17 105 155 163 311 235 864 122 71 119 190 56%

NETHERLANDS 23 54 127 147 163 137 574 77 47 57 104 35%

TURKEY 27 - 51 85 141 191 468 27 26 86 112 315%

INDIA 2 - 24 91 104 238 457 2 118 23 141 n.a.

TAIWAN 45 24 127 - - 63 190 69 23 46 69 0%

SWITZERLAND 12 16 64 44 38 42 188 28 29 8 37 32%

SWEDEN - 13 42 25 86 24 177 13 - 1 1 -92%

SOUTH AFRICA - - - 57 40 - 97 - - - - n.a.

BULGARIA - - 67 23 3 - 93 - - - - n.a.

OTHERS 16 83 117 62 63 139 381 99 49 40 89 -10%

TOTAL 3.204 3.781 10.440 12.062 11.005 10.627 44.134 6.985 3.544 3.812 7.356 5%

Country of Origin

2015 2016

[ tonnes ]





Slovenia – Stainless Steel Market Volume Index*

Long products peak in early 2016 and also flat products show a clear upward trend



0%

50%

100%

150%

200%

250%

300%

Ø 2

01

1

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Jun

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

2011 2012 2013 2014

Trend

Lines

2015 2016






Finland:

• The Finnish economy returned to weak growth in late 2015 after 3 years of recession, based on the

back of resilient private consumption and slow growth in exports.

• The Finnish stainless market is still in gradual recovery with slightly higher demand before the

summer season that starts there already in June. But, larger projects are missing and many

fabrication companies are reported to run short on orders.

• A main topic in the industry is the deal to make an internal competitive agreement (internal

devaluation by freezing salaries and prolonging working hours) which is about to be finalised. Most

labour market groups were waiting for the decision of the Metalworkers, the biggest industrial trade

union in Finland, whether they go along with the initiative.

• Several previous rounds of negotiations between the unions and the centre-right coalition

government have collapsed since May 2015. To sweeten the deal, the unions were promised to

grant half a billion euros in tax relief, once 85% of the workforce was reached. On June 10th 2016

the Metalworkers union announced to support the government-proposed competitiveness

agreement, which now has met the consent of 87% of Finland’s workforce.





Imports by Product

Imports of Stainless Steel Products into Finland

Strong increases at high-volume product imports add up to a total increase of 19% yoy



HR Sheet & Plate 3.119 2.509 1.627 3.209 2.729 3.059 3.052 2.683 2.412 1.242 2.672 3.423

CR Sheet 1.340 1.722 1.997 1.576 1.916 1.770 1.674 1.670 1.550 1.110 1.699 1.765

Round Bars 424 456 402 491 422 397 495 519 477 477 613 779


Forged Bars 43 24 41 34 30 36 25 48 29 18 32 38

Profiles 41 65 65 116 49 41 60 75 126 67 29 64

Seamless Tubes 149 188 83 131 79 112 181 140 130 113 143 125



All Products 5.824 5.623 5.044 6.486 5.934 5.997 6.325 6.031 5.235 3.595 5.744 6.847

2015 2015 2016 Change

FY ytd ytd ytd

[%]

HR Sheet & Plate 31.241 5.600 6.095 9%

CR Sheet 18.804 2.479 3.464 40%

Round Bars 5.491 931 1.392 50%

Non-circular Bars 1.545 251 238 -5%

Forged Bars 382 54 70 30%

Profiles 846 141 93 -34%

Seamless Tubes 1.468 162 268 65%

Welded Tubes (round) 5.726 825 776 -6%

Welded Tubes (square) 1.199 165 195 18%

All Products 66.702 10.608 12.591 19%

Products

[tonnes]

Products

[tonnes]

2015 2016





Imports by Country

Imports of Stainless Steel Products* into Finland

Sweden maintains its position as Finland’s main supplier with an increase of 18% yoy



Change


[ % ]

SWEDEN 2.013 1.568 5.616 5.741 6.038 5.992 23.387 3.581 1.828 2.408 4.236 18%

ITALY 500 894 2.187 2.580 2.255 2.211 9.233 1.394 463 807 1.270 -9%

BELGIUM 428 576 1.609 1.647 1.892 1.372 6.520 1.004 816 866 1.682 68%

FRANCE 433 277 1.068 1.448 1.608 1.311 5.435 710 339 552 891 25%

GERMANY 275 341 1.022 1.209 1.222 1.202 4.655 616 304 318 622 1%

CHINA 468 602 1.921 779 1.390 563 4.653 1.070 327 734 1.061 -1%

SPAIN 529 529 1.314 761 1.074 692 3.841 1.058 611 520 1.131 7%

U S A 282 119 484 1.480 1.070 269 3.303 401 531 88 619 54%

SLOVENIA 111 88 306 334 271 228 1.139 199 47 139 186 -7%

NETHERLANDS 18 61 189 245 269 211 914 79 53 128 181 129%

SOUTH AFRICA 117 - 117 161 378 77 733 117 26 - 26 -78%

DENMARK 39 43 140 124 102 115 481 82 54 35 89 9%

LUXEMBOURG - 48 82 35 143 68 328 48 22 29 51 6%

INDIA 19 33 52 124 49 101 326 52 - 47 47 -10%

POLAND 19 31 67 77 116 61 321 50 58 28 86 72%

UNITED KINGDOM 10 33 81 65 72 89 307 43 43 49 92 114%

ESTONIA 11 13 42 40 108 85 275 24 57 16 73 204%

PORTUGAL - 18 23 85 43 55 206 18 19 14 33 83%

AUSTRIA 7 6 33 30 32 49 144 13 14 12 26 100%

CZECH REPUBLIC 2 23 41 39 34 24 138 25 9 8 17 -32%

OTHERS 7 17 38 149 90 86 363 24 123 49 172 617%

TOTAL 5.288 5.320 16.432 17.153 18.256 14.861 66.702 10.608 5.744 6.847 12.591 19%

Country of Origin

2015 2016

[ tonnes ]





0%

50%

100%

150%

200%

250%

Ø 2

01

1

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

Ap

r

Ju

n

Au

g

Oct

De

c

Feb

[Ø 2

01

1 =

10

0%

]

Flat Products

Long Products

Finland – Stainless Steel Market Volume Index*

Long products recovered in February while the decline at flat products slowed down



2011 2012 2013 2014

Trend

Lines

2015 2016





Raw Materials

Nickel

Chrome

Molybdenum

Scrap





Raw Materials

Nickel:

Two steps forward - one step back

LME:

• After recovering to almost 9,600 EUR/t in early May, prices again fell to around 8,600 EUR/t in

early June. Class I nickel stocks at the LME continue to decline, standing at around 395,000 t

in early June, down by 5% mom 15% yoy.

Non-LME:

• Prices of nickel in NPI (Nickel Pig Iron) in May were in a range of 9,800-10,200 USD/t and then

fell to 9,400-9,700 USD/t in early June. Please note that iron (>85% of the weight) is included in

the NPI prices.

• China‘s nickel output from NPI is expected to fall by around 8% yoy to 355,000 t in 2016 mainly

due to low nickel prices, depleting laterite ore stocks and therefore falling supply.

• A significant change in the NPI supply chain may occur after the president elections in the

Philippines on June 30th, 2016, as a mineral export ban is under discussion similar to the

Indonesian ban in 2014.

• Chinese ferronickel imports including NPI in April 2016 increased to more than 107,000 t, up by

43% (!) on April 2015 at 75,000 t. Almost 84,000 t thereof were imported from Indonesia (April

2015: 0 t) of which the majority originates at Tsingshan Group‘s new Indonesian NPI smelter in

Sulawesi.





Raw Materials

Chrome:

Prices stabilise. The low point has been passed

• The European FeCr benchmark price agreed between mills and South African FeCr smelters

was lowered from 0.92 USD/lb in Q1/16 to 0.82 USD/lb in Q2/16, corresponding to a decline of

around 11%, falling for the second consecutive quarter. The Q3/16 price will be announced at

the end of June and are expected rather stable or even up.

• Recent spot prices for FeCr in China were reported at around 0.73-0.75 USD/lb and in Asia

stabilised at around 0.75 USD/lb CIF. Recent power shortage in Inner Mongolia forced Chinese

FeCr producers to cut output, forcing Chinese mills to continue with spot imports. The Chinese

price over 0.70 USD/lb is a significant increase from the bottom that has been around 0.55

USD/lb.

• Prices for South African UG2 chrome ore, which is the mainly feedstock used by Chinese FeCr

producers, rose from around 125 USD/t in May 2016 to around 150 USD/t in early June. The

price increase mainly was due to the South African rand gaining strength against the US dollar.

But also the fact that South Africa’s power tightness has eased somewhat allows the FeCr

industry there to produce more FeCr in the country instead of exporting ore to China.





Raw Materials

Molybdenum:

FeMo market overheats

• After being stable in Q1/16 at around 14 USD/kg, prices for ferromolybdenum skyrocketed to

around 20 USD/kg in May 2016 and then only slightly fell in early June to around 19.5 USD/kg.

Although prices seem to have stabilised at a high level, further price corrections are likely to take

place as the recent development was clearly over the top.

• Prices for canned molybdic oxide experienced a similar development, rising from around 5.5

USD/lb at the end of Q1/16 to around 8 USD/lb in early June.

• Most of the price rally was supply side driven as the Mo demand has not shown any increase

in 2016.

• The increase in prices may be a result of the world leading mining company KGHM having

stated that it may not proceed with the massive ‘Phase 2’ expansion of the Sierra Gorda mine in

Chile. To date it is unclear if there is a real supply tightness or if most of the rise has been

artificially created. In fact, currently there are probably more sellers than buyers at the market.





Raw Materials

Scrap:

Continuous tight supply

• Scrap prices for type 304 remained stable on a high level throughout May. Smaller scrap traders

keep on holding back material until LME prices tick higher, making it difficult for scrap

processors to guarantee sufficient volumes in case of an increasing melting production at

stainless steel mills. So far the crude steel production did not move up very much, but as rising

order-books indicate, Q3/16 could be (substantially) better in Europe than Q2/16 and Q3/15.

• But so far this is not reflected in scrap pricing. Prices for type 304 stainless steel scrap (solids)

were reported at around 905 EUR/t throughout May and in early June. Prices for type 304

turnings are calculated at a discount of around 15% of the solid’s price level and were traded at

around 780 EUR/t in early June. Turnings are mostly used in the production of stainless steel

long products whilst 304 solids are the base material for stainless steel sheet and plate

production.



The Chemical/Petrochemical Industry

From bullish to cautiously optimistic – an industry outlook

Focus of the Month: The Chemical/Petrochemical Industry





The Chemical/Petrochemical Industry – Drivers & Inhibitors

Stainless steel used in the chemical & petrochemical industry accounts for roughly 8% of the global Stainless Steel Long

Product market and 14% of the Flat Product market and made up in total 3.8 mill. t in 2015.

Chemical

Industry 78%

Petro- chemical Industry

22%

Global Market 2015:

3,800 kt

Source: Steel & Metals Market Research GmbH

• Olefins (Ethylene, Propylene, Butadiene)

• Aromatics (Benzene, Toluene, Xylene)

• Synthesis gases for Ammonia & Methanol

• Basic chemicals

• Life science chemicals

• Specialty chemicals

• Consumer products





Stainless steel types used in Chemical/Petrochemical

300 series (incl. molybdenum grades) heavily dominate the market

Mo 300 27%

Other 300 56%

400 series 11%

200 series 3%

Duplex 2%

Others 1%

Stainless Steel Types in Chemicals Production


Mo 300 39%

Other 300 30%

400 series 18%

200 series 3%

Duplex 8% Others

2%

Stainless Steel Types in Petrochemicals production





The Chemical/Petrochemical Industry – Capital Expenditures

-

1

2

3

4

5

6

7

8

BASF DOW Bayer Mitsubishi Chemical DuPont Braskem Akzo Nobel DSM

2013 2014

2015 2016

+5%

+15% +55% +4%

[in

bn

US

D]

-29%

+14%

-19%

-12%

-5% -7%

+79%

-0%

-14%

-7%

-39%

-16% -46%

-28%

-8%

+7%

-2% -26%

+42%

+4%

+79%

-12%

Capital expenditures are expected to decline by an average of 12% in 2016, but not all of the major companies are

following that trend


-12%





The Petrochemical Industry – Project Activity

The industry counts around 700 active projects in the petrochemical sector of which only 14% are in Europe.

Eastern Europe controls around 80% of all active petrochemical projects in the region.

Europe 14%

Middle East 22%

Asia-Pacific 31%

Canada 2%

Latin America

14%

US 16% Africa 4%

Total active

projects

700

Western Europe 21%

Other Eastern Europe 21%

Russia 38%

Other CIS 20%

Source: Hydrocarbon Processing’s Construction Boxscore Database - modified

Geographical distribution in petrochemical construction





The Petrochemical Industry – Project Activity

Almost 60% of all projects registered are in the preconstruction phase. The vast majority of projects under construction

can be found in the Middle East (23%) and the Asia-Pacific region (33%). Also for the number of new projects in 2016 the

Asia-Pacific region takes the lead.

Planning 26%

Under construction

42%

Study 8%

[CATEGORY NAME]* [VALUE]

Engineering 18%

Activity level Petrochemical construction

Source: Hydrocarbon Processing’s Construction Boxscore Database - modified

-

5

10

15

20

25

30

35

40

Afr

ica

As

ia-P

acif

ic

Ca

na

da

Eu

rop

e**

Lati

n A

meri

ca

Mid

dle

East

US

A

Number of new petrochemical projects by region 2016

Total: 103

*FEED: Front End Engineering Design

**incl. Russia and other CIS





Petrochemical Industry Outlook

The petrochemical market volume is expected to grow from around 490 mill. t in 2014 to around 730 mill. t in 2022. The

market value growth is rated at around 5.1% annually, from around 515 bn USD in 2014 to around 758 bn USD in 2022.

Source: Grand View Research - modified

-

100

200

300

400

500

600

700

800

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Global petrochemical market volume 2012-2022

[in

mill. t

]





Chemical Industry Outlook

Global Chemical Sales are expected to almost double between 2014 and 2030, but the share of the EU will decline

significantly

EU-28 17%

Other Europe 3%

NAFTA 16%

Latin America 5%

China 34%

Japan 4%

Other Asia 19%

Other World 2%

Global Chemical Sales 2014

Source: Cefic Chemdata International - modified

EU-28 12%

Other Europe 3%

NAFTA 14%

Latin America 5%

China 44%

Japan 4%

Other Asia 17%

Other World 1%

Global Chemical Sales 2030

6.3 trillion EUR 3.2 trillion EUR





Reflection of the Month

Renaissance of the ‘Old World’

Quote:

The downturn in China, which sends shockwaves throughout Asia,

shows the ‘Old World’ in a new, more positive light. If no market around

the world can trump with double-digit growth anymore, mills, distributors

and end-users focus on the fine differences and appreciate the subtle

success stories closer to home.

Markus Moll, Managing Director of SMR GmbH

Date post:	22-Jan-2021
Category:	Documents
Upload:	others
View:	3 times
Download:	0 times

Damstahl Stainless Steel Report #100 February 2016...Damstahl - a member of the...

Documents