Outlook for CIS Iron Ore Outlook for CIS Iron Ore Market Market Andrey Kuzmin Andrey Kuzmin Head of Raw Materials Department Head of Raw Materials Department Metal Courier Metal Courier CIS Raw Materials in World Markets CIS Raw Materials in World Markets 15-16 15-16 November November 2006, 2006, Moscow Moscow
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Outlook for CIS Iron Ore Market Andrey Kuzmin Head of Raw Materials Department Metal Courier CIS Raw Materials in World Markets 15-16 November 2006, Moscow.
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Outlook for CIS Iron Ore MarketOutlook for CIS Iron Ore Market
Andrey KuzminAndrey KuzminHead of Raw Materials DepartmentHead of Raw Materials Department
Metal CourierMetal Courier
CIS Raw Materials in World MarketsCIS Raw Materials in World Markets15-16 15-16 NovemberNovember 2006, 2006, MoscowMoscow
The main points of presentationThe main points of presentation
Prospects for CIS iron ore producers are not very promisingProspects for CIS iron ore producers are not very promising
• CIS domestic iron ore demand will show only sluggish CIS domestic iron ore demand will show only sluggish growthgrowth
• In the coming In the coming 5 5 years world major iron ore producers will years world major iron ore producers will increase production of high-grade material substantiallyincrease production of high-grade material substantially
• Consolidation in steel and mining industries will lead to Consolidation in steel and mining industries will lead to increase of long-term iron-ore contract market. So, the increase of long-term iron-ore contract market. So, the volume of spot market where CIS suppliers are most volume of spot market where CIS suppliers are most active may go downactive may go down
• Steel industry consolidation in Eastern Europe will force Steel industry consolidation in Eastern Europe will force out CIS suppliersout CIS suppliers
Important issues for CIS mining companies to surviveImportant issues for CIS mining companies to survive
To survive, CIS mining companies will have to: To survive, CIS mining companies will have to:
• increase product quality increase product quality • expand transport infrastructure with regard to expand transport infrastructure with regard to
exportexport
Steel Production in Russia is a Major RawSteel Production in Russia is a Major RawMaterials Consumption driverMaterials Consumption driver, , MtMt
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
OHF20%
EF20%
BOF60%
BOF48%
EF43%
OHF9%
Steel Production Structure in Russia, MtSteel Production Structure in Russia, Mt
20052005 20102010
Pig Iron Production in CIS, MtPig Iron Production in CIS, Mt
0,0
10,0
20,0
30,0
40,0
50,0
60,0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
HBI Production in CIS, MtHBI Production in CIS, Mt
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
2003 2004 2005 2006 2007 2008 2009 2010
Forecasts of Pellets Export from Russia, MtForecasts of Pellets Export from Russia, Mt
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
2003 2004 2005 2006 2007 2008 2009 2010
Металл-КурьерМеталл-Курьер
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