Platts European Steel Summit, London, 23rd May, 2013 1 Remaining Competitive in a Challenging Climate Actual outlook on steel market development with a focus on plates Günter Luxenburger Director Sales & Marketing Member of the Board
Platts European Steel Summit, London, 23rd May, 2013 1
Remaining Competitive in a Challenging Climate
Actual outlook on steel market development
with a focus on plates
Günter Luxenburger Director Sales & Marketing
Member of the Board
Platts European Steel Summit, London, 23rd May, 2013 2
• Short profile of Dillinger Hütte Group
• Raw materials
• Trends and developments in the steel market
• Specific view to the quarto plate market / Linepipe market
• Other important external conditions
Platts European Steel Summit, London, 23rd May, 2013 3
Dillinger Hütte and Saarstahl – leading companies with their products
SHS-Stahl-Holding-Saar
Saarstahl - Germany Dillinger Hütte - Germany
GTS, France
Long products
Heavy forgings Quarto plates
∑~ 5 Mio t/a
Platts European Steel Summit, London, 23rd May, 2013 4
ArcelorMittal SHS - Stahl-Holding-Saar Saarstahl
26,17% 33,75%
DHS - Dillinger Hütte Saarstahl (DHS holds 10% of its own shares) Private Shareholders 95,28% 4,72%
* direct and indirect
Production Steel Service Centres
30,08%
ROGESA Roheisengesellsch.
Zentralkokerei Saar
50% *
50% *
Saarstahl AG
Europipe
25,1%
50%
Jebens
Ancofer Stahlhandel
Dillinger Middle East (AE)
90%
100%
100%
AncoferWaldram Steelplates (NL)
Eurodécoupe (F)
100%
100%
Dillinger-GTS Ventes (F)
Dillinger Hütte Vertrieb
Dillinger Nederland (NL)
100%
100%
100%
Dillinger UK (GB)
Dillinger Italia (I)
100%
100%
Sales Companies Logistics
Dillinger Sverige (S)
Dillinger Norge (N)
100%
100%
Dillinger Espana (E)
Dillinger America (US)
100%
100%
Satrans
Trans-Saar (NL)
Saar-Rhein Transport- gesellschaft
100%
40%
100%
60%
DILLINGER HÜTTE
Share holding structure of the Dillinger Hütte
GTS Industries (F)
100%
MSG Mineralstoffgesellsch.
100%
Platts European Steel Summit, London, 23rd May, 2013 5
Dunkerque (France)
Dillingen (Germany)
Dillinger Hütte - The leading European plate maker
Platts European Steel Summit, London, 23rd May, 2013 6
Key data of Dillinger Hütte Group
• Plate capacity: 2.300 kt/a
Dillingen, Germany: 1.600 kt/a
GTS, France: 700 kt/a
• Focus on: - thick, large, heavy plates
- stringent specifications
- top services
• Employees in the group: 8.200
Dillingen 5.300
GTS, France 600 (using slabs of DH)
Platts European Steel Summit, London, 23rd May, 2013 7
Grand Stade Lille Métropole
• The stadium for the 2016 European Soccer Cup in France
• Plate thickness: up to 260 mm
• DH-deliveries: 5,400 t
• Steel grades: S355K2+N, S355N, S355NL, S460ML
Platts European Steel Summit, London, 23rd May, 2013 8
Hydroelectric power generating plant Santo Antônio
• Santo-Antônio-barrage fix at the river of Madeira in the northwest of Brazil
• Output: 3,150 MW
• Plate thickness: up to 210 mm
• DH-deliveries: 5,800 t
• normalised
steel grades: S235J0
S355J0
S355J2
S355J2G3
Platts European Steel Summit, London, 23rd May, 2013 9
• 250 sunshades reaching up to a height of 20 m protect pilgrims in Medina from the rays of the sun
• Plate thickness: up to 70 mm
• DH-deliveries: 2,600 t
• Steel grades: DILLIMAX 690 and DILLIMAX 965
Sunshades for Medina
Platts European Steel Summit, London, 23rd May, 2013 10
200 DS super heavy-lift crane
• Type: PTC 200 DS
• Plate thickness: up to 120 mm
• DH-deliveries: 12,500 t
• Steel grades: DILLIMAX high-tensile steels
Platts European Steel Summit, London, 23rd May, 2013 11
• Output: 367 MW
• Number: 102 towers
• Plate thickness: up to 105 mm
• DH-deliveries: 35,700 t
• Steel grades: S355NL, S355ML,
S355G10+M, S355G9+M
Offshore wind farm Walney, off the west coast of England
Quelle: RWE Innogy GmbH
Platts European Steel Summit, London, 23rd May, 2013 12
Installation vessel „Innovation“
• „Innovation“ of HGO InfraSea Solutions
• DH-deliveries: Racks 1,400 t Chords 1,050 t
• Plate thickness: Racks 190 mm Chords 55 mm
• Steel grade: DILLIMAX 690 E
Platts European Steel Summit, London, 23rd May, 2013 13
• Course: from Vyborg (Russia) to Greifswald (Germany)
• Length: 1,200 km
• Plate thickness: 26.7 - 34.6 mm
• DH-GTS-deliveries: 495,000 t
• Steel grade: SAWL-485-I-FD
Gas pipeline „Nordstream 2“, Baltic Sea
Platts European Steel Summit, London, 23rd May, 2013 14
One of the big innovation steps – the new continuous casting plant
Platts European Steel Summit, London, 23rd May, 2013 15
Capacity extension for super-heavy plates
New ingot casting stands in the extension of hall 5.
Platts European Steel Summit, London, 23rd May, 2013 16
Monopiles for Offshore Wind Power Stations !
Platts European Steel Summit, London, 23rd May, 2013 17
Weser
Nordenham
Nordsee
OTB Industrial estate
Blexen
Fabrication site at the north sea shore
Short distance to the north sea and offshore erection sides
Platts European Steel Summit, London, 23rd May, 2013 18
Construction of halls and quay (end of April 2013)
Weser river
(2 km to the North sea)
Platts European Steel Summit, London, 23rd May, 2013 22
• Trends and developments in the steel market
• Raw materials
• Short overview about Dillinger Hütte Group
• Specific view to the quarto plate market
• Other important external conditions
Platts European Steel Summit, London, 23rd May, 2013 23
IMF-Outlook for 2013/2014
(Status: Apr. 13)
Percentage GDP change compared to previous year
-0,6
0,9 0,6
1,6 1,9
3,3 3,4
5,7
8,0
1,1 1,5
4,0
3,0
4,0 3,8
6,2
0,9
2,0 2,2
3,2 3,4
4,0
7,8
-0,3
3,0
1,4
8,2
EU-27 D Brasil Japan USA World Russia. India China
2012 2013 2014
Source IWF , Apr. 13
Platts European Steel Summit, London, 23rd May, 2013 24
Quelle: CPB
Economic situation in industrial countries with little impetus
80
85
90
95
100
105
110
115
2011 2008 2009 2010
Industrieproduktion und Welthandel (2008=100, gl. 3-MD)
Jan--Feb 13: +1%
Jan-Feb 13: +2%
2012
Welthandel 2011: +6% 2012: +2%
Globale Industrieprod. 2011: +6% 2012: +3%
2013 80
85
90
95
100
105
110
115
120
125
130
135
140
2011 2008 2009 2010
Schwellenländer 2011: +7% 2012: +5%
Industrieländer 2011: +2%
2012: +0,4%
Industrieproduktion (Jan. 2008=100)
2012
Jan-Feb 13: +4%
Jan-Feb 13: -1%
2013
Global
industrial production
World trade
Emerging countries
Industrial Countries
Industrial production Industrial production and world trade
Platts European Steel Summit, London, 23rd May, 2013 25
0
200
400
600
800
1000
1200
1400
1600
1800
1950 1960 1970 1980 1990 2000 2010
Worldwide production of crude steel – up!
Average growth rates
(% per annum)
Years Growth
2000-12 5,3 %
1975-00 1,1 %
1950-75 5,0 %
I. II. III. II.
III.
2009 : 1,236 Mio t
2010 : 1,430 Mio t
2011 : 1,524 Mio t
2012: 1,548 Mio t
Outlook 2013: 1,596 Mio t *
Outlook 2014: 1,665 Mio t *
I.
*) Estimation Source: Worldsteel, WV, DH calculations
Development: 1950 - 2012
+5,3 %
+1,1 %
+5,0 %
Platts European Steel Summit, London, 23rd May, 2013 26
Eurofer Forecast: EU-steel market actually stagnating
192 201
185
121
148 157
142 139 144
0
50
100
150
200
250
06 07 08 09 10 11 12 13f 14f
Marktversorgung EU-27 (Mio. t)
Quelle: Eurofer Konjunkturkommission, Apr. 13
-10% -2% +3%
40
50
60
70
80
90
100
110
120
06 07 08 09 10 11 12 13f 14f
Deutschland
EU 27
Italien
Spanien
Marktversorgung Walzstahl in ausgewählten Ländern der EU-27 (2006=100)
Quelle: Eurofer Konjunkturkommission, Apr. 2013
Market supply EU-27 (Mio t) Market supply rolled steel in selected
EU-27 countries (2006=100)
Platts European Steel Summit, London, 23rd May, 2013 27
• Specific view to the quarto plate market
• Raw materials
• Short overview about Dillinger Hütte Group
• Trends and developments in the steel market
• Other external conditions
Platts European Steel Summit, London, 23rd May, 2013 28
Deliveries of Eurofer mills into EU 27 *)
Q1/2013 = Jan-March 2013; % variation y-o-y
into EU 27; Pre-material for large dia pipe excluded
1.000 t.p.m.
400
450
500
550
600
650
700
750
800
850
900
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
deliveries
orders
per year
Eurofer deliveries into EU 27 are recovering slowly in 2013
Orders
IV-12 597
I-13 636
Deliveries
IV-12 511
I-13 624
Platts European Steel Summit, London, 23rd May, 2013 29
*) = extrapolated from statistical figures for the German market; inventory at end of period; partly estimated Q1/13 = End of March 2013
2006 2007 2008 2009 2010 2011 2012
Inventory in kt Stock variation in kt
accumulated investory increase:
1,35 million tons or 50 % from beginning of
2006 till Q2/08
stockpiling: 28 months de-stocking 18 months
13
EU QP stock – continuous buying activity in 2013 expected
Platts European Steel Summit, London, 23rd May, 2013 30
Imports Q1/2013 = Jan./Feb. 2013; PS2 Q1/13*) = Jan.-March 2013
% variations y-o-y
EU 27: 3rd-country imports still too high – Monitoring takes place
0
5
10
15
20
25
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q3
13
0
5
10
15
20
25
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q3
13
10
2030
40
5060
70
8090
100
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q3
13
Ukraine Russia
Brazil
0
25
50
75
100
125
150
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q3
13
China
0
5
10
15
20
25
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q3
13
India
0
5
10
15
20
25
30
Q1
08
Q3
08
Q1
09
Q3
09
Q1
10
Q3
10
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q3
13
Indonesia
0
50
100
150
200
250
300
350
400
Imports 148 86 63 79 74 100 109 110 170 172 152 115 152 149 99 79 114
Licenc. 114 83 71 76 94 110 122 127 188 192 145 111 170 152 91 87 117
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
Q1
13
in 1.000 t.p.m.
-19,7%
Imports
Licences
*) = as of January 2013 according to PS2
Market share: 14 %
Platts European Steel Summit, London, 23rd May, 2013 31
Consumer segments for QP - 2013 vs 2012: mixed picture
*** **
2012
****
*****
***/*
***
**** ****
*** **
**** ***
2013
**** ****
Yellow goods
Heavy machinery
Shipbuilding Asia
Offshore Oil & Gas
Linepipe
Wind-Energy
Pressure Equipment
Trend
(QIII, QIV)
Platts European Steel Summit, London, 23rd May, 2013 32
Quo vadis – plate market:
1. Many plate consuming segments still in good shape
2. Demand for (non line pipe) plates - improvement expected in QIV-13
3. Demand for shipbuilding plates low pressure to producers in Asia
4. Demand for line pipe plates actually low improvement expected in QIV-13
5. Stock inventories in healthy conditions continuous buying activity over the year
6. Prices too low compared to cost situation price hikes as soon as the market
allows it
Platts European Steel Summit, London, 23rd May, 2013 33
• Raw materials
• Specific view to the quarto plate market
• Short overview about Dillinger Hütte Group
• Trends and developments in the steel market
• Other important external conditions
Platts European Steel Summit, London, 23rd May, 2013 34
Stand: 21.05.13
2010 2011 2012 2013
USD/t
Brasilien
Referenzsorte SSFT ab 12/2009
IODEX and FOB-prices Brazil
ROGESA & ZKS/Beschaffung
Price development Iron Ore (world market) - high volatility!
Platts European Steel Summit, London, 23rd May, 2013 35
0
50
100
150
200
250
300
350
400
450
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2. Q. 2
013
US
D/t
FO
B A
US
Quarterly prices Hard Coking Coal
“Quarter”- Benchmark 2013/14: Q2: 172 USD/t * 2012/13: Q2: 210 USD/mt * Q3: 225 USD/mt * Q4: 170 USD/mt * Q1: 165 USD/mt *
ROGESA & ZKS/Beschaffung
(*): FOB QLD/AUS
Stand: 21.05.13
Platts European Steel Summit, London, 23rd May, 2013 36
• High volatility of raw material prices
• High volatility of steel prices
• Project contracts with a validity of several quarters
Price quotations based on unknown costs!
Huge risks for the steel maker to work with fixed prices
Solution by price adjustment formulas – to be agreed with the customers
raw material clause steel price indexation
or in combination including capping rules
Challenging Conditions for long lead time projects
Platts European Steel Summit, London, 23rd May, 2013 37
• Other important external conditions
• Specific view to the quarto plate market
• Short overview about Dillinger Hütte Group
• Trends and developments in the steel market
• Raw materials
Platts European Steel Summit, London, 23rd May, 2013 38
Quelle: VIK, 2012
Canada
USA
Brasil
Argentina
Australia
India
China
Indonesia
Malaysia
South
Korea
Russia
Russia
Turkey
Finland
Norway
Great Britain
France
Spain
Romania
Italy
1
2
3 4
5
6
7
1. Netherlands
2. Belgium
3. Switzerland
4. Austria
5. Czech
Republic
6. Hungrier
7. Bulgarian
Sweden
Poland
Power prices for the industry - huge disadvantages in Europe!
►
Platts European Steel Summit, London, 23rd May, 2013 39
Cost based on renewable energy law in Germany (EEG-Gesetz) has
quadrupled since 2009 one reason for high energy cost
Platts European Steel Summit, London, 23rd May, 2013 41
Remaining Competitive in a Challenging Climate – means:
- frame conditions in EU have to be supportive, reliable and stable for the (steel) -
industry EU administration and national governments bear a high responsibility! - keep steel (consuming) industry in the EU – keep the jobs in EU!
- yes: to fair trade
- no: to unfair trade, dumping or unfair trade barriers!
- the steel companies in EU have still a lot of chances by marketing innovative
and customer oriented products & services!
- adjusting capacities is an issue not only in Europe – a general political solution is not realistic.
- Give the good companies the chance to win the race!