2526 May 2004

1
Stainless Steel A Global View
By Peter Kaumanns ISSF, Brussels
International Industry Forecasting Service
(IIS) International Industry Outlook Meeting

• 25/26 May 2004
• Hotel Europe , Basle, Switzerland

2
Some facts about ISSF

• Non-profit research organization for the
• stainless steel industry
• Founded in 1996
• The members are producers of stainless
• steel and industry organizations
• ISSF has 56 members in 21 countries
• ISSF members cover about 75 of
• world stainless steel production

3
Stainless steel categories
US Standard Typical chemical
Characteristic Importance
composition 200 series Cr 16 - 19
nickel-reduced 7.5 modified Mn
5.5 - 10 steel, austenitic Ni 1.0 -
6 300 series Cr 16 - 20 standard
chrome- 71 Ni 8 - 22 nickel
steel, (Mo, Si, etc) austenitic 400
series Cr 10.5 - 19 standard chrome 21
(Mo, Si, Mn, etc) nickel-free
steel, ferritic
4
Stainless steel product structure 2003
Total stainless crude steel production approx.
22.8 million tons Total shipments 19.5 million
tons, yield loss 15
Cold rolled flat 65
Long products
Flat Products 80
Long Products 20
Hot rolled flats 15
5
Stainless crude steel production in million
tonsWorld 1950 - 2003
25
22.8 mill t
Recession 2001
20
Asian Crises
15
Doubling approx. every ten years
Gulf War
10
5
2. Oil Crisis
1 mill mt
1. Oil Crisis
2003
1950
6
Stainless steelStrongest growth of major
metallic materials
Compound Annual Growth 1980 - 2003 in p.a.
7
Stainless crude steel production Similar
performance as plastics
Index 1990 100
22.8 million mt
Stainless Steel
1 million mt
Plastics
1950
2003
8
Stainless crude steel production More recent
even stronger growth than plastics
6.2
5.5
Compound annual growth in p.a.
1990 - 2003
9
Germany Stainless Steel Cold Rolled Flat, Grade
304, 2mm
Price Index 1967 100
nominal
- 0.7 p. a.
real
- 4.4 p. a.
1967
2003
10
Innovations in process technologies
Source ThyssenKrupp Stainless
11
Technical milestones and step by step improvement
Increasing productivity over 30 years
84
Yield (liquid steel to cold rolled strip)
4
88
10 t
Operational Coilweight
150
25 t
450 m/min
Rolling speed cold mills
122
up to 1,000 m/min
Power consumption electric arc furnace
625 kWh/t
- 30
440 kWh/t
Workers time cons. production cold rolled strip
6.0 h/t
- 65
2.2 h/t
180 min
Tap to tap time electric arc furnace
- 67
60 min
6.5 kg/t
Cons. of electrodes electric arc furnace
- 62
2.5 kg/t
Source ThyssenKrupp Stainless
12
(No Transcript)
13
Global stainless steel consumption and production
Asia on the way to world market leadership
driven by China
46
52
55
38
31
25
11
1990 1995 2003
1990 1995 2003
1990 1995 2003
Ingot Production
Cold Rolled Supply
Cold Rolled Consumption
14
Apparent supply stainless cold rolled flat Growth
mainly provided by China
000t
2,606
2,145
Source CRU
15
China Stainless steel apparent supplyHow long
can these growth rates be sustained?
16
China/HongKong Stainless steel net importHow
long can they take it all?
17
Stainless steel industryWorld - wide
concentration
The 70s The 80s The 90s The 00s
Nationalization Internationalization National
ization Internationalization
Driving forces European mills
Globalization
USA, South Korea, Taiwan, Japan
Globalization
USA, India, South Korea
18
Consolidation in stainless industry Example
Europe 1970 23 mills 2004 4 mills
KRUPP
AST
THYSSEN
AVESTA
SHEFFIELD
OUTOKUMPU
UGINE
ALZ
ACERINOX
Source Acerinox
19
Consolidating industry structure
SOURCE Deutsche Bank
20
Global stock cycle reviewApparent Supply vs.
Real Fabrication Cold Rolled Flat Products
Model Indexpoint
Apparent Supply
Real Fabrication
Fabrication Forecast
2003
1996
1999
2000
2001
2002
1997
1998
2004
21
Global stock cycle review Stock changes by region
acc. to indexpoint models
Euro-Africa Americas Asia w/o
China China
1996
1997
1999
2000
2001
1998
2002
2003
4
22
Global stock cycle review Global stock changes
acc. to indexpoint models
1996
1997
1999
2000
2001
1998
2002
2003
4
23
Global stainless steel demand indexCold rolled
flat products
2004
1996
1997
1998
1999
2000
2001
2002
2003
24
Global stock cycle review
25
Source ISSF
26
Stainless Crude Steel Production
25,850
24,350
22,808
20,663
19,185
ISSF Forecast
Provided by ISSF
27
Stainless Crude Steel Production
ISSF Forecast
Provided by ISSF
28
Stainless crude steel production in million
tonsWorld 1990 2003, forecast 2004-05
30
Trend square root-y Y(abX)² r² 97.74
CAGR 2003 2008 5.7 p.a.
25
20
Current forecast 2008 29.2 mio tons
CAGR 1990 2003 6.2 p.a.
Actual forecast 2004/05
15
Trend Exponential Y exp (abX) r² 97.55
10
29
Thanks for attention!
Questions?