Svetlana Delamure

1
Eastern Europe market industry, direction
outlook
SBB Steel Markets Europe 2008 June 18-19 2008,
London
Svetlana Delamure Editor Metal Expert Weekly /
Metal Expert News
2
Metal Expert in brief

• Part of Information agency Metal Courier
  established in 1994
• Reliable source of information on global steel
  and raw materials markets
• Provider of daily news, weekly reviews, monthly
  analytical bulletins, quarterly forecasts,
  special reports and consulting services
• Organizer of several international steel and raw
  materials conferences
• Offices in Dnipropetrovsk (Ukraine), Moscow
  (Russia), and Houston (Texas, USA)

3
Steel industry in Eastern Europe today
12 countries with 37,6 mln tonnes crude steel
production in 2007 (IISI data)
4
Pecularities of the regional steel industry
Substantial share of foreign capital as a result
of mass privatizations in early 2000s Poland -
ArcelorMittal, ISD, CMC, Celsa Group Czech
Republic - ArcelorMittal, EvrazHolding Romania -
ArcelorMittal, Mechel Slovakia - US
Steel Bulgaria - Sidenor, Metinvest Hungary -
ISD Serbia - US Steel Bosnia - ArcelorMittal Alban
ia - Kurum Holding etc. And more to come ongoing
Kremikovtzi privatization, new projects of
foreign investors (hot rolling mill by Vorskla
Steel in Hungary, pipe works and coil service
center by Marcegaglia in Poland etc.)
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Pecularities of the regional steel industry
High consolidation rate (especially in terms of
crude steel production)
Poland ArcelorMittal (67), CMC (13), Celsa
Group (8), ISD (7), Zlomrex (4) Czech
Republic ArcelorMittal (48), Trinecke Zelezarny
(36), EvrazHolding (14) Romania ArcelorMittal
controls 100 of flats and 40 of longs country
output, Mechel controls 50 of longs
output Bulgaria Sidenor 75 of longs output,
Metinvest 25 Hungary ISD Dunafer (86)
Unbalanced output structure - excess of flat
products in most countries and lack of longs
Trade flows are determined by geographical
location, though general trend is to export to
well paying Western European markets while
import either from neighbouring countries or from
CIS
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Poland

• 20 steel mills, including 9 steelmakers
• Around 12 mln tpy crude steel capacities
• Major importer of HR coils

• Rebar exports will grow this year due to market
  situation, and thus import will increase as well
• Slab exports will hardly slow down until
  ArcelorMittal Krakow launches new 4m tpy HR mill
  in 2010
• In future, HR coils demand will grow with new
  pipe projects (e.g. by Marcegaglia)

7
Czech Republic

• 8 steel mills, including 4 steelmakers
• Around 7 mln tpy crude steel capacity
• Major importer of HR coils

• 65-70 of rebar exports go to Eastern Europe
  (incl. 35 to Poland)
• Plate demand is reported to be strong due to
  large number of heavy machinery producing
  companies
• Slab imports grew 90 in 2007 - supplies from
  Evraz to its subsidiary - Vitkovice Steel

• Last year Czech Republic started exporting
  billet to Middle East (UAE, Oman, Saudi Arabia)
  having shipped around 90,000t, or 27 of total
  yearly figure. In 2008 the trend is likely to
  continue

8
Romania

• Rebar Turkey shipped 240,000t in 2007, 7 times
  up from 2006!
• Billet Russia and Ukraine supply 80-90 of all
  imports
• Slabs Polish AM shipped 275,000tpy in 2007 vs 0
  in 2006. If necessary Polish mill can increase
  slab shipments

• 8 steel mills, including 5 steelmakers
  6.5 mln tpy crude steel capacity

9
Slovakia
Mills US Steel Kosice (4.5m tpy) and Zeleziarne
Podbrezova (0.35m tpy) No longs producers
In 2007, 75 (275,000t) went to USS mill in Serbia

• Rebar imports grew 22 to 144,000tpy. Major
  suppliers are Poland (41) and Czech Republic
  (40)
• Major plate export destination was Turkey with
  43 in 2007. In 2008 high prices in Europe can
  change the picture.
• Ukraine is the major HRC and HRP supplier

10
Bulgaria
Mills Kremikovtzi (2.5mtpy), Sidenor Stomana
(1.2mtpy), Promet (reroller, 400,000tpy)

• Rebar imports grew 42 to 385,000t in 2007
  because of the stopped for modernization bar
  rolling mill at Stomana. This year situation will
  change, as 800,000tpy mill started production in
  early June
• As Kremikovtzi are on sale now, it affects
  production and shipments will be lower this year

11
Serbia
Mills US Steel Serbia (2.2mtpy) and new rebar
reroller Metalfer (250,000tpy)

• Rebar imports grew 46 to 162,000t in 2007
• In 2008, as Metalfer has started production,
  rebar imports is expected to dry up
• Instead, billet imports will emerge
  (preliminary, from Ukraine, Romania)

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Current market situation and nearest outlook

• Prices in Poland should get in line with
  regional to attract necessary import
• Eastern European countries could start paying
  more attention to Middle East
• Low prices in Bulgaria are the result of
  Kremikovtzi being on sale
• Ukraine accession to WTO could bring changes to
  the picture

Hot-rolled coils, EUR/t
Rebars, EUR/t exw

• Low rebar price in Poland increases its export
  potential in both rebar and billet
• Further price increases should be expected as
  theres almost no threat from imports
• Ukraine could substitute Turkey in Romania, as
  it got certificates to supply rebar to the market

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Products
Market industry news, analysis, statistics,
price database

• - Raw materials (scrap, pig iron, DRI / HBI, iron
  ore, coal, coke, ferro-alloys)
• Steel Semis (slab, billet, pipe billet)
• Finished steel products (flats, longs, pipes)
• Freight

Regions

• Turkey
• CIS (Russia, Ukraine, Kazakhstan)
• Europe South Europe (Italy, Spain), Central
  Europe (Poland, Romania, Czech, Slovakia),
  Balkans (Bulgaria, Serbia, Albania, Bosnia)
• Middle East (Iran, UAE, Syria, Saudi Arabia,
  Jordan) North Africa (Egypt, Algeria)
• India
• US
• China
• Southeast Asia (Taiwan, Thailand, Vietnam,
  Philippines, Singapore)