industrial titanium demand forecast...

VSMPO-AVISMA Corporation

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A World Leader In Titanium

Industrial Titanium Demand Forecast 2013

Kevin J. Cain Overview and 5-Year Forecast

Key Findings

2

• The world’s population will rise more than 25% from 2010 to 2040 reaching 9 billion.

• A majority of the population growth will reside in Africa, India, China and other developing countries.

• The global economy is expected to grow an average of 2.8% per year from now through 2040.

• Economic growth in the developed countries will be led by the USA.

Source: United Nations, World Population Prospects: The 2012 Revision, IMF 5-year forecast: April 2013, Exxon Mobil

Global Population Growth

3

• 7.1 billion now ~ 10 billion by 2050

-

2

4

6

8

10

12

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Wor

ld P

opul

atio

n (B

illio

ns) More developed regions

Less developed regions

Source: United Nations, World Population Prospects: The 2012 Revision

4%

8% 7%

3% 2%

-5%

0%

5%

10%

15%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GD

P G

row

th

WorldChinaIndiaUnited StatesEuropean UnionMiddle East and North AfricaCIS

Economic Growth

4

• Regional GDP Growth

Source: IMF 5 year forecast: April 2013 (growth at constant prices)

Key Findings

5

• The world’s population will rise more than 25% from 2010 to 2040 reaching 9 billion.

• A majority of the population growth will reside in Africa, India, China and other developing countries.

• The global economy is expected to grow an average of 2.8% per year from now through 2040.

• Economic growth in the developed countries will be led by the USA.

Source: United Nation, World Population Prospects: The 2012 Revision, IMF 5-year forecast: April 2013, Exxon Mobil

Industries for Ti consumption

6

• Energy • Chemical Processing • Desalination

Energy

7

Energy Outlook • Global energy demand will increase by

35% over the next 30 years. • Approximately 65% of that growth will

come from developing countries. Source: Exxon Mobil

Energy

8

Energy Outlook

• Oil & Gas • Power Generation

The role of unconventional fuel

9

• Global liquid fuel supply & resources

Conventional crude and

condensate

Deepwater Tight oil

Oil sands Natural Gas Other

Biofuels

0

20

40

60

80

100

120

2000 2010 2020 2030 2040

Mill

ion

barr

els

per d

ay

oil e

quiv

alen

t Liquid fuel supply by type

Source: EIA


10

• Conventional vs. Unconventional Gas

0

100

200

300

400

500

600

2010 2020 2030 2040

Bill

ions

of c

ubic

feet

per

day

Natural gas supply North America natural gas demand by supply type in 2040

Rest of world conventional

North America conventional

Rest of world unconventional

North America unconventional

80% By 2040, close to 80% of North America gas supplies will be produced from local unconventional resources

Unconventional Local Conventional

LNG

Source: ExxonMobil

Oil & Gas

11

• Demand for oil is forecasted to increase by 30% over the next 30 years (Exxon Mobil)

• Natural gas is likely to increase 60%. Growth in unconventional supplies to account for 60% of the increase (Exxon Mobil).

• Use of titanium • Deepwater platforms • FPSO’s (Floating Production, Storage & Offloading Vessel) • LNG plants • Degasification plants • Water filtration / purification plants • Heat transfer equipment

• Approximately 3500 MT to 5000 MT will be consumed per year over the next 5 years (Source: Internal estimate).

Energy

12

Energy Outlook

• Oil & Gas • Power Generation

World Net Electricity Generation

13

0

2

4

6

8

10

12

2005 2010 2015 2020 2025 2030 2035 2040

Trill

ion

kWh

OECD Americas OECD Europe OECD AsiaEurope and EuraisaMiddle East & AfricaIndia & Other AsiaChinaCentral and South America

Source: Energy Information Administration – International Energy Outlook 2013 * CAGR: Compound Annual Growth Rate

Forecast CAGR *

3.2%

Forecast CAGR *

1.3%

Forecast CAGR *

3.5%


• Remaining global natural gas resources

North America

4.0

Latin America

2.8

Europe 1.6

Africa 3.1

Middle East 4.8

Russia Caspian

6.6 Asia Pacific

4.8

Thousand trillion cubic feet Unconventional Conventional

World total 27’900

trillion cubic feet

Source: ExxonMobil

-

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Cap

acity

(GW

)

Online Year

Standard Thermal

Combined Cycle Gas

Nuclear Power

• New Online Capacity

Power Generation

15 Source: Internal estimate * CAGR: Compound Annual Growth Rate

CAGR *

15%

CAGR *

6%

Power Generation: Ti demand

16

Electricity: Titanium Demand

• Approximately 7000MT to 8000MT will be consumed per year over the next 5 years.

• Use of titanium • Welded tubes • Tube sheets • Heat transfer equipment Source: Internal estimate

Industries for Ti Consumption

17

• Energy • Oil & Gas • Power generation

• Chemical Processing • Desalination

Chemical Processing

18

• Global investment in Asia and Middle East • Capital investment shifting to North America.

• Natural gas liquids (NGL) • $100b of incremental capital investment by 2025

• Global capital expenditures • NGL’s • PTA (pure terephthalic acid); polyester film and filter production • Urea/ammonia nitrate; crop fertilizer • Chlorine/caustic soda Source: Bank of America Industry Overview May 20, 2013

Chemical Processing

19

• Titanium end-use applications • General fabrication of tanks and vessels • Piping systems • Heat transfer equipment • Fittings and fasteners • Welded tubing

• It’s estimated that the average annual consumption of titanium in the chemical process industry will range from 9,500 MT to 12,000 MT.

Source: Internal estimate


20

• Energy • Oil and gas • Power Generation

• Chemical Processing • NGL’s • PTA • Urea • Chlorine / Caustic

• Desalination

Desalination

21

• Applications • Removes salt from seawater for and potable

end use • Clean wastewater streams (ex. Frac flow

back water from shale gas) • Technologies

• Reverse osmosis (RO) • Thermal (MSF and MED)

Desalination

22

• Technology Split – 2013 to 2018

5% 6%

89%

million m3/d

MED

MSF

RO &ED/EDR

4,400 6,100

58,700

Contract Value ($ million)

MED

MSF

RO &ED/EDR

Source: Desaldata Forecast, June 2013

Desalination Forecast Drivers

23

• Industry rather than municipal is strongest driver Source: Oxford, UK (PRWEB) August 22, 2012 by Jeremy Brown

• Capital expenditure will grow from $2.8b (2011) to $5.7b (2017)

Source: Oxford, UK (PRWEB) August 22, 2012 by Jeremy Brown

• Fastest growing economic regions also have the lowest amount of fresh water; India, China and the Middle East

• Copper (copper alloy desal tubes) released into the sea from Gulf Coast desal plants is becoming problematic and could drive future technology in favor of titanium (Source: Dr. Ing Tobias Bleninger & Professor G.H. Jirka, PhD, Karlston Institute of Technology, Germany)

Desalination

24

• Regional Desal Demand

-

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Cap

acity

(m3 /d

ay)

Mill

ions

Online Year

Middle East and AfricaAsia South PacificAmericasEuropeOther

Source: Desaldata Forecast, June 2013

Desalination: Thermal

25

• Capacity Forecast

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Cap

acity

(m3 /d

ay)

Thou

sand

s

Online Year

Small Thermal (0-12k m3/d)Large Thermal (12-50k m3/d)Extra Large MSF (>50k m3/d)Extra Large MED (>50k m3/d)

Source: Internal Estimate * CAGR: Compound Annual Growth Rate

CAGR *

7%

CAGR *

6%

Thermal Capacity: Desalination

26

• The pipeline for titanium mill product shipments to the start-up of a desal facility can range from 1 to 3 years.

• In the last 3 years nearly 12,000MT of coil for welded tube was produced to support the Ras Al Kahir (Ras Az Zour) and Yanbu III projects. • Doosan Heavy Industries is the contractor on both projects.

• For the next 5 years capacity will grow at a 6% CAGR (compound annual growth weight).

• Titanium demand will range from 750MT to 2000MT per year over the next 5 years.



27

• Energy • Oil and gas • Power generation

• Chemical Processing • NGL’s • PTA • Urea • Chlorine / Caustic

• Desalination • MED • MSF


28

• Others • Medical • Mining • Cathodic Protection • Automotive • Recreational • Shipbuilding / Marine • Architecture

Industries for Ti Consumption (Source: Architectural Titanium)

29

Global Forecast: Industrial Ti

30

• 2011 through 2013: Average industry shipments; 33,000MT

• 2014; 29,000MT • 2014: Decline in desalination, continued

improvement in other major industrial sectors. • From 2014 to 2018: 29,000MT to 35,000MT

with support of Chemical processing, Energy and Desalination infrastructure industries.


Titanium Industrial Demand History and Forecast

31

0

5

10

15

20

25

30

35

40

45

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Met

ric T

ons

(x10

00)

Historical Forecast

Chemical Processing

Power

Automotive

Metallurgy

Oil & Gas

Chlor-alkali

Desalination

Architecture

Shipbuilding

Med. & other

• Does not include shipments within China


VSMPO-AVISMA Corporation

Joint Venture

an

A World Leader In Titanium

Industrial Titanium Demand Forecast 2013

THANK YOU!

Kevin J. Cain President, Uniti Titanium

industrial titanium demand forecast...

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