world steel market · 6 corus (eu) 17 6 tata steel (ind) 27 6 nippon steel (jpn) 33 6 shagang group...
TRANSCRIPT
2
Confidential
CY2002 Announced alliances among NSC and SMI, Kobe Steel
CY2011 Agreed to commence consideration of merger
October 1, 2012
Corporate History
CY1857 Japan’s first blast furnace went
into Operation at Kamaishi.
CY1901 The state-owned Yawata Steel
Works began operation.
CY1970 Yawata Iron & Steel and Fuji
Iron & Steel merged to from
Nippon Steel Corporation.
CY1897 Sumitomo Cooper Plant was
established.
<Corporate’s inauguration>
CY1912 Japan’s first private company
started manufacturing cold-
drawn seamless steel pipes.
CY1949 Shin-Fuso Metal Industries, Ltd.
been established.
<Corporate’s foundation>
3
Confidential
Overview of NSSMC
Trade Name
NIPPON STEEL & SUMITOMO METAL CORPORATION
“NSSMC”
Representative Representative Director, Chairman and CEO Shoji MUNEOKA
Representative Director, President and COO Hiroshi TOMONO
L o c a t i o n o f
H e a d O f f i c e Chiyoda-ku, Tokyo, Japan
Foundation Day October 1, 2012
B u s i n e s s Steelmaking and steel fabrication / Engineering /
Chemicals / New materials / System solutions
Stated Capital 419.5 bn yen
Fiscal Year End March 31
4
Confidential
The World Top-Ten Players by Crude Steel Production
unit:millions of tonnes
vs 2013 vs 2014
1 Arcelor (EU) 44 1 ArcelorMittal (EU) 116 1 ArcelorMittal (EU) 97 1 ArcelorMittal (EU) 98 +2% → 1 ArcelorMittal (EU) 97 -1%
2 LNM Group (EU) 35 2 Nippon Steel (JPN) 36 2 Hebei Group (CHN) 44 2 NSSMC (JPN) 49 -2% ↑ 2 Hesteel Group (CHN) 48 +1%
3 Nippon Steel (JPN) 30 3 JFE (JPN) 34 3 Baosteel Group (CHN) 43 3 Hebei Group (CHN) 47 +3% ↓ 3 NSSMC (JPN) 46 -6%
4 PO SCO (KO R) 28 4 PO SCO (KO R) 31 4 PO SCO (KO R) 39 4 Baosteel Group (CHN) 43 -1% ↑ 4 POSCO (KOR) 42 +1%
5 Shanghai Baosteel (CHN) 20 5 Baosteel (CHN) 29 5 Wuhan Group (CHN) 38 5 PO SCO (KO R) 41 +8% ↓ 5 Baosteel Group (CHN) 35 -19%
6 Corus (EU) 17 6 Tata Steel (IND) 27 6 Nippon Steel (JPN) 33 6 Shagang Group (CHN) 35 +1% → 6 Shagang Group (CHN) 34 -3%
7 Thyssen Krupp (EU) 16 7 Anshan-Benxi (CHN) 24 7 Shagang Group (CHN) 32 7 Ansteel Group (CHN) 34 +2% → 7 Ansteel Group (CHN) 33 -5%
8 NKK (JPN) 15 8 Jiangsu Shagang (CHN) 23 8 Shougang Group (CHN) 30 8 Wuhan Group (CHN) 33 -16% ↑ 8 JFE (JPN) 30 -5%
9 Riva (EU) 15 9 Tangshan (CHN) 23 9 JFE (JPN) 30 9 JFE (JPN) 31 +1% ↑ 9 Shougang Group (CHN) 29 -7%
10 US Steel (USA) 14 10 US Steel (USA) 22 10 Ansteel Group (CHN) 30 10 Shougang Group (CHN) 31 -2% ↑ 10 Tata Steel Group (IND) 26 +0%
World Total 904 World Total 1,347 World Total 1,536 World Total 1,670 World Total 1,621
Top 5 Total 156 (17%) Top 5 Total 246 (18%) Top 5 Total 262 (17%) Top 5 Total 279 (17%) Top 5 Total 268 (17% )
Top 10 Total 234 (26%) Top 10 Total 363 (27%) Top 10 Total 417 (27%) Top 10 Total 444 (27%) Top 10 Total 420 (26% )
China 182 (20%) China 490 (36%) China 702 (46%) China 823 (49%) China 804 (50% )
11 Kawasaki (JPN) 14 11 Wuhan Steel Group (CHN) 26 -22%
13 Sumitomo Metal (JPN) 12 20 Sumitomo Metal (JPN) 14 27 Sumitomo Metal (JPN) 13 21 Benxi Steel (CHN) 15 -8%
74 Nisshin Steel (JPN) 4 -6%
source: WSA World Steel in Figures 2016
20152002 20112007 2014
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Confidential
The World Top-Ten Players by Crude Steel Production
unit:millions of tonnes
2015 (after margers, officially announced and reportd)
vs 2014
1 ArcelorMittal (EU) 97 -1% 1 ArcelorMittal (EU) 97
2 Hesteel Group (CHN) 48 +1% 2 Hesteel Group + Shougang Group (CHN) 76 to be reported
3 NSSMC (JPN) 46 -6% 3 Baosteel Group + Wuhan Steel Group (CHN) 61 official announcement
4 POSCO (KOR) 42 +1% 4 NSSMC + Nisshin Steel (JPN) 50 official announcement
5 Baosteel Group (CHN) 35 -19% 5 Ansteel Group + Benxi Steel (CHN) 47 to be reported
6 Shagang Group (CHN) 34 -3% 6 POSCO (KOR) 42
7 Ansteel Group (CHN) 33 -5% 7 Shagang Group (CHN) 34
8 JFE (JPN) 30 -5% 8 JFE (JPN) 30
9 Shougang Group (CHN) 29 -7% 9 Tata Steel Group (IND) 26
10 Tata Steel Group (IND) 26 +0% 10 Shandong Steel Group (CHN) 22
World Total 1,621 World Total 1,665
Top 5 Total 268 (17% ) Top 5 Total 332 (20% )
Top 10 Total 420 (26% ) Top 10 Total 486 (29% )
China 804 (50% )
11 Wuhan Steel Group (CHN) 26 -22%
21 Benxi Steel (CHN) 15 -8%
74 Nisshin Steel (JPN) 4 -6%
source: WSA World Steel in Figures 2016
2015
6
Confidential
Location of Steel Mills in Japan
Muroran
Works
Kamaishi
Works
NSSMC will develop business in overseas markets based on manufacturing strength of its
manufacturing bases in Japan.
Kashima
Works
Kimitsu
Works
Tokyo Works
Naoetsu
Works
Nagoya Works
Hirohata
Works Yawata Works
Kokura Works
Oita Works
Amagasaki
Works Osak Steel
Works
Sakai Works
Wakayama Works
Hasaki Research and
Development Center
Research & Engineering
Center (Futtsu)
Amagasaki Research
and Development
Center
Works
R & D
Laboratory
Oita Works
Hikari Pipe & Tube Div.
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Confidential
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Crude Steel Production (source : World Steel Association)
434 450 478 471 493 513 492
389 467 498 486 479 485 473
60 61 66 66
71 72
69
60
67 69 70 69 72 71
92 94 100 95
99 98
91
58
80 86 89 87 88 79 29
32 33 46
49 53
58
64
69 74 78 81 87
89 108 111
113 112 116
120 119
88
110 108 107 111 111
105 182
222
273 356
421
490 512
577
639
702 717 822 823
804
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
[million tonnes]
PR CHINA
JAPAN
INDIA
USA
RUSSIA
rest of the World
+85%, +766million tonnes
(+7% growth rate per annual)
▲3%, ▲49
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Crude Steel Production(source : World Steel Association)
unit : million tonnes
WORLD TOTAL △443 (△49%) △323 (△24%) ▼49 (▼3%)
ASIA 395 (44%) △362 (△92%) 757 (56%) △322 (△43%) 1,080 (65%) △31 (△3%) 1,110 (67%)
EU28 188 (21%) △22 (△12%) 210 (16%) ▼44 (▼21%) 166 (10%) △0 (△0%) 166 (10%)
NORTH AMERICA 123 (14%) △10 (△8%) 133 (10%) ▼15 (▼11%) 118 (7%) ▼8 (▼7%) 110 (7%)
CIS 101 (11%) △23 (△23%) 124 (9%) ▼16 (▼13%) 108 (7%) ▼7 (▼6%) 102 (6%)
others 97 (11%) △26 (△27%) 123 (9%) △76 (△62%) 199 (12%) ▼65 (▼33%) 133 (8%)
TOP 10 countries 641 (71%) △396 (△62%) 1,036 (77%) △354 (△34%) 1,390 (83%) ▼42 (▼3%) 1,348 (83%)
1 PR CHINA 182 (20%) △307 (△169%) 490 (36%) △333 (△68%) 823 (49%) ▼19 (▼2%) 804 (50%)
2 JAPAN 108 (12%) △12 (△12%) 120 (9%) ▼10 (▼8%) 111 (7%) ▼6 (▼5%) 105 (6%)
3 INDIA 29 (3%) △25 (△86%) 53 (4%) △34 (△63%) 87 (5%) △2 (△2%) 89 (6%)
4 USA 92 (10%) △7 (△7%) 98 (7%) ▼10 (▼10%) 88 (5%) ▼9 (▼11%) 79 (5%)
5 RUSSIA 60 (7%) △13 (△21%) 72 (5%) ▼1 (▼1%) 72 (4%) ▼1 (▼1%) 71 (4%)
6 KOREA R 45 (5%) △6 (△13%) 52 (4%) △20 (△39%) 72 (4%) ▼2 (▼3%) 70 (4%)
7 GERMANY 45 (5%) △4 (△8%) 49 (4%) ▼6 (▼12%) 43 (3%) ▼0 (▼0%) 43 (3%)
8 BRAZIL 30 (3%) △4 (△14%) 34 (3%) △0 (△0%) 34 (2%) ▼1 (▼2%) 33 (2%)
9 TURKEY 16 (2%) △9 (△56%) 26 (2%) △8 (△32%) 34 (2%) ▼3 (▼7%) 32 (2%)
10 UKLAINE 34 (4%) △9 (△26%) 43 (3%) ▼16 (▼36%) 27 (2%) ▼4 (▼15%) 23 (1%)
source: WSA World Steel in Figures 2016
2015
1,621
2014
1,670
2002 2007
904 1,347
11
Confidential
Steel Product Prices / Hot Rolled Coil (HRC)
Nov-15; us$399
Sep-16; us$570
Oct-16, us$559 (+$160)
Feb-16; us$352
Sep-16, us$492 (+$140)
Nov-15; us$292
Sep-16, us$412 (+$120)
Oct-16, us$421 (+$129)
Nov-15; us$354
Sep-16, us$491 (+137)
us$200
us$300
us$400
us$500
us$600
us$700
us$800
us$900
us$1.000
USA
EUROPE
CHINA
HRC prices (World
Average)
＜HRC Price trend＞
✔ HRC Price revel: 500$/MT
✔ After hitting the bottom around $400 in USA, $450 in Euro and $300 in China, Prices
jump up sharply and then declined.
✔ Prices are still $130 to $160 higher than the bottom prices.
＜Profit and Loss Result of Chinese Steel Companies affiliated with CISA＞
Q1 Q2 Q3 Q4 Jan-Sep
PL 3.4 4.8 ▲10.1 ▲1.4 3.1 2.0 - 3.9ROS ＋0.6% ＋0.8% ▼2.2% ▼1.5% ＋2.8% ＋1.8% - ＋1.3%
*UNIT：US$ billion (CYN1=US$0.156349)、**CISA：China Iron and Steel Association
20162013 2014 2015
12
Confidential
Reduction of Production Capacity in China
4th Jan Mr. Li Kequian
Premier of China
Expressed strong needs of reduction of redundant
production capacity in Chinese Steel and Coal
industry.
22nd Jan State council of
China
Expressed a target capacity reduction of 100 – 150
Million Ton in five Years
22nd Jan Ministry of
Finance of China
Establishment for funding of 40Billion RMB
(6Billion USD) for restructuring of Chinese Steel
Industries
26th Jan Mr Xi Jinping
President of China
Expedited to establish a concrete plan to reduce
capacity (Reformation of Supply Side)
Feb OECD Plan to establish an organization to monitor capacity
reduction in China
Chinese government expressed serious concern to reduce
redundant capacity.
13
Confidential
Main Raw Material prices / Quarterly fixed prices
US$55
Q2 2016, US$39
(lowest in past 8 years)
US$52
(▲2%, ▲$1)
US$128
Q1 2016, US$81
(lowest in past 8 years)
Sep-16; US$92,5
US$200
(+116%, +$107.5)
US$0
US$50
US$100
US$150
US$200
US$250
US$300
US$350
QTR prices：Iron Ore
QTR prices：Coking Coal
【US$/MT】
Coking Coal Prices:
✔4th QTR 2016 Price has taken a jump, +116%, or +$107.5 higher
than 3rd QTR, after 2-QTR consecutive gentle rise.
✔Background: some production troubles in Australia, flood and new
regulation of coal production in China.
Iron Ore Prices:
✔4th QTR 2016 Price is about ▲2%, or ▲$1/MT lower than 3rd QTR
2016, and still the lowest level since 2009.
14
Confidential
Brazil
27%
Australia
56%
Others
17%
By Country
Vale (Brazil)
25%
BHP-Billiton
(Australia)
23% Rio Tinto
(Australia)
20%
Others
32%
By Company
Seaborne trading Volume of Iron Ore 1
Source : NSSMC estimate
1,364
million tons/year
(2015CY)
Top 3 share : 68% (←2014CY 62%) Brazil & Australia share : 83% (←2014CY 79%)
15
Confidential
Seaborne trading Volume of Iron Ore 2
Source : NSSMC estimate
EXPORT IMPORT
UNIT : million MT
65 82 85 113 124 121 111 132 157 202 212 206
166 55 61 90
86 90 101 116 103 79 37 15 10
4 24
22 26
26 30 32 45 48 53 54 63 66 65
187 219
224 243
268 277 264 307 326 322 320 338
362 188
210
239 248
267 310
362
402 438
494 579
717 767
0
200
400
600
800
1000
1200
1400
1600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Australia Brasil
South Africa India
Others
Australia
& Brasil72% 72% 70% 69% 69% 70% 70% 71% 73% 74% 76% 79% 83%
86 84 88 86 72 76 39 64 59 50 48 69 99
41 44 44 44 46 49 42
56 65 66 63 74
73 113 126 129 133 138 132
83
119 114 116 121 125
121
132 135 132 134 139 140
106
134 128 131 136 136
131
147 205
271 319
384 444
628
619 687
746 821
933 940
0
200
400
600
800
1000
1200
1400
1600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China Japan
Europe South Korea
Others
China 28% 35% 41% 45% 49% 53% 70% 62% 65% 67% 69% 70% 69%
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Confidential
Australia
64%
USA
13%
CANADA
10%
RUSSIA
3%
Others (rest of
the World)
10%
By Country
BHP-Billiton
(Australia)
27%
Anglo
(Australia)
6% Rio Tinto
(Australia)
5% Glencore
(Australia)
13%
Others
(Australia)
13%
USA
13%
CANADA
10%
RUSSIA
3%
Others (rest of
the World)
10%
By Company
Seaborne trading Volume of Coking Coal 1
Source : NSSMC estimate
Australia share : 64% (←2014CY 65%)
289
million tons/year
(2015CY)
Australia & USA share : 77% (←2014CY 79%)
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Confidential
Seaborne trading Volume of Coking Coal 2
Source : NSC estimate
EXPORT IMPORT
UNIT : million MT
29 25 16 23
1 4 12 14 17 5
16 17
38
23 22
25 23
27 25 20
25 27 30
35 30
28 17 21
22 21
26 35 32
48
61 61
56 52
38
108 112 125 121 138
137 132
155 133 143
169 187 185
0
50
100
150
200
250
300
350
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Australia USA
Canada Others
27 32 34 28 25 25 18 39 35 34 32 34
59 20
22 21 20 21 23
19
27 34 31 35 42
38 46
44 45 45 46 45
36
44 45 42 41
49
49 68 61 63 73 74 76
63
67 65 66 69
67
60 14 16
20 19 23 29
29
30 34 31
35
42
47
2 5 5 3 3
3
31
35 25 35
64
52
36
0
50
100
150
200
250
300
350
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China India
Japan Europe
South Korea Others
Australia 61% 62% 66% 64% 72% 68% 67% 64% 56% 60% 61% 65% 64%India &
China9% 12% 13% 12% 14% 16% 31% 27% 25% 28% 36% 33% 29%