The Steel Market Analysis, Financials & Forecasting 2012-2022

increase the auto production and subsequently increase the steel consumption in the transport sector. It is expected that the steel consumption in the transport sector will increase 4.5% in the year-on-year terms compared to the 3.1% in 2012. It is expected that steel consumption in the transport sector will grow by 3.4% CAGR during the 2012-2022 period, and will reach 209 million tonnes in 2022. In market value terms, the transport sector is expected to value $206 billion by 2022, compared to $127 billion in 2011.

Table 4.8 Global Steel Consumption Forecast in Appliances Sector 2011-2022 (million tonnes, AGR %)
2011 Appliances AGR(%)
66

2012
68

2013
71

2014
74

2015
77

2016
79

2017
82

2018
85

2019
88

2020
90

2021
92

2022
96

3.1%

4.5%

4.0%

3.6%

3.5%

3.3%

3.1%

3.5%

2.5%

3.0%

3.5%

Source: Visiongain 2012

Figure 4.8 Global Steel Consumption Forecast in Appliances Sector 2011-2022 (million tonnes)
120

100

80 million tonnes

60

40

20

0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: Visiongain 2012

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Driven by strong domestic demand, a good export market, close proximity to the US market, strong FDI and coherent government backing, the Mexican steel consumption will increase by 4% CAGR over the period 2012-2022. Visiongain forecasts that the steel consumption will reach 31 million tonnes by 2022.

Figure 5.51 Mexican Steel Production, Consumption and Balance Forecast 2011-2022 (million tonnes)
35 -

30

-1

25

-2

-3 million tonnes 20 -4 15 -5 10 million tonnes

-6

-7

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Consumption Source: Visiongain 2011 Production Balance

-8

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8. Expert Opinion
8.1 Juan Jose Prado, Marketing Specialist at Orinoco Iron S.C.S
Visiongain sought expert opinion of Mr Juan Jose Prado, who is the Marketing Specialist at Orinoco Iron, S.C.S. He has extensive experience in the DRI/HBI industry and involved in all aspects of the Oronoco Iron business including, sales, shipping, and marketing. He actively participated with members of other Venezuelan DRI/HBI companies in order to obtain better results for the sector. He acquired his postgraduate degree in International Trade and bachelor degree in Business Administration.

Orinoco Iron is the largest merchant Hot Briquette Iron (HBI) producer in the Americas. The plant uses FINMET technology, and is able to produce 2.2 million metric tonnes of HBI per year. The company is present in four continents, and it started exports in the late 1970's.

8.1.1 The Venezuelan DRI/HBI Industry in the Global Context

Visiongain: How do you foresee the Venezuelan DRI/HBI industry in the global context?

Juan Jose Prado: Venezuela has an installed production capacity of DRI/HBI, close to 11 millions tonnes per year. Moreover, the country has abundant iron ore deposits and an industrial park with several years of operation and highly trained personnel in the direct reduction sector. But the proper use and performance of these resources will depend on the political context that develops in the country.

The risk factors that would work against a good performance of iron and steel processing industry in Venezuela, is the possible insufficient supply of electric power and natural gas. It is well known that Venezuela has enough sources of electricity and natural gas but due to poor maintenance, lack of spare parts and low investment in this sector in recent years, currently Venezuela does not have enough power to bear all the direct reduction plants and steel mills to their maximum capacity. Therefore, to develop the DRI/HBI industry in the desired terms these resources would be insufficient, having to compete with other sectors that require the same resources. In addition, if Venezuela bring DRI/HBI plants to their design capacity, then it will have deficits of these two basic inputs because the government has not made any investment projects in infrastructure to have enough electric power and/or natural gas.

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9.1 Anshan Iron and Steel Group Corporation (Ansteel)
Headquarters: Anshan, Liaoning Province, China Employees (2011): 30,902 Revenues (2011): $14.1bn

Anshan Iron and Steel Group Corporation, also known as Ansteel, is a Hong Kong listed company engaged in the production and sales of steel products. The company has coking, sintering, iron making, steel making, steel rolling and other complete modern production process and related facilities, and have a complete set of energy power system. Products include hot rolled plate, cold rolled sheets, galvanised sheet and colour coated plate, large sections, wire rod, seamless steel tubes, cold rolled silicon steel and other steel products, widely used in the automotive, appliance, machinery, shipbuilding, railway construction and other fields.

The company has the capability to produce 16 types, 120 sub-types, 600 steel grades and 42,000 specifications of steel products which are widely used in various fields of the national economy. In 2008, Ansteel produced 16 million tonnes of iron and 16 million tonnes of steel which was increased to 22 million tonnes of iron and steel 22 million tonnes in 2010. Mr. Zhang Xiaogang is the Chairman of the company.

9.2 ArcelorMittal
Headquarters: Luxembourg, Luxembourg Employees (2011): 260,000 Revenue (2011): $93.9bn

ArcelorMittal is the largest market player in the steel industry with operations across 60 countries. With an employee base of nearly 282,000, the company serves clients across all steel-consuming industries, including automotive, appliance, engineering, construction, energy and machinery. ArcelorMittal produces a broad range of high-quality finished and semi-finished steel products. The company specialises in both flat and long products including hot and cold rolled products, sheets, plates, bars, rods, structural shapes, and stainless steel products. ArcelorMittal also produces pipes and tubes for various applications.

ArcelorMittals iron ore and coal mining projects have been a key focus in recent years and this focus is only expected to intensify in the medium term, as the company has a goal to secure 100 million tonnes of iron ore supply from its own mines and other strategic long-term supply contracts

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