outlook for cis iron ore market andrey kuzmin head of raw materials department metal courier cis raw...
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Outlook for CIS Iron Ore MarketOutlook for CIS Iron Ore Market
Andrey KuzminAndrey KuzminHead of Raw Materials DepartmentHead of Raw Materials Department
Metal CourierMetal Courier
CIS Raw Materials in World MarketsCIS Raw Materials in World Markets15-16 15-16 NovemberNovember 2006, 2006, MoscowMoscow
The main points of presentationThe main points of presentation
• CIS domestic market structureCIS domestic market structure
• CIS iron ore export structureCIS iron ore export structure
• Iron ore consumptionIron ore consumption and export forecastsand export forecasts
20062006Iron OreIron Ore
Production:Production:180.6 180.6 MtMt
20062006 DomesticDomestic
Market:Market: 133.2 133.2 MtMt
CIS Production and Domestic Iron Ore Supplies, MtCIS Production and Domestic Iron Ore Supplies, Mt
21%21%24%24% 25%25% 26%26%
0
20
40
60
80
100
120
140
160
180
200
2003 2004 2005 2006*
Production Domestic Market
20062006Concentrate Concentrate ShipmentsShipments::
8585..1 1 MtMt
20032003Concentrate Concentrate ShipmentsShipments::
7777..4 4 MtMt
Concentrate Shipments by CIS Producers, MtConcentrate Shipments by CIS Producers, Mt
11%11%13%13% 11%11% 14%14%
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
2003 2004 2005 2006*
CIS Market Export
20062006PelletsPellets
ShipmentsShipments::6363..2 2 MtMt
20032003PelletsPellets
ShipmentsShipments::5252..1 1 MtMt
Pellets Shipments by CIS Producers, MtPellets Shipments by CIS Producers, Mt
27%27%31%31% 38%38%
40%40%
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
2003 2004 2005 2006*
CIS Market Export
20062006Sintering OreSintering Ore
ShipmentsShipments::1818..6 6 MtMt
20032003Sintering OreSintering Ore
ShipmentsShipments::1717..6 6 MtMt
Sintering Ore Shipments by CIS Producers, MtSintering Ore Shipments by CIS Producers, Mt
42%42% 38%38% 40%40%40%40%
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
18,0
20,0
2003 2004 2005 2006*
CIS Market Export
Iron ore self-sufficiency rate of Iron ore self-sufficiency rate of CIS steelmakersCIS steelmakers
RussiaRussiaSintering OreSintering Ore 31%31%
ConcentrateConcentrate 76%76%
PelletsPellets 50%50%
UkraineUkraineSintering OreSintering Ore 34%34%
ConcentrateConcentrate 14%14%
PelletsPellets 67%67%
Consolidation of Russian Iron Ore MarketConsolidation of Russian Iron Ore Market
PelletsPellets
ConcentrateConcentrate
SSGPO35%
Others16%Korshunovsky
17%
Metalloinvest32% Kachkanarsky
4%
Karelsky Okatysh
12%
SSGPO32%
Metalloinvest52%
Consolidation of Ukrainian Iron Ore MarketConsolidation of Ukrainian Iron Ore Market
PelletsPelletsConcentrateConcentrate
Sintering OreSintering OreKGRK67%
Stoilensky13%
Sukhaya Balka20%
Kachkanarsky2%Ferrexpo
24%
Metinvest74%
Metinvest1%
Metalloinvest7%Yuzhny
21%
SMART Group71%
CIS Iron Ore Export Structure, MtCIS Iron Ore Export Structure, Mt
20062006Iron OreIron OreExportExport::4444..1 1 MtMt
20032003Iron OreIron OreExportExport::2929..5 5 MtMt
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
2003 2004 2005 2006*
Pellets Concentrate Sintering Ore
Major Markets for CIS exportersMajor Markets for CIS exporters
China20%
Turkey3%
Western Europe14% Eastern Europe
63%
2.5 MtROMANIA
0.6 MtBULGARIA
1.4 MtHUNGARY
7.1 MtPOLAND
2.3 MtSERBIA
6.5 MtSLOVAKIA
7.5 MtCZECH REP.
Pellets37%
Consentrate63%
Russia and Ukraine in Eastern European MarketRussia and Ukraine in Eastern European Market
UkraineTotal export – 20.2 Mtincl. to Eastern Europe – 14.6 Mt
RussiaTotal export – 19.5 Mtincl. to Eastern Europe – 13.2 Mt
Eastern Europe IronOre Import
- Others
- Ukraine
- Russia
Eastern Europe Iron Ore ImportStructure in 2006
Chinese Iron Ore ImportChinese Iron Ore Import
20062006Iron Ore ImportIron Ore Import::
325-330325-330 MtMt
20052005 Iron Ore ImportIron Ore Import: :
275 275 MtMt
pellets8%
concentrate+sintering
ore+lump ore92%
CIS Iron Ore Export Structure, MtCIS Iron Ore Export Structure, Mt
20062006Iron OreIron OreExportExport::4444..1 1 MtMt
20032003Iron OreIron OreExportExport::2929..5 5 MtMt
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
2003 2004 2005 2006*
Pellets Concentrate Sintering Ore
Prospects for CIS iron ore producers are not very promisingProspects for CIS iron ore producers are not very promising
• CIS domestic iron ore demand will show only sluggish CIS domestic iron ore demand will show only sluggish growthgrowth
• In the coming In the coming 5 5 years world major iron ore producers will years world major iron ore producers will increase production of high-grade material substantiallyincrease production of high-grade material substantially
• Consolidation in steel and mining industries will lead to Consolidation in steel and mining industries will lead to increase of long-term iron-ore contract market. So, the increase of long-term iron-ore contract market. So, the volume of spot market where CIS suppliers are most volume of spot market where CIS suppliers are most active may go downactive may go down
• Steel industry consolidation in Eastern Europe will force Steel industry consolidation in Eastern Europe will force out CIS suppliersout CIS suppliers
Important issues for CIS mining companies to surviveImportant issues for CIS mining companies to survive
To survive, CIS mining companies will have to: To survive, CIS mining companies will have to:
• increase product quality increase product quality • expand transport infrastructure with regard to expand transport infrastructure with regard to
exportexport
Steel Production in Russia is a Major RawSteel Production in Russia is a Major RawMaterials Consumption driverMaterials Consumption driver, , MtMt
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
OHF20%
EF20%
BOF60%
BOF48%
EF43%
OHF9%
Steel Production Structure in Russia, MtSteel Production Structure in Russia, Mt
20052005 20102010
Pig Iron Production in CIS, MtPig Iron Production in CIS, Mt
0,0
10,0
20,0
30,0
40,0
50,0
60,0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
HBI Production in CIS, MtHBI Production in CIS, Mt
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
2003 2004 2005 2006 2007 2008 2009 2010
Forecasts of Pellets Export from Russia, MtForecasts of Pellets Export from Russia, Mt
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
2003 2004 2005 2006 2007 2008 2009 2010
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