39th annual conference istanbul, turkey 2013 -...

International Manganese Institute

39th Annual Conference

Istanbul, Turkey 2013

Overview of the Manganese Industry

June, 2013 Alberto Saavedra Market Research Manager

2

• Introduction

• Global Steel Production

• Mn Ferroalloys Supply, Demand and Trade Flow • Mn Ore Supply, Demand, Trade Flow

• EMM Trade Flow • Conclusion

Introduction Steel Mn

Ferroalloys Mn Ore EMM Conclusion

24%

6%

69%

At last year’s 38th IMnI Annual Conference …

3

In your opinion, what will be the most important challenge for the Manganese industry in the coming year?

1. Sustainability and Environmental Issues

2. Social Responsibility

3. World oversupply

Sources: 38th IMnI’s Annual Conference Live Poll



Period of challenges…

4

World oversupply is not welcome in any

market…

… Much less if it comes along with challenges on the demand side due

to…

The bad economic performance in

Europe, the slow recovery in USA,

sluggish growth in China, among others



2007 2008 2009 2010 2011 2012

World 1 346 577 1 329 178 1 232 338 1 418 656 1 529 236 1 546 836

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

Sources: World Steel Association

World Crude Steel Production by Year (in 000’s metric tonnes)

5

00

0 T

on

nes

The World Steel Production in 2012 was 1.2% higher than in 2011

China was the most important country in terms of Steel production and its growth contributed to the world’s annual increase.

Region 2012 % 2012 Change

y-o-y

European Union (27)

168 935 11% -5%

Other Europe

39 923 3% 2%

C.I.S. 110 956 7% -2%

North America

121 839 8% 3%

South America

46 929 3% -3%

Africa 15 803 1% 1%

Middle East 24 226 2% 5%

China 716 542 46% 3%

Asia (excluding China)

295 878 19% 1%

Oceania 5 805 0% -20%

World 1 546 836 100% 1%

2012 World Crude Steel Production by Region

(in 000’s metric tonnes)



Sources: World Steel Association

World Crude Steel Production by Month January 2011-April 2013 (in 000’s metric tonnes)

6

• World Steel Production in the first four months of 2013 has increased 2.7% vs. the same period in 2012 and 4.1% vs. 2011. • China continues to be the most important player with the 49% of steel production (46% in the first four months of 2012). • China also represented an increase of 9% in the first four months of 2013 compared to the same period in 2012 (257,395

thousand tons -- 2013 period). • India showed an increase of 4% in the first four months of 2013 vs. the same period in 2012, while most of the European

countries showed a decrease in their steel output… (a decrease of almost 1% vs. the same period in 2012).

2011 2012 2013



105 000

110 000

115 000

120 000

125 000

130 000

135 000

140 000Ja

n-1

1

Feb

-11

Mar

-11

Ap

r-1

1

May

-11

Jun

-11

Jul-

11

Au

g-1

1

Sep

-11

Oct

-11

No

v-1

1

Dec

-11

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-12

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-13

00

0’s

Met

ric

Ton

nes

2007 2008 2009 2010 2011 2012

Consumption 13 264 13 578 12 769 14 020 18 142 18 114

Production 14 032 14 196 11 720 14 644 17 883 17 473

-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

Mn Ferroalloys Production and Real Consumption (in 000’s metric tonnes)

7 Sources: IMnI

00

0 T

on

nes

Production increase Over

Supply Production Decrease

Production Decrease Flat

• It appears that after a decrease in production, the market exceed consumption in the following year. • In 2012 some Mn Ferroalloy plants closed operations or reduced their output because of the bad economic climate (low

demand) and increases in electricity tariffs.

Over Supply

???

2013

Mn

Ind

ustry m

ust b

eware

on

ce again

of o

versu

pp

ly Introduction Steel

Mn Ferroalloys

Mn Ore EMM Conclusion

-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

2007 2008 2009 2010 2011 2012

SiMn Cons HC FeMn Cons MC FeMn Cons SiMn Prod HC FeMn Prod MC FeMn Prod

60%

Mn Ferroalloys Production and Real Consumption (in 000’s metric tonnes)

8 Sources: IMnI

59% 63% 60%

67% 67%

30%

28% 30%

25% 24%

30%

10%

9%

10%

9% 9%

10%

• SiMn is the most produced and consumed Mn ferroalloy… • … As SiMn is becoming more and more popular on global scale, the proportional requirements for high-grade ore would

grow more slowly vs mid-grade in the near term, • Global MC FeMn production and consumption has shown an increase of 12% over the past six years (2007 - 2012) in terms

of volume but continues to be the least produced and consumed Mn ferroalloy. • HC FeMn production is practically the same between 2007 & 2012 (4 215 vs. 4 217 thousand metric tons in 2007 and 2012

respectively).



Steel, Mn Ferroalloys and Mn Ore Production Index January 2011 = 1

9 Sources: IMnI

Jan

uar

y 2

01

1 =

1

• This chart compares the changes in production for the three levels of the value chain… • … During the past two years production variations for Mn Ferroalloys and Mn Ore have been much higher than the

movements in the Steel production market.



HC FeMn Production and Real Consumption (in 000’s metric tonnes)

10 Sources: IMnI

• Most of the world changes in the production and consumption side are explained by China.

• HC FeMn production has been at almost the same production level during the past 6 years.



2011 2012 Change YOY

Country 000 Tonnes % 000 Tonnes % %

India 418 10% 422 10% 1% South Africa 419 10% 384 9% -8%

Some Important HC FeMn Producers (in 000’s metric tonnes)

• Some production regions in China were affected by production cuts due to increases in costs and slow demand (mainly).

• India was the second most important producer of HC FeMn and showed a 1% of increase in production in 2012 compared to 2011, despite the world output decrease of 4% in 2012 vs. 2011.

back to index

11

Importers

Number Country Tons % of Imports

1 United States 300 22%

2 Germany 137 10%

3 Japan 122 9%

4 Netherlands 115 8%

5 Taiwan 72 5%

6 Belgium 57 4%

7 Italy 50 4%

8 Russia 45 3%

9 United Kingdom 36 3%

10 Ukraine 35 3%

Others 405 29%

Total 1 373 100%


1 South Africa 453 33%

2 Norway 122 9%

3 Korea, South 118 9%

4 Australia 107 8%


6 France 102 7%

7 India 87 6%

8 Ukraine 80 6%

9 Spain 53 4%

10 Russia 50 4%

Others 101 7%

Total 1 373 100%

HC FeMn Top 10 Importers and Deduced Exporters in 2012 (in 000’s metric tonnes)

Sources: GTIS

Deduced Exporters



• USA was the most important importer of HC FeMn despite the slow economic recovery in 2012.

• Germany, as the leading steel producer in Europe, which reflects the level of HC FeMn imports in 2012.

• South Africa, the third most important HC FeMn producer in 2012 was the most important deduced exporter of this Mn Ferroalloy by almost three times.

12 Sources: IMnII

Ref FeMn Production and Real Consumption (in 000’s metric tonnes)

• Both, production and consumption were balanced in 2012. • The increase of more specialized steels has permitted an

increase in the consumption of this market.



Some important Ref FeMn Producers (in 000’s metric tonnes)

• Norway, one of the most important producer of Refined FeMn increased its production 7% in 2012 vs. 2011, while South Korea, one of the leading countries in this market, decreased production… from 163 thousand metric tons in 2011 to 140 thousand metric tons in 2012.



Norway 198 12% 212 13% 7% South Korea 163 10% 140 9% -14%

back to index

13

Importers




3 Germany 56 9%

4 Canada 35 5%

5 Italy 32 5%

6 Brazil 30 5%

7 India 28 4%

8 Japan 26 4%

9 Australia 25 4%

10 Turkey 24 4%

Others 201 31%

Total 644 100%


1 Norway 201 31%


3 Korea, South 107 17%

4 Netherlands 58 9%

5 India 21 3%

6 Spain 20 3%

7 Mexico 18 3%

8 China 12 2%

9 France 12 2%

10 Vietnam 8 1%

Others 47 7%

Total 644 100%

Sources: GTIS

Deduced Exporters

• Four countries held 78% of the deduced export market. • Norway’s deduced exports were 45% higher than the

second most important player.

• As in the case of HC FeMn, USA was the most relevant importer or Refined FeMn in 2012.



Refined FeMn Top 10 Importers and Deduced Exporters in 2012 (in 000’s metric tonnes)

14 Sources: IMnI

SiMn Production and Real Consumption (in 000’s metric tonnes)



India 1 434 12% 1 478 13% 3%

India SiMn Production Figures (in 000’s metric tonnes)

• India is the second most important producer of SiMn in the world and is the most important exporter of this Mn Ferroalloy.

• Indian Mn Ferroalloy industry faced increases in the industrial electricity rates in some production regions, that affected the production, however, it is important to see how the Indian Mn Ferroalloy industry, and specially the SiMn producers increase the production.

• Other East European companies faced production adjustments (specially the CIS region), however, after an electricity price adjustments, CIS’s production cost will be more competitive.



• This chart shows a clear positive trend in both, production and consumption in the SiMn market in recent years.

• SiMn usually requires (depending of the production method) more electricity when produced…

• Will other South African producers also shut down SiMn, can India sustain the level of exports of SiMn given their high power cost and high raw material cost?

back to index Deduced Exporters

15

Importers



2 Turkey 253 9%

3 Japan 248 9%


5 Russia 206 8%

6 Germany 198 7%

7 Italy 167 6%

8 Taiwan 114 4%

9 South Korea 92 3%

10 Ukraine 81 3%

Others 747 28%

Total 2 703 100%


1 India 744 28%

2 Ukraine 495 18%

3 Georgia 191 7%

4 Norway 172 6%


6 Non-EU Suppression 144 5%


8 Kazakhstan 69 3%

9 France 65 2%

10 Vietnam 57 2%

Others 48 18%

Total 2 703 100%

Sources: GTIS



SiMn Top 10 Importers and Deduced Exporters in 2012 (in 000’s metric tonnes)

• India ranked no 1 in terms of deduced exports of SiMn while Ukraine (despite some production cuts in 2012) ranked 2nd.

• USA was the most relevant importer of SiMn in 2012, while Turkey and Japan became second and third place.

16

Steel production has been growing

Sources: IMnI

Mn Ore Production and Consumption in Mn Content (in Million metric tonnes)



• Even if the difference between production and consumption has reduced , at IMnI’s 2012 conference, the audience said that oversupply would be the most important challenge for the Mn industry…

17

Steel production has been growing

Sources: IMnI

2012 Mn Ore Production in Mn Content (Million Metric Tons)

Mill

ion

mt

Mn

Co

nte

nt

% Mn Content of Ore

Ghana

CIS

Gabon



These 7 countries, plus the region of CIS, accounted for 94% of global output in Mn units

back to index

Deduced Exporters

18

Importers


1 China 12.38 57%

2 India 2.37 11%

3 South Korea 1.27 6%

4 Japan 1.15 5%

5 Norway 1.07 5%

6 Ukraine 0.73 3%

7 France 0.56 3%

8 United States 0.51 2%

9 Spain 0.41 2%

10 Russia 0.41 2%

Others 0.85 4%

Total 21.71 100%


1 South Africa 7.12 33%

2 Australia 6.29 29%

3 Gabon 2.76 13%

4 Brazil 1.66 8%

5 Ghana 1.54 7%

6 Malaysia 0.91 4%

7 Myanmar 0.29 1%

8 Namibia 0.18 1%

9 France 0.11 1%

10 Kazakhstan 0.10 0%

Others 0.77 4%

Total 21.71 100%

Mn Ore Top 10 Importers and Exporters in 2012 (in 000’s metric tonnes)

Sources: GTIS

• 75% of the world’s deduced exports in 2012 were made by South Africa, Australia and Gabon.

• Even if China was the most important producer of Mn Ore in 2012, it required more Mn ore in order to feed its Mn alloy needs.

• With India’s increasing Mn Ferroalloy production , it became the second largest importer in the world.



China

Chinese Port Inventory as months of Reserve Stock

19 Sources: IMnI

# of M

on

ths

# of Months



• The Chinese market has seen a continuous decrease in its Mn port inventory since May 2011… • … the inventory port stocks represent 2.3 months of Consumption. • Will the port inventory increase in the second half of 2013?

Ton

nes

20

Chinese EMM Monthly Exports (January 2012-April 2013)

(in 000’s metric tonnes)

EMM

Sources: GTIS

• It appears that the EMM exports increased after the abolition of the export tax, however IMnI understands that illegal exports (to avoid the export tax) are not needed since the abolition,

• The official figures are higher, but the real export volume of EMM seems to be the same.



21

Steel

• The increase in Steel output during the first four months of 2013 was led by China and the rest of the year looks challenging in terms of production because of the recent decrease in Chinese utilization rates…

• Europe is the most affected region of the world and seems to be continuing with this trend during 2013.

• Other important regions like America and Asia have seen difficulties on the demand side.

Mn Feroalloys

• Production: China leads the world Mn Ferroalloys output, and it is focus on the local market.

• Imports: USA is the most important Mn Ferroalloy importer (HC, Refined and SiMn), despite that its Steel production utilization rate is below 80%.

• Exports: India is becoming the most important country in terms of SiMn Exports and its role in the industry will be increasingly important because of the export market and Mn Ore requirements.

Mn Ore

• The market has been oversupplied in the last 6 years.

• Imports: China leads the consumption of Mn Ore and …

• … Chinese port stocks have decreased since May 2011…

• 7 countries, plus the region of CIS, accounted for 90% of global output in Mn units.

EMM

• Chinese exports of EMM have increased considerably since the abolition of the export tax.

• Are the Chinese Mn mines ready to meet the needs of the EMM industry currently?



Contact information

[email protected]

22

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