FUTURE MADE OF STEEL
Adalet Kazımlı, International Trade Director, ERDEMİR Group, TURKEY
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
CONTENT
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
GENERAL OUTLOOK OF TURKISH STEEL MARKET
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
GDP Growth Rates (%)
10.0
World
USA
EU-25
Turkey
8.0
6.0
4.3
4.0
2.2
2.0
1.6
-0.2
0.0
2010
2011
2.5
2.2
2012
2.1
0.2
2013
2014
2015
-2.0
Turkish GDP is expected to grow at above 4% per annum over the medium term
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source: Oxford Economics – TRG (Turkish Republic Government)
Top Steel Producing Countries – Crude Steel (Mt)
Rank
Countries
2011
2012
Change %
1.
China
683
717
3,1
2.
Japon
108
107
-0,4
3.
USA
86
89
2,5
4.
India
72
77
4,2
5.
Rusia
69
71
2,5
6.
South Korea
68
69
1,2
7.
Germany
44
43
-3,6
8.
Turkey
35
36
5,3
9.
Brazil
35
35
-1,4
10.
Ukraine
34
33
-6,8
11.
Italy
29
27
-5,2
Turkey was ranked 8th position among Top Steel Producing Countries in 2012
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source: ISPA
Crude steel production capacity in Turkey
Turkish Capacity
Snapshot
Turkish Crude Steel Capacity [mtpy]
60.0
50.1
50.0
11.6
BOF
23%
40.0
EAF
77%
30.0
19.8
20.0
38.5
Slab
29%
10.0
0.0
2000
2005
2009
EAF
2010
BOF
2011
2012
Billet
71%
TOTAL
 Turkish crude steel capacity increased 2,5 times in the last 10 years
 Only 3 integrated steel makers among 31 producers
 Turkey is the biggest scrap importer in the world (ca. 23 mtpy), local scrap supply is around 10 mtpy
 Crude steel production reached 35,9 mtpy, indicationg a capacity utilization rate of 72%
Turkish crude steel production is heavily dependent on imported scrap
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source :DCUD
Finished Steel Consumption and GDP of Turkey
Finished Steel Consumption (Mt)
60
GDP Index (2005=100)
240
197
50
40
30
20
160
117
120
80
80
10
40
GDP Index – CAGR (%)
Finished Steel Cons. – CAGR (%)
2000-2010
3.9
6.1
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
0
2020 F
2018 F
2016 F
2014 F
2012 F
2010
2008
2006
11 14 15 18 21 24 21 18 24 27 29 30 33 36 38 41 44 47 50
2004
9
2002
13
2000
0
200
2010-2020
5.3
7.9
Source: ISPA (Turkish Iron & Steel Producers Association),
Oxford Economics
Turkish flat steel production capacity
Turkey Flat Steel Capacity, Consumption & Production
20.0
18.4
18.0
15.9
16.0
14.0
13.6
[mton]
12.0
10.0
8.0
9.0
6.0
4.0
2.0
0.0
2005
06
07
Flat Capacity
08
09
10
Flat Consumption
11
12
13
14
2015
Flat Production
 Turkish flat steel production capacity increased 5 fold since 2006
 Flat steel production capacity is enough to meet local demand
 Apparent flat steel use is estimated to be 13,6 mt, whereas flat steel production remains at 9,0 mt in 2012
 In 2012 Turkey imported about 6,5 mt flat rolled products
Flat steel production capacity has developed quickly since 2006 and Turkey became a net
exporter of flat products as well as long products
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source :DCUD
Finished Steel Production/Consumption (Mt) Turkey
Production
4
5
4
7
19
22
22
21
20
2006
2007
2008
2009
2010
4
9
9
Flat
Products
4
16
2005
23
25
2011
2012
Long
Products
Consumption
13
9
11
12
11
14
Flat
Products
12
8
9
11
12
10
10
12
2005
2006
2007
2008
2009
2010
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
14
15
2011
2012
Long
Products
Source: ISPA
Steel Export of Turkey (Mt)
1.9
1.7
2.4
1.5
3.7
11.8
9.2
2009
2010
2.3
3.0
2.5
Flat Products
Semi Products
Long Products
11.7
10.5
2011
2012
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source: TSI
Regional Distribution of Steel Export (Mt) – Turkey
2012
2011
15%
38%
36%
EU (27)
MENA
NAFTA
FAR EAST
CIS
OTHER
7%
34%
48%
Turkey exports mainly to MENA and EU countries
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013 *Other: Brazil, Peru, Ethiopia, Turkmenistan, Nigeria etc.
Source: TSI
ERDEMİR GROUP
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Group Companies
ERDEMİR
Romania
ERENCO
ERSEM
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
ERMADEN
Group Companies
Establishment of
ERSEM and
ERENCO
Acquisition of
İSDEMİR and
ERD.Romania
Establishment
1965
2001
Flat steel
production in
İSDEMİR
Acquisition of
ERDEMİR Maden
2002
Privatization
2004
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
2006
2008
2013
ERDEMİR – «World-Class Steel Producer»
ERDEMİR
Was ranked to
the category of
the world's top
steel producers
by WSD in 2012
Specialized
on domestic
markets
Having good
relations with
key
customers
Quick and
effective
reaction
TOP STEEL
PRODUCERS
Having
proactive
culture
Having
control over
its costs
Authorized
management
structure
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source: WSD
Liquid Steel Capacity (Mt) – ERDEMİR Group
9.1
9.1
5.3
5.3
7.9
7
5.4
5.4
7
5.4
3.5
3.5
4
İSDEMİR
ERDEMİR
TOTAL
2.2
2.2
2.2
3.2
3.2
3.2
3.5
3.5
3.9
3.9
3.9
2005
2006
2007
2008
2009
2010
2011
2012
Since 2005, liquid steel capacity of the group increased by 70% to 9.1 Mt
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Finished Steel Capacity (Mt) – ERDEMİR Group
İSDEMİR Long
6.1
İSDEMİR Flat
ERDEMİR Flat
TOTAL
11.1
11.1
11.1
11.1
11.1
2.5
2.5
2.5
2.5
2.5
3.5
3.5
3.5
3.5
3.5
7.6
7.6
2.5
2.5
5.1
5.1
5.1
5.1
5.1
5.1
5.1
2006
2007
2008
2009
2010
2011
2012
2.5
3.6
2005
The finished steel capacity of the group increased by 82% to 11.1 Mt
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Production Volume (Mt) – ERDEMİR Group
Long Product
5.2
5.4
6.0
2.0
1.7
2.0
Flat Product
7.1
6.5
1.4
1.9
3.9
4.2
4.2
2006
2007
2008
5.4
4.8
2009
2010
Crude Steel
7.5
7.9
0.8
1.5
6.1
6.0
2011
2012
«Erdemir Group is continously increasing its production volume»
Long product portion decreased over time in line with İSDEMİR’s conversion to Flat production
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
2011 & 2012 Total Export Sales on Region Basis
2011
2012
3%
6%
9%
EU (27)
21%
MENA
AMERICA & CANADA
MENA
49%
CIS & OTHER
70%
7%
36%
EXPORT TO EU DECREASED DUE TO LOW DEMAND
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
EU (27)
CIS + OTHER
AMERICA & CANADA
2012 Export Distribution on Region Basis
•
•
•
•
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
MENA
EU
CIS + OTHER
AMERICA & CANADA
49%
36%
9%
7%
Products & Markets
•
Flat Products
 HRC
 Plate
 CRC
 HDG
 Tinplate
 Silicon Steel
•
•
Domestic Markets
 Turkey
 Romania
•
Export Markets
Long Products
 Wire rod
 Billet
EU
 Other Europe & CIS
 MENA
 USA
ERDEMİR is a regional steel hub between European and MENA markets with a diversified
product portfolio
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
ERDEMİR Group Ports
ERDEMIR Port
16 million mt/year, loading/unloading capacity
Jetty : 1670 m (8 Jetties)
Draft : 20 m
Max.Vessel Size : 200,000 (DWT).
ISDEMIR Port
16,3 million mt/year, loading/unloading capacity
Jetty: 1530 m (5 Jetties)
Draft: 19 m
Max.Vessel Size : 200,000 (DWT)
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
EXPORT TO EUROPE
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Annual GDP Forecast for EU Markets
• Italy & Spain negative
• France, Germany & UK slightly positive
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source: European Commission
EU (27) Apparent Steel Use, finished steel
Mt
2012
WORLD
%
2013
2014 match 2014 as %
point
of 2007
2014
12/11
13/12
14/13
1 414.4 1 452.3 1 498.2
1.4
2.7
3.2
2014
123.0
140.2
139.5
144.0
-9.2
-0.5
3.2
1997
72.4
France
12.6
12.2
12.6
-8.1
-2.8
2.8
1993
75.6
Germany
37.7
38.2
39.6
-7.6
1.4
3.7
2006
92.8
Italy
21.7
21.2
21.7
-18.3
-2.0
2.3
1996
60.5
Poland
10.4
10.2
10.6
-5.7
-2.1
4.7
2006
88.3
Spain
10.7
10.3
10.9
-18.5
-3.5
5.3
1994
44.3
9.0
9.2
9.2
-0.2
-0.1
1.8
N.F.
71.6
European Union /27)
United Kingdom
Recovery of the demand in main European markets is slow
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Source:worldsteel
Outlook of European Union
Economy
• Weak demand
• Imbalance due to country differentials
• Political & financial uncertainties
• Recovery of GDP expected in 2014
Steel Market
• Slowing down in demand
• Short term restocking in early 2013
• Downtrend in EUR/USD parity
• Major steel mills reported losses in 2012
• Mergers and acquisitions expected
• Pressure over the margins
• Doubt on positioning
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
2013 Erdemir Export Targets to Europe
2012 Export Tonnage : 386.000
2013 Export Forecast :
Advantages
1. Euro pricing via hedging
2. Alternative payment solutions
3. R&D studies with the clients
4. Improvement in logistics
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Logistics Advantages of Erdemir & Turkey






Mainly by bulk vessels
Short lead time to neighbour markets
No inland handling in Turkey due to our own ports
Combination possibilities for cost efficiency
Container & barge delivery possibilities
JIT – Just in time deliveries
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
DISCLAIMER
Ereğli Demir Çelik Fabrikaları T.A.Ş. (Erdemir) may, when necessary, make written or verbal
announcements about forward-looking information, expectations, estimates, targets,
assessments and opinions. Erdemir has made the necessary arrangements about the
amounts and results of such information through its Disclosure Policy and has shared such
policy with the public through the Erdemir website, in accordance with the Capital Markets
Board regulations. As stated in related policy, information contained in forward-looking
statements, whether verbal or written, should not include unrealistic assumptions or
forecasts. It should be noted that, actual results could materially differ from estimates taking
into account the fact that they are not based on historical facts but are driven from
expectations, beliefs, plans, targets and other factors which are beyond the control of our
Company. As a result, forward-looking statements should not be fully trusted or taken as
granted. Forward-looking statements should be considered valid only considering the
conditions prevailing at the time of the announcement. In cases where it is understood that
forward-looking statements are no longer achievable, such matter will be announced to the
public and the statements will be revised. However, the decision to make a revision is a
result of a subjective evaluation. Therefore, it should be noted that, when a party is coming
to a judgement based on estimates and forward-looking statements, our Company may not
have made a revision at that particular time. Our Company makes no commitment to make
regular revisions which would fully cover changes in every parameter. New factors may
arise in the future which may not be possible to foresee at this moment in time.
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013
Thank you for your attention…
Metal Expert Europe Steel Trade Conference 2013 – Stresa, Italy / April 8-9 , 2013