Gerhard Pariser Final Presentation

Chromite & Ferrochrome - A Focus on Asia

Dr. Gerhard C. Pariser

Heinz H. Pariser Alloy Metals & Steel Market Research

March 2011

Source: Heinz H. Pariser Alloy Metals & Steel Market Research

Outline

March 2011

I. Global Markets

II. China – Stainless Super Power & FeCr Converter

III. South Africa – Ore Supplier or FeCr Producer?

IV. India – The Next Boom Market?

V. Outlook & Conclusions

Source: Heinz H. Pariser Alloy Metals & Steel Market Research March 2011

Global Markets


Chrome – The Essential Element

March 2011

Metallurgical

89%

Foundry Sands

6%

Chemical

3%

Refractory

2%

Firts Use of Chromite Ore 2010

Stainless Steel

72%

Carbon &

Low Alloy

16%

Engineering

Steels

6%

Tool & HSS

1%

Foundries &

Castings

3%

HSLA

1% Special Alloys *

1%

First Use of Chromium Alloys 2010


Economic Growth drives Stainless …

March 2011

1968

2006 2007

2008

2009

20102011

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0.0 20.0 40.0 60.0 80.0 100.0

Glo

ba

l Sta

inle

ss S

tee

l

Co

nsu

mp

tio

n in

Mill t

Stainless Steel

Corr: 0.99


Per Capita Stainless Consumption

March 2011

0.0

5.0

10.0

15.0

20.0

25.0

0 10,000 20,000 30,000 40,000 50,000 60,000

Pe

r C

ap

ita

Sta

inle

ss U

se,

in k

g

GDP in '000 US$ per Capita (ppp adjusted)

USA

Japan

Germany

China

India


Economic Growth drives Stainless & FeCr

March 2011

1968

2006 2007

2008

2009

20102011

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0.0 20.0 40.0 60.0 80.0 100.0

Glo

ba

l Sta

inle

ss S

tee

l

Co

nsu

mp

tio

n in

Mill t

Stainless Steel

Corr: 0.99

1968

2006

2007

20082009

20102011

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

0.0 20.0 40.0 60.0 80.0 100.0

Glo

ba

l Fe

rro

ch

rom

e

Co

nsu

mp

tio

n in

Mill t

GDP, in Trill US$ (PPP adjusted)

Ferrochrome Consumption

Corr: 0.98


Global Charge / HC FeCr Market

March 2011

-15

-10

-5

0

5

10

15

20

25

30

0 10 20 30 40 50 60 70 80 90

Gro

wth

Ra

te 2

00

0 -

20

10

, in

%

Share of Production, in %

Charge & HC FeCr Production

Bra

zil

Others

China

India

Russia

Finland

South Africa

Average Growth Rate: 6.0% p.a.

Kazakhstan

Zimbabwe

Turkey

Sweden

Others incl. Albania,

Romania & Iran

China

Others

India

Other AsiaNAFTA

EU

Japan

Other America

-5

0

5

10

15

20

25

30

35

40

45

0 20 40 60 80

Gro

wth

Ra

te 2

00

0 -

20

10

in

% p

.a.

Share of FeCr Demand in %

Charge / HC FeCr Demand


China –

Stainless Super Power &

FeCr Converter


Global Stainless Steel Consumption

March 2011

China

India

Other Asia

EU27Japan

NAFTA

-10

-5

0

5

10

15

20

25

30

35

40

0 0.5 1 1.5

Gro

wth

Ra

te 1

99

7 -

20

06

in

%

Relative Market Share

2006

1

23

4

5

1: Other Europe

2: Africa

3:Australasia4: Other America

5: Middel East

China

India

Other Asia

EU27

JapanNAFTA

-10

-5

0

5

10

15

20

25

30

35

40

0 0.5 1 1.5

Gro

wth

Ra

te 2

00

1 -

20

10

in

%


2010

1

2

3

4

5

1: Other Europe

2: Africa


5: Middel East


Chinese FeCr Demand

March 2011

2005 2010

Main Supply Source

Others

Russia

Zimbabwe

India

Kazakhstan

South Africa

53.2%

28.2%

14.3%2.4%

1.0%0.9%

21.7% 49.9%27.6%

0.3%

0.5%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

in M

ill t

FeCr Production & Demand

Production

G.R.: 26.9%

Apparent

Consumption

G.R.: 41.7%

Import Surplus

Export Surplus


FeCr Production based on imported Ore

March 2011

0

10

20

30

40

50

60

70

80

90

100

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2005 2006 2007 2008 2009 2010

Ra

tio o

f UG

2, in

%

Cr

Ore

Ex

po

rts

to C

hin

a,

in M

ill t

S. Africa Cr Ore Exports

to China

UG2 Exports

to China

G.R.: 67.4%

Total Ore Exports

to China,

G.R.: 56.1%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

0.0

0.5

1.0

1.5

2.0

2.5

2001 2002 2003 2004 2005 2006

Cr O

re Im

po

rts, in ´0

00

t

Ch

arg

e /

Hc

Fe

Cr

Pro

du

ctio

n,

in M

ill t

China Chromite Imports

Imports from

South Africa

G.R.: 54.0%

Total Ore Imports,

G.R.: 21.2%

Ferrochrome Production

G.R. 23.0%

2005 2006 2007 2008 2009 2010


China FeCr Demand Outlook

March 2011

0

5

10

15

20

25

30

35

0.0

2.0

4.0

6.0

8.0

10.0

12.0

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

20

19

Sta

inle

ss Ste

el M

eltin

g P

rod

uc

tion

in M

ill tFe

Cr Pro

du

ctio

n &

De

ma

nd

, in

Mill t

Production

G.R.: 26.9%

Demand

G.R.: 41.7%

Import

Surplus

Export Surplus

Actual Forecast

Production

G.R.: 5.1%

Demand

G.R.: 10.7%


South Africa –

Ore Supplier or

FeCr Producer?


South Africa‘s Chrome Ore Reserves

March 2011

Rank

in Mill t in % in Mill t in %

South Africa 7,340 77 1 14.8 *) 49.5

Zimbabwe 930 10 2 0.6 1.9

Kazakhstan 387 4 3 3.8 12.8

Finland 120 1.3 4 0.6 1.9

Turkey 70 0.7 5 2.4 8.1

India 67 0.7 6 3.2 10.7

Brazil 17 0.2 7 0.7 2.4

Others 576 6.1 8 3.7 12.5

Total 9,507 100.0 29.9 100.0

*) incl. UG2 & Independent Mines

Source: Departm ent of Mineral Resources, South Africa, Heinz H. Pariser

Chromite Ore Reserve Chromite Ore Output


UG2 Mine Production & Tailings

March 2011

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

0

2,000

4,000

6,000

8,000

10,000

12,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Est. U

tilisatio

n o

f UG

2 Ta

iling

s, in %

in ´

00

0 t

Potentail Output of

UG2 Tailings

Actually Identified

Tailings


South Africa Chrome Ore Usage

March 2011

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

in M

ill t

Input Metallurgical Cr Ore

G.R.: 3.2%

Input Other Cr Ore

G.R.: -3.0%

Cr Ore Exports

G.R.: 19.3%

Total Chrome Ore Supply

G.R.: 6.2%


South Africa Chrome Ore Market 2010

March 2011

FeCr - Domestic &

Export Sales

Revenues: 3,816 Mill $

Output 14.9 Mill t


Export


Metallurgical

Revenues: 360 Mill $

internal sales

Chemical & Foundry

Revenues: 193 Mill $


India –

The Next Boom Market?


Global Stainless Steel Consumption

March 2011

China

India

Other Asia

EU27Japan

NAFTA

-10

-5

0

5

10

15

20

25

30

35

40

0 0.5 1 1.5

Gro

wth

Ra

te 1

99

7 -

20

06

in

%


2006

1

23

4

5

1: Other Europe

2: Africa


5: Middel East

China

India

Other Asia

EU27

JapanNAFTA

-10

-5

0

5

10

15

20

25

30

35

40

0 0.5 1 1.5

Gro

wth

Ra

te 2

00

1 -

20

10

in

%


2010

1

2

3

4

5

1: Other Europe

2: Africa


5: Middel East


India‘s FeCr Demand

March 2011

0.0

0.2

0.4

0.6

0.8

1.0

1.2

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

in M

ill t

FeCr Production & Demand

Production

G.R.: 13.3%

Apparent

Consumption

G.R.: 5.6%

Export Surplus

2005 2010

Main Export Destinations

Others

Nethrlands

United States

South Korea

Japan

China

48.9%

19.0%

24.6%

2.5%1.8%

3.2%

23.9%

23.5%

32.5%

5.2%

14.9%


India Stainless Production & FeCr Demand Outlook

March 2011

0

1,000

2,000

3,000

4,000

5,000

6,000

0

200

400

600

800

1,000

1,200

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Sta

inle

ss Ste

el M

eltin

g, in

´00

0 t

Ch

arg

e /

HC

Fe

Cr C

on

sum

pti

on

, in

´0

00

t

Actual Forecast

G.R.: 8.6% G.R.: 9.4%

G.R.: 5.3% G.R.: 8.8%


Conclusion


Conclusion

- Global stainless production has come back to historic growth patterns

of some 6% per annum

- Demand for ferrochrome will continue to rise – with China increasing

its already dominant position

- India has and will experience extraordinary growth in stainless – and

a rising ferrochrome demand – but on a different scale than

China

- South Africa is a chrome ore supplier and ferrochrome producer –

but where will it position itself in the future?


Contact Details

Dr. Gerhard C. Pariser

Heinz H. Pariser

Alloy Metals & Steel Market Research

Scharnstr. 51

46509 Xanten

Germany

Tel.: +49 2801 77 11 0

Email: [email protected]

You are always welcome

to contact us.

mailto:[email protected]


Panel Discussion

Dr. Danko Koncar, Ruukki Metals

Jürgen Schalamon, Samancor Cr

Robert Yildirim, Yildirim Group / EtiKrom

Mark Midgley, ENRC

Dr. Gerhard Pariser, Heinz H. Pariser Alloy Metals & Steel

Market Research

Gerhard Pariser Final Presentation

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