Steel Industry Update #257

8/8/2019 Steel Industry Update #257

http://slidepdf.com/reader/full/steel-industry-update-257 1/8

Email: [email protected] | Website: [email protected]

Steel Industry Update/257 December 2010

Locker Associates, 225 Broadway, Suite 2625 New York NY 10007 Tel: 212-962-2980

Table 1: Selected U.S. Steel Industry Data, October & Year-To-Date

Month of October Year-to-Date

(000 net tons) 2010 2009 % Chg 2010 2009 % Chg

Raw Steel Production ............... 7,212 6,603 9.2% 74,328 51,392 44.6%

Capacity Utilization ................. 67.3 62.3 -- 70.8 49.4 --

Mill Shipments .......................... 6,629 6,098 8.7% 69,784 48,888 42.7%

Exports ..................................... 995 983 1.2% 10,059 7,418 35.6%

Total Imports............................. 1,888 1,626 16.1% 20,271 13,428 51.0%

Finished Steel Imports ............ 1,585 1,243 27.5% 15,855 12,037 31.7%

Apparent Steel Supply*............. 7,220 6,358 13.6% 75,579 53,507 41.3%

Imports as % of Supply* ......... 22.0 19.6 -- 21.0 22.5 --Average Spot Price** ($/ton) ...... $663 $616 7.6% $690 $602 14.6%

Scrap Price# ($/gross ton) .......... $341 $264 29.2% $343 $225 52.4%

Source: AISI, Global Insight *Excl semi-finished imports **Avg price of 8 carbon products #shredded bundles

Table 2: U.S. Spot Prices for Selected Steel Products, November & Year-to-Date

Month of November Year-To-Date

($ per net ton) 2010 2009 % Chg 2010 2009 % Chg

Hot Rolled Sheet………….. 539 508 6.1% 602 469 28.4%Cold Rolled Sheet......…….. 647 607 6.6% 712 559 27.3%

HD Galvanized Sheet..…… 696 610 14.1% 761 608 25.2%

Coiled Plate................…….. 575 554 3.8% 629 606 3.8%

Cold-Finished Bar (SBQ)….. 864 743 16.3% 847 794 6.7%

Wide-Flange Beams....…… 703 643 9.3% 718 712 0.9%

Wire Rod/Low Carbon.…… 605 564 7.3% 650 556 16.8%

Rebar.........................…….. 563 471 19.5% 571 501 13.8%

Average Spot Price+…….. $649 $588 10.5% $686 $601 14.2%

OCTG Seamless Tube…… 1,769 1,523 16.2% 1,748 1,718 1.7%

Scrap ($/gross ton)*....………. 350 235 48.9% 344 226 52.1%

Sources: Global Insight, Spears Research +Comp price of 8 carbon products *shredded bundles



Steel Industry Update/257

- 2 -

Source: World Steel Association, 12/10

Table 3: World Crude Steel Production by Region, October & Year-To-Date

(000 metric tons) Month of October Year-to-Date

Region 2010 2009 % Chg 2010 2009 % Chg

European Union……. 15,444 14,790 4.4% 145,460 112,660 29.1%Other Europe………. 3,087 2,699 14.4% 27,075 23,718 14.2%

C.I.S…………………. 9,315 8,910 4.5% 89,635 79,757 12.4%

North America……… 9,366 8,398 11.5% 93,704 66,066 41.8%South America……... 3,994 3,880 2.9% 36,739 30,441 20.7%

Africa………………... 1,488 1,268 17.2% 13,947 12,186 14.4%

Middle East…………. 1,680 1,406 19.5% 15,731 14,325 9.8%

Asia………………….. 72,493 72,715 -0.3% 736,007 648,086 13.6%

Oceania………...…... 694 698 -0.6% 6,817 4,693 45.3%

Total………………… 117,562 114,765 2.4% 1,165,116 991,931 17.5%

Countries

China………………… 50,304 52,302 -3.8% 525,095 474,379 10.7%Japan………………... 9,508 8,801 8.0% 91,443 69,726 31.1%

United States……….. 6,565 5,991 9.6% 67,451 46,623 44.7%

India(e)…….………… 5,750 5,283 8.8% 55,764 51,737 7.8%

Russia(e)...…..……… 5,726 5,607 2.1% 55,561 49,038 13.3%

South Korea..………. 5,206 4,671 11.4% 47,293 39,649 19.3%

Germany.…………… 3,834 3,453 11.0% 36,809 26,108 41.0%

Ukraine……..……….. 2,945 2,660 10.7% 27,589 24,340 30.9%

All Others…………... 27,741 25,860 7.3% 257,887 213,419 20.8%

Source: World Steel Association, 12/10

Graph 1: World Crude Steel Production




- 3 -

Table 4: Global DRI Production, October 2010

Country Oct’10 Oct’09 % Chg

India 1,820 1,720 6%

Iran 800 567 41%

Mexico 490 463 6%Saudi Arabia 450 445 1%

Venezuela 425 408 4%

Qatar 231 227 2%

Trinidad Tobago 180 123 46%

Argentina 160 138 16%

South Africa 160 150 7%

Libya 125 61 105%

Canada 41 56 -27%

Peru 10 9 11%

Total 4,633 5,159 11%

Source: Worldsteel.org, 11/24/10

Steel Industry Update (ISSN 1063-4339) published 12 times/year by Locker Associates, Inc. Copyright © 2010 by Locker Associates Inc. Allrights reserved. Reproduction in any form forbidden w/o permission. Locker Associates, Inc., 225 Broadway Suite 2625 New York NY 10007.

Table 5: Global Blast Furnace Iron Production, Y-T-D 2010

Country Jan-Oct’10 Jan-Oct’09 % Chg

China 491,984 454,685 8.2%

Japan 68,691 53,439 28.5%

India 32,654 31,549 3.5%

Russia 40,183 35,987 11.7%South Korea 26,576 22,194 19.7%

Brazil 26,671 20,008 33.3%

Germany 24,865 15,621 59.2%

U.S. 22,938 14,896 54.0%

Ukraine 22,722 21,031 8.0%

France 8,663 6,371 36.0%

All Others 91,253 70,487 29.5%

Total 857,200 746,268 14.9%

Source: Worldsteel.org, 11/24/10




- 4 -

Table 6: World Ranking of Coke Producers, byCapacity, 2008-2009

Country (mil tonnes) 2009 2008

China 345.0 327.0

Japan 30.4 38.2

Russia 25.8 30.3

India 18.4 18.4

Ukraine 13.7 18.5

USA 10.5 14.2

South Korea 10.1 10.6

Brazil 8.4 9.4

Poland 7.0 9.8

Germany 5.8 8.3

World 528.7 541.8

Source: Steel Times International, September 2010

Table 7: Met Coal Shipments, 2004-2009

Seaborne Imports 2004 2005 2006 2007 2008 2009

China (net) 0 0 2 net 1 0 30

Japan 56 55 52 54 54 45

Korea 15 12 12 16 19 15

India 0 21 22 24 25 25

Europe 51 51 54 59 61 41

South America 11 11 12 14 16 12

Other 42 50 40 42 43 31

Total 174 200 192 211 217 199

Seaborne Exports

Australia 117 125 124 137 134 134

USA 20 21 20 26 35 31

Canada 22 25 23 25 25 21

Other 16 29 24 23 23 13

Total 174 200 192 211 217 199

Source: Goldman Sachs October, 2010; in million tonnes




- 5 -

Graph 2: World Coke Production, 1988-2009

Source: Xcoal Energy & Resources, September 2010; in million tonnes

Graph 3: Benchmark Hard Coking Coal

Source: Grande Cache Company Report, October 2010




- 6 -

Graph 4: Iron Ore & Coking Coal % of Hot-rolled Coil Price, 1998-2011E

Source: Goldman Sachs, October 2010

Graph 5: Number 1 Bushelings &Hot-Rolled Coil, 2007-2010

Source: ISRI Friday Report, December 10, 2010




- 7 -

Steel Mill Products: US Imports, October & Year-to-Date

Imports: Country of Origin Month of October Year-to-Date

(000 net tons) 2010 2009 % Chg 2010 2009 % ChgCanada……………………….. 470 529 -11.2% 5,771 3,346 72.5%

Mexico………………………… 271 163 66.3% 2,451 1,449 69.2%

Other W. Hemisphere……….. 82 95 -13.7% 910 709 28.3%

European Union……………… 355 297 19.5% 3,590 2,122 69.2%

Other Europe*……………….. 130 151 -13.9% 1,922 974 97.3%

Asia……………………………. 541 339 59.6% 4,997 4,523 10.5%

Oceania………………………. 28 51 -45.1% 537 279 92.5%Africa………………………….. 11 3 266.7% 93 26 257.7%

Total 1,888 1,626 16.1% 20,271 13,428 51.0%

Imports: Custom District

Atlantic Coast………………… 219 230 -4.8% 2,518 1,740 44.7%

Gulf Coast/Mexican Border… 721 417 72.9% 6,918 5,551 24.6%

Pacific Coast…………………. 322 309 4.2% 3,878 2,099 84.8%

Gr Lakes/Canadian Border…. 610 649 -6.0% 6,785 3,886 74.6%

Off Shore……………………… 16 21 -23.8% 173 152 13.8%

Source: AISI; * includes Russia

Update #257

200

300

400

500

600

700

800

900

1000

1100

89 93 97 04 05 07 08 09 O N D J F M A M J J A S O N

U.S. Flat-Rolled Prices

250

350

450

550

650

750

850

950

1050

1150

1250

1350

89 93 97 04 05 07 08 09 O N D J F M A M J J A S O N

U.S. Other Product Prices

CF Bar (SBQ)

Beam

CR Sheet

Wire Rod

HR Sheet

Plate

($ per ton) ($ per ton)

Locker Associates Steel Track: Spot Prices

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

20102009

2010 6.9 6.9 7.8 7.7 8.0 7.8 7.5 7.3 7.3 7.2

2009 4.5 4.4 4.4 4.2 4.5 4.8 5.6 6.1 6.4 6.6 6.3 6.5

J F M A M J J A S O N D

U.S. Raw Steel Production (mil net tons)

U.S. Capacity Utilization

Locker Associates Steel Track: Performance

30%

40%

50%

60%

70%

80%

90%

100%

2010 2009

2010 64% 71% 73% 74%75% 75% 72% 68%70% 67%

2009 43% 46% 43% 41%43% 47% 52% 58%62% 62% 61% 61%

J F M A M J J A S O N D




Locker Associates, Inc.

LOCKER ASSOCIATES is a business-consulting firm that specializes in enhancing thecompetitiveness of businesses and industries on behalf of unions, corporate and governmentclients. By combining expert business and financial analysis with a sensitivity to labor issues,the firm is uniquely qualified to help clients manage change by:

♦ leading joint labor/management business improvement initiatives;♦ facilitating ownership transitions to secure the long-term viability of a business;

♦ conducting strategic industry studies to identify future challenges and opportunities;

♦ representing unions in strategic planning, workplace reorganization and bankruptcy♦ formulating business plans for turnaround situations; and♦ performing due diligence for equity and debt investors.

Over the last 28 years, the firm has directed over 225 projects spanning manufacturing,transportation, distribution and mining industries. Typical projects involve in-depth analysis of afirm’s market, financial and operating performance on behalf of a cooperative labor-management effort. Locker Associates also produces a widely read monthly newsletter, Steel Industry Update that circulates throughout the U.S. and Canadian steel industry.

RECENT PROJECTS

• Business Plan for High-Tech Startup (2009-present): drafted detailed business plan to

raise capital and promote a new hydrogen battery technology

• IBT-Supervalu (2010): assist union and management to identify major operational problemsimpacting warehouse performance and provide recommendations for joint improvement

• Institute of Scrap Recycling Industries (2010): presented a status report on the U.S. steelmarket before the Institute of Scrap Recycling Industries Commodities roundtable

• Save the World Air-Marketing (2009-present): developed a marketing plan to help drivesales of a green technology product, ELEKTRA, an electronic fuel device for trucks thatincreases fuel economy (mpg's), reduces exhaust emissions and improves engine performance

MAJOR CLIENTS

United Steelworkers Air Line Pilots Association/Delta Air Lines MEC

Bank of Boston Sharpsville Quality Products

Congress Financial IPSCO

Santander Investment Securities International Association of Machinists

AEIF-IAM/AK Steel Middletown CSEA/AFSCME

Prudential Securities United Auto Workers

US Steel Joint Labor-Mgmt Comm Service Employees International Union

LTV Steel Joint Labor-Mgmt Committee American Fed of Television & Radio Artists

Int’l Union of Electrical Workers Supervalu

Bethlehem Joint Labor-Mgmt Comm United Mine Workers

Inland Steel Joint Labor-Mgmt Comm Algoma SteelNorthwestern Steel and Wire North American Refractories

Boilermakers UNITE/HERE

American Federation of Musicians AFL-CIO George Meany Center

USS/KOBE Watermill Ventures

Sysco Food Services of San Francisco Wheeling-Pittsburgh Steel

International Brotherhood of Teamsters Canadian Steel Trade & Employment Congress

Development Bank of South Africa Minn Gov's Task Force on Mining

J&L Structural Steel Special Metals

Steel Industry Update #257

Documents

Transcript of Steel Industry Update #257