Keynote presentations. 20th Mexican Steel Forum. Cancún, México Jan 29 th, 2015

Transcription

1 Keynote presentations 20th Mexican Steel Forum Cancún, México Jan 29 th, 2015

2 The world s number one steel company With 119 Millions of installed capacity ArcelorMittal is the world's number one steel company, with over 232,000 employees in more than 60 countries. ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 20 countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets. ArcelorMittal values scale, vertical integration and product diversity. Approximately 38% of our steel is produced in the Americas, 46% in Europe and 16% in other countries such as Kazakhstan, South Africa and Ukraine. Underpinning all our operations is a philosophy to produce Safe Sustainable Steel 2

3 Execute organic growth options Market position and market share estimates by region No 1 in North America No 1 in Western Europe No 1 in Eastern Europe and CIS Emerging markets continue to offer the best organic growth potential for ArcelorMittal Superior demand growth potential We have the platform and experience: No 1 in South America No 1 in Africa ArcelorMittal Others Already the steel market leader in Latin America, CIS and Africa ArcelorMittal focus areas for growth are Brazil and India We also have JV projects in the Middle East and China Industrial and commercial network focus on market sustainability and growth opportunity Source: World Steel Association and ArcelorMittal estimates 3

4 ArcelorMittal Mexico at a glance ArcelorMittal has been operating and competing successfully in Mexico for more than 20 years ArcelorMittal is present throughout Mexico in a variety of steel sectors 4 million tons/year slab capacity; Largest API slab producer 2 million tons/year billet and rebar & wire rod rolling capacity 6.5 million tons/year iron ore mining capacity 150 thousand tons/year tube rolling capacity 9 distribution centers and 9 sales offices across México, from Tijuana to Mérida Import HRC, CRC, stainless, and structural products from mills in US, Canada, Brazil, and Europe Lázaro Cárdenas, Michoacán Steel mill/mines Distribution center Sales office 4

5 Steel demand outlook continue to growth; semis is not the exception Source: World Steel Historic world's aparent steel use CAGR (03-08: 6.2% CAGR (03-14): 5.1% CAGR (08-14): 4.1% ASC J/N 2013 vs J/N 2014 J/N 2013 J/N 2014 Diff 14 vs 13 % Change Steel 21,091,555 24,429,116 3,337,561 16% Slab 2,409,790 2,969, ,830 23% Flat products 10,112,244 11,963,231 1,850,987 18% Long 6,447,124 7,125, ,570 11% Welded Pipe 683,377 1,158, ,098 70% Slab demand Million MT 2.1% World Steel demand 2015 expected to growth above 4%. Additional capacity in growing economies Market volatility due to financial uncertainty Concerns in China growth IO $68/dmt to $70/dmt Conflict in Ukraine Oil price CIS currency depreciation The ASC Jan-Nov 2014 growth 15.8% vs same period 2013, from to million tons 3.3% CAGR 03/08 and 1.8% after In 2015 slab demand is expected to grow around 2.1% Source: AM Analysis

6 Steel Imports in Mexico continue to growth Import country Product Japan, 14% Korea, 11% HDG, 13% Alloy, 13% USA, 31% Russia, 10% China, 7% HRC, 14% CRC, 11% Bars, 8% Canada, 6% Slab, 18% Others, 17% Ukraine, 4% Others, 17% CRP, 6% Steel Imports J/N 2013 vs J/N 2014 Slab Imports 1.8 Million + annualized Imports J/N 13 Imports J/N 2014 Change Imports Slab 1,132,848 1,733,592 53% 250, ,000 Roll Steel 5,528,886 6,476,774 17% Flat products 3,955,922 4,899,365 24% Long Products 1,423,303 1,443,334 1% Welded pipes 405, ,501 21% 150, ,000 50,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 6

7 Mexico market dynamics and challenging factors.. Expected Market environment Positive factors Chronic overcapacity in Longs + new capacity coming. Increasing domestic competition - as export volumes has dropped due to lower prices from overseas sources + AD in US Slab S/D balance - excess of slab demand around 500KT for the entire New players established in the market supplying slabs CIS Mills exploring more businesses to North America due to lower cost and better prices. Pressure from the raw material cost is expected to hit the slab price AD case initiatives against cheap imports, China, Korea, Russia Import Duty of 3% likely to prevail in Mexico Government major infrastructure projects expected to start in H Energy Reform promoting line pipe projects, more than 5000 KM in next 5 years Construction index finally showing positive index since July 14 after 18 consecutive months with negative evolution Auto industry overpassing expecting growth rates. Opportunities Auto growing market segment Expecting an improvement in domestic demand driven by Government Infrastructure plan Challenging factors Customers Uncertainty on local scrap prices in 2015 (international trend is negative) IO price deterioration has an impact on the slab price. CIS mills breaks the slab market discipline, other following like korean mills Continue leveraging our expertise in energy sector Oil prices and the impact on Mexican expenditure. Increase direct Rebar sales to Construction companies Continue developing our Distribution Network Negotiating a strategic alliance to capture major infrastructure projects Continue long term relationship with key customers Develop the market for flat products for energy sector in Mexico Continue the development of the API grades and UHSS grades with AM Calvert Huge volume of flat products imported over 4 millions. Relativelly healty price dynamics for flat products Slab Cost $/MT Self Suf Buy Iron ore 7

8 Energy and auto sectors driving a sustainable growth in Mexico for next years 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Car production, is exceeding forecasted numbers Produced units Pipe projects, more than 5000 KM in next 3 to 5 years Project Lengh (Km) Capex (mdp) Time to start CFE 3265 Sásabe-Guaymas 505 2o sem ,000 Guaymas-El Oro 330 2o sem El Encino-Topolobampo 661 2,000 2o sem El Oro-Mazatlán o sem Ojinaga-El Encino 254 5,160 1er sem El Encino-La Laguna 423 8,385 1er sem Waha-Central Eléctrica "Norte III" (Samalayuca) 300 7,095 1er sem Waha-Ojinaga 230 5,160 1er sem Ehrenberg-Los Algodones-San Luis Río Colorado 160 3,225 2o sem PEMEX 5082 Mérida-Cancún 300 5,999 2o sem Suministro de Gas Natural a Baja California Sur NA 7,740 2o sem Sur de Texas-Tuxpan (submarino) ,700 2o sem Tula-Villa de Reyes 279 5,418 2o sem Tuxpan-Tula 237 5,160 2o sem Samalayuca-Sásabe ,836 2o sem Colombia-Escobedo 254 4,838 1er sem Jaltipan-Salina Cruz 247 8,333 1er sem Los Ramones-Cempoala ,071 1er sem Villa de Reyes-Aguascalientes-Guadalajara 355 7,159 1er sem Laguna-Centro ,610 1er sem Lázaro Cárdenas-Acapulco 331 5, Salina Cruz-Tapachula (Extensión a Centroamérica) 440 5, Market analysis suggests that there is enough room to displace imports with bigger lead times and domestic incumbents with lower technological capabilities in the auto and pipe & tube segment 8

9 Mega infrastructure projects to be developed in the coming years will be key to size the construction segment Plan Nacional de Infraestructura, , USD B Communications and Transport Secretary Energy (Comisión Federal de Electricidad) Hydraulic infrastructure Fiber optic installation 9.8 Subsea pipelne (Texas Tuxpan) 2.9 Water tunnel Mex-Hgo 2.8 Highway conservation Speed train Qro. Mexico Interurban train Mex - Toluca Los Ramones pipeline Oriental I & II clean energ Anti flooding project Fresh w infra. N. Leon Vercruz Port expansion 1.8 Escobedo (C Cycle) 1.4 Water dam 1.2 SOURCE: Plan Nacional de infraestructura, team analysis 9

10 We continue to see a big opportunity in the flats Mexican market; on lack of our own mill in Mexico the doors are open for Calvert coils Slabs from Lazaro Cardenas port; Max Vessel DWAT 55 KT Trucking 24t capacity, more with special permitting Barge direct into inland waterways 1,600t capacity Rail direct on Norfolk Southern 88t capacity Additional rail available via Port of Mobile (CSX, KCS, BN through AGR) Vessel from Port of Mobile to Altamira, Coatzacoalcos Rail & truck from Alatmira and Coatzacoalcos Gomez Palacios Moclova SLP Brows MTY 300 miles Altamira 4 days Mobile 12 days Lazaro Cardenas Edo. Mexico Compliant with and leverages on National Content Regulation initiative Domestically produced goods transformed in USA not subject to price risks Definitive coils import scheme easier to handle than temporary import of transformed slabs into coils Well positioned to serve Southeastern United States and Center of Mexico 10

11 State-of-the-art facility with optimum logistics Plant Configuration of ThyssenKrupp Steel USA Equipment Layout, Capacities and Shipment Structure In millions of metric tonnes HSM 5.3 CRM 2.5 HDGL 1.5 HRC 1.0 Pickling 1.1 Cont. Anneal 0.7 HRP&O 1.1 CRC (Anneal) 0.7 HDG 1.5 HRC 1.0 HRP&O 1.1 CRC 0.7 HDG 1.5 Stainless 1.0 Total HSM Capacity 5.3 Stainless Rolling 1.0 GA.55 GI.65 AL.15 AZ.15 11

12 Best-in-Class Hot Strip Mill provides competitive advantage Head-to-Head Comparison of U.S. Home Market Hot Strip Mills Thickness Inch mm Calvert, AL thickness 73.6 width Wide-ranging product mix Tolerances and gauge control Superior surface quality Advanced steel grades 5 Best-in-Class Width Inch mm 7 # Finishing Stands Group LC MnB CMn IF ULC HSLA HSLA/API DP Commercial Grade DS, CS, FS, SS25, SS30, SS33, SS36, SS37, 1005 BH240 BHS35, BHS31,SHS35, SHS31,FS, DS, CS, SS25, SS30, SS33, SS36, BH220, CSTYPEB HR3, DS w/ B HR2, CS, DS, FS, SS25, SS30, SS33, SS36, SS37 270LA, CS, SS30, SS33, SS36, SS37, SS40, 1007, 1008, 1009 SS33, SS36, SS37, SS40, 1010 SS36T1, SS40, BH280 A36, SS36, SS40, SS , MBW1500 A36, SS36, SS40, SS45, 440TS SS33, SS36, SS37, SS40, SS45, 1015, 1017 BUMPER, 440TS, DP 1018, 1019, SS36, SS37, SS40, SS45, 1018, 1019 A36, SS36, SS40, SS45, SS50, SS55, 1021,1022 SS55 DDS Type C, 180 IF DDS, BH210, VIT III EDDS, DDS, DDS Type A,DS Type A, CS Type C, CS Type A BHS26, SHS26, SS25, CS Type C, CS Type A HSLAS 40, HSLA45 HSLA50, 340XLF HSLAS 50, HSLAS 55, HSLAS 60 HSLA 80 HSLA 80 (CR, GI, GA) API X52, HSLA55, HSLA50, HSLA45 API X52 - X60, HSLA50, HSLA55,HSLA60 API X60 - X65, HSLA55, HSLA60, HSLA65 API X65, 590TS APIX70 APIX70,HSLA65,HSLA70 DP W600 DP 600 (GI, GA) DP 600 (CR) 12