Hadi Hami General Manager, Norecom Group (Middle East and Africa Steel Specialist) FLUORSPAR CONFERENCE 2012

Transcription

1 MENA STEEL MARKET (OPPORTUNTIES&CHALLENGES) Hadi Hami General Manager, Norecom Group (Middle East and Africa Steel Specialist) FLUORSPAR CONFERENCE

2 MIDDLE EAST AND NORTH AFRICA STEEL MARKET WHY MENA? - About Middle East and North Africa (MENA) - MENA Challenges and Opportunities in 2011/ MENA Steel and Raw Materials Market - Metspar Market, Demand and Supply Dynamics 2

3 WHY MENA IS IMPORTANT TO METSPAR? DIRECT (DEMAND) 3kg Metspar required for every tons of steel made Metspar = Almost a mandatory value added raw materials for steel making MENA to achieve production of about mio MT steel a year IN-DIRECT (ENERGY, POLITICS, ECONOMY, DIVERSIFICATIONS, ) MENA political changes and its influences in the world economy MENA and it s impacts on the world s energy prices MENA= key world s critical region= Changes world s steel production trends 3

4 4

5 MENA ECONOMY- GLOBAL OPPORTUNITY OR CHALLENGES? - MENA largely recovered from global financial crises by Prodemocracy movements began in the region - Regime changes in Tunisia, Egypt, & Libya and speared to Syria and Yemen, Bahrain - Investment will be delayed and economic challenges will emerge - Short-run has big challenges because of the political changes - Potential to boost economic growth and raise living standards in medium run - More competition and political stability to come after revolutions - Attractive investment and rapid growth to come - Result varies in countries depend on how swiftly/credibly states can commit to reform - GCC to support the region to robust growth above 5% - Growth rates varies depending on whether the country is oil exporter or importer - Economic Growth in GCC more stronger than the others - Inflation rates to be increased in most of MENA countries Continued. 5

6 - Growth of oil importers in North Africa to be about 2 % - Growth of oil importers with GCC links to be about 4% - Growth of Oil exporters (NON GCC) in average at about 1.8% - Growth of Iran to be about 3 % - Growth of oil exporters (GCC) at 5.0 %. - Demand could go high because of government expenses - Main risk to forecasting is lack of clarity about the future political transitions - Meanwhile drop in tourism and investments in the unrest countries. - Boost expected in 2013 with more political stability - Many more opportunities to come on a long-term. many challenges in the MENA but the opportunities are much more 6

7 CHALLENGES FACING MENA & GLOBAL STEEL INDUSTRY Possible MENA uncertain regional political power changes Instability in the Arab world economy followed by the recent regional political issues and the eventual changes in the areas of supply and demand. Iran sanctions Exposure to steel price volatility. Long & varying lead times for imports force distributors to hold 3-4 months inventory whereas pricing cycles much quicker now Currency fluctuations and its effects on imports and exports trends Credit risk with end users, A massive issue in current environment. While many of the insurance firms have walked a way from the market Pure distribution have low barriers to entry Mills developing their own distribution assets, clients attempt direct sourcing Rising costs of resources, possible higher oil prices and availability of human capital Working capital funding challenging for all but the largest firms Price competition pressure to MENA producers by Chinese lower exports offers (weakening local China demand and exports(e.g to Europe) lowers the demand) Too many players 7

8 . 8

9 9

10 CONCLUSION MENA remain as a critical and important region in the world Massive reserves in Gas, Water, Electricity, Cheap Labour Having tax heaven places such as Dubai(free tax regime) Metspar sales to the regional steel and aluminum factories the way to have other raw materials sales into the region too (Iron ore, Met Coke, Coal, Pig iron, Ferro Alloys, Scrap, HBI, Pellets, etc) There are challenges to do business with MENA but the opportunities are more 10

11 Thanks for your attention For questions regarding this presentation, and/or the MENA steel market, contact undersigned: Hadi Hami, General Manager Norecom Group Mobile(Canada): Mobile(UAE): E: h.hami@norecomltd.com & hadihami@gmail.com Tel(UAE): Tel(Cyprus): Tel(Germany): +49(0)69/