Global Automotive Market Trends and the Impact on the Steel Industry. Dr. Heinz-Jürgen Büchner Istanbul, 7 September 2015

Transcription

1 Global Automotive Market Trends and the Impact on the Steel Industry Dr. Heinz-Jürgen Büchner Istanbul, 7 September 2015

2 Agenda 2 1 The Macroeconomic Environment with Risks 2 Trends in the global Automotive Industry: Smaller and more energy efficient? 3 Consequences for the global Steel Industry Appendix

3 Agenda 3 1 The Macroeconomic Environment with Risks 2 Trends in the global Automotive Industry: Smaller and more energy efficient? 3 Consequences for the global Steel Industry Appendix

4 World Economy 2030: China moves ahead, India catches up with EU and US 4 Population in million GDP in PPP in prices of 2005 in bn US-$ China China India India EU28 EU28 USA USA Brazil Brazil Russia Russia Forecast Forecast 2030 Source: E.I.U.

5 US Economy: Broad Improvement with some Risks 5 US consumer confidence Conference Board (1985=100) University of Michigan (1966=100) S&P Case-Shiller-Housing index, (2000=100), n. s. adj New orders, durable goods, in % mom, s. adj In detail The US economy shows a very solid development. The GDP grew by 3.7 per cent in the 2 nd quarter of 2015 Even the manufacturing sector had a strong growth in July Risks for the US economy could result from the stronger US-Dollar and a lacking demand from Asia A steadily declining unemployment rate and a lot of newly created jobs should stimulate the private consumption even in the second half of 2015 Sources: Bloomberg; BLS; IKB

6 Euro zone: Improvement amid positive general conditions 6 Real GDP growth in %, qoq Real GDP growth in %, qoq Finland Slowakia Portugal Austria Netherlands Lithunia Latvia Cyprus Italy France Spain Greece Estonia Germany Belgium Q2 2015Q1 Euro Zone 2015Q1: Q2: 0, Q1 2011Q4 2012Q3 2013Q2 2014Q1 2014Q4 2015Q3 In detail Forecast We see signs of a further improvement in the Euro zone. The growth rate was higher in the second quarter of 2015 and GDP improvement could be observed in some countries. But Italy (0.3 %) and France (0 %) lagged behind Therefore, IKB forecasts GDP growth of 1.5 % for the Euro zone in total The depreciation of the Euro, lower oil prices and low interest rates should stimulate growth in the Euro zone Sources: Eurostat, IKB research (seasonally adjusted )

7 Crude Oil: The golden Days of low Prices? 7 Brent oil price; US-$/barrel North America rig count: oil A temporary oversupply During the first seven months of 2015 the global crude oil market shows an oversupply mainly driven by a high production of the OPEC countries and the production in the United States In the medium term we forecast a decrease in the crude oil supply. These are the reasons: A reduction in the number of active rigs in the US: Since October 2014 more than a half of all rigs became inactive An investment stop in several North Sea oil fields by the Norwegian producers Most of the OPEC countries need crude oil prices of around 80 US-$/barrel to finance their social welfare programs and to avoid a bigger household deficit From the end of 2016 on, Iran is able to raise its crude oil production by up to 1 mbd (million barrel per day) We forecast a fluctuation of the crude oil price of around 50 US-$/bbl Brent by the end of the fourth quarter of 2015 Sources: Baker Hughes North America Rotary Rig Count; Bloomberg; IKB Research

8 Euro and Renminbi weaker 8 1 EURO = US-Dollar EURO = Renminbi In detail In August 2015 the Chinese central bank started a process of depreciation of the Renminbi against the US-Dollar and other foreign currencies The lower exchange rates are supposed to stimulate the exports of the Chinese economy The weakening of the Renminbi will have a negative impact on European and Turkish exports to China During the last quarter of 2015 higher US interest rate are expected In addition to the trouble in the Euro zone and the Greek crisis this will result in a weaker Euro against the US- Dollar Sources: Bloomberg; IKB

9 Agenda 9 1 The Macroeconomic Environment with Risks 2 Trends in the global Automotive Industry: Smaller and more energy efficient? 3 Consequences for the global Steel Industry Appendix

10 Light vehicles: China dominates while Production in Japan/ Korea declines Global light vehicle production (in million) 10 North America Europe China Japan/ Korea South America Middle East/ Africa South Asia The German car manufacturers are expected to gain market share during the recovery of the Western European automotive industry The positive development in North America results from growing production in Mexico and investments of foreign OEMs in the US South Asia and Japan/ Korea lose production volumes to China Source: IHS

11 Investments in new Capacities: Overcapacities in China expected 11 New branches / capacities 2014; in % Mexico 14.1 USA 17.3 New branches / capacities 2011 to 2014; in % Brazil 9.4 Other 15.9 Other 9.7 China 52.7 In detail Between 2011 and 2014 the global OEM invested around 81.2 bn. US-$ in new capacities for the manufacturing of light vehicles. China held a share of 60 per cent In 2014, more than 24 bn. US-$ were invested. Beside China, Mexico and the Nafta region are of greater importance VW, Daimler and GM are among the leading investors in China BMW, Toyota, Renault-Nissan and GM dominate the investments in Mexico As a result of the high investments in China we forecast overcapacities in the production of light vehicles of up to 10 million units USA 9.5 Mexico 11.5 China 60.0 Sources: Automotive news, Bloomberg

12 Trends in the global Light Vehicles Market 12 E-Vehicles: share in new car registration 1st half 2015; in % E-Mobility a global trend? Norway Netherlands UK France USA Japan Germany China Since 2010: Only 756,000 new e-vehicles registered globally Nearly every second new e-vehicle was registered in the United States 3 In Germany only 9,653 new e-vehicles were registered in 1 st half of 2015: this equals a market share of only 0.6 per cent of all new cars 4 Small vehicles dominate the demand New car registration (cumulated): electric vehicles * Germany 37,815 France 38,372 UK 36,620 Norway 51,684 Netherlands 55,853 ca. 756,000 Vehicles USA (LV) 339,796 China 88,420 Japan 107,554 Sources: IHS; KBA; VDA; Ward s;; IKB Research * 1st half

13 Changing light vehicle material mix Material split in light vehicles; in % In detail Increasing requirements for energy efficiency and stronger emission regulations will support the trend towards lightweight production in the upcoming two decades The biggest loser concerning the change of material application is conventional steel. In the future, only about one fifth of the total materials used will be conventional steel. Another fifth will be accounted for by hightensile steel The light metals aluminum and magnesium will significantly gain in importance Another fifth will be made up by plastics and composites, of which however only a small share is attributable to carbon fibers, mainly used in luxury class Source: VDI

14 Future Development of Fuel Consumption 14 Standard fuel consumption; in l per 100 km Fuel consumption decreases In 2013, the average fuel consumption of a gasoline light vehicle in Germany equaled 5.8 l per 100 km and for a diesel light vehicle 5.2 l. For new car registrations the European NFEZ regulation will result in a reduced fuel consumption and in lower emissions. As a result not only the fuel consumption of new registrations of cars decreases, but also the total average consumption of the complete fleet of light vehicles NEDC regulation New registrations Fleet Source: Shell Light Vehicle Scenario 2040

15 A Comparison of the Energy Costs in Light Vehicles 15 Energy costs in for a 100 km distance How to optimize energy costs In a study Shell analyses the energy costs of different types of power transmission until In a trend scenario the costs for electric vehicles decrease only slightly, in the alternative scenario faster. In the trend scenario the gas fuel types LPG and CNG (compressed natural gas) are the most efficient fuel types. But the ranking position of the different types of fuel changes, if we have a look at the total costs of ownership for a light vehicle with a run of 100,000 km respectively 140,000 km. From 100,000 km on the diesel-driven light-vehicle is the most efficient solution and from 140,000 km on the gasoline-hybrid is the best solution. Trend Alternative Source: Shell Light Vehicle Scenario 2040

16 Classical Combustion Engine dominates 16 World passenger cars by source of fuel; million 2,500 2,000 1,500 1, Other Liquefied Petroleum Gas Natural Gas Vehicle Plug-in-Hybrid Hybrid Electric Vehicle Diesel Gasoline Source: OPEC

17 Emission Regulations stimulate Demand for Trucks 17 Global truck production (in thousand) North America Europe China ,225 1,167 1,141 1,234 1,234 Japan/ Korea South America Middle East/ Africa South Asia Regulations of the European Union and the US target reduced fuel consumption and lower emissions This leads to investments in the modernization of truck fleets Source: IHS

18 Medium and Heavy Trucks: Future Market Trends 18 Sales volume: future market development per segment EU Eastern Europe USA South/Central America ASEAN China India Brazil Russia Japan RoW 0% 20% 40% 60% 80% 100% Low Cost Mid Market Premium Aftersales Future Market trends show a rising importance of the after sales business In Europe, North America and Japan the future demand will concentrate on the premium segment of the business Even in the future the sales in the truck market will be dominated by the low cost segment in India Source: Deloitte Global Truck Study 2014

19 Consolidation in the Medium and Heavy Vehicles Market 19 Regions with the strongest pressure for OEM consolidation in the future; in % China ASEAN India Europe Brazil Russia Japan US RoW The global truck market will consolidate in the near future Mainly in Asia including China we see high pressure for the OEMs to consolidate In Europe the consolidation process has started with Volkswagen, MAN and Scania Source: Deloitte Global Truck Study 2014: Survey-Answers in 5 of respondents

20 China and Russia with high Potential for Consolidation in the Truck Market Number of OEMs present in major markets in 2014 Eastern Europe 19 Medium consolidation pressure Russia 24 US 8 Low consolidation pressure EU 16 Medium consolidation pressure China 34 High consolidation pressure High consolidation pressure India 12 Japan 4 Low consolidation pressure Central America 19 Medium consolidation pressure Medium consolidation pressure Asean 13 Medium consolidation pressure South America 17 Medium consolidation pressure 1) Sources: IHS Global Insight; Deloitte Analysis & Deloitte Global Truck Study 2014

21 Agenda 21 1 The Macroeconomic Environment with Risks 2 Trends in the global Automotive Industry: Smaller and more energy efficient? 3 Consequences for the global Steel Industry Appendix

22 Chinas Crude Steel Production stagnating after All-Time High 22 Production crude steel; in million tons p 2016e 2018p China Europe (since 2008 EU27) USA ROW p = preliminary e = estimated Sources: ISSF ; p = IKB-Forecast Chinas dynamic growth in the crude steel production seems to end in the current year Even in the next years, we only forecast slight growth rates; new capacities will replace some of the old steel mills In addition, we expect higher exports

23 Surface-treated Steel Grades: Rising Importance of China 23 Production of electrical sheet & strip; in million tons Production of tinmill products; in million tons RoW China North America EU RoW China North America EU Production other metal coated sheet & strip; in million tons In detail RoW China North America EU The global production of electrical sheets and strips shows a strong upward trend and a rising importance of China The production of tinmill products mainly for the packaging industry declined. In this market, China only plays a minor role Other metal coated sheets and strips showed a new all-time high in 2013 China holds a market share of over 40 per cent in other metal coated products Sources: Worldsteel; IKB

24 Will Indonesia s Export Ban for NPI end Chinas Stainless Steel Boom? 24 Production Stainless Steel; in million tons p 2017p 2019p America EU/Africa Asia without China China CEE Indonesia s export ban for NPI leads to reduced inventories of NPI ore in China. Currently, China uses more Philippine NPI with a lower metal content Therefore, the production of stainless steel in China becomes more expensive. This could result in a lower competiveness of Chinese stainless steel producers Sources: ISSF ; p = IKB-Forecast

25 Consequences for the global Steel Industry 25 We see a rising demand coming from the light vehicles industry. The classical combustion engine will still dominate even in the medium- and long-term The trend towards light-weight production in the automotive industry will shift the demand from conventional steel grades to high-tensile steel and surface treated steel grades In the long run new systems to secure the steel scrap supply for recycling plants will be necessary We forecast a higher demand for high-tensile steel grades It is necessary to increase the recycling activities

26 Agenda 26 1 The Macroeconomic Environment with Risks 2 Trends in the global Automotive Industry: Smaller and more energy efficient? 3 Consequences for the global Steel Industry Appendix

27 Your Contact 27 Dr. Heinz-Jürgen Büchner Managing Director Industrials & Automotive IKB Deutsche Industriebank AG Eschersheimer Landstraße Frankfurt am Main Phone: Fax: Mobile:

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