Scenarios and drivers - for High & Low salmon prices 2018 BRUSSELS SEMINAR Hotel Bloom 23rd Apr 2018 by Ragnar Nystøyl
Atlantic Salmon Market Development All markets 2015 2016 16/15 2017 17/16 2018e 18/17 Q1 534 900 562 200 5,1 % 523 900-6,8 % 571 500 9,1 % Q2 552 100 530 900-3,8 % 517 300-2,6 % 548 400 6,0 % Q3 589 600 553 300-6,2 % 575 700 4,0 % 607 100 5,5 % Q4 631 800 576 100-8,8 % 643 400 11,7 % 684 700 6,4 % Total 2 308 400 2 222 500-3,7 % 2 260 300 1,7 % 2 411 700 6,7 % 2018 - Q1: EU: + 15 300 tonnes (+ 6,7 %) USA: + 7 500 tonnes (+ 6,9 %) Japan: - 300 tonnes (- 2,0 %) Russia: + 6 000 tonnes (+ 38 %) All Others: + 19 100 tonnes (+ 12,4 %) Totalt: + 47 600 tonnes (+ 9,1 %) Price Change Q1: In NOK: - 8 % In EUR: - 14 %
Development through the quarter. A different story Supply All Markets Spot price change In NOK (& EUR)
Feedsales development ; Including 2017 EUROPA AMERICAS
Outlook; Harvest volume Atlantic salmon Expectations can change swiftly Our estimate Medio Jan 2018: + 7 % : + 155 000 tonn WFE Our estimate Ultimo April 2018: + 4 % : + 86 000 tonn WFE - What did happen during these 3 months?
Feedsales Europe; Q1-18 Norway: - 10 000 tonnes (- 4%) Scotland: - 13 700 tonnes (-25 %) Færøyene: - 4 800 tonnes (- 20%) Total sample: - 28 500 tonnes ( - 8 %)
Feedsales Americas; Q1-18 Chile: + 15 000 tonnes (+ 6 %) Herof Atlantics: + 10 000 tonnes (+ 4 %) North America: + 5 000 tonnes (+ 10 %) Americas - Atlantic + 15 000 tonnes (+ 6 %)
Relative Feeding; Atlantics Chile
Relative Feeding; Atlantics Norway
NOK / Kilo Contract prices (& Contract-level) 80,00 70,00 60,00 SSB Nasdaq +1,00 +2,16 +0,25 +2,95-0,74-0,49-3,03-4,34-1,60 50,00 40,00-2,45-2,67-2,80-1,72 30,00 20,00 10,00 0,00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 2018
European price vs. American price
Americas Atlantic Salmon Harvest Estimates per Quarter Hereof: North America + 1 000 tonnes (+ 2 %) Chile + 33 000 tonnes (+ 25 %)
US West Coast; Fresh Whole Strong large-fish premium
Europe Atlantic Salmon Harvest Estimates per Quarter
EU Major growth countries Q1-2018 Q1-17 Q1-18e Chg. % Chg. Volume France 41 210 45 230 10 % 4 020 UK 31 340 34 090 9 % 2 750 Italy 18 530 21 450 16 % 2 920 Belgium 6 550 7 940 21 % 1 390 Finland 6 090 7 470 23 % 1 380 Sweden 12 640 13 900 10 % 1 260 Spain 17 880 18 820 5 % 940 Portugal 3 410 4 080 20 % 670 Netherlands 16 330 16 920 4 % 590 Germany 47 710 46 470-3 % -1 240
Fresh salmon Retail price level; «Not competitive» or Change of league?
Fresh salmon Retail price level; «Not competitive» or Change of league?
Alternative Europe Supply Scenario - Second Half 18 Focus Norway
Norway; Relative Feeding «Before» and «Now»
2018; A «late» cold winter / Cold spring Also affecting end-april- & May-growth
Compensation Growth?? Second Half 2018??
Compensation Growth 2nd Half 18 Effects vs. Std. Scenario... July December 2018: Increased Feedconsumption: Increased Harvest volume: 55 000 tonnes 35 000 tonnes WFE Hereof Q3 15 000 tonnes «Hereof Q4 20 000 tonnes «Increased Average Harvest weight + 0,10 0,12 kilo
Scenarios For High / Low Salmon Prices
Q2-2018 Spot Price? (In NOK) Scenario A: At Q2-2017-level (Mid) Still decline feedsales Europe May picking up in June Scenario B: At Q1-2018-level (Low) Retail price level shifts up (Fresh) + No campaigns. Current price level hampering Asia / China sales Chile presence Compensation growth already from May. Scenario C: Over Q2-level (High) Asia sales
Second Half - 2018 Scenario A: 2016-level (NOK 61 66; High) No compensation growth Sea-lice combat not making this possible Further challenges Scotland, Faroes, Iceland Chile productivity declines.. EUR / NOK stilll above 9,50. Absence China grey trade -> Spurring demand/smoothing normal channels.. Scenario B: 2017-level (NOK 50 56; Low) Q2-18» - Slow harvests May /June -Europe yet production picks up Compensation growth in Norway + other Europe Chile surprise positively with respect to productivity & Growth pressure US The price-hike from Q1-Q2, has seriously hampered demand in Europe No campaigns in Q3, Reluctance from buyers EUR / NOK below 9,30 - New protectionism measures from China? Scenario C: As Fishpool (NOK 57 60; Mid) A mix of Scenario A & B?
Playing with statistics.. Last 15 years; - Norwegian Spot price (NOK) How many years have 2nd Half price, been below the April-price? How many years have the Q2-price, been higher than the Q1-price? How many years have the 2nd Half price, been more than 5 % below the Q2-price? How many years have the 2nd Half price, been more than 10 % below the Q2-price? How many years have the Q4-price been higher than the Q3-price?
Last 15 years; - Norwegian Spot price (NOK) 2nd Half price, below the April-price? 11 out of 15 5 out of 6 with «Cold winters» Q2-price, higher than the Q1-price? 9 out of 15 5 out of 6 with «Cold winters» 2nd Half price, more than 5 % below the Q2-price? 9 out of 15 5 out of 6 with «Cold winters» 2nd Half price, more than 10 % below the Q2-price? 4 out of 15 3 out of 6 with «Cold winters» Q4-price, higher than the Q3-price? 6 out of 15 (Hereof 5 during the last 6 years) 1 out of 6 with «Cold winters»
Thank you for the attention RN@kontali.no