steelmaking raw materials in russia - oecd · coking coal • in 2010 export went up by 65% yoy...
TRANSCRIPT
OECD Steel Committee
Steelmaking Raw Materials Workshop
5 December, 2011
Paris
Aleksey Pinchuk
Ministry of Industry and Trade of
the Russian Federation
Yuri Mishin
Metalloinvest
Steelmaking Raw Materials in Russia Availability, challenges, policy
SRM Russia
1. Mineral Resources• Iron Ore
• Coking Coal
• Coke
• Challenges
• Policy
2. Metallics• Scrap
• Pig Iron
• DRI/HBI
• Challenges
• Policy
3. Summary
2
1. Mineral Resources
3
The main iron ore and coking coal deposits
Iron ore: reserves – 99,5 billion mt.
Coking coal: reserves 447 billion mt
4
Iron ore
5
71,9 75,6 75,4 77,7 76,1 69,7 65,1 71,4 72,2
-16,8 -18,4 -19,3 -22,4 -25,3 -21,2 -21,8 -22,3 -28,6
10,1 10,4 9,7 10,6 12,210,8
8,910,6 10,5
-40
-20
0
20
40
60
80
100
2003 2004 2005 2006 2007 2008 2009 2010 2011*
Import Export Domestic supplies
Russian iron ore apparent consumption, export,import, million tonnes
Sources: Rudprom * estimate
Russia is a net exporter of iron ore. Import from Kazakhstan to Russia is determined by
logistics.
Russian share in international iron ore trade is only 2.2% (2010)
In 2011 export shipments are expected to increase by 28%
Iron ore production in 2011 is expected to reach pre-crisis level.
Iron ore
6
Europe is a traditional destination for Russian iron ore exports.
Share of exports to Europe dropped from 60 – 70% before 2008 to 28% in 2011.
Shipments to China are expected to reach 60% of total export sales in 2011.
2,25,4
3,15,7 6,1
9,6 8,8
17,4
9,1
12,710,9 16,5
15,511,6 6,8 9,4
8,1
7,7
3,6 2,9
2,84,1
3,4 5,4 4,1
3,1
0
5
10
15
20
25
30
35
2003 2004 2005 2006 2007 2008 2009 2010 2011*
Other
Europe
China
Russian exports of iron ore concentrateand iron ore pellets, million tonnes
Sources: Rudprom * estimate
Coking coal
• In 2010 export went up by 65% yoy exciding
pre-crisis levels and is expected to grow
further. Russian share in the international
sea borne trade (2010) is about 6.7%.
• Main export destinations: Ukraine, China,
Japan, South Korea
• Import is provided by technological reasons
and shortage of fat coals.
7
53,7 56,2 53,5 58,6 62,454,2 55,6 56,8
42,735,4
42,4
-7,3 -8,8 -9,5 -10,4 -12,6 -11,3 -10,3 -13,3 -13,2 -10,8-17,9
1,51,0
1,51,6 0,8 1,0
1,40,0
0,8
-20
-10
0
10
20
30
40
50
60
70
80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Import Export Domestic supplies
Russian coking coal apparent consumption, export,import, million tonnes
Sources: Railway statistics, Metal Courier, IMH estimates
Coke
• Russia exports about 10% of coke
production.
• Exports of coke grew by 19% in 2010, but is
still below pre-crisis level.
8
30,7 30,5 28,725,3 26,6
-2,0 -3,3 -3,3 -2,1 -2,5
0,3 0,30,4
0,3 0,4
-5
0
5
10
15
20
25
30
35
40
2006 2007 2008 2009 2010
Import Export Domestic supplies
Russian coke apparent consumption, export,import, million tonnes
Sources: Metal Expert
Raw materials challenges
• Transport logistics for both existing mines and new projects
• Geography of new iron ore and coking coal deposits which are
located in remote areas
• Lack of industrial, energy, social and transport Infrastructure
for some of new projects
• High investments for new projects with long payback periods
• Dependence on export markets – price volatility risks
• Development of technology for iron ore treatment/processing
9
Iron ore and coking coal - policy measures
• There are no export and import restrictions for iron ore, coking coal and
coke
• Reasonable and stable natural resources tax on iron ore and coal mining
• No limitations on foreign investments into iron ore and coking coal
mining projects
• Possibility of Government support for infrastructure projects of
nationwide significance (State guarantees on bank loans, co-financing of
infrastructure projects).
• Mechanism for granting mining licenses to companies who conducted
exploration of a new deposit at their own expense
• Duty and tax free import of industrial equipment (not produced in
Russia) for new projects.
10
2. Metallics
11
SRM: Scrap
12
Scrap exports started in mid 90-s and reached its
peak in 2004-2005. Decline of exports since 2006.
Scrap reserves: for 15 years scrap collection
excided consumption of finished steel products.
Raise of domestic demand: EAF projects, extension
of steel continuous casting
18,415,0
10,613,3 13,2 13,1 10,9
13,717,5 18,6 16,8 16,9
20,5 21,926,1
29,524,1 24,0 23,1
0,30,6
1,31,7 2,7 5,3 7,3
7,6
6,8 6,45,8 7,0
12,812,7
9,97,9
5,7 3,3 4,7
0
5
10
15
20
25
30
35
40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Export Domestic consumption
Russian steel scrap apparent consumption, export, million tonnes
Sources: UN Comtrade, Metal Courier, Worldsteel
0
5
10
15
20
25
30
35
40
45
50
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Srap collection
Apparent steel use
Russian steel scrap collectionand apparent steel use,million tonnes
Sources: Rosstat, Metal Courier, Worldsteel * estimate
SRM: Scrap
13
Russian scrap export destinations are changing significantly. In 2005 China and EU were the main
buyers. Since 2009 Turkey and Belarus have taken top positions.
China33%
EU29%
Moldova17%
Turkey5%
Belarus4%Others
12%
Russian scrap export market, 2005
Sources: Metal Expert
12,7 Mt
China1%
EU9%
Turkey38%
Belarus29%
S. Korea12%
Others11%
Russian scrap export market, 2011
Sources: Metal Expert
5,7* Mt
* 10 months date annualized
SRM: Merchant Pig Iron
14
Russia is the main supplier of the international
merchant pig iron market.
The main destinations of Russian MPI are EU,
Turkey, USA.
The share of Russian MPI in the EU market is
about 60% .
EU57%
Turkey14%
USA13%
S. Korea5%
China4%
Other7%
Russian pig iron export market, 2010
Sources: UN Comtrade
3,9 Mt
5,6 5,34,5
3,94,3
0
1
2
3
4
5
6
2007 2008 2009 2010 2011
Russian exports of pig iron, million tonnes
Sources: UN Comtrade, Metal Expert * estimate
Russia35%
Brazil21%
Ukraine13%
Other31%
World export of pig iron, 2010
Sources: UN Comtrade, Worldsteel
11,1 Mt
SRM: DRI/HBI
15
With 2.5 Mty of HBI shipments Russia is one of the
major players in the global market.
Further development of HBI production: construction
of new 1.8 miln. tpy HBI plant at Lebedinsky mine
(Metalloinvest).
EU36%
Ukraine24%
S.Korea11%
Turkey10%
Iran6%
Russia4%China
4%Other5%
Russian DRI shipments, 2008
Sources: Metalloinvest
2,2 Mt
EU34%
Ukraine15%
Russia16%
China32%
Other3%
Russian DRI shipments, 2011
Sources: Metalloinvest
2,6* Mt
* 10 months date annualized
DRI60%
Russia34%
HBI40%
World DRI/HBI shipments, 2010
14 Mt
Sources: Midrex, Metalloinvest
Metallics challenges
16
• Increase of steel EAF production is pushing worldwide
demand for iron and steel metallics.
• Raising domestic demand and limited availability are creating
conditions for scrap shortages in Russia in the near future.
• Development of new projects for HBI production in Russia.
Metallic's - policy measures and plans
17
• Export duty on steel scrap (15% or 15 Euro) will be reduced according to
WTO Accession Protocol.
• No export and import tariffs or quotas on pig iron and DRI/HBI trade.
• No import duties on DRI/HBI production equipment.
• Existing merchant pig iron and HBI capacities, new DRI/HBI production
projects will help to satisfy demand for iron and steel metallics.
SRM Russia
18
3. SUMMARY
• Russia has no trade restrictions for the main Steelmaking Raw Materials.
• Russia has no restrictions for foreign investments in SRM projects and
in Iron & Steel sectors.
• Russia will further develop its position as the leading global supplier of
primary steelmaking metallics.
• Government support for infrastructure projects (co-financing from the
RF Investment Fund, granting of state guaranties for bank loans)
• Availability of steelmaking raw materials and energy provide favorable
conditions for further development of competitive Iron and Steel
production in Russia.
19
THANK YOU!