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					         ELG Haniel GmbH




Development Of The Stainless Scrap
        Industry In China

            Michael G Wright
             October 2005




THE FUTURE IN STAINLESS STEEL
                      Outline



1 Asia in the World Stainless Steel Markets

2 Present Status of Asian Stainless Scrap Markets

3 Stainless Scrap in China

4 Conclusions
         1

  Asia in the World
Stainless Steel Markets
   Stainless Production – Status 1995/2004
                             ‘000 tonnes
                                           Growth
                     1995           2004
                                             Rate
Japan                3,925         4,187      0.8
China                 380          2,800     29.1
India                 500          1,420     12.0
Taiwan                434          1,607     13.3
South Korea           707          2,337     12.4
Subtotal             5,946        12,351      8.0
Ratio in %            39.1          49.5
Rest of World        9,269        12,611      3.6
Ratio in %            60.9          50.5
Total               15,216        24,963      5.5
                Stainless Demand Structure
                                          ‘000 tonnes
                                                        Growth
                                      1995      2004
                                                          Rate
Japan                                 2,420     2,661      1.0
China (incl. Coils for Re-Rolling)     928      5,331     21.9
India                                  558      1,175     10.2
Taiwan                                 783        965      2.4
South Korea                            830      1,208      6.1
Other Asia                             374        706      8.1
Subtotal                              5,893    12,045      8.8
Ratio in %                             46.2      55.0
Rest of World                         6,849     9,845      3.4
Ratio in %                             53.8      45.0
Total                                12,742    21,890      6.1
                                                Stainless Steel Demand 2004

                                       22

                                       20

                                       18

                                       16
Growth Rate 1995 - 2004(e) in % p.a.




                                       14

                                       12       China
                                                             India
                                       10
                                                                     Others
                                        8
                                                                                        Average Growth Rate: 6.0%
                                        6

                                        4
                                                                                    Europe               Other Asia   America        Japan
                                        2

                                        0
                                            0   10      20      30            40         50         60          70     80       90           100

                                                                                   Share of Total in %
          2

Present Status of Asian
Stainless Steel Market
Asia - Stainless Scrap Market Parameters
                        2004

                   in ´000 t
  4,500

  4,000
                               Exports
  3,500                          556
                   Imports
  3,000             1.376

  2,500

  2,000
                                         Demand
  1,500                                   3.460
          Supply
  1,000    2.640

   500

     0
        Asia - Stainless Scrap Market Parameters
                              2004


                                 ‘000 tonnes
               Availability     Exports     Imports   Demand
Japan                  960           218       151       893
China                  800            39       258      1,019
South Korea            430           106       475       799
Taiwan                 270            53       334       551
India                   40                     158       198
Other Asia             140           140
Total                2,640           556      1,376     3,460
         3

Stainless Steel Scrap
       in China
     Stainless Steel Production - China



                  2004   2007f   2010f   2015f GR (%)
Crude Stainless
                   2.8     5.2     8.1    14.4   15.1
Output (mill t)


Product Mix
Austenitic (%)    67.1    64.0    68.0    68.0
Ferritic (%)      13.7    15.0    10.0     7.0
Low Ni CrMn (%)   19.2    21.0    22.0    25.0
            Crude Stainless Melting Performance - China

            16.0
                                         Actual                                             Forecast
            14.0
                                                                                            G.R.: 15.1 %
                      100%
            12.0          90%
                          80%
                          70%
            10.0          60%
in Mill t




                          50%
                          40%
             8.0          30%
                          20%
                          10%
             6.0
                          0%
                                2004         2007              2010          2015

             4.0                Austenitic          Ferritic           Low Ni CrMn




             2.0

             0.0
                   1990                1995                           2000           2005      2010        2015
                            China’s Growing Scrap Reserves


            70.000

                       Cumulated Values   1990     2004     2015
            60.000                               in Mil t
                       SS Consumption     2.4       18.8    64.5
                       Reclaimed Scrap    0.1        1.1    14.6
            50.000     Scrap Reserve      2.3       17.6    49.8
in ´000 t




            40.000
                                                              Net Austenitic Stainless
                                                              Steel Consumption
            30.000

            20.000                                                                       Scrap Reserve


            10.000
                                                                                                Reclaimed Scrap
                                                                                                Consumption
                0
                     1980       1985      1990         1995        2000           2005      2010         2015
      Impact of Cr Mn Cu Grades on Stainless Scrap Markets



 Cr Mn & Cr Mn Cu grades are poisonous for all types of
  Stainless Steel Scrap

 Detection of these grades from 18/8 Stainless Steel grades
  is extremely difficult

 With more usage of more Cr Mn & Cr Mn Cu grades the
  scrap reserve will be severely contaminated

 This contamination will create major problems for both
  Stainless Recyclers & Melters alike.
                    Stainless Scrap Recycling Potential

            3,000


            2,500


            2,000
in ´000 t




            1,500


                                                             Reclaimed &
            1,000                                            Blended Scrap


             500
                                                           Industrial Scrap

               0
               1980     1985   1990   1995   2000   2005         2010         2015
            Austenitic External Scrap - China



                                         2004   2007f   2010f   2015f
Austenitic Melting Production (mill t)    1.9     3.3     5.5     9.8

Scrap Input (mill t)                      0.9     1.5     2.5     4.5

Scrap Ratio (%)                          45.2    45.5    45.5    45.8

Scrap Availability (mill t)               0.8     1.1     1.7     2.9

Deficit (mill t)                         -0.3    -0.4    -0.8    -1.6
    4

Conclusions
                    Outlook (By 2015)


 Asia might produce 31 mill t of Stainless Steel, which will
  be some 63% of World Production

 Asia's Crude Stainless Output includes 18.5 mill t austenitic
  grades, 5.4 mill t Ferritic & 6.7 mill t Low Ni Cr Mn grades

 Asia's Stainless Scrap Requirement will triple to 8.6 Mill t,
  which corresponds to 51% of Global Stainless Scrap
  Availability
                    Outlook (By 2015)

 China might produce14.4 mill t of Stainless Steel which will
  be some 30% of world production

 China’s output includes 10 mill t of austenitic grade, 1 mill t
  of ferritic & 3.4 mill t of Ni Cr Mn


 China’s Stainless Scrap requirement will increase 5 fold to
  4.5 mill t which corresponds to 27% of global Stainless
  Scrap availability


 China will need to increase imports from 0.3 mill t to 1.6
  mill t or 10% of total world Stainless Steel availability
THE FUTURE IN STAINLESS STEEL

				
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