9M 2019 Preliminary Results 17 December 2019
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Industry overview
Global steel, iron ore and coking coal markets • In 2019, global steel production is expected to Steel price and production in Europe 2 Global steel industry show another year of growth (+2.0% y-o-y), mainly amid strong increases in China, Vietnam, India, MT 1,853 the US and Iran. Consumption of finished steel is 1,817 3 Steel production in Europe, MT (RHS) 1,732 1,760 1,709 forecast to increase by 3.0% y-o-y in 2019 1,629 1,634 HRC, US$/t (LHS) 1,520 650 22 • In 2019, global steel prices have been decreasing 21 amid weaker demand in most regions, including 20 500 Europe, intensified trade tensions and 19 18 expectations of a global recession 17 350 • Sluggish demand in Europe and high raw material 16 15 prices have pushed European steel producers to 200 14 reduce production. Economic stimulus measures Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 2016 2017 2018 2019F have been announced across major economies 1 Crude steel production Finished steel consumption • In 3Q 2019, HRC FOB Black Sea decreased by 5% q-o-q and 17% y-o-y to US$466/t Source: World Steel Association, Metinvest estimates Source: World Steel Association, Metal Expert • In 3Q 2019, the 62% Fe iron ore price remained high at an average of US$103/t (US$101/t in 2Q Hard coking coal price 5 Iron ore price 2019) amid a supply deficit from Brazil and strong US$/t US$/t demand in Asia Quarterly contract Daily spot index • In September 2019, the Atlantic basin pellet 300 4 premium contracted to US$40/t, from US$61/t in 240 August, amid lower steel production in Europe • In 3Q 2019, the average hard coking coal contract 180 price decreased by 14% y-o-y to US$178/t, mainly 120 amid improved supply conditions 60 1. Apparent consumption of finished steel products Jul-16 Jul-17 Jul-18 Jul-19 Jan-16 Apr-16 Oct-16 Jan-17 Apr-17 Oct-17 Jan-18 Apr-18 Oct-18 Jan-19 Apr-19 Oct-19 2. Europe includes EU 28, Bosnia-Herzegovina, North Macedonia, Norway, Serbia and Turkey 3. FOB Black Sea 4. 62% Fe iron ore fines, CFR China 5. FOB Australia Source: Bloomberg, Platts Source: Bloomberg, Platts 4
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