Industrial Titanium Demand Forecast 2013

Transcription

1 A World Leader In Titanium Industrial Titanium Demand Forecast 2013 Kevin J. Cain Overview and 5-Year Forecast an VSMPO-AVISMA Corporation Joint Venture

2 Key Findings The world s population will rise more than 25% from 2010 to 2040 reaching 9 billion. A majority of the population growth will reside in Africa, India, China and other developing countries. The global economy is expected to grow an average of 2.8% per year from now through Economic growth in the developed countries will be led by the USA. Source: United Nations, World Population Prospects: The 2012 Revision, IMF 5-year forecast: April 2013, Exxon Mobil 2

3 Global Population Growth 7.1 billion now ~ 10 billion by World Population (Billions) More developed regions Less developed regions Source: United Nations, World Population Prospects: The 2012 Revision 3

4 Economic Growth Regional GDP Growth GDP Growth 15% 10% 5% 0% World China India United States European Union Middle East and North Africa CIS % 7% 4% 3% 2% -5% Source: IMF 5 year forecast: April 2013 (growth at constant prices) 4

5 Key Findings The world s population will rise more than 25% from 2010 to 2040 reaching 9 billion. A majority of the population growth will reside in Africa, India, China and other developing countries. The global economy is expected to grow an average of 2.8% per year from now through Economic growth in the developed countries will be led by the USA. Source: United Nation, World Population Prospects: The 2012 Revision, IMF 5-year forecast: April 2013, Exxon Mobil 5

6 Industries for Ti consumption Energy Chemical Processing Desalination 6

7 Energy Energy Outlook Global energy demand will increase by 35% over the next 30 years. Approximately 65% of that growth will come from developing countries. Source: Exxon Mobil 7

8 Energy Energy Outlook Oil & Gas Power Generation 8

9 The role of unconventional fuel Global liquid fuel supply & resources Million barrels per day oil equivalent Liquid fuel supply by type Conventional crude and condensate Biofuels Other Natural Gas Oil sands Tight oil Deepwater Source: EIA 9

10 The role of unconventional fuel Conventional vs. Unconventional Gas Billions of cubic feet per day Natural gas supply Rest of world unconventional North America unconventional Rest of world conventional North America conventional North America natural gas demand by supply type in 2040 Unconventional Local Conventional 80% By 2040, close to 80% of North America gas supplies will be produced from local unconventional resources LNG Source: ExxonMobil 10

11 Oil & Gas Demand for oil is forecasted to increase by 30% over the next 30 years (Exxon Mobil) Natural gas is likely to increase 60%. Growth in unconventional supplies to account for 60% of the increase (Exxon Mobil). Use of titanium Deepwater platforms FPSO s (Floating Production, Storage & Offloading Vessel) LNG plants Degasification plants Water filtration / purification plants Heat transfer equipment Approximately 3500 MT to 5000 MT will be consumed per year over the next 5 years (Source: Internal estimate). 11

12 Energy Energy Outlook Oil & Gas Power Generation 12

13 World Net Electricity Generation Trillion kwh OECD Americas OECD Europe OECD Asia Europe and Euraisa Middle East & Africa India & Other Asia China Central and South America Forecast CAGR * 3.2% Forecast CAGR * 1.3% 4 Forecast CAGR * 3.5% Source: Energy Information Administration International Energy Outlook 2013 * CAGR: Compound Annual Growth Rate 13

14 The role of unconventional fuel Remaining global natural gas resources World total trillion cubic feet Source: ExxonMobil North America 4.0 Latin America 2.8 Europe 1.6 Middle East 4.8 Africa 3.1 Russia Caspian 6.6 Asia Pacific 4.8 Thousand trillion cubic feet Unconventional Conventional

15 Power Generation New Online Capacity Capacity (GW) CAGR * 15% Standard Thermal Combined Cycle Gas Nuclear Power CAGR * 6% 50 - Source: Internal estimate * CAGR: Compound Annual Growth Rate Online Year 15

16 Power Generation: Ti demand Electricity: Titanium Demand Approximately 7000MT to 8000MT will be consumed per year over the next 5 years. Use of titanium Welded tubes Tube sheets Heat transfer equipment Source: Internal estimate 16

17 Industries for Ti Consumption Energy Oil & Gas Power generation Chemical Processing Desalination 17

18 Chemical Processing Global investment in Asia and Middle East Capital investment shifting to North America. Natural gas liquids (NGL) $100b of incremental capital investment by 2025 Global capital expenditures NGL s PTA (pure terephthalic acid); polyester film and filter production Urea/ammonia nitrate; crop fertilizer Chlorine/caustic soda Source: Bank of America Industry Overview May 20,

19 Chemical Processing Titanium end-use applications General fabrication of tanks and vessels Piping systems Heat transfer equipment Fittings and fasteners Welded tubing It s estimated that the average annual consumption of titanium in the chemical process industry will range from 9,500 MT to 12,000 MT. Source: Internal estimate 19

20 Industries for Ti Consumption Energy Oil and gas Power Generation Chemical Processing NGL s PTA Urea Chlorine / Caustic Desalination 20

21 Desalination Applications Removes salt from seawater for and potable end use Clean wastewater streams (ex. Frac flow back water from shale gas) Technologies Reverse osmosis (RO) Thermal (MSF and MED) 21

22 Desalination Technology Split 2013 to 2018 Contract Value ($ million) million m 3 /d 5% 6% 4,400 6,100 MED MED MSF MSF 58,700 RO & ED/EDR 89% RO & ED/EDR Source: Desaldata Forecast, June

23 Desalination Forecast Drivers Industry rather than municipal is strongest driver Source: Oxford, UK (PRWEB) August 22, 2012 by Jeremy Brown Capital expenditure will grow from $2.8b (2011) to $5.7b (2017) Source: Oxford, UK (PRWEB) August 22, 2012 by Jeremy Brown Fastest growing economic regions also have the lowest amount of fresh water; India, China and the Middle East Copper (copper alloy desal tubes) released into the sea from Gulf Coast desal plants is becoming problematic and could drive future technology in favor of titanium (Source: Dr. Ing Tobias Bleninger & Professor G.H. Jirka, PhD, Karlston Institute of Technology, Germany) 23

24 Desalination Regional Desal Demand Millions 7 6 Middle East and Africa Asia South Pacific Americas Europe Other Capacity (m 3 /day) Source: Desaldata Forecast, June Online Year 24

25 Desalination: Thermal Capacity Forecast Capacity (m 3 /day) Thousands 1,800 1,600 1,400 1,200 1, Source: Internal Estimate CAGR * 7% * CAGR: Compound Annual Growth Rate Online Year Small Thermal (0-12k m3/d) Large Thermal (12-50k m3/d) Extra Large MSF (>50k m3/d) Extra Large MED (>50k m3/d) CAGR * 6% 25

26 Thermal Capacity: Desalination The pipeline for titanium mill product shipments to the start-up of a desal facility can range from 1 to 3 years. In the last 3 years nearly 12,000MT of coil for welded tube was produced to support the Ras Al Kahir (Ras Az Zour) and Yanbu III projects. Doosan Heavy Industries is the contractor on both projects. For the next 5 years capacity will grow at a 6% CAGR (compound annual growth weight). Titanium demand will range from 750MT to 2000MT per year over the next 5 years. Source: Internal estimate 26

27 Industries for Ti Consumption Energy Oil and gas Power generation Chemical Processing NGL s PTA Urea Chlorine / Caustic Desalination MED MSF 27

28 Industries for Ti Consumption Others Medical Mining Cathodic Protection Automotive Recreational Shipbuilding / Marine Architecture 28

29 Industries for Ti Consumption (Source: Architectural Titanium) 29

30 Global Forecast: Industrial Ti 2011 through 2013: Average industry shipments; 33,000MT 2014; 29,000MT 2014: Decline in desalination, continued improvement in other major industrial sectors. From 2014 to 2018: 29,000MT to 35,000MT with support of Chemical processing, Energy and Desalination infrastructure industries. Source: Internal estimate 30

31 Titanium Industrial Demand History and Forecast Metric Tons (x1000) Chemical Processing Power Automotive Metallurgy Oil & Gas Chlor-alkali Desalination Architecture Shipbuilding Med. & other Historical Forecast Does not include shipments within China Source: Internal estimate 31

32 A World Leader In Titanium Industrial Titanium Demand Forecast 2013 THANK YOU! Kevin J. Cain President, Uniti Titanium an VSMPO-AVISMA Corporation Joint Venture