Damstahl Stainless Steel Report June 2014

Transcription

1 Damstahl Stainless Steel Report e 2014 Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 1 -

2 Report on Market Highlights Issue 23, e 2014 Contents Stainless Steel at a glance European industry news & Business climate (PMI) Market Performance: Relevant Issues in Germany Netherlands Denmark Sweden Norway Slovenia Raw materials Focus of the Month: Europe: Target for Asian Mills Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 2 -

3 Stainless Steel at a glance So far, so good... further improvement expected for HY2/14 Demand: After a satisfactory Q1/14, the European market is driven by a strong stainless steel end-user demand also in Q2/14, supported by an ongoing re-stocking activity for commodities. High nickel prices (~21,000 USD/t in Mid- May) motivated distributors to place their orders in anticipation of further rising prices. Stockholders will give up hesitance as they are afraid of waiting too long and miss the opportunity. Mills: The erosion of the base prices in Europe came to an end at the beginning of Q2/14, which brings European mills in a better position for the next months. However they still struggle against mills such as Posco Assan in Turkey as well as Chinese, Taiwanese and Indian suppliers. It is expected that base prices have bottomed out and that mills will succeed with further price increases. Demand will improve in HY2/14, but on the other hand the profit situation remains a critical issue for European mills, even if two out of three major stainless steel flat producers in Europe were in the profit zone in Q1/14. In the first two months of 2014, the stainless steel crude steel production volume was ~1.35 mill. t slightly below the tonnage melted a year ago. It is expected that the European crude steel production will remain on a high and stable level in the next months. In spite of the closure of Outokumpu s Krefeld melt shop, a production growth of ~2% is forecasted by SMR for this year. Prices: The price situation remains different between European countries. Whereas in Germany ex-stock distributor sales prices are below 2,200 EUR/t, they have increased in Italy and Eastern Europe partially to around 2,350 EUR/t. Stocks: Stockists will continue to re-stock in Q2/14 due to the momentum of rising Ni prices. The stock-reach for flat products is expected to increase again after it has reached a critically low level of below 50 days in Germany. End Use Segments: It is expected that the European cold rolled market will grow in real demand terms by 3-4% in 2014 (excluding Turkey). Indicators are positive for all major end use segments. Building and Construction: According to the latest Eurostat figures, construction output in the EU28 was up 6.7% in Q1/14 (yoy). While some main markets such as Germany (+14.3% yoy), Spain (+19.5% yoy) and Poland (+10.3% yoy) showed a strong growth, Italy posted a completely different trend (-5.4% yoy) due to the fact, that it continued to be affected by a general economic crisis. Consumer Goods: Economic expectations and willingness to buy is gaining strength. The consumer confidence in Germany remains steady at 8.5 points for the fourth straight month in e. Automotive: The important Western European automotive market continues to grow. The number of new passenger cars registered reached ~1.1 mill. units in il (+4% yoy). This was the eighth month of growth in succession. Process Industry: According to VDMA, the mechanical engineering industry in Germany will growth by 3% in Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 3 -

4 European industry news / Business climate Industry news Business climate at a glance PMI Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 4 -

5 European industry news Mills are heading for the profit zone again The European stainless crude steel production was 710,000 t in March 2014 (+1% yoy) compared to 700,000 t in March The Damstahl countries Sweden (+6% yoy) and Slovenia (+2% yoy) achieved high growth figures while the closure of Outokumpu s melt shop in Krefeld brings the production in Germany down by 20% in March 2014 (yoy). Outokumpu Stainless: The company finalized the 100 mill. EUR investments at the quarto plate mill in Degerfors. The investments increased the mill s capacity by 30% to 155,000 t. New installed equipment includes a new walking hearth furnace, cold leveler, heat treatment batch furnaces, and associated quencher as well as an updated transfer bed. Outokumpu is one of the global market leader in stainless steel quarto plate. E.g. Outokumpu delivers about 4,000 t of duplex stainless steel LDX2404 for the Husab uranium mine project in Namibia, Africa. The material will be used in tanks, pressure vessels, clarifiers and columns. The deliveries have started and they will continue until September Aperam: Both shipments and earnings improved in both comparisons year on year as well as quarter on quarter. The company reported steel shipments in Q1/14 of 475,000 t (+18.5% yoy and +8% qoq). Sales increased in Q1/14 by ~9% (yoy) to 1,394 mill. USD and compared to Q4/13, sales were up ~9%. EBITDA doubled in Q1/14 to 129 mill. USD (Q1/13: 65 mill. USD) and was more than 50% higher than in Q4/13. Aperam reported a net profit of 19 mill. USD in Q1/14 after net losses of 28 mill. USD in Q1/13 and 42 mill. USD in Q4/13. For Q2/14, Aperam expects its EBITDA to rise (qoq) on better demand in Europe and Brazil. Acerinox: Effective with shipments from e 1, 2014, the Acerinox subsidiary North American Stainless (NAS) increased prices for Long Products, including angle, round bar and wire rod by 5-7%. Tubacex: The manufacturer of seamless stainless steel tubes reported sales in Q1/14 of 140 mill. EUR (-3.6% yoy). The gross operating profit (EBITDA) has grown by 15%, reaching 16.5 mill. EUR, contrasting with the 14.4 mill. EUR recorded in Q1/13. The EBITDA on sales margin was 11.8% (above the target of 10% set for 2014), compared to the 9.9% achieved in Q1/13. Tubacex posted a net profit of 5.64 mill. EUR (59.8% yoy). Schmolz+Bickenbach: The company returns to profitability in Q1/14. Revenues slightly increased in Q1/14 (+0.5% yoy) to 872 mill. EUR (Q1/13: 867 mill. EUR). EBITDA was up 35% (yoy) amounting to 66 mill. EUR in Q1/14. S+B reported a net profit in Q1/14 of 12.4 mill. EUR compared to a net loss of 7.7 mill. EUR in Q1/13. Thus, the company returned to positive figures for the first time since Q1/12. Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 5 -

6 Index of 50 = Break Even Point Where do we stand in the business cycle? PMI Status May 2014 Momentum in Europe, a decline in the U.S. and a turning point in China, but all in all still not satisfactory 65 EU USA China Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 6 -

7 Market performance in Damstahl-Land Summary: Relevant issues in Damstahl-Land Germany Netherlands Denmark Sweden Norway Slovenia Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 7 -

8 Relevant Issues in Damstahl-Land Germany, Netherlands Germany: Despite increasing prices, market activity is still subdued. End-user demand was not too bad in May, but there is nothing to be enthusiastic about. Distributors are reluctant with new orders despite further price increases expected in e. It seems that some uncertainty still prevails in the market, and sufficient material is on stock. Automotive: In il 2014, a total of 274,100 passenger cars were newly registered (-4% yoy). But the reduction is a result of the Easter holidays. Since January, new registrations in Germany grew by around 3% to 985,900 vehicles. Production in Germany dropped slightly in il (-2% yoy). Again, the timing of the Easter break has to be taken into account. Since the beginning of this year, passenger cars (+7% yoy) have rolled off production lines in Germany. In the same period, exports by German manufacturers increased by 8% to passenger cars. Building and Construction: The total value of new orders received by building construction and civil and underground engineering enterprises in Germany increased 5.6% in March 2014 (yoy). In building construction demand increased by 9.2%, in civil and underground engineering by 1.9%. VDMA, the German Engineering Association, reported that incoming orders in the mechanical engineering sector in Germany were down 1% in il 2014 (yoy). Domestic business rose by 8%, while on the other hand international business was down 4%. GEA Group: The Group started 2014 with a record-breaking quarter. In Q1/14, revenues generated by continuing operations increased by 2.9% to 951 mill. EUR (Q1/13: 924 mill. EUR). The operating EBITDA was 85 mill. EUR (+17.6% yoy). Consolidated profit amounted to 47.2 mill. EUR (+15.6% yoy). GEA Group recorded its highest ever first-quarter figures for operating EBITDA, topping the record year in Netherlands: The Dutch economy is slightly growing in Q2/14 and also the demand for stainless steel shows only a moderate growth. However, the market has improved step by step and for HY2/14 the expectations are that the demand in stainless steel will increase due to the longer delivery times and higher prices for stainless steel products. Output generated by the Dutch manufacturing industry shows a modest growth of 1.4% in March (yoy) compared to ruary (+5.1%). The electrical products and machinery sector grew by 3.4% in March (yoy), in ruary +9.3%. AkzoNobel: The Dutch-based company opened its new chlorine membrane electrolysis plant in the Rhein-Main area, Germany. The 140 mill. EUR investment increased the company s capacity by 50%. AkzoNobel also opened a new 80 mill. EUR chemical island in Imperatriz, Brazil. The new facility will supply, store and handle all chemicals for the 1.5 mill. tpy Suzano Maranhão Pulp Mill in northern Brazil. DSM: The producer of life-science chemicals has opened an animal nutrition center in the Chinese town of Bazhou, south of Beijing. Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 8 -

9 Relevant issues in Damstahl-Land Denmark, Sweden Denmark: The market activity in Denmark is good and the market is becoming more and more positive. The order horizon is slightly increasing in the sub-contractor market within the dairy industry, which generates some positive vibes in the market. The prices are following the market indicators, and are increasing heavily these days. Danfoss: Both net sales and operating profit improved in Q1/14. Net sales were up 3% (yoy) to mill. DKK (Q1/13: mill. DKK) and the operating profit (EBIT) amounted to 996 mill. DKK, which was significantly higher than the 679 mill. DKK recorded in the relatively weak Q1/13. Danfoss signed a cooperation agreement with the German manufacturer of photovoltaic inverters and monitoring systems SMA Solar Technology AG. Danfoss will acquire 20% of SMA s outstanding shares and sell its entire solar inverter business to SMA. Arla Foods: The merger between Arla Foods and EGM Walhorn has been officially approved by the owners of both companies. EGM Walhorn is owned by farmers in Belgium, Germany and the Netherlands and produces around 550 mill. kg of milk per year. Arla Foods sells its packaging subsidiary Danapak Flexibles A/S to the Austrian-based Schur Flexibles Group. The takeover is expected to have effect by July 1st In May, Arla Foods officially opened a new 150 mill. GBP (~184 mill. EUR) fresh milk processing facility in Aylesbury, UK. The new facility can produce around 1.5 mill. bottles of fresh milk per day. It has the capacity to process up to 240,000 liters of milk per hour and one billion liters annually. Novo Nordisk: The Danish manufacturer of pharmaceutical products increased sales by 2% in Q1/14 (yoy) to 20.4 bn DKK (~2.7 bn EUR). In the same period the operating profit increased by 6% (yoy) to 8 bn NOK (~1.1 bn EUR). Net profit increased by 8% (yoy) to 6.5 bn DKK (~865 mill. EUR). Sweden: Activity in the stainless steel market in Sweden is still surprisingly low. The market hasn t picked up pace so far and the rising alloy surcharges are only triggering some minor speculative business. The summer vacation period is lying ahead and there is still a great uncertainty regarding how the market will develope after the summer. Building and Construction: According to Eurostat, the construction output decreased by 2.8% in March (yoy). Alfa Laval: The company completed the already announced acquisition of Frank Mohn AS. The cash consideration totals 13 bn NOK, on a cash and debt free basis. Three new orders were booked in May 2014 with a total value of around 230 mill. SEK, including an order to supply heat exchangers to a coal liquefaction plant in China (order value: ~100 mill. EUR, delivery is scheduled for 2014), the supply of a marine exhaust gas cleaning system for a German customer (order value: ~75 mill. SEK, delivery scheduled for 2015) as well as an order to supply air cooler systems to a U.S. export terminal for natural gas liquids (order value: ~55 mill. SEK, delivery scheduled for 2014). Consolidation: The Swedish confectioner Cloetta acquired the owner of the Jelly Bean Factory brand, Aran Candy, for about 140 mill. SEK. Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group - 9 -

10 Relevant issues in Damstahl-Land Norway, Slovenia Norway: The Norwegian market is performing better, supported by many projects within the building and construction industry. The highly increased prices for stainless steel are to hit the market in Norway. Statoil: Net operating income in Q1/14 was 51.4 bn NOK (+35% yoy). EBITDA was up 9% (yoy) to 46 bn NOK. The company reported a significantly higher net income in Q1/14 of 23.7 bn NOK (Q1/13: net income of 6.4 bn NOK). Together with partners, Statoil has made an oil and gas discovery in the Drivis prospect in the Barents Sea. Statoil estimates the total volumes in Drivis to be in the range of mill. barrels of recoverable oil equivalent. Scana: The Norwegian supplier of products and system solutions to the oil and gas, energy, and marine industry published its Q1/14 results. Order inflow in Q1/14 amounted to 410 mill. NOK (up 18 mill. NOK from Q4/13). The total revenues in Q1/14 were 464 mill. NOK (compared to 413 mill. NOK in Q1/13 and 455 mill. NOK in Q4/13). EBITDA improved to 8 mill. NOK in Q1/14 (Q1/13: -16 mill. EUR, Q4/13: -29 mill. NOK). Aker Solutions: The company won a framework contract from BP in Norway to provide engineering, modifications and maintenance services for BP-operated oil and gas fields offshore Norway. The contract has a period of up to two years valued at maximum 1.8 bn NOK, with options to extend the framework by as many as four years. The agreement started on e 1, 2014, following the expiration of an existing framework contract for similar services. Slovenia: Growth continued in Q1/14 GDP increased by 1.9% (yoy). This was mainly driven by external demand. Exports increased by 4.7% (yoy), mainly due to the increase of exports of electrical equipment and motor vehicles. The share of exports to the GDP is currently around 85%. The general improvement of the Slovenian economy lead to a higher value of the consumer confidence indicator in May 2014 (+4% compared to il 2014, +13% yoy). Building and Construction: The value of construction put in place was up 44.7% in March 2014 (yoy). As regards buildings it went up by 2.8% and as regards civil engineering by 66.5%. The reason for the relatively high annual growth was more favorable weather conditions in March 2014, and clean-up operations after the ice storm that hit Slovenia in ruary In Q1/14 the value of construction put in place was 37.2% higher than in Q1/13. Nieros: The Slovenian manufacturer of stainless steel food processing equipment designed and installed an automatic meat processing line at one of the company s customers in Russia (Fabrika Katchestva). Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

11 Damstahl-Countries Flat Product imports 2014 vs Tremendous growth in all Damstahl-Countries except for Sweden Imports of Stainless Steel Flat Products Germany Flat Products: Imports - Change in % Ytd 2014 vs Ytd % Netherlands Denmark Germany: Jan- Netherlands: Jan- Denmark: Jan- Sweden: Jan Norway: Jan-Mar Slovenia: Jan- 10% 36% Sweden -13% Norway 33% Slovenia 33% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

12 Damstahl-Countries Long Product imports 2014 vs Winners: Scandinavian countries and the Netherlands Losers: Germany and especially Slovenia was weak Imports of Stainless Steel Long Products Germany -2% Long Products: Imports - Change in % Ytd 2014 vs Ytd 2013 Netherlands 25% Denmark Sweden Germany: Jan- Netherlands: Jan- Denmark: Jan- Sweden: Jan Norway: Jan-Mar Slovenia: Jan- 9% 20% Norway 20% Slovenia -16% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

13 Germany Imports by product Remarkably overall growth of 28% (ytd) generated by an extremely strong growth at Flat Products Imports of Stainless Steel Products into Germany Products Mar May Jul Sep Nov Jan HR Sheet & Plate 16,170 15,511 16,664 29,780 17,404 45,818 16,273 24,039 21,657 11,126 35,652 33,690 CR Sheet 38,481 42,580 42,006 47,704 50,893 38,285 49,114 54,831 52,407 33,010 69,887 67,449 Round Bars 15,244 14,692 12,724 12,856 14,730 8,266 11,783 13,213 13,146 9,097 14,354 15,872 Non-circular Bars 3,539 3,534 3,424 3,697 4,134 2,573 3,910 4,238 2,733 3,476 3,644 3,748 Forged Bars 1,249 1,212 1, , ,172 1,598 1, ,254 1,168 Profiles 1,163 1, ,151 1,093 Seamless Tubes 3,155 2,694 2,627 2,761 2,833 2,126 2,807 3,042 2,563 1,966 2,781 2,654 Welded Tubes (Rounds) 9,524 9,196 8,042 9,705 11,943 7,997 9,951 12,039 11,560 8,318 9,098 10,742 Welded Tubes (Square) 3,068 3,056 1,793 3,800 6,404 3,074 3,242 4,751 4,051 2,776 5,159 4,766 All Products 91,593 93,495 89, , , ,210 99, , ,976 71, , ,182 Products Change FY ytd ytd ytd [tonnes] [%] HR Sheet & Plate 263,899 49,457 69,342 40% CR Sheet 542,921 93, ,336 47% Round Bars 155,909 30,158 30,226 0% Non-circular Bars 42,472 7,214 7,392 2% Forged Bars 13,626 2,669 2,422-9% Profiles 10,630 2,227 2,244 1% Seamless Tubes 33,104 6,530 5,435-17% Welded Tubes (Rounds) 119,450 21,175 19,840-6% Welded Tubes (Square) 45,337 9,322 9,925 6% All Products 1,227, , ,162 28% [tonnes] Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

14 Germany Imports by country Finland more than doubled its deliveries to Germany (+130%) Significantly more material is also coming from Taiwan (+107%) Imports of Stainless Steel Products* into Germany Change ytd Country of Origin January ruary Q1 Q2 Q3 Q4 TOTAL ytd January ruary ytd [ tonnes ] [ '% ] ITALY 35,904 20,887 76,354 56,800 68,181 68, ,858 56,791 26,076 27,919 53,995-5% FINLAND 19,154 7,994 33,340 38,791 58,526 37, ,925 27,148 35,451 26,865 62, % BELGIUM 10,995 12,963 36,717 43,004 43,341 40, ,786 23,958 17,076 17,510 34,586 44% FRANCE 14,401 12,647 42,430 41,829 35,154 43, ,583 27,048 13,781 15,855 29,636 10% SPAIN 14,433 9,003 35,062 31,987 31,080 34, ,120 23,436 16,206 17,443 33,649 44% SWEDEN 5,351 6,269 16,619 14,999 11,708 11,130 54,456 11,620 3,990 8,586 12,576 8% NETHERLANDS 2,900 3,141 8,628 8,633 10,478 8,348 36,087 6,041 4,097 4,512 8,609 43% INDIA 3,362 3,790 10,767 9,222 8,835 5,957 34,781 7,152 3,886 2,861 6,747-6% SLOVENIA 1,203 2,946 6,545 6,649 9,298 8,345 30,837 4,149 3,539 2,646 6,185 49% AUSTRIA 2,264 2,127 6,861 6,891 6,299 6,124 26,175 4,391 2,218 2,195 4,413 1% TAIWAN 1,577 2,172 5,579 5,606 6,105 5,590 22,880 3,749 4,724 3,033 7, % CZECH REPUBLIC 3,184 2,246 6,195 5,522 2,294 6,222 20,233 5,430 3,215 2,287 5,502 1% U S A 1, ,282 3,756 3,460 3,704 14,202 2,561 1,180 1,414 2,594 1% SOUTH AFRICA 3,413 2,164 5,954 2,484 4,131 1,352 13,921 5, ,269 2,005-64% UKRAINE 901 1,257 3,380 4,066 2,585 2,716 12,747 2, ,229 2,034-6% UNITED KINGDOM 1, ,099 2,747 2,622 2,285 10,753 1, ,083 1,978 0% SWITZERLAND ,539 2,658 2,987 2,521 10,705 1,640 1,209 1,066 2,275 39% CHINA 1,057 1,185 2,952 2,423 2,885 2,438 10,698 2,242 1, ,053-8% POLAND ,998 1,877 2,116 2,256 8,247 1, ,540 14% LUXEMBOURG , ,326 1,878 5,785 1, % SOUTH KOREA ,245 1,537 1,201 4, % JAPAN , % PORTUGAL , % ROMANIA , % THAILAND , % DENMARK , % OTHERS , , % TOTAL 126,738 95, , , , ,729 1,227, , , , ,162 28% * HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

15 Ø 2010 Ø 2010 = 100% Germany Stainless Steel Market Volume Index Impressive growth within Flat Products in the beginning of 2014 also Long Products are showing an upwards tendency 170% 160% 150% 140% Flat Products Long Products Poly. (Flat Products) Poly. (Long Products) 130% 120% 110% 100% 90% 80% 70% 60% Trend Lines 50% 40% 30% 20% Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

16 Netherlands Imports by product A good start with a solid overall growth of 12% (ytd) Imports of Stainless Steel Products into Netherlands Products Mar May Jul Sep Nov Jan HR Sheet & Plate 3,633 3,956 3,753 2,705 3,309 2,927 4,212 2,751 2,957 2,070 2,914 2,617 CR Sheet 11,037 14,987 15,627 13,205 15,712 8,375 10,913 10,955 13,882 12,736 17,346 15,374 Round Bars 1,813 1,797 1,798 1,709 1,344 1,457 1,160 2,236 1,325 1,721 2,581 2,954 Non-circular Bars Forged Bars Profiles Seamless Tubes Welded Tubes (Rounds) 1,982 2,245 1,915 1,582 2,246 1,333 1,412 1,659 1,728 2,201 2,241 1,864 Welded Tubes (Square) 623 1,085 1, ,129 1, ,153 1,236 All Products 20,758 26,178 25,719 21,972 24,810 16,127 20,049 20,924 22,578 20,424 27,887 26,123 Products Change FY ytd ytd ytd [tonnes] [%] HR Sheet & Plate 36,832 4,559 5,531 21% CR Sheet 155,517 28,088 32,720 16% Round Bars 19,582 3,222 5,535 72% Non-circular Bars 5, ,082 15% Forged Bars 5,025 1, % Profiles 2, % Seamless Tubes 8,205 1,320 1,394 6% Welded Tubes (Rounds) 23,997 5,694 4,105-28% Welded Tubes (Square) 10,499 2,322 2,389 3% All Products 267,638 48,099 54,010 12% [tonnes] Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

17 Netherlands Imports by country Strong percentage increases from Spain (+250%) and Asian suppliers: Japan (249%), China (+199%) and India (+168%) Imports of Stainless Steel Products* into Netherlands Change ytd Country of Origin January ruary Q1 Q2 Q3 Q4 [ tonnes ] TOTAL ytd January ruary ytd [ '% ] FINLAND 42,023 37, ,954 94,587 99, , ,502 79,912 45,459 42,762 88,221 10% ITALY 5,575 2,606 10,816 16,065 11,495 10,488 48,864 8,181 5,045 4,634 9,679 18% GERMANY 4,327 5,627 13,314 11,731 9,184 11,176 45,405 9,954 3,733 3,828 7,561-24% BELGIUM 4,768 4,072 12,848 12,555 7,640 8,135 41,178 8,840 2,730 4,008 6,738-24% SOUTH KOREA 2,037 1,177 5,766 7,109 6,901 5,537 25,313 3,214 3, ,270 33% INDIA 553 1,343 3,407 4,583 6,037 5,966 19,993 1,896 2,529 2,548 5, % SOUTH AFRICA 2, ,004 6,038 3,852 3,354 18,248 3,789 1,421 1,498 2,919-23% SWEDEN 1,545 1,189 4,906 2,934 3,085 2,951 13,876 2, ,113 2,043-25% FRANCE 1,116 1,713 3,968 2,570 2,590 3,274 12,402 2,829 1,289 2,025 3,314 17% CHINA 1, ,917 2,480 2,725 5,255 12,377 1,696 2,654 2,415 5, % TAIWAN 936 1,064 2,682 3,252 3,196 3,026 12,156 2,000 1, ,602 30% U S A , ,088 1,242 4,041 1, ,176 17% SPAIN , , , % UNITED KINGDOM , % SLOVENIA , JAPAN , % LUXEMBOURG , % BRAZIL , % SWITZERLAND % OTHERS , , % TOTAL* 26,031 22,068 68,857 73,869 60,986 63, ,638 48,099 27,887 26,123 54,010 12% *excl. Finland *HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes Imports to Terneuzen (from Finland) not inlcuded in Total Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

18 Ø 2010 Ø 2010 = 100% Netherlands Stainless Steel Market Volume Index Long Products with a strong start in 2014 reaching a new peak level while Flat Products are more like Up and Down with a positive trend 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% Flat Products Poly. (Flat Products) Long Products Poly. (Long Products) Trend Lines Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

19 Denmark Imports by product A strong double-digit growth across all important products (especially welded tubes) boosts the total imports up to +33% Imports of Stainless Steel Products into Denmark Products Mar May Jul Sep Nov Jan [tonnes] HR Sheet & Plate ,001 1, , CR Sheet 3,660 4,513 3,570 3,129 3,013 4,362 5,140 4,654 3,843 4,395 5,717 3,951 Round Bars 1,191 1, ,224 1,391 1, ,257 1,507 Non-circular Bars Forged Bars Profiles Seamless Tubes Welded Tubes (Rounds) 1, , ,181 1,147 1, ,021 2,982 Welded Tubes (Square) , All Products 7,842 8,697 7,234 6,537 6,531 7,814 10,234 9,546 8,023 8,005 10,705 10, Change Products FY ytd [tonnes] ytd ytd [%] HR Sheet & Plate 10,701 1,688 2,144 27% CR Sheet 48,612 8,333 9,668 16% Round Bars 13,125 2,257 2,764 22% Non-circular Bars 1, % Forged Bars 1, % Profiles 1, % Seamless Tubes 2, % Welded Tubes (Rounds) 11,879 1,785 4, % Welded Tubes (Square) 5, ,183 81% All Products 96,415 15,952 21,203 33% Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

20 Denmark Imports by country The main supplying countries Germany and Italy extended their lead and almost doubled their deliveries to Denmark Imports of Stainless Steel Products* into Denmark Change ytd Country of Origin January ruary Q1 Q2 Q3 Q4 TOTAL ytd January ruary ytd [ tonnes ] [ '% ] GERMANY 1,428 1,533 4,515 4,477 5,593 4,895 19,480 2,961 1,849 3,524 5,373 81% ITALY 1,160 1,275 3,959 4,351 3,776 4,998 17,084 2,435 1,981 2,242 4,223 73% SWEDEN 1,495 1,438 4,205 3,049 3,313 3,311 13,878 2,933 1, ,946-34% TAIWAN 1,384 1,004 3,241 3,061 3,508 3,822 13,632 2,388 1, ,991-17% FRANCE ,599 2,699 2,563 2,438 10,299 1, ,661 2% FINLAND 1, ,719 1,978 2,761 2,432 9,890 1,927 1, ,656 38% SPAIN , % INDIA , % CHINA , NETHERLANDS , % SOUTH AFRICA % NORWAY % POLAND % UNITED KINGDOM % U S A % BELGIUM % SLOVENIA % SWITZERLAND % PORTUGAL % LATVIA ESTONIA % OTHERS % TOTAL 8,104 7,848 23,794 22,468 24,579 25,574 96,415 15,952 10,705 10,498 21,203 33% * HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

21 Ø 2010 Ø 2010 = 100% Denmark Stainless Steel Market Volume Index Weak Flat and strong Long Products at the beginning of the year 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% Flat Products Long Products Poly. (Flat Products) Poly. (Long Products) Trend Lines Trend Lines Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

22 Sweden Imports by product Weak CR Flat Products brought the total Imports down to -11% Imports of Stainless Steel Products into Sweden Products Mar May Jul Sep Nov Jan HR Sheet & Plate CR Sheet 8,914 8,456 11,063 10,430 8,174 5,067 8,061 9,108 6,570 8,249 5,889 9,012 Round Bars 1,229 1,323 1,237 1, , ,354 1,739 1, ,125 Non-circular Bars Forged Bars Profiles Seamless Tubes Welded Tubes (Rounds) 1, , ,201 1,552 1,219 1, ,050 Welded Tubes (Square) All Products 12,992 12,101 14,696 14,107 11,820 8,211 11,510 13,528 11,130 12,193 8,070 12,359 Products Change FY ytd ytd ytd [tonnes] [%] HR Sheet & Plate 8, % CR Sheet 100,898 10,917 9,012-17% Round Bars 14, ,125 18% Non-circular Bars 1, % Forged Bars % Profiles 2, % Seamless Tubes 1, % Welded Tubes (Rounds) 11, , % Welded Tubes (Square) 2, % All Products 144,215 13,857 12,359-11% 2013 [tonnes] 2014 Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

23 Sweden Imports by country More deliveries from Finland while other important suppliers reduced their shipments to Sweden (Germany even by 50%) Imports of Stainless Steel Products* into Sweden Country of Origin 2013 Change ytd January Q1 Q2 Q3 Q4 TOTAL ytd January ytd [ tonnes ] [ '% ] FINLAND 4,797 12,798 13,414 10,798 10,410 47,420 4,797 5,259 5,259 10% SPAIN 4,258 10,459 9,923 7,808 6,341 34,531 4,258 2,119 2,119-50% GERMANY 1,499 3,955 4,073 3,519 3,749 15,296 1,499 1,334 1,334-11% ITALY 1,151 3,688 3,840 3,582 3,836 14,946 1,151 1,066 1,066-7% DENMARK 987 2,636 3,122 2,725 2,743 11, ,011 1,011 2% FRANCE 394 1,828 1,832 1,479 1,787 6, % SOUTH AFRICA ,185 1, , UNITED KINGDOM , % NETHERLANDS % JAPAN % BELGIUM % NORWAY % AUSTRIA % CHINA % TAIWAN % U S A % SLOVENIA % INDIA % SWITZERLAND % POLAND % LUXEMBOURG OTHERS % TOTAL 13,857 38,950 40,623 33,249 31, ,215 13,857 12,359 12,359-11% * HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes Source: SMR - Steel & Metals Market Research Analysis 2014 Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

24 Ø 2010 Jan Ø 2010 = 100% Sweden Stainless Steel Market Volume Index Both Flat and Long Products recovered from the (partly) heavy decline they suffered at the end of the year % 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% Flat Products Long Products Poly. (Flat Products) Poly. (Long Products) Trend Lines Sources: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

25 Norway Imports by product Norway is performing well: all products contributed to 28% growth Imports of Stainless Steel Products into Norway Products May Jul Sep Nov Jan Mar HR Sheet & Plate CR Sheet 1,493 1,477 1,221 1,108 1,059 1,388 1,644 1,276 1,314 1,990 1,207 1,580 Rolled Bars Forged Bars Profiles Seamless Tubes Welded Tubes (Rounds) All Products 3,539 3,520 3,415 2,765 2,691 3,842 3,872 3,615 3,313 4,454 3,478 4,265 Products Change FY ytd ytd ytd [tonnes] [%] HR Sheet & Plate 5,310 1,243 1,740 40% CR Sheet 15,969 3,989 4,777 20% Rolled Bars 5,163 1,347 1,721 28% Forged Bars 1, % Profiles 1, % Seamless Tubes 5,302 1,078 1,161 8% Welded Tubes (Rounds) 5,668 1,100 1,890 72% All Products 40,066 9,494 12,197 28% 2013 [tonnes] Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

26 Norway Imports by country All major suppliers increased their imports to Norway significantly Imports of Stainless Steel Products* into Norway Country of Origin Change ytd Q1 Q2 Q3 Q4 TOTAL ytd Q1 ytd [ tonnes ] [ '% ] SWEDEN 3,259 2,722 3,010 3,695 12,686 3,259 3,850 3,850 18% FINLAND 1,880 2,159 1,614 1,626 7,279 1,880 2,261 2,261 20% TAIWAN 677 1, , ,065 1,065 57% GERMANY , ,279 1,279 87% DENMARK , % FRANCE , % ITALY , % UNITED KINGDOM , % SPAIN % CZECH REPUBLIC % CHINA % AUSTRIA % JAPAN % INDIA % POLAND % BELGIUM-LUXEMBOURG % NETHERLANDS % U S A % OTHERS % TOTAL 9,494 10,474 9,298 10,800 40,066 9,494 12,197 12,197 28% * HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

27 Ø 2010 Mar Ø 2010 = 100% Norway Stainless Steel Market Volume Index Long Products reached a new peak level Flat Products stable 210% 200% 190% 180% 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% Flat Products Long Products Poly. (Flat Products) Poly. (Long Products) Trend Lines Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

28 Slovenia Imports by product CR Sheets, Round Bars and Welded Tubes showed a solid growth of ~40% and lifted the total imports to +30% (ytd) Imports of Stainless Steel Products into Slovenia Products Mar May Jul Sep Nov Jan HR Sheet & Plate CR Sheet 1,353 1,153 1,180 1,371 1, ,486 1,935 1,680 1,780 1,235 1,437 Round Bars Non-circular Bars Forged Bars Profiles Seamless Tubes Welded Tubes (Rounds) Welded Tubes (Square) All Products 2,303 2,074 2,083 2,253 2,859 1,438 2,412 3,054 2,634 2,577 2,394 2,526 [tonnes] Products Change FY ytd ytd ytd [tonnes] [%] HR Sheet & Plate 3, % CR Sheet 16,492 1,905 2,672 40% Round Bars 2, % Non-circular Bars % Forged Bars % Profiles % Seamless Tubes % Welded Tubes (Rounds) 2, % Welded Tubes (Square) 1, % All Products 27,475 3,788 4,920 30% Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

29 Slovenia Imports by country Italy increased its lead, remains the Number 1 supplier to Slovenia Imports of Stainless Steel Products* into Slovenia Change ytd Country of Origin January ruary Q1 Q2 Q3 Q4 TOTAL ytd January ruary ytd [ tonnes ] [ '% ] ITALY 992 1,049 3,319 3,644 3,880 4,401 15,244 2,041 1,280 1,254 2,534 24% GERMANY , % AUSTRIA , % HUNGARY , % SOUTH KOREA , % SWEDEN % FINLAND % FRANCE % SPAIN INDIA % NETHERLANDS % POLAND % TURKEY SWITZERLAND % OTHERS % TOTAL 1,742 2,046 6,091 6,410 6,709 8,265 27,475 3,788 2,394 2,526 4,920 30% * HR Sheet/Plate, CR Sheet, Round Bars, Profiles, Welded and Seamless Tubes Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

30 Ø 2010 Ø 2010 = 100% Slovenia Stainless Steel Market Volume Index Both Flat and Long Products are stable in the first months of % 200% 190% 180% 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% Flat Products Long Products Poly. (Flat Products) Poly. (Long Products) Trend Lines Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

31 Raw materials Nickel Chrome Molybdenum Scrap Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

32 Raw materials Nickel and Chrome Lower NPI Stocks are driving Ni Prices Cr Prices might go up NICKEL: LME prices showed strong volatility in May. The Indonesian NPI ore export ban drove the prices from around 18,000 USD/t at the beginning of May to a peak of over 21,000 USD/t in mid May 2014 and back to ~18,500 USD/t a few days later. Supply/Demand: INSG reported a nickel surplus for 2014, but there is a certain risk that the Ni market will get into deficit in A high number of new NPI projects in Indonesia will most likely come on stream in 2016/17, leading to a possible normalisation of the situation again. NPI: The Indonesia NPI ore export ban will continue and raises the pressure on Chinese mills as some of them have not enough NPI stocked for several months to continue with NPI usage and so they have to fill the gap with other raw material sources. It is expected that enough NPI is on stock until the beginning of Q4/14, but nobody knows it for sure. Some Chinese mills have already ordered stainless steel scrap in Europe in order to replace NPI. This relatively high uncertainty about the real stock level situation for NPI in China is the main price driver at the moment. Prices for NPI skyrocketed in recent weeks in China and some NPI producers are not willing to sell at the moment as they expect further price increases. Vale: In Q1/14 Vale registering a record production for nickel of 67,500 t (+3.7% yoy) almost the same level as registered in Q4/13. Sales volumes showed a slight increase to 65,000 t (Q1/13: 63,000 t), while revenues decreased by 14% because of the lower average realised price. Norilsk Nickel: The Russian company reported a 5% lower nickel output in Q1/14 of ~68 kt (Q1/13: ~72 kt). CHROME: The benchmark price between South African FeCr smelters and European mills for Q2/14 was set to 122 US cents/lb (4 cents more than in Q1/14). European mills are reporting thicker order books. This has a positive impact on the global demand for FeCr. In case of further increasing Ni prices, Cr could also grow due to pro-ferritic substitution. GlencoreXstrata: FeCr production amounted to 335,000 t in Q1/14 (+29% yoy). The increase primarily relates to participation in an power buy-back program in 2013 which limited production last year. Lion phase 2 smelter started production at one furnace in il The second furnace is expected to come on line in early Q3/14. International Ferro Metals: The South African FeCr producer increased its production by 59% in Q1/14 (yoy) to 54,000 t. Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

33 Raw Materials Molybdenum and Stainless Steel scrap Shooting up Mo Prices and competition for Stainless Steel Scrap MOLYBDENUM: FeMo prices rose substantially (except China) in Q2/14 and crossed the level of 35 USD/kg at the end of May 2014 with indications that prices could rise even further, despite thinner trading volumes. The global Mo market shows strength and the situation looks promising. A lack of availability and very good demand is driving the market at the moment. Market participants are much more confident in recent weeks. Some stockholders are now waiting to see whether prices will rise even further, before they offer material. Molymet: The Chilean molybdenum processor posted an EBITDA of 34.4 mill. USD in Q1/14 (+32% yoy). Mo products processed and sold volumes increased to 42.8 mill. pounds in Q1/14 (+7.7% yoy). General Moly: The USA-based molybdenum mineral development, exploration, and mining company reported a net loss for Q1/14 of 2.4 mill. USD (Q1/13: net loss of 3.0 mill. USD). Diversified miner Thompson Creek Metals Company Inc. has reported higher molybdenum production for its Thompson Creek mine and slightly lower production at its JV (Sojitz) Endako mine. The total molybdenum production for Q1/14 amounted to 7.9 mill. pounds compared to 7.7 mill. pounds in Q1/13, resulting primarily from higher mill recoveries at the Company's mines, partially offset by lower grade ore. STAINLESS STEEL SCRAP: The Indonesian ore export ban will support the use of 18/8 scrap in the next months. The order situation for stainless steel scrap dealers is very good they are receiving plenty of orders at the moment. Due to the fact that the ore export ban will continue, they are also optimistic for HY2/14. Demand: Chinese mills started buying more and more material from European scrap dealers in recent weeks. Increasing demand (not only from China, but also form India) changes the situation for European mills as the competition gets tough. Availability for scrap is expected to further improve, supported by increasing Ni prices. Scholz: The German scrap processor reported a 32% (yoy) increase in its operating income in Q1/14, despite falls in both turnover and tonnage. EBITDA came to 46 mill. EUR, up from 35 mill. EUR in Q1/13. The group sold 2.07 mill. t of products in Q1/14 (-9% yoy), resulting in a 15% (yoy) fall in turnover to mill. EUR. Thanks to the stable to slightly positive price level developments expected in the coming months and the fact that Scholz avoids selling tonnages with insufficient margins, the company expects that the operating income for 2014 will further improve. Scholz will sell a 39.9% stake in the company to Japan s Toyota Tsusho. The deal is expected to be completed by the end of Q2/14. Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

34 Focus of the Month Europe: Target for Asian Mills China European Imports of Cold Rolled Products from China European Imports of Cold Rolled Products from Taiwan European Imports of Cold Rolled Products from South Korea Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

35 [ 000 tonnes] Focus of the Month: Europe: Target for Asian Mills European Imports of Cold Rolled Flat Products from China Jan- '13 Jan- ' Chinese deliveries to Europe doubled in the first four months of 2014 (+97% yoy). Main destinations: Italy (+182%, +26,000 t) and Belgium (+130%, +17,000 t) Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

36 [ 000 tonnes] Focus of the Month: Europe: Target for Asian Mills European Imports of Cold Rolled Flat Products from Taiwan Q1/13 Q1/ Italy (+77%) became the major importer. Germany (+178%) and Poland (+158%) increased their position. Turkey down 50% from 26,000 to 13,000 t (own production at Posco Assan) Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

37 [ 000 tonnes] Focus of the Month: Europe: Target for Asian Mills European Imports of Cold Rolled Flat Products from South Korea Q1/13 Q1/ Total European imports from South Korea increased by 32% in Q1/14 (yoy) as a result of substantially higher shipments to Italy (+69%) and Turkey (+53%). 2 - Source: SMR - Steel & Metals Market Research Analysis Damstahl 2014, Damstahl - a member of the NEUMO-Ehrenberg-Group

38 Report: Stainless Steel in Damstahl-Land, No. 21. ruary 2014 Damstahl 2013, Damstahl - a member of the NEUMO-Ehrenberg-Group