EUROMETAL PRESENTATION 2014 2. EUROPE STEEL TRADE CONFERENCE STRESA, APRIL 27-29, 2014 POSITION OF STEEL DISTRIBUTION IN EU STEEL MARKETS GEORGES KIRPS,

EUROMETAL PRESENTATION 2014 2. EUROPE STEEL TRADE CONFERENCE STRESA, APRIL 27-29, 2014

POSITION OF STEEL DISTRIBUTION IN EU STEEL MARKETS

GEORGES KIRPS, DIRECTOR GENERAL EUROMETAL

EUROMETALTHE VOICE OF EUROPEAN STEEL, TUBE AND METAL INTERMEDIATION

ABOUT EUROMETAL

MONITORING TODAY - ASSESSING TOMORROW – WE KNOW STEEL

PLEASE NOTE: WHEN PRINTING USE OPTION [ADAPT TO SIZE]

EUROMETAL IS A NON PROFIT ASSOCIATION ESTABLISHED IN BASEL(CH) ACCORDING TO SWISS LAWS

EUROMETAL OPERATIONAL OFFICES ARE BASED IN THE GRAND DUCHY OF LUXEMBOURG

ADRESS: EUROMETAL OFFICE, LUXEMBOURG, 202b, RUE DE HAMM, L-1713 LUXEMBOURGE-MAIL: [email protected] PHONE: +352 2625 9026 FAX: +352 2645 9205

CONTACTS: GEORGES KIRPS, DIRECTOR GENERAL [email protected] RICARDO SILVA, OFFICE MANAGER [email protected]

EUROMETALTHE VOICE OF EUROPEAN STEEL, TUBES & METALS INTERMEDIATION

4

WITH FOUR MEMBER ORGANISATIONS COVERING ALL TYPES OF DISTRIBUTION & TRADE

STUDY GROUP OF DISTRIBUTORS

OF STEEL, TUBES AND METALS

EUROPEAN ASSOCIATION OF FLAT STEEL SERVICE CENTERS

STUDY GROUPOF STEEL TRADING

COMPANIES

ASSOCIATION OF NATIONAL STEEL DISTRIBUTION

FEDERATIONS

EUROMETAL: THE VOICE OF EUROPEAN STEEL INTERMEDIATION

IN 2013, EUROMETAL REPRESENTS:70 MIO TONS OF SALES

1 600 ASSOCIATED COMPANIES100 000 EMPLOYEES

MORE THAN 1 MILLION CUSTOMERS


5

STEEL INTERMEDIATIONPRODUCERS END USERS

HOME MARKETPRODUCERS

&

FOREIGNPRODUCERS

STEEL, TUBESAND METALS

END USESECTORS

STEEL, TUBE, METALSSTOCKHOLDING

FLAT STEELPROCESSING

STEEL & METALSTRADING

WITH NAT.FED, DISMET, EASSC AND STSG EUROMETAL IS COVERINGALL MAIN OPERATIONS OF STEEL, TUBES AND METALS INTERMEDIATION

EUROMETAL NETWORKS INCORPORATES ALL ASPECTS OF STEEL, TUBES & METALS INTERMEDIATION

EUROMETALTHE VOICE OF EUROPEAN STEEL TUBES & METALS DISTRIBUTION

6

38 21

46

25

47

1

2

141

166

14

141

50

222

600

100

30

14

34

18 NATIONAL ASSOCIATIONS FEDERATED WITH EUROMETAL REPRESENTTODAY ABOUT 1 600 EUROPEAN STEEL DISTRIBUTION ENTERPRISES

SOURCE : EUROMETAL

STATUS: 03.12.13

70

NAT.FED MEMBER FEDERATIONS:

ACOMEFER, PORTUGAL ARDIMET, ROMANIA ASSOFERMET, ITALY BDS, GERMANY FFDM, FRANCE GRYMAFER, BELGIUM MAFE, HUNGARY NASS, UK PUDS, POLAND STAALFEDERATIE, NETHERLANDS SOHM, CZECH REP. & SLOVAKIA SSHV/SVEMH, SWITZERLAND STALFORENINGEN, DENMARK STAL OCH METALL, SWEDEN STALFORENINGEN, NORWAY TEKNISEN KAUPPA, FINLAND UAHE, SPAIN WKOOE, AUSTRIA

INDIVIDUAL NAT.FED MEMBERS:

AMDS, LUXEMBOURG ELASTRON, GREECE GORJO, BULGARIA SIDMA, GREECE

1


7

DISMET COVERAGE OF EUROPEAN STEEL STOCKHOLDING MARKETS

SOURCE : EUROMETAL

DISMET STUDY GROUP REPRESENTS MAIN EU GENERAL & PROXIMITY DISTRIBUTORS HAVING AN INTERNATIONAL MARKET COVERAGE


8SOURCE : EUROMETAL

EASSC COVERAGE OFEUROPEAN FLAT SSC MARKETS

EASSC ASSOCIATION REPRESENTS EU FLAT SSC COMPANIES HAVING AN INTERNATIONALMARKET COVERAGE

EUROMETALTHE VOICE OF EUROPEAN STEEL TUBES & METALS DISTRIBUTION

9

STSG STUDY GROUP REPRESESENTS EU STEEL TRADING COMPANIES HAVING INTERESTS IN FREE EXPORT / IMPORT STEEL TRADE

SOURCE : EUROMETAL

STATUS: 03.12.13

STSG

EU STEEL DISTRIBUTION IS AN INTELLIGENT MATCHMAKER BETWEEN 200 STEEL AND TUBES PRODUCERS

AND MORE THAN ONE MILLION STEEL END USERS


THE KEY PLAYERS IN EU STEEL SUPPLY CHAIN:200 STEEL AND TUBES PRODUCERS,3 000 STEEL DISTRIBUTORS & SSC

1 000 000 STEEL AND TUBES ENDUSERS

EUROMETAL PRESENTATIONMETALEXPERT CONFERENCE STRESA 28-29 APRIL 2014

200

EU STEEL & TUBE PRODUCERS

3 000

EU STEEL & TUBE DISTRIBUTORS

EU STEEL END USERS

ABOUT 1 000 000STEEL END USERS

MAX 25-30 000 END USERS

SERVED DIRECTLY BY PRODUCERS

CLOSE TO 1 000 000 END USERS

SERVED BY DISTRIBUTORS

12

EUROMETAL PRESENTATION METAL EXPORT CONFERENCE STRESA 28-29 APRIL 2014

12

SMALLORDERS ADDITIONAL

PROCESSING INCREASINGCOMPLEXITY SHORT

LEAD TIMESSERVICE

AND VALUERAPID

RESPONSE DELIVERYREQUIREMENTS FLEXIBILITY

BIGVOLUMES

LONGRUNS

ECONOMIESOF SCALE

STEEL DISTRIBUTORS ARE THE INTELLIGENT MATCHMAKERS BETWEEN STEEL PRODUCERS AND STEEL CONSUMING INDUSTRIES

PARAMETERS OF STEEL PRODUCTION BUSINESS MODEL

PARAMETERS OF STEEL END USER BUSINESS MODEL

PRODUCTAVAILABILITY

DELIVERY IN24-48 HOURS

PROCESSINGSERVICES

LOCAL & REGIONALFOOT PRINTS

ONE STOPSHOPPING

MULTI-PRODUCT

MILL ORDERLEAD TIMES

DELIVERY BY RAIL OR BOAT

NON COMPLEXORDERS

CLUSTERINGORDERS

PARAMETERS OF STEEL DISTRIBUTION – CUSTOMER SIDE

PARAMETERS OF DISTRIBUTION – MILL SIDE

PRODUCT SOURCING

13

EUROMETAL PRESENTATION METALEXPERT CONFERENCE STRESA 28-29 2014

13

CUSTOMERS VALUE CREATION

STEEL AND METALS INTERMEDIATING VALUE CHAIN

VALUE

UNIQUE SERVICEPROPOSAL

SUPPLY CHAIN MANAGEMENTTECHNICAL SUPPORT

FINANCING - IT NETWORK

LOGISTICS - FREIGHTINGSTOCKING-PROCESSING-TRANSFORMATION

SOURCING - TRADING

HIGH VALUE ADDED

PRODUCTS

COST SAVINGSIMPROVED

PRODUCTIVITY

EFFICIENTMARKETINGAND SALES

INNOVATIVEBUSINESSMODELS

UNIQUE SERVICE PROPOSALS BY STEEL DISTRIBUTION HELP CUSTOMERS TO CREATE VALUE

14

EUROMETAL PRESENTATION METALEXPERT CONFERENCE STRESA 28-29 APRIL 2014

14

PROXIMITYSUPPLY CHAINMARKET SUPPLYCORE BUSINESS

4 EMERGINGBUSINESS

MODELS:

TREND1990-2010 1980-1990

TREND

BUSINESS MODEL 1960-80

LOCALPLAYERLOCALPLAYER

REGIONAL /GLOBAL PLAYER

REGIONAL /GLOBAL PLAYER

MONO PRODUCTMONO SEGMENTMONO PRODUCTMONO SEGMENT

MULTI PRODUCTMULTI SEGMENTMULTI PRODUCTMULTI SEGMENT

BUY & SELLBUY & SELL

PROCESSINGREADY TO USEPROCESSING

READY TO USE

MARKETFOLLOWER

MARKETFOLLOWER

CUSTOMER DRIVEN MARKET MAKER

CUSTOMER DRIVEN MARKET MAKER

DURING LAST 50 YEARS, EU STEEL DISTRIBUTION HAS BEEN IN A CONTINOUS PROCESS OF ADAPTING BUSINESS MODELS TO CHANGING MARKET ENVIRONMENTS

15


15

BUSINESS MODELS OF STEEL DISTRIBUTION ARE FOLLOWING THE CHANGING AND DIFFERENTIATED MARKET FUNCTIONALITIES…

…LEADING TO A RATHER LARGE SCOPE OF OPERATIONAL MODES IN STEEL DISTRIBUTION

MARKET FUNCTIONALITIES AFFECT STEEL DISTRIBUTION BUSINESS MODELS IN LOCAL, REGIONAL AND INTERNATIONAL STEEL MARKETS

PROXIMITY BUSINESSFOCUSED ON SERVING LOCAL / REGIONAL MARKETS

MARKET SUPPLY BUSINESSFOCUSED ON LARGE MATERIAL SOURCING FOR SME STOCKISTS

SUPPLY CHAIN BUSINESSFOCUSED ON INTEGRATING INTO VALUE ADDED NETWORKS

CORE COMPETENCE BUSINESSPRODUCT SPECIALIST / SERVICE SPECIALIST ACTING IN NICHE MARKETS

16


16

BEAM & PROFILE CENTERS & GENERAL STOCKIST

PLATE PROCESSOR & STOCKIST

HIGH CARBON & ALLOY STEELS STOCKIST

STRIP MILL PRODUCTS SERVICE CENTER

STAINLESS STEEL SERVICE CENTER

REINFORCING STEEL CENTERS

DISTRIBUTION OF TUBULAR PRODUCTS

TYPICAL STEEL STOCKHOLDING

FLAT STEEL SERVICE CENTERS

BASED ON PRODUCT AND SERVICE OFFER, EU STEEL DISTRIBUTION IS RUNNING DIFFERENT TYPICAL OPERATIONAL MODELS ADAPTED TO

SPECIFIC SUPPLY CHAIN REQUIREMENTS OF EACH END USE SECTOR

EU STEEL DISTRIBUTION & STEEL SSC ARE SYSTEMIC FORSUPPLY CHAINS TO STEEL END USERS


18


THE TYPICAL STEEL PRODUCT PORTFOLIO TRADED BY STEEL DISTRIBUTION REPRESENTS 87 % OF THE VOLUMES 0F ALL PRODUCTS

OFFERED IN EU STEEL MARKET

BEAMSMERCHANT BARS

REBARSPLATES

STRIP MILL PRODUCTSSTAINLESS

OTHER ALLOY STEELS

86 % = 113 MT

EU MARKET SUPPLY IN CONSIDERED PRODUCTS : 131 MT IN 2013

EU MARKET: ALL FINISHED STEEL PRODUCTS OFFERED BY STEEL MILLS

WIRE ROD

RAILS

SHEET PILES

14 %= 18 MT

STEEL PRODUCTS TRADED BY EU STEEL DISTRIBUTION AS WELL AS BY MILLS

ONLY BYMILLS

19


19

EU MILLS87 %

DIRECTDELIVERIES

MILL TO END USER

62 %

38 %

SUPPLY SIDE INTERMEDIATION DEMAND SIDE

ALL STEEL PRODUCTS CONSIDERED, STEEL DISTRIBUTION INTERMEDIATES TODAY 62 % OF EU-27 STEEL MARKET SUPPLY,

NON EU MILLS13 %

EUSTEEL

DISTRIBUTION

STEELDEMAND

BY END USERSEGMENTS

IN EUSTEEL MARKETS

62 %

38 %

SOURCE: EUROMETAL, DATA ESTIMATED FOR 2013

20


IN 2013, STEEL DISTRIBUTION ACCOUNTED FOR 62% OF ROUTES TO THE MARKET:

CONSIDERING ALL STEEL PRODUCTS, THERE WERE NO REALLY SIGNIFICANT CHANGES IN MARKET SHARE OF THE THREE MAIN SUPPLY ROUTES

39 %

37 %

2010 2011 2012

37 % 38 %

23 % 23 %

40 % 39 %SHARE IN EU ROUTES TO MARKETALL STEEL PRODUCTS

DIRDIRECT MILL

DIRFLAT SSC

DIR STEEL STOCKHOLDERS

24 %

E2013

38 %

24 %

38 %

21


FLAT SSC

E2013 ROUTES TO MARKET: STOCKHOLDING DISTRIBUTION MILLS

MA

RK

ET

SH

AR

E

0 %

50

%

1

00

%

RA

IL

S

ME

RC

HA

NT

BA

RS

BE

AM

S

REBARS STRIP MILL PRODUCTS

PL

AT

ES

TUBES

* EXCL. PRE-MATERIAL FOR COLD REROLLING & TUBES, RAILS, SHEET PILING, WIRE RODS

TU

BE

S

FLAT SSC

EU STEEL DISTRIBUTION IS A SYSTEMIC PLAYER IN MARKET SUPPLY FOR ALL STEEL PRODUCT S, EXCEPT FOR WIRE ROD, RAILS, SHEET PILINGS

SOURCE: EUROMETAL UPDATED 16.04.2014

STA

INL

ES

S

OT

HE

R A

LL

OY

ST

EE

LS

22


2012 ROUTES TO MARKET: EU STEEL DISTRIBUTION & TRADERS DIRECT MILL BUSINESS

MA

RK

ET

SH

AR

E

0 %

50

%

1

00

%

RA

IL

S

CONSTRUCTIONSECTOR

STRIP MILL PRODUCTS

* INCL PRE-MATERIAL FOR COLD REROLLING & TUBES,

BY END USE SECTORS, STEEL DISTRIBUTION IS A SYSTEMIC PLAYER FOR CONSTRUCTION & MECH. ENGINEERING SECTORS. FOR AUTOMOTIVE, SSC ARE SYSTEMIC ADDED VALUE PROVIDERS

SOURCE: EUROMETAL UPDATED 16.04.2014

STA

INL

ES

S

AUTOMOTIVESECTOR

MECH.ENGINEE

RING

OTHEREND USE SECTORS

67 %

33%

89 %

69 %

ALL SECTORS

68 %

38%

62 %

31 %

11 %

63 %

33 %

AFTER A SLIGHT SLUMP IN 2013, STEEL DISTRIBUTION SALES RECOVEREDA ROBUST GROWTH PACE IN THE 1.QUARTER OF 2014


DISMET MARKET MONITORINGMARCH 2014

24

IN FIRST 3 MONTHS 2014, DISMET SALES NOTED A GROWTH OF + 7 %, Y-O-Y.

SOURCE : EUROMETAL SOURCE: EUROMETAL UPDATE: 25.04.2014

DEVELOPMENT OF DISMET VOLUME SALES: Y-0-Y COMPARISON

LONG STEEL PRODUCTS

2013 J-M 14

-3%

+8%

PLATES

2013 J-M 14

-3%

+ 8%

STRIP MILL PRODUCTS

2013 J-M 14

-7%

+7%

STAINLESSTUBULAR PRODUCTS

ALL STEEL PRODUCTS

201320132013 J-M 14J-M 14J-M 14

-3 %

+6%

+9%

+11%

- 4 %

+7%

Documents

EUROMETAL PRESENTATION 2014 2. EUROPE STEEL TRADE CONFERENCE STRESA, APRIL 27-29, 2014 POSITION OF STEEL DISTRIBUTION IN EU STEEL MARKETS GEORGES KIRPS,