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The International Metals Study Groups The International Metals Study Groups Supporting the Global Metals Industry Don Smale l Secretary-General ILZSG, ICSG, INSG JOGMEC SEMINAR JOGMEC SEMINAR Tokyo 2 September 2010 1 Tokyo, 2 September 2010
Transcript of The International Metals Study GroupsThe International ...mric.jogmec.go.jp › kouenkai_index ›...
The International Metals Study GroupsThe International Metals Study Groups Supporting the Global Metals Industry
Don SmalelSecretary-General ILZSG, ICSG, INSG
JOGMEC SEMINARJOGMEC SEMINAR
Tokyo 2 September 20101
Tokyo, 2 September 2010
OutlineOutline
• The Study Groups• The Study Groups• Promoting a forum for governments and industry to meet• How we can make a difference• How we can make a difference
– Provision of accurate data on production, usage and trade in copper, lead, zinc and nickelpp
– Directories comparing regulations– Recycling and sustainability
I i l di i f l• International discussion on areas of mutual concern
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The Study GroupsThe Study Groups• Three independent intergovernmentalThree independent intergovernmental
organisations set up within the UN system:I t ti l L d d Zi St d G (1959)– International Lead and Zinc Study Group (1959)
30 members– International Nickel Study Group (1990)
16 memberse be s– International Copper Study Group (1992)
21 members21 members
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Study Groups (cont )Study Groups (cont.)
• Located in Lisbon Portugal since January 2006• Located in Lisbon, Portugal since January 2006, with significant cost savings and synergiesSh S t G l• Share one common Secretary-General
• Significant role for industry representation• Invite observer countries, industry and observer
organisations such as UNCTAD, World Bank, UNIDO, Common Fund for Commodities and metals associations
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A Forum for DiscussionA Forum for Discussion
• Markets: forecasts of supply and demand for• Markets: forecasts of supply and demand for metals a year ahead
• Trade: monitoring of international trade in metals• Trade: monitoring of international trade in metals• Environmental policy: sharing information on
approaches to regulationapproaches to regulation• Industry Advisory Panel: metals industry
executives provide input to member governmentsexecutives provide input to member governments• Study Group Sessions: up to 200 participants at
ILZSG (the largest)ILZSG (the largest)
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Data ProvisionData Provision• Monthly Bulletins of Statistics on Copper, Lead & Zinc and NickelMonthly Bulletins of Statistics on Copper, Lead & Zinc and Nickel• Biannual/annual reporting on mine, smelter an refinery start-ups,
closures, expansions and planned development • Reporting on smelting and refining capacity and other plant details• Publication of data on principal end uses of metals• Studies on trends in downstream metals sectors• Interactive data on lead and zinc accessible through internet
Hi t i l d t i il bl t• Historical data series available on request• Monthly press releases distributed widely
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Sharing Policy ApproachesSharing Policy Approaches• Discussion about national regulatory measures andDiscussion about national regulatory measures and
market-based incentives • Reporting by member countries on environmentalReporting by member countries on environmental
approaches in their jurisdictions• Discussion on multilateral environmental policy (e.g.Discussion on multilateral environmental policy (e.g.
United Nations Commission on Sustainable Development Review of Mining, UNEP, Basel p gConvention)
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SustainabilitySustainability
• Forum to promote sustainable use of metals• Work to develop stewardship of metals through
h lif l f i l li fthe life cycle from mine to metal to recycling for re-use, such as Green Lead (www.greenlead.com)
k d i h lif l f d d• Work to determine the life cycle of products and the efficiency of recycling activity
E d f Lif R li Effi i R (RER)– End-of-Life Recycling Efficiency Rate (RER)
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Recycling Project TeamRecycling Project Team
• Lack of a set of recycling rates that can be used acrossLack of a set of recycling rates that can be used across the metals was causing confusion.
• The International Metal Study Groups’ Recycling• The International Metal Study Groups Recycling Project Team (RPT) established in Sept 2003 to address this issueaddress this issue
• Methodology eventually agreed and report published in Oct 2005in Oct 2005
• Recycling Seminar held in Lisbon in Oct 2007• Work to determine rates for different metal ongoing• Work to determine rates for different metal ongoing
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Recycling Project TeamILZSG ICSG INSGILZSG, ICSG, INSGEuropean Aluminium Association (EAA)European Copper Institute (ECI)European Copper Institute (ECI)European Nickel Industry AssociationEuroferEuroferEurometauxInternational Lead Association (ILA)International Lead Association (ILA)International Wrought Copper Council (IWCC)International Zinc Association (IZA)International Zinc Association (IZA)Nickel InstituteOrg of Aluminium Refiners and Remelters (OEA)Org of Aluminium Refiners and Remelters (OEA)International Council on Mining and Metals (ICMM)
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Recycling Rate Definitions (1)Recycling Rate Definitions (1)Recycling Input Rate =
M l R l d (f EOL & N S )Metal Recycled (from EOL & New Scrap)Metal Produced
Overall Recycling Efficiency Rate = Metal Recycled (from EOL & New Scrap)y ( p)Metal Available for Recycling (EOL & New Scrap)
EOL* Recycling Efficiency Rate =Metal Recycled (from EOL Scrap)M t l A il bl f R li (EOL S )Metal Available for Recycling (EOL Scrap)
*EOL=End of Life
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Recycling Rate Definitions (2)Recycling Rate Definitions (2)
EOL Collection Rate = Metal Collected (EOL Scrap)Metal Collected (EOL Scrap)Metal Available for Recycling (EOL Scrap)
EOL Processing Rate = M t l R l d (f EOL S )Metal Recycled (from EOL Scrap)Metal Collected (EOL Scrap)
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Partnership with CFCPartnership with CFC• The three International Metals Study Groups are recognisedThe three International Metals Study Groups are recognised
as International Commodity Bodies by the Common Fund for CommoditiesTh h k l i• They have a key role in: – Bringing together international commodity associations
and developing country metals industry to apply for CFCand developing country metals industry to apply for CFC funding to promote the development of mining and metals industries in the developing world
– Supervising CFC projects once they are underway– Ensuring that the benefits of metals projects are shared
with other developing countries once they are completedwith other developing countries once they are completed
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Attending the Study Group MeetingsAttending the Study Group Meetings
• All industry representatives from member countries are• All industry representatives from member countries are welcome to participate in Study Group Sessions
• Industry or government delegates from non-memberIndustry or government delegates from non member countries can request participation in Study Group Meetings
• The Study Groups are unique forums where mining y p q gministries can meet their global counterparts and the international metals industry
• Japan is a highly valued member of all 3 Study Groups• We hope that the successful outcome of this seminar will
t d j i i Li bencourage you to come and join us in Lisbon
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International CopperInternational CopperInternational CopperInternational CopperStudy GroupStudy GroupStudy GroupStudy Group
15www.icsg.org
ICSG ICSG -- MEMBERSHIPMEMBERSHIP
Membership is open to any country involved in copper production consumption or internationalcopper production, consumption or international trade.
Current members are: Belgium, Chile, China, Finland France Germany Greece India ItalyFinland, France, Germany, Greece, India, Italy, Japan, Luxembourg, Mexico, the Netherlands, Peru, Poland Portugal the Russian Federation SerbiaPoland, Portugal, the Russian Federation, Serbia, Spain, Sweden, the United States and the European Commission
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Commission.
ICSG ICSG -- MANDATEMANDATE
The mandate of the Study Group provides for enhanced co-operation on issues related to copper and a forum in which governmental consultations on copper can be held.
The Study Group provides a forum for all market y p pparticipants, both producers and consumers, to examine their common problems and carry out open dialogue and free
h f i f tiexchange of information.
Greater market transparency is an important goal of the Group through more complete, reliable and up-to-date statistics, as well as through special research and studies.
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ICSG ICSG -- MAIN OBJECTIVES & MAIN OBJECTIVES & FUNCTIONSFUNCTIONS
To conduct consultations and exchanges of information on theinternational copper economy.
T i t ti tiTo improve statistics on copper.To increase market transparency.To undertake studies on issues of interest to the Group.To undertake studies on issues of interest to the Group.To consider special problems or difficulties that exist or may arise
in the international copper economy.
ICSG endeavours to provide its membership with the most accurate,comprehensive and timely information on capacities, production,p y p , p ,usage, trade, stocks, prices, technologies, research anddevelopment, and other areas that may influence the supply anddemand for copper
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demand for copper.
ICSG MAIN PUBLICATIONS/OUTPUTSICSG MAIN PUBLICATIONS/OUTPUTSICSG MAIN PUBLICATIONS/OUTPUTSICSG MAIN PUBLICATIONS/OUTPUTS
Copper Bulletin (monthly): includes annual and monthly statistics, bycountry on copper mine smelter refined and semis production coppercountry, on copper mine, smelter, refined and semis production, copperusage and trade, as well as stocks and exchange prices, providing aglobal view of supply and demand.
Statistical Yearbook : As above, covering the past 10 years.
Monthly Press Release on the state of the copper market (to beincluded in the email distribution list please contact [email protected])
World Copper Market Forecast: Prepared twice a year for the followingtwo years.
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ICSG MAIN PUBLICATIONS/OUTPUTSICSG MAIN PUBLICATIONS/OUTPUTSICSG MAIN PUBLICATIONS/OUTPUTSICSG MAIN PUBLICATIONS/OUTPUTS
Directory of Copper Mines & Plants (semi-annual): The Directory ofCopper Mines and Plants highlights current capacity and provides afive year outlook of forecasted capacity for over 1 000 existing andfive year outlook of forecasted capacity for over 1,000 existing andplanned copper mines, plants and refineries on a country by countrybasis, including separate tables for SX-EW plants. Salient details for
h ti i l d d d th Di t t tieach operation are included and the Directory separates operationsbetween Operating & Developing and Exploration & Feasibility stages.
Directory of Copper & Copper Alloy Fabricators – First Use (annual):This directory provides a systematic global overview of companies andplants involved in the first use of copper First users are mainly semisplants involved in the first use of copper. First users are mainly semisfabricators that process refinery shapes into semi-finished copper andcopper alloy products. The Directory covers wire rod plants, ingot
k (f ti ) t ll l t b ill d20
makers (for castings), master alloy plants, brass mills, andelectrodeposited copper foil mills.
ICSG RECENT PUBLICATIONSICSG RECENT PUBLICATIONSICSG RECENT PUBLICATIONSICSG RECENT PUBLICATIONS
“Th C S M k t i J ” (2009) “Chi ’ S• “The Copper Scrap Market in Japan” (2009), “China’s Scrap Usage Survey” (2009) and “Domestic Scrap Generation in China 2010-2015” (2009)2010 2015 (2009)
• “Framework for Analyzing the Impacts of Investment Legislation and Tax Regimes on Global Copper Supply Coming on Stream”and Tax Regimes on Global Copper Supply Coming on Stream (2009)
• “The Chinese Copper Scrap Market” (2009) and “The CopperThe Chinese Copper Scrap Market (2009) and The Copper Scrap Market in India” (2009)
• “The World Copper Factbook” (2009)• The World Copper Factbook (2009)
• Coming Soon: “Final Report of the ICSG Copper Scrap Project”
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Copper Stocks vs. PriceCopper Stocks vs. PriceJan 2000Jan 2000 Apr 2010Apr 2010Jan 2000 Jan 2000 -- Apr 2010Apr 2010
2,7002,7752,8502,9253,000
360370380390400
2,1752,2502,3252,4002,4752,5502,625
290300310320330340350
1 5751,6501,7251,8001,8751,9502,0252,100
nnes
, cop
per
210220230240250260270280
nts/
poun
d)
1 0501,1251,2001,2751,3501,4251,5001,575
Thou
sand
met
ric to
140150160170180190200210
Pric
e LM
E (U
S c
en
525600675750825900975
1,050
708090100110120130140
075
150225300375450525
010203040506070
22
Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul-07 Jan 08 Jul-08 Jan 09 Jul-09 Jan-10
Exchanges Producers Merchants Consumers Price LME (UScents/pound)
Stocks are end of period. Prices are averages for the period.
World Refined Copper UsageWorld Refined Copper Usagepp gpp g19001900--20092009
(thousand metric tonnes)(thousand metric tonnes)
17,500
20,000
12,500
15,000
10,000
12,500
5,000
7,500
0
2,500
23
0
1900
1904
1908
1912
1916
1920
1924
1928
1932
1936
1940
1944
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
Refined Copper Usage by RegionRefined Copper Usage by Regionpp g y gpp g y g(thousand metric tonnes)(thousand metric tonnes)
12,000
10,000
Cop
per
6,000
8,000
c To
nnes
4,000
,
and
Met
ric
2,000
Thou
sa
01960 1980 2009p
24Africa America Asia Europe Oceania
Intensity of Refined Copper Use, 2009Intensity of Refined Copper Use, 200911
T i (Chi )Belgium
25on
)
Taiwan (China)
Korean Rep.
United Arab Emirates
20
a (k
g/pe
rso
Germany
United Arab Emirates
15
per C
apita
Italy
10
per U
sage
Saudi Arabia Spain Japan
EU-27 AustraliaChina
ChileUSAFranceTurkey
CanadaR i F dM iE t
Poland5
efin
ed C
opp
Russian Fed.MexicoEgypt
PeruBrazil
India Portugal0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
Re
251/ Note: Refined copper is consumed by semis fabricators or the “first users” of refined copper, including ingot makers, master alloy plants, wire rod plants, brass mills, alloy wire mills, foundries and foil mills. As a result, per capita consumption of refined copper refers to the amount of copper consumed by industry divided by the total domestic population and does not represent consumption of copper in finished products per person.
, , , , , , , , , ,
GDP per Capita (2009 US$/person)
World Copper Usage and ProductionWorld Copper Usage and Production19601960 2006200619601960--20062006
(thousand metric tonnes)(thousand metric tonnes)20,000
16,000
18,000
12,000
14,000
8,000
10,000
4,000
6,000
2,000
,
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008
26Refinery Production Usage Mine Production
Copper Mine Production by RegionCopper Mine Production by Regionpp y gpp y g(thousand metric tonnes)(thousand metric tonnes)
10,000
7 000
8,000
9,000
Cop
per
5,000
6,000
7,000
c To
nnes
3,000
4,000
and
Met
ri
1,000
2,000
Thou
s
01960 1980 2009p
Africa America Asia Europe Oceania
27
Africa America Asia Europe Oceania
Trends in Mining Capacity, 1995Trends in Mining Capacity, 1995--20092009g p y,g p y,(thousand metric tonnes)(thousand metric tonnes)
24 000
18,000
20,000
22,000
24,000
r
12,000
14,000
16,000
d to
nnes
cop
per
4 000
6,000
8,000
10,000
Thou
sand
-
2,000
4,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Concentrates SX-EW Total Mines
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WORLD MINE PRODUCTION
7 5008,000
6 0006,5007,0007,500
4 5005,0005,5006,000
nnes
Cu Africa
N.AmericaLatin America
3 0003,5004,0004,500
sand
ton Asia
EU-27Europe Others
1 5002,0002,5003,000
Thou Oceania
0500
1,0001,500
29
02002 2003 2004 2005 2006 2007 2008 2009
Leading Exporters and Importers ofLeading Exporters and Importers ofCopper Ores and Concentrates, 2009Copper Ores and Concentrates, 2009
(thousand metric tonnes)(thousand metric tonnes)
Exporters Importers
S
Others9%
Mongolia 2%
Argentina 3%USA Chile China
Bulgaria 3%Brazil 2%
Sweden 2%
Others5%
Philippi
%3%Kazakhstan 3%Brazil 3%
SA 3%
Canada
Chile33% 30%
%
Germany
ppines 4%Spain6%
5%
Australia10%
Korean Rep.8%
Germany7%
Peru16%Indonesia
13%
Japan22%
8%
India11%
30
Refined Copper Production by RegionRefined Copper Production by Regionpp y gpp y g(thousand metric tonnes)(thousand metric tonnes)
9,000
7,000
8,000
5,000
6,000
3,000
4,000
0
1,000
2,000
0
199319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
09
31Africa America Asia Europe Oceania
Trends in Refining Capacity, 1995Trends in Refining Capacity, 1995--20092009g p y,g p y,(thousand metric tonnes)(thousand metric tonnes)
28,000
22,000
24,000
26,000
16 000
18,000
20,000
,
s co
pper
10 000
12,000
14,000
16,000
ousa
nd to
nnes
6,000
8,000
10,000
Tho
-
2,000
4,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Electrolytic Electrowinning Fire Refining Total Refineries
WORLD COPPER REFINED PRODUCTION
8 5009,000
7,0007,5008,0008,500
5 0005,5006,0006,5007,000
nnes
Cu
AfricaN.America
3,5004,0004,5005,000
usan
d to
n Latin AmericaAsiaEU-27
1 5002,0002,5003,0003,500
Thou Europe Others
Oceania
0500
1,0001,500
332002 2003 2004 2005 2006 2007 2008 2009
Leading Exporters and Importers of Leading Exporters and Importers of g p pg p pRefined Copper, 2009Refined Copper, 2009
(thousand metric tonnes)(thousand metric tonnes)
ImportersExporters
ThailandN
Others14%Others
22% and 3%Netherlands 3%France 3%
Turkey 4%
China38%
Netherlands 3%
Chile36%
Korean Rep.6%
Taiwan6%lia
4%
Kazakhstan 4%Poland 4%
Belgium 3%
USA8%
6%Italy7% Germany
8%
Zambia7%
Japan7%
Russia6%
Peru
4%
Austra
liaKa
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Global Copper Recyclables Use Global Copper Recyclables Use pp ypp y20022002--20082008
(thousand metric tonnes)(thousand metric tonnes)
Total Scrap Usage - Cu 2002 2003 2004 2005 2006 2007 2008Americas 1,466 1,379 1,426 1,429 1,476 1,493 1,345Asia 2,807 2,882 3,324 3,575 4,257 4,304 4,296Europe 2,711 2,529 2,594 2,469 2,638 2,579 2,529Africa & Oceania 68 51 51 55 50 61 52World Total 7,056 6,848 7,401 7,536 8,425 8,445 8,230
Total scrap use year-on-year -3.0% 8.1% 1.8% 11.8% 0.2% -2.6%Secondary refined production 1,898 1,786 2,069 2,161 2,613 2,743 2,823Cu content of Direct Melt 5,159 5,061 5,331 5,375 5,812 5,702 5,407R fi d U 15 238 15 719 16 845 16 677 17 058 18 239 18 062Refined Usage 15,238 15,719 16,845 16,677 17,058 18,239 18,062Total copper usage 20,396 20,781 22,176 22,053 22,869 23,941 23,468World Recycling Input Rate (RIR) 34.6% 33.0% 33.4% 34.2% 36.8% 35.3% 35.1%
Recycling Input Rate by Region 2002 2003 2004 2005 2006 2007 2008Asia 30.9% 30.0% 31.7% 33.1% 37.7% 34.2% 34.0%Europe 44.4% 41.6% 41.2% 41.5% 41.0% 41.3% 42.7%North America 32.4% 31.5% 30.5% 31.1% 33.2% 34.1% 33.0%Rest of the World 16 3% 14 0% 14 6% 16 6% 17 1% 18 8% 16 3%
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Rest of the World 16.3% 14.0% 14.6% 16.6% 17.1% 18.8% 16.3%
Copper Semis and Casting Production Copper Semis and Casting Production 19801980--20082008
(thousand metric tonnes)(thousand metric tonnes)
24,000
27,000
18,000
21,000
12,000
15,000
6,000
9,000
0
3,000
36
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
Copper Semis Copper Alloy Semis Other Semis Foundry Castings
Copper Semis and Casting Production Copper Semis and Casting Production By RegionBy Region
(thousand metric tonnes)(thousand metric tonnes)
2008
1980
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
37Africa Asia Europe North America Oceania South America
Leading Exporters and Importers ofLeading Exporters and Importers ofS iS i F b i t d C P d t 2009F b i t d C P d t 2009SemiSemi--Fabricated Copper Products, 2009Fabricated Copper Products, 2009
(thousand metric tonnes)(thousand metric tonnes)Exporters
1,200
600
800
1,000
200
400
600
0
GermanyChina
Korean Rep.
TaiwanFrance
Italy Hong Kong
United States
Russian Fed.
BelgiumJapan
SpainSweden
CanadaPoland
Others
1,600Importers
1,000
1,200
1,400
,
200
400
600
800
380
ChinaUnited States
Italy Hong Kong
GermanyFrance
United Kingdom
MexicoCzech Rep.
AustriaSpain
Switzerland
ThailandKorean Rep.
Singapore
Others
End Use by Sector and Region, 2008End Use by Sector and Region, 2008CCBasis: Copper content, thousand metric tonnesBasis: Copper content, thousand metric tonnes
Source: International Copper AssociationSource: International Copper Association
20082008tonnes
000
China 6 937China 6,937Japan 1,622South Korea 768India 882ASEAN 892ASEAN 892Taiwan 521
Region: Asia 11,622North America 3,171R f W ld 2 186Rest of World 2,186Latin America 1,533
Region: All others 6,890Western Europe 3,984Eastern Europe 1,451
Region: Europe 5,435
World 23,947
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2009 2009 –– The year of the global collapseThe year of the global collapse
•Economic slowdown (impacting all sectors of the copper industry)
•Copper supply below expectationspp pp y pIndustry took cautious measures to overcome the crisis
(announced production cuts, delays in mine start-ups) W k l h i id k t li iti lt t tWeak sulphuric acid market limiting smelter outputShortage of scrap and concentrates constraining production ratesMajor producers affected by operational failures
•Copper refined usage declined substantially in major consuming regionsg
Depressed construction, automotive and industrial machinery sectors
D t kiDe-stockingChina was the exception with strong apparent usage growth 40
2010/2011 Refined Copper Usage2010/2011 Refined Copper UsageMain Global AssumptionsMain Global AssumptionsMain Global AssumptionsMain Global Assumptions
Positive FactorsI d i i t d tl k h l iImproved economic environment and outlook helping usage recovery
IMF raised its forecast for world growth in 2010 to 4.2% and 4.3% for 2011: US growth at 3.1% in 2010 and 2.6% in 2011; China at 10% and 9.9% respectively; India at 8.8% in 2010 and 8.4% for 2011; Euro area at 1.0% in 2010 and 1.5% in 2011; Japan at 1.9% in 2010 and ; ; p2.0% in 2011
Already positive signs in world ex-China demand seen end 2009/1Q2010 (Japan, the EU and the USA)
E t d i t i t ti / t bil t d f t iExpected improvements in construction/automobile sectors and manufacturing activity
Expected rise in capacity utilization rates at new semis plantsContinued growth of India and China boosting copper usageg g pp g
Cautionary FactorsSubstitution (continued high prices increases risk of substitution)( g p )Withdraw of Government stimulus schemesRelease of Chinese stocksSlower than expected world economy recovery and EU financial issuesIncreased use of scrap vs cathode (vs 2009)
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Increased use of scrap vs cathode (vs 2009)
2010/2011 Refined Copper Usage 2010/2011 Refined Copper Usage World ForecastWorld Forecast
2010 expected lower Chinese apparant usage growth putting pressure on world growth.
World ForecastWorld Forecast
World refined usage expected to decrease by 1.4% in 2010 (China effect)World refined usage expected to increase by 5.1% in 2011
REGIONS('000T) 2008 2009 2010 2011
(t) (%) (t) (%) (t) (%)
growth growth growth
COPPER USAGE
Africa 299 306 8 2.6% 338 32 10.5% 389 51 15.0%
N.America 2,542 2,048 -494 -19.4% 2,156 108 5.3% 2,235 79 3.7%
Latin America 575 505 -70 -12.1% 560 54 10.7% 592 32 5.7%
Asean 10 753 687 66 8 8% 734 47 6 8% 770 36 4 9%Asean-10 753 687 -66 -8.8% 734 47 6.8% 770 36 4.9%
Asia ex Asean/CIS 8,743 10,546 1,803 20.6% 9,855 -691 -6.5% 10,401 546 5.5%
Asia-CIS 104 105 1 0.8% 105 1 0.6% 106 1 0.8%
EU-27 3,816 3,096 -720 -18.9% 3,224 128 4.1% 3,349 125 3.9%
Europe Others 1,073 775 -298 -27.8% 822 47 6.0% 861 39 4.8%Oceania 151 130 -21 -14.1% 142 12 9.6% 148 6 4.2%WORLD 18,056 18,198 142 0.8% 17,937 -261 -1.4% 18,851 914 5.1%
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2010/2011 Copper Production2010/2011 Copper ProductionMain Global AssumptionsMain Global Assumptions
Positive FactorsReopening of C&M mines Operational levels at curtailed operation back to normalImproved sulphuric acid market not constraining smelter outputImproved sulphuric acid market not constraining smelter outputBetter scrap supply helping increasing secondary production Expanded refined production capacity mainly in ChinaMine ramp-up and new capacityp p p yOvercome of operational failures at major producers
Constraining FactorsgLabour contract renewalLack of concentrates/low Tc/Rc’s limiting refined productionDelays in anticipated new capacity (ramp-up/expansions)Operational failuresOperational failures Lower than expected head grades
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2010/2011 Copper Production2010/2011 Copper ProductionWorld Copper Mine ForecastWorld Copper Mine Forecast
World copper mine production is expected to increase by 6.7% in 2010 (1Mt). Lower growth rate expected for 2011 (2 9%) due to delays/deferrals in project
World Copper Mine ForecastWorld Copper Mine Forecast
Lower growth rate expected for 2011 (2.9%) due to delays/deferrals in project development caused by global crisisAround 70% of the increase in mine production in 20010/2011 will arise from concentrates
REGIONS('000T) 2008 2009 2010 2011growth growth growth
MINE PRODUCTION
(t) (%) (t) (%) (t) (%)
Africa 952 1,076 124 13.0% 1,345 269 25.0% 1,598 253 18.8%
N.America 2,189 1,933 -256 -11.7% 2,012 79 4.1% 2,257 245 12.2%
Latin America 6 977 7 036 59 0 8% 7 438 402 5 7% 7 561 123 1 7%Latin America 6,977 7,036 59 0.8% 7,438 402 5.7% 7,561 123 1.7%
Asean-10 772 1,180 409 52.9% 1,215 35 2.9% 989 -226 -18.6%
Asia ex Asean/CIS 1,540 1,504 -36 -2.4% 1,544 40 2.6% 1,589 46 3.0%
Asia-CIS 531 501 -29 -5.5% 524 23 4.6% 525 1 0.1%
EU-27 709 729 19 2.7% 802 74 10.1% 836 34 4.2%
Europe Others 815 774 -41 -5.0% 803 29 3.7% 826 23 2.9%Oceania 1,043 1,021 -22 -2.2% 1,122 101 9.9% 1,119 -3 -0.2%WORLD 15,528 15,754 226 1.5% 16,805 1,051 6.7% 17,301 496 2.9%
44
2010/2011 Copper Production2010/2011 Copper ProductionR fi d C R i l G thR fi d C R i l G th
World refined production expected to increase by 0.7% in 2010 and 3.1% in 2011W ld d fi d d ti t b 6% i 2010 5% i 2011
Refined Copper Regional GrowthRefined Copper Regional Growth
World secondary refined production to grow by 6% in 2010, 5% in 2011World SX-EW production to grow by an accumulated 13% in 2010/2011
REGIONS REFINED PRODUCTION
('000T) 2008 2009 2010 2011(t) (%) (t) (%) (t) (%)
Africa 582 672 91 15.6% 929 257 38.2% 1,142 213 22.9%
growth growth growth
N.America 2,017 1,758 -260 -12.9% 1,792 34 1.9% 1,887 95 5.3%
Latin America 3,774 3,937 163 4.3% 4,039 102 2.6% 4,136 97 2.4%
Asean-10 495 544 49 10.0% 568 24 4.4% 615 47 8.3%
Asia ex Asean/CIS 6,757 7,055 298 4.4% 7,558 503 7.1% 8,035 477 6.3%Asia ex Asean/CIS 6,757 7,055 298 4.4% 7,558 503 7.1% 8,035 477 6.3%
Asia-CIS 488 458 -30 -6.2% 460 2 0.4% 501 41 8.9%
EU-27 2,566 2,511 -55 -2.1% 2,656 145 5.8% 2,715 59 2.2%
Europe Others 1,041 995 -45 -4.4% 1,017 22 2.2% 1,036 19 1.9%O i 502 445 % 447 % 478 %Oceania 502 445 -56 -11.2% 447 1 0.3% 478 31 6.9%WORLD 18,222 18,377 155 0.8% 19,467 1,090 5.9% 20,545 1,078 5.5%
Adjustment for Primary Feed Shortage -37 -261Allowance for Disruptions -915 -1,189
45World after adjustments 18,377 155 0.8% 18,515 138 0.7% 19,094 580 3.1%
ICSG World Copper ForecastICSG World Copper Forecast FORECAST TO 2011
REGIONS
(1000 t) 2009 2010 2011 2009 2010 2011 2009 2010 2011
MINE PRODUCTION REFINED PRODUCTION COPPER USAGE
Africa 1,076 1,345 1,598 672 929 1,142 306 338 389N.America 1,933 2,012 2,257 1,758 1,792 1,887 2,048 2,156 2,235Latin America 7,036 7,438 7,561 3,937 4,039 4,136 505 560 592Asean-10 1,180 1,215 989 544 568 615 687 734 770sea 0 , 80 , 5 989 5 568 6 5 68 3 0Asia ex Asean/CIS 1,504 1,544 1,589 7,055 7,558 8,035 10,546 9,855 10,401Asia-CIS 501 524 525 458 460 501 105 105 106EU-27 729 802 836 2,511 2,656 2,715 3,096 3,224 3,349Europe Others 774 803 826 995 1,017 1,036 775 822 861Oceania 1,021 1,122 1,119 445 447 478 130 142 148TOTAL 15,754 16,805 17,301 18,377 19,467 20,545 18,198 17,937 18,851
Adjustment for Primary Feed Shortage 1/ 37 261Adjustment for Primary Feed Shortage 1/ -37 -261Allowance for Disruptions 2/ -915 -1,189
World 15,754 16,805 17,301 18,377 18,515 19,094 18,198 17,937 18,851% change 1.46% 6.67% 2.95% 0.85% 0.75% 3.13% 0.79% -1.44% 5.10%
46
gRefined Production - Usage Balance 179 578 2431/ based on a formula for the difference between the projected copper availability in concentrates and the projected use in primary refined production2/ Based on capacity utilisation of mines and refineries
ICSG World Copper forecastpp
WORLD COPPER BALANCE'000MT '000MT
17,500
20,000
400
600000
12,500
15,000
0
200
5 000
7,500
10,000
600
-400
-200
0
2,500
5,000
-1 000
-800
-600
02003 2004 2005 2006 2007 2008 2009 2010 2011
-1,000
Balance (after ajustments) World Refined Production (adjusted) World Usage
47
CONCLUSIONSCONCLUSIONSCONCLUSIONSCONCLUSIONS
• World copper mine production is expected to increase by 7% in 2010 to nearly 16.8 million tonnes and is forecast to i th 3% i 2011increase another 3% in 2011.
• Refined copper production is expected to increase by 0.7% and 3 1% in 2010 and 2011 respectivelyand 3.1% in 2010 and 2011, respectively.
• Although world copper usage is expected to decrease by 1 4% this year the rate of growth is forecast to rebound to1.4% this year, the rate of growth is forecast to rebound to 5.1% in 2011.
• As a result, the refined surplus is expected to grow by over , p p g y380,000 tonnes in 2010 but is forecast to contract by nearly 335,000 tonnes in 2011 to less than 245,000 tonnes.
48
NEXT ICSG MEETINGS:NEXT ICSG MEETINGS:
28 September 201028 September 2010
Antofagasta, ChileAntofagasta, Chileg ,g ,
A Bicentennial Mining Week EventA Bicentennial Mining Week EventA Bicentennial Mining Week EventA Bicentennial Mining Week Event
For more information please visitFor more information please visit www icsg orgwww icsg orgFor more information, please visit For more information, please visit www.icsg.orgwww.icsg.orgwww.semanaminerabicentenario.clwww.semanaminerabicentenario.clor contact ICSG at or contact ICSG at [email protected]@icsg.org
49
@ g g@ g g
I t ti l L d d ZiInternational Lead and ZincStudy GroupStudy Group
50www.ilzsg.org
ILZSG OverviewILZSG Overview
I t t l i ti t ithi th UN tIntergovernmental organization set up within the UN system
Significant level of industry representation
Established by UN in 1959 in New York
Moved to London in 1977Moved to London in 1977
From start of 2006 ILZSG, ICSG & INSG co located inICSG & INSG co-located in Lisbon, Portugal
51
ILZSG MembershipILZSG Membership
Membership open to any country involved in lead and/or zinc p p y yproduction, usage, or trade.30 members (>85% of global lead/zinc industry):
AustraliaBelgium
GermanyIndia
SerbiaSouth Africa
NamibiaNetherlandsBelgium
BrazilBulgaria
IndiaIranIreland
South AfricaSpainSweden
NetherlandsNorwayPeruBulgaria
CanadaChina
IrelandItalyJapan
SwedenThailandUnited States
PeruPolandPortugal
FinlandFrance
pKorea Rep.Morocco
European Community
gRussian Fed.
52
ILZSG Main PublicationsILZSG Main Publications50% Discount
For companies based in member
Lead and Zinc New Mine and Smelter Projects 2010
World Directory: Continuous Galvanizing Lines 2010
based in member countries
China Lead Acid Battery Market (prepared for ILZSG by BGRIMM)
China Zinc Recycling Industry (prepared for ILZSG by BGRIMM)
Principal Uses of Lead and Zinc 2008
World Zinc Oxide and Zinc Dust Production 2008
World Directory: Primary & Secondary Zinc Plants 2008
Environment and Health Controls on Zinc 2008
The Use of Zinc in Construction and Public Infrastructure 2007
The Market for Zinc: Fundamentals Driving Change 2006
53
g g
ILZSG ForecastsILZSG Forecasts
• Published in April and October
• Based on information provided by industry in member countries
• Use “bottom-up” approach
• Provide insight into views and plans of industry d tand governments
54
Stocks and Prices
• Trends in reported stock levels are a useful i di tindicator
• Main source of stock information is LMEMain source of stock information is LME
• Other data provide by SHFE and some producers and consumers
55
Lead Stocks and Prices
550'000 tonnes
4000US$ per tonne
Apr 2004 – Apr 2010
450
500
3000
3500monthly average
300
350
400
2500
3000
200
250
300
1500
2000
100
150
200
1000
0
50
0
500Source: ILZSG / LME
56
Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09 Apr‐10
Stocks Lead LME Cash Settlement Price
World Lead Demand 1960 to 2010f'000 tonnes
8000
9000
7000
6000
5000
3000
4000
571960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010f
Lead End UsesLead End Uses
27% 18%27% 18%
1960 80%
1%18%
2005
6%
3%Batteries3%10%
13%
2%
5%
3%
Cable Sheathing
Rolled & Extruded
Shot/Ammunition
11%10%
Shot/Ammunition
Alloys
Pigments & Compounds
58Miscellaneous
Lead Demand Growth ‐ China vs Rest of the ld fWorld 2002‐2010f
4400'000 tonnes
7000
'000 tonnes 3600
4000
6000
6500
2400
2800
3200
5500
1600
2000
2400
China
4500
5000
2002 2003 2004
800
1200World excluding
hi
China
Source: ILZSG2002 2003 2004 2005
4000
2003 2004 2005 2006 2007 2008 2009 2010f
China
59
Sou ce SG2005 2006 2007 2008 2009 2010f
Chinese Lead Demand Growth
• Increased production of automotive (SLI)
lead‐acid original equipment and
replacement batteriesreplacement batteries
• Output of industrial batteries used as back‐p
up power in telecoms and computing
sectors also rising
60
E‐Bikes in ChinaE Bikes in China
• Huge rise in popularity• Huge rise in popularity
• Low costLow cost
• Zero emission
• Powered by lead‐acid batteries
61
Chinese E‐Bike Production
Chinese Output of Electric Bicycles by Region in 2008(Million units)
Chinese Output of Electric Bicycles by Region in 2008
Province Output Province Output
Tianjin 6 5 Guangdong 0 8Tianjin 6.5 Guangdong 0.8
Jiangshu 5.3 Hebei 0.02
Zhejiang 5 Other 0 2Zhejiang 5 Other 0.2
Shangdong 2.9
Shanghai 1 2Shanghai 1.2
Total 21.9
62
Source: China Bicycle Association/ILZSG
Chinese E‐Bike DevelopmentChinese E Bike Development
• Designs becoming more sophisticatedg g p
• Newer, more powerful models utilise 48v + 72v batteries
• E tricycle sales rising• E‐tricycle sales rising
63
Chinese Motrocycle ProductionChinese Motrocycle Production
Chinese Output of Motorcycle by Region in 2008
Province Output Province Output
Chinese Output of Motorcycle by Region in 2008(Million units)
Province Output Province Output
Guangdong 9.1 Shanghai 0.7
Chongqing 7.8 Hebei 0.6
Zhejiang 3.0 Tianjin 0.2
Jiangshu 2.1 Other 2.4
Henan 1 6Henan 1.6
Total 27.5
64
Source:BGRIMM/ILZSG
Chinese Industrial Lead Acid Battery ProductionChinese Industrial Lead Acid Battery Production
Chinese Output of Industrial Lead Acid Battery in 2008
Province Output Province Output
Chinese Output of Industrial Lead Acid Battery in 2008(Million KVAh)
Province Output Province Output
Jiangshu 4.2 Fujian 1.3
Zhejiang 3.7 Hunan 1.3
Heilongjiang 3.5 Anhui 1.1Heilongjiang 3.5 Anhui 1.1
Guangdong 1.9 Other 4.0
Shandong 1.4
Total 22.4
65Source: NBS/ILZSG
Chinese Vehicle Population and Production1979‐2009
1600060000000 units production population, 000s
12000
14000
48000
1000036000Vehicle Production Vehicle Population
6000
8000
24000
Vehicle Production Vehicle Population
4000
6000
12000
0
2000
0
66
01979 1984 1989 1994 1999 2004 2009
0
World Lead Metal Demand Forecast
A l Ch
8.0%
ILZSG F
Annual Change
6.0%
7.0%ILZSG Forecast
3 0%
4.0%
5.0%2010 7.3 %
1.0%
2.0%
3.0%
0.0%2006 2007 2008 2009 2010f
Source: ILZSG
67
Source: ILZSG
World Lead Metal DemandWorld Lead Metal Demand
After 17% decline in 2009, forecast rise in Europe of 3.2% as car production increases and demand from telecommunications and IT sectors gradually improves
d d b fUSA demand to increase by 2.8% after 6.3% fall in 2009
68
World Lead Mine Supply ForecastWorld Lead Mine Supply Forecast
8.0%
ILZSG F
Annual Change
6.0%
7.0%ILZSG Forecast
2010 5 1 %
4.0%
5.0%2010 5.1 %
1 0%
2.0%
3.0%
0.0%
1.0%
2006 2007 2008 2009 2010fSource: ILZSG
69
Source: ILZSG
World Lead Mine SupplyWorld Lead Mine Supply
Restart of 85kt/year Magellan mine will influence rise in Australia
Opening of Goldcorp’s 95Kt/year Penasquito mine in Mexico at end of last year
Higher output in China and India
70
World Lead Metal Supply ForecastWorld Lead Metal Supply Forecast
A l Ch
8.0%
Annual Change
ILZSG Forecast 6.0%
7.0%
2010 7.5 %
3 0%
4.0%
5.0%
1.0%
2.0%
3.0%
0.0%2006 2007 2008 2009 2010f
Source: ILZSG
71
World Lead Metal SupplyWorld Lead Metal Supply
Commissioning of new plants at Juiz de Fora in Brazil and Chanderiya in India
Restart of La Oroya in Peru remains uncertain but likely in near futurey
11.9% increase in Chinese output
72
World Refined Lead Metal Balance
200 '000 tonnes
100
150
0
50
‐50
0
‐150
‐100
‐250
‐200 Source: ILZSG
73
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
Zinc Stocks and Prices
1400'000 tonnes
4500US $ per tonne monthly average
Apr 2004 – Apr 2010
1000
1200
3500
4000monthly average
800
1000
2500
3000
600
1500
2000
200
400
500
1000
0
Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09 Apr‐10
0
Source: ILZSG / LME
74SRB+SHEFE Producers+Consumers+LME Zinc LME Cash Settlement Price
Zinc First Uses
16%
Zinc First Uses
16%
32%
52%17%
20%1960 2005
6%3%
6%3%Galvanizing
Alloys25%9%
11%
Brass and BronzeSemisChemicals
9%
Source: ILZSGMiscellaneous
75
Source: ILZSG
Zinc Demand in China 1990-2009
‘000 tonnes
3500
4000
4500
2500
3000
3500
1500
2000
500
1000
Source: ILZSG
17.5% increase in 2009
199019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
09
0Source: ILZSG
76
2 2 2 2 2 20 20 20
China – Selected Trends in 2009
Rise in GDP of 8.5% (IMF)
I i t l t t f 14%Increase in steel output of 14%
Galvanized steel production up by 15%Galvanized steel production up by 15%
White good sales 15% higher
Floor space under construction up by 16%
Automotive sales rise by 48%
77
Zinc Market – Demand GrowthChi R f h W ld 2002 2009
5000'000 tonnes
China vs Rest of the World 2002‐2009
400010000
3000
10000'000 tonnes
2000China
8000
2002 2003 2004 2005 2006
10006000
World excluding China2006 2007 2008 2009
2002 2003 2004 2005 2006
4000
78
2005 2006 2007 2008 2009 Source: ILZSG
Distribution of Refined Zinc Usageg
Japan
1999 2009
IndiaJIndia3.0%
Other27.7%
Japan7.5%
India4.8% Other
21.1%
Japan4.0%
Europe31.9%
China14.1% USA
15.8%
Europe18.1%
China43.7%
USA8.3%
79Source: ILZSG
Production of Galvanized Steel in China
20000000 tonnes
16000
12000
8000
4000
0
Source: China Metals
801979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
China’s Infrastructure Requirementsq
USAUSA CHINACHINAUSAUSA CHINACHINAPer million peoplePer million people
Motorways (km)Motorways (km) 21 86221 862 1 0801 080Motorways (km)Motorways (km) 21,86221,862 1,0801,080Roads (km)Roads (km) 14,15714,157 242242R il (k )R il (k )Railways (km)Railways (km) 780780 5454
Per 000 kmPer 000 km22
Motorways (km)Motorways (km) 699699 150150Roads (km)Roads (km) 453453 3434Roads (km)Roads (km) 453453 3434Railways (km)Railways (km) 2525 88
81Source: China Metals
Extent of China’s Transport Routes
60.0Expressways '000km
80.0Railways '000km
50.0 70.0• 30,000km of new railway to be built in next 5 years – including
40.0 60.0Harmony Express project
20 0
30.0
40 0
50.0
• Additional 16 000km of
10.0
20.0
30.0
40.0• Additional 16,000km of expressways to be completed by 2020
0.0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
20.0
Source: National Bureau of Statistics; People’s Daily
y
82
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007Expressways Railways
Chinese Stimulus Package (Yuan Bn)
Welfare Housing 280 400
Previous New
Rural Infrastructure 370 370
Railways, Highways & Airports 1800 1500
Medical and Education Reform 40 150
Energy Saving & Ecology 350 210Energy Saving & Ecology 350 210
Independent Restructuring 150 370
Post-earthquake Reconstruction 1000 1000Post-earthquake Reconstruction 1000 1000
Total 3990 4000
83
Source: NDRC/China Metals
World Zinc Metal Demand ForecastWorld Zinc Metal Demand Forecast
12.5%ILZSG Forecast
Annual Change
7.5%
10.0%ILZSG Forecast
2010 11 3 %
0 0%
2.5%
5.0%2010 11.3 %
-5.0%
-2.5%
0.0%
-7.5%
5.0%
2006 2007 2008 2009 2010f
Source: ILZSG
84
Source: ILZSG
World Zinc Metal DemandWorld Zinc Metal Demand
Unprecedented 25% decline in Europe last year. Recovery of 21.6% in 2010 but demandyear. Recovery of 21.6% in 2010 but demand to remain well below levels achieved in 2008 and 2009and 2009
Partial recovery of 5.6% anticipated in USA in y p2010
Demand in Japan and most of S.E. Asia also expected to register strong growth
85
Chinese Zinc Metal DemandChinese Zinc Metal Demand
Increase of 17.8% in apparent demand in 2009
Other indicators also positiveOther indicators also positive:14% rise in steel output
15% rise in galvanised steel output
16% increase of floor space under construction
15% rise in sales of white goods
48% increase of vehicle outputp
Further rise in demand of 8.9% in 2010
86
World Zinc Mine Supply Forecastpp y
7.5%
ILZSG F
Annual Change
5.0%ILZSG Forecast
0.0%
2.5%2010 6.3 %
-2.5%
-5.0%2006 2007 2008 2009 2010f
Source: ILZSG
87
Source: ILZSG
World Zinc Mine SupplyWorld Zinc Mine Supply
Resumption of normal production at Century mine in Australia after transportation pproblems in Q4 2009
Further increases at Rampura Agucha in India – now the world’s biggest zinc mine
Opening of Penasquito in Mexico will provide ddi i l i f 90k /additional capacity of 190kt/year
88
World Zinc Metal Supply ForecastWorld Zinc Metal Supply Forecast
12.5%
ILZSG Forecast
Annual Change
7.5%
10.0%ILZSG Forecast
2010 10 3 %
2.5%
5.0%2010 10.3 %
-2.5%
0.0%
-5.0%2006 2007 2008 2009 2010f
Source: ILZSG
89
Source: ILZSG
World Zinc Metal SupplyWorld Zinc Metal Supply
Increase due to combination of opening ofIncrease due to combination of opening of new capacity and restart of suspended production
Nyrstar’s 255kt/yr Balen operation inNyrstar s 255kt/yr Balen operation in Belgium brought back on stream in October 20092009
Overall rise in European output of 16%Overall rise in European output of 16% anticipated
90
Indian Zinc Metal Output 2000‐2010f
800
p
‘000 tonnes
Debottlenecking at Debari and
210kt Rajpura Dariba refinery opened Mar10
700
800Source: ILZSG
Dec07 – second 170kt refinery d t Ch d i
Debottlenecking at Debari and Chanderiya ISF completed
500
600
Expansion of May05 – first 170kt refinery opened at Chanderiya
opened at Chanderiya
400
Debari and Visakhapatnam
200
300
0
100
912000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
Zinc Metal World Balance
500 '000 tonnes
300
400
100
200
0
100
‐200
‐100
Source: ILZSG
‐400
‐300
922000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
Lead – Major Issuesj
Market expected to be in surplus in 2010
However supply side limitations remainHowever, supply side limitations remain
Demand almost intirely depending on sales of lead‐d b d l dacid batteries, used primarily in automotive, IT and
telecomms sectors
China no. 1 producer and consumer
Environmental legislation (eg. REACH & RiskEnvironmental legislation (eg. REACH & Risk Management) will continue to have major impact on industry
93
y
Zinc – Major Issuesj
Significant surplus anticipated in 2010
Reported stocks have risen steadily since end 2007Reported stocks have risen steadily since end 2007
China largest producer and consumer
I d lid i i i ( bid fIndustry consolidation continuing (eg. recent bid for Noranda Income Funds by Xstrata)
Use of galvanized steel increasing
Increased recycling
Environmental legislation (REACH & Risk Management)
94
g )
I t ti l Ni k lInternational NickelStudy GroupStudy Group
95www.insg.org
International NickelStudy Group Members
European UnionBrazilAustralia Cuba European Union
Greece
Brazil
France
Australia
Finland
Cuba
Germany
NorwayJapanItaly Netherlands
United KingdomRussianFederation
Portugal Sweden
96
Why an IntergovernmentalWhy an IntergovernmentalGroup?p
In 1960s to 1980s the quality of nickel statistics had q ydeclinedA 1970s attempt to form a producer association did p pnot succeedPrivate organizations helped to fill the gaps, but the g p g p ,leverage was limitedBecause of its recognized neutrality, the Group can g y, pget easier access to certain information that would otherwise be kept confidential.
97
INSG Obj tiINSG Objectives (1/2)
to collect and publish improved statistics monthly i k l k (i l di d ion nickel markets (including production,
consumption, trade, stocks, prices and other i i h li )statistics such as recycling)
to publish other information on nickel, such as data on industry facilities and environmental yregulations
98
INSG Obj tiINSG Objectives (2 /2)
to undertake and publish economic analysis of i k l k d l d inickel markets and related topics
to provide a forum for discussions on nickel issues of interest to nickel producing and consuming p g gcountries and their industries, including environmental issues
99
INSG St ti tiINSG Statistics
Extensive range of statistics produced monthlyCoverage includes mine production, primary nickel, nickel-bearing scrapProduction, usage (consumption), stocks, tradeUsage (consumption) data is particularly wellUsage (consumption) data is particularly well regardedthe data facilitates transparency and efficient operation of global nickel markets
100
INSG bli tiINSG publications
World Nickel Statistics BulletinTwelve issues focused on the latest available monthly dataTwelve issues focused on the latest available monthly data.Yearbook (Special Issue) published once a year in November; annual data for the latest available 12-year period.y p
World Directory of Nickel Production FacilitiesyNickel Mines, Nickel Smelters and Refineries, New Nickel Industry Developments (Committed Developments, Likely P j t D l t P t ti l P j t D l t ) dProject Developments, Potential Project Developments) and Contact details.Published each year in September.
101
Published each year in September.
Economic and Environmental issues
Legislative: advising governments on impact of existing and new legislation on the nickel marketNickel Recyclingy g
environmental impact: waste, primary resources economic (market) impact: supply of nickel units ( ) p pp yfrom scrap
Economic: studies on nickel supply and demand;Economic: studies on nickel supply and demand; country studies; trade issues; potential Common Fund for Commodities projects to promote nickel
102
u d o Co od es p ojec s o p o o e c e
Ni k l R liNickel Recycling
Compiling information on nickel recycling to assessi t l i t d l d h t t fenvironmental impact: developed a coherent set of
recycling indicators in conjunction with industry i ti d th St d G th hassociations and other Study Groups through
Recycling Project Teammarket impact: provide information on future supply of Ni units in scrap
103
Ni k l R liNickel Recycling
Recently more attention at INSG on secondary nickel:Bulletin: trade statistics on stainless steel scrapMeetings: overview of primary market is followed by presentation on (stainless) scrap But: no hard data on Ni in scrap (except trade data) p ( p )
104
Nickel Industry EnvironmentalNickel Industry Environmental and Regulatory Issuesg y
Nickel Risk AssessmentEU Risk Assessment – finalized in 2007OECD Risk Assessment –finalized in 2007
REACH EU Program registration obligations for NickelREACH EU Program – registration obligations for Nickel imported/produced in EU“Read-across” of nickel compounds in EUpGlobally Harmonized System – new classification of chemicals – impact on nickel.
105
REACH - The EU Chemicals PolicyREACH The EU Chemicals Policy
REACH (Registration, Evaluation, Authorisation Restriction of Chemicals) entered into force in the European Union on 1 June 20072007All importers and manufacturers of nickel compounds will have to register with the new EU Chemicals Agencyg g y
Nickel ore is exempt from registrationREACH fully operational from June 2008Nickel industry completed REACH registration process for the nickel metal and nickel sulphate dossiers in March 2010
106
“R d ” f Ni k l C d“Read-across” of Nickel Compounds
“Read-across” is a EU approach to classify 150 compounds for authorisation within REACHNickel compounds would be classified as Category 1 (proven) carcinogens without the need for corroborating data F ll i l t ti f d ld h i ifi tFull implementation of read-across could have a significant impact on the nickel industry well beyond the nickel chemicals specifically targetedThere is concern that nickel metal could face substantial damage to its image and reputation. In turn this could damage its usage as an alloy in stainless steely“Read-across” has been challenged in courts, the outcome of the challenge will be handed down in early 2011
107
Globally Harmonized SystemGlobally Harmonized System
Globally Harmonized System – classification of chemicals sponsored within UN frameworksponsored within UN frameworkFocuses on hazard classification and labelingNickel is the first metal to be reviewed under GHSNickel is the first metal to be reviewed under GHSIndustry is keen to ensure latest science is used globally andAn independent consultant has been asked to look at nickelAn independent consultant has been asked to look at nickel metal and compound hazard data sets
108
World Nickel Ore Production (1/2)World Nickel Ore Production (1/2)
in 1000 tonnes1800
1400
1600
1200
800
1000
6001990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
109
World Nickel Ore Production (2/2)World Nickel Ore Production (2/2)
2009in 1000 tonnes
A i
Africa5.0%
Oceania20.0%
2009(1329.0)
Oceania Africa
1999(1058.1)
America31.5%
Oceania24.1% 6.6%
America
Asia21.8%
Europe21.7%
Europe23.7%
Asia13.1%
America32.5%
21.8%
110
World Primary NickelWorld Primary NickelProduction (1/3)
in 1000 tonnes1600
1400
1200
800
1000
6001990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
111
World Primary NickelWorld Primary NickelProduction (2/3)
in 1000 tonnes
Asia27 5%
America22 1%
2009(1329.1)
America
1999(1023.5)
Africa3.1%
27.5%22.1%America25.5%
Asia16.9%
Africa5.2%
Europe
Oceania10.3%
Oceania12.0%
Europe40.3% p
37.0%
112
World Primary NickelWorld Primary NickelProduction (3/3)
in 1000 tonnes
Area 2007 2008% change
2009% change
2010f % change
Africa 49 1 42 1 -14 3 36 4 -13 5 38 0 4 4Africa 49.1 42.1 14.3 36.4 13.5 38.0 4.4
America 324.7 304.8 -6.1 239.2 -21.5 188.0 -21.4
Asia 379 4 378 6 0 2 432 3 14 2 515 6 19 3Asia 379.4 378.6 -0.2 432.3 14.2 515.6 19.3
Europe 513.7 510.2 -0.7 453.6 -11.1 486.2 7.2
O i 156 2 141 9 9 1 167 6 18 1 167 3 0 2Oceania 156.2 141.9 -9.1 167.6 18.1 167.3 -0.2
Total 1423.1 1377.7 -3.2 1329.1 -3.5 1395.1 5.0
113
World Primary NickelWorld Primary Nickel Usage (1/3)
in 1000 tonnes1600
1400
1200
800
1000
6001990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
114
World Primary NickelWorld Primary Nickel Usage (2/3)
in 1000 tonnesin 1000 tonnes
Europe
2009(1231.7)1999
(1081.6)31.3%
Oceania0.2%
Europe41.2%
Oceania0.2%
America12.6%
Africa2.1%Asia
53.8%America18.2%
Africa3.1%Asia
37.4%
%
115
World Primary NickelWorld Primary Nickel Usage (3/3)
in 1000 tonnes
Area 2007 2008% change
2009% change
2010f % change
Africa 33 6 27 0 -19 6 31 3 15 9 34 1 8 9Africa 33.6 27.0 19.6 31.3 15.9 34.1 8.9
America 171.4 160.5 -6.4 121.8 -24.1 153.3 25.9
Asia 690 9 688 3 0 4 760 3 10 5 847 8 11 5Asia 690.9 688.3 -0.4 760.3 10.5 847.8 11.5
Europe 423.9 399.6 -5.7 315.6 -21.0 347.6 10.1
O i 2 9 2 9 0 0 2 7 6 9 2 7 0 0Oceania 2.9 2.9 0.0 2.7 -6.9 2.7 0.0
Total 1322.7 1278.2 -3.4 1231.7 -3.6 1385.5 12.5
116
World Primary NickelWorld Primary Nickel Balance (1/2)
1400
1600in 1000 tonnes
1000
1200
600
800
33 58 9119 25 56 26
100 99 97200
400
33 58 19
-46 -59
14 -4 25
-58 -40
56 11
-27
7 26
-51
10
-200
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010f
BALANCE PRIMARY NICKEL PRODUCTION PRIMARY NICKEL USAGE
117
World Primary NickelWorld Primary Nickel Balance (2/2)
Area 2007 2008% change
2009% change
2010f % change
in 1000 tonnes
Production 1423.1 1377.7 -3.2 1329.1 -3.5 1395.1 5.0
Usage 1322.7 1278.2 -3.4 1231.7 -3.6 1385.5 12.5
Balance 100.4 99.4 97.3 9.6
118
LME prices and stocksLME prices and stockstonnes US$/tonne
1 0000
165000
180000
0000
55000
60000
tonnes US$/tonne
105000
120000
135000
150000
35000
40000
45000
50000Stocks (tonnes)
Prices (Cash, US$/tonne)
60000
75000
90000
105000
20000
25000
30000
35000
15000
30000
45000
5000
10000
15000
0J FMAMJ JA SONDJ FMAMJ JA SONDJ FMAMJ JA SONDJ FMAMJ J A SOND J FMAM J JA SONDJ FMAMJ JA SONDJ FMAMJ JA SONDJ FMAMJ J
2003 2004 2005 2006 2007 2008 2009 2010
0
119
Principal End Uses of pPrimary Nickel in 2009
Other uses7%
Steel castings (alloyed)
4%
7%
Stainless Steel63%
Other alloy steels
6%
Plating7%
NF Products (incl. Castings)
120
( g )13%
World Stainless Crude Steel Production
28,359(+16 6%)
27,836(-1 8%)
25,930(-6 8%)
24,578(-5 2%)
25,000
30,00024,570(+7.6%)
24,319(-1.0%)
(+16.6%) (-1.8%) (-6.8%) (-5.2%)
22,840(+10.4%)
20,000
tonn
es
15,000
00 m
etric
t
5,000
10,0001,00
02003 2004 2005 2006 2007 2008 2009
121Source: ISSF Asia W.Europe/Africa Americas Central+Eastern Europe
Stainless Steel by CategoriesStainless Steel by Categories
2 1 8
1005.
323
.2
5.7
22.1
7.4
21.8
422
.96
424
.8
423
28.4
28.1
28.4
80
905 5 7
9.4
9.84 9.
4
11.5
12.2
12.3
60
70
71.5
72.2
70.8
5.5
.07
5.5
5 2 2
40
50%
7 7 7 65 63.
65
57.5
57.2
58.2
20
30
0
10
2001 2002 2003 2004 2005 2006 2007 2008 2009
122Source: ISSF
CrNi (300) CrMn (200) Cr (400)
Nickel and Stainless SteelKey Issues
• The nickel content in stainless steels have basically reached minimum levels (to still be within (specifications) and there is little, if any more to save here
• There should be increasing nickel supply on the horizonhorizon
• Nickel price volatility remains a crucial issueD d f f t d i k l t i i t i l• Demand for manufactured nickel containing stainless steel products should recover this year
123• The longer term future for nickel containing stainless
steels is still very bright
Stainless Steel Scrap (1)Stainless Steel Scrap (1)
• Based on Heinz H. Pariser’s report for INSG (April 2010)
• Global scrap availability: around 1 Mt in 1970, 7.2 Mt in 2009; d i 14 b 2020Expected to increase to 14.7 Mt by 2020
• Average annual growth (index basis since 1960):
• Crude Stainless Steel Output: 5.3%• Primary Nickel usage : 3.6%• Chrome: 4.0%• Availability and usage of Stainless Steel Scrap: 8.1%• Molybdenum usage (since 1985): 4.0%
• Globally, recycling ratios average between 40-43% (all stainless d ) d hi
124grades) – Europe and US 60-70%, China 25%
Stainless Steel Scrap (2)Stainless Steel Scrap (2)
• Scrap is a highly flexible and moving commodity; more than half of the global market has at least once crossed boarders
l ( h d) i l l i i h• External (purchased) stainless steel scrap consumption is the key driver of the marketT t l i t f t l t i l t l 5 6 Mt i 2000 8 4• Total input of external stainless steel scrap: 5.6 Mt in 2000, 8.4 Mt in 2007, 7.1 Mt in 2009
• External scrap ratio for melting austenitic stainless steel scrap:• External scrap ratio for melting austenitic stainless steel scrap: 37.6% in 2000, 42.6 in 2009
• External austenitic stainless steel scrap used: 38% in the EUExternal austenitic stainless steel scrap used: 38% in the EU, 18% in China, 17% in other Asia, 13% in the US
125
Stainless Steel Scrap (3)Stainless Steel Scrap (3)
• Stainless scrap pricing: from 2000 to 2009 intrinsic values for• Stainless scrap pricing: from 2000 to 2009, intrinsic values for nickel in scrap fluctuated between 1.7% in the 3Q2002 and 21.6% in the 1Q2009 of the LME priceQ p• a specific price is agreed upon for each of the alloying
elements contained in scrap• 2000-1Q2010 average nickel cash price 15,787 US$/t,
average Ni valuation in scrap: Europe 14,175 (89.8%), US 14,342 (91.0%) – scrap users in Asia often take the US valuation as their reference priceV l ti i Ch 81 9% M l bd 64 3%• Valuation in scrap: Chrome 81.9%, Molybdenum 64.3%
• In China, NPI competes with stainless steel scrap; in most cases nickel units in NPI are highly discounted outreaching
126
cases, nickel units in NPI are highly discounted , outreaching those of SS scrap
Stainless Scrap Flow DiagramNi-BaseScrap
GenericStainless
Scrap
Alloy Steel Scrap &
Other MetalCarriers
PurchasedScrapPrimary Metals
N A
L
Scrap Collecting& Processing
Non-recoverable Materials
Raw Materials
Internal Scrap
N T
E R
N
Dusts Slags Int. ScrapDustsWaste
Primary Product
(Coil)
I N
By-Product External / Internal(Coil)
R N
A L
By Product External / InternalBeneficiation
Non-recoverable "New Scrap"
Finished Product
E X
T E
R
Non- ReclaimedE d f Lif
Basis: wrought Stainless Steel 579/031/PFD
Sources: Heinz H. Pariser
Non-recoverable
ReclaimedScrap
End of Life
127
Nickel Pig Iron in China (1)Nickel Pig Iron in China (1)
• Based mainly on CBI’s report for INSG (April 2010)• Based mainly on CBI s report for INSG (April 2010)
• NPI producers purchase nickel ore from overseas, i l f I d i d Th Phili imainly from Indonesia and The Philippines
• NPI is used to produce 200 series and 300 series stainless steel
• Nickel Production (‘000 t)
2006 2007 2008 2009 20101H
China NPI (est ) 31 84 74 90 85China NPI (est.) 31 84 74 90 85
China Refined 105 115 126 164 79
World 1350 1423 1378 1329 849128
World 1350 1423 1378 1329 849Source: INSG
Nickel Pig Iron in China (2)- 2009 -
• NPI by grade: Low grade (Ni content 1.6-2%): 39%NPI by grade: Low grade (Ni content 1.6 2%): 39%Medium grade (Ni content 4-8%): 26%Hi h d 35%High grade (Ni content 9-15%): 35%
• Technology: Blast Furnace: 56%Electric arc furnace: 44%
• Total capacity of NPI (Ni equivalent) was about 300Total capacity of NPI (Ni equivalent) was about 300 thousand tons in China, several projects on stream
• Nickel sources in SS production in China:• Nickel sources in SS production in China: • 200 Series: NPI 54%
129• 300 Series: NPI 30%
Nickel Pig Iron in China (3)Nickel Pig Iron in China (3)
• NPI producer’s profitability is unstable:p p y• Nickel and pig iron prices have great impact on NPI price• L-NPI and M-NPI costs are mainly influenced by coke and y y
nickel ore prices; H-NPI cost fluctuates less due to more stable power prices
• The growth of China’s stainless steel industry created great demand for NPI in the last 4 years
• Government’s policy on trade of nickel related products: • import duties are very low or 0% (FeNi: 1%, refined nickel
1% i k l 0%)1%, nickel ore 0%)• export duties are high (NPI 20%, nickel ore 15%, semi
t i l t l d t 15%)130
stainless steel products 15%)
World Primary RefinedWorld Primary Refined Nickel Capacity in 2009
• World nickel refined capacity was over 1.60 Mtpa in p y p2009
• Compared with 2008, capacity increased by overCompared with 2008, capacity increased by over 25000 tpa, or almost 2%, in 2009, according to INSG datadata
• World capacity utilization was over 82%A i f b d fi ld i• A mix of brown and green field expansions
• The figures above exclude nickel pig iron production
131capacity in China, which could be considerable
Nickel projectsNickel projects
One can see from the following listings that there are no shortage of nickel projectsare no shortage of nickel projectsDifficulty to find “rich deposits”, most have a low t di i k l t t d li it dto medium nickel content and limited reservesTo obtain financing is currently a major problemActual timing to a possible realization of a deposit into a mine/refinery is today virtually impossible to accurately forecast
132
Nickel projectsNickel projects2010 Directory (preliminary)
Ore & Intermediate Refined
Capacity (Ni content, t/y)
Ore & Concentrate
Intermediate Products
Refined products
C itt dCommitted Developments 221,400 133,400 516,600
Likely ProjectLikely Project Developments 87,750 15,000 112,000
Potential Project 174 300 129 100 435 900Potential Project Developments 174,300 129,100 435,900
133
Refined Nickel CapacityRefined Nickel Capacity by Country
New committed developments: Production 2009:
CUBA3%
CHINA P.R.10%
CANADACOLOMBIA
3%DOM. REP.
2%FINLANDBRAZIL
29%
≈ 0.5Mt (preliminary)≈ 1.5Mt
AUSTRALIA9%
10%
AUSTRIA0%
FYROM1%
FRANCE1%
FINLAND4%BRAZIL
2%
29%
CANADA9%
SOUTH AFRICA4%
RUSSIAN FED
UKRAINE
UK2%
9%
VENEZUELA1%
JAPAN11%
GREECE2%
INDONESIA2%
ZIMBABWE1%
JAPAN6%
FINLAND1%
RUSSIAN FED.4%
NORWAY3%
CHINA P.R.7%
SOUTH AFRICA2%
SERBIA (KOSOVO)
1%
UKRAINE1%
RUSSIAN FED.21%
NEW CALEDONIA
4%
KOREA2%
NORWAY6%
MADAGASCAR11%
6%
MYANMAR4%
NEW CALEDONIA
22%
21%
134
New producing countries
New producing country
Nickel Capacity onNickel Capacity onStream / Ramp Up in 2010
Name/Country Product Mode Est. Production Remarks
Posco / Korea FeNi Ramp Up Max 25 000 Own use
Goro / New Caledonia Semi Ramp Up Max 5 000 To China & Other
Coral Bay II / Philippines Semi Ramp Up ≈ 10 000 To Japan
Talvivaara / Finland Semi Ramp Up Max 15 000 For Finland
Ramu / PNG Semi Start Up possible To China & other
Santa Rita / Brazil Conc. Start Up ≈ 12 000 Brazil & Finland
Munali / Zambia Conc. Ramp Up Max 5 000 To China
135
Nickel Market Key Issues (1 / 2)Nickel Market - Key Issues (1 / 2)
• Usage down by almost 4% in 2009 but could• Usage down by almost 4% in 2009, but could increase by 12% in 2010
• Production declined by close to 4% in 2009 but• Production declined by close to 4% in 2009, but could recover by 5% in 2010
• The nickel market is experiencing a stock build up in• The nickel market is experiencing a stock build up in 2H2010
• Projects are starting to come into production and up• Projects are starting to come into production and up to 0.5Mt have been identified as committed in 2010/20112010/2011
• Suspended nickel capacity is slowly being re-started or ramped up
136
or ramped up
Nickel Market Key Issues (2 / 2)Nickel Market - Key Issues (2 / 2)
• Sufficient primary nickel units should be available in• Sufficient primary nickel units should be available in, at least, the short to medium termChi i k l i i it d d ti h• Chinese nickel pig iron capacity and production has increased substantially in 2010
• China will continue to remain the most important market for primary nickel
• Prices increased in 1H2010 to over US$ 27,000/t in April, thereafter a decline to under US$ 18,000/t in June
• LME prices increased somewhat again in July/August137
p g y g• The nickel market will remain very volatile.
Challenges for the Non-ferrous Metals Industry
• The non-ferrous metals industry must ensure the continued supply of concentrates, secondary material and refined metal to meet evolving demand both in the near term and the longer termevolving demand, both in the near term and the longer term
• At the same time supply must respond flexibly to changing demand for the industry to remain profitabledemand for the industry to remain profitable
• Ensure transparency and efficiency in the markets for raw materials, metals and productsmaterials, metals and products
• The International Metals Study Groups have an important role here in meeting the data and analysis needs of the industry g y y
• Governments have a role in reducing barriers to trade
138
Challenges for the Non-ferrous Metals Industry
• New technologies must be developed and implemented to maintain the competitiveness of the non-ferrous metals industry, enhance environmental performance and reduce energy intensityenhance environmental performance and reduce energy intensity
• The industry must rise to the challenges presented by the three strands of sustainable development – economic, environmental and social
• The industry must respond to the challenges that are created by a carbon-constrained regulatory environment
139
ConclusionsConclusions
The Study Groups:The Study Groups:
play an important role in the global industryplay an important role in the global industry helping governments to help their mining and
t l i d t imetals industries
need the continued support of governments andneed the continued support of governments and industry to perform their roles
140
NEXT STUDY GROUPS’ MEETING DATESNEXT STUDY GROUPS MEETING DATESICSG: 28 September, Antofagasta, Chile
INSG: 5-6 October, Lisbon, Portugal
ILZSG: 7-8 October, Lisbon, PortugalILZSG: 7 8 October, Lisbon, Portugal
Joint ILZSG / INSG Seminar 6 October, Lisbon, Portugal:
“The Contribution of Metals to Our Sustainable Future”
ICSG Industry Advisory Panel: 14 October, London, England
141
y y g
To learn more about theTo learn more about the International Metals Study Groups:
www icsg orgwww.icsg.orgwww.ilzsg.orgg gwww.insg.org
142
The International Metals Study GroupsThe International Metals Study Groups Supporting the Global Metals Industry
Don SmalelSecretary-General ILZSG, ICSG, INSG
JOGMEC SEMINARJOGMEC SEMINAR
Tokyo 2 September 2010143
Tokyo, 2 September 2010
