Romania Metals Industry Update Quarter 3 2012

• Publication date: July 2012
• Report size: 48 pages

The Romania Metals Report examines the long-term trends in steelmaking, but argues that while shortterm growth will outpace the European Union, average output remains at historical lows. The report examines how producers are minimising investment risk and also explores the impact of the increasingly precarious external macroeconomic environment on Romanian consumption. The growth and risk management strategies being employed by the leading player...

The Romania Metals Report examines the long-term trends in steelmaking, but argues that while shortterm growth will outpace the European Union, average output remains at historical lows. The report examines how producers are minimising investment risk and also explores the impact of the increasingly precarious external macroeconomic environment on Romanian consumption. The growth and risk management strategies being employed by the leading players in the steel and aluminium segments are also analysed, as they seek to maximise the growth opportunities offered by the local automotive and construction segments . In the first four months of 2012 Romanian crude steel output grew 2.2% y-o-y to 1.31mn tonnes (mnt) with monthly output sustained at the levels seen in H211. Production will be supported through 2012 by a resumption of activities by Mechel, whose Romanian plants were affected by temporary shut-downs in early months of the year, as well as ArcelorMittal’s 2mn tonnes per year (mntpa) No.5 furnace, which remains operational following an Euros 80mn investment.

BMI believes that the No.5 furnace will operate at maximum capacity through 2012. Meanwhile, ArcelorMittal Galati is proceeding with construction of a new steel mill in Hunedoara with a Euros 43mn rolling mill, due to come online by 2012. Additionally, the industry player is increasing liquid steel production to 700,000tpa to raise output of round semis at its Tubular Products Roman plant. Although Romania is bucking the trend of falling steel production in the EU, output is still well below the levels seen before the 2008 financial crisis due to cuts in production at ArcelorMittal’s Romanian operations. With capacity still idled, the market has not recovered from the 45.4% drop in output reported in 2009.

It will take until 2015 until the market has totally recovered from the collapse seen in recent years.
- With output likely to remain steady through 2012, BMI is retaining its projection of 1% growth in both crude steel output and consumption to 3.87mn tonnes and 3.77mn tonnes respectively.
- The automotive market retains its central importance for the Romanian steel market, with flat products making up 62% of hot-rolled output and much of that production dedicated to serving the car market .
- In 2011, Romanian aluminium producer Alro produced around 261,000 tonnes of primary aluminium, up 8.3% y-o-y. However, output is set to decline 4.4% to 249,000 tonnes in 2012 due to poor industry performance and energy supply shortages.

Metal Mining Industry in Romania

Executive Summary 5
Industry SWOT Analysis 6
Romania Business Environment SWOT 6
Europe Metals Overview . 7

Market Projection s 12
Steel 12
Data : Romania’s Steel Market (’000 tonnes, unless otherwise stated) .. 14
Data : Romania’s Steel Market (’000 tonnes, unless otherwise stated) .. 14
Aluminium... 15
Data : Romania’s Primary Aluminium (mn tonnes) 16
Data : Romanian Aluminium Industry (’000 tonnes) 16

Macroeconomic Data .. 17
Weak Growth Ahead ... 17
Data : Romania – Economic Activity .. 22
Commodities Projection .. 23
Data : BMI Steel Projections . 23
Data : Steel Price Data, (US$/TONNE) .. 28
Commodity Strategy – Monthly Metals Update 28
Data : Select Commodities – Performance & BMI Projections .. 37

Competition Overview 38
Aluminium... 38
Steel 39
Company Profiles .. 40
ArcelorMittal ... 40
ArcelorMittal – Key Financial Data ... 43
Alro SA ... 44
Mechel 45
Tenaris Silcotub .. 46
BMI Methodology .. 47
How We Generate Our Market Projections . 47
Cross Checks .. 47

Steel in Romania

Romania Iron And Steel, Exports, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 1995 To 2017
By Business Monitor International
Source: UNCTAD

• Industries : Metal Mining
• Countries : Romania

Romania Iron And Steel, Imports, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 1995 To 2017
By Business Monitor International
Source: UNCTAD

• Industries : Metal Mining
• Countries : Romania

Romania Iron And Steel, Exports, % Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 1996 To 2017
By Business Monitor International
Source: BMI calculation

• Industries : Metal Mining
• Countries : Romania

Romania Iron And Steel, Imports, % Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 1996 To 2017
By Business Monitor International
Source: BMI calculation

• Industries : Metal Mining
• Countries : Romania

Romania Steel Exports, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2011
By Business Monitor International
Source: ISSB, World Steel Association, BMI

• Industries : Metal Mining
• Countries : Romania

Metal Mining in Romania

Romania Silver Domestic Population Mn

• $ 250
• Industry data
• February 2013

Yearly, From 1990 To 2017
By Business Monitor International
Source: World Bank/UN/BMI Calculation

• Industries : Metal Mining
• Countries : Romania

Romania Crude Steel Production, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2011
By Business Monitor International
Source: ISSB, World Steel Association, BMI

• Industries : Metal Mining
• Countries : Romania

Romania Steel Imports, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2011
By Business Monitor International
Source: ISSB, World Steel Association, BMI

• Industries : Metal Mining
• Countries : Romania

Romania Steel Imports, `000 Tonnes

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2011
By Business Monitor International
Source: ISSB/World Steel Association

• Industries : Metal Mining
• Countries : Romania

Romania Crude Steel Production, `000 Tonnes

• $ 250
• Industry data
• February 2013

Yearly, From 2004 To 2016
By Business Monitor International
Source: World Steel Association

• Industries : Metal Mining
• Countries : Romania