docFare clic per modificare gli stili del testo dello schema
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Fare clic per modificare gli stili del testo dello schema
___ ____ ___ __________ ___ _____ ___ _____ _____ ______ ______ _______ ____ _______ _____ _______ _____ _______ Focus on nickel and zinc: present trends and possible evolution Stephen Briggs, RBS Global Banking & Markets 20th March 2009 “Why did no one see it coming?” − RBS Base Metal Index plunged Objective: 60% in 9 months, much faster than in past cycles Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Terzo ____ _______ livello275 Quarto _____ _______ livello 225 Quinto _____ _______ livello 175 125 75 25 73 75 77 79 81 83 RBS Real Base Metal Price Index 85 87 89 91 93 95 97 99 01 03 05 07 09 RBS Nominal Base Metal Price Index Source: LME, RBS 1 LME 3-month prices, $/t indexed − nickel has outperformedObjective: zinc ever since the bull market began Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Terzo ____1200 _______ livello Quarto _____ _______ livello 1000 Quinto _____ _______ livello Index 800 600 400 200 0 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Nickel Oct-06 Oct-07 Oct-08 Zinc Source: LME, RBS 2 Top 3, 5 and 10 companies’ share of 2007 world mine production – the Objective: zinc industry is highly competitive, nickel is more concentrated Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Terzo ____ _______ livello Quarto _____ livello Top 3_______ Quinto _____ _______ livello Top 5 Top 10 0% 20% 40% 60% Nickel Zinc 80% 100% Source, CRU, RBS 3 100,000 16.00 75,000 12.00 50,000 8.00 25,000 4.00 0 0.00 83 85 87 89 91 93 LMEwarehouse nickel inventory - tonnes (lhs) 95 97 99 01 03 05 07 US$/lb Tonnes LME nickel stocks have soared to near 14-year high in the Objective: face of exceptionally weak demand and despite big production cuts Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello 150,000 24.00 Terzo ____ _______ livello 125,000 20.00 Quarto _____ _______ livello Quinto _____ _______ livello 09 Spot LMEnickel price US$/lb (rhs) Source: LME, RBS 4 Almost unprecedented plunge in world stainless steel production (two Objective: thirds of primary nickel use) Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Annual and quarterly yoy change in world stainless steel production Terzo ____ _______ livello 40% 30% Quarto _____ _______ livello 20% Quinto _____ 30% _______ livello 20% 10% 10% 0% 0% -10% -10% -20% -20% -30% -30% -40% 72 76 80 84 88 92 96 00 04 08 93 95 97 99 01 03 05 07 09 Source: CRU, RBS 5 Nickel producers in the forefront of cutbacks, approachingObjective: 20% of world production Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Publicly announced cutbacks/closures: capacity cut as a proportion of 2008 world output Secondo ______ _______ livello Terzo ____ _______ livello Lead (mine) Quarto _____ _______ livello Lead (refinery) Quinto _____ _______ livello Copper (mine) Copper (smelter) Zinc (mine) Zinc (smelter) Aluminium Nickel (mine) 0% 5% 10% 15% 20% Source: Company reports, Reuters, RBS 6 Selected nickel mine cuts and closures announced since mid-2008 Objective: Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Mine Country Capacity cut or closed (kt/y Ni) Secondo ______ _______ livello Falcondo Dominican Rep. 29 Terzo ____ _______ livello Ufaleynickel/Reznickel Russia 15 Quarto _____ _______ livello Cawse Australia 9 Quinto _____ _______ livello PT Inco Indonesia 16 Eramet Berong Black Swan/Waterloo Copper Cliff South Avebury Loma de Niquel Ravensthorpe Xstrata Sudbury Lake Johnson Munali Sub-total New Caledonia Philippines Australia Canada Australia Venezuela Australia Canada Australia Zambia 12 8 15 8 8 17 40 11 14 9 ~210 Source: Company reports, Reuters, RBS 7 But there is potential for strong nickel production growth in 2010-12 Objective: Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livelloWorld nickel mine production before disruptions and cutbacks Terzo ____ _______ livello 2,000 Quarto _____ _______ livello Quinto _____ _______ livello 000t 1,500 1,000 500 0 2002 2004 2006 2008 2010F 2012F Undisrupted world nickel mine production Source: CRU, RBS 8 50 30,000 0 20,000 -50 10,000 -100 US$/tonne '000 tonnes of surplus/deficit Nickel producers may struggle to contain structural surplus, although Objective: demand will eventually rebound strongly Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello 150 50,000 Terzo ____ _______ livello Quarto _____ _______ livello 40,000 Quinto _____100 _______ livello 0 2000 2002 2004 2006 Nickel market surplus or deficit 2008 2010F 2012F Nickel price (rhs) Source: CRU, RBS 9 Zinc exchange stocks have risen rapidly but are still historically low Objective: and have recently turned down Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello 1,250,000 250 Terzo ____ _______ livello Quarto _____ _______ livello 1,000,000 200 Quinto _____ _______ livello 150 500,000 100 250,000 50 USc/lb tonnes 750,000 0 87 89 91 LMEzinc inventory (lhs) 0 93 95 97 99 01 Shanghai zinc inventory (lhs) 03 05 07 09 Monthly average spot zinc price (rhs) Source: LME, RBS 10 Zinc is fully exposed to the recession, but also, eventually,Objective: to recovery Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Estimated zinc demand by first use and final sector Terzo ____ _______ livello Other ther O Quarto _____ _______ livello Transport 18% 18% 9% Quinto _____ _______ livello Galvanizin Galvanizing Consumer Diecasting 47% g 47% Diecasting 17% 17% Brass Brass 18% 18% Products 10% Machinery 10% Construction 48% Electrical Products 23% Source: Anglo American, RBS 11 Zinc producers have been uncharacteristically swift to cut Objective: back. Cuts now at least 10% of production globally Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Publicly announced cutbacks/closures: capacity cut as a proportion of 2008 world output Secondo ______ _______ livello Terzo ____ _______ livello Lead (mine) Quarto _____ _______ livello Lead (refinery) Quinto _____ _______ livello Copper (mine) Copper (smelter) Zinc (mine) Zinc (smelter) Aluminium Nickel (mine) 0% 5% 10% 15% 20% Source: Company reports, Reuters, RBS 12 Selected zinc mine cutbacks and closures announced since mid-2008, Objective: excluding China Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Mine Country Capacity cut or closed (kt/y Zn) Secondo ______ _______ livello Shelf Australia 75 Terzo ____Lennard _______ livello Balmat USA 55 Quarto _____ _______ livello Golden Grove/Scuddles Australia 75 Gordonsville USA 60 Quinto _____ _______ livello et al Endeavor Caribou/Restigouche Myra Falls Langlois Neves-Corvo Aljustrel McArthur River East Tennessee Pend Oreille Galmoy Australia Canada Canada Canada Portugal Portugal Australia USA USA Ireland 30 50 38 38 25 80 32 57 31 80 Iscaycruz Peru 170 Sub-total ~900 Source: Company reports, Reuters, RBS 13 Selected zinc smelter cutbacks and closures announced since Objective: September 2008, excluding China Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Mine _______ Country Capacity cut or closed (kt/y) Terzo ____ livello Quarto _____ livello Datteln _______ Germany 135 Chelyabinsk Russia 60 Quinto _____ _______ livello Balen Budel Trail Onsan Sukpo Kokkola/Odda Clarksville Copsa Mica Sub-total Belgium Netherlands Canada South Korea South Korea Finland/Norway USA Romania 275 73 55 45 29 60 50 60 ~840 Source: Company reports, Reuters, RBS 14 Cutbacks may eliminate the zinc surplus by 2010, significantly tighter Objective: market by 2012 Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello 500_______ 3500 Terzo ____ livello Quarto _____ _______ livello Quinto _____ _______ livello 250 2750 0 2000 -250 1250 -500 500 2000 2002 2004 2006 Zinc market balance '000t (lhs) 2008 2010F 2012F Spot price US$/t (rhs) Source: CRU, ILZSG, RBS 15 Disclaimer Objective: Fare ___ ____ clic per ___modificare __________ gli___ stili_____ del testo ___ dello _____schema _____ ______ Secondo ______ _______ livello Terzo ____ _______ livello Quarto _____ _______ livello Quinto _____ _______ livello http://strategy.rbsm.com/disclosures - View this page for additional Important Disclosure Information for Research Recommendations including Recommendation history. 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