2005-2006 Financial Statements and Management Report

06
NICKEL ALLOYS AND TITANIUM
MILL PRODUCTS BENEFITED
FROM STRONGER DEMAND.
capacity. There were temporary bottlenecks in supplies to customers, and delivery times increased
steadily. Higher prices and supply shortages also resulted in a significant increase in imports, which
had declined the year before. In North America, there was also a surge in demand for stainless steel
flat products which allowed base prices to be raised on several occasions. The situation in Asia and
China remained tight. High capacity overhangs and weak demand impacted prices.
The market for nickel alloys benefited from positive developments in the plant construction, oil, gas
and aerospace sectors. According to current forecasts, global market volume in 2006 showed a further
slight improvement from its high prior-year level. The strong demand and improving prices for titanium
mill products were also pleasing.
Sales by customer group 2005/2006 in %
Packaging 2
Steel and related processing 18
Engineering 10
Transit 2
Automotive 25
Construction 6
Public sector 4
Trading 11
Energy and utilities 2
Other customers 20
Automobile production growing in Asia
As expected, global auto demand continued to increase. According to estimates, global production
grew by 2.5% in 2006 to 68.7 million cars and trucks. Roughly 80% of worldwide production growth
was accounted for by the countries of Asia. China in particular strengthened its market position further
and for the first time produced more vehicles than Germany. Initial forecasts put vehicle production
in the Asian countries (excluding Japan) at around 15 million units, an increase of just under 10%.
At 16.2 million vehicles, production in the North American auto industry was slightly lower than a
year earlier. In the face of sharply rising gasoline prices, the light truck segment – in particular large
pick-ups and sport utility vehicles – suffered a significant reduction in sales. In Brazil, vehicle production
rose by 4.5% in 2006 to 2.5 million units.
The auto markets in Central and Eastern Europe were in good shape, with production up by around
10% in 2006 according to forecasts. Vehicle production in Western Europe in 2006 was slightly lower
than a year earlier at just under 17.4 million units. Initial estimates put Germany’s vehicle production at
5.8 million units, a 1% improvement on the previous year. This was due in particular to high demand
for trucks and car exports.