icda-chromium-2012-l..

Liu Yujing

Leading Information Provider and Consultant forMetal and Mining IndustryReview of China HcFeCr & STS PriceRMB/50base ton FeCr: 11% STS: 21% NI: 26% stable RMB/$/ton SourceAntaike

Leading Information Provider and Consultant forMetal and Mining IndustrySTS mills are determiner of ChinaP&L HcFeCr price 6850RMB=0.83$/Ib RMB/50 base ton SourceAntaike

Leading Information Provider and Consultant forMetal and Mining IndustryRMB/50Base ton Price Gap between Local and Import RMB/50 Base ton 70% is from end users SourceAntaike

Overview of Price in recent years Leading Information Provider and Consultant forMetal and Mining IndustryRMB/Base ton RMB/50 Base ton 15000 5000 RMB/ton SourceAntaike

Leading Information Provider and Consultant forMetal and Mining Industry Price Production Consumption Trend

Leading Information Provider and Consultant forMetal and Mining IndustryKt Output of China’s HcFeCr from 2008 to 2012 CAGR=24.44% 3MT ↑22% In 2012, the output of HcFeCr is about 3Mt rising 22% compared with last year. %Because of coming down ofthe STS growth rate, the growth rate of HcFeCr isslower than in 2011 when thegrowth rate is 31%. CAGR from 2008 to 2012 is about 24.44%. In the next fiveyears the CAGR can't keepsuch high level any more.SourceAntaike

The HcFeCr output reaches record high in 2012Leading Information Provider and Consultant forMetal and Mining IndustryKt In 2012 the HcFeCr output of China marks a record high. It is not depending on the increase ofthe domestic capacity , but the declining of the imported.28.5

New capacity of HcFeCr of China in 2012Leading Information Provider and Consultant forMetal and Mining IndustryCompany name New capacity Facility Location CommissioningJihua jiangyuang 100kt 25500KVA*2 Qinghai 2012Jisco Hongdian 100kt 25500KVA*2 Gansu 2012Tianyi 100kt 25500KVA*2 Qinghai 2012Mingmaite 100kt 25500KVA*2 Xianxi 2012Others100ktTotal500kt

Leading Information Provider and Consultant forMetal and Mining IndustryNew capacity RKEFof HcFeCr of China in 2013-2014Company name New capacity Facility Location CommissioningKowo 200kt 30000KVA*4 Inner Mongolia 2014Mingtuo 300kt 66000KVA*2 Inner Mongolia 2013Wangbang 300kt 69000KVA*2 Shanxi 2013Yili 200kt 30000KVA*4 Inner Mongolia 2014Total1000kt

Import of HcFeCr of China Leading Information Provider and Consultant forMetal and Mining IndustryKt 2001- 2012 HcFeCr import 2.163Mt 1.4Mt↓ 22% Kt Jan – Sep of 2012 HcFeCr importSourceChina customs

Leading Information Provider and Consultant forMetal and Mining IndustryImport shares of the Ferrochrome in first 9 months of 2012Kt 1Mt ↓25% Import shares by countries in First9 months of 2012 SourceChina customs

Leading Information Provider and Consultant forMetal and Mining Industrykt Import of Chrome ore of China 2001- 2012 Chrome ore importJan – Sep of 2012 Chrome ore import F: 10Mt increasing 6% Kt SourceChina customs

Import shares of the chrome ore in first 9 months of 2012Leading Information Provider and Consultant forMetal and Mining Industry Kt 7Mt same level Import shares by countires inFirst 9 months of 2012 SourceChina customs

Leading Information Provider and Consultant forMetal and Mining IndustryKt rmb/mtu Chrome ore stocks of main ports in China Price of China chrome ore in mainports by RMB $/t Price of China chrome ore in mainports By USD

Leading Information Provider and Consultant forMetal and Mining Industry Price Production Consumption Conclusion

China is the main STS producer in the worldLeading Information Provider and Consultant forMetal and Mining Industrykt From 2005 to 2012, the share of China's STS productionincreases from 14% to 46% Compared cheaper raw materials like NPI is the main role to reduce the production costThe huge domestic consumption is a driver.

China became a net export of STSLeading Information Provider and Consultant forMetal and Mining IndustryImport800kt, down 12% y-o-y.Export:2000kt, down 11% y-o-y.Net export: 1200kt, down 10% y-o-y.SourceAntaike

China’s STS production in 2012Leading Information Provider and Consultant forMetal and Mining IndustryCompany name Capacity kt/a STS output in 2012H1 KtTisco 3000 1550Baosteel Group 3200 1200Jisco 1200 580ZPSS 1000 540Lisco 2000 750Tsingshan Group 2700 900Xinan Stainless 1200 340Total 23000 7520Share 62% 78%We predict the total production will reach 15.5Mt in 2012 increased 9%, whereas the lastyear’s growth rate is 15%. The stainless steel industry in China enters the stable growthperiod. SourceAntaike

China’s STS new capacity in 2011-2013Leading Information Provider and Consultant forMetal and Mining IndustryCompany name Capacity Kt/a Process CommissioningBeihai Chengde 1000NPI(E.F.& B.F.)+STS2011.3Liangyungang Huale 600 NPI(B.F.)+STS 2012.1Guangdong Gruangqing 1000 NPI(E.F.)+STS 2012.6Yunnan Project of XinanStainlessFujian Fuxin SpecialSteel600 NPI(B.F.)+STS 2012.8720 STS 2013.3Total 3920SourceAntaike

Leading Information Provider and Consultant forMetal and Mining IndustryKt End usersclassification SourceAntaike

Leading Information Provider and Consultant forMetal and Mining Industry Stainless Scarp Imports inChina(Kt) STS Scrap availability inChina(Kt) SourceAntaike

Leading Information Provider and Consultant forMetal and Mining Industry 2012 China’ HcFeCr Balance Sheet2009 2010 2011 2012(F)Supply 1550 1880 2457 2998Consumption 2658 3341 3813 4097Balance -1108 -1461 -1356 -1098 (↓20%)(Kt)SourceAntaike

Leading Information Provider and Consultant forMetal and Mining Industry Price Production Consumption Conclusion

Leading Information Provider and Consultant forMetal and Mining IndustryKt STS outputCAGR: 8.8% HcFecr output CAGR:16.41% HcFecr consumptionCAGR: 9 % SourceAntaike

Leading Information Provider and Consultant forMetal and Mining Industry The stainless scrap supply is increasing, which will reduce the consumption offerrochrome. The ferrochrome supply of domestic is increasing, which will instead part of theimported. China government cut GDP growth, which has closely related with stainlesssteel consumption and also has an impact on the consumption of ferrochrome.In 2012, the ferrochrome consumption is about 4100kt, only increased 7% y-oy,in 2011 the growth rate is 14%. Although China's Stainless steel market stillhas great potential for growth, but the growth rate is slowdown. Thedevelopment of ferrochrome industry is behind the stainless steel, so in the nextfew years, the growth rate is higher than the stainless steel.

Leading Information Provider and Consultant forMetal and Mining IndustryThanksLiu Yujinglyj0818@sina.comTel: 86-10-63978092-8180www.MetalChina.com