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2.2 Management report on the Group Consolidated results of operations 2.2 Management report on the Group Consolidated results of operations Iron ore prices Spot prices, 62% FE, CFR China in US dollars, indexed, October 2008 = 100 250 200 150 100 50 FY 2008/09 FY 2009/10 FY 2010/11 Materials expense of business areas as % of sales Steel Europe Steel Americas Materials Services Elevator Technology Plant Technology Components Technology Marine Systems Stainless Global Electronic purchasing systems make our purchasing more efficient. In the reporting year we handled over 10,000 requests for quotes on our e-procurement platform. Our catalogue ordering system is also successful at optimizing process costs: Almost 7,500 users worldwide have access to over 5.45 million articles. With our supplier management system we carried out 1,200 supplier projects worldwide. Demand for raw materials at record level In the reporting year <strong>ThyssenKrupp</strong> purchased approx. 20 million tons of iron ore. The main supplier country continued to be Brazil, followed by Canada and South Africa. High global demand and delivery delays caused by heavy tropical rainfall led to a steep rise in average spot market prices for ore fines (CFR China) up to spring 2011, which also pushed up quarterly prices. As the fiscal year progressed the situation eased little as ore demand remained high. Year-on-year the average spot market price was 32% higher. The price of coking coal also increased. High imports into China and supply interruptions after Australian coal mines were hit by floods resulted in significant prices increases on the global market. This also affected our coal purchases. Prices for coke from China were also higher. The recovery of the steel markets increased international demand for steel scrap, which pushed up prices. At €340 per ton, the average market price of grade 2 scrap was around 33% higher year-on-year. Reduced price swings for most alloying metals Intensive global demand caused a further increase in procurement prices for alloying metals in the reporting year. As the economy slowed in the 2nd half of the fiscal year corrections were made in some areas. Prices moved within a narrower range than in previous years. 32 49 59 62 67 75 80 83 68
Management report on the Group 2.2 Management report on the Group Consolidated results of operations Nickel prices London Metal Exchange in 1,000 US dollars/metric ton 30 25 20 15 10 Oct 2009 Sept 2011 Capesize ships are too large for for the the Suez and Panama Canals and therefore have to to sail round Cape Horn and the the Cape of of Good Hope. Good Hope. 68 | 69 For our Stainless Global business area the alloying metals nickel, ferrochromium and ferromolybdenum are of foremost importance – as primary raw materials and as components of stainless steel scrap. The monthly average price of nickel on the London Metal Exchange was between 20,392 and 28,252 US dollars per ton. For ferrochromium from South Africa the quarterly price increased initially to 1.35 US dollars per pound (around 0.45 kg) before slipping to 1.20 US dollars. Quarterly prices for ferromolybdenum fluctuated between 36.57 and 43.45 US dollars per kilogram. The price of zinc – used to coat carbon steel – fluctuated enormously and averaged around 2,400 US dollars per ton, 7% above the prior-year average. Prices for manufactured products mirror raw material prices For manufactured products strongly dependent on raw material prices – e.g. steel components for machinery – the prior-year trend with in some cases steeply climbing prices continued. This effect was particularly drastic for products containing rare earths, for example permanent magnets in drives and electric motors used in the elevator industry. The materials market moved in short-term cycles. After coming under considerable pressure at the beginning of the fiscal year, prices rose sharply up to the middle of the year and subsequently softened slightly. The main factors behind this trend were raw material costs and the euro/US dollar exchange-rate effect, which at times benefited imports from Asia. In this situation our trading operators made short-term arrangements and consolidated and optimized purchasing volumes in some cases on a cross-country basis. The plant construction procurement markets stabilized considerably. As many of our suppliers had a full workload, delivery times increased but supplies remained secure. There was only a slight increase in prices for capital goods. Rise in freight costs halted For the maritime transport of bulk goods, increased cargo space became available. This was particularly true of capesize ships, the bulk carriers generally used for the shipment of iron ore and coal. For container shipments, too, more than enough ships were available. This halted the rise in freight rates and in some cases led to reductions. However shipment times increased, with ships often reducing speed to save fuel. Road haulage freight space in Germany remained tight due to the absence of capacities taken out in the crisis. Freight rates were therefore higher in particular for shipments at short notice. Rail capacities were in similarly short supply.
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Annual Report 2010/2011 At the cent
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Our mission statement We are Thysse
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Our capabilities Material We combin
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Making tomorrow possible Our engine
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Letter to shareholders Dr.-Ing. Hei
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Letter to shareholders To assist ou
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Contents Our mission statement C2 F
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To our shareholders To our sharehol
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Solutions for many sectors In the f
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Management report on the Group 2.7
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Consolidated fi nancial statements
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Using space better The challenge of
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3.1 Consolidated financial statemen
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million € For the fiscal year end
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Fully consolidated group companies
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Auditors’ Auditor’ report Repor
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4.1 Additional information Multi-ye
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4.8 Additional information Contact
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