In 2010, the international steel market showed a trend of rising first and then falling. Driven by the gradual recovery of the global economy, international steel demand and raw material prices both increased significantly in the first half of 2010. At the same time, traders and end users began to replenish stocks, pushing the steel market volume and price up. After entering May, with the gradual withdrawal of economic stimulus policies in some countries and the intensification of the European debt crisis, the growth rate of international steel demand began to decline, and the market price also gradually declined. In particular, China’s continued suppression of the real estate industry has severely hit the market. confidence. In this context, what is the performance of the global steel market in 2011?
2011 global economic growth pressure
Looking ahead to 2011, there is great uncertainty in global economic growth, and inflation expectations and economic imbalances may hinder global economic growth.
The Fed launched the second round of quantitative easing, pushing inflation to the world. Inflation has triggered interest rate hikes and interest rate hike expectations. In fact, many emerging economies in Asia have raised interest rates many times this year, and interest rate hikes are unbearable for emerging economies in recovery, as emerging economies are more motivated to recover. More from fiscal policy, when the effects of fiscal policy are exhausted, interest rates are at a high level, currencies are rising, and the recovery process in emerging economies may come to an abrupt end. This round of global economic recovery is largely driven by emerging Asian economies. Once the macroeconomic stalls in emerging Asian economies decline, it means that the recovery after the crisis has been interrupted, and the global economy is facing a 'double dip'. risk.
The International Monetary Fund (IMF) predicted in a report released in October that the global economy will grow by 4.8% in 2010 and 4.2% in 2011. Developed countries grew by 2.7% in 2010 and 2.2% in 2011. Emerging economies grew by 7.1% in 2010 and by 6.4% in 2011. It is clear that both the developed countries and emerging economies will slow down in 2011.
2011 global steel market outlook is more optimistic
The judgment of the trend of the global steel market in 2011 will be based on four aspects, namely supply, demand, inventory and cost.
First, the global steel demand growth rate has declined in 2011.
Due to the uncertain global economic outlook, global steel demand growth is expected to decline sharply in 2011. The International Steel Association expects global steel demand to be 1.334 billion tons next year, an increase of 5.3% over this year, and the growth rate will fall by 7.8 percentage points. In terms of regions, the demand of the 27 EU countries increased by 5.7% to 147.4 million tons in 2011, the growth rate decreased by 13.2 percentage points; the demand of the Commonwealth of Independent States increased by 9.5% to 31.4 million tons, and the growth rate dropped by 10.6 percentage points; North American Free Trade Demand in the district increased by 8.7% to 118 million tons, a growth rate of 22.6 percentage points; demand in Central and South America increased by 9.1% to 47.6 million tons, a growth rate of 19.1 percentage points; demand in Africa increased by 7.1% to 30 million tons, Africa Demand growth is the only region of growth; demand in the Middle East increased by 4.4% to 47.6 million tons, a growth rate of 3.5 percentage points; demand in the Asia-Pacific region increased by 4.1% to 867 million tons, a growth rate of 5.1 percentage points.
In fact, the economic recovery in developed regions such as Europe and the United States this year is basically a job-free recovery. The foundation is very weak. After the automobile industry exits the stimulus policy, its output and sales volume began to shrink, and the real estate industry has not improved. The International Steel Association is still optimistic about the demand for steel in developed countries. We believe that the growth rate of steel demand in developed countries in 2011 is 3-4%.
Second, the steel production costs will increase further in 2011.
Taking into account the inflation factor and the increase in steel production in 2011, we believe that the cost of steel production will maintain a growth trend next year, and the specific increase in raw materials will have a large gap.
As far as iron ore is concerned, supply tensions will be further eased next year. If global crude steel production increases by 5-6% next year, pig iron production will increase by 6-7% or 65 million tons, iron ore demand will increase by about 100 million tons. According to statistics, in 2011, several major mining giants added about 90 million tons of new capacity. Together with other small mining companies, the new iron ore production capacity is expected to be around 150 million tons next year, considering the second half of this year. Newly put into operation, the new iron ore output will be more than 100 million tons next year, and the tight supply of iron ore will ease. Therefore, the iron ore price will not rise sharply in 2011. It is estimated that the average annual increase will be 5-10%, and the spot price of 63.5% printing powder will be between 120-200 USD/ton.
Compared with iron ore, the tight supply of coking coal in 2011 will not improve. In recent years, global steel production has increased sharply, which is inseparable from the demand of emerging countries, and the BRIC countries are representatives of emerging countries. Among the BRIC countries, Russia has abundant coking coal resources and can export it to the outside world. China's resources are also very rich, but due to huge demand and the country's restrictions on small coal mine production, in recent years has been converted from coking coal exporting countries into importing countries. India and Brazil basically have no coking coal resources, almost all rely on imports. In recent years, due to the relatively small investment in coking coal in major companies, there will be few new projects in the next 2-3 years, so supply will continue to be tight. The average coking coal price is expected to increase by 20-30% next year. Australia The main coking coal price is between 220-280 US dollars / ton.
Scrap prices will continue to rise steadily in 2011, mainly due to continued recovery in demand. The supply of scrap is mainly from developed countries. Due to the relatively low manufacturing industry in developed countries, the growth of industrial scrap production is limited. Most of the demand for scrap is also from developed countries, and demand is expected to increase slightly next year. The demand for scrap in emerging countries has also grown rapidly in recent years, and the demand for scrap in emerging countries is expected to continue to grow next year. Overall, the average international scrap price will increase by 10-20% next year, and the Asian No. 2 heavy waste import price will be 400-480 US dollars / ton (CFR).
In summary, under the support of coking coal, iron ore and scrap prices, both blast furnace production and electric furnace production will have a high production cost next year. It is estimated that the blast furnace production cost will increase by about US$60/ton. Production costs have increased by about $70/ton.
Third, the average global steel price will rise in 2011.
In terms of supply, according to data released by the International Steel Association, the current global crude steel production capacity is more than 1.8 billion tons, so the steel supply in 2011 will still be relatively surplus.
In terms of inventory, steel inventories in Europe, North America, Japan and South Korea have remained relatively low in recent years. In the second half of this year, steel inventories in mainland China have also fallen sharply. Therefore, there will be no inventory pressure on the international steel market next year. Overall, due to lower inventory, increased demand and increased costs, the average global steel price will rise by 10-20% next year, and Asian hot rolled coil prices will be in the range of 600-780 US dollars/ton. In the second half of the year, steel mills' profits will increase slightly.
World steel mills continue to take countermeasures
Faced with the uncertainty of global economic growth, as well as rising raw material prices and slow demand growth, the world's major steel manufacturers are actively responding to further enhance competitiveness. ArcelorMittal believes that it may take more than two years for the steel trade to return to its pre-crisis level, and a global recovery will be a slow process. Based on this, the company predicts that global steel demand will increase by 5%-6% in 2011, and demand growth will be mainly driven by Asian and emerging economies. The recovery in Europe and North America is still slow, China is still in healthy growth, but the growth will also slow down. ArcelorMittal also expects global crude steel production to reach 1.4 billion tons this year, up 7% from 2008 and 1.7 billion tons in 2015, up 21% from this year. Nippon Steel, the world's fourth-largest steel producer, said it expects that the current adjustments in the Asian steel market will not last long, and that China's demand will recover after production cuts and destocking. Nippon Steel also plans to increase the export price of hot coils to more than $700 per ton in the fourth quarter of this year.
In 2010, ArcelorMittal, Nippon Steel and Posco achieved satisfactory results in terms of cost reduction, acquisition of raw material assets and overseas expansion. Faced with factors such as increased global inflationary pressures and high raw material prices in 2011, these factors Initiatives will continue to be a top priority in their work plans.
The first is to reduce costs. In the first half of this year, ArcelorMittal achieved a total cost savings of US$3 billion through various cost reduction measures such as production reduction and optimized production, achieving the goal of reducing costs throughout the year. Posco also continued to implement cost reduction plans by expanding the use of low-cost raw materials and recycling by-products. The cumulative cost savings for the first three quarters of this year were 1.023 trillion won, and this year's target is 1.15 trillion won, which is now 89% of the target.
The second is to adjust the pace of production. In order to adapt to changes in market demand, steel producers continue to adjust production rhythms according to market conditions, and production is more flexible. At the end of the global financial crisis in late 2008, ArcelorMittal cut production by 45%, capacity utilization was less than 50%, and remained at 59% in 2009, and gradually recovered to 78% in June this year. In the face of slow recovery in demand in Europe, ArcelorMittal recently decided to close three blast furnaces in Europe, reducing the number of blast furnaces in Europe from the current 18 to 15. In November, the No. 3 blast furnace at the Galati steel mill in Romania was closed. In December, it is also planned to shut down one blast furnace in France and Germany. ArcelorMittal has 25 blast furnaces in Europe. At the peak of demand, there are up to 23 locomotives. During the financial crisis, the number of blast furnaces was reduced to 11 and then restored to 18.
The third is to increase the self-sufficiency of raw materials. ArcelorMittal plans to invest 4 billion U.S. dollars in the next five years to expand iron ore production. By 2015, iron ore production will reach 100 million tons, achieving a self-sufficiency rate of 75%-85%. The company's existing mining operations are mainly located in Algeria, Liberia, Bosnia, Brazil, Canada, Kazakhstan, Mexico, Ukraine and the United States, with a global reserves of about 19 billion tons of mines. The company recently offered $433 million for the Mary River iron ore mine in Barin, Canada, and intends to acquire the troubled US coal producer Massey Energy, and will also develop Indian coal and iron ore resources with local companies such as the Indian state mining company. And the iron ore mine in Senegal, West Africa. In addition, the company will further expand its existing iron ore production capacity. By 2015, Brazilian iron ore production in Andrade and Serra Azul in Minas Gerais will be expanded from 5.3 million tons to 15 million tons.
At present, the daily import ratio of Nippon Steel from its own overseas coal mines is 25%-30%, and the self-sufficiency rate of coking coal is expected to increase further. So far, Nippon Steel has invested in overseas metallurgical coal assets for a total of eight times, including four in Queensland, Australia, three in New South Wales and one in British Columbia, Canada. Nippon Steel acquired a 10% stake in Foxleigh Coal Mine in Queensland, Australia, held by Itochu, and invested in the 8th overseas metallurgical coal asset of Nippon Steel. It is also the first time it has acquired a coal mine producing low-volatility blast furnace coal injection (LVPCI). Nippon Steel will also work with Posco to acquire a 23% stake in the Revuboe coking coal project in Mozambique. The project is expected to cost US$500-600 million. The feasibility study will be completed in December 2011 and will be put into operation in 2014 or 2015. Nippon Steel receives approximately 1.7 million tons of supply per year from the Revuboe coal mine with an annual output of 5 million tons. The coal self-sufficiency rate will increase from the current 25% to over 30%.
This year, Posco's acquisition of raw material assets has been frequent, and joint ventures with small and medium-sized mines such as Australia, Brazil or emerging resource countries have made some progress. In 2011, Posco will continue to increase investment in raw materials. By 2014, the self-sufficiency rate of raw materials will increase to 34% and the target will increase to 50%. Posco has signed an agreement with Anglo American, the world's third largest exporter of bituminous coal, to acquire all mining rights in the Bailongshan coal mine and 70% of the mining rights in the SuttonForest coal mine. After acquiring a 7.8% stake in the Texa Coal Mine project in Mozambique and a 3.75% stake in RoyHill Iron Ore in Western Australia, Posco is also looking to acquire Indonesian coal and iron ore and plans to acquire Australian iron ore company AMCI (WA) ) 49% of the company's shares. Recently, Pohang decided to cooperate with Russian Che-Steel to jointly develop Russian Far East and Siberian resources.
The fourth is to target overseas capacity expansion. Despite the difficult progress of the Indian project, ArcelorMittal and Posco will not give up the fast-growing Indian market. ArcelorMittal believes that although India is expanding its steel production capacity, India will still face a supply shortage of up to 33 million tons of steel in the next 10 years, and the supply shortage will increase from 2015. At present, the annual output of crude steel in India is about 51 million tons. Based on the plan of the world's major steel mills in India and the expansion plan of domestic steel mills in India, it is estimated that the supply of steel in India will increase to 131 million tons by 2019. India's steel demand will increase from the current 56 million tons to 150 million tons, and by 2020 demand will further increase to 164 million tons. Since the two large Indian steel projects planned since 2005 are difficult to achieve, ArcelorMittal will focus on building several smaller steel production sites in India that are smaller than a few million tons, instead of focusing all of them. Concentrated on large steel production companies. At present, it plans to build 2-4 production bases in India. For example, the Karnataka Greenland Steel Plant project with an annual production capacity of 6 million tons is expected to precede the two steel mill projects in Orissa and Jharkhand. Joint ventures such as the local steel company Utham galvanized steel company will accelerate the timetable for entering the Indian market. In addition, with the cooperation of the automobile board joint venture project with Valin Steel and the steel sheet piles being negotiated with China Oriental, it will enter the competition of China's high-end steel market.
Nippon Steel is also focusing on overseas expansion. The company plans to increase its annual crude steel production capacity from 40 million tons to 50-60 million tons in the next few years. Most of the capacity growth will come from overseas markets, mainly in other Asian countries and Latin America, to change production mainly in Japan. The local situation. Nippon Steel will accelerate the global alliance and further strengthen the production of automotive sheet, downstream processing and supply chain development for the Asian market. Nippon Steel will also increase its export offensive, and its share of production has risen from 35% before the crisis to 45%.
Nippon Steel's priority investment market is in India, Brazil and Southeast Asia. It has teamed up with India's Tata Steel to produce and sell high-strength tensile steel with an annual capacity of 600,000 tons. It has established a contract with Latin American Ternium Steel in Mexico. A hot-dip galvanizing sheet plant for automobiles with an annual production capacity of 400,000 tons, including the construction of a blast furnace. Nippon Steel also teamed up with three Japanese companies to buy a 55% stake in Indonesia's galvanized sheet manufacturer Latinusa for US$60 million to strengthen its tinplate business in Asia, and plans to build an annual capacity in Vietnam with Sumitomo. The 60,000-ton steel pipe and sheet pile production plant has made Vietnam an overseas construction steel production base. In addition, Nippon Steel has also accelerated the expansion of its Brazilian Minas Gerais Steel Company.
Posco Steel is active in overseas M&A expansion and aims to become an international group by entering mineral resources such as iron ore, coal and natural gas, and its heavy-duty user shipbuilding sector. Posco has spent $2.28 billion to acquire Daewoo International, a local energy, resource and trading group. The next possible acquisition target is Daewoo Shipbuilding and Marine Engineering, the second largest shipbuilder in Korea. At present, there are at least three greenfield integrated steel mill projects that Posco is tracking, two in India and one in Indonesia. The groundbreaking ceremony for the Posco Indonesian integrated steel plant has been held. The first integrated steel plant in Southeast Asia (with an annual capacity of 3 million tons) will be put into operation in 2013, and the annual production capacity of the second phase will be expanded to 6 million tons. Due to the delay in the Pohang Indian steel mill project, the company finally decided to jointly build a plant with the Indian Steel Authority and use Posco's Finex technology to reduce unnecessary trouble.
In addition, in 2011, the world's major steel producers will continue to increase investment in equipment renovation and new technology development, focusing on the reserve of advanced technology, while further expanding the global sales network and enhancing competitiveness to cope with various market occurrences. Variety.
2011 global economic growth pressure
Looking ahead to 2011, there is great uncertainty in global economic growth, and inflation expectations and economic imbalances may hinder global economic growth.
The Fed launched the second round of quantitative easing, pushing inflation to the world. Inflation has triggered interest rate hikes and interest rate hike expectations. In fact, many emerging economies in Asia have raised interest rates many times this year, and interest rate hikes are unbearable for emerging economies in recovery, as emerging economies are more motivated to recover. More from fiscal policy, when the effects of fiscal policy are exhausted, interest rates are at a high level, currencies are rising, and the recovery process in emerging economies may come to an abrupt end. This round of global economic recovery is largely driven by emerging Asian economies. Once the macroeconomic stalls in emerging Asian economies decline, it means that the recovery after the crisis has been interrupted, and the global economy is facing a 'double dip'. risk.
The International Monetary Fund (IMF) predicted in a report released in October that the global economy will grow by 4.8% in 2010 and 4.2% in 2011. Developed countries grew by 2.7% in 2010 and 2.2% in 2011. Emerging economies grew by 7.1% in 2010 and by 6.4% in 2011. It is clear that both the developed countries and emerging economies will slow down in 2011.
2011 global steel market outlook is more optimistic
The judgment of the trend of the global steel market in 2011 will be based on four aspects, namely supply, demand, inventory and cost.
First, the global steel demand growth rate has declined in 2011.
Due to the uncertain global economic outlook, global steel demand growth is expected to decline sharply in 2011. The International Steel Association expects global steel demand to be 1.334 billion tons next year, an increase of 5.3% over this year, and the growth rate will fall by 7.8 percentage points. In terms of regions, the demand of the 27 EU countries increased by 5.7% to 147.4 million tons in 2011, the growth rate decreased by 13.2 percentage points; the demand of the Commonwealth of Independent States increased by 9.5% to 31.4 million tons, and the growth rate dropped by 10.6 percentage points; North American Free Trade Demand in the district increased by 8.7% to 118 million tons, a growth rate of 22.6 percentage points; demand in Central and South America increased by 9.1% to 47.6 million tons, a growth rate of 19.1 percentage points; demand in Africa increased by 7.1% to 30 million tons, Africa Demand growth is the only region of growth; demand in the Middle East increased by 4.4% to 47.6 million tons, a growth rate of 3.5 percentage points; demand in the Asia-Pacific region increased by 4.1% to 867 million tons, a growth rate of 5.1 percentage points.
In fact, the economic recovery in developed regions such as Europe and the United States this year is basically a job-free recovery. The foundation is very weak. After the automobile industry exits the stimulus policy, its output and sales volume began to shrink, and the real estate industry has not improved. The International Steel Association is still optimistic about the demand for steel in developed countries. We believe that the growth rate of steel demand in developed countries in 2011 is 3-4%.
Second, the steel production costs will increase further in 2011.
Taking into account the inflation factor and the increase in steel production in 2011, we believe that the cost of steel production will maintain a growth trend next year, and the specific increase in raw materials will have a large gap.
As far as iron ore is concerned, supply tensions will be further eased next year. If global crude steel production increases by 5-6% next year, pig iron production will increase by 6-7% or 65 million tons, iron ore demand will increase by about 100 million tons. According to statistics, in 2011, several major mining giants added about 90 million tons of new capacity. Together with other small mining companies, the new iron ore production capacity is expected to be around 150 million tons next year, considering the second half of this year. Newly put into operation, the new iron ore output will be more than 100 million tons next year, and the tight supply of iron ore will ease. Therefore, the iron ore price will not rise sharply in 2011. It is estimated that the average annual increase will be 5-10%, and the spot price of 63.5% printing powder will be between 120-200 USD/ton.
Compared with iron ore, the tight supply of coking coal in 2011 will not improve. In recent years, global steel production has increased sharply, which is inseparable from the demand of emerging countries, and the BRIC countries are representatives of emerging countries. Among the BRIC countries, Russia has abundant coking coal resources and can export it to the outside world. China's resources are also very rich, but due to huge demand and the country's restrictions on small coal mine production, in recent years has been converted from coking coal exporting countries into importing countries. India and Brazil basically have no coking coal resources, almost all rely on imports. In recent years, due to the relatively small investment in coking coal in major companies, there will be few new projects in the next 2-3 years, so supply will continue to be tight. The average coking coal price is expected to increase by 20-30% next year. Australia The main coking coal price is between 220-280 US dollars / ton.
Scrap prices will continue to rise steadily in 2011, mainly due to continued recovery in demand. The supply of scrap is mainly from developed countries. Due to the relatively low manufacturing industry in developed countries, the growth of industrial scrap production is limited. Most of the demand for scrap is also from developed countries, and demand is expected to increase slightly next year. The demand for scrap in emerging countries has also grown rapidly in recent years, and the demand for scrap in emerging countries is expected to continue to grow next year. Overall, the average international scrap price will increase by 10-20% next year, and the Asian No. 2 heavy waste import price will be 400-480 US dollars / ton (CFR).
In summary, under the support of coking coal, iron ore and scrap prices, both blast furnace production and electric furnace production will have a high production cost next year. It is estimated that the blast furnace production cost will increase by about US$60/ton. Production costs have increased by about $70/ton.
Third, the average global steel price will rise in 2011.
In terms of supply, according to data released by the International Steel Association, the current global crude steel production capacity is more than 1.8 billion tons, so the steel supply in 2011 will still be relatively surplus.
In terms of inventory, steel inventories in Europe, North America, Japan and South Korea have remained relatively low in recent years. In the second half of this year, steel inventories in mainland China have also fallen sharply. Therefore, there will be no inventory pressure on the international steel market next year. Overall, due to lower inventory, increased demand and increased costs, the average global steel price will rise by 10-20% next year, and Asian hot rolled coil prices will be in the range of 600-780 US dollars/ton. In the second half of the year, steel mills' profits will increase slightly.
World steel mills continue to take countermeasures
Faced with the uncertainty of global economic growth, as well as rising raw material prices and slow demand growth, the world's major steel manufacturers are actively responding to further enhance competitiveness. ArcelorMittal believes that it may take more than two years for the steel trade to return to its pre-crisis level, and a global recovery will be a slow process. Based on this, the company predicts that global steel demand will increase by 5%-6% in 2011, and demand growth will be mainly driven by Asian and emerging economies. The recovery in Europe and North America is still slow, China is still in healthy growth, but the growth will also slow down. ArcelorMittal also expects global crude steel production to reach 1.4 billion tons this year, up 7% from 2008 and 1.7 billion tons in 2015, up 21% from this year. Nippon Steel, the world's fourth-largest steel producer, said it expects that the current adjustments in the Asian steel market will not last long, and that China's demand will recover after production cuts and destocking. Nippon Steel also plans to increase the export price of hot coils to more than $700 per ton in the fourth quarter of this year.
In 2010, ArcelorMittal, Nippon Steel and Posco achieved satisfactory results in terms of cost reduction, acquisition of raw material assets and overseas expansion. Faced with factors such as increased global inflationary pressures and high raw material prices in 2011, these factors Initiatives will continue to be a top priority in their work plans.
The first is to reduce costs. In the first half of this year, ArcelorMittal achieved a total cost savings of US$3 billion through various cost reduction measures such as production reduction and optimized production, achieving the goal of reducing costs throughout the year. Posco also continued to implement cost reduction plans by expanding the use of low-cost raw materials and recycling by-products. The cumulative cost savings for the first three quarters of this year were 1.023 trillion won, and this year's target is 1.15 trillion won, which is now 89% of the target.
The second is to adjust the pace of production. In order to adapt to changes in market demand, steel producers continue to adjust production rhythms according to market conditions, and production is more flexible. At the end of the global financial crisis in late 2008, ArcelorMittal cut production by 45%, capacity utilization was less than 50%, and remained at 59% in 2009, and gradually recovered to 78% in June this year. In the face of slow recovery in demand in Europe, ArcelorMittal recently decided to close three blast furnaces in Europe, reducing the number of blast furnaces in Europe from the current 18 to 15. In November, the No. 3 blast furnace at the Galati steel mill in Romania was closed. In December, it is also planned to shut down one blast furnace in France and Germany. ArcelorMittal has 25 blast furnaces in Europe. At the peak of demand, there are up to 23 locomotives. During the financial crisis, the number of blast furnaces was reduced to 11 and then restored to 18.
The third is to increase the self-sufficiency of raw materials. ArcelorMittal plans to invest 4 billion U.S. dollars in the next five years to expand iron ore production. By 2015, iron ore production will reach 100 million tons, achieving a self-sufficiency rate of 75%-85%. The company's existing mining operations are mainly located in Algeria, Liberia, Bosnia, Brazil, Canada, Kazakhstan, Mexico, Ukraine and the United States, with a global reserves of about 19 billion tons of mines. The company recently offered $433 million for the Mary River iron ore mine in Barin, Canada, and intends to acquire the troubled US coal producer Massey Energy, and will also develop Indian coal and iron ore resources with local companies such as the Indian state mining company. And the iron ore mine in Senegal, West Africa. In addition, the company will further expand its existing iron ore production capacity. By 2015, Brazilian iron ore production in Andrade and Serra Azul in Minas Gerais will be expanded from 5.3 million tons to 15 million tons.
At present, the daily import ratio of Nippon Steel from its own overseas coal mines is 25%-30%, and the self-sufficiency rate of coking coal is expected to increase further. So far, Nippon Steel has invested in overseas metallurgical coal assets for a total of eight times, including four in Queensland, Australia, three in New South Wales and one in British Columbia, Canada. Nippon Steel acquired a 10% stake in Foxleigh Coal Mine in Queensland, Australia, held by Itochu, and invested in the 8th overseas metallurgical coal asset of Nippon Steel. It is also the first time it has acquired a coal mine producing low-volatility blast furnace coal injection (LVPCI). Nippon Steel will also work with Posco to acquire a 23% stake in the Revuboe coking coal project in Mozambique. The project is expected to cost US$500-600 million. The feasibility study will be completed in December 2011 and will be put into operation in 2014 or 2015. Nippon Steel receives approximately 1.7 million tons of supply per year from the Revuboe coal mine with an annual output of 5 million tons. The coal self-sufficiency rate will increase from the current 25% to over 30%.
This year, Posco's acquisition of raw material assets has been frequent, and joint ventures with small and medium-sized mines such as Australia, Brazil or emerging resource countries have made some progress. In 2011, Posco will continue to increase investment in raw materials. By 2014, the self-sufficiency rate of raw materials will increase to 34% and the target will increase to 50%. Posco has signed an agreement with Anglo American, the world's third largest exporter of bituminous coal, to acquire all mining rights in the Bailongshan coal mine and 70% of the mining rights in the SuttonForest coal mine. After acquiring a 7.8% stake in the Texa Coal Mine project in Mozambique and a 3.75% stake in RoyHill Iron Ore in Western Australia, Posco is also looking to acquire Indonesian coal and iron ore and plans to acquire Australian iron ore company AMCI (WA) ) 49% of the company's shares. Recently, Pohang decided to cooperate with Russian Che-Steel to jointly develop Russian Far East and Siberian resources.
The fourth is to target overseas capacity expansion. Despite the difficult progress of the Indian project, ArcelorMittal and Posco will not give up the fast-growing Indian market. ArcelorMittal believes that although India is expanding its steel production capacity, India will still face a supply shortage of up to 33 million tons of steel in the next 10 years, and the supply shortage will increase from 2015. At present, the annual output of crude steel in India is about 51 million tons. Based on the plan of the world's major steel mills in India and the expansion plan of domestic steel mills in India, it is estimated that the supply of steel in India will increase to 131 million tons by 2019. India's steel demand will increase from the current 56 million tons to 150 million tons, and by 2020 demand will further increase to 164 million tons. Since the two large Indian steel projects planned since 2005 are difficult to achieve, ArcelorMittal will focus on building several smaller steel production sites in India that are smaller than a few million tons, instead of focusing all of them. Concentrated on large steel production companies. At present, it plans to build 2-4 production bases in India. For example, the Karnataka Greenland Steel Plant project with an annual production capacity of 6 million tons is expected to precede the two steel mill projects in Orissa and Jharkhand. Joint ventures such as the local steel company Utham galvanized steel company will accelerate the timetable for entering the Indian market. In addition, with the cooperation of the automobile board joint venture project with Valin Steel and the steel sheet piles being negotiated with China Oriental, it will enter the competition of China's high-end steel market.
Nippon Steel is also focusing on overseas expansion. The company plans to increase its annual crude steel production capacity from 40 million tons to 50-60 million tons in the next few years. Most of the capacity growth will come from overseas markets, mainly in other Asian countries and Latin America, to change production mainly in Japan. The local situation. Nippon Steel will accelerate the global alliance and further strengthen the production of automotive sheet, downstream processing and supply chain development for the Asian market. Nippon Steel will also increase its export offensive, and its share of production has risen from 35% before the crisis to 45%.
Nippon Steel's priority investment market is in India, Brazil and Southeast Asia. It has teamed up with India's Tata Steel to produce and sell high-strength tensile steel with an annual capacity of 600,000 tons. It has established a contract with Latin American Ternium Steel in Mexico. A hot-dip galvanizing sheet plant for automobiles with an annual production capacity of 400,000 tons, including the construction of a blast furnace. Nippon Steel also teamed up with three Japanese companies to buy a 55% stake in Indonesia's galvanized sheet manufacturer Latinusa for US$60 million to strengthen its tinplate business in Asia, and plans to build an annual capacity in Vietnam with Sumitomo. The 60,000-ton steel pipe and sheet pile production plant has made Vietnam an overseas construction steel production base. In addition, Nippon Steel has also accelerated the expansion of its Brazilian Minas Gerais Steel Company.
Posco Steel is active in overseas M&A expansion and aims to become an international group by entering mineral resources such as iron ore, coal and natural gas, and its heavy-duty user shipbuilding sector. Posco has spent $2.28 billion to acquire Daewoo International, a local energy, resource and trading group. The next possible acquisition target is Daewoo Shipbuilding and Marine Engineering, the second largest shipbuilder in Korea. At present, there are at least three greenfield integrated steel mill projects that Posco is tracking, two in India and one in Indonesia. The groundbreaking ceremony for the Posco Indonesian integrated steel plant has been held. The first integrated steel plant in Southeast Asia (with an annual capacity of 3 million tons) will be put into operation in 2013, and the annual production capacity of the second phase will be expanded to 6 million tons. Due to the delay in the Pohang Indian steel mill project, the company finally decided to jointly build a plant with the Indian Steel Authority and use Posco's Finex technology to reduce unnecessary trouble.
In addition, in 2011, the world's major steel producers will continue to increase investment in equipment renovation and new technology development, focusing on the reserve of advanced technology, while further expanding the global sales network and enhancing competitiveness to cope with various market occurrences. Variety.
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