Romania Metals Report Q1 2010

The Romania Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Romania's metals industry.

Romanian metals production will stabilise in 2010, but a recovery is unlikely to begin until the second half of the year, according to the latest Romania Metals Report.

In the first 10 months of 2009, Romanian crude steel output fell 60.7% year-on-year (y-o-y) to 4.64mn tonnes, which was in line with the publishers forecasts. Romania’s performance was the worst in the EU. Monthly output peaked at 215,000 tonnes in May, but had fallen back to around 180,000 tonnes per month in H209, which was little better than the performance seen in Q109. The trend was not typical of the rest of the EU, which saw a modest but steady upturn from Q209.

The effect of the slump has been devastating across the steel industry. the publishers estimates that crude steel production halved to 2.52mn tonnes in 2009. A major concern for longs producers is the collapse of the construction sector, with 20% of construction firms going bankrupt or insolvent in the first nine months of 2009 and the sector shrinking by up to 18%. This led to a 30% slump in the construction materials market in 2009, with a direct impact on concrete reinforcing bar and wire rod. The publishers estimates that concrete reinforcing bar output fell 48.7% y-o-y in 2009 to 396,500 tonnes, but will recover by 4.5% to over 414,200 tonnes in 2010, though a serious recovery is only likely beyond H210.

Meanwhile, heavy sections production has seen orders collapse as the result of a freeze on new ship orders and a postponement of existing orders, with output down 34% to around 157,000 tonnes. As new ship orders will lag behind economic recovery, the publishers expects a further fall in heavy plate output to 145,000 tonnes in 2010, before it rebounds from 2011. Romanian shipyards had one of their worst years in 2009, having received no orders in the first half of the year. However, shipyards are working at near full capacity due to orders placed in previous years. Many shipyards are also changing their strategies with Damen Galati seeking orders for military and luxury ships and the Constanta Shipyard and Daewoo Mangalia focusing on ship repairs. The publishers expects the cut in orders in 2009 to affect heavy section production in 2010, with the decline in output set to continue.

Romania’s aluminium industry is also set to see a sharp downturn in output. Romanian aluminium producer Alro produced 56,196 tonnes of primary aluminium in Q109 (down 20% over Q408) and 6,076 tonnes of flat rolled products (up 0.5%). Alro plans to produce 201,225 tonnes of electrolytic aluminium in 2009, down 24% over 2008 with an operating rate at around 70%. This reduction is largely related to the shutdown of one pot line, implemented at the end of 2008. The publisher believes that Alro may suffer a bigger fall in output, based on our pessimistic outlook for key export markets and the poor performance of the car industry, a major aluminium consumer. The report estimates that primary aluminium production growth was flat in 2008, totalling around 263,000 tonnes. A 30% fall is expected in 2009, with output down to just under 171,000 tonnes. A key contributor to the decline will be the automotive sector, but car assembly will also secure the sector’s revival, with output set to reach 290,000 tonnes by 2013 as Ford boosts output at Craiova.

SWOT Analysis
- Romania Metal Industry SWOT
- Romania Political SWOT
- Romania Economic SWOT
- Romania Business Environment SWOT

Global Metals Market Overview
- Table: World’s Top 10 Steel Producing Countries
- Aluminium Outlook
- Table: BMI Aluminium Forecast
- Table: Aluminium Indicators – Historical Data and Forecasts
- Copper Outlook
- Table: BMI Copper Update
- Table: Copper Indicators, Historical Data and Forecasts
- Metals Price Outlook
- Table: Stock Levels At London Metal Exchange Warehouses (tonnes)
- Global Mining Outlook
- Table: Biggest Chinese Acquisitions In Australia Since 2005
- Table: Global Mining – Top Five Companies By Market Capitalisation (US$mn)
- Table: Global Mining – Key Players’ Future Investment Plans (selected projects)

Regional Overview

Industry Forecast Scenario
- Table: Romanian Aluminium Market, 2004-2007
- Table: Romania’s Metals Industry, 2007-2014
- Macroeconomic Outlook
- Table: Romania – Economic Activity, 2006-2013

Competitive Landscape

Company Profiles
- Alro SA
- Mechel
- ArcelorMittal
- Tenaris Silcotub

Global Assumptions
- Table: Global Assumptions, 2007-2013
- Table: Developed States GDP Growth, 2008-2010
- Table: Emerging Markets GDP Growth, 2008-2010
- Table: Commodity Prices, 2007-2010

BMI Methodology
- How We Generate Our Industry Forecasts
- Cross Checks

Country Snapshot: Romania Demographic Data
- Section 1: Population
- Section 2: Education And Healthcare
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2005-2010 (US$)
- Table: Average Annual Wages, 2006-2010

- Alro SA

- Mechel

- ArcelorMittal

- Tenaris Silcotub

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