Canada Metals Report Q2 2012
Business Monitor International, May 2012, Pages: 50
While the Canadian metals market is set to be an outperformer, consumption growth will be insufficient to sustain output growth in 2012 with the US market set to determine production, according to BMI’s latest Canada Metals Report. As such, some segments will see slower growth and even contraction, particularly where plants are affected by labour disputes.
Canadian crude steel output was decline by 1.0% to 13.1mn tonnes in 2011, despite a 10% rise in apparent finished steel consumption to 15.5mn tonnes. This is largely due to the continuing controversial shut-down of US Steel’s Hamilton facility, which led to a widening of Canada’s steel trade deficit. A deal between US Steel and the Canadian government could stimulate output, but in light of the deteriorating economic conditions and the potential for over-supply particularly in the US flat steel market, we have revised down our output growth forecast from 10% to 4.6%.
The aluminium industry will be hit by the drastic cut in production at Rio Tinto Alcan’s 438,000tpa Saguenay-Lac-Saint-Jean smelter to one-third capacity amid a labour dispute which will more than outweigh the restart of up to 50,000tpa of capacity at its Shawinigan smelter. BMI forecasts a 7% decline in primary aluminium output to 2.78mn tonnes in 2012 as a result. Over the medium term, despite capacity expansion, growth will be limited by capacity, with output reaching 3.37mn tonnes by 2016, an increase of 12.7% over 2011 levels.
Nickel refining has been undermined by the effects of labour disputes on ore mining activities and 12,200 tonnes of planned finished nickel output was lost due to a shut-down of a facility operated by Vale due to technical problems. Nickel refining increased by an estimated 25% to 140,000 tonnes in 2011 with a further 1.9% forecast increase to 143,000 tonnes in 2012. Production is projected to reach 180,000 tonnes over the forecast period. A significant risk to this forecast comes from doubts over the commercial viability of Vale’s complex in Thompson with 55,000tpa refining and 60,000tpa smelting capacities.
Canadian zinc production will shrink 2% in 2012 following the closure of Xstrata’s zinc and copper plants. BMI anticipates 11.6% growth in Canadian zinc consumption in 2011-16 to 173,000 tonnes as the economy returns to full strength, with the domestic market consuming 26% of production, up from 22% in 2010.
Business Monitor International's Canada Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Canada's metals industry.
Executive Summary
SWOT Analysis
Canada Political SWOT
Canada Economic SWOT
Global Overview
Table: BMI's Steel Forecasts
Table: Steel Products And Inputs – Price Data
Commodities Forecast
Gold
Copper
Aluminium
Lead
Nickel
Tin
Zinc
Forecast Scenario
Steel
Table: Canada’s Steel Industry, 2010-2016 (‘000 tonnes, unless otherwise stated)
Aluminium
Table: Canadian Smelters’ Capacity, 2010-2016
Nickel
Zinc
Macroeconomic Activity
Table: Canada - Economic Activity, 2011-2016
Regulatory Environment
Trade Relations With The US
Company Profiles
ArcelorMittal
Table: ArcelorMittal’s Key Financial Data
Rio Tinto
Table: Rio Tinto’s Key Financial Data
US Steel
Table: US Steel’s Key Financial Data
Global Assumptions, Q212
Table: Global Assumptions, 2010-2016
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2011-2013
Table: Emerging Market Exchange Rates, 2010-2013
Developed States
Table: Developed States – Real GDP Growth, 2010-2013
Emerging Markets
Table: Emerging Markets – Real GDP Growth 2010-2013
Consensus
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Country Snapshot: Canada Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2003
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Average Annual Manufacturing Wages, 2000-2012
Table: Consumer Expenditure, 2000-2012 (US$)
BMI Methodology
How We Generate Our Industry Forecasts
Cross Checks
- ArcelorMittal
- Rio Tinto
- US Steel
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