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Commodity and currency assumptions
Renaissance Capital
3 December 2018
Steel
Figure 56: Commodity price and currency forecasts
CY |
2015 |
2016 |
2017 |
2018E |
2019E |
2020E |
2021E |
2022E |
LT Real |
Raw materials |
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Iron ore fines (62% Fe, CIF China), $/t |
56 |
58 |
71 |
66 |
65 |
64 |
64 |
65 |
60 |
Hard coking coal - spot, $/t |
95 |
144 |
188 |
200 |
190 |
167 |
159 |
162 |
150 |
Scrap (Turkey), $/t |
241 |
235 |
300 |
350 |
322 |
301 |
295 |
301 |
278 |
Pig iron - CIS, $/t |
241 |
244 |
332 |
378 |
339 |
311 |
305 |
312 |
288 |
Slab - CIS, $/t |
290 |
325 |
439 |
525 |
454 |
430 |
427 |
436 |
403 |
Long products |
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Rebar - CIS, $/t |
365 |
370 |
467 |
549 |
489 |
466 |
464 |
474 |
438 |
Rebar - China, $/t |
321 |
348 |
517 |
589 |
491 |
469 |
469 |
479 |
443 |
Flat products |
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Hot rolled coil - USA, $/t |
416 |
473 |
564 |
772 |
634 |
515 |
515 |
526 |
486 |
Hot rolled coil - China, $/t |
330 |
377 |
508 |
577 |
517 |
493 |
494 |
504 |
466 |
Hot rolled coil - CIS, $/t |
345 |
382 |
502 |
569 |
514 |
492 |
491 |
501 |
463 |
Heavy plate - CIS, $/t |
419 |
394 |
538 |
618 |
539 |
517 |
517 |
528 |
488 |
Cold rolled coil - CIS, $/t |
413 |
434 |
559 |
636 |
619 |
600 |
602 |
614 |
568 |
Galvanised, $/t |
649 |
625 |
739 |
782 |
764 |
786 |
814 |
830 |
768 |
ZAR/$ |
12.77 |
14.70 |
13.31 |
13.24 |
14.00 |
13.98 |
14.04 |
14.32 |
12.75 |
RUB/$ |
61.23 |
66.99 |
58.33 |
62.37 |
64.50 |
63.54 |
63.63 |
64.92 |
57.80 |
$/EUR |
1.11 |
1.11 |
1.13 |
1.18 |
1.18 |
1.22 |
1.24 |
1.23 |
1.20 |
US consumer price index |
237 |
240 |
245 |
251 |
256 |
261 |
266 |
272 |
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Source: Bloomberg, Renaissance Capital estimates |
Historical and forecast commodity prices compared with spot |
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Figure 57: Iron ore forecasts compared with spot, $/t |
Figure 58: Hard coking coal forecasts compared with spot, $/t |
200
180
160
140
120
100
80
60
40
20
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122 |
152 |
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152 |
175 |
132 |
136 |
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85 |
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97 |
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58 |
71 |
67 |
66 |
65 |
64 |
64 |
60 |
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2002 |
2003 (+4%) |
2004 (+11%) |
2005 (+41%) |
2006 (+33%) |
2007 (+106%) |
2008 (+25%) |
2009 (-44%) |
2010 (+79%) |
2011 (+15%) |
2012 (-24%) |
2013 (+3%) |
2014 (-29%) |
2015 (-43%) |
2016 (+5%) |
2017 (+22%) |
Spot |
2018E (1% upside) |
2019E (2% upside) |
2020E (4% upside) |
2021E (5% upside) |
LT real (11% upside) |
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Source: Bloomberg, Renaissance Capital estimates
350
300
250
200
150
100
50
0
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118 |
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253 |
172 |
191 |
289 |
211 |
159 |
126 |
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144 |
188 |
187 |
200 |
190 |
167 |
159 |
150 |
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2002 |
2003 (-3%) |
2004 (+16%) |
2005 (+99%) |
2006 (+9%) |
2007 (-13%) |
2008 (+147%) |
2009 (-32%) |
2010 (+11%) |
2011 (+52%) |
2012 (-27%) |
2013 (-25%) |
2014 (-21%) |
2015 (-25%) |
2016 (+52%) |
2017 (+30%) |
Spot |
2018E (7% downside) |
2019E (1% downside) |
2020E (12% upside) |
2021E (18% upside) |
LT real (25% upside) |
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Source: Bloomberg, Renaissance Capital estimates
Figure 59: China HRC forecasts compared with spot, $/t |
Figure 60: China rebar forecasts compared with spot, $/t |
900
800
700
600
500
400
300
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807 |
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616 |
685 |
584 |
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577 |
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553 |
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514 |
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542 |
502 |
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508 |
495 |
517 |
493 |
494 |
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466 |
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330 |
377 |
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2007 (+16%) |
2008 (+46%) |
2009 (-36%) |
2010 (+20%) |
2011 (+11%) |
2012 (-15%) |
2013 (-7%) |
2014 (-7%) |
2015 (-34%) |
2016 (+14%) |
2017 (+35%) |
Spot |
2018E (14% downside) |
2019E (4% downside) |
2020E (0% upside) |
2021E (0% upside) |
LT real (6% upside) |
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Source: Bloomberg, Renaissance Capital estimates
900
800
700
600
500
400
300
200
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511 |
801 |
530 |
599 |
684 |
592 |
527 |
460 |
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517 |
540 |
589 |
491 |
469 |
469 |
443 |
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2007 (+24%) |
2008 (+57%) |
2009 (-34%) |
2010 (+13%) |
2011 (+14%) |
2012 (-13%) |
2013 (-11%) |
2014 (-13%) |
2015 (-30%) |
2016 (+8%) |
2017 (+49%) |
Spot |
2018E (8% downside) |
2019E (10% upside) |
2020E (15% upside) |
2021E (15% upside) |
LT real (22% upside) |
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Source: Bloomberg, Renaissance Capital estimates
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