Canada Metals Report

Published 24 December 2014

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$1,295.00
Canada Metals Report

BMI View: Canadian metal productio n will be driven by increasing import demand in both the US and Mexico to 2018 . Increasing manufacturing and industrial activity in the latter two countries should help drive demand for metal inputs. Moreover , a weaker Canadian dollar against the US dollar should help support Canadian exports.

Accelerating economic expansion in the US and Mexico in 2015, combined with a weaker Canadian dollar (CAD) in the coming quarters, will support growth in the Canadian metals sector to 2018. Indeed, we expect both the US and Mexico will experience positive trends in real GDP growth in the coming years, with automotive and general manufacturing activity picking up. We estimate 2015 real GDP growth of 2.7% and 3.5% in the US and Mexico, respectively, and forecast real GDP growth averaging 2.4% in the US and 3.8% in Mexico in 2016-2018.

Foreign Growth To Support Metal Demand
US & Mexico - Fixed Capital Formation & Automotive Production, % chg y-o-y

The Canadian dollar will continue to weaken against the US dollar over the next two years, averaging CAD1.200/USD in 2015 and CAD1.210/USD in 2016, compared to an average of CAD1.110/USD in 2014. Both a relatively dovish monetary policy outlook and continued weakness in global oil prices into 2015 will keep downside pressure on the currency. Since Canada is a significant exporter of aluminium, nickel, and steel to the US, and to a lesser extent Mexico, this exchange rate dynamic should support Canadian exports to end users in both countries.

Rising US Demand To Bolster Export Growth
Canada Merchandise Goods Exports To US And US Durable Goods Orders

On the domestic front, we forecast relatively subdued economic expansion, though growth in key sectors should support modest metals consumption. We currently expect real GDP growth of 2.3% in 2015 and 2.4% in 2016. Industrial capacity utilisation in Canada has been heading gradually higher, though is heavily dependent on the US manufacturing...

Table of Contents

BMI Industry View
7
SWOT
10
Metals SWOT
10
Industry Forecast
11
Steel: Low But Steady Growth Ahead
11
Domestic Output To Lag Demand
12
Modest Consumption Supported
13
Table: Steel Production & Consumption (Canada 2010-2018)
14
Table: Steel Industry Historical Data (Canada 2005-2012)
14
Nickel: Export Demand To Support Sector
16
Indonesian Ore Ban Upside For Canada
17
Table: Refined Nickel Production & Consumption (Canada 2010-2018)
18
Aluminium: Canada To Be Top North American Supplier
18
Canada To Lead In Americas
19
Majority To Be Exported
20
Table: Aluminium Production & Consumption (Canada 2010-2018)
21
Regulatory Development
22
Recent Updates
22
Local Consultation & Environmental Stewardship To Remain Top Priorities
23
Tax Regime
23
Table: Canada Political Overview
24
Commodities Forecast
25
Commodity Strategy
25
Ferrous Metals:
25
Non-Ferrous Metals:
29
Aluminium: Prices To Remain Elevated Following Recent Dip
29
Copper: Chinese Weakness To Create Further Headwinds
30
Nickel: No Sustained Rally Ahead
32
Zinc: Subdued Short-Term Outlook Before Multi-Year Gains
35
Table: Select Commodities - Performance And BMI Forecasts
36
Steel: Prices To Head Higher From 2016
37
Table: BMI Steel Price Forecast
37
Short-Term Outlook (three-to-six months)
37
Long-Term Outlook
38
Production: Chinese Rationalisation Measures To Bite
39
Consumption: Slowing Demand Growth On The Horizon
40
Burgeoning Chinese Exports Will Not Last
41
Eurozone Growth Downgrade Highlights Long Road To Recovery
42
Risks To Price Forecast
42
Table: Steel Data & Forecasts
43
Competitive Landscape
44
Table: Canada - Largest Listed Metals Companies
45
Company Profile
46
ArcelorMittal
46
Company Overview
48
Company Strategy
48
Latest Financial Results
50
Company Details
50
Financial Data
50
Table: ArcelorMittal - Key Financial Data
50
Rio Tinto
51
Company Overview
53
Company Strategy
54
Latest Financial Results
55
Table: Rio Tinto - Key Financial Data
57
US Steel
58
Company Overview
60
Company Strategy
60
Latest Results
61
Table: US Steel - Supply Chain Analysis
62
Table: Financial Data
63
Address Details
63
Methodology
64
Cross Checks
64

The Canada Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in Canada.

BMI's Canada Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in Canada.

Key Benefits

  • Benchmark BMI's independent metals industry forecasts for Canada to test other views - a key input for successful budgeting and strategic business planning in the Canada metals market.
  • Target business opportunities and risks in Canada through our reviews of latest industry trends, regulatory changes and major projects and investments.
  • Exploit the latest competitive intelligence and company profiles on your competitors and peers.

Coverage

BMI Industry View

A comprehensive summary of the impact and implications of the latest regulatory developments and key forecast indicators covering metals production, consumption and upside/downside risks to our outlook. The Metals SWOT analysis outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.

Industry Forecast

Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Steel: Steel production & consumption (‘000 tonnes).
  • Aluminium: Aluminium consumption production & balance (‘000 tonnes).
  • Copper: Refined copper production & consumption (‘000 tonnes).
  • Zinc: Refined zinc production & consumption (‘000 tonnes).
  • Lead: Refined Lead production, consumption & balance (‘000 tonnes).
  • Nickel: Refined nickel production & consumption (‘000 tonnes).
  • Tin: Refined tin production, consumption & balance (‘000 tonnes).

Regulatory Development

Details of the industry regulatory framework, relevant key legislation and environmental standards that impact the metals industry. The regulatory developments section provides analysis of the overall regulatory burden, the tax regime (including income tax rates), bureaucratic framework, corruption and a country specific political overview. Details of the industry regulatory framework provide information on relevant key legislation and regulations that will impact the metals industry.

Commodities Forecast

Provides in depth coverage and forecasting of steel prices and includes BMI’s core view of what to expect in upcoming months. Within the monthly metals update, BMI provides performance data and key forecasts for select commodities, including prices for aluminium, copper, gold, iron ore, lead, nickel, palladium, platinum, silver, steel (MEPS Carbon Steel), tin and zinc.

Competitive landscape

The competitive landscape section provides comparative company analyses of detailed financial data for key listed metals firms, ranked in order of market cap (USDmn).

Company Profiles*

Examines the competitive position and short to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects. Details of products and services provide a full overview of each company’s operations.

Sources

The Metals Reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc