VAI's continuous casting and rolling conference: Austrian based plantbuilder, Voest Alpine...

CCR'04, as it was billed, was the first VAI conference which included both continuous casting and rolling. The VAI continuous casting conference, held every four years has been a regular event on the calendar for many years but this is the first time that rolling papers have been included. A

Attendance of the conference was free and by invitation but with delegates meeting their own travel and accommodation costs. An excellent social programme was provided in the evenings as well as a tour programme for non-delegates and a site visit to the voestalpine steel works on the morning of the third day.

PRESENTATIONS

Welcoming addresses were made by Gerhard Falch, Member of the managing board VA Technologie AG (VAI's parent company) and President and Chairman of the Board, VAI GmbH; Erich Becker CEO & Chairman VA Technologic AG; Johann Mayr, Member of the City Senate of Linz and Josef Puhringer, Govenor of Upper Austria. These were followed by a keynote address by Jean-Yves Gilet, Senior Executive VP, Stainless Steel of Arcelor, the multinational steelmaker headquartered in Luxembourg.

Inevitably, the immense demand for steel from China dominated M. Gilet's presentation but he reminded the audience that steel was a very cyclic business and that the present upturn will be followed by a downturn. Two thirds of growth in the steel business in 2002-03 had taken place in China. Despite some success by the Chinese Government to slow the growth of near 10% per year to a more sustainable 7%, China would remain the driving force throughout the decade, predicted M. Gilet, as per capita consumption of flat-carbon steel in China was still only a third that of the OECD average.

As well as steel prices increasing globally, the demand from China for raw materials has pushed these and freight charges to record levels.

While stainless steel flat production was now well concentrated with 60% of the market supplied by the top ten producers--similar to the concentration of aluminium, copper and cement (50%), in flat-carbon steels only 27% of the market was supplied by the top ten producers, despite considerable consolidation in Europe and more recently in Japan and USA. Profitability, said M. Gilet, was closely related to concentration. Even in concentrated businesses the floor price was determined by the lowest cost producers, which in C steel flats ranges by 100%, with Russia, Brazil and China being the lowest cost producers and USA being the highest (Fig 1). Labour costs were much of the reason for this but also Russia and Brazil benefit from low raw material costs.