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Overview of Japan’s Titanium Industry
International Titanium Association 2014September 22, 2014
Shinya HIGUCHIChairman, the Japan Titanium Society
1
Final
1. Current Economic Situation in Japan
2. Outlook of Japan’s Titanium Industry 2014
3. History of Japan’s Titanium Industry since 1995
4. Conclusion
2
Agenda
impact by consumption tax rate rise (1)
3
Current Economic Situation in Japan
‐8.0
‐6.0
‐4.0
‐2.0
0.0
2.0
4.0
6.0
8.0
Jul‐Sep2012
Oct‐Dec Jan‐Mar2013
Apr‐Jun Jul‐Sep Oct‐Dec Jan‐Mar2014
Apr‐Jun
Real GDP growth rate(compared with previous quarter. Annualized) 5%
The rate of consumption tax was raised from 5% to 8%
from April 1, 2014.
8%Consumption Tax
impact by consumption tax rate rise (2)
4
Current Economic Situation in Japan
▼2.7
▼0.5
+5.1 +3.4
+1.8
▼0.5
+6.0
▼7.1
▼18.0
▼16.0
▼14.0
▼12.0
▼10.0
▼8.0
▼6.0
▼4.0
▼2.0
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
3Q
2012
4Q 1Q
2013
2Q 3Q 4Q 1Q
2014CY
2Q
(%)
CY
Real GDP Growth rate(compared with previous quarter, annualized)
Net Export
Public
Inventory
Government
investment
Government
Expenditure
Private
Inventory
Private
Investment
Private
Housing
InvestmentPrivate
Consumption
GDP
Forecast of next quarters (1)
5
Current Economic Situation in Japan
75
80
85
90
95
100
105
110
JPY / USD Exchange rate (Tokyo foreign exchange market)
6
Current Economic Situation in Japan
Bank of Japan’s “Tankan” Survey(Short term outlook of business conditions)
‐30
‐20
‐10
0
10
20
30
Mar2011
Jun Sep Dec Mar2012
Jun Sep Dec Mar2013
Jun Sep Dec Mar2014
Jun
LE (Manufacturing)
LE (Non‐Manufacturing)
SME (Manufacturing)
SME (Non‐Manufacturing)
1. Current Condition
Japanese companies’ sentiments about current business condition were still positive at the timing of June research.
Forecast of next quarters (2)
Forecast of next quarters (3)
7
Current Economic Situation in Japan
Bank of Japan’s “Tankan” Survey(Short term outlook of business conditions)
‐40
‐30
‐20
‐10
0
10
20
30
Mar2011
Jun Sep Dec Mar2012
Jun Sep Dec Mar2013
Jun Sep Dec Mar2014
Jun Sep
LE(Manufacturing) LE (Non‐Manufacturing)SME (Manufacturing)SME (Non‐Manufacturing)
2. Forecast of Future (after 3 months) Condition
SME’s sentiments about future (after 3 months) business condition changed into positive side at the timing of June research.
(Forecasted in June)
Forecast of next quarters (4)
8
Current Economic Situation in Japan
600,000
650,000
700,000
750,000
800,000
850,000
900,000
950,000
1,000,000
Jan2012
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan2013
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan2014
Feb Mar Apr May Jun Jul
Machinery Orders in Private Sector(excl. orders for ships and those from electric power companies)
Leading indicator for private investment
Jul
Forecast of next quarters (5)
9
Current Economic Situation in Japan
‐8.0
‐6.0
‐4.0
‐2.0
0.0
2.0
4.0
6.0
8.0
Jul‐Sep2012
Oct‐Dec Jan‐Mar2013
Apr‐Jun Jul‐Sep Oct‐Dec Jan‐Mar2014
Apr‐Jun Jul‐Sep Oct‐Dec Jan‐Mar2015
Apr‐Jun
Real GDP growth rate(compared with previous quarter. Annualized)
Average of forecasts by Japanese 7 analysis companies as of Sep. 8 ;
2014. Jul‐Sep : 3.8%Oct‐Dec : 2.4%
2015.Jan‐Mar : 1.8%Apr‐Jun : 1.4% (source : Nikkei)
‐ “Basic Energy Plan” (Apr. 2014)‐ ‐ ‐ “important base‐load power source”
‐ Examination by Nuclear Regulation Authority concerning resumption of Nuclear Power Plant operation (case by case).
‐ Public Opinions
Situation concerning Nuclear Power Plant in Japan
10
Current Economic Situation in Japan
1. Current Economic Situation in Japan
2. Outlook of Japan’s Titanium Industry 2014
3. History of Japan’s Titanium Industry since 1995
4. Conclusion
11
Agenda
Production of Titanium Sponge
12
Outlook of Japan’s Titanium Industry 2014
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000 Annual production (in MT)
63,400
42,178
8,397
Export of Titanium Sponge
13
Outlook of Japan’s Titanium Industry 2014
0%
20%
40%
60%
80%
100%
120%
0
5000
10000
15000
20000
25000
30000
Export volume (in MT) Percentage of export
3,685
Shipment of Titanium Mill Products
14
Outlook of Japan’s Titanium Industry 2014
0
5,000
10,000
15,000
20,000Annual Shipment (in MT)
19,358
16,183
6,465
12,361
Export of Titanium Mill Products
15
Outlook of Japan’s Titanium Industry 2014
10%
20%
30%
40%
50%
60%
70%
80%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
(MT) Mill Products Export Export ratio
4,227
Shipment of Titanium Mill ProductsDifference compared with the same half in the previous year
16
Outlook of Japan’s Titanium Industry 2014
‐6,000
‐5,000
‐4,000
‐3,000
‐2,000
‐1,000
0
1,000
2,000
3,000
4,000
2009.1H 2H 2010.1H 2H 2011.1H 2H 2012.1H 2H 2013.1H 2H 2014.1H
Shipment in totalShipment to JapanShipment for export
CY
(MT)
1. Current Economic Situation in Japan
2. Outlook of Japan’s Titanium Industry 2014
3. History of Japan’s Titanium Industry since 1995
4. Conclusion
17
Agenda
18
History of Japan’s Titanium Industry since 1995
9.0
10.9
13.612.3
11.112.8
15.1 14.613.8
18.3 17.7 18.119.5 19.1
9.7
15.6
21.7
11.6
13.1
4.0
8.0
12.0
16.0
20.0
24.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
<PeriodⅠ> <PeriodⅡ> <Period Ⅲ> <Period Ⅳ>
Shipment of Titanium Mill Products since 1995
(MT/FY)
19
History of Japan’s Titanium Industry since 1995
9.0
10.9
13.612.3
11.112.8
15.1 14.613.8
18.3 17.7 18.119.5 19.1
9.7
15.6
21.7
11.6
13.1
4.0
8.0
12.0
16.0
20.0
24.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
<PeriodⅠ> <Period Ⅱ> <Period Ⅲ> <Period Ⅳ>
Asian Financial Crisis
< Period Ⅰ 1995-2004 >- Expansion and exploration of the application of titanium for industrial usage.
Application of titanium have been expanded in the various industrial sectors.- September 11, 2001
=> After a slump of demand for Aerospace sector, demand had been increased gradually.
September 11
図+写真
20
History of Japan’s Titanium Industry since 1995
Plate Heat Exchanger [Photo: courtesy of Hisaka Works, Ltd.]
21
History of Japan’s Titanium Industry since 1995
9.0
10.9
13.612.3
11.1
12.8
15.1 14.613.8
18.317.7 18.1
19.5 19.1
9.7
15.6
21.7
11.6
13.1
4.0
8.0
12.0
16.0
20.0
24.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
<PeriodⅠ> <Period Ⅱ> Period Ⅲ> <Period Ⅳ>
< Period Ⅱ 2005-2008> - Titanium demand had expanded for Aerospace sector and for infrastructure.- Demand for titanium mill products exceeded the capacity of sponge production.- Supply- demand balance of titanium metal had rapidly tightened.
Price of titanium products rose sharply.- Price of raw material (Synthesized rutile) were stable.
図+写真
Construction of Marine pier for D runway of
Tokyo Haneda International Airport[Photo: courtesy of Haneda Airport Expansion Project JV]
22
History of Japan’s Titanium Industry since 1995
23
History of Japan’s Titanium Industry since 1995
Kyushu National Museum
(Fukuoka, Japan)
24
History of Japan’s Titanium Industry since 1995
National Center for Performing Arts (Beijing, China)
25
History of Japan’s Titanium Industry since 1995
Titanium Exhaust System
26
History of Titanium Industry since 1995
9.0
10.9
13.612.3
11.1
12.8
15.1 14.613.8
18.317.7 18.1
19.5 19.1
9.7
15.6
21.7
11.6
13.1
4.0
8.0
12.0
16.0
20.0
24.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
<PeriodⅠ> <PeriodⅡ> <Period Ⅲ> <Period Ⅳ>
< Period Ⅲ 2009-2011>- Global economic crisis and decrease of titanium demand.- Because of a sudden price rise at period Ⅱ, following situations which could cause
supply-demand balance easing appeared.1 ) Some customers changed their material from titanium to another one.2 ) Investments for extra capacity of titanium sponge
- Big supply-demand gap has continued since then including negative impacts by Lehmanand the great east Japan earthquake .
Lehman Brothers
Bankruptcy
The Great East Japan Earthquake
図+写真
27
History of Japan’s Titanium Industry since 1995
Sea Water Desalination Plant [Photo: courtesy of DHIC]
28
History of Japan’s Titanium Industry since 1995
9.0
10.9
13.612.3
11.1
12.8
15.1 14.613.8
18.317.7 18.1
19.5 19.1
9.7
15.6
21.7
11.6
13.1
4.0
8.0
12.0
16.0
20.0
24.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
<PeriodⅠ> <PerioodⅡ> <Period Ⅲ> <Period Ⅳ>
< Period Ⅳ 2012-2014>- Supply-demand balance situation in period III has continued. Titanium demand for industrial sectors has been low because of Nuclear Power Plant situation and economic situation in China.- Inventory adjustment in Aerospace sector.- Price of mill products declined sharply because of strong price competition. - Price of titanium raw material rose because supply-demand balance of TiO2 for pigment had tightened.
Abenomics
Fluctuation of Mill Products Shipment for the last 6 years
29
History of Japan’s Titanium Industry since 1995
0
5,000
10,000
15,000
20,000
25,000
2002 03 04 05 06 07 08 09 10 11 12 2013FY
Automobile & others
Aerospace
PHE
Electrolysis & Chemical
Power plant & Desalination
30
History of Japan’s Titanium Industry since 1995
9.0
10.9
13.612.3
11.1
12.8
15.1 14.613.8
18.317.7 18.1
19.5 19.1
9.7
15.6
21.7
11.6
13.1
4.0
8.0
12.0
16.0
20.0
24.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
<PeriodⅠ> <PeriodⅡ> <Period Ⅲ> <Period Ⅳ>
< Period Ⅴ 2015 - >- Titanium demand for Aerospace sector is expected to increase.- The level of titanium demand increase for Industrial sector is unclear at the moment.=> In order to increase whole volume of titanium demand, activities to expand
and explore titanium application by titanium industry and individual companies are very important.
<Period Ⅴ>
Administration Committee
ITF Committee
General Meeting
West Japan Branch
Water Service WG
Fastener WG
Welfare & Medical WG
Sanitary WG
Associate Members Committee
Application Development Committee
Environment Committee
Secretary
Academia-Industry Cooperation Committee
ISO/TC79/SC11 Committee
Technical Committee
Editorial Committee
Awards Committee
Board Meeting
Executive Meeting
JTS Organization chart20 Corporate Members
172 Corporate Associates32 Individual Members
31
History of Japan’s Titanium Industry since 1995
Desalination & Environment
Construction & Ocean Eng.
Medical Appliances
Technological Development by collaboration among Industry, Universities and Ministries
32
History of Japan’s Titanium Industry since 1995
JTS / Academia-Industry Cooperation Committee is positioned as a coordinator for this collaboration.
- Provision of opportunities for debating the direction of technological development among Industry, Universities and Ministry (METI)
- Discussion of development issues for new technologies from a medium to long-term perspective.
- Provision of opportunities for discussion of needs and solutions between Industry andUniversities.
- Coordination of intimate contact for young engineers and researchers between Industry and Universities with the purpose of development of human resources.
Industry Universities
MinistriesMinistry of Economy, Trade & IndustryMinistry of Education, Science & Culture
1. Current Economic Situation in Japan
2. Outlook of Japan’s Titanium Industry 2014
3. History of Japan’s Titanium Industry since 1995
4. Conclusion
33
Agenda
Conclusion
34
1. Titanium demand remains low in Japan now. The level of titanium demand increase for Industrial sector is unclear at the moment.Steady growth forecast of Japanese economyis a positive factor.
2. Contribution to the world titanium industriesWe will continue to make a great effort to contribute to the
world titanium industries through stable supply of high-quality titanium sponge and mill-products to global customers, expansion and exploration of the application of titanium, and technological development, etc.
Thank you very much for your kind attention!
Thank you very much for your kind attention!
35