GLOBAL TRENDS IN INDUSTRIAL MARKETS

Gilles DUSSART 2012 ITA Conference

October 8, 2012

DISCLAIMER

The information, estimates and projections contained in this presentation constitute the current

judgment of Valtimet as of the date of this report. They are believed to be reliable, but Valtimet

makes no representation or warranty regarding the accuracy, completeness or reliability. You

rely on these projections and other information in this presentation at your own risk, and

Valtimet assumes no duty to update any of this information should expectations change.

PTA District Cooling

Segment 3

PROCESS

Chemical Oil & Gas

LNG Pool Heater

Segment 2

DESALINATION

Thermal MSF/MED

Segment 1

POWERGEN

Nuclear Power Plant Thermal Power Plant

TITANIUM IN THE INDUSTRY

Gilles Dussart, COO

0,162

0,051 0,036

0

HYDRO, WIND, SOLAR SINGLE CYCLE NUCLEAR COAL

COMBINED CYCLE

Ti tu

bes k

g/M

W

Segment 1: TI USE IN POWER GENERATION MARKET

Gilles Dussart, COO

-

20.0

40.0

60.0

80.0

100.0

120.0

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Base

100

in 2

011

MW

Energy Demand Forecast – New connections to the grid

Nuclear Coal Combined Cycle Single Cycle

Hydro Solar Biomass & Waste Wind

Other Renew Titanium Consumption

Segment 1: ENERGY DEMAND OUTLOOK

Gilles Dussart, COO

60+ nuclear reactors under construction

160+ nuclear reactors planned

36

17 14

6

20

51

17 Nafta

ROW

Europe

Korea

Russia CIS

India

China

Corresponding to over 40 000MT of Ti tubes over the coming 20 years

Segment 1: NUCLEAR ENERGY

Gilles Dussart, COO

1

8

6

12

7

26

4

No Ti Ti from

3.5 to 6 kg/(m³/d)

Ti from

0 to 1.2 kg/(m³/d)

MARKET TREND

Thinner tubes generating feasibility and cost questions No growing sustainable volume for Ti MSF design Potential not to be neglected: China & Retubing

Segment 2: DESALINATION

Gilles Dussart, COO

3 TECHNOLOGIES

Thermal MSF Thermal MED Forecasted Evolution : 60 65% Forecasted Evolution: 30 20%

No tubing required Ti versus Copper Alloy Ti versus Stainless Steel or Al Brass

Reverse Osmosis Forecasted Evolution: 10 15%

Huge range of sizes depending on applications and projects

Ti tu

bes M

T/pr

ojec

t

PTA Crystallization LNG District Cooling Refinery

Up to 180 MT

Up to 150 MT

Up to 60 MT 5 to 40 MT

1 to 10 MT

MARKET TREND

Ti still has to be promoted as a Material of Reference with variations comparable to Ni or Cu Room for added value products with improved heat exchange, mechanical or corrosion resistance

Gilles Dussart, COO

Segment 3: PROCESS

0

5000

10000

15000

20000

25000

30000

35000

2011 2012 2013 2014 2015 2016 2017

MT

Industrial Titanium Demand

Power Gen Process Desalination

Gilles Dussart, COO

INDUSTRIAL TITANIUM MARKET TREND

Industrial applications are high-risk applications

In the industry, the main driver has always been Improving durability of materials Increasing efficiency

The recent tendency of the industry towards decontenting is dangerous

We do believe high quality products are essential to the industry

Gilles Dussart, COO

INDUSTRIAL TITANIUM TECHNOLOGY TREND

Fukushima Power Plant Doel Power Plant Sayano-Shushenskaya Power Plant

THANK YOU

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Gilles Dussart, COO