Canada Metals Report Q2 2014

Date: April 9, 2014
Pages: 63
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: C22671D1981EN

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Includes 3 FREE quarterly updates

BMI View: Given that much of Canada's metals production is exported, we expect the country's economic exposure to both the US and Mexico to underpin the industry's growth through 2018. Increasing manufacturing and industrial activity in both countries should help drive demand for metal inputs. Furthermore, a weaker Canadian dollar against the US dollar should provide upside for Canadian metals exporters.

Our forecast for strong economic fundamentals in Canada, the US, and Mexico, combined with a weaker Canadian dollar (CAD) in the coming years, leads us to forecast the Canadian metals sector will see expansion through 2017. After the CAD/US$ exchange rate averaged 1.04 through in 2013, we expect it to weaken further, with yearly averages of 1.15 in 2014 and 1.20 in both 2015 and 2016, before coming back down to 1.17 in 2017 and 1.15 in 2018. Since Canada is a significant exporter of aluminium, nickel, and steel to the US, and to a lesser extent Mexico, this exchange rate dynamic could boost Canadian exports to end users in the US and Mexico. We expect increasing metals demand from Canada to both the US and Mexico as both see broad recovery in their real GDP growth and increasing manufacturing and investment activities. We maintain forecasts for real GDP growth of 2.8% and 3.3% in the US and Mexico, respectively, in 2014. Looking through 2018, we see real GDP growth averaging 2.5% in the US and 3.8% in Mexico.
BMI Industry View
Metals SWOT
Industry Forecast
Steel: Low But Steady Growth Ahead
Production To Lag Consumption
Market Trends To Support Consumption
  Table: Canada - Steel Production & Consumption ('000 tonnes, unless stated otherwise)
  Table: Canada - Steel Production & Consumption
Aluminium: Labour Disputes To Affect Production
Country To Remain Top Producer
Exports To Drive Demand For Canadian Aluminium
  Table: Canada - Aluminium Production & Consumption (kt)
Nickel: Uncertainty Over External Demand & Concentrate Supply
Risks To Outlook
  Table: Canada - Nickel Production & Consumption (kt)
Regulatory Development
Priority Remains On Local Consultation & Environmental Stewardship
Tax Regime
  Table: Canada Political Overview
Commodities Forecast
Commodity Strategy
Iron Ore: Fading Iron Will
Steel: Global Glut To Weigh On Prices
Aluminium: Fundamentals To Remain Weak
Copper: All Eyes On China
Lead: Outperforming Its Troubled Peers
Nickel: Monthly Outperformer
Tin: Outperforming A Weak Field
Zinc: Further Consolidation Likely
  Table: Select Commodities - Performance & BMI Forecasts
Steel Price Forecast
  Table: BMI Steel Forecast
Short-Term Outlook
Core View
Global Steel Glut To Persist
Production: Rationalisation In The Long Term
Consumption: Growth Decelerating
Excessive Chinese Exports
Growing Arbitrage Between East & West
Risks To Price Outlook
  Table: Steel Data & Forecasts
  Table: Global Steel Prices By Region & Product, US$/tonne (ave)
Competitive Landscape
  Table: Canada - Largest Listed Metals Companies, FY 2013
Company Profile
US Steel
Recent Financial Results
  Table: US Steel - Key Financial Data
Company Strategy
Latest Financial Results
Company Details
Financial Data
  Table: ArcelorMittal - Key Financial Data
Rio Tinto
Company Overview
Company Strategy
Latest Financial Results
  Table: Rio Tinto - Key Financial Data
Cross Checks
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