Outlook for Japan Titanium Industry 2011 International Titanium Association 27 th Annual Conference & Exhibition October 3 rd, 2011 Shozo Nishizawa Chairman of the Japan Titanium Society 1
Agenda 1. Summary of Japan Earthquake & Tsunami 2. Effects on Japan Titanium Industry 3. Outlook for Japan Titanium Industry 2011 2
Acknowledgement We deeply appreciate support from the over 140 countries and titanium concerned friends and companies. We are facing unprecedented difficulties since the earthquake & tsunami which occurred on March 11 th. We are working resolutely toward recovery. 3
Japan Earthquake & Tsunami Earthquake Epicenter March 11 th, 2011 Magnitude 9.0 Fault Rupture 500km x 200km Huge Tsunami Hit Region Highest Tsunami 38 Meters (125ft.) (Waters raged inland to mountains) Fukushima Nuclear Power Plant Height of Tsunami about 15 Meters (50ft.) 4
Japan Earthquake & Tsunami Number of deaths 15,800 Number of missing 4,100 5
Japan Earthquake & Tsunami Houses & Buildings swept away or damaged Estimated financial loss 330,000 B$200~B$300 6
Japan Earthquake & Tsunami Operation of power plants near the earthquake epicenter were shutdown. As a result, 20~25% of the electricity generation capacity was lost (East Japan). 7
Japan Earthquake & Tsunami Power shortages destabilized operations at many production plants. Electronic Parts Iron and Steel Nonferrous Metals Automobiles Chemical Engineering Foods 8
Japan Earthquake & Tsunami Tsunami is coming to Fukushima Nuclear Power Plant. 9
Japan Earthquake & Tsunami Tsunami is hitting Fukushima Nuclear Power Plant. 10
Japan Earthquake & Tsunami Traffic and logistics network were seriously damaged. Submerged Swept Tilted Tourist Sendai Containers Crane Ship Airport Damaged Damaged Shinkansen Road Station 11
Japan Earthquake & Tsunami Thank you for your heartfelt support. 友 (TOMODACHI) MEANS FRIEND 12
Japan Earthquake & Tsunami Infrastructure Restoration Restoration Date Electricity 20-25% was lost right after the earthquake Gradual increase in hydroelectric and thermal power generation Sendai Airport April 13th(Partially Reopened) July 25th(Fully Reopened) Unserviced Term Partial Restriction July - September 33 Days 136 Days Highway March 24th 13 Days Railway (Back to Normal Service) 13 (Shinkansen) April 29th 49 Days
Effects on Japan Titanium Industry Tsunami-Affected Region Sponge Producer Mill Producer Fukushima Nuclear Power Plant 14
Outlook of Japan Titanium Industry 2011 Working on boosting production capacity of Titanium Sponge Products 80,000 Actual Production & Capacity 70,000 60,000 50,000 40,000 30,000 Production Capacity 20,000 10,000 0 2009 2010 2011/4 2011/7 2011/10 2012/1 2012/4 15
Outlook of Japan Titanium Industry 2011 Demand-supply gap transition of high grade Ti Feedstock (1million ton/ year) 4.0 3.5 3.0 2.5 Emergence of demand-supply gap Demand Supply (Current source) Increasing of gap to be concerned Supply (New source included) 2.0 '09 '10 '11 '12 '13 '14 '15 16
Outlook of Japan Titanium Industry 2011 Rising price of Titanium Sponge Feedstock Feedstock Price ( 03=100 ) 400 350? 300 250 200 150 100 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 17
Outlook of Japan Titanium Industry 2011 Mill Products / Actual shipment of 2008 2010 and 2011 forecast 25000 Shipments of Mill products 20000 15000 10000 5000 1 st Half Forecast Others Aerospace PHE Electrolysis Desalination Power Gen. Chemical 0 2008 2009 2010 2011 18
Outlook of Japan Titanium Industry 2011 Factors in increase Plate Desalination Power Heat Plant Exchanger Plant Parts 19
Outlook of Japan Titanium Industry 2011 Topics: Japan Aeroforge Ltd. Joint Venture to mainly manufacture aircraft forgings has been jointly established by: Hitachi metals, Ltd. Kobe Steel, Ltd. IHI Corporation Kawasaki Heavy Industries, Ltd. 50,000 metric ton forging press Titanium, nickel and high alloy products for aircraft and power plant 20
Outlook of Japan Titanium Industry 2011 Topics: Boeing 787 First Regular Flight on November 1st 21
Conclusion <Titanium Industry> Titanium Sponge Working to boost production capacity as scheduled Mill Products Increasing production trend likely to continue Almost no impact of the earthquake on the titanium industry We will continue to make every effort to ensure stable supply of products to our customers. 22