1、M IdeaEuropean Metals&Mining Tracker|EuropeUtilisation Shifts Morgan Stanley&Co.International plc+Alain Gabriel,CFAEquity Analyst Alain.GabrielMorganS +44 20 7425-8959 Ioannis Masvoulas,CFAEquity Analyst Ioannis.M +44 20 7425-0427 Adahna EkokuEquity Analyst Adahna.E +44 20 7425-0578 Amy Gower(Amy Se

2、rgeant),CFACommodities Strategist Amy.G +44 20 7677-6937 Ferdinand HuberResearch Associate Ferdinand.H +44 20 7677-2702 Carbon SteelEuropeIndustry ViewIn-LineEMEA-Metals&MiningEuropeIndustry ViewIn-LineStainless SteelEuropeIndustry ViewIn-LinePaper&PackagingEuropeIndustry ViewIn-Line Mining 101 Mini

3、ng&Steel Equities Mining Sector Valuation Long Term Steel Sector Valuation Long Term Commodity Price Signals Commodity Price Forecast Steels shifting trade flows Exhibit 1:World ex-China capacity utilisation averaged 9%lower in 2009-24 vs 2000-08 given the rise of Chinas steel exports71%60%65%70%75%

4、80%85%90%20002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242000-08 Avg of 81%2009-24 Avg of 72%The rise of Chinas steel exportsSource:World Steel Association,CRU,Morgan Stanley ResearchGlobal dislocation.The steel industry has been shaped by Chinas r

5、ise as a dominant player since the early 2000s.However,as domestic demand peaked,Chinese mills have turned to export markets,shipping their overcapacity to the rest of the world.For context,the annualized run-rate of net exported volumes YtD was equivalent to the entire annual consumption of the Uni

6、ted States.This dynamic has disrupted global trade flows,displaced local production,and driven a notable 9%decline in utilisation rates across other regions.Consequently,post-tax RoCE of European/US producers fell towards 5%(2009-24),far below cost of capital.Shifting the profit pool.With 100 anti-d