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Friday, 05 December 14
CHINESE SPECIAL STEEL MAKERS' RISK PROFILES MORE RESILIENT - FITCH
 Fitch Ratings says the risk profiles of Chinese makers of special steel, especially high-end products, are more like those of manufacturers and more resilient than that of ordinary steel mills, whose products are commoditised.
Chinese steel mills suffered razor-thin margins in 2011-2013, due to limited bargaining power in raw material costs and industry-wide overcapacity. The per ton profit margin of ordinary steel products, mainly rebar and wire rods used by construction industry, dropped to below CNY150 during the bottom of the industry cycle in 2011 from close to CNY300 in 2010, and has remained around this low level since.
Based on discussions with industry participants, Fitch has found that the metal spread per ton could be more than CNY400 for certain high-end special steel products for specific clients, which is significantly higher than ordinary steel.
Although there has been a mild margin increase in 2014 due to lower iron ore and coking coal prices, the fundamentals of Chinese steel mills, especially the small and mid-scale companies with low value-added products, are still weak.
Special steel products are different from ordinary steel in terms of chemical composition and mechanical properties. The prices of special steel products, such as bearing steel and large molded ingots, are more of a function of quality control, tighter tolerance and finer processing than the steel alloy content. The production of special steel requires more advanced technology and production facilities, relatively long production periods and large capital investment.
The prices of mid- to low-end special steel products still move in line with industry-wide price changes, which impacts Chinese special steel producers who mainly make low- to mid-end products. However, the prices of high-end products are much less volatile because they are used in high-tech or high-margin downstream industries, such as marine engineering, high-end auto production, high-speed rail and even national defence.
The Chinese steel industry has potential to move further up the value chain. In developed countries, the special steel industry developed rapidly once the traditional steel industry reached a mature stage. As at end-2013, special steel production accounted for only 6.1% of China's total crude steel output, while the same ratio was 55.0% in Sweden, 22.5% in Germany and 18.8% in Japan.
Buyers of high-end special steel products usually have specific requirements and typically will sign contracts with producers that include a negotiated price and a certain portion of prepayments, both of which are positive for the producer's profitability and cash flow position. Special steel makers' profitability, especially for high-end producers, has the potential to rise above the steel industry average. In the Chinese government's development blueprint for the five-year period to 2015, high-end special steel products have been categorised as refined products under the steel industry, which means that the segment would receive government support. At the same time, the enormous scale and rapid development of China's automobile and engineering machinery industries will underpin demand for special steel.
The key risks to the special steel industry include 1) weaker demand due to slower-than-expected economic growth, 2) faster-than-expected special steel production expansion that will generate overcapacity in the coming years, and 3) volatility in prices of commoditised steel products, which will impact prices for low- to mid-end special steel products.
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Wednesday, 14 January 15
DRY BULK MARKET NOTED ANOTHER WEEKLY DECLINE - INTERMODAL
COALspot.com: The Dry bulk market noted another weekly decline on Friday, with the performance of the Capesize market still weighing down on the re ...
Wednesday, 14 January 15
MARKET INSIGHT - TIMOS PAPADIMITRIOU
In Oil we trust! The Barrel price has declined by almost a third in comparison to the 2014 January and has being on the downhill since early last s ...
Wednesday, 14 January 15
COMMODITIES AREN'T PRIMED FOR A REBOUND DURING 2015: SHIPPING COULD BENEFIT FROM LOWER PRICES - ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In the recent past, higher commodity prices were driven by an increase in demand from developing countries, which spelled good news for ship owners ...
Wednesday, 14 January 15
SUB-BIT FOB INDONESIA COAL SWAP FOR Q1 DELIVERY CLOSED AT US$ 46.97 PMT
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 declined month on month and week over week.
The Q1 swap has fell US$ 1.53 (-3.15 ...
Wednesday, 14 January 15
Q4' 15 FOB NEWCASTLE COAL SWAP CLOSED 4.51% LOWER COMPARED TO Q1' 15 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.56 per MT (-3.0%) month over month and US$ 1.03 (-2.0%) week ove ...
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- Australian Coal Association
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Central Electricity Authority - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- PTC India Limited - India
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
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