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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, 17 December 14
MARKET INSIGHT - INTERMODAL SHANGHAI, SNP TEAM
As the end of the fourth quarter is approaching, we are all witness to the second hand market prices softening day by day. Any new deal surfacing t ...
Tuesday, 16 December 14
THIS PRICE IS A STEAL - EVA TZIMA
COALspot.com: Despite concerns that the slowdown of the Chinese economy would affect imports of iron ore, it seems that this has not been the case ...
Tuesday, 16 December 14
FOB RICHARDS BAY COAL SWAP FOR Q2' 15 DELIVERY CLOSED AT US$ 65.60 PMT
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month.
The Q1 swap has lost US$ 0.18 (-0.27%) month on month ...
Tuesday, 16 December 14
SUB-BIT FOB INDONESIA COAL SWAP CONTINUES ITS FALL
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 1.7 ...
Monday, 15 December 14
WILL TANKERS BENEFIT FROM REEMERGENCE OF FLOATING STORAGE PLAYS? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market has been seeing high freight rates for some time now, riding on the back of low oil prices, which are boosting demand from develo ...
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- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
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