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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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Thursday, 20 November 14
HANDY: INDO ROUNDS ARE BEING FIXED IN REGION OF US$ 10K - FEARNLEYS
Handy
In the Atlantic we have experienced firmer rates this week much lead by the grain activity out of USG. Vsls open in the USG can achieve in ...
Thursday, 20 November 14
DEMAND FOR DRY BULK CARRIERS INCREASES ON THE BACK OF HEIGHTENED FREIGHT RATE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners are looking to take advantage of favorable market conditions through the acquisition of more dry bulk carriers. According to shipbroker ...
Wednesday, 19 November 14
INDONESIA FUEL-PRICE RISE A CLEAR, POSITIVE REFORM SIGNAL - FITCH
COALspot.com: Indonesia's hike of more than 30% in administered fuel prices, announced on 17 November, provides a clear, positive signal of the ...
Wednesday, 19 November 14
CAPES WERE UNDER PRESSURE; LOST 20% WITHIN A WEEK
COALspot.com: " The negative environment in which the week prior ended, marked this past week as well, which closed off on Friday noting the f ...
Wednesday, 19 November 14
SHIPPING MARKET INSIGHT - BY KATERINA RESTIS
The current Ebola outbreak in West Africa has been declared as a worldwide health emergency by the World Health Organization and has had a great im ...
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- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
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