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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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Friday, 07 November 14
U.S. PRODUCED 85.60 MILLION SHORT TONS OF COAL IN OCTOBER, UP 2.88% M-O-M
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.0 million short tons (mmst) of coal ...
Thursday, 06 November 14
THE ATLANTIC HAS REMAINED STRONG WITH A HEALTHY SUPPLY OF NEW CARGOES
Handy
This week has continued its slow trend in both hemispheres and even though rates are a bit up w-o-w it is not a clear sign for any improvem ...
Wednesday, 05 November 14
CAPESIZE SEGMENT ENJOYED FIRMING RATES ACROSS BOTH BASINS
Following a fantastic week in terms of rate performance for Capes, the Dry Bulk market managed to note another positive weekly closing, which stron ...
Wednesday, 05 November 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
COALspot.com: The steep appreciation in dry bulker values between late 2012 and March 2014 resulted in unrealistically expensive ship values compar ...
Tuesday, 04 November 14
INDONESIAN COAL SWAPS FOR 2015 DELIVERIES SHOW A WEAK TREND
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost month on month and gained day on day and week on week, the trend was same as las ...
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- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- White Energy Company Limited
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
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