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Thursday, 19 November 15
CHINA STEEL PRODUCTION CAPACITY TO PEAK IN 2016 - FITCH RATINGS
 COALspot.com: Fitch Ratings today says that China's steel production capacity is likely to peak in 2016, with capacity elimination over the next five years likely to outpace additions.
In the Q&A below, Hong Kong-based Laura Zhai and Shanghai-based Charles Li of Fitch's Industrial Team, discuss the factors driving their forecasts for China's steel production, exports and consumption.
Q. Chinese steel production capacity continues to increase despite weak demand; when will capacity peak?
Fitch expects Chinese steel production capacity to increase to about 1.17 billion tonnes in 2015 from 1.15 billion in 2014. The increase in 2015 includes about 30 million tonnes of new capacity, which is partly offset by estimated capacity shutdown of 10 million tonnes. Fitch expects annual new capacity of around 16 million tonnes to be added in 2016 and 2017, although this will be offset by shutdowns of plants with total capacity of 75 million-85 million tonnes over the next five years. This will result in capacity peaking in 2016.
Fitch believes that future capacity elimination in China will mainly be driven by market forces rather regulations. Most of the regulatory measures implemented have already forced out smaller players and the plants that remain in operation are larger in comparison and comply with existing policies. Stricter environment standards could also cause financially weak steel producers to shut down because they will not be able to afford the required investments.
Q. China's apparent steel consumption declined in 2014 for the first time in 20 years, and the decrease has extended into 2015. What is Fitch's expectation for steel consumption for 2016 and after?
The decline in China's apparent steel consumption (sum of production and imports, less exports) was mostly due to slower fixed-asset investment (FAI) growth and de-stocking in the steel industry.
China's FAI rose by 10.2% in 10M15, slower than the 15.9% in 10M14, due to deceleration in activity in the manufacturing and property sectors, which accounted for 33% and 23%, respectively of FAI in China in 10M15. The slowdown in construction activity led to a collapse in steel prices. At the same time, steelmakers stepped up sales of their stocks. De-stocking is not captured in apparent consumption, contributing to an understatement of the apparent consumption figure.
Fitch expects FAI growth to pick up slightly in 2Q-3Q16, driven by real-estate construction activities, before reverting to a lower level of normalised growth 12-18 months later. Fitch believes that Chinese apparent consumption of steel will remain flat in the next few years now that de-stocking has ended, at about 760 million tonnes a year. Any substantial negative or positive surprises in growth rates are likely to be driven by swings in real-estate construction activities.
Q. What is Fitch's expectation for Chinese steel exports in the long term?
Exports of steel reached 93.8 million tonnes in 2014, but are likely to return to around 70 million-80 million tonnes a year in the long term. China's exports comprise product sales overseas and the transfer of production capacity overseas, which is known as capacity export in China, to alleviate overcapacity in China.
In the short term, Fitch expects Chinese steel producers to continue to enjoy cost advantages stemming from further depreciation in the Chinese yuan and lower material prices, which will help drive exports.
Over the long term, exports will be mainly driven by China's One Belt One Road plan, where Chinese funding for the construction of a network of transport, energy, and telecommunications infrastructure extending across Asia to Europe and East Africa will create demand for either Chinese steel products or Chinese-constructed production capacities abroad, as a means to alleviate current overcapacity issues in China. The implementation of this policy, though, will depend on domestic government funding and more concrete policy guidelines.
Q. What are the key challenges for Chinese steel producers amid oversupply and slack demand in the market?
Fitch believes that Chinese producers will need to invest in R&D to facilitate manufacturing of higher-value-added products. They will also be faced with more stringent environmental regulations, such as lower limits on sulphur dioxide emission (a major by-product of steel making). Meeting these new standards would require substantial investment with no significant benefit to EBITDA, which may reduce profitability for some steel manufacturers.
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Thursday, 03 December 15
DRY BULK: THERMAL COAL LOWER USAGE UNDER A POTENTIAL NEW CLIMATE DEAL WILL ADVERSELY IMPACT THE MARKET'S RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In direct contrast to the tanker market, the dry bulk one has seen demand for key commodities, such a coal, dwindling down over the course of the p ...
Thursday, 03 December 15
PANAMAX BUSINESS REMAINED UNDER PRESSURE LAST WEEK
COALspot.com: Following the new record lows the Dry Bulk market witnessed the week prior, the BDI took a much needed breath during the past days.
...
Wednesday, 02 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SLIGHTLY UP FOR THE THIRD STRAIGHT WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up month over month and fell week over week.
The Q1’ 2016 &nbs ...
Wednesday, 02 December 15
MARKET INSIGHT - VASSILIS LOGOTHETIS
Boom and bust cycles in commodity prices are not something rare, yet they have important implications both for the world economy in general and for ...
Tuesday, 01 December 15
FOB NEWCASTLE COAL SWAP UP THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $3.75 per ton (9.26%) month over month to US$ 36.75 per ton. The swap ...
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- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
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