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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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Monday, 16 November 15
KOMIPO INVITES BIDS FOR 1.295 MILLION TONS OF BITUMINOUS COAL FOR Q1 - Q2'16
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,295,000 Metric Tons (MT) of minimum 4,600 kc ...
Monday, 16 November 15
SOUTH CHINA COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.05 (12.59%) per ton month over month.
A commodity swa ...
Monday, 16 November 15
CLARKSEA INDEX COMPETITION: IS IT ALL IN THE TIMING? - CLARKSONS
Readers of the Shipping Intelligence Weekly are invited each year to predict the value of the ClarkSea Index one year ahead in the first week of No ...
Monday, 16 November 15
DRY BULK MARKET: Q1' 2016 SHAPING UP TO BE A ' DISASTROUS' ONE OF PROJECTED LOWER IRON ORE IMPORTS FROM CHINA
Over the course of the past year or so, it’s been the drop of coal imports from China, which has had a detrimental effect on the course of dr ...
Friday, 13 November 15
WEAK CHINA POWER DEMAND DAMPENS COAL CONSUMPTION - FITCH
The weak growth in China's electricity consumption in 2015, together with increasing non-thermal power generation capacity are exerting more pr ...
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- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
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