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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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Friday, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- Australian Coal Association
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
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