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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, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Australian Coal Association
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- The University of Queensland
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
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