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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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Tuesday, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
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- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Latin American Coal - Colombia
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- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
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- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
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