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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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- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- The University of Queensland
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
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