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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, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
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- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
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