Oct 14 2009
<b>Research and Markets</b>(http://www.researchandmarkets.com/research/eb8691/china_metals_repor) has announced the addition of the "China Metals Report Q4 2009" report to their offering.
China Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on China's metals industry.
China Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on China's metals industry.
The Chinese steel market endured a roller-coaster ride in Q2 and Q3 as price volatility exacerbated an uncertain environment and aluminium demand remained poor. The latest China Metals Report forecasts rapid growth from H209, although smaller and less-efficient steel mills and aluminium smelters are likely to close as the metals industry consolidates. In H109, China produced 317.3mn tonnes of crude steel, up 3% year-on-year (y-o-y). Rebar and wire rod prices have picked up on improved demand from construction and real estate sectors, but flats have suffered a sustained downturn. China exported 9.34mn tonnes of steel products worth US$10.17bn in value, down by 65.3% and 59.7% y-o-y respectively. Imports in the period totalled 8.13mn tonnes and US$9.26bn in value, down 1.8% and 18.8% y-o-y respectively.
Growth was largely fuelled by indications of recovery in the domestic market. On a daily basis, the production rate was 1.63mn tonnes, down 1.2% month-on-month (m-o-m) but still higher than expected and beyond the level the government had wanted in order to stabilise markets.
China Iron and Steel Association (CISA) has forecast steel output exceeding 500mn tonnes in 2009, a view shared by the authors which, on the basis of current statistics and broader economic trends, forecasts production at 509.1mn tonnes, up 2% y-o-y. Over-capacity and the speculative nature of the Chinese commodity markets are the main challenges facing the Chinese metals industry. The fear is that every time steel prices surge, output is increased, leading to a sudden drop in domestic prices. The authors believe that the stimulus programme could also exacerbate the structural problems within the steel industry. Overcapacity is causing inventory build-up, with producers responding too quickly to market recovery.
Over the medium term, the authors expect that scheduled new capacity could be delayed, while moves towards consolidation could lead to the closure of smaller steel mills. As a result, the recovery in steel production will be at lower annual growth rates than the 15 25% seen in recent years, with forecasting growth of 10% in 2010 and in the 9.0-10.5% range in the following three years, totalling 676.2mn tonnes by 2013, a 36% increase over 2008. During this time, the report envisages the closure of smaller, less efficient mills and the opening of larger, more technologically advanced mills.
Problems of over-capacity are also being felt in the aluminium sector, which by mid-2009 had failed to feel any benefits from the government stimulus programme. However, producers have been more cautious about raising output. In the first seven months of 2009, Chinese primary aluminium production fell 13.9% y-o-y to 6.64mn tonnes. On the basis of trends within the automotive and household appliance industries, the report forecasts a 10.9% fall in aluminium output to 10.68mn tonnes.
We expect consolidation within the Chinese aluminium industry as a result of the collapse in both domestic and export demand, leading to the closure of some smaller smelters - representing 48% of capacity by January 2009. As such, annual growth will be more modest than the 15-35% seen in previous years, coming in at 8-12% with output reaching 17.24mn tonnes by 2013, an increase of 32% over 2008. In the long term, the Chinese aluminium industry is expected to focus more on the export market, with an expected decline in imports. However, export tax policies, which place a 15% duty on aluminium exports, are an obstacle to China's ability to compete on the world market.
<b>Key Topics Covered: </b>
<ul><li>Executive Summary </li>
<li>SWOT Analysis </li>
<li>Global Metals Market Overview </li>
<li>Regional Overview </li>
<li>Industry Forecast Scenario </li>
<li>Competitive Landscape </li>
<li>Global Assumptions </li>
<li>Methodology </li>
<b>Companies Mentioned: </b>
<li>China Steel Corporation </li>
<li>Chung Hung Steel </li>
<li>Chinalco </li></ul>
Source: http://www.researchandmarkets.com/
<small>Posted 14th October 2009</small>