Present Situation and Outlook of the Chinese Steel … 1 - CISA - OECD-SA Dec 2014.pdf2014/12/11 1...
Transcript of Present Situation and Outlook of the Chinese Steel … 1 - CISA - OECD-SA Dec 2014.pdf2014/12/11 1...
2014/12/11
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China Iron and Steel Association
Dec. 11, 2014
Present Situation and Outlook of the Chinese Steel Industry
Crude Steel Prod. Continue to Grow, at a Slower Pace
For Sept, the crude steel production is 67.54mmt, almost no change yoy while the daily
production stays at 2.2513mt.
For the first 9 months, the crude steel production is 618mt, up by 2.3% or 13.9 mt yoy while
the average daily crude steel production stays at 2.2637mmt and the annualized crude
steel production will be 826mt.
136.75
155.57
174.58
187.75
195.78
213.44
226.37
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10000t/Day / Daily Crude Steel Production
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In Sept., apparent crude steel consumption is 59.92mt, down 5.82% yoy
For the first 9 months, ACSC is bout 560mmt, down by 0.9% or 5.16mt yoy
Apparent Steel Consumption Decreases
5838.0 5787.1 5835.9 5960.9
5833.9
6092.0
5694.9
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6297.1 6189.9
5992.3
25.25
- 1.67
- 6.35
- 4.33 - 3.3
- 1.7 - 1.74 - 2.22 - 1.49
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Apparent Crude Steel Consumption and Growth Rate YoY
ASC (10,000mt) Growth Rate yoy % )
Steel Export Rise
In Sept., finished steel import stayed at 1.36mt,up by 190,000 t or 16.2% mom; for the
1st nine months, steel import increased 5% yoy to 11.01 mt.
In Sept., finished steel export increased mom by 760,000 t or 9.8% yoy; for the 1st
nine months, finished steel export increased by 39.3% yoy to 65.34mt.
For the 1st nine months, crude steel (equivalent) export was 57.8mt, up by 19mt yoy.
1. Steel Import and Export
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万吨
Steel Import and Export
Import Export
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For the 1st nine months, finished
steel import from Korea, Japan
and China Taiwan accounted for
90.51%.
For the 1st nine months, finished
steel import from Japan, Korea
and Germany increased yoy
respectively by 2.63%,11.77%
and 18.95%.
2. Finished Steel Import and Export by Country
For the 1st nine months, finished
steel export to ASEAN, Korea
and the Middle East accounted
for 54.2% of the total.
Finished steel export to the EU,
US and China Taiwan grew
swiftly, all above 60% yoy.
Steel Export Rise (continue)
Japan 42%
Korea 32%
China Taiwan 3%
Germany 4% Others
9%
ASEAN 27%
Korea 15%
Middle East 2%
South America
8%
Rest Asia 8%
EU 7%
Africa 6%
Others 17%
Steel Price Continue to Decline
At end of Sept., the CSPI recorded 86.35 points, down by 4.65 points mom and
14.22 points or 14.14% yoy. The index, which had been below 100 points since
last Oct, was at the lowest level since Jan. 2003.
The average finished steel price for Sept (ex. Tax) dropped by 108 Yuan RMB or
3.55% mom, 314 Yuan RMB or 9.06% yoy.
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1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 2010 2011 2012 2013 2014
Chinese Domestic Finished Steel Price Index
CSPI Composite CSPI Flat CSPI Long
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The Industry Struggling to Break Even
For the 1st nine months, the key steel enterprises recorded a sales revenue of
2.71724 Trillion Yuan RMB, down 0.22% yoy and the profit 19.282 billion Yuan RMB,
up by 71.26% yoy. The sales profit rate is merely 0.71% but up 0.3 percentage points
yoy and the core steel business remained in black.
20.84
- 41.96
33.32
70.08
- 17.52 4.78
12.25
28.47
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亿元 Profit of the Key Steel Enterprises
Main Steel Raw Material Prices Continue to Slide
Imported iron ore price has been lingering around 80USD which fell below 80USD in late
Sept. and rebounded to over 80USD in mid Oct.
Iron ore futures price picked up a little bit in early Oct. but dipped again in late Oct.
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10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10
2011 2012 2013 2014
China Iron Ore Price Index CIOPI
CIOPI Domestic CIOPI Import
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Ferrous Smelting
and Processing
359.9 Billion Yuan
Down 5% YoY
Steel Industry FAI
399.9 Billion Yuan
Down 4.35% YoY
FAI New Projects Key
Enterprises
59.8 billion Yuan
Down 15.25% YoY
Ferrous Mining
134.4 Billion Yuan
Up 6.6% YoY
Jan-Sept., 2014
Steel Fixed Asset Investment Shrink Further
Performance of Main Steel Consuming Sectors---Real Estate
1. Investment slow down and inventory increase
Item Jan-Sep
Total YoY
Growth Rate
Change
Total Invest. 6.8751 T
Yuan 12.5% -7.2 pp
Area in
Construction
67.323 T
㎡ 11.5% -3.5 pp
Newly Started
Area
13.1411 T
㎡ -9.3% +/-
Land
Purchase
2.4014 T
㎡ -4.6% -1.3 pp
Real Estate Investment Ex. Land Purchase
Area in Construction
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扣除土地购置费的房地产投资额(亿元)
增长率(%)
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Performance of Main Steel Consuming Sectors---Auto
Production Jan-Sept
1000 Units
Accumulative
yoy
Sept
1000 Units YoY MoM
Automobile 1723 8.1% 201 4.2% 17.1%
Passenger Car 1439 11.3% 173 9.4% 16.4%
Commercial V 284 -5.7% 28 -19.3% 21.1%
2. Auto production and sales grew at a slower pace
%
Auto Production and Sales Growth Rate
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产量 销量
Performance of Main Steel Consuming Sectors:
3. Machine building industry is expected to slow down in general but the sub-sectors are more divided
4. Ship building industry saw revenue grow with two indicators up and one down
Item Finished Tonnage Order in Hand New Orders
Jan-Sept 24.25M DWT 152.51M DWT 48.99M DWT
Growth YoY -6.9% 46.1% 38.0%
Growth Rate Change YoY +19.5 pp -/+
+51.8 pp
-101.9 pp
Product. Cement Large Tractor M. Tractor Power Generation E. Handy Tools
Jan-Sept. 731000Ton 52000Unit 447000Unit 112.65MKW 189.97MUnit
YoY 0.5% -4.6% -7.4% 12.0% 5.0%
Growth Rate
Change YoY -7.5 pp +/- +/- -/+ -/+
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Performance of Main Steel Consuming Sectors---Appliances
5. Home appliances industry sales revenue growth slowed down with high inventory of the main steel contained products
Item Jan-Sept Growth YoY Growth Rate Change YoY
Home Refrig. 73.89M Unit 1.9% -8.7 pp
Home Air
Conditioner 122.96M Unit 13.9% +5.9 pp
Home Washing
Machine 50.99M Unit -3.8% +/-
Home Freezer 14.15M Unit -2.8% +/-
GDP growth rate, which dropped to 7.3% in the 3rd quarter hitting a 6 year
low,will not likely see decent rebound in the 4th
Crude steel daily production will continue to stand high and over supply
will still be protruding
Apparent crude steel consumption will remain weak in 4th quarter, but
infrastructure investment, ship building and automobile look encouraging
while the other sectors remain flat
Finished steel export will overpass 80 million MT for the whole year
Iron ore price will remain on the downward track while coal price may
stablize or rebound slightly
Finished steel price will remain weak
Short Range Outlook
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Chinese Economy on the Way to “New Normal”
6.6
7.5
8.2
9.2
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11.2 10.7
10.4 9.8 9.7 9.5 9.3
7.9 7.7 7.6 7.7 7.7 7.6 7.7 7.7 7.4 7.5
GDP Growth YoY from 2009 to 2014 by Quarter
GDP(%)
Chinese Steel Industry on the Way to “New Normal”
One, the “New Normal” of slower growth In 2013,China’s crude steel production growth slowed down to 7.5% and further
dropped to 2.3% for the first nine months 2014 and the domestic steel consumption
stayed flat.
Two, the “New Normal” of structural adjustment Facing the changed economic structure, which drives the demand on high end steel
but have little effect on medium and low end steel products, and escalating pressure
in environmental protection and mitigating excessive capacity, the steel industry
have to embrace green growth emphasizing environmental friendliness, quality and
efficiency instead of merely quantity.
Three, the “New Normal” of macro policy reform and adjustment A series of reform measures announced by the Chinese government will gradually
take effect which will finally create a fair market place for steel enterprises including
equality in law reinforcement, environmental protection, taxation, market order and
resources allocation., etc.
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Pressure in 6 Aspects facing Steel Mills in “New Normal” Period
Weak steel price
bleak economic efficiency due to excessive capacity and over supply;
Hiking financial cost because of inadequate fund of its own, difficult financing on the stock market, high –cost in issuing bond and the rising bank loan rate;
Unstable iron ore supply due to low rate of equity ore
rising environmental protection cost particularly because of lack of investment in the past;
Pressure of rising VAT;
Pressure in steel export due to rising trade frictions and export policy adjustment.
New Opportunities for Steel Industry in “New Normal” Period
New opportunities in restructuring,
transformation and upgrading
New opportunities in reform and innovation
New opportunities in demand structure
change
New opportunities in green steel
development
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resource-saving
environment-friendly
sustainable
innovative
more responsibility
profitable and
globally competitive
Vision of the Chinese Steel Industry in 2020