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● Underneath the headline 14% YoY growth for China and 7% ex
China, production cuts are now finally coming through. While Aug
is anyway a weak month, global steel production was weaker than
seasonal: (1) China production fell 1% MoM versus 20-year mean
of a 1.5% rise and (2) ex China fell 3.5% versus 20-year mean
decline of 1.5%. Europe’s decline in particular was much weaker
than seasonal, falling 15% MoM when the average in the last
seven years has been 9%.
● India was flat MoM (Seasonal: +1%) for the second consecutive
month. It could be a data issue, but if not, in spite of the ban on
Karnataka ore mining, production stayed resilient—EAF
production was up 25% YoY. It is likely that the smaller mills have
switched to scrap, as longs demand has been relatively strong.
● If production moderation continues, we could see some decline in
RM prices: Coking coal is already falling, and iron ore may fall too,
as iron ore stockpiles in China have risen to a new peak (Figure 4).
● Despite cheap valuations, we maintain our negative stance on
Indian steel stocks: Domestic demand growth remains sluggish,
and mining profits of companies may come under pressure
Underneath the headline 14% YoY growth for China and 7% ex China,
production cuts are now finally coming through. While August is
anyway a weak month, global steel production was weaker than
seasonal: (1) China production fell 1% MoM versus 20-year mean of
+1.5% growth and (2) ex China fell 3.5% versus 20-year mean decline
of 1.5%. Europe’s decline in particular was much weaker than
seasonal, falling 15% MoM when the average in the last seven years
has been 9%.
Indian production remains flat MoM again
India was flat MoM (Seasonal: +1%) for the second consecutive
month. It could be a data issue, but if not, in spite of the ban on
Karnataka ore mining, production stayed resilient—EAF production
was up 25% YoY. It is likely that the smaller mills have switched to
scrap, as longs demand has been relatively strong
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Underneath the headline 14% YoY growth for China and 7% ex
China, production cuts are now finally coming through. While Aug
is anyway a weak month, global steel production was weaker than
seasonal: (1) China production fell 1% MoM versus 20-year mean
of a 1.5% rise and (2) ex China fell 3.5% versus 20-year mean
decline of 1.5%. Europe’s decline in particular was much weaker
than seasonal, falling 15% MoM when the average in the last
seven years has been 9%.
● India was flat MoM (Seasonal: +1%) for the second consecutive
month. It could be a data issue, but if not, in spite of the ban on
Karnataka ore mining, production stayed resilient—EAF
production was up 25% YoY. It is likely that the smaller mills have
switched to scrap, as longs demand has been relatively strong.
● If production moderation continues, we could see some decline in
RM prices: Coking coal is already falling, and iron ore may fall too,
as iron ore stockpiles in China have risen to a new peak (Figure 4).
● Despite cheap valuations, we maintain our negative stance on
Indian steel stocks: Domestic demand growth remains sluggish,
and mining profits of companies may come under pressure
Underneath the headline 14% YoY growth for China and 7% ex China,
production cuts are now finally coming through. While August is
anyway a weak month, global steel production was weaker than
seasonal: (1) China production fell 1% MoM versus 20-year mean of
+1.5% growth and (2) ex China fell 3.5% versus 20-year mean decline
of 1.5%. Europe’s decline in particular was much weaker than
seasonal, falling 15% MoM when the average in the last seven years
has been 9%.
Indian production remains flat MoM again
India was flat MoM (Seasonal: +1%) for the second consecutive
month. It could be a data issue, but if not, in spite of the ban on
Karnataka ore mining, production stayed resilient—EAF production
was up 25% YoY. It is likely that the smaller mills have switched to
scrap, as longs demand has been relatively strong
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