Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Annualised global steel production grew 2% MoM in Jun-10 to
1.55 bn t (+8% YoY), a new historical high (Fig 1). It was led by
China (+3% MoM, in line with seasonality). Ex-China grew 1%, as
Japan (post-quake recovery, but still below pre-quake levels) and
Mexico (likely new capacity) offset declines in the EU (Fig 2).
● Pig iron (Blast Furnace) production was up 2% MoM (day-adj.),
with a 4% surge in China offsetting the 0.4% MoM decline ex-
China. The cuts ex-China were mainly in EU and South America,
offset by increases in NAFTA and in India.
● The decline ex-China was less than expected: As pig iron makers
have started to use high-priced coking coal and ore, we expected
marginal producers to drop out. That not happening may indicate
that marginal producers are still profitable and in the game.
Continued strength in Chinese production has been surprising too.
● EAF production ex-China picked up: Flattish scrap prices clearly
offered an opportunity when pig iron costs have risen. 4% MoM
pick-up in India was mainly due to non-BF producers (+6% MoM).
● Our concerns on Indian steel-makers are structural. Even from a
trading perspective steel stocks can see strength only once a
meaningful re-stock starts. That may still be a few months away.
Annualised global steel production grew 2% MoM in Jun-10 to 1.55 bn
tonnes (+8% YoY), a new historical high (Fig 1). It was led by China
(+3% MoM, in line with seasonality). Ex-China grew 1%, as Japan
(post-quake recovery, but still below pre-quake levels) and NAFTA
(mainly Mexico: likely new capacity) offset declines in the EU
Activity in EAF seems to be picking up
Pig iron growth weakened ex-China, though only marginally: China PI
grew at 3.9% MoM. With rising coking coal costs now beginning to hit
steelmakers, it seems that production strength in ex-China is rising
from EAF producers
Rising production even at lower margins seems to imply that most
mills are still making comfortable cash profits. We think it is yet too
early to take a strong view on demand momentum picking up, and
would wait for visible improvement of real demand indicators
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Annualised global steel production grew 2% MoM in Jun-10 to
1.55 bn t (+8% YoY), a new historical high (Fig 1). It was led by
China (+3% MoM, in line with seasonality). Ex-China grew 1%, as
Japan (post-quake recovery, but still below pre-quake levels) and
Mexico (likely new capacity) offset declines in the EU (Fig 2).
● Pig iron (Blast Furnace) production was up 2% MoM (day-adj.),
with a 4% surge in China offsetting the 0.4% MoM decline ex-
China. The cuts ex-China were mainly in EU and South America,
offset by increases in NAFTA and in India.
● The decline ex-China was less than expected: As pig iron makers
have started to use high-priced coking coal and ore, we expected
marginal producers to drop out. That not happening may indicate
that marginal producers are still profitable and in the game.
Continued strength in Chinese production has been surprising too.
● EAF production ex-China picked up: Flattish scrap prices clearly
offered an opportunity when pig iron costs have risen. 4% MoM
pick-up in India was mainly due to non-BF producers (+6% MoM).
● Our concerns on Indian steel-makers are structural. Even from a
trading perspective steel stocks can see strength only once a
meaningful re-stock starts. That may still be a few months away.
Annualised global steel production grew 2% MoM in Jun-10 to 1.55 bn
tonnes (+8% YoY), a new historical high (Fig 1). It was led by China
(+3% MoM, in line with seasonality). Ex-China grew 1%, as Japan
(post-quake recovery, but still below pre-quake levels) and NAFTA
(mainly Mexico: likely new capacity) offset declines in the EU
Activity in EAF seems to be picking up
Pig iron growth weakened ex-China, though only marginally: China PI
grew at 3.9% MoM. With rising coking coal costs now beginning to hit
steelmakers, it seems that production strength in ex-China is rising
from EAF producers
Rising production even at lower margins seems to imply that most
mills are still making comfortable cash profits. We think it is yet too
early to take a strong view on demand momentum picking up, and
would wait for visible improvement of real demand indicators
No comments:
Post a Comment