Toekomstbeeld schreef op 24 april 2017 18:52:
Prachtig mooi verhaal mbt China. De meest interessante opmerking is mijn inziens dat de “Median-cost producers are already losing US$40 a tonne. This is a catastrophe for China’s steel industry,”.
Aannemende dat de man met al zijn ervaring weet waar hij het over heeft, zal dat uiteindelijk betekenen dat de Chinezen veel echte productie moeten wegsnijden.
China to lose steel game on Trump cuts
‘ZERO-SUM GAME’:The steel market will be subject to mercantilism that would promote domestic industries in the US, which would harm China, a consultant said
Bloomberg
Chinese flags fly near a steel factory in Wuan in Hebei Province on Feb. 23.
Photo: Reuters
This year’s Chinese steel price rout heralds worse to come, according to a 50-year industry veteran who said the world’s top producer is poised for a painful contraction as demand tumbles and rival nations build trade barriers.
China’s looming troubles contrast with optimism among US steelmakers, encouraged by US President Donald Trump’s pledges to back the industry with infrastructure spending and an “America first” trade agenda.
Last week, the Trump administration began an investigation into whether steel imports threaten national security, while US Steel Corp asked for a probe into alleged price-fixing by Chinese producers.
“We’re going from one world to another,” US consultancy World Steel Dynamics founder and managing partner Peter Marcus said in an interview in Shanghai. “We’re going to have mercantilism that’s going to promote domestic industries. The US is going to win and China is going to lose.”
Prices in China could return toward the crisis levels seen in late 2015 before the end of the year, Marcus said on Sunday.
Annual output might shrink by 100 million tonnes in three to four years as domestic demand slumps by the same amount and as exports fail to hold their explosive growth this decade, he said.
China last year made 808 million tonnes, about half of world production.
“China’s steel industry is doing an incredible job with great workers, but this is a zero-sum game, and they are in trouble,” said Marcus, who began tracking steel companies on Wall Street in the 1960s and has advised some of the world’s biggest mills.
The nation’s steel sector faces “zugzwang,” he said, referring to the chess term when a player cannot move without triggering a loss.
China’s steel prices surged at the start of this year, extending last year’s surprise rebound and giving a rocket to earnings, amid optimism over economic stimulus and government-backed plant closures to curb supply.
However, the rally has turned to rout, with the benchmark hot-rolled coil product used in cars and consumer goods tumbling 23 percent in the past two months.
Even though the raw material iron ore has slid to a five-month low, it has not been enough to prevent margins at some mills turning negative, according to Bloomberg Intelligence.
“Median-cost producers are already losing US$40 a tonne. This is a catastrophe for China’s steel industry,” Marcus said, dismissing as “a joke” Beijing’s efforts thus far to tackle oversupply. “They keep announcing closures of plants that are already closed, we all know that, and the capital spending by medium-to-larger companies means capacity has been rising. Going forward they will reduce, but it will take pain.”
The late-2015 slump in prices and margins saw mills offloading excess production on world markets. That hammered overseas producers and prompted what Marcus called an “avalanche” of trade protections, most often targeting China.
There were 47 measures launched against China in 2015, 39 last year and 11 in the first quarter of this year, Shanghai Steelhome Information Technology Co (???????????????) president Wu Wenzhang (???) told a conference in Shanghai on Saturday.
“You have all these countries they can’t export to and it’s an incredible constraint,” Marcus said.
Much of the additional export volume since 2010 has fed relatively open, fast-growing regions, such as Southeast Asia, but “growth there is limited and there will be more competition in those markets,” he said.