Steel (Iron Ore) 03 (May 17 - Dec 25)

[winston]

China’s iron ore imports tumble as pollution clean-up gets going

Mills brace for curbs by Beijing on steel output this winter

Purchases dropped to 79.49 million tonnes in October, according to customs data on Wednesday. That’s down from September’s 102.8 million tonnes, and is the lowest amount since February 2016.

Steel exports fell to 4.98 million tonnes last month, down from September’s 5.14 million tonnes, and the lowest since 2014.

Source: SCMP

http://www.scmp.com/business/global-eco ... gets-going

[winston]

Malaysia: Can steel stocks maintain their momentum?

China’s steel prices stabilised, driven by government initiatives to reduce its steel production capacity in a bid cut the steel glut and reduce pollution there.

For this year, the prices of steel were not driven by demand, but by supply from China.

Local steel players continue recording strong earnings growth on rising steel prices and a steady increase in domestic demand driven by infrastructure projects.

Source: The Star

https://www.thestar.com.my/business/bus ... -momentum/

[winston]

China Steel Prices Bottoming; Positive Profit Alerts

Domestic steel prices have bottomed out, with downstream stocking demand gradually picking up close to Chinese New Year. Mills’ profitability (steel product spreads) is widening, due to the rebound in steel prices and weakness in raw material prices.

All three steel companies under our coverage have announced their 2017 preliminary results, largely beating consensus forecasts on better-thanexpected margin improvements.

We expect mills’ earnings recovery to continue into 2018. Maintain OVERWEIGHT on the steel sector.

Source: UOBKH

https://research.uobkayhian.com/content ... 2fa7f3f223

[winston]

Malaysia: Steel counters down after UOB Kay Hian turns more cautious, less optimistic on sector

by Sulhi Azman

KUALA LUMPUR (May 3): Several steel counters on the local bourse were down this morning, falling by between 1% and 7%, after UOB Kay Hian Securities (M) Sdn Bhd turned “more cautious” and “less optimistic” on the outlook for local steel prices.

According to UOB Kay Hian, the sluggish outlook for the local steel sector in the second half of 2018 (2H18) is based on factors such as softer average selling price (ASP) and rising steel supply that could easily outstrip rising demand.

Several steel counters that took the bite include Mycron Steel Bhd which fell by as much as 7.22% during the morning trading session today, followed by Southern Steel Bhd (2.09%), Lion Industries Corp Bhd (1.06%), CSC Steel Holdings Bhd (0.72%) and Malaysia Steel Works (KL) Bhd (1.89%).

UOB Kay Hian said rising domestic steel supplies and lower average selling price (ASP) may eventually contract margins for steel companies from the second quarter of 2018 (2Q18).

“Based on our generic model, we think that steel companies may report another set of strong earnings for 1Q18, with gross profit per tonne potentially expanding to RM711 per tonne (4Q17: RM708 per tonne),” UOB Kay Hian analyst Abdul Hadi Manaf said in a report to clients today.

Margins “would ease moving into 2Q18 and beyond, given softer steel ASP and rising domestic supply,” UOB Kay Hian added.

Amid contained optimism, UOB Kay Hian is retaining a “market weight” stance on the local steel sector, as the upside factor is capped by the influx of rising incoming supply in 2H18.

As for stock pick, UOB Kay Hian is keeping its Buy call on Ann Joo Resources Bhd, but has cut target price to RM3.60 per share, from RM4.50 per share previously.

“This is mainly to capture a wider valuation horizon during previous cycles, as well as the period when investors were risk-averse on small-cap stocks,” the investment bank added.

Similarly, UOB Kay Hian has also cut its target price on Choo Bee Metal Industries Bhd to RM2.70, from RM3.10 previously, as the counter has been less volatile in terms of earnings cycle, amid a relatively stable demand, as well as ASP for steel products.

At noon-break, Ann Joo paused unchanged at RM2.90, while Choo Bee rose 2 sen or 0.85% to pause at RM2.38 respectively.

Source: The Edge

http://www.theedgemarkets.com/article/s ... tic-sector

[winston]

Contradictory views on China’s steel output. But only time will tell if production will rise or fall

Reports by the Australian government and other economic analysts that Chinese steel production has peaked are at odds with the expectations by local observers that the government’s infrastructure push will underpin demand

The department also estimated Chinese steel consumption would slump by 1.9 per cent in 2019 and 2.3 per cent in 2020 after increasing 2.8 per cent this year.

Source: SCMP

https://www.scmp.com/economy/china-econ ... ll-tell-if

[winston]

Global Iron Ore Market Faces Deficit, Mining Billionaire Forrest Warns

by Krystal Chia and Tom Mackenzie

(Bloomberg) -- The global iron ore market is likely to have a shortfall following the dam spill and mine curtailments at top supplier Vale SA, according to Fortescue Metals Group Ltd. founder Andrew Forrest, who cautioned that other producers face constraints in boosting output.

“We do have to face the reality of a potential deficit,” Forrest said in a Bloomberg Television interview at the Boao Forum in Hainan province.

While the Australian miner is “looking very hard” at how it can help customers, it can’t guarantee it’ll be able to help fill the deficit, according to Forrest.

Iron ore is heading for the biggest quarterly advance since late 2017 as investors seek to gauge the consequences of the disruption in Brazil, with Citigroup Inc. warning the market has yet to see the full impact of the disaster as a looming mid-year crunch will spur a rally to $100 a ton.

The comments from Fortescue come during a busy week for the market, with Vale set to report earnings later Wednesday after turning in production data on Tuesday.

In the near term Fortescue can’t easily “turn up the dial” in response, Forrest said, echoing recent comments from executives at Australian shippers Rio Tinto Group and BHP Group that they are not in a position to add substantial tons swiftly.

Still, Fortescue’s Chief Operating Officer Greg Lilleyman signaled last week that the company may boost supply from a mine being developed in Australia should the aftershocks of the Brazilian disaster persist.

Price Surge

Benchmark spot ore was at $85.10 a ton on Tuesday, up 17 percent this year, according to Mysteel.com. In the weeks immediately after Vale’s spill, the price rallied to $91.50 in early February, the highest level since March 2017. On Wednesday, futures in Singapore were steady after a two-day drop.

Banks including Credit Suisse Group AG and Morgan Stanley have flagged a deficit, and top exporter Australia raised its price forecast.

Vale -- which opted not to provide revised 2019 guidance on Tuesday as it detailed output -- has shuttered operations at facilities that produce almost 93 million tons a year.

The disaster at Vale has “left a hole in the seaborne market,” Morgan Stanley said in a note this week, estimating the miner’s output will slump 34 million tons this year.

While shipments from Brazil were stable in the initial weeks after the accident, there’s been a slowdown since mid-March, the bank said.

Cleveland-Cliffs Inc., the top U.S. producer, has also warned on the outlook. The market has “totally underappreciated” the disaster’s impact, Chief Executive Officer Lourenco Goncalves said this month. “I have been receiving inquiries from companies that are served by Vale, but we’re sold out.”

Fortescue’s Forrest said that the type of dam that failed in Brazil will likely be abandoned. “Upstream tailings dam will probably become a thing of the past,” he said. “They work theoretically in engineering terms. But as you can see, they haven’t worked practically.”

Source: Bloomberg

https://finance.yahoo.com/news/global-i ... 38656.html

[winston]

Global Iron Ore Supply Expected to Grow in 2019

1. Australia’s iron ore output expected to move up around 22 MnT– Australia’s iron ore production in CY’18 is expected to reach 894 MnT compared to 872.3 MnT in previous year.

2. Brazil iron ore production increased by around 9.1 MnT– Brazil’s iron ore output in 2018 is expected to increase by 9.1 MnT to 428.6 MnT.

3. Russia iron ore production to remain stable – In 2018, the Russian iron ore will be mostly stable. Further in 2019, production is expected to remain around 100 MnT in 2019.

4. China iron ore production is expected to move up in 2019 – Iron ore concentrate in 2018 is expected to be 249.85 MnT, down 13.95 MnT from 2017. However in 2019, output is expected to ramp up to 254 MnT in 2019.

5. India may add around 10 MnT supply in 2019 – Indian iron ore production may move up by 10 MnT in 2019 as many leases in Odisha are likely to raise production to utilize their EC limits and before 2020 auctions. Indian iron ore production may remain close to 192 MnT in CY18 against 202 MnT in CY17, as per SteelMint.

Source: Steel Mint

https://events.steelmintgroup.com/globa ... w-in-2019/

[winston]

Iron ore collapses 6.2% after China mills urge probe into rally

Source: The Star

https://www.thestar.com.my/business/bus ... EhspbpZ.99

[behappyalways]

China scraps tariffs on some steel products to curb iron ore prices
https://www.globaltimes.cn/page/202104/1222407.shtml

[winston]

Malaysia's steel price to ride global wave in 2021

By John Gilbert

The Lion Group said with strong demand for steel products coupled with raw materials shortages such as iron ore and metal scrap, steel prices would tend to improve.

"In addition, the new themes in electric vehicles (EV), solar and green energy, 5G, big data and IoT (Internet of Things) will boost the steel industry as it moves up the value chain.

Source: NST

https://www.nst.com.my/business/2021/05 ... -wave-2021