发帖
雷达卡
China Basic Materials Monthly
MONTHLY
June 2008 – short-term policy risk on coal
Figure 1: Relative price performance by materials (normalised from Jan. 2004)
50
100
150
200
250
300
350
400
Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09
Copper
Steel - HRC
Cement
Thermal coal
Aluminum
Steel - Rebar
Chinese Commodity Price Performance (%)
Source: Bloomberg, China Coal Market Network, Mysteel, CEIC, Credit Suisse estimates
■ Coal – short-term policy risk, long-term positives remain: NDRC announced it
would raise the power tariff by Rmb0.025/kwh starting 20 June, and put a
temporary cap on the thermal coal price, capping mine mouth thermal coal (for
independent power producers) price at the 19 June level. The changes are
relatively moderate, and the impact on earnings of coal stocks is limited, in our
opinion, given: 1) the high percentage of contract sales for Shenhua and Chinacoal,
and 2) our FY ASP assumption for YZC (Rmb560/t) was already met in 1Q08. We
reckon policy risk as well as the poor economics at power plants would cap the
potential upside of coal prices in the short term, and trigger a potential de-rating of
the Chinese coal sector. However, we remain positive on the sector on mid-long
run, given the continued tight supply-demand outlook in coal.
■ Steel – decelerating margin trend: China’s finished steel output growth in
May was 11%, 3-4% behind demand. HRC in eastern China is at US$750/t,
while rebar prices now stand at US$648/t. Baosteel concluded its iron ore
contracts with Australian suppliers at an 80% hike YoY, in line with market
expectations. We estimate major steel mills will see an iron ore-driven
US$52-65/t higher cost, along with a higher freight rate, and a coking coaldriven
US$50-80/t higher cost by 3Q08. While most cost hikes should be
offset by higher steel prices (Baosteel’s benchmark HRC price is now
US$194/t higher versus 1Q08, post its 5% hike in 3Q08), margins are likely
to peak in 2Q08 and decelerate going into 2H08.
■ Cement – unit profit expansions remain on track: Anhui Conch started to
raise its cement price by Rmb5-10/t in June MoM. Our recent visit to Zhejiang
suggests CNBM’s acquisition targets are seeing Rmb5-20-plus unit profit
expansions in 1H08 versus the beginning of the year.
225180.pdf
(1.07 MB, 需要: 5 个论坛币)
京公网安备 11010802022788号
