Research and Markets has announced the addition of the "China Metals Report Q1 2011" report to their offering.
Business Monitor International's China Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on China's metals industry.
Chinese metals output and markets were affected by government energy efficiency targets and efforts to stabilise prices through the auctioning of stockpiles, but this latest China Metals Report from BMI sees the efforts having only a short-term term impact. We believe the government will need to effect fundamental change in order to tackle the problem of over-supply in the Chinese metals market. Steel output continued to surge ahead in 2010, only modestly affected by government-imposed cuts late in the year. Chinese crude steel output is forecast to have grown by 10.4% to an estimated 625.6mn tonnes, with H2 output down 6.7% on H1 as the government reined in production to meet energy saving targets and shut down inefficient units. Commodity prices did not rise as fast as anticipated due to lower than normal demand while output was higher than the government had hoped, indicating that measures to reduce output and stabilise the market were not having the full intended effect. In 2011, BMI forecasts crude steel consumption and output of 596mn tonnes and 669mn tonnes, an increase of 6.0% and 6.9% respectively. This will in turn have a wider impact on iron ore and coking coal prices further upstream as well as shipping freight rates in Asia.
Primary aluminium output declined as a result of efforts to increase the cost of electricity and reduce inefficient capacity. Average daily primary aluminium output rates fell to 41,600 tonnes in October 2010, which was only marginally less than in the previous October and 12.4% down on the peak achieved in June 2010. However, annual output in 2010 is still set to be 25.5% up on 2009 at 16.27mn tonnes, according to BMI estimates, and the country still struggled with an over-supply situation with global implications. While the annual aluminium output growth range of 15-30% seen in recent years is unlikely over the next five years, we nevertheless expect production to reach 17.71mn tonnes by 2015, an increase of 37% on 2009.
China's refined lead production is expected to have risen by around 9% to 3.9mn tonnes in 2010 according to BMI estimates, with the impact of power cuts on smelters in Henan having a limited impact on overall output. Production and consumption of refined lead in China is expected to rise further in 2011, following the addition of 580,000 tonnes per annum (tpa) of refining capacity in 2010 which brings total capacity both primary and secondary to 5.5mn tpa in 2011. A further 10% growth could be expected in 2011, bringing output to 4.3mn tonnes. Growth will be spurred by the expansion in the transportation sector, with lead used in batteries. Lead consumption is predicted to rise by over 9% in 2011 to 4.0mn tonnes, leaving around 300,000 tonnes for export. Lead consumption could rise still further in 2012. Following an anticipated 350,000tpa increase in capacity to 6.3mn tpa in Q410, Chinese zinc production is likely to rise by 4% to 5.2mn tonnes for the year, while consumption should rise by 8% from 4.7mn tonnes to 5.1mn tonnes, leading to net zinc imports of 100,000 tonnes. Growth in galvanised steel should support zinc consumption over the medium-term. Meanwhile, Chinas nickel consumption growth will slow to around 4% in 2011 from an estimated 12% in 2010 due to over-supply in the stainless steel sector.
Chinese stainless steel production is forecast to rise by 10% to 12.1mn tonnes in 2011 having risen 22% to 11.0mn tonnes in 2010. The over-supply of stainless steel could force some low yield, high cost capacity to come offline. Power supply cuts in China did not affect copper production as much as other non-ferrous metals because major smelters are not located in the provinces that reduced power supplies.
Jiangxi Copper Company expects domestic copper consumption to grow by over 9% in 2011 and warns of a global shortage. With consumption closely following the economic growth trend, BMI concurs with this assessment.
- China Steel Corporation
- Chung Hung Steel