【出版时间及名称】：2010年3月中国金属与矿产行业研究报告
        【作者】：摩根大通
        【文件格式】：pdf
        【页数】：32
        【目录或简介】：
Chinese steel makers facing a margin squeeze: Despite a recent rash of
global steel price increase announcements (which is likely to continue),
we believe Chinese steel producers will not be able to avoid a rawmaterial-
induced margin squeeze in FY10. We believe slowing FAI
growth, removal of monetary stimulus, and government measures aimed
at preventing/pricking a real estate bubble in China will hamper demand
for steel in China in FY10 (especially 2H CY10). In addition, mill
utilization rates are running well over 80%, and inventories at the traders’
level are at 18mt (plus at least 10mt at the producer level) – the highest
they have been in the last two years, and 200% above the lows in Dec.
2008. Steel makers globally are facing steep increases in key steel-making
raw materials. We have already seen BHP settle, with JFE on a 55%
increase in coking coal supplies for 1Q FY10. Benchmark iron ore prices
are likely to rise by 40%-80%. Under our BF/BOF steel-making cash cost
model, iron ore and met coal cost increases of these magnitudes would
result in cash cost increases of 20-33% (see Table 1).
• Steel price increase announcements in full swing, but not likely to be
enough: Steel makers globally have been rapidly announcing steel price
increases in an effort to offset impending raw material cost increases. They
have ranged from between 7% by Baosteel and as much as 36% by JFE
(see Table 4). While steel equities are likely to rally in the short term on
further expected steel price increase announcements we remind investors
of two things. Many Chinese steel producers are starting off this year in
the hole before the dramatic rises in raw materials. In addition, not only
have the price increase announcements that we have seen so far have not
been enough to offset the rise in costs, we would not be surprised to see
steel price increase announcements fail to stick.
• Implications include 1) increased exports, 2) vertical integration, and
3) consolidation: As a result of dramatic rises in raw material costs we
anticipate greater steel exports by China as steel makers look to higherpriced
markets to capture some margin, acquisitions of raw material assets
by steel makers in an effort to backwardly integrate and to protect
themselves from future cost increases, and some consolidation of steel
production in China as margin pressure forces companies to look for cost
savings through synergies.