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Can the Dry Bulk Shipping Industry Recover from Its All-Time Lows? (Continued from Prior Part) China’s steel production
China’s steel appetite is the major determinant of its iron ore needs. About 98% of the iron ore goes into making steel. China’s steel output fell by 3.1% YoY (year-over-year) in October to 66.1 million tons. For the first ten months of 2015, the production fell 2.2% YoY to 675.1 million tons. Following weakness in the end consumer markets and falling steel prices, steel mills started cutting back on the production.
Weak outlook
According to the forecasts by the CISA (China Iron and Steel Association), China’s crude steel output could fall by 23 million tons to 783 million tons in 2016 from 806 million tons in 2015. In the CISA’s opinion, the fall could be driven by a worse downturn in the local demand amid opposition to exports.
Weak iron ore imports
In the meantime, the weak steel production outlook is weighing on the raw material demand. China imported 75.5 million tons in October 2015. This is 12.3% lower month-over-month. Also, the steel exports aren’t keeping pace with the production. This is leading to weaker sentiment in the steel market. China’s steel exports fell by 19.8% month-over-month to 9 million tons in October.
The weaker iron ore demand is negative for iron ore miners like BHP Billiton (BHP) (BBL), Rio Tinto (RIO), Vale SA (VALE), and the Asia-Pacific division of Cliffs Natural Resources (CLF). Weaker demand isn’t good for the shipping companies transporting iron ore (SEA) over long distances. Navios Maritime Holdings (NM), Navios Partners (NMM), Scorpio Bulkers (SALT), Ship Finance International (SFL), and Diana Shipping (DSX) are some of these companies. Cliffs Natural Resources forms 0.05% of the Vanguard Materials ETF (VAW).
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CLIFFS Natural Resources
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PRODUCER |
CODE : CLF |
ISIN : US18683K1016 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
CLIFFS Natural Res is a iron producing company based in United states of america. CLIFFS Natural Res produces iron, coal in Australia, in Brazil and in Canada, and holds various exploration projects in Canada. Its main assets in production are WABUSH MINE, EMPIRE AND TILDEN MINES, HIBBING TACONITE, NORTHSHORE MINE, UNITED TACONITE, OAK GROVE MINE, GREEN RIDGE MINE and PINNACLE MINE in Canada, AUSTRALIAN IRON ORE and SONOMA in Australia and AMAPA in Brazil and its main exploration properties are MT JACKSON J1 in Australia and DIAGNOS, WAWA, FREEWEST, MC FAULD'S LAKE, MACFADYEN, WAWA CLAIMS and BIG DADDY in Canada. CLIFFS Natural Res is listed in France, in Germany and in United States of America. Its market capitalisation is US$ 6.2 billions as of today (€ 5.8 billions). Its stock quote reached its highest recent level on May 16, 2008 at US$ 99.17, and its lowest recent point on January 15, 2016 at US$ 1.20. CLIFFS Natural Res has 297 400 968 shares outstanding. |