高盛-亚洲地区-商业策略-亚洲商品会议：钢铁与天然气的最乐观要点-20180910-24页_763kb

报告摘要

Asia Commodities Conference Summary

Core Content

The Asia Commodities Conference held in Shenzhen on September 6 & 7 brought together around 400 investors, corporates, and industry experts to discuss key trends in commodities such as steel, gas, base metals, oil & gas, petrochemicals, agriculture, and electric vehicles. The conference emphasized the impact of policy changes, market dynamics, and supply-demand shifts on the industry landscape.

Main Topics and Key Insights

Steel Industry Outlook

Near-term Demand: Solid seasonal demand pickup in September 2018, with a 10% MoM increase in steel demand compared to August. Demand remains stable and better than expected.
Supply Policy: China has closed over 150mnt of blast furnace capacity and 140mnt of MFF capacity since 2016. The central government is focusing on structural improvements, including industry concentration, regional production shifts, and process mix changes.
Winter Suspension: Expected to be more extensive than 2017, with a differentiated approach based on emission control compliance. High-compliance mills will face less suspension, while low-compliance ones may see up to 100% capacity suspension. Environmental costs are likely to more than double.
Export and Trade: Export volumes have dropped 40% year-on-year, mainly due to improved domestic pricing, not trade tensions.
Pricing and Margins: Current steel prices and margins are viewed as sustainable and reasonable, with historical context showing significant improvement from 2015-2016 losses.

Electric Arc Furnace (EAF) Steel Production

Growth: EAF steel production is rising, with a projected increase from 9% in 2017 to 12% in 2018, and a target of 20% by 2020.
Costs and Materials: EAF steel is more expensive by RMB400/tonne due to higher scrap and auxiliary material costs. However, the environmental policy is driving EAF adoption.
Raw Material Outlook: Steel scrap prices may rise during winter suspension. Graphite electrode prices may decline short-term due to new supply, but UHP-grade electrodes remain in short supply. EAF margins are sensitive to electricity prices and tax rebates for scrap processing.

IMO 2020 Sulphur Cap

Compliance Mechanisms: Around 70% of bunker fuel is sold in ports with existing IMO enforcement experience. IHS Markit expects 85% compliance, while Braemar Research estimates 70-90%.
Scrubbers: Favorable economics for large vessels, with a payback period of 2 years. IHS expects 2000 ships to install scrubbers by 2020.
Refining Impact: Refineries will need to increase distillate production and reduce HSFO output. Diesel margins could peak at USD25/bbl and settle near USD20/bbl. HSFO prices may briefly reach USD20/bbl.
Shipping Industry: Efficient operators and new fleets will benefit from higher bunker prices. Some speed reduction is expected. Oil and product tankers may see increased tonne miles due to regulatory changes.

Natural Gas Market

Demand Growth: China's natural gas demand grew 15% in 2017, with a 3-4% growth attributed to inventory fill. The market is well-prepared for the 2018/19 winter.
Policy Support: The State Council's new circular is positive for gas producers, especially tight gas. Environmental policies are expected to make the sector more resilient during economic slowdowns.
Infrastructure: LNG terminals are under development, with Kunlun's Shenzhen terminal and ENN's Zhoushan terminal being key projects. Storage and import capacity investments are expected to ease bottlenecks.

Agriculture – US-China Trade Tensions

Soybean Market: Supply remains sufficient, but prices may rise due to 25% additional tariffs on US imports. Domestic inventory is low, and prices could increase further.
Hog Industry: Impact of trade tensions is limited as corn is a more significant component of hog feed. African swine fever is a greater concern, leading to stricter controls on pork imports and distribution.
Trade Implications: Chinese food oil companies may face higher costs, while international trade companies benefit from price differentials.

Electric Vehicles (EV) Supply Chain

Market Outlook: EV penetration is low at ~1%, with significant growth potential. The government is incentivizing EVs to reduce crude dependency and utilize power surplus.
Battery Costs: Prices have halved since EV adoption began. The panel expects Generation 3 battery prices to stabilize around 1 RMB per 1 KWh.
Cobalt Shortage: Despite NCM811 reducing cobalt usage to 5-10%, cobalt is still expected to remain in shortage due to low EV penetration and long-term growth.
Upstream Moves: Some EV battery producers are seeking to control raw material supply, but this is challenging due to the need for expertise and stability.
Recycling: Current recycling costs are high, but EV models aged 3-5 years offer potential for scrap battery recycling.

Company-Specific Highlights

Angang Steel (CL-Buy/Buy)

Downstream demand remains stable, with strong growth in shipbuilding and steel pipelines.
24mnt capacity, with 2mnt more under injection.
Auto-sheet market faces competition and margin pressure, but the company expects sustained margins and at least 30% dividend payout.

Bangchak Corp (Neutral)

Benefiting from IMO regulations due to low sulfur fuel output.
Refining earnings expected to grow 30% over the next 3 years.
Plans to increase flexibility in production and reduce maintenance costs.

Baoshan Iron & Steel (Buy)

Expect environment policy to remain stringent but differentiated.
New blast furnace in Zhanjiang will add 4mnt capacity.
Views current profit levels as acceptable for industry deleveraging.

China Coal (Buy/Neutral)

New projects include Muduchaideng, Nalinhe Phase II, and Xiaohuigou.
Capital expenditure is expected to increase in 2H18, but actual spending will likely be 80% of the target.
Coal consumption is expected to rise despite government targets for reduced coal share in energy mix.

China Gas (0384.HK)

Confident in rural coal transition and gas demand growth.
Gas demand is expected to grow at double-digit CAGR through 2020.
Gas distributors are well-prepared for winter, with no major margin erosion expected.

Key Takeaways

Steel demand is expected to remain strong with tight supply and low inventory.
EAF steel production is rising due to environmental policies.
IMO 2020 Sulphur Cap will reshape the shipping industry with increased compliance and scrubber adoption.
Natural gas demand in China is on an upward trajectory with strong policy support.
EV growth is expected to drive demand for metals, though cobalt shortage remains a concern.
Trade tensions have limited impact on the hog industry but affect soybean and food oil sectors.

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