Market Monitor Metals and Steel China 2019

マーケットモニター

  • 中国
  • 金属,
  • 鉄鋼

26 11 2019

The number of protracted payments and insolvencies was high in 2019, and is expected to increase further in 2020, mainly affecting private-owned producers.

Chinese metals and steel sectors’ growth over the years

Performance forecast along Chinese metals and steel subsectors

Supply side reforms in China’s metals and steel industry improved overcapacity issues somewhat in 2017 and 2018. However, according to the National Bureau of Statistics, crude steel production increased again in the first eight months of 2019, up 9.1% year-on-year, to 665 million metric tons. This has coincided with high iron ore prices and a relaxation of production curtailments formerly introduced to increase environmental protection. 

However, at the same time demand from key buyer sectors has decreased, mainly due to China´s ongoing economic deleveraging program, while the Sino-US trade dispute has negatively impacted domestic business sentiment. Metals and steel demand from the construction industry has weakened, as infrastructure investment has slowed down since 2018. Property investment is impacted by tighter government policies in order to reduce speculation in the supply heavy market. Growth of steel demand from the property sector is expected to slow to 2.9% in 2019, 1.1% in 2020, and to contract afterwards. Additionally, the slowdown in domestic automotive production and sales is having a negative impact on metals and steel suppliers.

Chinese steel businesses are also impacted by rising iron ore prices, while sales prices remain volatile. Replenishment of inventories after the Chinese New Year in February 2019 pushed steel prices up to USD 525 per tonne, but prices started to decrease again in Q2 of 2019 amid faltering domestic demand and are expected to hit new lows in H2 of 2019. As a result, Chinese steel manufacturers reported sharp declines in profit in 2019, and margins are expected to deteriorate further in the coming 12 months.   

Payment in the Chinese steel and metals industry take between 60 and 120 days on average. The number and amount of protracted payments and insolvencies over the past 12 months was high, and is expected to increase further in 2020. While leading state-owned steel makers still show some resilience, many private-owned steel and metals producers face serious trouble. The majority of private Chinese metals and steel traders do not have sufficient fixed assets, and suffer from slim margins and very limited bank facilities. 

Given the poor credit risk situation in the industry, our underwriting stance remains very restrictive, with cover strictly limited to businesses with strong financial profiles or state-owned background. Downstream businesses like manufacturers of oil pipes and metals/steel products with high-tech applications are also more resilient.

関連ドキュメント

免責条項

本ウェブサイトの記載事項は、一般的な情報提供のみを目的とし、何らの目的においてもこれに依拠すべきではありません。規定条件については、実際の保険契約または該当の製品・サービス契約をご覧ください。本ウェブサイトの記載事項は、買主についてのまたは利用者の代理人としてのデューデリジェンスの実施義務を含め、アトラディウス側に何らの権利、義務または責任を生じさせるものではありません。アトラディウスが買主についてデューデリジェンスを実施する場合は、当社の保険引受をその目的とし、被保険者その他の利益を目的とするものではありません。さらに、アトラディウスおよびその関連会社、系列会社、子会社は、本ウェブサイトの掲載情報の利用によって生じた直接的、間接的、特異的、付随的、結果的損害について一切の責任を負いません。