RE: China may face shortfall in COKING coal...
"New demand for coking coal in China could reach 180 million tonne between 2011 and 2015,while coking coal output could increase by only 80 million tonne in the same period
Despite China growing supply by 20mt /y (10 CMK's) ,West must increase supply by 100mt by 2015.
What is new supply pipeline by 2015 ?
--
-Just US / Canada will increase prod by 35 mt by 2013 ,
Rest of world by another 100mt= 30% oversupply, even taking into account 2 y delays in projects
Australian, Mongolian and Mozambican coking coal would likely capture the "lion's share of supply growth over the medium term" in the Chinese market, said Commonwealth Bank analysts.
Mozambique will go from zero to 55mt by 2025,
So will Mongolia .-around 50mt
So will Russia, Poland ,CIS-,others -30mt
Just those 3 = 130mt .
Add Canada USA , AU- 50mt by 2025.
See, Feb report by Gee-Research
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=29266542&l=0&r=0&s=CMK&t=LIST
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=29282269&l=0&r=0&s=CMK&t=LIST
While you at it , check out TURNED TO BE SO TRUE post from 2 months ago
"Anatomy of scam " and do not dare to say you were not warned waaay ahead
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?sv=1&m=29365268&l=0&r=0&s=CMK&t=LIST
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rough details on Riverside (RIV ) deal
WUHAN PAID $ 800 FOR 12MT (40%) OF FUTURE PROD + RIGHT TO BUY 1MT from Benge
At CMK 3 mt it equals $ 200m for CMK. = $ 0.9/sh
Chinese and Indians are cheap- so, they may be interested in CMK take over
@ $ say 1 /sh
RTP by taking over RIV didn't buy just 33m t of future production,@ $ 100/t ( $1.5 /sh CMK equiv if 3 mt prod)
-- or 1.3 b t resource.@ 30c/tone ( $ 1.25/sh CMK equiv @ 380 mt reserve)
They bought a commitment of $800m capex by Wuhan , secured customers
and made sure future demand growth of 40mt will be CONTRACTUALLY THEIRS to supply.
So, next time you read : China will import so and so more ..just remember MOST of this growth
in demand is ALREADY LOCKED -IN by big boys who staked the future growth for themselves.
Most of China and India is staked by the usual 3 boys BTU,BHP and RTP.
Some little guys like CMK ,GCE can squeeze themselves in between, but they are first to go when things turn south.
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The technological paradigm change is also accelerating .
Both Posco’s Finex technology and Kobe Steel’s ITmK3 technology are based on producing steel using thermal coal.
Finex along with mini flat mill (MFM) is a ground breaking technology development, as it allows direct use of iron ore fines and non-coking coal,
SEI JV with Japan ’s Kobe Steel and Korea’s Posco will be non- coking coal or thermal coal steel plants,” he added.
https://conticoalers.com/2011/04/13/thermal-coal-to-dramatically-cut-cost-of-steel-making-sail/
By 2015 the non -met coal steel mills will reach + 20mt /Y= lower by 11mt met coal demand .
And by 20mt lower met demand by 2025.
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WHAT HAPPENS AT END OF CHINA URBANIZATION?
By 2020 China will be in a greatest depression world has ever known.
The
UN has forecast that China's population will have about an equal number of people staying in the rural and urban areas by 2015.= 700m people vs 630m people living in cities now .
https://en.wikipedia.org/wiki/Urbanization_in_the_People%27s_Republic_of_China
So ,China needs to build city apps by 2015 for say 100m people ( 70m new people and 30 m replacements)
T
hat's a need for 33m more apps by 2015.= 8 m /y and they are building like 20-30m/y
Now China had ALREADY build 64m 'free market "EMPTY homes for 200 m people.(see the ghost towns of China)
https://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html
I
n 2010 there is already 33m MORE apps .THAN NEEDED BY 2015 = for 100m more people than cities can absorb ( jobs)
+ still building like crazy
+ 10m new social housing in just 2011.= 30 m people
At that pace by 2015 they will build another 100m apps for 300 m people indicating urbanization level of 1- 1.1 b people = 80% by 2015. ( vs 50% both forecast and possible absorpton rate 2015)
THAT's the saturation point = END OF construction boom = build 20 y supply of apps. 20 Y ahead of time / needs. US RE bubble is nothing in comparison.
That's 30% oversupply =130 m EMPTY apps for 400m people (1.3 times US population.
Filling them over 20 y time ( 2015-2035)- but that time delapitated- 10Y old but never occupied.
As reference :US 4 y of home supply ( vs 2 Y "normal") caused this depression.
MASSIVE MISS- ALLOCATION <WASTE OF CAPITAL.Hitting a wall within 6 Y
1/2 China growth is a theft from future growth.= as every bubble not sustainable .
20 Y ahead of itself
So, talking China steel demand past 2015 is COMPLETELY POINTLESS.
What happens after urbanization ends ?
here clue from US ,Jap, EU story - see 'employment in steel industry after urbanization end.
https://en.wikipedia.org/wiki/Global_steel_industry_trends
US 1974 = 451 k people , 2000= 151 k people = shrunk by 3 x
UK 1974 =197k people , 2000= 29 k people = shrunk by 6.5 x
Jap. 457/197 = shrunk by 2.2 x
Post - urbanization US steel demand is 100mt in good times , 70mt in bad .
US population = 1/4 China.
Post urbanization China demand =400mt = 1/3 of today's demand.
So , if China steel demand after end of physical urbanization = building city
homes ./cities ,for 80% of people around 2015-17
starts shrinking towards 1/2 ,( not a matter IF but WHEN )
this will equal to wiping out entire 300mt (by 2015) seaborne met coal trade .
Thereal urbanization- people actually moving -into the empty homes ,if cities will be able to create EXTRA 200m jobs = 2 x more than jobs in US , will take 20 Y .
Some other countries will replace China demand destruction ( especially when steel /met price will be decimated ) so, we are looking at gradual shrinking of world seaborne met demand past 2016 ...down to 1/2 from the say,2016 peak.
Black swans can cause this date to be much earlier.
IE
China is facing NOW ( emergency meetings as we speak)
2-3 T . RMB = + 400B $ bankrupt local goverments -because of bad RE deals mostly .
This can blow -up anytime now - banks failures .
The constant gov orders for banks to rise reserves are as big warning flags as my CMK posts Feb ,March.
Almost as big as 2009 crash , causing $ 600b artificial gov New Deal program.
$ 300B SUBPRIME DEBACLE IN 2 TIMES BIGGER ECONOMY STARTED WORLD'S MELTDOWN.
IE.Germany is demolishing entire quarters of cities and planting trees.
Detroit,want to do same ( if they had money for demolition ) and plant a corn fields over 1/3 of city area.
CMK is late for wedding but will arrive right on time for the funeral.
Though may be able to grab some wedding's left-overs.