Latest Production News of Cement in CHINA
December 17, 2008
One of the main factors shaping the costs of Chinese factories is naturally the prices of commodity & raw materials such us oil, electricity, wages, iron & steel, plastics etc. We are closely following those trends to sharpen our market analysis and forecasts the direction of cost & price movements.
Here is one of those factors, latest cement news:
CHINA’S cement production saw a slower growth at 2.8 percent year on year to about 1.27 billion tons in the first 11 months of this year, according to figures released yesterday by the Ministry of Industry and Information Technology.
Experts attributed the slower growth pace to the adverse effects of the deepening global economic crisis and the slowdown in the Chinese economy.
Although the growth rate had been on a downward trend since September, the industrial upgrading process was moving forward, with the total industrial output of cement businesses reaching 456.8 billion yuan (US$66.7 billion) from January to last month, up 21.25 percent on year, said the ministry.
Meanwhile, the ex-factory wholesale cement price gained 12 percent from January to October year on year. The cement industry is set to post a stable growth with the implementation of China’s 4-trillion-yuan stimulus package, experts said.
China last month unveiled the package to avert an economic slump, with the funds to be spent over the next two years.
Source: China Daily
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Energy: Steel mills to cut production on slump demands
October 8, 2008
Several leading Chinese steel mills are set to cut production to cope with the pressure of weak demand hanging over their iron-smelting furnaces.
Shougang Group and three other big domestic iron and steel manufacturers will slash 20 percent of their production this month amid slack domestic demand and dropping steel prices, according to Monday’s China Securities Journal.
These major steel makers included Hebei Iron and Steel Group, Shandong Iron and Steel Group and Anyang Iron and Steel Group.
Hu Kai, a senior industry analyst with the Umetal.com website, told Xinhua on Monday the sagging price was the main cause of the production reduction.
“There is no signal that the steel product price would be ratcheted up in the near future, as some steel product prices remain high compared to previous years, construction-use steel products in particular.”
China’s real estate sector was currently in its nadir, which also pulled down steel product consumption, he added.
Steel prices on the domestic market dropped 5 percent in the week preceding the weeklong National Day holiday that started September 29, according to the newspaper citing Xu Xiangchun, a mysteel.com analyst.
These steel mills would endeavor to further reduce the purchasing price of raw materials, adjust product mix and enhance communication among the companies respective management, according to the Beijing-based newspaper.
Hu said to some extent these companies had overreacted to the sluggish market as the output cutback exceeded the actual market demand decline.
Beijing-based Shougang Group declined to comment on the news report when reached by Xinhua. Its shares shed 5.31 percent to 3.39 yuan (50 cents) per share on Monday trading.
Source: China Daily
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CHINA’S industrial production cooled to 14.7 percent
August 15, 2008
CHINA’S industrial production cooled to 14.7 percent in July, the slowest pace since February 2007, the National Bureau of Statistics said today.
The slower output growth, down from 16 percent in June and May, stirred renewed concerns of an economic slowdown, after production costs surged to a 12-year high, analysts said.
Combined growth in the first seven months settled at 16.1 percent, compared with an 18.5-percent increase recorded last year. [Read more]
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China’s PPI rises 10% in July
August 12, 2008
– The producer price index (PPI) for China’s industrial products rose 10.0 percent year on year in July, the National Bureau of Statistics said on Monday.
The double-digit growth of PPI, which measures the value of finished products when they leave the factory, was the highest since 1996.
The PPI jumped 8.0 percent year on year in the first seven months, compared with 7.6 percent in the first half this year, said the NBS.
The purchaser prices for raw materials, fuel and power rose 15.4 percent in July, compared with 13.5 percent in June.
Source: XINHUA
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China’s Wind Power Industry
July 20, 2008
Article by Lou Schwartz and Ryan Hodum
When 2007 ended, China’s installed base of wind power totaled just over 6 gigawatts (GW), earning the country fifth place among the world’s largest wind energy producers (after Germany, the U.S., Spain and India), up from sixth place in 2006. Wind power industry statistics show that by the end of 2008, China’s total installed base of wind power production will have reached 10 GW; some experts are estimating that by 2010, the total installed capacity for wind power generation in China will reach 20 GW and that by 2020 China’s installed base of wind power will total 100 GW (current global wind installation is 94 GW).
In 2007 an estimated 24 billion Yuan [approximately US $3.28 billion] was invested in China’s wind energy sector. Not surprisingly, this level of investment has spawned an industry — local manufacturers are responding by producing the equipment and components that the wind energy industry requires to sustain this growth.
It is conservatively estimated that between 2006 and 2015, 100 billion Yuan [US $14.5 billion] will be spent on equipment and component purchases to further develop China’s wind power industry. According to the Ministry of Commerce, by the end of 2006 there were more than 100 Chinese companies manufacturing equipment and components for the wind industry.
Foreign wind power equipment manufacturers, including the most significant international wind turbine manufacturers, Vestas, Suzlon, Gamesa, Nordex Corp., Honiton Energy Ltd. and GE Energy, have aggressively engaged this market. Though foreign wind turbine manufacturers’ share of the market has declined from nearly 75% a few years ago to 55% now, the foreign presence in China’s wind industry remains significant.
Foreign wind power equipment manufacturers have made strategic investments in China, allowing them to remain dominant even as indigenous Chinese wind equipment capabilities grow. At EU €60 million, Gamesa’s factory in Tianjin, which manufactures wind turbines, is the Spanish company’s second largest foreign investment (after the United States).
Also located in Tianjin is Vestas’ Wind Turbine Equipment (China) Co. Ltd., which manufactures blades and does wind turbine assembly.
Nordex has located two of its three manufacturing centers in China and has established the company’s Asia headquarters in Beijing. In the next three years, Nordex expects to invest an additional 500 million Yuan [approx. US $71 million ] to grow its business in China four-fold. GE Energy’s Shenyang wind turbine plant produces 1.5-MW-class wind turbines.
Localization of Equipment Manufacturing
To help spur the development of an indigenous wind power equipment and components industry, Beijing has mandated that all new wind power projects have at least a 70% Chinese component. Wind power equipment manufacturers also now enjoy a 50% discount on value added taxes (VAT) payable in China.
On April 23, 2008 the Ministry of Finance announced two changes to import tariff regulations with respect to the wind power industry, further spurring development of Chinese wind power equipment manufacturing. The first change, effective January 1, 2008, implemented a tariff and VAT rebate program for imports of parts and raw materials used in the manufacture of wind turbines. This change was significant because a large percentage of parts and raw materials used in the manufacture of wind turbines still must be sourced from outside of China.
The second tariff change, effective May 1, 2008, eliminated the tariff-free importation of wind turbines less than 2.5 MW. This tariff change is a strong indicator that the Chinese wind turbine industry is maturing rapidly; as recently as late 2007 Chinese wind power equipment was incapable of producing megawatt-class wind turbines.
Megawatt-class turbines are increasingly produced domestically and the elimination of tariff-free imports of wind turbines less than 2.5 MW in size will give added impetus to the domestic production of increasingly large wind turbines.
The economics of the wind power equipment industry are quite favorable. At present the cost of construction of wind power in China is approximately 8000-9000 Yuan/Kw [US $1170-1315 /kw] and 60% to 70% of those costs are equipment purchases. Because many of the most important Chinese wind power equipment and components companies have grown out of large industrial companies (including several public companies), there appears to be sufficient financial strength for these companies to grow.
Funds to finance new wind power equipment and component manufacturing in China have come primarily in the form of commercial bank loans, retained earnings and equity investments.
Turbines
According to Steve Sawyer, secretary general of the Global Wind Energy Council, by 2009 China will become the world’s largest producer of wind turbines. At present China has at least 40 wind-power turbine manufacturers: 17 are state-owned or state-controlled companies, 12 are private Chinese companies, 7 are joint-venture companies and 4 are wholly foreign-owned companies.
Though China has yet to export wind turbines, China’s two largest wind turbine manufacturers — Xinjiang Jinfeng (Goldwind, whose December 2007 initial public offering (IPO) was the first pure-play wind power equipment Chinese stock offering in the U.S.) and Sinovel — have plans to export in 2009 and 2010.
Many of the largest wind turbine and other equipment manufacturers have licensed technology from western companies, including from AMSC Windtec, REpower, Aerodyn, Vensys and Garrad Hassan. Most of the largest Chinese wind turbine manufacturers have begun to produce 1.5-MW wind turbines and gradually these Chinese wind turbine manufacturers, having purchased designs for 2-, 3- and 5-MW wind turbines, are developing prototypes of larger wind turbines.
Bearings
The Chinese wind power industry continues to depend on imports for its supply of bearings. However, this dependence may be short lived. On December 11, 2007, the Timken Company entered into a joint venture agreement with the Xiangtan Electric Manufacturing Co., Ltd. to manufacture ultra-large bore bearings for the main rotor shafts of megawatt-class wind turbines. The bearings will be manufactured in China with some of the bearing materials and components coming from the U.S. The new US $38 million plant, which will be located in Hunan Province, will begin construction in 2008. Timken will have an 80% interest in the new venture.
Blades
The largest wind turbine blades to be manufactured in China to date (measuring 40.25 meters long) are now being manufactured by the China Materials Science and Technology Wind Power Blades Joint Stock Co. Ltd., [Read more]
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