NICKEL_SECTOR:BETTING_ON_A_RECOVERY_IN_CHINA-2013-01-25.pdf
《NICKEL_SECTOR:BETTING_ON_A_RECOVERY_IN_CHINA-2013-01-25.pdf》由会员分享,可在线阅读,更多相关《NICKEL_SECTOR:BETTING_ON_A_RECOVERY_IN_CHINA-2013-01-25.pdf(14页珍藏版)》请在三一文库上搜索。
1、SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Sector Note 25 January 2013 Indonesia Nickel Sector Betting On A Recovery In China New economic policy in China is bullish for commodities. The Central Economic Work Conference, a meeting that determines the direction of Chinas econ
2、omic development for 2013 and beyond, has formulated several strategies to revive Chinas floundering economic growth. Among the measures is a plan to increase consumer spending through the creation of hot spots for consumption. In this regard, the government of China will promote urbanisation to unl
3、eash the full potential of domestic demand. The measures taken to achieve this target will be bullish for commodities going forward. Nickel the most leveraged to China. Among the commodities, nickel has the highest exposure to growth in China, as the country is the worlds largest producer of stainle
4、ss steel, with 44% market share as of Sep 2012. In contrast, Chinas share of the global seaborne coal market is only around 17%. The street is expecting Chinas growth to pick up to above 8% from 7.8% in 2012. As such, we expect strong demand for the metal in 2013. Supply problems to restore some equ
5、ilibrium on the nickel market. There have been several major problems at large nickel mines that will see less-than-stellar supply contributions from new sources. Vale SAs Onca Puma (53ktpa) ferronickel facility ceased operations in Jun 2012 because of refractory problems due to a flawed design, and
6、 requires a furnace rebuild. Onca Puma is expected to be back online only in 2H13. Meanwhile Vales VNC (Goro) is expected to produce at just half its capacity in 2013, or 30ktpa. Anglo Americans Barro Alto kiln #1 electric furnace experienced a sidewall collapse, which will hinder its ramp-up to nam
7、eplate capacity of 41ktpa this year. Expecting a slight increase in nickel prices. We expect a 4% YoY increase in nickel prices on average to USD8.3/lb in 2013 and USD8.8/lb in 2014, taking into account the favourable supply-demand situation. There is upside risk to our forecast; if the government o
8、f Indonesia sticks to its plan to fully ban ore exports in 2014, half of nickel pig iron producers in China will be deprived of raw materials, thus muting a major drag to better nickel prices going forward. Source: Kim Eng estimates Overweight (upgrade) Lucky Ariesandi, CFA Lucky.Ariesandimaybank-ke
9、.co.id (62 21) 2557 1127 IDX Index 4417 Mining Sector Index 1920 Historical Chart 1,500 1,700 1,900 2,100 2,300 2,500 2,700 2,900 3,100 24-Jan-129-Mar-1227-Apr-12 15-Jun-121-Aug-1221-Sep-128-Nov-122-Jan-13 0 500 1,000 1,500 2,000 2,500 Volume (mil. shares)Close (Index)(Million shares) Performance: 5
10、2-week High/Low 2847/1767 1-mth 3-mth 6-mth 1-yr YTD Absolute (%) 3.9 0.2 -7.0 -29.0 -2.5 Relative (%) 0.0 -1.5 -15.2 -39.6 -4.1 Stock recommendations Company Rec Tgt price Upside Target PER (x) (IDR) (%) FY13F FY14F Antam (ANTM.IJ) BUY 1,510 15.3 9.3 7.2 Vale Indonesia (INCO.IJ) BUY 2,925 12.5 22.5
11、 15.6 25 January 2013 Page 2 of 14 Nickel Sector China: Pursuing urbanisation to lift growth China completed a once-in-a-decade leadership transition last November, with Xi Jinping and Li Keqiang elected to replace Hu Jintao and Wen Jiabao as president and premier of the PRC respectively. The Xi-Li
12、administration will formally take over the responsibilities of previous regime starting Mar 2013. The new regime got down to business immediately. At the Central Economic Work Conference held on 15-16 Dec 2012, a meeting that determines the direction of Chinas economic growth for 2013 and beyond, Xi
13、 Jinping delivered speeches on measures to be taken to revive Chinas economic growth. Among the measures announced is a plan to increase consumer spending through the creation of hot spots for consumption. In this regard, the government of China will promote urbanisation and increase its quality, wh
14、ich will unleash the full potential of domestic demand. To achieve this target, the PRC government will propose construction of more than 20 major cities, 180 district-level cities, and over 10,000 townships in the next 10 years, with investment expected to amount to USD6.4t. The money will not be s
15、pent on making big cities even bigger, but instead used to integrate cities and towns, as a result of which towns will develop better public facilities and services. Chinas urban population exceeded rural population for the first time in 2011, with its urbanisation ratio standing at 51%. The PRC gov
16、ernment plans to raise the ratio to 70% by 2030, according to former vice- chairman of the National Development and Reform Commission. This translates into an effort to move almost 270m of people into cities, which is expected to create demand for USD4.32t of infrastructure spending plus an uptick i
17、n GDP due to increased consumer spending. Urbanisation to increase demand for commodities The mandate to promote urbanisation should be bullish for commodities, as steps taken to achieve the target will require heavy investment for physical construction. Although detailed plans have not been announc
18、ed, we foresee that the PRC government will pour money into railway networks, high-rise residential areas, and power plants. This should bode well for the stainless steel (SS) market, and is therefore bullish for the nickel market. Nickel the most tied up with the rise and fall of China China is the
19、 worlds largest market for commodities, and the revival of growth here will benefit all commodity producers. However, the increased demand for commodities will be most pronounced for nickel, as China is the worlds largest producer of SS, controlling almost half of market share. Over the last four ye
20、ars, China has been practically the only driver of growth in SS demand. According to the International Stainless Steel Forum, Chinas production of SS grew from 6.94mtpa in 2008 to 12.59mtpa in 2011, a CAGR of 22%. During the same period, consumption from the rest of the world grew at a CAGR of just
21、1%, to 19.52mtpa. In 9M12, China reported 16% YoY growth in steel production to 10.86m tonnes while the rest of the world reported a 1% YoY decline to 14.71m tonnes, giving the former a 43% market share. 25 January 2013 Page 3 of 14 Nickel Sector Figure 1. Global SS production 0 5,000 10,000 15,000
22、20,000 25,000 20082009201020119M119M12 ChinaRest of the world k tonnes Source: ISSF It is interesting to draw comparisons between nickel and coal, as both sectors are highly dependent on the China factor. A greater urban population will definitely require higher power consumption per capita, which s
23、hould boost coal demand. However, it should be noted that China plays a smaller part in the coal than in the nickel market, as its domestic production is still sufficient to cover the bulk of its domestic consumption. China imported 146m tonnes of steam coal in 2011, 17% of the global thermal coal t
24、rade of 861m tonnes. During the year, domestic producers in China dug 2,831m tonnes of steam coal out of the ground. Thus, imports represent just 5% of Chinas consumption of coal. With several dedicated coal railway lines to commence operation this year, and the underutilisation of the major Daqin r
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- NICKEL_SECTOR BETTING_ON_A_RECOVERY_IN_CHINA 2013 01 25
链接地址:https://www.31doc.com/p-3788691.html