1. TRENDS & PROSPECTS OF BILLET EXPORT FROM CHINA TO GCC REGION
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TRENDS & PROSPECTS OF BILLET EXPORT FROM CHINA TO GCC REGION
Olga Grygoryeva
Agent of C&D Material Middle East

2. STEEL
China produces about half of the world’s steel but growth in domestic demand has slowed…
SOURCE: WORLDSTEEL.ORG ; FORECASTS - METAL EXPERT

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Highlights
- This year the country increased credit to the construction and infrastructure sectors which will support local steel demand in 2016
- But the long-term slowdown in China’s steel demand has not changed
- Steel production in China will maintain at high level and the surplus capacity will continue to be exported at the world market

4. The gap between scrap prices and billets reduced
STEEL
An excess supply and slow down in Chinese demand caused a gradual decrease in iron ore prices over last few years
The gap between scrap prices and billets reduced
SOURCE: WSJ Market Data Center; METAL EXPERT

5. GCC country breakdown of Chinese billet imports in 2015
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Export of Chinese “bars” which includes billets to the GCC has increased 10 times since 2012
GCC country breakdown of Chinese billet imports in 2015
M.tons
SOURCE: ISSB

6. The Apparent Demand for Steel Products Continues to Grow in the GCC
SOURCE: STEEL STATISTICAL YEARBOOK

7. Saudi Arabia and UAE are the largest steel producers in the GCC
GCC steel production is orientated towards long products ( i.e. re-bar & sections ) , which is typical of economies that are in a development stage and construction / project driven
Saudi Arabia and UAE are the largest steel producers in the GCC

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Current shortage of billet production capacities in GCC might be compensated within next 3 years, mainly by Saudi Arabia
SOURCE: METAL EXPERT

9. Population Growth Supports Steel Demand In The Region
SOURCE: WORLD BANK

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There are two main factors which might negatively impact steel demand in the region:
Continued low oil prices. Which will result in a further reduction in the value of construction contracts being awarded in the region.
SOURCE: WORLD BANK

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It was envisaged that infrastructure development would have diversify the GCC economies from oil and gas ?
However, infrastructure spend has had to be reduced on account of the low oil price. As a result the value of construction contracts scheduled to be awarded this year is forecast to 15 per cent lower.
According to Meed, the value of projects is set to decline by $ 25 billion from $ 165 billion in to $140 billion in 2016.

12. 2) Strategic Spend. GCC countries are expected to continue with their
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2) Strategic Spend. GCC countries are expected to continue with their
military spending. This could result in funds being diverted from
infrastructural spend.

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Conclusions:
China’s steel billet production and growth of exports is forecast to remain high
GCC will remain one of the main buyers and consumers for Chinese billet
Despite 15% drop in GCC spending for infrastructure projects in 2016, in the long-term steel demand in the region will continued to grow , supported by growth in population and infrastructure development
However, there are two main factors which may negatively affect steel demand in the region (a) low oil prices and (b) funds being diverted from infrastructural spend to strategic projects

14. Cheongfuli (Xiamen) Co., Ltd.
Company Introduction
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Cheongfuli (Xiamen) Co., Ltd.
With a registered capital of RMB 100 million, Cheongfuli (Xiamen) CO.,LTD, is wholly invested by Cheongfuli (H.K.) Co.,Ltd which is a foreign subsidiary of Xiamen C&D Incorporation. Xiamen C&D INC (stock code: ) is a modern service oriented enterprise mainly specialized in supply chain operation and real estate development. Its business dates back to With the sole sponsorship of Xiamen C&D Group Corporation Ltd. , Xiamen C&D INC was founded and listed on the Shanghai Stock Exchange in After years of development, Xiamen C&D INC has achieved great success and earned itself much reputation in the field. Its annual operating revenue reached RMB billion in 2015 and ranked No.43 among all of Chinese listed Companies.
Cheongfuli (Xiamen) CO.,LTD specializes in export and import of steel products. It’s a combination of the International business Departments of Xiamen C&D Metals and Xiamen C&D Materials. Both companies have been engaged in the export and import of steel for more than 10 years and are equipped with strong overall operating capabilities, rich experience in international trade and stable procurement channels.

15. 2015
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Annual Sale
CNY 152,223,000.00
Annual Export MT

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