1. Latest News
  2. Submit Press Release
  1. PR Home
  2. Latest News
  3. Feeds
  4. Alerts
  5. Submit Free Press Release
  6. Journalist Account
  7. PRNewswire Distribution
Energy Publishing Asia Pacific Logo

False Warehouse Receipts Used To Keep China’s Steel Sector Afloat

There are reports that some struggling steel producers in China have resorted to using false warehouse receipts to raise funds to keep their businesses afloat. Energy Publishing’s Inside Coal Report has more.

FOR IMMEDIATE RELEASE

 
 
Coal Reports | Coal Market News | Publications
Coal Reports | Coal Market News | Publications
PRLog (Press Release) - Sep. 3, 2012 - There are reports that some struggling steel producers in China have resorted to using false warehouse receipts to raise funds to keep their businesses afloat.
It is yet another worrying sign for China’s steel sector which has been hammered in recent months by depressed demand. It is just as worrying for those international coking coal producers who had in recent years set their sights and ambitions on an apparently insatiable appetite from the Asian giant for their product.


But with growing economic uncertainty and a sharp downturn in consumer sentiment, the appetite of China’s dragon has been well and truly satiated and is manifesting itself in continuing defaults on coal cargoes as end users and traders struggle to secure letters of credit. Shanghai-based SteelHome told Energy Publishing the State-owned Assets Supervision and Administration Commission (ASAC) of Shanghai late last month warned steel traders from Ningde in Fujian province among others, are posing a major risk to state-owned assets by the use of false warehouse receipts to secure funding.

“Currently bank loans are shrinking in all aspects, it has been an informal code of conduct in most banks that no loans and no credit [be issued] to steel traders or businesses whose owners are from Fujian or Zhejiang province,” ASAC said.
SteelHome reports that more than 20,000 steel trading houses in China are currently on the verge of closure “because banks are continuously pulling credits”.

The crisis [sees a risk] of collapse in the steel industry and could possibly trigger all kinds of economic and social problems,” SteelHome said. And the problems don’t stop there. Preliminary customs data for July shows China’s imports of coking coal were 3.9Mt, down 3.2% year-on-year. The largest supplier of coking coal was Mongolia, providing 1.66Mt, a 7% y-o-y increase but significantly down from the country’s June coking coal exports to China of 2.52Mt. Just as worryingly for seaborne coking coal producers, domestic prices for coking coal within China have been plummeting while stocks remain high.
In the last week of August, the price for Shanxi Liulin #4 primary coking coal and Xiaoyi primary coking coal dropped to RMB700 (US$110) and RMB670 ($106) respectively, a drop of RMB50 ($7.90) week-on-week for each, according to Fenwei Energy Consulting.
Fenwei also reports that as at August 27, coking coal stockpiled at 32 major steel mills and coke plants was 6.27Mt, a fall of just 154kt w-o-w.

“There is no doubt demand for China’s steel is going to continue to fall and along with it the chances of significant imports of coking coal into what many had once believed was the promised land for exports,” an industry analyst said. “China’s middle class has started to do what the middle class around the world is doing and that is stashing their cash for the rainy day many feel is about to arrive. That is the same middle class in China which had been investing in real estate and fancy cars and air conditioning units.”

Energy Publishing Australia is a Brisbane-based internationally renowned publisher of leading coal industry publications and reports covering Asia Pacific and the Americas. In addition to the weekly Australian Coal Report, our publications include the weekday Inside Coal, weekly China Coal Report, Coalfax, Indian Coal Report, South African Coal Report, and the monthly Indonesian Coal Report and importantly, we also deliver key market price indicators for all regions, including the Newcastle Export Index (NEX) and the world's first Coking Coal Index as well as a Database of Prices & Indices.

For more information please contact marketing@energypublishing.biz, call +61 7 3020 4000 or visit http://www.coalportal.com

Photo:
http://www.prlog.org/11965562/1

--- End ---

Click to Share

Contact Email:
***@energypublishing.biz Email Verified
Source:Energy Publishing Asia Pacific
Phone:+61 (0) 7 3020 4000
Zip:4001
City/Town:Brisbane - Queensland - Australia
Industry:Energy, Business
Tags:china, industry, economy
Last Updated:Sep 03, 2012
Shortcut:prlog.org/11965562
Disclaimer:   Issuers of the press releases are solely responsible for the content of their press releases. PRLog can't be held liable for the content posted by others.   Report Abuse

Latest Press Releases By “

More...

Trending News...



  1. SiteMap
  2. Privacy Policy
  3. Terms of Service
  4. Copyright Notice
  5. About
  6. Advertise
Like PRLog?
9K2K1K
Click to Share