In 2017, WSD’s Global Financial Dynamics system estimated product deliveries by the Chinese mills of 791 million tonnes and by the non-Chinese of 774 million tonnes.
- Estimated aggregated EBITDA of $115 million amounted to $74 per tonne shipped.
- Capital outlays were an estimated $57 billion for the Chinese mills, or $72 per tonne shipped; for the non-Chinese, the figures were $45 billion and $58 per tonne, respectively.
- Free cash flow for the Chinese mills amounted to a negative $37 billion in 2016 and a negative of $18 billion in 2017. For the non-Chinese, there was a deficit of $16 billion in 2016 and a surplus of $2 billion in 2017.
- Interest expense was $9 billion for the Chinese and $15 billion for the non-Chinese.
In 2018, WSD foresees a massive profit surge. Besides a hot-rolled band export price at the end of January 2018 at $600 per tonne, FOB the port of export, which is far above the median-cost mills’ operating cost, the HRB price is high in most home markets. The average HRB price for the USA, EU and Japan is about $700 per tonne. The Chinese ex-works HRB home-market price is about $540 per tonne, reflecting a tight steel supply/demand balance in their country.
If there’s a $40 per tonne rise in average yearly profits in 2018, on a global basis this amounts to about $65 billion.
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WSD WORLD FINANCIAL DYNAMICS (YEAR ENDED DECEMBER 31) |
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CHINESE STEEL INDUSTRY |
1995 |
2000 |
2005 |
2010 |
2012 |
2013 |
2014 |
2015 |
2016P |
2017E |
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(MILLION OF TONNES) |
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STEEL PRODUCTION |
95,4 |
128,5 |
353,2 |
629,6 |
731,0 |
815,6 |
822,7 |
804,0 |
808,4 |
846,2 |
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WORLD SHARE (%) |
12,7% |
15,1% |
30,9% |
44,3% |
46,9% |
49,6% |
49,3% |
49,6% |
49,7% |
49,9% |
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STEEL SHIPMENTS |
81,6 |
119,1 |
320,7 |
611,5 |
714,4 |
792,9 |
799,2 |
791,1 |
776,3 |
791,4 |
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YEAR TO YEAR PCT CHANGE |
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12,7% |
23,7% |
9,9% |
5,3% |
11,0% |
0,8% |
-1,0% |
-1,9% |
1,9% |
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STEEL INCOME STATEMENT |
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RMB TO THE DOLLAR |
8,29 |
8,28 |
8,18 |
6,76 |
6,30 |
6,14 |
6,17 |
6,29 |
6,66 |
6,76 |
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(MILLION DOLLARS) |
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TOTAL REVENUE |
31.371 |
37.402 |
169.336 |
544.217 |
591.515 |
620.032 |
584.215 |
458.053 |
444.803 |
491.435 |
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TOTAL EXPENSES |
29.771 |
39.869 |
159.585 |
526.717 |
597.524 |
615.167 |
561.234 |
477.875 |
446.008 |
481.667 |
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TOTAL PRETAX INCOME |
1.599 |
-2.467 |
9.750 |
17.500 |
-6.009 |
4.865 |
22.982 |
-19.822 |
-1.205 |
9.767 |
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EBITDA |
5.433 |
4.093 |
21.488 |
47.084 |
25.718 |
42.816 |
63.536 |
18.037 |
37.028 |
50.410 |
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LESS: INTEREST EXPENSE |
1.158 |
1.148 |
1.924 |
7.032 |
9.644 |
8.722 |
8.951 |
9.098 |
9.044 |
9.417 |
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LESS: INCOME TAXES |
370 |
352 |
2.633 |
4.725 |
Neg |
1.313 |
6.205 |
Neg |
Neg |
2.637 |
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LESS: CAPITAL OUTLAYS |
8.007 |
4.433 |
31.567 |
61.249 |
80.255 |
82.903 |
78.270 |
65.500 |
64.060 |
57.013 |
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EQUALS: FREE CASH FLOW |
-4.103 |
-1.840 |
-14.636 |
-25.922 |
-64.181 |
-50.123 |
-29.890 |
-56.560 |
-36.075 |
-18.658 |
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NON-CHINESE STEEL INDUSTRY |
1995 |
2000 |
2005 |
2010 |
2012 |
2013 |
2014 |
2015 |
2016P |
2017E |
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(MILLION OF TONNES) |
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STEEL PRODUCTION |
657,2 |
721,0 |
790,6 |
792,3 |
828,7 |
828,2 |
846,9 |
817,1 |
818,5 |
848,6 |
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WORLD SHARE (%) |
87,3% |
84,9% |
69,1% |
55,7% |
53,1% |
50,4% |
50,7% |
50,4% |
50,3% |
50,1% |
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STEEL SHIPMENTS |
619,0 |
662,9 |
731,1 |
718,3 |
752,9 |
752,4 |
773,4 |
750,0 |
752,4 |
774,1 |
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YEAR TO YEAR PCT CHANGE |
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6,1% |
0,6% |
24,6% |
-0,9% |
-0,1% |
2,8% |
-3,0% |
0,3% |
2,9% |
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STEEL INCOME STATEMENT |
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(MILLION DOLLARS) |
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TOTAL REVENUE |
457.936 |
429.100 |
589.339 |
719.719 |
852.054 |
799.585 |
814.114 |
650.833 |
623.366 |
733.709 |
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TOTAL EXPENSES |
427.141 |
411.650 |
508.507 |
686.714 |
851.519 |
788.515 |
792.291 |
668.775 |
636.204 |
729.162 |
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TOTAL PRETAX INCOME |
30.210 |
15.219 |
80.833 |
33.005 |
535 |
11.070 |
21.823 |
-17.942 |
-12.838 |
4.546 |
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EBITDA |
77.850 |
49.932 |
119.583 |
91.907 |
63.025 |
72.766 |
84.470 |
41.683 |
45.546 |
63.768 |
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LESS: INTEREST EXPENSE |
10.796 |
9.943 |
8.774 |
14.366 |
13.552 |
15.048 |
16.242 |
15.000 |
14.746 |
15.096 |
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LESS: INCOME TAXES |
6.872 |
4.450 |
23.875 |
9.748 |
158 |
3.270 |
6.446 |
Neg |
Neg |
1.343 |
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LESS: CAPITAL OUTLAYS |
39.375 |
19.224 |
33.632 |
72.550 |
78.301 |
74.111 |
75.022 |
55.500 |
46.647 |
44.900 |
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EQUALS: FREE CASH FLOW |
20.808 |
16.315 |
53.302 |
-4.758 |
-28.986 |
-19.663 |
-13.239 |
-28.817 |
-15.847 |
2.429 |
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Source: WSD's Global Steel Finance system |
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