CAMAL recently organised a trip to China for KNCCI Marsabit Chamber where the delegates had special interests in getting investors and also meeting suppliers. The 5 days trip was aimed at value addition to the Chamber and the office in China delivered beyond expectation.
CAMAL facilitated- KNCCI Marsabit and Guangdong Chamber of Commerce, B2B meeting with Chinese investors. The firm witnessed Signing of an MOU, exploring business cooperation and investment areas in Marsabit County. The talks held were aimed at identifying potential business opportunities from Marsabit
The Chamber also had some interest in meeting construction material suppliers in China. CAMAL took the delegates to a company where they showed special interest in procurement of construction materials such as tiles, prefabs materials etc.
KNCCI Marsabit meeting with Chinese construction, energy and building materials companies.CAMAL also took KNCCI Marsabit to visit Solar panel factory. The Chamber had requested CAMAL to facilitate this meeting as they had a project which involved solar energy and they wanted to know where they can get them from. The meeting was successful with the supplier promising to work with CAMAL to deliver high quality products to the Marsabit County as soon as the order is placed.
CAMAL will continue to organise such trips for the client to understand better opportunities and how CAMAL can assist them to procure from China after or during the trip. CAMAL’s value addition include;
- Identification of reliable suppliers for our clients;
- Carrying out factory due diligence on behalf of the Client;
- Engaging with the potential investors;
- Advising the Client on how to procure Products from China;
- Facilitating preliminary discussions by having an interpreter who understands Chinese and English well to get rid of language barrier.
- Base Titanium 是肯尼亚最大的采矿业务 > 1亿吨钛资源，投资3.5 亿美元，每年出口量16万吨
- 在过去几年中，肯尼亚已采取行动，正式确定并提高采矿业的 有效性
- 与总体趋势相反，肯尼亚的勘探一直在增加，但与同行相比较 小
- 虽然设备较落后，但矿山仍在出口中国和印度。目前每月能达 到3000吨左右
- 由于缺乏设备，装载目前是手动的，但为当地人提供了就业机 会
- 在中国、货一般到天津港，然后贸易公司卖给内蒙和宁夏企业 主要针对硅锰工厂
- CIQ 结果一般是29-33% mn
- 社会责任 – 公司已经在给当地人提供更多的销售量及更多的机会
- 我们已经确认了有市场，我们需要三个方面合作伙伴：勘探， 开采设备，选矿设备
- 上周在中非论坛国家主席强调了- 中非将重点实施“八大行动”- 肯尼亚锰矿是一个很好机会落实4个行动
全报告可以在这里查看 – CAMAL – 肯尼亚矿业和锰矿演讲 – 铁合金会议 -2018
I have just returned from a sourcing trip in Tangshan and I was marked by the blue sky and white clouds. In all my years in China, I have never seen Tangshan like this, let alone during winter. I have witnessed the same scene in the last week in Dingzhou, Anping, Shijiazhuang and other steel producing cities of China.
Clean Air at a Cost
New regulations in China have mandated anti-pollution measures / equipment / quotas / shutdowns etc. which have all led to increased costs amongst restricted supply. In Tangshan for instance, coal power is no longer permitted as a source of power for producing steel. The alternative, natural gas, is a cleaner energy source, but one that has lead to an increase of USD 10-15 per ton of steel.
With coal no longer a permissible source of (cheap) power, most coal processing machines lay ideal in most steel mills
Although most people appreciate the breathable air, there are hundreds of mills and processing plants that have been shutdown leading to lost income, unemployment and rising prices. Where shutdowns have not been mandated, increased costs have rendered many firms noncompetitive (locally and internationally) leading to bankruptcies and closures.
With the new regulations, electric furnaces have been targeted due to their typically high pollution and often smaller size in comparison to blast furnaces. The result has been extremely tight supply of steel especially billets that are necessary for downstream production, and which once constituted a major portion of China’s steel exports.
Not everyone is Upset with New Regulations
The biggest beneficiaries of the strict regulations have been blast furnace suppliers of steel billets. They have seen profits sour with figures of over USD 150 per ton. With some factories producing thousands of tons per week, business has been booming as artificially high profit margins continue.
On the other hand, downstream industries have been forced to buy raw materials at these elevated prices and ultimately the costs are being passed on to consumers. With fewer producers, elimination of the (Cheaper) electric furnace producers and new quotas, billet manufacturers have ripped immense profits during this period.
End of Cheap China?
Those who have paid close attention to the steel industry can only reminisce when steel prices were sub USD 150 compared to USD 600 per ton today. It is highly unlikely that the price will ever return to these figures.
Excessive steel billet (such as above) prices have caused a knock-on effect on downstream industries and manufacturing
Given that profits of the billets are abnormally high, it is possible that new regulations targeting certain enterprises will tame these margins therefore resulting in knock on effect for downstream industries, but its clear China has turned a chapter of cheap steel at all costs.
‘New Normal’ and the Changing China Opportunity
So what does all this mean for international firms looking to China for procurement or investment? Next week, I shall examine implications of this new normal.
(Walter Ruigu is managing director of CAMAL Group, a trade and investment advisory firm based in Beijing, Nairobi and Lusaka and can be reached at firstname.lastname@example.org)