Price gap to remain narrow. Despite rising crude steel output in China will boost metallurgical coke consumption in China, we believe the depressed price gap between metallurgical coal (input) and metallurgical coke will remain over the medium term, as rising metallurgical coke capacity in China that will continue to cap the pricing power of the independent metallurgical coke producers. Not helping either is the acute shortage of metallurgical coal, which boosts prices of metallurgical coal and weakens metallurgical coke players’ bargaining power.
Sino Hua-An International Berhad : Valuations Remain Undemanding-09/04/2010
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