Presentation is loading. Please wait.

Presentation is loading. Please wait.

September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey CAN CHINESE COAL BE COMPETITIVE AGAINST RUSSIAN COAL IN TURKEY? Robert Yuksel YILDIRIM.

Similar presentations


Presentation on theme: "September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey CAN CHINESE COAL BE COMPETITIVE AGAINST RUSSIAN COAL IN TURKEY? Robert Yuksel YILDIRIM."— Presentation transcript:

1 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey CAN CHINESE COAL BE COMPETITIVE AGAINST RUSSIAN COAL IN TURKEY? Robert Yuksel YILDIRIM President & CEO YILDIRIM GROUP OF COMPANIES McCloskey Russian Coal Conference 2007

2 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of YILDIRIM Holding Inc. or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the YILDIRIM Holding Inc. or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document. This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond YILDIRIM Holding Inc.‘s control that could cause the actual results, performance or achievements of YILDIRIM Holding Inc. to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Turkish economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions. Such forward-looking statements are based on numerous assumptions regarding YILDIRIM Holding Inc.‘s present and future business strategies and the environment in which YILDIRIM Holding Inc. will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and YILDIRIM Holding Inc. expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in YILDIRIM Holding Inc.’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Neither YILDIRIM Holding Inc., nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document. The information contained in this document is provided as at the date of this document and is subject to change without notice.

3 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1. Structure of Turkish Coal Market 2. Advantages / Disadvantages of Russian Coal (RC) 3. Advantages / Disadvantages of Chinese Coal (CC) 4. Outlook of RC & CC in Turkey 5. Forecast for Turkish Coal Market 6. Conclusion Content

4 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1.1. Types of Imported Coals in Turkey Steam Coal Coking Coal PCI Coal Sized Coal Anthracite 1. Structure of Turkish Coal Market

5 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1. Structure of Turkish Coal Market 1.2. Sectoral Distribution of Coal in Turkey Steel Industries Power Plants Cement Industries House Heating Others (Soda, Sugar, Textile, Paper, etc.)

6 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1. Structure of Turkish Coal Market 1.3. Consumption of Imported Coal in Turkey (in ’000 mt)

7 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1. Structure of Turkish Coal Market 1.4. Consumption of Imported Coal in Turkey (in ’000 mt)

8 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1.5. Coal Exporters to Turkey Coking Coal: Australia, USA, Canada, Poland, Russia, Ukraine Steam Coal: Russia, South Africa, Colombia PCI Coal: Russia, Australia, Colombia, China Sized Coal: Russia, China, South Africa Anthracite: Russia, Ukraine, Vietnam 1. Structure of Turkish Coal Market

9 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 1.6. Quality Comparison Table for Thermal Sized Coal Coal SpecsRussianChinese Total Moisture (a.r.)10 % max.13% max. Ash (d.b.) % % Sulphur (d.b.)0.5 % max. Volatile Matters (d.b.) % % CV N.A.R. (Kcal/kg) Size mm 1. Structure of Turkish Coal Market

10 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 2. Advantages / Disadvantages of RC 2.1. Advantages RUSSIA is always a WINNER in Turkey!... Because of: Their best quality and specifications of coal Geographical location Lowest freight rates Faster deliveries Affordable amount of deliveries

11 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 2. Advantages / Disadvantages of RC 2.2. Disadvantages Dependance on Ukrainian R/W & Ports Old infrastructure of railway network Lack of R/W wagons for export Bad weather conditions and ice declarations in ports during winter Impossible to make fixed price contract more than 3 months

12 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 2. Advantages / Disadvantages of RC 2.2. Disadvantages The highest FOB prices Requirement of 100% prepayment Long term coal contracts not available Coal mines located very far away from ports Unable to load more than 30,000 dwt vessels to Turkey for sized coal

13 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 3. Advantages / Disadvantages of CC 3.1. Advantages Cheaper FOB prices than RC’s Very effective and efficient ports for coal export Ability to load Handymax & Panamax vessels for Turkish Market Ability of screening coal at loadports for Turkish sized coal buyers

14 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 3. Advantages / Disadvantages of CC 3.1. Advantages Having long term coal contracts available Accepting L/C payments Coal mines are located near to loadports & lower transportation costs Effective R/W system

15 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 3. Advantages / Disadvantages of CC 3.2. Disadvantages NDRC (National Development and Reform Committee) has changed their coal policy for the 11th 5-year plan ( ) Export license & Export quota system Despite contractual obligations some Chinese suppliers may not perform contract during high season

16 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 3. Advantages / Disadvantages of CC 3.2. Disadvantages Quality assurance system still need further development The sized coal quality is lower than RC Geographical location Higher freight rates to Turkey

17 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 2008 & BEYOND? 4. Outlook of RC & CC in Turkey

18 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey Russia has been and always will be the “Dominant Power” in the Turkish Coal Market. When Prices become “much higher” for Russian Coal  Turkish Importers search alternative suppliers from China, South Africa & elsewhere 4. Outlook of RC & CC in Turkey

19 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4. Outlook of RC & CC in Turkey 4.1. Let’s understand China better China’s GDP is growing fast based on tremendous industrialazition triggering the demand of raw materials

20 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4.1. Let’s understand China better 4. Outlook of RC & CC in Turkey Statistics for all commodities in China are not only unreliable but also enigmatic No one outside of China will know the real truth about Chinese economy and industry for a long time

21 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey You must understand China’s coal policy to analyze the factors why the price of Chinese coal, especially sized coal would keep increasing in the future Let’s understand China better 4. Outlook of RC & CC in Turkey

22 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey China made three important steps to secure its future domestic coal demand: 1. Beijing scrapped an 8% tax rebate for sized & thermal coal exports in November This recently implemented legislation allowed China to become a NET coal importing country in Outlook of RC & CC in Turkey 4.1. Let’s understand China better

23 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 2. China has not increased its coal export license quantity for last 6 years and it is expected that Beijing will continue to reduce the export quotas step by step in the next few years to tempt the import of coal. 3. China removed import tax of 1% related with coal products on June 1, 2007 to encourage to boost its future coal import. 4. Outlook of RC & CC in Turkey 4.1. Let’s understand China better

24 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey Beijing may impose an export tax on coal products to curb the export. Beijing made similar moves in 2007 for Coke and various Ferroalloys products. China adjusted the export tax for coke products twice (first 5%, then 15%) during The aim of this decision was to secure the supplies necessary for the rapidly growing demand of the local steel industry. 4. Outlook of RC & CC in Turkey 4.1. Let’s understand China better

25 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey China became a “NET” coal importer in Outlook of RC & CC in Turkey 4.1. Let’s understand China better China’s Export & Import of Coal Business (in ’000 mt)

26 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4. Outlook of RC & CC in Turkey 4.1. Let’s understand China better China’s Export & Import of Coal Business in 2007 (in ’000 mt)

27 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4. Outlook of RC & CC in Turkey 4.2. Let’s understand Russia better Russia’s GDP is growing fast based on export of natural resources

28 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4. Outlook of RC & CC in Turkey 4.2. Let’s understand Russia better Russia is ALWAYS and will REMAIN a major coal exporting country (in ’000 mt)

29 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4. Outlook of RC & CC in Turkey 4.2. Let’s understand Russia better Russian coal resources are majorly controlled by six private groups It is very difficult to make foreign investment in Russian coal resources Russia’s coal exports help its economy to stay in stable growth Russia has no plans to reduce coal production

30 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 4.3. Similarities of RC & CC Industries On one side, Chinese Central Government shuts down all small / unhealthy / unsafe coal mines; on the other side, local Chinese Governments silently allow these closed coal mines to continue their coal production. 4. Outlook of RC & CC in Turkey

31 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey On one side, small Russian coal producers are trying to produce & export coal; on the other side, “Russian Coal Barons” are trying to blockade these small exporters by stopping them by preventing to access to R/W network and ports. 4. Outlook of RC & CC in Turkey 4.3. Similarities of RC & CC Industries

32 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey The fast growing steel & cement industries Expected boom in coal-fired power plants Constant growth of Turkish Economy for 22 quarters in-a-row and expected to continue 4.4. Why CFR Coal Prices will continue to increase in Turkey? 4. Outlook of RC & CC in Turkey

33 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey Boom in construction of new houses Turkey doesn’t have good enough coal reserves left to satisfy the growing of coal consumption China’s domestic coal demand will trigger the prices in the World and Turkey 4. Outlook of RC & CC in Turkey 4.4. Why CFR Coal Prices will continue to increase in Turkey?

34 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5.1. Steel Industry Turkey’s Steel production (in ’000 mt) Forecast for Consumption of: Coking coal:  PCI coal :  Anthracite :  5. Forecast for Turkish Coal Market

35 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5.2. Cement Industry Turkey’s Cement production (in ’000 mt) Forecast for Consumption of: Steam coal:  5. Forecast for Turkish Coal Market

36 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5. Forecast for Turkish Coal Market Turkey’s demand in electricity is growing tremendously The Turkish Electricity Market Regulatory Authority (EPDK) authorized licenses in total of 2190 MW to several private groups to produce electricity by imported coal-fired power plants by end of Coal Fired Power Plant Industry

37 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5. Forecast for Turkish Coal Market In addition to this power generating capacity, by end of 2008 we expect that various private coal-fired power plant projects (approx MW total) will apply for a licenses at EPDK by using the imported steam coal 5.3. Coal Fired Power Plant Industry

38 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5. Forecast for Turkish Coal Market YILDIRIM Group has signed a JV for establishing one coal-fired power plant with capacity of 300 MW to be built within next 3 years and has plans to establish two more coal-fired power plants with a total capacity of 2000 MW to be built within next 8 years. Imported steam coal will be used at all these plants Coal Fired Power Plant Industry

39 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5. Forecast for Turkish Coal Market Hence, the consumption of imported steam coal will increase continously due to upcoming coal-fired power plants Coal Fired Power Plant Industry

40 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5.4. Forecast of Imported Sized Coal FORECAST RUSSIA (in ’000 mt) CHINA (in ’000 mt) ,000 2, ,500 2, Forecast for Turkish Coal Market

41 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey Forecast of CFR Turkey Price for Imported Sized Coal 5. Forecast for Turkish Coal Market

42 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 5. Forecast for Turkish Coal Market Forecast of Sellers’/Buyers’ Perspectives for CFR Prices FORECAST RUSSIACHINA EXPORTERS  IMPORTERS 

43 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 6. CONCLUSION Steam coal will enjoy a strong and growing market in Turkey. Huge investments in coal-fired power plants and fast growing domestic cement sector will trigger additional demand for Russian steam coal in the forthcoming years. The imported steam coal sector will grow every year minimum 20%; however, expansion of sized coal business will slow down.

44 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 6. CONCLUSION Turkish Coal Market is always bullish and the Bulls will rule this coal market. The removal of the export rebates, the cancellation of the import tax, the expected export tax and the future decrease of export quota will complicate the life of Turkish importers of Chinese coal. The Russians will benefit from these policies despite the sluggish future demand for sized coal products in Turkey.

45 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 6. CONCLUSION Beijing’s new coal policy will strengthen the position of the Russian sized coal vendors. China became a NET importer of coal from The Chinese are looking for global acquisition possibilities of coal enterprises and mines in Australia, Botswana, Mozambique, Indonesia, Vietnam, South Africa and Russia to secure their future coal needs. China will push the global coal prices up.

46 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 6. CONCLUSION Profit levels will rise sharply in future for all type of Russian coal suppliers. Big Russian coal groups like KRUTrade, Mechel and MIRTrade will enjoy remarkable profits obtained from the Turkish coal business.

47 September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey 6. CONCLUSION The CFR coal prices will ascend faster than the real FOB costs. We observe the effects of the Chinese influence at the global commodity prices since In particular, global coal products (incl. Russian and Chinese origin) will become more expensive (approx. 20% per annum) in the forthcoming years.

48 Thank you! Russian Coal Conference 2007 – Istanbul, TurkeySeptember 25, 2007


Download ppt "September 25, 2007Russian Coal Conference 2007 – Istanbul, Turkey CAN CHINESE COAL BE COMPETITIVE AGAINST RUSSIAN COAL IN TURKEY? Robert Yuksel YILDIRIM."

Similar presentations


Ads by Google