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May 5, 2014
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SEE PAGE 13 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Regional Materials Gems, Picks & Shovels Key headlines impacting materials Iron ore futures prices in China tumble on reports that banks
will raise financing costs (China: Southern Metropolis Daily).
Asia nickel ore import prices reach new highs on strong Chinese demand to replace those banned out of Indonesia (MKE).
Indonesia mulling over export tax changes to copper concentrate but no change seen in ore export ban (US: AMM).
Boeing reviewing sanctions set on Russian titanium executive of state-owned Rostec Corp., which is the parent of Russia’s VSMPO-Avisma Corp., one of its three suppliers (US: AMM).
Shenhua lifted spot prices for May by RMB5/t (USD0.81/t), and its discount to large buyers will also be reduced (McCloskey).
The Shanghai Pudong court received 1,051 cases involving steel traders defaulting on bank loans during the first three months of this year vs. 2,500 for all of 2013 (China Securities Journal).
China steel prices remain soft, despite positive seasonal factors due to weak demand and ample supply (MKE).
Top picks (BUY/SELL) VALE Indonesia (INCO IJ; IDR3,550; BUY; TP IDR4,600)
Sesa Sterlite (SSLT IN; INR185.35; BUY; TP INR252)
Minmetals MMG (1208 HK; HKD1.80; BUY; TP HKD2.45)
Angang Steel (347 HK; HKD4.70; SELL; TP HKD4.00)
China Coal (1898 HK; HKD 4.19; SELL; TP HKD3.25)
Recent reports Sesa Sterlite - 4Q in line, FY15 outlook strong (4/30/14)
Jiangxi Copper – Look past weak 1Q to rising copper (4/30/14)
Trading strategies in China's structurally challenged thermal coal and steel sectors. (Short reports on China Shenhua, China Coal, and Angang Steel 1Q14 results (4/28/14)
Initiation: Minmetals MMG - High risk, higher reward (4/25/14)
Vale Indonesia - Nickel market: salt in the wound (4/24/14)
Nickel Asia - Higher contract prices raise TP (4/14/14)
Analysts HK/CHINA Alexander Latzer (metals, coal, steel) Regional Sector Head (852) 2268 0647 [email protected] INDIA Jigar Shah (cement, oil/gas) (91) 22 6623 2601 [email protected] Anubhav Gupta (metals, steel) (91) 22 6623 2605 [email protected] INDONESIA Isnaputra Iskandar, CFA (metals, coal, cement) (62) 21 2557 1129 [email protected] MALAYSIA Lee Yen Ling (steel, building materials) (603) 2297 8691 [email protected] PHILIPPINES Ramon Adviento (metals, coal) (63) 2 849 8845 [email protected] Lovell Sarreal (cement, consumer, media) (63) 2 849 8841 [email protected] THAILAND Sutthichai Kumworachai (coal, energy, oil/gas, petrochemical) (66) 2658 6300 x 1400 [email protected] Surachai Pramualcharoenkit (steel, construction, contractors, automotive) (66) 2658 6300 x 1470 [email protected] VIETNAM Trung Thai (construction, materials, property) (84) 444 55 58 88 x 8180 [email protected]
May 5, 2014 2
Regional Materials Sector
News Headlines Iron ore futures prices in China tumble on reports that banks will
raise financing costs (Bloomberg citing Southern Metropolis Daily, 4/29/14).
‘Banks will increase the size of deposits required “by a large measure” from May 1 for letters of credit used to finance purchasing iron ore, the Guangzhou-based Southern Metropolis Daily reported, citing sources it didn’t identify. Iron ore stockpiles at Chinese ports jumped to a record amid demand to use the material as collateral to obtain credit while spot ore prices have declined 17 percent this year.’
What’s our View?
Since our initiation in September last year, iron ore has been our least preferred material for 2014 on concerns a projected global 30% increase in supply would overwhelm slowing steel consumption growth in China. Apparent steel consumption growth in China is virtually flat YoY vs. a 2% rise in steel production, pushing steel prices and steel mill profits to very low levels. Iron ore prices are down 17% CIF China and by a lesser 13% in China YTD, but iron ore imports are up 19% YoY and ore inventories have increased 27% YTD and 46% from the low in April last year (Figures 1 & 2).
We believe the increase in iron ore stockpiles has been motivated by finance-driven purchases to obtain credit from domestic banks, and facilitated by easy credit terms from iron ore suppliers seeking to place materials. Credit repayment terms being offered to some Chinese buyers have reportedly tripled to 120 days or longer. According to iron ore trader sources, Chinese ore buyers indicate letters of credits take weeks to obtain vs. only a few days previously or simply ‘don’t reply’ when asked how long.
We believe it is increasingly likely iron ore prices will face a hard fall, particularly if Chinese buyers renege on contracts in a falling market, leaving iron ore suppliers and traders with losses. Steel companies have not benefitted from lower raw materials costs due to low steel prices as companies maintain production volumes given pressure to generate cash to repay debts. The problem is mainly concentrated among private steel mills.
Figure 1: Iron ore prices: China import CIF and domestic Figure 2: Iron ore inventories at China’s main ports
Source: Bloomberg. Source: Steelhome
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Importers may be required to place more money into the bank before obtaining the L/C document (used as collateral), with the rate for iron ore likely to be raised sharply from the usual 15% of the import value, according to insiders (McCloskey). We believe it is increasingly likely iron ore prices will face a hard fall, particularly if Chinese buyers renege on contracts in a falling market, leaving iron ore suppliers and traders with losses. Steel companies have not benefitted from lower raw materials costs as steel prices have been undermined by surplus steel production relative to demand, with companies under pressure to maintain volumes to generate cash to repay debts.
May 5, 2014 3
Regional Materials Sector
Asia nickel ore import prices reach new highs on strong Chinese demand (Maybank Kim Eng). Chinese nickel pig iron spot prices surge on tight supply (Platts, 4/30/14);
News reports are closely monitoring continued rapid increases in nickel ore prices delivered to China as a result of a loss of supply from Indonesia, which banned the export of raw ores in January of this year. Chinese nickel pig iron producers (NPI) who import and smelt the raw ores rich in nickel and iron for use in the stainless steel industry have increased their selling prices in line with the rising ore costs.
Supply is tight on strong demand and also because NPI producers are limiting sales in anticipation of higher prices to come. Quoting a Platt’s source: “Anything that has nickel in it, be it NPI or scrap, mills are ‘fighting’ for it.” NPI prices had risen by CNY320-340/unit or over 30% since mid-February, right after the Chinese New Year holidays. The country's leading stainless steel producers had raised their NPI purchase prices for May deliveries in late April. Shanxi Taigang Stainless Steel had raised its monthly price by CNY170/unit month-on-month to CNY1,200/unit, while Baosteel increased its price by CNY145/unit m-o-m to CNY1,180/unit.
Our Philippine-based analyst Ramon Adviento provided the following table of ore prices, grades, types and implied nickel value per pound. Nickel prices on the LME and in Shanghai are up 31% and 25% YTD, to USD8.22/lb and USD8.90/lb, which is well below the value of the nickel in the ores. We believe the premium for ores reflects the bottleneck of supply to NPI producers, many of whom are linked with stainless steel mills in an integrated supply chain in China.
Figure 3: Nickel ore export prices and types Philippines to China Product Ore type Price (USD/WMT) Contained Nickel price/lb
1.9% Ni saprolite 94-95 18.17 1.8% Ni saprolite 83-84 17.87 1.6% Ni saprolite 62-63 16.90 1.5% Ni limonite 53 16.44
Source: Maybank Kim Eng.
What’s our View?
We identified nickel last September as a laggard with the potential to turn leader in 2014 (Figure 5). We felt the Indonesian ore ban would be enacted due to nationalistic sensitivities during an election year, despite the country’s history of making last-minute changes to such regulations. The ban has been most impactful to nickel due to China’s reliance on the ores to make NPI, which account for about 50% of China’s total supply.
Nickel prices have run past our earlier forecast and a consolidation in price and the related equities is possible over the next few months until the supply deficit worsens later this/early next year. Also, the dynamics of consumption are likely to change as stainless steel producers start to divert production to lower nickel bearing grades of stainless steel.
We recently raised our nickel price forecasts by 10% to USD8/lb for 2014, 23% to USD9.50/lb for 2015 and 17% to USD8.50/lb for 2016. Nickel is the most volatile of the base metals based on historical analysis. We look for prices to peak during 2015 at about USD10/lb and drift lower thereafter once China either finds alternative ore sources in Asia (not a long-term solution) or builds NPI plants in Indonesia (more likely) (Figure 4).
Nickel prices have run past our earlier forecast and a consolidation in price and the related equities is possible over the next few months until the supply deficit worsens later this/early next year. We recently raised our nickel price forecasts by 10% to USD8/lb for 2014, 23% to USD9.50/lb for 2015 and 17% to USD8.50/lb for 2016. Nickel is the most volatile of the base metals based on historical analysis.
May 5, 2014 4
Regional Materials Sector
Figure 4: LME nickel price actual and forecast (dash lines) Figure 5: Maybank KE ranking of materials for 2014E
Source: Bloomberg. Maybank Kim Eng estimates. Source: Bloomberg. Maybank Kim Eng estimates.
Forecasting a peak in nickel price is almost as dangerous as forecasting gold, as the inventory of nickel metal on the LME and nickel ores in China are ample, with the latter being held by traders anticipating higher prices.
The value of the nickel in the ores indicates that at some point it will be less expensive to buy primary nickel to feed into the stainless steel plants than to keep running the NPI plants. At that point, if ore prices ease lower they may be released into the market causing a rapid price correction.
The other major risk factor to our price forecast is the situation in the Ukraine as it impacts market sentiment regarding a potential ban on Russian nickel imports by the West. It is not hard to imagine a scenario where Russia exports nickel to China, which would be very difficult for European stainless steel mills that rely heavily on Russian nickel.
Indonesia mulling export tax changes (USA: AMM, April 30, 2014).
Under much pressure from the major copper concentrate producers in the country (Freeport McMoRan Copper & Gold and Newmont), news reports indicate Indonesia is considering cutting the export tax on this particular material. Both producers have not been able to export concentrate since January due to uncertainties pertaining to the law, which stipulates an export tax of 25% this year, 35% in 1H15 and rising to 60% in 2H16.
What’s our View?
We continue to believe the ore ban will remain in place, but some compromise on copper concentrates is likely as it is value-added: 30% copper content in concentrate, upgraded in a mill from ores grading about 1-2.5%. The news story indicates the government may consider reducing the tax but not until an approved development plan for a copper smelter is provided and well advanced by 2017 to process the copper concentrates.
Freeport has a long-standing first generation contract of work that stipulates the tax regime governing its activities and that no additional taxes will be levied. Some sort of compromise is likely as the mines may have to close if the copper concentrate cannot be exported and all parties (the government and miners) will lose out big time. We see Freeport’s position given its contract and the fact that building a smelter is a low-
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Nickel
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Forecasting a peak in nickel price is almost as dangerous as forecasting gold, as the inventory of nickel metal on the LME and nickel ores in China are ample, with the latter being held by traders anticipating higher prices. The value of the nickel in the ores indicates that at some point it will be less expensive to buy primary nickel to feed into the stainless steel plants than to keep running the NPI plants. The other major risk factor to our price forecast is the situation in the Ukraine as it impacts market sentiment regarding a potential ban on Russian nickel exports. This seems a remote possibility that could trigger a reprisal involving other commodities.
We continue to believe the ore ban will remain in place, but some compromise on copper concentrates is likely as it is value-added: 30% copper content in concentrate, upgraded in a mill from ores grading about 1-2.5%.
May 5, 2014 5
Regional Materials Sector
profit-margin activity and there is plenty of smelting capacity in China waiting for the concentrate.
The copper supply disruption is meaningful to the overall global market with most of the materials going to Chinese and Japanese smelters. If unresolved, the global market could lose about 2% of supply from Freeport’s mine alone during 2014 putting the market into deficit. The export tax is likely to be lowered and Freeport may work with a local partner to build a smelter within the country to process the concentrate.
The disruption to copper concentrate exports in Indonesia and supply delays elsewhere (Oyu Tolgoi Mongolia, Toromocho Peru) has tightened the copper market supply and demand balance, which turned to deficit earlier this year, supporting our positive view. Our 2015 price forecast is 8% above consensus at USD3.50/lb.
Shenhua lifted spot prices for May by CNY5/t (USD0.81/t) and its discount to large buyers will also be reduced (McCloskey).
The China thermal coal market appears to be slowly improving, with coal inventory at power plants down from a recent high of 23 days last December to the current level of 20 days (Figure 6). Inventory at the northern ports is down as well to low levels. Overall, prices remain soft, in what is normally a period of seasonal strength before the summer.
Coal inventory days at power plants increased from 18 at the end of March to 20 in April as burn rates slowed due to warmer weather (Figure 6). Total inventory days are still high reflecting pockets of inventory elsewhere. Inventory at China’s four main northern ports have fallen from a high of 22mt in February this year to 14mt, in line with the November 2014 low.
Our forecast is for coal prices to slowly rise from current levels as re-stocking gathers momentum over the next few months and again later this year for the winter burn season. But our expectation for price volatility is low (Figure 7). Relative to the seaborne price, the China price appears to be slightly more expensive (Figure 24). The surplus in the seaborne market is likely to limit the upside for domestic Chinese prices as traders and power plant importers along the coastal areas arbitrage the difference.
Figure 6: China Coal inventory power plants and total (days) Figure 7: Thermal coal prices in China and Australia*
Source: Bloomberg, McCloskey, Maybank Kim Eng estimates. Source: Bloomberg, McCloskey, Maybank Kim Eng estimates. *China coal price includes 17% VAT basis 5,800 kcal. Australia price is FOC basis 6,000 kcal.
The Shanghai Pudong court received 1,051 cases involving steel traders defaulting on bank loans during the first three months of this year vs. 2,500 for all of 2013 (China Securities Journal).
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(USD/t) Qinhuangdao coal price Newcastle coal price
Est. 2014/15
Current prices: Qinhuangdao 5,800 kcal USD92/t (incl. 17% VAT); Newcastle 6,000 kcal USD73/t.
Copper supply disruptions have contributed to putting the copper market back into deficit earlier this year despite the weakness in China.
Our forecast is for coal prices to slowly rise from current levels as re-stocking gathers momentum over the next few months and again later this year for the winter burn season. But our expectation for price volatility is low. Days supply of coal at power plants increased during April to 20 days from 18 days the prior month due to softer demand mainly as temperatures rose. China has stepped up small mine closures in the face of the oversupplied coal market, with the latest shut-down target for this year more than double the original proposal. A total of 1,725 small mines, with a combined capacity of 117.48mt/yr, will be closed this year, up from 770 last year.
May 5, 2014 6
Regional Materials Sector
According to an April 24 news article in the China Securities Journal, The Shanghai Pudong court received 1,051 cases involving steel traders defaulting on bank loans during only the first three months of this year, which is an annual run rate nearly double the 2,500 for all of 2013. According to the report, the January-March loan defaults totalled RMB11.4b (USD1.83b) while last year’s total was RMB19b. The journal pointed out that trader’ defaults on bank loans are growing and the trend will probably continue into next year.
What’s our View?
Steel prices in China increased by about 2% in March, but have since fallen due to increased steel production against continued weak demand (Figure 8). Prices are down about 15% YTD vs. the corresponding period last year. We forecast a 12% decrease in 1H14 YoY and a 4% decrease in 2H’14 YoY in line to our forecast 8% fall in 2014 YoY. There is downside risk to our 2014 steel price forecast if ore prices fall sharply and steel mills continue to compete on price to place orders.
Anticipating a much needed seasonal demand recovery in steel prices, major steel mills raised list prices earlier this year, but with tight credit availability traders are not restocking and the end market demand pull is weak putting the increases at risk of correction. Figure 9 points to a widening gap of company steel list prices above steel market prices to about CNY600/t vs. less than CNY200/t earlier this year.
This again points to how the Chinese steel companies have been wrong footed by the lack of a strong seasonal improvement in demand this year and are producing at too high a level. Steel production reached a new all-time record during 1Q14 and the year-ago figures continue to be revised higher as well (Figure 34).
Figure 8: Steel market prices in eastern China Figure 9: Company list prices too high vs. market prices
Source: Steelhome. Source: Steelhome.
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Steel producers raised list prices earlier this year anticipating a much needed seasonal demand recovery, but with tight credit availability traders are not restocking and the end market demand pull is weak.
May 5, 2014 7
Regional Materials Sector
Share price performance: materials, coal, and steel (YTD, 3 months). Figure 10: Asia region materials stocks YTD Figure 11: Asia region materials stocks past three months
Source: Bloomberg. Source: Bloomberg.
Figure 12: Asia region coal stocks YTD Figure 13: Asia region coal stocks past three months
Source: Bloomberg. Source: Bloomberg.
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LynasWCC
IndophilePanAust
Chinalco MiningFortescue
Yunnan CopperBaotou Rare Earth
CNBMSinoma
HongqiaoRio Tinto
Hunan NonferrousJiangxi Copper
Sesa SterliteShanshui
Paladin EnergyIRC
China VanadiumChina Moly
BHP BillitonHindustan Zinc
Sterlite IndsVedanta
Atlas MineralsAnhui ConchAsia Cement
NALCOTaiwan Cement
CR CementZhaojin Mining
ERAKorea Zinc
ChalcoBumi Res. Min.
Aneka TambangMinmetal MMG
Ambuja CementHindalco
PhilexZijin MiningOZ Minerals
ICEMUltratech Cement
ACCAluminaHaranga
Shree CementNewcrest
VALE IndonesiaRUSAL
Nickel Asia
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WCCBaotou Rare Earth
Atlas MineralsJiangxi Copper
PhilexHunan Nonferrous
IndophilePanAust
Bumi Res. Min.HongqiaoRio Tinto
Sesa SterliteFortescue
CNBMAnhui Conch
SinomaSterlite Inds
Korea ZincCR Cement
Yunnan CopperZhaojin Mining
ChalcoOZ Minerals
Hindustan ZincBHP BillitonChina Moly
NALCOAlumina
Asia CementIRCERA
Taiwan CementChinalco MiningChina Vanadium
NewcrestZijin Mining
VedantaMinmetal MMG
Aneka TambangHindalcoShanshui
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Ambuja CementRUSAL
ACCShree Cement
ICEMNickel Asia
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May 5, 2014 8
Regional Materials Sector
Figure 14: Asia region steel stocks YTD Figure 15: Asia region steel stocks past three months
Source: Bloomberg. Source: Bloomberg.
Metals prices and inventory Figure 16: Copper exchange prices and inventories Figure 17 Aluminum exchange prices and inventories
Source: Bloomberg Source: Bloomberg
Figure 18: Nickel exchange prices and inventories Figure 19: Zinc exchange prices and inventories
Source: Bloomberg Source: Bloomberg
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May 5, 2014 9
Regional Materials Sector
Figure 20: Gold exchange prices Figure 21: Silver exchange prices
Source: Bloomberg Source: Bloomberg
Figure 22: Platinum exchange prices Figure 23: Palladium exchange prices
Source: Bloomberg Source: Bloomberg
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l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14
Pric
e (R
mb
per
gram
)
Pric
e (U
S$ p
er o
z)
LME Spot Price (LHS) Shanghai Spot Price (RHS)
2,200
4,200
6,200
8,200
10,200
12,200
0
20
40
60
80
100
Jan-
00Ju
l-00
Jan-
01Ju
l-01
Jan-
02Ju
l-02
Jan-
03Ju
l-03
Jan-
04Ju
l-04
Jan-
05Ju
l-05
Jan-
06Ju
l-06
Jan-
07Ju
l-07
Jan-
08Ju
l-08
Jan-
09Ju
l-09
Jan-
10Ju
l-10
Jan-
11Ju
l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14
Pric
e (R
mb
per
gram
)
Pric
e (U
S$ p
er o
unce
)
LME Spot Price (LHS) Shanghai Spot Price (RHS)
-
80
160
240
320
400
200
600
1,000
1,400
1,800
2,200
Jan-
00Ju
l-00
Jan-
01Ju
l-01
Jan-
02Ju
l-02
Jan-
03Ju
l-03
Jan-
04Ju
l-04
Jan-
05Ju
l-05
Jan-
06Ju
l-06
Jan-
07Ju
l-07
Jan-
08Ju
l-08
Jan-
09Ju
l-09
Jan-
10Ju
l-10
Jan-
11Ju
l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14
Pric
e (R
mb
per
gram
)
Pric
e (U
S$ p
er o
z)
LME Spot Price (LHS) Shanghai Spot Price (RHS)
0
40
80
120
160
200
240
-
200
400
600
800
1,000
1,200Ja
n-00
Jul-
00Ja
n-01
Jul-
01Ja
n-02
Jul-
02Ja
n-03
Jul-
03Ja
n-04
Jul-
04Ja
n-05
Jul-
05Ja
n-06
Jul-
06Ja
n-07
Jul-
07Ja
n-08
Jul-
08Ja
n-09
Jul-
09Ja
n-10
Jul-
10Ja
n-11
Jul-
11Ja
n-12
Jul-
12Ja
n-13
Jul-
13Ja
n-14
Pric
e (R
mb
per
gram
)
Pric
e (U
S$ p
er o
unce
)
LME Palladium Price (LHS) Shanghai Spot Price (RHS)
May 5, 2014 10
Regional Materials Sector
China coal inventory and prices, and power data
Figure 24: Thermal coal price Qinhuangdao vs. Newcastle* Figure 25: Thermal coal prices in China and Australia*
Source: Bloomberg, McCloskey, Maybank Kim Eng estimates.*Prices are adjusted for coal calorific content and estimated transportation cost for delivery to southern China for comparison purposes.
Source: Bloomberg, McCloskey, Maybank Kim Eng estimates. *China coal price includes 17% VAT basis 5,800 kcal. Australia price is FOC basis 6,000 kcal.
Figure 26: China Coal inventory power plants and total (days) Fig 27: China total raw coal production and YoY growth trend
Source: Bloomberg, McCloskey, Maybank Kim Eng estimates. Source: CCTD, McCloskey.
Figure 28: Monthly power generation and pct. change Figure 29 Power generation by source and pct. change
Source: China NBS. Source: China NBS.
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
25
50
75
100
125
150
175
200
Jan-
01M
ay-0
1Se
p-01
Jan-
02M
ay-0
2Se
p-02
Jan-
03M
ay-0
3Se
p-03
Jan-
04M
ay-0
4Se
p-04
Jan-
05M
ay-0
5Se
p-05
Jan-
06M
ay-0
6Se
p-06
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14
Premium (discount) (USD/t)
Qinhuangdao coal price (LHS)Newcastle coal price (LHS)Qinhuangdao premium (discount)
0
25
50
75
100
125
150
175
200
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16
(USD/t) Qinhuangdao coal price Newcastle coal price
Forecast 2014/15
0
5
10
15
20
25
30
35
40
Jan
05Ju
n 05
Nov
05
Apr
06Se
p 06
Feb
07Ju
l 07
Dec
07
May
08
Oct
08
Mar
09
Aug
09Ja
n 10
Jun
10N
ov 1
0Ap
r 11
Sep
11Fe
b 12
Jul 1
2D
ec 1
2M
ay 1
3O
ct 1
3M
ar 1
4
Power plants TotalDays
(30%)(20%)(10%)0%10%20%30%40%50%
050
100150200250300350400
Jan-
03Ju
n-03
Nov
-03
Apr-
04Se
p-04
Feb-
05Ju
l-05
Dec
-05
May
-06
Oct
-06
Mar
-07
Aug-
07Ja
n-08
Jun-
08N
ov-0
8Ap
r-09
Sep-
09Fe
b-10
Jul-
10D
ec-1
0M
ay-1
1O
ct-1
1M
ar-1
2Au
g-12
Jan-
13Ju
n-13
Nov
-13
mt Production (LHS)YoY Chg. (RHS) YoY Chg
-14
-7
0
7
14
21
28
0
100
200
300
400
500
600
&Feb
-07
May-0
7Au
g-07
Nov-0
7Ma
r-08
Jun-
08Se
p-08
Dec-0
8Ap
r-09
Jul-0
9Oc
t-09
&Feb
-10
May-1
0Au
g-10
Nov-1
0Ma
r-11
Jun-
11Se
p-11
Dec-1
1Ap
r-12
Jul-1
2Oc
t-12
&Feb
-13
May-1
3Au
g-13
Nov-1
3Ma
r-14
(YoY %) (bn kWh) Monthly power generation (LHS) % YoY (RHS)% MoM (RHS)
(40)(30)(20)(10)
0102030405060
Jan&
Feb-
07Ma
y-07
Aug-
07No
v-07
Mar-0
8Ju
n-08
Sep-
08De
c-08
Apr-0
9Ju
l-09
Oct-0
9Ja
n&Fe
b-10
May-1
0Au
g-10
Nov-1
0Ma
r-11
Jun-
11Se
p-11
Dec-1
1Ap
r-12
Jul-1
2Oc
t-12
Jan&
Feb-
13Ma
y-13
Aug-
13No
v-13
Mar-1
4
YoY % Chg. Thermal Hydro Nuclear
May 5, 2014 11
Regional Materials Sector
China steel inventory and prices
Figure 30: Steel market prices in eastern China Figure 31: Company list prices
Source: Steelhome. Source: Steelhome.
Figure 32: Coking coal prices China and the region Figure 33: Comparison: imported iron ore vs. domestic HRC
Source: Steelhome. Source: Steelhome.
Figure 34: China crude steel production and YoY growth Figure 35: Long-term view of steel prices and input costs
Source: Steelhome, Maybank Kim Eng forecasts. Source: Steelhome, Maybank Kim Eng forecasts.
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Jan
04Ju
n 04
Nov
04
Apr
05Se
p 05
Feb
06Ju
l 06
Dec
06
May
07
Oct
07
Mar
08
Aug
08Ja
n 09
Jun
09N
ov 0
9Ap
r 10
Sep
10Fe
b 11
Jul 1
1D
ec 1
1M
ay 1
2O
ct 1
2M
ar 1
3Au
g 13
Jan
14
Rebar ψ12 Plate 20mmHRC 2.75mm CR sheet 1mm
Rmb/t
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
Jan
04Ju
n 04
Nov
04
Apr
05Se
p 05
Feb
06Ju
l 06
Dec
06
May
07
Oct
07
Mar
08
Aug
08Ja
n 09
Jun
09N
ov 0
9Ap
r 10
Sep
10Fe
b 11
Jul 1
1D
ec 1
1M
ay 1
2O
ct 1
2M
ar 1
3Au
g 13
Jan
14
Co. avg. HRC price (VAT excl.)Market price (2.75mm, VAT excl.)Rmb/t
0
50
100
150
200
250
300
350
400
Jan
07M
ay 0
7Se
p 07
Jan
08M
ay 0
8Se
p 08
Jan
09M
ay 0
9Se
p 09
Jan
10M
ay 1
0Se
p 10
Jan
11M
ay 1
1Se
p 11
Jan
12M
ay 1
2Se
p 12
Jan
13M
ay 1
3Se
p 13
Jan
14M
ay 1
4
Shanxi coking coal (ex-VAT)Newcastle Premium HCC (FOB Australia)
2,000
3,000
4,000
5,000
6,000
7,000
250
500
750
1,000
1,250
1,500
Jan
07M
ay 0
7Se
p 07
Jan
08M
ay 0
8Se
p 08
Jan
09M
ay 0
9Se
p 09
Jan
10M
ay 1
0Se
p 10
Jan
11M
ay 1
1Se
p 11
Jan
12M
ay 1
2Se
p 12
Jan
13M
ay 1
3Se
p 13
Jan
14M
ay 1
4
Iron ore (CIF China 62% grade, CNY, Left axis)
HRC price China (2.75mm, VAT inclusive, CNY, Right axis)
-20%
-10%
0%
10%
20%
30%
40%
50%
10
20
30
40
50
60
70
80
Jan
06M
ay 0
6Se
p 06
Jan
07M
ay 0
7Se
p 07
Jan
08M
ay 0
8Se
p 08
Jan
09M
ay 0
9Se
p 09
Jan
10M
ay 1
0Se
p 10
Jan
11M
ay 1
1Se
p 11
Jan
12M
ay 1
2Se
p 12
Jan
13M
ay 1
3Se
p 13
Jan
14
Monthly crude production (LHS)YoY growth (RHS)
YoY chg.
mt
100 150 200 250 300 350 400 450 500 550
400 500 600 700 800 900
1,000 1,100 1,200 1,300
1Q'0
63Q
'06
1Q'0
73Q
'07
1Q'0
83Q
'08
1Q'0
93Q
'09
1Q'1
03Q
'10
1Q'1
13Q
'11
1Q'1
23Q
'12
1Q'1
33Q
'13
1Q'1
4E3Q
'14E
1Q'1
5E3Q
'15E
Raw materials cost ex-freight (RHS)China HRC 2.75mm, VAT excl. (LHS)US HRC price (LHS)
USD/t USD/t
May 5, 2014 12
Regional Materials Sector
Research Offices
REGIONAL
WONG Chew Hann, CA Regional Head of Institutional Research (603) 2297 8686 [email protected]
ONG Seng Yeow Regional Head of Retail Research (65) 6432 1453 [email protected]
Alexander GARTHOFF Institutional Product Manager (852) 2268 0638 [email protected]
ECONOMICS
Suhaimi ILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 [email protected]
Luz LORENZO Philippines (63) 2 849 8836 [email protected]
Tim LEELAHAPHAN Thailand (662) 658 1420 [email protected]
JUNIMAN Chief Economist, BII Indonesia (62) 21 29228888 ext 29682 [email protected]
Josua PARDEDE Economist / Industry Analyst, BII Indonesia (62) 21 29228888 ext 29695 [email protected]
MALAYSIA
WONG Chew Hann, CA Head of Research (603) 2297 8686 [email protected] • Strategy • Construction & Infrastructure
Desmond CH’NG, ACA (603) 2297 8680 [email protected] • Banking & Finance
LIAW Thong Jung (603) 2297 8688 [email protected] • Oil & Gas - Regional • Shipping
ONG Chee Ting, CA (603) 2297 8678 [email protected] • Plantations - Regional
Mohshin AZIZ (603) 2297 8692 [email protected] • Aviation - Regional • Petrochem
YIN Shao Yang, CPA (603) 2297 8916 [email protected] • Gaming – Regional • Media
TAN Chi Wei, CFA (603) 2297 8690 [email protected] • Power • Telcos
WONG Wei Sum, CFA (603) 2297 8679 [email protected] • Property & REITs
LEE Yen Ling (603) 2297 8691 [email protected] • Building Materials • Glove Producers
CHAI Li Shin (603) 2297 8684 [email protected] • Plantation • Construction & Infrastructure
KANG Chun Ee (603) 2297 8675 [email protected] • Consumer
Ivan YAP (603) 2297 8612 [email protected] • Automotive
LEE Cheng Hooi Regional Chartist (603) 2297 8694 [email protected]
Tee Sze Chiah Head of Retail Research (603) 2297 6858 [email protected]
HONG KONG / CHINA
Howard WONG Head of Research (852) 2268 0648 [email protected] • Oil & Gas - Regional
Alexander LATZER (852) 2268 0647 [email protected] • Metals & Mining - Regional
Jacqueline KO, CFA (852) 2268 0633 [email protected] • Consumer
Karen KWAN (852) 2268 0640 [email protected] • Property & REITs
Osbert TK TANG, CFA (86) 21 5096 8370 [email protected] • Transport & Industrials
Ricky WK NG, CFA (852) 2268 0689 [email protected] • Utilities & Renewable Energy
Simon QIAN, CFA (852) 2268 0634 [email protected] • Telecom & Internet
Steven ST CHAN (852) 2268 0645 [email protected] • Banking & Financials - Regional
Warren LAU (852) 2268 0644 [email protected] • Technology – Regional
William YANG (852) 2268 0675 [email protected] • Technology – Regional
INDIA
Jigar SHAH Head of Research (91) 22 6623 2601 [email protected] • Oil & Gas • Automobile • Cement
Anubhav GUPTA (91) 22 6623 2605 [email protected] • Metal & Mining • Capital Goods • Property
Urmil SHAH (91) 22 6623 2606 [email protected] • Technology • Media
SINGAPORE
NG Wee Siang Head of Research (65) 6432 1467 [email protected] • Banking & Finance
Gregory YAP (65) 6432 1450 [email protected] • SMID Caps – Regional • Technology & Manufacturing • Telcos
Wilson LIEW (65) 6432 1454 [email protected] • Property Developers
ONG Kian Lin (65) 6432 1470 [email protected] • S-REITs
James KOH (65) 6432 1431 [email protected] • Consumer - Regional
YEAK Chee Keong, CFA (65) 6432 1460 [email protected] • Offshore & Marine
Derrick HENG (65) 6432 1446 [email protected] • Transport (Land, Shipping & Aviation)
WEI Bin (65) 6432 1455 [email protected] • Commodity • Logistics • S-chips
John CHEONG (65) 6432 1461 [email protected] • Small & Mid Caps • Healthcare
TRUONG Thanh Hang (65) 6432 1451 [email protected] • Small & Mid Caps
INDONESIA
Wilianto IE Head of Research (62) 21 2557 1125 [email protected] • Strategy
Rahmi MARINA (62) 21 2557 1128 [email protected] • Banking & Finance
Aurellia SETIABUDI (62) 21 2953 0785 [email protected] • Property
Anthony YUNUS (62) 21 2557 1136 [email protected] • Consumer • Poultry
Isnaputra ISKANDAR (62) 21 2557 1129 [email protected] • Metals & Mining • Cement
Pandu ANUGRAH (62) 21 2557 1137 [email protected] • Infrastructure • Construction • Transport
Janni ASMAN (62) 21 2953 0784 [email protected] • Cigarette • Healthcare • Retail
PHILIPPINES
Luz LORENZO Head of Research (63) 2 849 8836 [email protected] • Strategy
Laura DY-LIACCO (63) 2 849 8840 [email protected] • Utilities • Conglomerates • Telcos
Lovell SARREAL (63) 2 849 8841 [email protected] • Consumer • Media • Cement
Rommel RODRIGO (63) 2 849 8839 [email protected] • Conglomerates • Property • Gaming • Ports/ Logistics
Katherine TAN (63) 2 849 8843 [email protected] • Banks • Construction
Ramon ADVIENTO (63) 2 849 8845 [email protected] • Mining
THAILAND
Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] • Consumer / Materials
Jesada TECHAHUSDIN, CFA (66) 2658 6300 ext 1394 [email protected] • Financial Services
Kittisorn PRUITIPAT, CFA, FRM (66) 2658 6300 ext 1395 [email protected] • Real Estate
Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 [email protected] • Services Sector
Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 [email protected]
Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 [email protected] • Strategy
Padon VANNARAT (66) 2658 6300 ext 1450 [email protected] • Strategy
Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 [email protected] • Auto • Conmat • Contractor • Steel
Suttatip PEERASUB (66) 2658 6300 ext 1430 [email protected] • Media • Commerce
Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 [email protected] • Energy • Petrochem
Termporn TANTIVIVAT (66) 2658 6300 ext 1520 [email protected] • Property
Woraphon WIROONSRI (66) 2658 6300 ext 1560 [email protected] • Banking & Finance
Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 [email protected] • Transportation • Small cap
Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected] • Electronics VIETNAM LE Hong Lien, ACCA Head of Institutional Research (84) 844 55 58 88 x 8181 [email protected] • Strategy • Consumer • Diversified • Utilities
THAI Quang Trung, CFA, Deputy Manager, Institutional Research (84) 844 55 58 88 x 8180 [email protected] • Real Estate • Construction • Materials
Le Nguyen Nhat Chuyen (84) 844 55 58 88 x 8082 [email protected] • Oil & Gas NGUYEN Thi Ngan Tuyen, Head of Retail Research (84) 8 44 555 888 x 8081 [email protected] • Food & Beverage • Oil&Gas • Banking
NGUYEN Trung Hoa, Dy Head of Retail Research (84) 8 44 555 888 x 8088 [email protected] • Macro • Steel • Real estate
TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 [email protected] • Technology • Utilities • Construction
TRUONG Quang Binh (84) 4 44 555 888 x 8087 [email protected] • Rubber plantation • Tyres and Tubes • Oil&Gas
PHAM Nhat Bich (84) 8 44 555 888 x 8083 [email protected] • Consumer • Manufacturing • Fishery
NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 [email protected] • Port operation • Pharmaceutical • Food & Beverage
May 5, 2014 13
Regional Materials Sector
APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.
This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.
US
This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.
UK
This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.
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Regional Materials Sector
Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.
Singapore: As of 5 May 2014, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.
Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
As of 5 May 2014, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.
OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system BUY Return is expected to be above 10% in the next 12 months (excluding dividends) HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) SELL Return is expected to be below -10% in the next 12 months (excluding dividends)
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.
DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.
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Regional Materials Sector
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