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Walter Energy, Inc. Message Board

  • blackboxfund blackboxfund Jul 10, 2013 6:37 AM Flag

    When the Chinese close the inefficient Steel Mills this year I expect a boom in Met and Steel prices

    Remember WLT coal is one of the BEST in the World and there is decades of it left in their mines!
    This is
    What everyone already knows ... But it is the longer term outcome that they have yet to predict !

    China’s economic planners have sought to rein in steel industry growth since at least 2004, when work on a 10.6 billion yuan project in the eastern province of Jiangsu was halted. Yet annual capacity has risen to 970 million metric tons, according to the steel association, exceeding the industry’s output of 716.5 million tons in 2012. Output is seven times larger than that of Japan, the No. 2 producer.

    “Industries that face overcapacity problems will likely go through a tough restructuring in the second half and we expect these industries to experience corporate defaults,” Nomura economist Zhang Zhiwei wrote in a June 20 note.

    We believe continuing challenges in the Chinese steel industry and Baosteel’s significant capital spending will limit any major improvement in the company’s financial strength,” S&P said in a June 13 statement. “The intense competition in the steel industry in China constrains domestic steel prices.”

    Vice Premier Zhang Gaoli said on May 15 that China would “strictly forbid” approval of steel, cement, aluminum-smelter and ship-building projects, according to the central government’s website. Severe punishment will be meted out to steel companies that sidestep regulations since they pollute the air “heavily,” the Economic Information Daily reported July 1, citing Liu Bingjiang, an official at the Ministry of Environmental Protection.

    MANDATORY ... STEEL MILL CLOSURES ARE TAKING PLACE in China NOW .. shut down or be executed
    This can only be good for the long term pricing of Steel products and high quality Met Coal !

    Of course most people will sell these current headlines and buy only when everything looks great to the steel and coal analysts again,

    however then you will be paying $ 60 plus for WLT shares next summer !

    Sentiment: Strong Buy

 
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