Full Earnings Call Transcript (Audio) for HEG Limited - Q3FY20
To listen, click on the youtube link.
Highlights
- Total world crude steel production was at 3.4%. Without China growth was -1.75% last year. China produces 53% of all steel in the world.
- Slowdown in demand and tensions between US and China led to overall decline. Iran sanctions blocked HEG's participation in Iran's steel production.
- HEG has seen less buying in the last few quarters. Buying cycles are long, from 6-32 weeks.
- Input coke is imported and there is substantial coke in stock. Still keep consuming high-priced coke despite changes in demand and prices of electrodes.
- Customers overbought in 2018 and first half of 2019. Now demand has plateaued, resulting in the drop in HEG numbers.
- Pursuing expansion of 20,000 tonnes which should be operational in 2022. This will give HEG an advantage in costs, and management believes by then the market will have stabilized.
