None of us know for sure how strong 2h09 will be for CHGS.
But there are some sign posts that point the way. From a BASML document this morning:
"Monthly output hitting new high. 52.3Mt of crude steel output in Aug creates a new historical high, which is annualized at 615Mtpa, +23%yoy & +3%mom.
.
.
.
Merrill Lynch revised up 2009 crude steel output forecast to 545Mt, and
there’s still upside risk.
.
.
.
Record high monthly apparent consumption of crude steel. Driven by the new high of crude output, China’s apparent crude steel consumption broke the record for the 4th consecutive month to 52Mt in Aug, +2% higher than the previous record high in Jul, & +48%yoy. Jan-Aug total apparent consumption increased 17%yoy to 371Mt."
And lest we forget, First Solar recently inked a deal for a massive solar project in Inner Mongolia. The targeted capacity from solar in the PRC's energy plan continues to go up & up. Things like that are going to drive precision abrasives, which are likely to be CHGS highest margin product. Whether or not we'll see follow through from that this year remains to be seen, but based on revenue guidance for this product line we are likely to see something positive.
Finally, I would point out what CRR said on their last conference call:
"<Q – Steve Ferazani>: Okay. And then, just the last question was just on utilization in the Chinese facility and sort of long-term view of that operation?
<A – Gary Kolstad>: We’re running it pretty hard. I can say that."
This is all the more important when you consider what they said earlier in the call:
"Internationally, our China operation has had to contend with a large number of domestic competitors."
So the signs indicate that every single one of CHGS business segments are operating on all cylinders.
AI
