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Vale sees 2018 iron ore prices not much lower than this year

Thu Dec 7, 2017 08:23am GMT
Brazilian miner Vale’s chief executive said on Wednesday he does not expect iron ore prices to be much lower next year compared with 2017. 
Speaking at an investors’ event in New York, Fabio Schvartsman also said the company would do everything to resume operations as soon as possible at the Samarco mine, a joint venture with BHP Billiton that has been closed since a tailings dam collapsed in 2015, killing 19 people.

Shanghai rebar jumps nearly 3 pct on demand hopes, lean supply

Tue Nov 21, 2017 01:49pm GMT

Chinese rebar steel futures climbed almost 3 percent on Tuesday, gaining for a second straight day on tighter supply and expectations that demand in the world’s top consumer would bounce back when production curbs are lifted after winter.

Chinese steel mills, mainly across the country’s north, have been ordered to curb output during winter as part of Beijing’s campaign to limit air pollution. The curbs apply from this month through March.

“Investors continue to look towards the pent up demand in early 2018 when the winter production constraints are removed,” ANZ analysts said in a note.

The most-active rebar contract for May delivery on the Shanghai Futures Exchange closed up 2.7 percent at 3,763 yuan ($567) a tonne.

Rebar prices were also supported by tighter supply as winter output curbs are enforced.

Inventory of rebar among Chinese traders had fallen to 3.61 million tonnes as of Nov. 17, the lowest level in a year, according to data compiled by SteelHome consultancy. SH-TOT-RBARINV

Steel inventory at both distributors and mills has “dropped materially”, reflecting the winter production cuts, Morgan Stanley analysts said in a report.

Gains in steel prices helped lift raw material iron ore. The most-traded iron ore for January delivery on the Dalian Commodity Exchange closed 1 percent higher at 470 yuan per tonne.

On Monday, iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 1.4 percent to $63.47 a tonne, the highest since Sept. 27, according to Metal Bulletin.

The increase in iron ore prices came even as stockpiles of the steelmaking commodity continued to rise in China.

Inventory of imported iron ore at China’s major ports reached 138.48 million tonnes as of Friday, the most since Aug. 4, SteelHome data showed. SH-TOT-IRONINV

“We have been cautious in reading too much into port stockpiles given that a large proportion of it is low-grade,” said Commonwealth Bank of Australia analyst Vivek Dhar.

“China’s steelmakers have shown a preference for higher grade ores, as well as lumps, to boost productivity and limit emissions. That preference, which looks structural, suggests that the iron ore market is segmenting based on quality.”

Coking coal rose 2.8 percent to 1,227.50 yuan a tonne and coke climbed 2.9 percent to 1,917.50 yuan.  


China iron ore slides, coke cuts gains as demand woes prevail

Thu Nov 9, 2017 10:29am GMT
Chinese iron ore futures pulled back from a seven-week high in volatile trading on Thursday as investors took profits in the steelmaking raw material, demand for which was at risk as many steel mills cut output as part of Beijing's fight against smog.
Other steelmaking ingredients - coking coal and coke - also retreated from multi-week peaks after rallying in morning trade, along with rebar steel futures.
The most-traded iron ore contract on the Dalian Commodity Exchange closed down 1.2 percent at 460.50 yuan ($69) a tonne, after rising as much as 2.9 percent to an intraday peak of 479.50 yuan, its strongest since Sept. 21.
The morning run-up in the ferrous market may have been largely due to speculative investors aiming for quick gains, said a coke trader in Tianjin.
Demand for iron ore and coking coal may reduce, the trader said, as northern Chinese cities require their steel mills to cut output over winter, or from this month through March, as part of China's campaign for clearer skies.
"Given the steel mills are about to switch off and stockpiles already accumulated the next leg of physical buying is happy to wait for now it seems," Matt France, head of institutional sales for metals in Asia at Marex Spectron, said in a note.
After surging as much as 5 percent to a a seven-week high, coking coal ended up 2.1 percent at 1,207.50 yuan per tonne. Coke closed nearly flat at 1,839 yuan after earlier rallying 5.8 percent to a three-week peak.
The most-active rebar on the Shanghai Futures Exchange , which touched a two-week high of 3,846 yuan intraday, ended at 3,760 yuan, up 0.7 percent.
In the spot market, iron ore prices continued to slip from this week's highs amid slow demand.
Iron ore for delivery to China's Qingdao port eased 0.6 percent to $62.26 a tonne on Wednesday, according to Metal Bulletin. The spot benchmark reached a six-week high on Monday.
China's iron ore imports fell 23 percent in October from a record level in the previous month to 79.49 million tonnes, data on Wednesday showed, and analysts say purchases will remain low in coming months as Beijing enforces the production restrictions over winter. "With swathes of China's industrial sector curtailed or on halt for the environmental related outages, steel producers still producing are drawing upon inventories, lessening the need for spot (iron ore) imports," Barclays analysts said in a note.

Fortescue Q1 iron ore shipments up, price forecast down

Thu Oct 26, 2017 08:00am GMT

Fortescue Metals Group Ltd on Thursday reported a slight rise in fiscal first-quarter iron ore shipments, but also warned its ore was selling at a greater discount than expected.

The world’s fourth-largest producer of iron ore said shipments rose to 44 million tonnes in the three months to Sept. 30 versus 43.8 million tonnes in the same period a year ago.

Fortescue Chief Executive Nev Power said the miner was at the same time factoring in a reduced average realised price between 70 and 75 percent of the benchmark 62 percent grade index, down from a previous forecast of 75 to 80 percent.

Fortescue stock closed down 4 percent to A$4.84, against a slightly firmer overall market.

“Despite maintaining full-year guidance and continuing along the path of cost reduction, it looks like the broader market was expecting more from Fortescue today,” said Kurt Mayell, Asian equity hedge analyst, CMC Markets Asia Pacific Pty Ltd.

Power told reporters a drive in China to reduce steel mill activity over the winter to fight pollution was pushing mills there to import higher-grade ores than the 56.7 percent grade Fortescue mines, paying premiums for the higher-quality metal.

Fortescue has historically received a discount of 10 percent to 15 percent to the benchmark, but in the 2017 financial year it recorded a sales discount of 23 percent, which ballooned to 29 percent in the first quarter of fiscal 2018.

“We are going to see steel mills continue to pay very high premiums for higher grade iron ores to try and increase production,” Power said.

China is the biggest market for seaborne iron ore. It imports about 1 billion tonnes a year, mainly from Australia and Brazil. Iron ore .IO62-CNO=MB was last quoted at $62.42 a tonne.

Fortescue’s production costs averaged a record low $12.15 per wet metric tonne over the quarter, 10 percent less than the year-ago period. And the company said it maintained its cost target for this year at $11 to $12 a tonne.

Its cost structure puts Fortescue near or below the average costs of bigger rivals Rio Tinto , Vale and BHP .

China steel rises as market eyes winter cuts; iron ore, coal slide

Mon Oct 9, 2017 08:25am GMT
Shanghai steel rebar futures jumped nearly 3 percent on Monday as Chinese markets reopened after a week-long holiday, with investors anticipating production cuts in the world's top steel producer as the country fights smog.
Prices of steelmaking raw materials iron ore and coking coal fell, reflecting worries over weaker demand.
Chinese authorities have ordered heavily air-polluting industries including steel to curb output and cut emissions during the four-month winter heating period that typically begins on Nov. 15.
Some cities have already ordered its mills to reduce output. The city of Handan in the top steelmaking province of Hebei has told its steel mills to halve output from Oct. 1 until March. The most-active rebar on the Shanghai Futures Exchange rose as much as 5.3 percent from the close on Sept. 29 to 3,795 yuan ($573) a tonne, the highest since Sept. 21. The construction steel product later cut gains and settled at 3,701 yuan, up 2.7 percent.
Chinese markets were shut from Oct. 2 to 6 for the National Day holiday.
The main driver behind the spike in steel prices is the "winter cuts and we need to pay attention to detailed plans of the different provinces to measure the material impact on steel production and supply," said Kevin Bai, a consultant at CRU.
But Bai said the production cuts would also coincide with the seasonal downturn in consumption during winter, possibly muting any impact on supply and demand conditions.
If all 28 Chinese cities covered by the restrictions slash production by 50 percent, around 45.67 million tonnes of crude steel output will be lost, said Cao Ying, an analyst at SDIC Essence Futures, told an industry conference in Qingdao late last month. That is equal to nearly 6 percent of China's 2016 output.
Iron ore futures reversed initial gains to trade lower amid ample supplies. The most-traded iron ore on the Dalian Commodity Exchange closed down 2.1 percent at 442.50 yuan per tonne.
Stockpiles of iron ore at China's ports rose 2.35 million tonnes from the previous week to 133.2 million tonnes as of Sept. 29, just before China went on holiday, according to SteelHome consultancy. The increase in port stocks followed an eight-week decline.
Coking coal futures closed 3 percent lower at 1,091 yuan a tonne, after falling to as low as 1,076.50 yuan intraday, a level last seen on July 6. Coke slipped 0.8 percent to 1,884 yuan.

China steel, iron ore drop for 5th day; but outlook still upbeat

Mon Sep 11, 2017 01:20pm GMT
Chinese iron ore futures fell to their weakest level in almost a month on Monday, dropping for a fifth session along with steel prices as investors pared positions in the two commodities although the outlook for demand remained bright.
The losses were in line with a retreat in other China-traded commodities, with rubber sliding nearly 3 percent and nickel down almost 4 percent.
The most-active iron ore on the Dalian Commodity Exchange fell as far as 519 yuan ($80) a tonne, the lowest since Aug. 16. The contract cut losses to close at 533.50 yuan, down 2.2 percent.
Iron ore demand in China, the world’s top importer of the steelmaking commodity, remains firm particularly for high-grade material, said a Shanghai-based trader.
“Mills are looking for high-grade (iron ore) and they’re willing to pay the market level,” he said. “I think the futures market is not impacting the physical market.”
Futures prices have been in a range between 500 yuan and 600 yuan, he said, adding that only a drop below 500 yuan could fuel a more sustained decline in prices.
Reflecting firm appetite for the raw material, stocks of iron ore at China’s ports dropped for a sixth straight week to 133 million tonnes on Friday, according to SteelHome consultancy. SH-TOT-IRONINV
That was the lowest inventory at the ports since early May.
The most-traded rebar on the Shanghai Futures Exchange eased 1.2 percent to end at 3,915 yuan a tonne, but also off the session’s low of 3,835 yuan.
As with iron ore futures, Monday marked the fifth straight session of losses for the construction steel product which touched 4,194 yuan on Sept. 4, its loftiest since February 2013.
On the ground in China, the outlook for steel consumption is good “because we are in the peak season for demand”, said the Shanghai trader.
Chinese steel demand tends to pick up in September and October after the summer lull as construction activity increases.

Chinese steel, iron ore futures surge on industrial outlook

Fri Sep 1, 2017 10:23am GMT
Chinese rebar steel futures rose by as much as 6 percent on Friday, the biggest one-day gain since April 2016, buoyed by further signs of strength in Chinese industrial activity.
China’s manufacturing activity expanded at the fastest pace in six months in August, buoyed by a surge in export orders and higher prices, according to the private Caixin manufacturing purchasing managers index.
A day earlier, the official Purchasing Managers’ Index (PMI) rose to 51.7 in August from 51.4 a month earlier.
The positive data also boosted Chinese iron ore futures and was seen supporting U.S. dollar-denominated iron ore prices.
The most active rebar on the Shanghai Futures Exchange was trading up 5.7 percent at 4,070 yuan ($618.29) a tonne by 0600 GMT. The construction steel product was at its highest price since early 2013.
Iron ore for January delivery on the Dalian Commodity Exchange was up more than 4 percent, heading back towards five-month highs hit last week.
Benefiting from fatter margins, Chinese steel producers have boosted steel production and restocked on raw materials, prompting investment bank Macquarie to upgrade its iron ore price forecast for the third quarter to $73 from $50.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB stood at $78.91 a tonne, up 3.3 percent from the previous quote, according to Metal Bulletin.

China iron ore futures soar before new buying limits go into effect

Mon Aug 21, 2017 11:55am GMT
China's iron ore futures rose for a third day on Monday, soaring more than 6 percent, fuelled by concerns of shortages of high-grade iron ore and before curbs on futures purchases come into force.
The Dalian Commodities Exchange on Friday said it will limit the daily purchases and sales of contracts for delivery in January and February to 6,000 lots since Tuesday. The January contract is currently the most active iron ore future on the exchange. Each lot is 100 tonnes of ore.
"Administrative methods cannot change the imbalanced supply and demand situation," said Wang Yilin, analyst at Sinosteel Futures.
The most-active iron ore futures on the Dalian Commodities Exchange closed 6.6 percent higher to 596 yuan ($89.34) a tonne on Monday. The contract rose as high as 601 yuan, the highest level since March 20 this year.
Iron ore futures have climbed 10.8 percent over the past three sessions, the biggest three-day percentage gain since the three days ended Feb. 14, 2017.
Mills are churning out steel products with high-grade iron ore ahead of production curbs that are set to start before the beginning of the northern hemisphere winter.
China's top steel producing province Hebei said earlier this month it will impose capacity limits on steel mills in three cities, including city of Tangshan, during the winter season in an effort to tackle pollution.
The province also vowed last week to fulfil its capacity-cutting targets for this year in steel, cement, coal and glass by the end of September.
"Margins on long- and flat-products are good at mills, which supports them to keep full-load operation and purchase more raw materials even prices are hiking," said a supply manager at state-backed steel firm in Henan.
Analysts estimated that profits on steel products are now 600 to 1,000 yuan a tonne.
"It is unlikely to see the supply gap on high-grade iron ore to be filled until the middle of September, when the September contract approaches delivery," said Wang.
"No one wants to deliver at current price level."
The most-traded rebar futures on the Shanghai Futures Exchange rose 3.6 percent at 3,962 yuan a tonne.
Spot rebar prices rose 0.3 percent to 4,243.04 yuan a tonne on Friday, according to data on the Mysteel website.
Other raw materials also followed iron ore higher. The January coking coal contract edged up 0.4 percent to 1,472.5 yuan a tonne.
Coke futures on the Dalian Commodities Exchange rose 2.9 percent to 2,314 yuan a tonne.
The exchange also said on Friday that it will adjust the margins on coking coal and coke to 12 percent from Tuesday.

Steel and its raw materials surge in China amid firm demand outlook

Thu Aug 17, 2017 10:09am GMT
Chinese steel futures jumped more than 2 percent on Thursday to end a four-day losing streak amid a firm outlook for demand in the world's top consumer, fueling a rally in steelmaking raw materials iron ore and coking coal.
Coking coal surged by its 8 percent exchange-set limit to hit a record high, while iron ore climbed as much as 7 percent.
The recovery in steel and iron ore futures followed a four-day slide after the Shanghai Futures Exchange hiked transaction fees and imposed trading limits to tame speculative trading that lifted rebar futures to 4-1/2-year highs last week.
Rebar prices in the physical market have fallen much more slowly than futures prices in the past four days, indicating that underlying sentiment remains bullish, said Richard Lu, analyst at CRU consultancy in Beijing.
"The physical market has not completely collapsed. Traders did not sell their inventories with big discounts," said Lu, reiterating that most mills have full order books in August.
The most-active rebar on the Shanghai exchange closed up 2.1 percent at 3,809 yuan ($571) a tonne, after peaking at 3,860 yuan earlier.
Steel inventories among Chinese traders had been falling, indicating strong end-user demand. As of Aug. 11, inventories of rebar stood at 3.78 million tonnes, less than half of this year's peak of 8.4 million tonnes reached in February, according to data tracked by SteelHome consultancy. SH-TOT-RBARINV
Iron ore on the Dalian Commodity Exchange ended 5.6 percent higher at 554.50 yuan a tonne, after rising as far as 561.50 yuan.
Coking coal climbed the daily-limit of 8 percent to settle at 1,455.50 yuan a tonne, a record high. Coke rose 6.4 percent to 2,253.50 yuan.

China steel, iron ore struggle to recover after curbs

Wed Aug 16, 2017 10:20am GMT
Chinese steel and iron ore futures slipped for a fourth consecutive session on Wednesday as recent moves by the Shanghai exchange to increase trading charges kept the two commodities under pressure.
The China Iron and Steel Association last week put a surge in rebar steel futures down to speculative trading, prompting the Shanghai Futures Exchange to lift transaction fees and impose limits on intraday positions on some rebar futures contracts from this Tuesday.
That fueled a retreat in steel and iron ore prices from last Friday when the measures were announced.
The most-active rebar on the Shanghai Futures Exchange fell 1 percent to close at 3,707 yuan ($554) a tonne.
Iron ore on the Dalian Commodity Exchange eased 0.4 percent to 523.50 yuan a tonne. The steelmaking raw material fell as far as 518 yuan earlier, its weakest since July 31.
Expectations that Chinese steel mills in key producing areas such as Hebei province would cut output by up to 50 percent during winter, upon Beijing's orders to fight smog, spurred a rally in rebar futures last week, lifting prices to their strongest since 2013.
But data this week showing a slowdown in China's fixed-asset investment growth, particularly in property investment, suggested steel demand from the construction sector could soften, said Carsten Menke, analyst at Julius Baer.
"While the weakness of the July data should not be over-emphasized, it still fits our view of a moderate slowdown in China towards the end of this year," Menke said in a note.
"The construction sector should face further cyclical and seasonal headwinds, which should weigh on demand over the coming months," he said.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB dropped 1.4 percent to $73.68 a tonne on Tuesday, the lowest since Aug. 3, according to Metal Bulletin, slipping for a third straight day.
Coking coal outperformed other steelmaking futures on Wednesday, with the most-active contract on the Dalian Exchange climbing 4 percent to 1,358 yuan a tonne. Coke rose 1.1 percent to 2,119 yuan per tonne.
Meanwhile, Jinneng Co Ltd was ordered to shut its open-pit coal mines in the city of Jinzhong in Shanxi province following a deadly accident at one of its mines, state media reported. Shanxi is one of China's top producing coal regions.

CISA Key mills’ daily crude steel output up in early Jan

Tue Jan 26, 2016 10:21am GMT

The China Iron and Steel Association(CISA) said that the average daily crude steel output of large and medium-sized steel mills of China (all CISA members) totaled 1.5681 million tonnes in Jan 01-Jan 10 period, up 3.47 percent from last ten days( Dec 21-31, 2015).

China's large steelmakers lost $507 mln in Jan-Feb

Thu Mar 26, 2015 10:51am GMT

China's large and medium-sized steelmakers made a combined loss of 3.15 billion yuan ($507.1 million) in the first two months of this year, an industry official said on Thursday, as a supply glut and slower demand growth dampened prices.
Apparent consumption of crude steel in China, the world's top producer and consumer of the construction material, fell 7.5 percent in January and February, Wang Liqun, vice chairman of the China Iron & Steel Association (CISA) told an industry conference.

China steel firms turn overseas as domestic woes mount

Tue Mar 24, 2015 10:20am GMT

Laden with debt and struggling to make money as the world's No.2 economy loses momentum, China's steel mills do not appear obvious candidates for overseas expansion.

But the country's crisis-hit steel sector is calling for strong government backing for plans to ramp up foreign acquisitions, as it looks to escape weak demand-growth and soaring environmental costs at home.

In a draft of a revised restructuring plan for the industry issued late last week, Beijing included a line saying it would support mills' efforts to buy assets abroad, with attention now turning to more detailed measures that could be announced later in the year.

"There is capacity that we can shift abroad, to regions that need it like Southeast Asia and Eastern Europe, as well as places like Indonesia and Africa where demand for steel is huge but production capacity is very low," said Deng Qilin, Chairman of Wuhan Iron and Steel Group, China's No.4 producer.

Foreign expansion by the world's biggest steel sector would offer some support to prices of steelmaking ingredient iron ore .IO62-CNI=SI, which plunged to record lows this month as Beijing ramps up environmental checks that could shut more mills in an industry where production capacity is 300 million tonnes above demand.

The export market offered one of the few bright spots for Chinese producers last year, but trade barriers erected amid accusations that China has been dumping products overseas mean exporting is becoming more difficult, with firms increasingly looking to shift actual output abroad.

Beijing has already rolled out measures to broadly encourage the foreign expansion of Chinese industry including simplifying currency rules and making it easier to raise money through bond markets, with sectors such as nuclear at the forefront of the drive overseas.

At this year's full session of parliament, Wuhan Iron and Steel along with another major producer, Anshan Iron and Steel Group, urged the government to provide financial and policy support for the steel sector's expansion abroad.

China's top steelmaking province of Hebei has also called for greater backing for its plan to move 20 million tonnes of capacity overseas by 2023.

Some are already making the leap, with Hebei Steel Group, China's largest steelmaker, looking to build a 5-million-tonne-per-year steel project under a joint venture in Africa.

Shougang, one of the largest mills, in February started production at a Malaysian project with an annual capacity of 3 million tonnes.

A smaller company, Bazhou New Asia Metal Products Co. Ltd, bought a stake in an Indonesian firm in 2013 to build a steel strip project, with vice-president Xing Xiuying saying it made the move as there was little room to expand in China.

"Investing abroad will help China to cut the excess capacity at home in the long run, as some companies will shift their focus to overseas markets and thus reduce output and competition domestically."

Others have found moving more tricky, with the Baosteel Group and Wuhan Iron and Steel both dropping plans to build plants in Brazil, blaming high costs.

"It will depend on how much capital is eventually engaged in helping Chinese firms go abroad, but generally speaking, the overseas expansion strategy will have a positive impact on Chinese steelmakers in seeking new growth," said Lawrence Lu, analyst at Standard & Poor's Ratings Services in Hong Kong.

Some were more sceptical, questioning whether there would be cost advantages to shifting output.

"The government should not use this as a main solution to ease domestic overcapacity as any blind push would bring consequences," said Jiang Feitao, policy researcher at the China Academy of Social Sciences.

China large steelmakers' daily output falls 5 pct in early March

Thu Mar 19, 2015 11:37am GMT

Average daily output from China's large steel producers declined 5 percent to 1.682 million tonnes in the first ten days of March from the preceding 8-day period, data from the China Iron & Steel Association (CISA) showed on Wednesday.
Harsher environmental inspections and deepening losses have forced Chinese steel mills to cut output amid lukewarm steel demand in the world's top consumer. Rebar on the Shanghai.

China's Jan-Feb crude steel output falls 1.5 pct

Sat Mar 14, 2015 02:22am GMT

China's crude steel output fell 1.5 percent to 130.5 million tonnes for the first two months of 2015, government data showed on Wednesday, as a supply glut and slower demand growth led mills to bring forward scheduled maintenance to curb output.

Average daily steel output slipped to 2.212 million tonnes, according to Reuters' calculations based on data from the National Bureau of Statistics, although the figure was up 0.7 percent from December.

China's statistics bureau releases combined output data for the first two months of the year in order to avoid monthly data being skewed by the Chinese new year holiday.

"A slower economy has hit production in power-intensive sectors such as steel. And a weak property market has also piled pressure on steel demand," said Cao Yang, an analyst with Shanghai Pudong Development Bank in Shanghai.

Steel prices lost 28 percent during 2014, due to overcapacity and the economic slowdown, and industry sources expect more inefficient steel mills to shut down this year, given tougher environmental laws.

Production by large Chinese steel mills dipped for much of January and early February but jumped 8 percent in the final 10 days of February to 1.77 million tonnes a day.

China, the world's largest steel producer and consumer, set its annual economic growth at about 7 percent this year, the lowest rate in a quarter of a century. The "new normal" is expected to weigh down demand for commodities.

Steel production grew 0.9 percent to 822.7 million tonnes in 2014, it slowest rate in more than three decades, as its cooling economy curbed demand and the government moved to tackle overcapacity and pollution.

Li Xinchuang, the vice secretary general of the China Iron & Steel Association, forecast in December that Chinese steel production would rise to 834 million tonnes in 2015.

China steel exports plunge in February after tax changes

Tue Mar 10, 2015 05:07am GMT

Steel exports from top producer China fell sharply in February, indicating that Beijing's attempt to curb surging overseas sales by cancelling tax rebates on boron-added steel may have started to bear fruit.

Preliminary Chinese customs data showed that steel product exports in February were down 24.2 percent from January at 7.8 million tonnes, though they were still up 62.5 percent from a year ago.

"Given the China New Year distortions (in February) let's wait until the March data before getting too excited, but that's a big drop nonetheless," Nomura analysts said in a note.

Last year China's steel exports rose 50.5 percent to a record 94 million tonnes, with about 40 percent of the overseas shipments containing the chemical element boron to qualify for the tax rebate.

As such, the fall in exports last month provides some hope for an oversupplied industry struggling to absorb the flood of Chinese exports and battling with steel prices ST-CRU-IDX at their lowest since 2009.

However, the China Iron and Steel Association has forecast that steel exports will remain between 80 million and 90 million tonnes this year and there are some concerns that Chinese steelmakers could exploit other tax loopholes.

Exclusive: EU set to impose duties on Chinese, Taiwan stainless steel

Mon Mar 9, 2015 04:05am GMT

The European Union will impose anti-dumping duties later this month on imports of stainless steel cold-rolled sheet from China and Taiwan, according to two sources familiar with a European Commission proposal.

The Commission plans to set tariffs of about 25 percent for imports from China and of about 12 percent for Taiwanese product, following a complaint lodged in May 2014 by the European steel producers association, Eurofer.

The Commission will present its proposal to EU member states next week and by March 26 will put in place the duties, which are provisional pending the outcome of an investigation due to end in September.

Eurofer says that China and Taiwan shipped 620 million euros ($680 million) worth of cold-rolled stainless steel into the European Union in 2013, some 17 percent of the overall market, and were guilty of dumping, or selling at unfairly low prices.

A parallel investigation into alleged illegal subsidies for Chinese producers is also due to end in September.

Europe's largest stainless steel producers are Acerinox, Outokumpu and Aperam. Chinese and Taiwanese producers include Shanxi Taigang Stainless Steel Co, Baosteel <600019.SS > and Yusco.

The Commission, prompted by Eurofer, is also investigating alleged dumping of grain-oriented flat-rolled electrical steel, typically used in transformers, by producers in China, South Korea, Japan, Russia and the United States.

Eurofer is also seeking to prolong existing duties on Chinese imports of wire rod.

Eurofer told a news conference on Thursday that, despite a lower euro and a slow pick-up of European demand, European producers were still confronted with a massive increase of imports from Asia, and from China in particular.

Total Chinese steel exports rose to a historic peak of 93 million tonnes in 2014, Eurofer said, equivalent to 60 percent of total EU steel consumption.

Chinese steel exports to the EU increased to 4.5 million tonnes last year from 1.2 million tonnes in 2009.

Eurofer believes the large expansion of China's steel industry does not reflect cost advantages but is based on state-owned enterprises raising capital on preferential terms, as well as other forms of subsidy.

It also says China's exports include not just basic products, such as hot-rolled steel, but also high-end coated sheets.

Eurofer said it was also concerned by a potential export surge from Russian producers due to the lower rouble and depressed local economy. It has urged the Commission to monitor imports closely.

China's steel capacity likely to grow this year -industry ministry

Fri Feb 6, 2015 12:20pm GMT

Crude steel capacity in China, the world's top producing country, is likely to grow this year despite difficult market conditions as new projects are coming onstream, the Ministry of Industry and Information Technology (MIIT) said on Thursday.

Long-standing overcapacity, slower growth in demand and tighter credit have forced many Chinese steel mills to produce at a loss or at low profitability.

"Generally, oversupply in the steel sector is unlikely to improve this year, exports will drop slightly, steel prices will stay at low levels and steel mills' profitability may not be positive," MIIT said in a report on its website (

Investment in the ferrous metals smelting and processing industry fell 5.9 percent last year but remained at a relatively high level and there are still 2,037 new steel projects under construction.

China's crude steel capacity reached 1.16 billion tonnes at the end of 2014, with its production accounting for 49.4 percent of global output, MIIT said.

Some analysts expect capacity to increase by only about 10 million tonnes this year.

Despite the removal of an export rebate for boron-added steel products from this year, steel exports are expected to stay at elevated levels due to a continued supply glut at home and competitive prices, the ministry said.

The China Iron & Steel Association has forecast domestic crude steel output would fall 1.1 percent to 814 million tonnes this year, after rapid expansion over the past decade, as a slowing economy has hit demand for commodities.

China's apparent steel consumption fell 4 percent to 740 million tonnes last year, and steel demand is unlikely to improve much as Beijing is shifting its economic growth model and slowing fixed asset investment.

In order to minimise their risks on loans, banks have largely cut credit to Chinese steel mills since last year, leading to shutdowns and bankrupticies at some companies.

The debt-to-asset ratio for large steel mills dropped 0.8 percentage points to 68.3 percent last year but was still 11 percentage points higher than in 2007 when the industry experienced a boom.

Large Chinese steelmakers' daily output dips 5.1 pct in mid-Jan

Thu Jan 29, 2015 10:28am GMT

Production from China's large steel mills fell 5.1 percent over Jan. 11-20 to 1.694 million tonnes, data from the China Iron and Steel Association (CISA) showed, with producers responding to weak demand by cutting output.
Steel demand is traditionally weak in January, but output rose to its highest rate since October in the first 10 days of the month, adding to a supply glut that has sapped prices.

China eliminates 31.1 million tonne of steel capacity in 2014

Tue Jan 27, 2015 11:12am GMT

China has eliminated 31.1 million tonnes of steel production capacity last year, higher than expected, a senior official of the industrial ministry said on Tuesday, as Beijing seeks to ease overcapacity and improve air quality. 

China has also removed 81 million tonnes of cement production capacity, Mao Weiming, vice minister of the Ministry of Industrial and Information Technology, told at a presser in Beijing. 

China, the world's largest steel producer, earlier set the target of 27 million tonnes for the steel sector. 

Separately, Hebei province, the country's biggest steel-making region, has closed as much as 15 million tonnes of steel production capacity last year, meeting its target, but aims to shut only 5 million tonnes this year.

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BHP's copper output up 24% in September quarter

Thu Oct 18, 2012 06:53am GMT

Global resources giant BHP Billiton reported that copper output for the three months ended September 30 reached 273,900t, up 24% from the same period in the previous year, due to higher ore grades this quarter at its Escondida operation in Chile and the effects of a strike that impacted production in the year-ago quarter.

Output from Latin American operations grew by 32% to 235,700t, the company said in a statement.

The company's 57.5% share of output from Escondida amounted to 101,200t of copper in concentrate and 41,600t of cathode, representing increases of 103% and 26.4%, respectively. On a 100% basis, Escondida mined 103Mt of ore during the quarter, a 48.5% increase, with a 39.2% higher average head grade of 1.35% copper.

Escondida should see a 20% increase in copper output during fiscal 2013 after scheduled maintenance and tie-in activities were completed this quarter, according to the company.

Antamina in Peru contributed a record 40,200t of copper in concentrate in the 2012 quarter versus 30,300t in the year-ago quarter as milling rates continue exceeding nominal capacity, the company said. On a 100% basis, the mine registered throughput of 54.5Mt during the quarter, up from 44.2Mt, and an average copper head grade of 1.15% versus 1.11% year-on-year.

Antamina also contributed 14,514t zinc, up 62%, 919,000oz silver (-5.45%), 260t lead (155%) and 454t molybdenum (-23.7%). BHP Billiton holds a 33.8% stake in the mine.

The Spence and Cerro Colorado mines in Chile together produced 17,800t of copper cathode in fiscal Q1, a year-on-year decrease from 22,500t. The company also produces copper at the Olympic Dam mine in Australia and Pinto Valley in the US.

China: Inflation jumps as economy slows

Mon Sep 10, 2012 01:50am GMT

After four straight months of declines, consumer price inflation has finally edged up in China.

Chinese consumers paid 2% more in August than they did a year ago, the government's National Bureau of Statistics reported Sunday. That's up from a 1.8% increase in July -- a two-and-a-half year low.

China's annual inflation rate rose 2.0% in August, the government's National Bureau of Statistics reported Sunday, up from 1.8% in July -- a two-and-a-half year low.

Food prices, which account for more than a third of the inflation calculation, rose 3.4% during the month.

Household finances in China are especially susceptible to fluctuations in food prices, as many poor families spend large percentages of their income on food.

Still, inflation remains at very low levels. As recently as one year ago, China's consumer price index stood above 6% -- well north of the government's stated inflation rate target of 4%.

The very low rate should allow the government more flexibility in pursuing economic stimulus.

In July, officials said that annual economic growth dropped to 7.6% in the second quarter -- down from 8.1% the previous quarter.

The People's Bank of China twice lowered interest rates, and the central bank has also tried to spur growth by cutting the amount of money banks are required to hold in reserves.

But those measure seem to have fallen flat. Some analysts have recently lowered their growth forecasts for the rest of the year, while some noted that weakness is likely to extend into 2013.

On Friday, the government confirmed more action, this time in the form of a $157.7 billion investment in 55 new infrastructure products. Analysts said the move should help boost growth in the fourth quarter.

Zhiwei Zhang, and economist at Nomura, said in a research note that the projects -- which include 25 new subway lines -- are a sign that the government's policy stance "has become significantly more proactive."

China Aug official PMI hits 9-month low

Mon Sep 3, 2012 05:39am GMT

China's official factory purchasing managers' index fell to a lower-than-expected 49.2 in August from 50.1 in July, official data showed on Saturday, in a result that is likely to strengthen the case for further policy steps to bolster growth.

The official PMI dipped below 50, which demarcates expansion from contraction, for the first time since November 2011, in the latest sign that the world's second-biggest economy is struggling against global headwinds.

Economists polled by Reuters this week had expected the August official PMI to slip to 50.

China cut interest rates in June and July and has been injecting cash into money markets to ease credit conditions to support the economy that notched a sixth straight quarter of slower growth in the April-June period.

But analysts are divided over whether that will be enough to stop the slowdown extending to a seventh quarter.

The PMI's output sub-index eased to 50.9 in August from July's 51.8, the National Bureau of Statistics said.

A flash PMI published last week by HSBC plunged to a nine-month low of 47.8 in August, as new export orders slumped and inventories rose, a signal that a persistent slowdown in economic growth has extended deeper into the third quarter.

According to the latest Reuters poll, China's annual economic growth could pick up to 7.9 percent in the third quarter from a three-year low of 7.6 percent in the second quarter in response to government policy fine-tuning.

A raft of weaker-than-expected July data had cooled market expectations for any quick economic recovery, especially as the central bank sticks to its "prudent" policy stance for fear of reigniting property and inflation risks.

Still, analysts believe the central bank will continue to loosen policy further by cutting interest rates and banks' reserve requirement ratio in coming months to support growth.

The HSBC PMI has been below 50 for 10 straight months, reinforcing calls from analysts and investors for further measures from Beijing to support economic growth.

The official PMI generally paints a rosier picture of the factory sector than the HSBC PMI as the official survey focuses on big, state-owned firms, while the HSBC PMI targets smaller, private firms that have limited access to bank loans.

There are also differing approaches to seasonal adjustment in the surveys.

The final HSBC reading will be published on September 3, as will the National Bureau of Statistics' services PMI.

China threatens to burst Australia's iron ore bubble-Blog

Thu Aug 30, 2012 06:18am GMT

Marc Faber, the Swiss investor and ultra bear, says there have been four mega bubbles in the past 40 years. In the 1970s it was gold; in the 1980s it was the Nikkei, and in the 1990s it was the Nasdaq. Bigger than all of them, though, has been the iron ore bubble, a tenfold increase in prices in less than a decade.

Iron ore is the raw material for steel, production of which has rocketed as a result of China's economic boom. Consider the following facts. In the past 15 years, China has built 90 million new homes – enough to house the populations of the UK, France and Germany combined. A quarter of global steel demand is for Chinese property and Chinese infrastructure.

Commodity-rich countries, like Australia, have never had it so good. China takes 25% of Australia's exports and iron ore accounts for 60% of all the goods Australia sells to China. One reason Australia avoided recession during the global downturn of 2008-09 was that it had a well-run banking system. A much bigger reason was that the country had become a giant pit from which China could extract the minerals it needed for its industrial expansion. Money flooded into the country from sovereign wealth funds and hedge funds looking for AAA investments. The Australian dollar has soared, as have property prices.

China's economy is now slowing, and although the economic data is not particularly reliable, it seems to be slowing fast. The country has two million unsold homes, with another 30 million under construction. There is a glut of iron ore and the price is falling. Where does that leave Australia?

Horribly exposed, quite obviously. It has an over-valued currency, an over-valued property market, and its major customer is now desperately pulling every available policy lever in the hope of avoiding a hard landing. Whatever happens, the Australian dollar is a sell. Just how big a sell will depend on how successful Beijing is in reflating the Chinese economy.

China's CPI growth slows to 1.8 pct in July

Fri Aug 10, 2012 04:24am GMT

China's consumer inflation eased to its lowest rate in two and a half years in July, giving the government more leeway to loosen credit to spur the slowing economy.

The Consumer Price Index (CPI), a key gauge of inflation, grew to 1.8 percent year on year in July, the slowest rate since February 2010, the National Bureau of Statistics (NBS) announced Thursday.

The rate was 0.4 percentage points lower than the figure for June.

The Producer Price Index (PPI), a main gauge of inflation at the wholesale level, fell 2.9 percent in July from a year earlier.

The easing inflation is believed to be a result of the base effect. The CPI growth rate hit a 37-month high of 6.5 percent in July last year before gradually retreating as China's economy slowed for eight quarters in a row.

China July official factory PMI slips to 50.1, lower than expected

Wed Aug 1, 2012 03:36am GMT

China's official factory purchasing managers' index (PMI) fell to an eight-month low of 50.1 in July, suggesting the sector is barely growing, while a rival HSBC survey indicated the more market-sensitive private sector is starting to recover.

The HSBC PMI rose to a seasonally adjusted 49.3, its highest level since February and little changed from a flash, or preliminary, estimate of 49.5.

With both PMI readings around 50 -- a threshold dividing expansion from contraction -- the surveys signal that the private and state-backed parts of China's vast factory sector are stabilising - albeit at a relatively low level of growth.

"It is clear that the manufacturing sector is doing very poorly, and requires policy support," Dariusz Kowalczyk, senior economist at Credit Agricole-CIB in Hong Kong said.

"However, we want to highlight the fact that such levels of sentiment are still consistent with positive growth of industrial output," he wrote in a note to clients.

Indeed, both the official PMI and the HSBC version showed factory output at 50 or above. Government data showed industrial output in June rose 9.5 per cent from a year earlier.

Shanghai copper at lowest in over 1 mth on demand fears

Mon Jul 23, 2012 07:44am GMT

Copper prices retreated on Monday amid growing concerns of a spreading debt contagion in the euro zone as Spain risks becoming the fourth country in the bloc to seek a sovereign bailout, denting the outlook for metals demand worldwide.

Worries about the health of the global economy pushed Shanghai copper futures down more than 2.5 percent, bringing prices to their lowest since June 29. The most active November copper contract dropped as low as 54,540 yuan ($8,600) per tonne, its biggest percentage fall since June 4, before recovering some ground by the midday trading break.

Three-month copper on the London Metal Exchange had fallen 0.6 percent to $7,503.50 per tonne by 0418 GMT, extending losses after a decline of 2.4 percent in the previous session, the most since June 21.     

"Shanghai copper is mostly playing catch up with London copper, which fell steeply on Friday due to concerns about the Spanish economy," said a Shanghai-based trader. "Chinese investors are also more sensitive to bad news lately, given that China's economy is evidently slowing down while physical copper demand has been sluggish as well."

Looking forward, market players said they expected major governments to introduce more stimulus to stabilise the world economy, which has been dented by slowing growth in China, a shaky recovery in United States and mounting debt problems in the euro zone. Such policies are expected to boost metal prices, at least temporarily.

Investors grew jittery about Spain's finances after the tiny region of Murcia said it would seek financial assistance from the central government, and media reported that half a dozen local governments were ready to follow in the footsteps of Valencia, which has already requested help from the central government to stay afloat. 

Elsewhere in the euro zone, Greek Prime Minister Antonis Samaras said the country was in a "Great Depression" similar to the American one in the 1930s, two days before international lenders arrive in Athens to push for additional cuts needed for the debt-laden country to qualify for further rescue payments to keep it afloat.

Traders are awaiting manufacturing data from China and Europe, due on Tuesday, for further clues on the health of the global economy and its implications for metals demand.

"The next trading cues we are looking forward to are news of new stimulus measures in China and the United States, and concrete measures to deal with Spain's problems," said an analyst with a international trading firm. "The next stimulus measure to watch is an expected Bank reserve ratio cut by China.

But we don't think this will be rolled out in July since it would be too soon after the last interest rate cut."

The grim economic backdrop offset an International Copper Study Group report on Friday that said the global refined copper market was in a 384,000-tonne deficit from January to April 2012, up sharply from a 26,000-tonne deficit during the same period of 2011.

The report implied some support from fundamentals for copper prices at current levels, but bearish market sentiment and global economic uncertainties are weighing on the demand outlook and discouraging investors from buying.

China's Baotou plans to start rare earths trading exchange

Mon Jul 23, 2012 03:24am GMT

China's Baotou Steel Rare-Earth Hi-Tech will join six other firms to invest a total of 70 million yuan ($10.98 million) to start a rare earths trading platform in early August, the firm said in a statement late on Friday.

Each shareholder will invest 10 million yuan and hold around 14.29 percent stake in the company, said Baotou Rare Earth, China's top rare earths producer.

Baotou said the exchange will help to establish a unified physical trading platform, allowing more transparency in prices.

China is the world's top rare earth producer and accounts for more than 95 percent of the global output. The exchange will help the country exert more control over the pricing of 17 strategically important rare earth metals on the global market.

Currently, prices in China are published by several independent consultancies and most of the metals have fallen over the past few months due to weaker demand.

The exchange will be located in Baotou city in China's Inner Mongolia region, home to nearly half of the world's light rare-earths production, Baotou said.

Chinese GDP growth slows to 7.6%

Fri Jul 13, 2012 11:36am GMT

China’s growth fell to 7.6 per cent in the second quarter, its slowest since early 2009, as a property market downturn and weak exports weighed on the world’s second-biggest economy.

Over the past two months, as evidence of the slowdown has mounted, the government has shifted its policy to a pro-growth stance, which analysts say is likely to bring about a recovery in the second half of the year.

“The expectation for weakness in the second quarter was pretty strong. But the investment number is the surprise. There appears to have been a significant pick-up. That is policy beginning to work”, said Ken Peng, an economist with BNP Paribas in Beijing. “We are looking for a small rebound in the third quarter and a bigger rebound in the fourth quarter.”

The year-to-date investment figure jumped to 20.4 per cent last month from 20.1 per cent in May, an indication that the increase in investment in June alone must have been considerably stronger, following on the heels of the government’s moves to stimulate the economy.

The Chinese central bank cut interest rates last week, the second time in less than a month. Premier Wen Jiabao has also said that the government will look to increase public investment in order to stabilise the economy.

A steep drop in inflation, to just over 2 per cent from last year’s high near 7 per cent, has cleared the way for more aggressive policy easing.

The latest bank lending figures, published on Thursday, confirmed that the government is clearly trying to support growth. New loans reached Rmb920bn in June, up from Rmb793bn in May and more than expected.

Yet officials have also repeatedly vowed that they will not unleash a massive stimulus programme as they did in late 2008 when the global financial crisis erupted. That boom in spending and bank lending fuelled debt worries that China is still trying to contain as well as a property bubble that it has been trying to deflate.

Mr Wen has also been adamant that the government will not relax the measures that it has used to dampen property speculation, fearful that a big rebound in already lofty housing prices could ensue.

If the second quarter does indeed prove to be the trough of this economic cycle for China, commentators who have described the current downturn as a soft landing would have some vindication.

The peak-to-trough drop in growth would be 4.5 percentage points from 2010 to now. That contrasts with a plunge of 8 percentage points in the previous downturn, from 2007 to the start of 2009.

China's CPI hits 29-month of 2.2% in June

Mon Jul 9, 2012 11:52am GMT

Consumer price inflation in China accelerated at the slowest rate since January 2010 in June, as food costs eased, official data showed on Monday.

In a report, China’s National Bureau of Statistics said consumer price inflation rose by a seasonally adjusted 2.2% in June, slowing from 3.0% in May.

Analysts had expected Chinese CPI to rise by 2.3% in June.

Month-on-month, the consumer price index fell 0.6% in June, compared to a 0.3% drop in May.

Politically sensitive food costs decelerated to 3.8% from May's 6.4%.

The report also showed that producer price inflation fell by 2.1% in June, compared to expectations for a 1.9% decline. Producer price inflation declined 1.4% in May.