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Brazil's Vale iron ore output hits 2nd-qtr record

Thu Jul 20, 2017 01:22pm GMT

Brazil's Vale SA , the world's largest iron ore producer, said on Thursday that second-quarter iron ore output rose 5.8 percent compared with the same period last year, hitting a fresh high for an April-to-June period.

Vale said iron ore production totaled 91.849 million tonnes last quarter, up from 86.823 million tonnes in the second quarter of 2016. It expects 2017 output to be close to the bottom of its forecast of 360 million to 380 million tonnes.

One Billion Tons of Iron Ore Headed for China as Miners Jump

Thu Jul 13, 2017 10:22am GMT

Iron ore imports by China this year are on course to exceed 1 billion metric tons by a comfortable margin, breaking 2016’s record, after first-half figures showed another jump in cargoes and highlighted the ability of the top steelmaker to absorb rising supplies. Miners’ shares advanced.

Shipments in June were 94.7 million tons, up from 91.5 million in May, according to customs data on Thursday. In the first six months, imports rose to 539 million tons, 9.3 percent higher than the same period in 2016. Last year, China only just beat the 1 billion ton mark, importing 1.024 billion tons.

Asia’s top economy has been pulling in ever-greater volumes of low-cost ore to meet resilient demand from mills, who’ve benefited from rising steel prices in the second quarter. The increase is aiding the largest miners including BHP Billiton Ltd. and Rio Tinto Group, as well as Brazil’s Vale SA, which is bringing on production from its giant S11D project. While iron prices are lower this year, they’ve rebounded since mid-June, gaining for four of the past five weeks.

“Steel output continues to be on the rise, which will boost consumption of iron ore,” said Zhao Chaoyue, an analyst at China Merchants Futures Co., who forecasts that full-year imports of the raw material will reach 1.08 billion tons. “Mills are making chunky profits, so they’re firing up production.”

Spot ore with 62 percent content delivered to Qingdao retreated 2.1 percent to $64.05 a dry ton on Wednesday after hitting a two-month high a day earlier, according to Metal Bulletin Ltd. Still, prices have lost 19 percent this year as analysts flagged prospects for rising global production.

China’s iron imports supplement local production, although domestic output is generally of lower quality than supplies from Australia and Brazil. Nationwide exports from Australia may rise to 885 million tons in 2018 and 897 million in 2019, from 851 million this year, according to a government forecast.

Shanghai rebar hits 3-1/2-month high on firm demand, spurs iron ore

Mon Jul 3, 2017 12:49pm GMT

Chinese steel futures on Monday climbed more than 3 percent to their highest since March, supported by firm demand in the world's top producer and data showing a recovery in China's manufacturing activity.

China's manufacturing sector cranked back into growth mode in June, expanding at the fastest pace in three months after unexpectedly contracting in May, as new orders and production rose, a private survey showed.

"The comment from our steel mill clients is they have quite a lot of demand and got a lot of orders in hand," said an iron ore trader in Shanghai. "They're quite comfortable selling their cargo at a good price."

The most-active rebar on the Shanghai Futures Exchange closed up 3.2 percent at 3,413 yuan ($503) a tonne, not far from its session peak of 3,415 yuan, the highest since March 16.

Powered by China's infrastructure push, Chinese construction steel producers are seeing their best profits in years, prompting them to boost output as prices rise. This year, rebar futures have gained almost 27 percent.

Increased steel margins have spurred mills' appetite for raw material iron ore, with spot iron ore prices rising 13.9 percent in June, the biggest increase for that month since 2009.

"We continue to see the iron ore rally gaining momentum in the short run as Chinese steel mill margins continue to remain elevated," Commonwealth Bank of Australia said in a note.

The most-traded iron ore on the Dalian Commodity Exchange rose 3.4 percent to end at 487 yuan a tonne, just shy of the intraday peak of 488 yuan, its loftiest since May 23.

China iron ore on track for best day in month on short covering rally

Tue Jun 27, 2017 10:18am GMT

Chinese iron ore prices rallied more than 4 percent on Tuesday and were on track for their biggest one-day gain in a month as investors bet on rising demand as steel mills boost output, prompting another rash of short covering

The most-traded iron ore contract on the Dalian Commodity Exchange rose as much as 4.1 percent to 449 yuan ($65.64) a tonne in morning trade, its highest since May 31. Iron ore was at 443.5 yuan at 0450 GMT.

The most-active steel futures rose 1.8 percent to 3,171 yuan per tonnes.

"High margins after the government's effort to eliminate low-grade steel are enticing mills to produce more steel, which increases the need for iron ore," said Zou Mingdong, Shanghai-based steel manager at Zhongcai Merchants Investment Group.

"However, the rising price doesn't change the fundamental situation of oversupply and weak demand."

Margins for ferrous metallurgy and the steel rolling business jumped 93.5 percent in the first five months this year, compared with same period in 2016, data from National Statistics Bureau showed on Tuesday.

"High margins may not last for long due to unpromising demand expectations and resumed capacities in mills," said Zou.

The crackdown on low-end steel production has been in focus recently ahead of a June 30 deadline for mills to halt induction furnaces producing rebar used for construction purposes.

Shutting low-quality steel furnaces is part of China's years-long effort to cut excess capacity and tackling pollution.

"Two decisive battles in the steel industry this year are thoroughly eliminating low-grade rebar and preventing (indusction furnances) from reopening," said Liu Zhenjiang, secretary general at China Iron and Steel Association, at an industry meeting last week in remarks published on Monday.

Open interest in the most-active iron ore contract on Monday fell 56,000 lots to 1.799 million lots, the lowest in nearly eight weeks, reflecting short covering as investors covered bearish bets.

China's May imports from North Korea 3rd lowest on record

Fri Jun 23, 2017 11:51am GMT

China's imports of North Korean goods in May fell by more than 30 percent from a year ago, data showed on Friday, the latest sign that China's ban on coal purchases from the isolated country continues to curb trade between the two neighbours.

The world's second-largest economy bought goods worth $123.8 million in May from North Korea, down 31 percent from a year ago and third lowest on records going back to June 2014, according to data from China's General Administration of Customs.

The total was up from $99.3 million in April, the lowest on record. The second weakest total was registered in March.

The data indicates that China's halt of North Korean coal imports on Feb. 26 has crimped Pyongyang's ability to raise hard currency through exports.

China's iron ore imports from North Korea in May, at 233,508 tonnes and worth $13.4 million accounted for 11 percent of the total for the month.

Chinese exports to North Korea in May rose to $319.8 million, up 11 percent from April and a third higher than in the same month last year.

The data came a day after the United States pressed China again to exert more economic and diplomatic pressure on North Korea to help rein in its nuclear and missile programs during a round of high-level talks in Washington.

On Friday, a U.S. official told Reuters that North Korea had carried out another test of a rocket engine believed to be part of its programme to develop an intercontinental ballistic missile.

China iron ore stabilises; Citi cuts forecasts as supply expands

Mon Jun 19, 2017 08:29am GMT

Chinese iron ore futures ticked higher on Monday along with steel prices but the steelmaking raw material is still under pressure amid a persistent glut.

Investment bank Citi said it has cut its iron ore price forecasts for this year and next, due to expanding supply and said it should fall below $45 a tonne for the market to rebalance.

Spot iron ore, which traded at just below $56 on Friday, has dropped 41 percent from this year's peak.

The most-traded iron ore on the Dalian Commodity Exchange was up 0.6 percent at 432.5 yuan ($63) a tonne, as of 0227 GMT. The contract, for September delivery, touched a seven-month low of 412.50 yuan last week.

Firmer steel supported iron ore, with the most-active rebar on the Shanghai Futures Exchange climbing 0.3 percent to 3,123 yuan per tonne.

But analysts at Citi see further downside risks, saying they expect more than 100 million tonnes in iron ore surplus this year, on top of over 60 million tonnes in surplus in 2016, citing expansion projects by top miner Vale in Brazil and the Roy Hill mine in Australia.

"As prices approach $50 per tonne, we may start to see lower output from Russia, Canada and Ukraine. When prices approach $45 per tonne, high-cost Australian and Brazilian miners could be under pressure to cut," they said in a report.

Citi slashed its 2017 average price forecast to $61 a tonne from $70, and to $50 from $53 for next year.

The bank expects iron ore stocks at Chinese ports, currently near their highest level in 13 years, to peak in the second-half of the year.

"We anticipate steel mills' restocking activities to gradually weaken, not only because expectations on a bearish iron ore outlook have grown, but also because Chinese banks have tightened credit lines to large steel mills and therefore mills are forced to purchase ores in cash," the analysts said.

Inventory of imported iron ore at major Chinese ports stood at 138.95 million tonnes on Friday, according to data tracked by SteelHome. The week before, the stockpiles reached 140.05 million tonnes, the highest ever on SteelHome's records that date back to 2004. SH-TOT-IRONINV

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 0.9 percent to $55.75 a tonne on Friday, according to Metal Bulletin.

China iron ore falls 6 pct to 6-mth low, steel sags despite upbeat PMI

Wed May 31, 2017 10:34am GMT

Iron ore futures in China tumbled 6 percent on Wednesday to the lowest since November, posting their biggest monthly decline in a year, amid lower steel prices and a glut of the raw material.

Industry data showing activity in China's steel industry expanded at the fastest pace in a year in May spurred gains in Shanghai steel futures earlier in the session. But steel later gave up those gains and slid nearly 4 percent as analysts warned demand may ease in the coming summer months when construction activity slows.

The most-traded iron ore contract on the Dalian Commodity Exchange fell as low as 423.50 yuan ($62) a tonne, its lowest since November 2016. It closed down 6 percent at 424.50 yuan.

The contract lost 16.7 percent in May, its biggest monthly decline since May 2016.

Chinese markets reopened on Wednesday after being shut for public holidays on Monday and Tuesday.

The decline in Chinese futures, along with a stubborn glut, has fuelled a nearly 40 percent drop in spot iron ore prices from this year's peak.

In the medium to longer term, iron ore should move towards $50 per tonne, said Julius Baer analyst Carsten Menke.

"This is based on the assumption that Chinese steel production has moved beyond its structural peak and would decline steadily over the coming years," Menke said.

"At the same time, we see iron ore supplies from Australia and Brazil expanding and displacing higher-cost Chinese volumes."

Last week, iron ore stocks at China's ports reached 136.6 million tonnes SH-TOT-IRONINV, the highest since consultants SteelHome began tracking the data in 2004. That is enough to build the Eiffel Tower in Paris more than 13,000 times over.

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB was unchanged at $58.50 a tonne on Tuesday, according to Metal Bulletin. The spot benchmark has lost 15 percent in May, heading for its steepest monthly drop in a year.

The most-active rebar on the Shanghai Futures Exchange closed down 3.6 percent at 3,095 yuan a tonne. That was its biggest single-day drop in almost a month.

Steelmaking coal also slumped. Coking coal traded on the Dalian exchange fell by the exchange-set limit of 9 percent to end at 949 yuan per tonne and coke dropped 7.6 percent to 1,426.50 yuan.

Fortescue warns of greater volatility in iron ore

Tue May 23, 2017 09:16am GMT

One of the world’s largest producers of iron ore has warned that the steelmaking ingredient may need to fall further to counter the effect of a glut of Chinese supply that has made it one of the worst performing commodities of the year.

The iron ore price has tumbled from around $95 a tonne in February to $60 today, reflecting mounting stocks of lower grades of material at China’s ports. This year’s decline is a “significant price signal”, said Nev Power, chief executive of Fortescue, the world’s fourth-largest producer. “I think at $60 a lot of that additional production will start to exit, but if it doesn’t exit as quickly enough to rebalance the market then we could see more volatility.’’ The market is grappling with a build-up of lower-grade iron ore in China, as a rising steel price prompts manufacturers to use a higher-grade variety that allows them to produce steel more speedily. Inventory of iron ore at China’s ports rose to a record 136m tonnes on Friday, according to data from SteelHome. Iron ore prices have slumped by just over a fifth this year, with particularly sharp falls in March and April. That is in sharp contrast to other commodities, including copper and aluminium, which are also heavily dependent on China and have advanced so far in 2017. As steel supply increases to meet demand, a weakening in prices will lead steel mills to use lower-grade iron ore and help reduce port inventories within three to six months, Mr Power said. A lot of the port stocks are used to secure trade financing or are held by large traders, which means the unwind is likely to be gradual, Mr Power added. “We think people will want to see a more orderly reduction in those stocks,” Mr Power said. “Rather than it happen sharply.” Analysts at Barclays note that “iron ore port stock volumes are generally viewed as of low quality and, when steel prices are high (and mill profitability is high) they are disfavoured relative to higher-quality lump and pellet ores.” Steel rebar prices in China are up 17 per cent this year, boosted by efforts the government has made to crack down on pollution by curbing production. Shares in Fortescue, which produces around 160m tonnes a year and competes against Rio Tinto, BHP Billiton and Vale, are down 23 per cent over the past three months, but are up 77 per cent over the past year. The company, which used debt to fund a $9.2bn expansion over the past few years, refinanced some of that debt this month with a $1.5bn bond. The company’s net debt is estimated to fall from $5.19bn in 2016 to $2.7bn this year, according to analysts at Credit Suisse. “That strategy is now paying enormous benefits for us, since we are able to very quickly de-gear the company,” Mr Power said. Fortescue is also trying to diversify away from iron ore through exploration in Australia and Ecuador. It is currently examining its reserves of lithium, a key metal for batteries, on its tenements in the Pilbara, Mr Power said. “We’ve got some lithium but is it big enough to be something we sell on to others or develop ourselves, I don’t know at this stage,” he said.

Hong Kong-listed IRC says could reopen Russia iron ore mine

Wed May 17, 2017 11:56am GMT

Commodity company IRC Ltd on Wednesday said it was considering restarting its 1.1-million tonnes per year iron ore mine in the far east of Russia, the latest sign of revival in a sector shaking a years-long downturn.

"Following the positive price movements in 2017 and the recent stabilization in the bulk commodity market, the board is considering restarting Kuranakh, including options of potential cooperation with other parties," the Hong Kong-listed company said in a statement.

The Kuranakh mine, in Russia's Amur region, was producing about 1.1 million tonnes of iron ore concentrate each year before it was put under 'care and maintenance' in early 2016. It was also churning out about 200,000 tonnes a year of ilmenite, a titanium ore.

Iron ore prices have surged 30 percent and ilmenite by 150 percent since the mine was suspended, the company said.

However, the statement comes at a time when futures prices in China have toppled off record highs hit in recent months, dampened by concerns about a slowdown in demand in the world's top importing nation and a growing glut as stockpiles have ballooned.

The most-active Chinese iron ore futures have fallen by about 30 percent since hitting record highs of 650.5 yuan ($94.49) per tonne in February.

Rocketing prices prompted some Chinese producers to reopen mines after suffering years of tepid demand.

Shanghai steel edges up after 3-day slide, but glut weighs

Tue May 16, 2017 10:14am GMT

Shanghai rebar steel edged higher on Tuesday after a three-day fall, but gains were limited by concerns over plentiful supply and slow growth in demand in top consumer China.

Optimism for the future lent some support, though, with Chinese President Xi Jinping pledging $124 billion for his new Silk Road plan that aims to expand investments in Asia, Africa and Europe and boost demand for raw materials such as steel.

The most-active rebar on the Shanghai Futures Exchange was up 0.4 percent at 2,992 yuan ($434) a tonne by the midday break. The construction steel product hit a one-week low of 2,925 yuan on Monday.

"We remain positive on Chinese steel demand but we also continue to believe Chinese steel output rates are unsustainably high, and will eventually decline," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

"That should translate through to weaker iron ore demand and prices, too."

China produced a record 72.78 million tonnes of crude steel in April, official data showed on Monday, as mills anticipated stronger demand with the government committed to boost infrastructure spending.

But traders say steel consumption has not been as brisk as many in the market had expected, bloating stocks of raw material iron ore at Chinese ports to the highest in at least 13 years.

Inventory of imported iron ore at 46 Chinese ports reached 134.25 million tonnes SH-TOT-IRONINV on May 12, up 2.3 million tonnes from the previous week, according to data tracked by SteelHome consultancy.

It was the highest such inventory since SteelHome began compiling the data in 2004.

Iron ore on the Dalian Commodity Exchange was up 0.8 percent at 457.50 yuan a tonne, after touching a four-month trough of 442.50 yuan on Monday.

Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.9 percent to $60.80 a tonne on Monday, according to Metal Bulletin.

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 (www.miit.gov.cn).

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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Dear IronOreTeam members,

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Chloe

Chloe | IRON ORE TEAM

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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.


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