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Auto steel: the lighter the more promising(2009/9/15)

Experts at the 2009 International Conference for Auto Steel and Its Applications in Dalian have arrived at a consensus about the importance of greenfield, energy-saving auto steel to its producers. Since carbon dioxide (CO2) emissions from the vehicle-dominated transportation sector account for about one quarter of the world’s total CO2 emissions, outcries for tightening controls on car emissions have been mounting. Therefore, steelmakers are increasingly required to produce materials of high quality to meet this trend. As steel comprises 70 percent of the car structures, it is imperative for the industry to focus on the production of lighter, higher strength, precision and easier-cutting steel. Attempts have been made by various producers around the world to concentrate on light metal, high-strength compound materials as an alternative to the traditional steel-frame parts.

Steel export growth continues in August(2009/9/14)

Customs data showed China exported 2.08 million tons of steel products in August, up 270,000 tons from July, down 72.9 percent year-on-year; and exported 40,000 tons of coke, down 97.16 percent from a year earlier. The country imported 1.59 million tons of steel products in August, down 150,000 tons from the previous months and up 19.55 percent from the same period last year; 350,000 tons of billet, down 220,000 tons month-on-month; and 49.68 million tons of iron ore, up 32.83 percent from a year earlier. In the first eight months, China exported 13.24 million tons of steel products, down 68.4 percent; and 320,000 tons of coke, down 96.7 percent while importing 11.47 million tons of steel products, up 3.7 percent; and 404.90 million tons of iron ore, up 32 percent.

China opposes US duties on OCTG imports(2009/9/14)

China's Ministry of Commerce (MOC) expressed a strong protest against a United States preliminary decision to impose duties ranging from 10.9 percent to 30.6 percent on OCTG imports from China. A spokesman of the MOC said that the way the U.S. defined as a kind of state subsidies no matter OCTG producers bought round bar from state-owned or private suppliers was wrong, which resulted in higher subsidy rates and would "greatly hurt" the interests of Chinese enterprises. He stressed that the United States should stop new trade protectionism actions before the end of 2010 and shun trade remedies as the government promised in the G20 summit in London.

August steel output hits all-time high(2009/9/11)

Despite a 1,000 yuan per ton plunge in steel prices, China produced 51.65 million tons of crude steel in August with a daily output of 1.67 million tons, all breaking the record highs, according to the latest data from CISA. The figure equated to 608 million tons at an annual rate, far in excess of the 460 million tons first targeted early this year. Minister of Industry and Information Technology reckoned China’s steel capacity has surpassed 660 million tons, not mention to roughly 58 million tons of new capacity under construction, whereas apparent consumption would be short of 500 million tons this year. The price dives are supposed to gradually throw its weight on the market in September.

71 key mills profit 10.6 bln in July(2009/9/11)

CISA’s data showed China’s 71 large and medium-sized mills obtained a profit of 10.6 billion yuan in July, four of which suffered a loss with a total deficit of 215 million yuan. They produced 38.67 million tons of crude steel and 36.53 million tons of steel products in the month. The steel sector in 22 provinces and cities had a profit of 29.8 billion yuan in the first seven months. Small steelmakers uncovered by the CISA’s July data were supposed to produce 12.01 million tons of steel, 24.38 million tons of steel products, and make a profit of 7.5 to 10 billion yuan.

Falling steel prices extend to iron ore, coke(2009/9/9)

Domestic steel prices have fallen for four weeks running, though the pace is currently slowing. As a result, the price of iron ore and coke has also dropped. Indian fines grading 63.5 percent are being offered at about $82 per ton, down $6 per ton, or 6.8 percent, from last week. It is commonly thought that the drop below the $80 per ton mark is just a matter of time. The September monitoring price of coke in Shanxi was suggested by the Shanxi Coking Industry Association at 1,780 yuan per ton (FOT, duty unpaid), 100 yuan per ton lower than the previous month. The association also called on a strengthened output limit, say, at 60 to 70 percent of their normal capacity among local producers.

Iron ore imports fall in August(2009/9/4)

Spot iron ore vessel bookings to China in August by the world's two biggest exporters, Australia and Brazil, fell to a 9-month low, indicating strong demand from the world's top steel maker may be slowing as steel prices slump. Separate data showed on Tuesday that Brazil's iron ore exports, most of which goes to China, also dropped 8.4 percent to 23.3 million tonnes in August from their 2009 peak level in July, underscoring that China's iron ore buying spree may be losing some steam.

Chinese major mills see H1 profits plummeting(2009/9/2)

More than half of steelmakers releasing their half-year results suffered a loss with Ansteel, Laiwu Steel, Valin Steel, Liuzhou Steel and Tisco, to name a few, seen in the list. Ansteel lost 1.56 billion yuan, the worst among its peers, in the first half. Baosteel and Wisco reported a net profit of 669 million yuan and 505 million yuan respectively, down about 90 percent year-on-year. On the other hand, the steel sector in Hebei Province dominated by smaller mills with capacity below three million tons each enjoyed a nearly 9 percent growth in profitability in the first five months of this year, according the CISA.

Construction steel prices plunge in Beijing(2009/8/28)

Construction steel in the Beijing market has suffered the worst as the steel prices began to plummet from mid-August, with the price of rebar falling as much as 1,200 yuan per ton on average. On August 26, the prevailing offer of second-grade rebar dropped to 3,800 yuan per ton, compared to the peak level of 5,000 yuan per ton; and that of wire rod fell by 30 yuan per ton to 3,600 yuan per ton. In the Shanghai market, second grade rebar was offered at 3,600 yuan per ton, down 60 yuan per ton. High inventory and changes in market sentiments are said to be responsible for the apparent corrections.

Mills’ profitability hits 4-year low(2009/8/27)

 According to a report from Unbank, gross profit margin of China’s steel industry dropped by 4.53 percentage points to 5.28 percent in the first half of this year, the lowest since 2004. During the period, gross profit margin, profit margin and return on assets of large-sized steelmakers were 7.35 percent, 3.39 percent and 2.47 percent respectively; those of medium-sized mills were 3.67 percent, minus 0.11 percent and minus 0.06 percent; and those of small mills were 6.72 percent, 0.99 percent and 0.77 percent. Gross profits of large, medium and small producers were down 99.7 percent, 102.84 percent and 70.14 percent year-on-year respectively. Analysts say constrained by soaring costs and protracted stagnation in downstream sectors, the steel industry is experiencing an era of thin margin.

China steel prices plunge after July rises(2009/8/25)

 BEIJING, Aug. 22 (Xinhua) -- China's steel prices went through a crazy rise and fall within 20 days, with the biggest fall at 20 percent, according to figures from the country's leading industry information provider.
Steel prices plunged from this year's record high early this month, a culmination of price rises since late July when big steel plants took to raise prices.
Prices of deformed steel bars dropped from the highest 5,000 yuan (735 U.S. dollars) per tonne to 4,200 yuan, a decrease of 16 percent, and steel wires saw the highest decrease of 20 percent, from 4,850 yuan per tonne to 3,900 yuan as of Wednesday, according to the industry information provider MySteel.com.
Xu Xiangchun, analyst of Mysteel, said price hike led by major steel plants was the last straw to weigh down on the steel market and triggered the price slump.
Traders who sold stockpiles to cash in on earlier price rises also helped drive the prices lower, Yao Hongchao, president of a Henan steel trader told the China Securities Journal.
Other traders suffered huge losses as prices slumped, while steel producers had significantly reduced stockpiles when prices were high, said Zhang Ping, an analyst with Umetal, another industry information provider.
Steel price adjustment might continue for some time, said Zhang, as stockpiles continued to rise on lower trade and maintained supply.
He said price change was a technical adjustment at first, but it could be compounded by a change in macro policies, such as a slight adjustment in bank credit, and a bearish run of the stock market that may impact investor confidence.
Xu said signs showed steel prices had plunged too much and might overdive.
Zhang expected prices of deformed steel bars could stabilize at 3,700 yuan per tonne before overdiving.

Prices won’t rise unless production cuts(2009/8/24)

Domestic steel prices began to plummet from last week after 17 weeks of continuous rally. CISA general secretary Shan Shanghua attributed the sharp fall to overcapacity, claiming the steel prices would continue to dip if mills fail to slash their output for the rest of the year. Some of experts argued, however, the condition has something to do with the current off-season during July and August. Others believed it is simply a routine response to the unusual climbs in the second quarter due to de-stocking associated with the government four trillion yuan investment package, and expected a further 20 to 30 percent rise in prices for the rest of the year.

US electric steel targeted by China’s countervailing investigation(2009/8/21)

China’s Ministry of Commerce has decided to include ten more types of grain oriented (GO) electric steel imported from the United States into its countervailing investigation originally launched on June 1, 2009 after it held talks with US counterpart on the matter on August 13. The latest move was in the response to the requests filed on July 20, 2009 by Baosteel and Wisco on behalf of domestic GO electric steel producers on adding the number of GO electric steel made in the US to be investigated against the countervailing charges.

Iron ore deal not a big deal(2009/8/19)

BEIJING, Aug. 18 -- Chinese negotiators have backed down from a demand for a 45 percent cut in iron ore prices, settling for a 35 percent reduction from Australia's Fortescue Metals Group Ltd (FMG) and asking for the same deal with SA Vale, Billiton BHP Ltd and Rio Tinto Group.
Analysts said the cut was a face-saving gesture after seven months of stalled talks involving miners and the China Iron and Steel Association.
"The FMG agreement won't end the long talks between China and the largest suppliers," said Hu Kai, a Shanghai-based analyst with Umetal Research Institute. "Fortescue is too small to be representative in setting benchmark prices."
FMG's annual production stands at only 50 million tons per year, while China's iron ore imports require more than 50 million tons per month, said Fan Haibo, a senior analyst from Xinda Securities.
"Such a small fraction cannot shelter China from the dominant position enjoyed by the three global giant miners," Fan said.
Fortescue agreed to supply iron ore for all Chinese clients at a unified price, "whether State-owned or private steel companies, large or small", Shan Shanghua, the secretary-general of the iron and steel association, said yesterday during a news conference.
Free on board fine ores will be sold at 94 cents per dry ton unit for the rest of 2009, down 35 percent from the price last year, while lump ores will be sold at 100 cents per dry ton unit, down 50.4 percent, he said.
A dry metric ton unit, or dry ton, has the same mass value, but the material has been dried to decrease the moisture level.
Shan said China will apply this "China mechanism" with Billiton, Vale and Rio, using the FMG prices as a reference point.
Xu Xiangchun, a director of Mysteel Research Institute, questioned the value of the deal.
"Although it sounds like a breakthrough in the protracted talks, will the new mechanism be accepted by other miners?" he wondered.
"Actually, it's unlikely that the three global miners will offer China a better price after the 33 percent cut has been accepted by other countries such as Japan and South Korea," he said.
(Source: China Daily)

China settles 2009 benchmark iron ore prices with FMG(2009/8/18)

Baosteel, on behalf of Chinese steelmakers concluded 2009 benchmark iron ore prices with Australia’s FMG through serious and adequate consultations on the basis of mutual benefits and cooperation. Under agreement, the new reference prices per dry metric ton Fe unit are $0.94 for fines and $1.00 for lump with a contract period between July 1, 2009 and December 31. Chinese steelmakers should observe the new prices in earnest and do their jobs well in line with the Adjustment and Revitalization Program on the Steel Industry.

No new expansion approvals in three years(2009/8/17)

No new steel expansion should be encouraged for the next three years in a bid to curb excessive capacity, minister of Industry and Information Technology Li Yizhong said in an interview. China has a steel capacity of 660 million tons, excluding 58 million tons of capacity under construction while actual demand is just 470 million tons. Steel overcapacity is threatening to bring the industry to a “dead end.” Concreted measures to bail the industry out in a guideline which is drafting include: continue to eliminate outdated capacity according to the 11th Five-year Plan that has confirmed 100 million tons of pig iron and 50 million tons of steel as outdated capacity to be scraped by 2010; further promote mergers and consolidation in the industry; and discourage any new expansion work for the next three years.

Official: China should have more say in global iron ore trade(2009/8/14)

BEIJING, Aug. 13 (Xinhua) -- As the world's largest iron ore buyer, China should have more say in the global iron ore trade, Industry and Information Technology Minister Li Yizhong said Thursday.
"Spot prices of iron ore are increasing sharply on the global market and we hope to see an appropriate relationship between spot prices and long-term contract prices," Li said at a press conference.
He said he hoped the world's major iron ore suppliers would consider both their own long-term interests and their long-term cooperation with China's steel industry.
According to customs statistics, China imported 355.3 million tonnes of iron ore in the first seven months this year, an increase of 31.8 percent from a year earlier.

Excessive iron ore imports emerge in H1(2009/8/14)

China saw a year-on-year increase of surprising 31 percent in iron ore imports in the first seven months of this year, caused by higher steel prices at home, mills and importers’ concern over the uncertainty of future market and, undoubtedly an uncontrolled buying by some importers, said a source with the Ministry of Commerce.

China July iron ore imports at new record(2009/8/13)

China imported 58.08 million tons of iron ore in July, the highest monthly volume on record and up 47 percent from the same period last year, according to the country's customs authority. 355.3 million tons of iron ore were imported into China in the first seven months. Crude steel output stood at 50.68 million tons in July, equivalent to nearly 600 million tons yearly, far in excess of the 460 million tons originally scheduled early this year. July figure also marked the third consecutive month breaking the output records. As of August 7, iron ore stocks at ports had reached 73.29 million tons, approaching the recorded 75.5 million tons seen last September. Indian fines grading 63.5 percent are being traded at over $110 per ton, making possible a massive restoration of output in Chinese producers.

Steel consumption from two sectors to hit 28 million tons(2009/8/12)

China’s auto and shipbuilding industries may consume 15 million tons and 13 million tons of steel respectively this year, predicated by experts at the 2nd Chinese Steel Distributors Summit Forum held on August 8 in Zhengzhou, Henan. Sales of vehicles are expected to top 11 million units in 2009, compared with 9.38 million units last year, said Shi Jianhua, vice general secretary of China Association of Automobile Manufacturers. The proportion of sheet to structural steel to be consumed this year would be three to one. Section, medium plate, sheet, strip, premium steel and pipe are among the most used varieties in the auto sector. Among 13 million tons of steel to be consumed by shipbuilders, ship plate will take 11.7 million tons, section and ball flat steel will hold 1.2 million tons and pipe will require 400,000 tons, according to Tan Naifen, vice president of China Association of the National Shipbuilding Industry.

Spot iron ore prices hit 10-month high(2009/8/12)

The delivered prices of spot iron ore have raised to a 10-month high of $110 per ton, much higher than the benchmark prices reached between Japanese and South Korea’s mills and ore suppliers. Indian fines grading 63.5 percent are currently offered at $110 to 112 per ton, nearly 80 percent higher than those in mid-April. Mills worrying about their normal production have expressed their discontent over CISA’s tough but increasingly barren stance, claiming it is in a large part fighting for nothing but its self-esteem. Some mills are said to have accepted a 33 percent markdown in private with suppliers.

Iron ore-forming belt found in Qian’an(2009/8/11)

The Bureau of Hebei Geology and Mineral Resources Exploration announced it discovered an iron ore-forming belt measuring nearly 3 kilometers in length and some 20 meters in thickness 10 m to 50 m beneath the area in Qian’an, Hebei. The deposit has a potential iron ore reserve of more than 200 million tons with a Fe content of over 30 percent on average.

China may produce 500 million tons of steel this year(2009/8/6)

The CISA pointed out in a report China is expected to produce more than 500 million tons of crude steel. The prices of steel in the latter half will continue to rebound, but perhaps in a wig-wag way. The problem of oversupply remains distinct with the lagging export situation unable to be reversed any time soon. The excessive imports of iron ore have distorted the normal supply and demand position, thus seriously disturbing the ongoing iron ore price talks.

July iron ore imports hit year-high(2009/8/6)

China imported 56.5 million tons of iron ore in July - the highest monthly level this year, up 35 percent year-on-year. Dealers are said to be the major contributor to the surging imports. Of 297 million tons of iron ore imported into China in the first half, 166 million tons went to steelmakers, up 9.65 percent, while 131 million tons were bought by dealers, up 903.43 percent. With the revival of the steel market, real demand will increasingly become a possible factor behind the booming iron ore imports.

China steel makers striving for unified price(2009/8/5)

BEIJING, Aug.3-- China's steel industry association said on Friday that it plans this year to unify the spot and long-contract prices for the country's iron ore imports.
It will also set a ceiling for charges levied by import trading firms, as part of an effort to regulate the market.
The proposal was the top item of discussion at the steel industry body's two-day semiannual meeting, said Luo Bingsheng, deputy chairman of the China Iron and Steel Association (CISA), at a press conference.
The term prices negotiated with global miners should become a benchmark unified price, and the import agencies could charge 3-5 percent in commission on top of the term prices, Luo said.
The move aims to regulate excess iron ore import by steel makers and trading firms, which distorted the supply and demand balance and disrupted the annual contract talks, Luo said.
The price talks, which are continuing, appeared to be snagged on China's insistence upon bigger reductions than the 33 percent cut agreed to earlier with Japanese and Korean steel mills. News reports and industry analysts say China wants a 40 percent price cut.
Luo said foreign iron ore suppliers promoted massive sales on the spot market, leading to huge stockpiles.
Spot iron ore accounted for 82.7 percent of imports this year, leading to excessive imports that far exceed actual needs, the CISA said.
Luo made the remark as the spot price of iron ore in China surged above the contract prices offered by three large miners - Rio, BHP and Vale.
Benchmark spot prices of iron ore in China rose above $100 a ton on Thursday, as compared with $58 a ton in April, according to industry consultant Mysteel.
Iron ore imports rose 29.3 percent year on year, to 297 million tons, in the first half of this year, while traders imported 131 million tons, up 90.4 percent from last year.
There are 152 iron ore importers in China this year, exceeding the 112 licenses that CISA issued, the association said.
Luo said the annual talks were ongoing and CISA would keep working to push them forward.
"We are working for a reasonable result and hope to reach a win-win situation," Luo said.
"For small steel companies, a unified price system is definitely good news," said Fan Haibo, a steel analyst from Xinda Securities. "Large steel mills and trading companies have made huge profits by selling iron ore to small steel factories who do not hold import license."
"But how to define which firms have 'agent license' seems essential. Giving them the privilege is akin to guaranteeing a business always makes a profit," he said.

Iron ore resources founded in Anhui(2009/8/5)

After two years of exploration and drilling more than 70 holes measuring 80,000 meters in total, a geological team has detected a large iron ore deposit in Lujiang County, Anhui. According to a preliminary report, the deposit has a magnetite reserve of 120 million tons and a sulfur-iron reserve of 35 million tons with a potential economic value of nearly 50 billion yuan. The definite report will be completed by 2010.

July profits to top RMB20B(2009/8/4)

Experts say the steel industry is expected to have a profit of more than 20 billion yuan in July based on the highest monthly rise of 11.9 percent in the benchmark steel index in eight years. The sector is likely to pocket 100 billion yuan in profits in the whole year of 2009, up from the last year’s 84.6 billion yuan. The long product index was up 13.4 percent and the flat index rose by 9.5 percent during the month. Recovery in demand, the end of de-stocking and favorable policies intended to stimulate the economy were responsible for the price rally. Any possible price adjustment in the third or fourth quarter would be a modest, rather than a sharply plummeting one.

China to reinforce coke, ferroalloy elimination(2009/8/4)

China has included two more sectors- ferroalloy and coke - into its energy saving and emission reduction program in 2009. Under the new plan, the country will remove six million tons of coke, 700,000 tons of ferroalloy, 15 million kilowatts of coal-fired electricity, 10 million tons of pig iron, six million tons of steel, 50 million tons of cement and 500,000 tons of papermaking capacity this year. During the first three years of the 11th Five-year Plan (2016-10), the country’s energy consumption of the unit GDP reduced by 10.1 percent; sulfur dioxide and Chemical Oxygen Demand emissions dropped by 8.95 percent and 6.61 percent respectively, all lagging behind the first planned schedule. 20 more gas desulfurization units should be added to sintering machines in steel manufacturing in 2009.

China’s steel exports slows down in H1(2009/8/3)

China exported 7.99 million tons of steel products in the first half of this year, down 68 percent year-on-year, with its ranking on the world’s largest steel exporters dropping from the first place last year to the No 7. Exports to Europe decreased by 81 percent, those to Asia by 75 percent, those to the Middle East by 68 percent and those to the United States, Canada and Mexico by 51 percent. China imported 10.7 million tons of steel in the first six months, up 30 percent , thus resulting in a net import of 2.71 million tons.

Steel prices continue to climb(2009/7/31)

Steel prices have kept rising for 15 weeks in a row. The price of construction steel has been climbing over the past three days with a daily increase of 100 yuan per ton on average. Experts attributed the rally to the positive prospects on the steel market in the future, noting this would inevitably give a boost to the costs of iron ore. The steel futures index set a new high on July 29 following a continued surge for seven trading days.

Large mills make profits in June(2009/7/31)

71 medium and large steelmakers in China had a profit of 3.55 billion yuan in June after eight months of losses, with eight mills remained at loss, down 12 from May. They had a net profit of 1.73 billion yuan in the first half of this year. According to data from the CISA, two thirds of the 24 steelmakers with a production scale of more than five million tons each suffered a loss in the first half, and six out of the ten with a capacity of over 10 million tons each made losses. Main business operating losses for the steel industry stood at 11.64 billion yuan.

Steel indices rebound in Q2(2009/7/29)

China’s climate index for steel rose to 94.94 points and the early-warning index for the sector stood at 60 points in the second quarter of 2009, much higher than those in the first quarter, according to China's business climate index survey released by the National Bureau of Statistics and a research center under the Economic Daily on July 28. Indicators on steel production, prices, sales revenue and profits increased and total loss value in the industry continued to decline. The industry is expected to go better in the second half with the national economy further rebounding.

Detailed merger regulations to be released soon(2009/7/28)

Detailed regulations on merger and acquisition in the steel industry are expected to be published as early as September, which will remove the biggest barrier to realizing the goal of an extensive cross-regional consolidation among the steel sector. According to the plan, the traditional tax division system would be replaced by a new tax distribution system, under which tax revenues created by a target company are likely to be equally distributed among the governments in charge of the parties involved in the deal. China will finally see the top five steelmakers dominate the steel market with a 45 percent share.

Steel industry may record huge H1 losses(2009/7/23)

As of July 21, 26 steelmakers had released their business results in the first half of this year with an estimated loss of 8.64 billion yuan, down 124.55 percent year-on-year. 12 of them warned a possibility of gaining less income and 14 others predicated a loss. The 26 mills recorded a net loss of 3.51 billion yuan in the first quarter and 5.12 billion yuan in the second quarter. Weak demand, overcapacity, steep falls in both sales and prices are said to be responsible for the decline.

KPMG: Stimulus package to drive China’s steel consumption(2009/7/22)

China is expected to consume about 427 million tons of steel products in 2009, KPMG China said in a report. Hit by the financial crisis, China consumed 20 million tons less steel last year. Among the four trillion yuan stimulus package, the projects will account for about 90 percent that are directly bound up with the consumption of construction steel, which represents 54 to 55 percent of the country’s total steel consumption. China has a steel capacity of over 500 million tons, thus having entered an episode of overcapacity in the context of dwindling demand. The unprecedented difficulties facing China’s steel industry, according to the report, include the low degree of the industry’s centralization, improper employment and the lack of control over resources, in addition to external factors.

More scrap imported via Zhangjiagang port(2009/7/21)

Zhangjiagang port saw a tremendous increase in scrap imports in the first half of this year. 2.24 million tons of scrap were imported via the port with an import value of $630 million during the period, up 1,108.6 percent and 512.8 percent year-on-year respectively. Local dealers have showed no hesitance to import scrap from Japan, the Unite States and Hong Kong since the latter half of last year by taking advantage of the astonishing low price of about $180 per ton amid the global financial crisis.

Utilization rate remains low in Q2(2009/7/20)

China experienced a utilization rate of just 73.1 percent for its steel industry in the second quarter of this year and 70.4 percent for the ferroalloy sector. According to the National Bureau of Statistics, problems confronting with the national economy include falling prices, apparent shortage of overall demand, a slow growth rate of the economy, overcapacity in some sectors and lower utilization rates.

June output hits new high(2009/7/20)

Data from the National Bureau of Statistics showed China produced 258.8 million tons of pig iron in the first half of this year, up 5.6 percent year-on-year; 266.58 million tons of crude steel, up 1.2 percent; and 316.48 million tons of steel products, up 5.7 percent. In June, China produced 48.93 million tons of pig iron, 49.39 million tons of crude steel and 62.14 million tons of steel products, all setting the new records. The average daily output stood at 1.65 million tons in June.

Coke consumption may exceed 300 million tons(2009/7/17)

Calculated at steel production levels in May and June, China would consume more than 300 million tons of coke in 2009, said Huang Jingan, president of China Coking Industry Association. But there is a high degree of uncertainty associated with whether the output growth is sustainable due to lack of private investment and strenuous efforts to scrap outdated capacity. China’s major companies produced 126.41 million tons of coke in the first five months, down 10.06 million tons or 7.4 percent year on year. Shanxi Province saw a decline of 12.2 million tons or 32.5 percent. The association will continue to propose a 50 percent output limit to local producers in July. The coke industry nationwide suffered 725 million yuan losses in the first five months with more than 300 still losing money at the moment.

Problems in steel sector remain serious (2009/7/16)

Phenomena that challenged routine practices have emerged in the steel sector on many occasions, which raised further concerns in addition to a drop in profits. While the installed capacity of steel outnumbers the supplies by over 150 million tons, China’s crude steel output saw a year-on-year increase of 0.54 percent in the first five months of this year, compared to a 36 percent fall for the rest of the world, and has become a net steel importer since March. The output has been on the rise since May despite emergency orders issued by the Ministry of Industry and Information Technology to curb production. Moreover, long products which are referred to as “outdated materials” enjoy better sales than high value added flat products.
Calculated at a daily output of 1.45 million tons on average during the first half, China will produce almost 530 million tons of steel in 2009, much greater than the 460 million tons scheduled by the Adjustment and Revitalization Program on the Steel Industry. While steel prices began to rebound from late April, problems remain serious as a result of fast growth of output, sharp decline in exports and higher costs of raw materials.

BDI hits 7-week low amid iron ore deadlock(2009/7/15)

The Baltic Dry Index (BDI) dropped to a 7-week low of 2,985 points on July 13, down 30 percent from 4,291 points on June 3. As the iron ore price talk deadlock goes on between the Chinese side and Australian suppliers, China began to slow iron ore imports from mid-June. Just 9.3 million tons of iron ore were exported from Port Hedland of Australia to China in June, down 11.5 percent from 10.6 million tons in May. China’s imports of iron ore from Brazil also declined 16 percent. India’s 63.5 percent grade fines was offered at 660 to 670 yuan per ton delivered at Tianjin port on July 13 while Australia’s 62 percent grade Newman fines was quoted at 720 to 730 yuan per ton on the same basis, compared with the average 610 yuan per ton and 620 to 630 yuan per ton respectively during the week ending June 19. Analysts say the BDI will rise again after the price talk is over in the latter half.

China remains net importer in June(2009/7/14)

Customs data showed China exported 1.43 million tons of steel products in June, up 80,000 tons from May and down 72.6 percent year on year. From January to June, China exported 9.34 million tons of steel products, down 65.4 percent. In June, the country imported 1.63 million tons of steel products, down 20,000 tons from May and up 29.4 percent from the same period of last year. In the first six month, the country imported 8.13 million tons of steel, down 1.8 percent. China had a net steel import of 200,000 tons in June and a net export of 1.21 million tons in the January to June period. It exported 10,000 tons of billet in June as well as in the first half of this year, down 93.9 percent; and imported 380,000 tons in June, down 320,000 tons from the previous month and 2.65 million tons in the first half, up 25 times. Net imports of billet stood at 370,000 tons in June, bringing the net imports of both billet and steel products that month to 570,000 tons, down from one million tons in May. China exported 30,000 tons of coke in June, down 98 percent year on year and 230,000 tons in the first half, down 96.9 percent; and imported 55.29 million tons of iron ore in June, up 46.3 percent and 297.18 million tons in the first half, up 29.3 percent.

Hebei and Shandong also raise coke prices(2009/7/13)

Following the price increase of coke in Shanxi, Shandong and Hebei authorities also decided to raise the price of coke by 50 to 60 yuan per ton for July shipment. In Hebei, the new price of second grade metallurgical coke is offered at 1,700 yuan per ton and 1,780 yuan per ton for first grade material. In the Tianjin market, the FOT price of quasi first grade metallurgical coke is quoted at 1,730 to 1,750 yuan per ton, duty unpaid.

3 Chinese mills included in 2009 Fortune 500 List(2009/7/10)

Three Chinese mills have been named to the 2009 Fortune 500 List released on July 8, 2009. Baosteel Group Co Ltd advanced by 39 places from last year and jumped to 220th place with operating revenues of $35.52 billion in 2008, followed by Hebei Iron and Steel Group at 375th with operating revenues of $24.43 billion yuan and Jiangsu Shagang, a non-government run steelmaker, at 444th with operating revenues of $20.90 billion. It is also the fifth time for Baosteel to get this glory since 2005. A total of 43 Chinese enterprises are included in this year’s Fortune 500 List.

Ranking of Chinese Mills

Ranking of Baosteel by Years

Ranking of Chinese Mills in Details

Coke price up 60 yuan in July(2009/7/10)

Shanxi Coking Industry Association has proposed a month-on-month rise of 60 yuan per ton in the monitoring price to 1,710 yuan per ton for coke with sulfur content below 0.7 percent and ash content below 12.5 percent in July. The decision was made with targets to minimize losses of producers, relax supply tension and calm down chaos in the recent coke market.

Regulations on M&A to be released soon(2009/7/9)

A long-awaited regulation on steelmakers’ merger and acquisition is expected to be unveiled soon by the Ministry of Industry and Information Technology in a bid to further encourage consolidation among steelmakers from across the country. China will try to shape up several super large steel producers with a capacity of more than 50 million tons each such as Baosteel, Anben Group and Wisco by 2011, according to the adjustment and revitalization program on the steel industry. Data shows there are more than 500 crude steel producers in China with the top five mills accounting for just 28.5 percent of the country’s total steel output, well below the 60 to 70 percent of market shares dominated by the top four producers in the advances nations such as the United States, the EU and Japan.

June steel output hits new high(2009/7/6)

Domestic daily crude steel output hit 1.52 million tons in mid-June, the highest level so far this year and equivalent to 556 million tons annually, much higher than the 470 million tons projected by the MIIT. The output continued to rise because of higher steel prices, the recovery of demand, and mills’ favorable bookings. As of last week, domestic steel prices rose for nine weeks in a row. Experts predicated a better market in the latter half of this year than the first half, on the grounds that the four trillion yuan investment package is taking a stronger effect on the real estate, railways, auto and home appliance sectors.

China to produce 10 million tons of stainless this year(2009/7/2)

China is expected to produce 10 million tons or more of stainless steel this year as long as no such a great fluctuation occurs in the international and domestic markets as one happened in the latter half of last year. China has a designed stainless capacity of over 20 million tons. The country produced 500 million tons of crude steel last year, only 1.65 percent of which were stainless steel, compared with more than 2.5 percent in advanced nations.

New measures to scrap outmoded capacity(2009/7/2)

Anhui Province plans to conduct technical reform and updates on 14 items covering a steel capacity of 8.2 million tons and produce 12.5 million tons of steel by 2010. In order to replace and eliminate outdated capacity, 10 municipal governments have signed letters of guarantee promising to launch these items by the end of October this year and finish them in late 2010.

Second batch of export quota on coke released(2009/7/1)

The Ministry of Commerce announced the second batch of export quota on coke under the general trade in 2009 on June 29, 2009. Companies that received the quota are listed below:
二〇〇九年六月二十九日

China opposes US investigations against steel imports(2009/7/1)

The Chinese government was strongly opposed to the US’s decision on June 26 to launch anti-dumping and countervailing investigations against wire mesh pallets from China. This is the third trade case filed by the US against steel imports from China in nearly ten days following the June 17 investigation on steel wire strand and the June 19 case on steel grating. According to China, these moves not only sent a wrong message of trade protectionism to the United States and international community, but also seriously harmed the interests of downstream sectors in the US.

Large mills make profits in May(2009/6/30)

The CISA said 89 large and medium-sized mills made a profit of 1.26 billion yuan in May while 25, or 28.1 percent, made a loss of 1.82 billion, 1.29 billion yuan lower than April. The steel industry remained a deficit at 3.89 billion yuan in the first five months, compared to a profit of 86.51 billion yuan during the same period of last year.

Merger approved by provincial government(2009/6/26)

The Provincial Government of Hebei has approved a share buying and swap program regarding the consolidation of Hebei Iron and Steel Group’s three listed arms – Tangshan Steel, Chengde Vanadium and Titanium and Handan Steel. Earlier, the Ministry of Commerce had given up further examination over the proposed deal. The deal is still subject to the approval from the shareholder’s meetings of each company and China’s Securities Regulatory Commission.

Large iron ore deposit discovered in Liaoning(2009/6/25)

A super large iron ore deposit consisting of a blend of magnetite and hematite with grades ranging from 25 to 62 percent was found in Qiaotou County, Benxi City of Liaoning Province. The proven reserves of the deposit are conservatively estimated at three billion tons with actual reserves perhaps doubling. The discovery, coupled with the CISA’s harsh crackdown on speculative iron ore imports, is very likely to play an important role in the ongoing iron ore price talks, presenting the Chinese side more confidence and time to seek the desired settlements of a 40 percent year-on-year markdown.

Higher output causes concern over mounting inventory(2009/6/24)

In the past week, China’s spot prices of steel continued to rise sharply whereas the future prices registered a fall for three days running. Despite a drastic shortfall in global capacity utilization, China’s crude steel output rose to 46.46 million tons in May, equaling to 520 million tons annually, well in excess of the projected consumption at 460 million tons this year. Higher inventories seen in major cities in late May have directly been bound up with the increased output.

Daily steel output rises in early June(2009/6/23)

China’s daily crude steel output came to 1.50 million tons in the first ten days of June, up from 1.49 million tons in late May and equaling to 547 million tons on yearly basis, compared to 500 million tons last year and 460 million tons previously predicted for 2009. Key medium and large-sized mills are expected to have produced 11.78 million tons of steel over the same period. The CISA noted steel prices showed signs of slight recovery in May thanks to a series of stimulus economic policies by the state, growing demand from domestic market and the process of de-stocking. But the problem of an overall overcapacity in the industry remained serious.

Steel service alliance formed in Beijing(2009/6/23)

The Capital Iron and Steel Service Alliance was officially launched in Beijing on June 21 and, at the opening ceremony, received two major engineering contracts with a total value of more than 1.2 billion yuan. The alliance, co-founded by nine steel producers and steel-related service suppliers from the capital city of China including Shougang Corporation, MCC Jingcheng Engineering Technology Co Ltd and the Iron and Steel Research Institute, is to build its own brand and help local producers to extend their market shares by participating in international and domestic tenders for engineering services in a collective move.

China's steelmakers possibly turn to spot market if price talks break down, analyst (2009/6/19)

 BEIJING, June 18 (Xinhua) -- The spot market would be the decisive factor in China's iron ore imports if the ongoing negotiations between the country's steel mills and the overseas miners break down, Thursday's China Daily quoted an industry insider as saying.
The supply chain would continue working smoothly on the spot market, for many domestic steel makers and foreign suppliers had been tapping this as a main business model recently, the newspaper quoted Hu Kai, an analyst with Umetal.com.
The 33 percent price reduction reached between Japanese steel makers and the Austrilian miners in late May, and the proposed alliance between Rion Tino and BHP Billiton, the world's two largest miners, have imposed great pressure on the Chinese side in the negotiation.
But with only two weeks left for the expiry of last year's ironore supply contract, the China Iron and Steel Association (CISA), leader in the iron ore talks, insists a 40 percent price cut from the Australian miners.
The major reason that China's steel makers reject the 33 percent price cut was that the rate was at least 5 U.S. dollars higher than the current spot market price, according to Hu.
In addition, Chinese steel plants will suffer huge losses if they agree to a 33 percent price reduction this year, said the CISA earlier.
Many insiders believe if the Chinese side fails to reach the deal with suppliers before June 30, they may seek a new quarterly pricing system, within which the steel mills ask for quarterly price adjustment under the benchmark price in accordance with the ups and downs of steel mills' cost and prices.
The Chinese government also expressed strong opposition to the Rio Tino and BHP Billiton's proposed alliance.
An official with the Ministry of Industry and Information Technology (MIIT) said the proposal had a "strong monoplistic color".
China might have to seek new policies and regulations to enable its companies to have a bigger say in iron ore price talks if the tie-up was found to be monopolistic, the newspaper quoted Chen Yanhai, another official with the MIIT.

Market is recovering, but not firm(2009/6/19)

The CISA predicted in a report while domestic demand for steel would continue to rise driven by an array of national policies designed to expand domestic demand, sustain the growth and make structural adjustments, the market in the foreseeable future remains bleak due to weakening international demand, high levels of domestic capacity and prolonged situation of a net steel import. As of the end of May, the domestic steel price index stood at 98.14 points, up 2.58 points from the previous month – the first month-on-month rise in nearly three months, with a growth rate of 2.7 percent; and down 58.72 points year-on-year with a decline rate of 37.43 percent.

Handan City to scrap more outmoded capacity(2009/6/18)

The Handan municipal government has launched a “thunderclap” campaign that would result in cleaning up 4.97 million tons of outmoded capacity from 38 local coke, pig iron, cement and papermaking plants by December 10, 2009. Steelmakers that have failed to meet the national steel industry policy are required to pull down their blast furnaces, converters, electric furnaces, accompanied wind turbines, sintering machines and chimney stacks, as well as having grounds leveled up prior to that time.

Rio-BHP tie-up harms China’s steel industry(2009/6/18)

China is working on countermeasures to protect the country’s steel industry from the proposed Rio-BHP tie-up, said Chen Haiyan, director of the raw material department under the Ministry of Industry and Information Technology. “The alliance between Rio Tinto and BHP Billiton would present great negative impacts on the healthy development of the steel industry in China, the world’s largest iron ore importer,” said Chen at an industry meeting held in Anshan, Liaoning.
Chen Haiyan made the following remarks at the meeting:
1. The proposed tie-up with a strong nature of monopoly would possibly strike a heavy blow to China’s steel industry and stunt the development of domestic mills. Thereby, we would watch it closely and find ways to cope with it.
2. The merger should be conducted under China’s Anti-Monopoly Law.
3. If the tie-up proved to be monopolistic, we have to seek new policies and regulations to allow Chinese companies have a bigger say in iron ore price negotiations.
4. A principle to be followed is the CISA’s status as an exclusive agent on behalf of the domestic steel industry in iron ore price negotiations.
5. Domestic steelmakers should strengthen their interior managements, promote technical advances and updates, launch structural adjustments and energy-saving and emissions reduction drive, as well as enhance the comprehensive utilization rate of resources.
6. China should increase exploration of domestic mines to reduce reliance on imports.

MIIT mulls M&A rules(2009/6/17)

The Ministry of Industry and Information Technology (MIIT) is working on rules to regulate merger and acquisition activities in the steel industry. It’s reported there are more than 500 producers of crude steel throughout the country each with an average output falling short of one million tons per year. Five largest mills in China accounts for just 28.5 percent of the country’s total output, compared with 60 to 70 percent in the advanced economies such as the United States, the European Union and Japan. Thus it’s imperative to revitalize the industry through optimizing and consolidating the industry’s institutional structuring, especially under the circumstances of the global financial crisis and an overall excessive capacity. There has been progress in the combination of industrialization with information, added the MIIT.

Qian’an to shut pellet shaft furnaces(2009/6/16)

The Qian’an municipal government, Hebei, has decided to shut down 108 shaft furnaces at 78 pellet plants by the end of June, 2009 that had failed to meet environmental standards as of the end of last June. Administrative enforcement measures are expected to be employed in 20 days, when the business licenses and organization code certificates of the producers involved will be revoked, electricity supply for them will be cut off and power supply facilities removed. Police and law enforcement officials are to get involve in the clampdown moves, and officials with the environmental departments will take part in supervision and acceptance.

Shanxi encourages coal mergers(2009/6/16)

The Shanxi government is calling for mergers and consolidation activities in the coal industry across the province, participated by such coal related industries as power, metallurgy and chemicals in a bid to reverse the infamous image of its local coal industry – too many producers, small size of each producer and a fragmented layout. According to a plan, the province’s five largest state-run coal producers each will be responsible for integrating no less than 100 local mines with an aim to reduce the number of coal mines to 1,000 with the output of a single mine reaching more than 900,000 tons per year by the end of next year.

No green-light for steel projects on environmental violations(2009/6/15)

The Ministry of Environmental Protection has decided to suspend approval for steel projects in Shandong with immediate effect for their violation of regulations on the environmental protection. These projects include hot rolled sheet/strip technical reforms belonging to Rizhao Iron and Steel and a five million t/y steel plant at Weifang Iron and Steel. They failed to meet the relevant regulations of the Steel Industry Development Policy, which stipulates “new capacity is allowed as long as old one should be eliminated simultaneously” and “new steel projects in the coastal areas or near deep sea harbors must be equipped with 3,000-cubic meters or above blast furnaces, or 200-ton or above converters”.

Steel imports further rise in May(2009/6/12)

Customs data showed China exported 1.35 million tons of steel products in May, down 60,000 tons from April and 75.7 percent year-on-year, bringing the total exports in the first five months to 7.9 million tons, down 63.6 percent. China imported 1.65 million tons of steel products, up 30,000 tons from April and 23.6 percent from the same period of last year, bringing the five-month imports to 6.5 million tons, down 7.1 percent. The country experienced a net steel import of 300,000 tons in May. China imported 700,000 tons of billet in May, up 30,000 from April. The country’s net billet imports were 700,000 tons in May. China exported 20,000 tons of coke in May, down 98.8 percent year-on-year, and exported 200,000 tons of coke in the first five months, down 96.6 percent. China imported 53.46 million tons of iron ore in May, up 37.4 percent and 241.92 million tons in the five-month period, up 25.7 percent.

MOC: China entitled to veto Rio-BHP merger(2009/6/12)

China has rights not to recognize the validity of Rio-BHPB merger as long as the alliance would constitute impacts to competitive order in domestic steel market in a restrictive and exclusive way, the Ministry of Commerce said in an initial statement on the proposed cooperative deal between the two international mining giants. Provided the potential new joint venture is set up in disregard of strong opposition from the Chinese side, it will likely be exposed to trade sanctions imposed by the government while concluding business with Chinese partners in the future.

China’s daily output stays high in late May(2009/6/10)

China's daily crude steel production in late May reached 1.49 million tons. The government wants to cap this year's total steel output at 460 million tons, 8 percent lower than last year, but it has so far been unable to rein in the sector. China has been urging its steel mills to curb production, in an apparent attempt to stabilize domestic steel prices and to hold a better position in iron ore term negotiations with miners including BHP Billiton, Rio Tinto and Vale. The country’s monthly iron ore import volume has been on a record-breaking run, reaching an all-time high of 57 million tons in April, and stockpiles at major ports have soared beyond 75 million tons, according to Chinica Shipbrokers Ltd, up around a quarter since the beginning of the year. Last month, the Ministry of Industry and Information Technology urged commercial banks to cut off credit to steel enterprises that are "blindly expanding in disregard of the market".

China raises export rebates on steel(2009/6/10)

China has decided to lift export rebate rates on parts of commodities starting June 1, with alloy steel, profiled shapes and structural steel being adopted an increased rebate rate of 9 percent. Based on the export figures in the first four months, the move would produce $170 million worth benefits for the steel industry this year. Steel exports covered by the tax revisions account for 12.5 percent of export volume and 10.8 percent of export value in the first four months, and 13.7 percent and 12.1 percent respectively in April. The CISA vice general secretary Qi Xiangdong noted the rebate adjustments this time, albeit small in scale, will encourage bigger mills to export more steel products by offsetting their losses due to the appreciating yuan.

Three favorable factors give Chinese steel mills edge amid price(2009/6/9)

BEIJING, June 4 (Xinhua) -- A global iron ore oversupply, lower spot prices, and huge stockpiles in China's domestic iron ore market will improve the odds of Chinese steel mills in securing more cuts in its iron ore price negotiation with overseas suppliers, Du Wei, an Umetal analyst told Xinhua Thursday.
China Iron and Steel Association (CISA) refused on May 31 to accept the iron ore price cut between 33 percent and 44 percent reached between Rio Tinto and Japan's Nippon Steel Corp, and insisted on a price cut of more than 40 percent in the annual contracts of iron ore.
Analysts and insiders believe an estimated global excessive supply and a considerable decline in demand impose great pressure on the miners amid the economic downturn.
"The global iron ore supply surplus is estimated to be between 200 million and 300 million tonnes," said Luo Bingsheng, vice chairman of the CISA in Shanghai Tuesday.
Total iron ore demand is expected to drop between 150 million and 200 million tonnes this year, according to Xu Xiangchun, chief information officer of Mysteel.com Wednesday.
Luo also said China's steel maker would turn to the spot pricing, abandoning the benchmark price system, if the suppliers deny its 40 percent to 50 percent price cut request.
"Despite a 33 percent price cut, the long contract price is still 8 to 9 U.S. dollars higher than the spot price," said Du Wei.
Huge stockpiles should prompt China's steel makers to call for a bigger cuts in iron ore prices in the progressing negotiation, Du said.
The latest data from the www.umetal.com shows that iron ore stocks at Chinese main ports exceeded 70 million tonnes as of May 31.
Du estimated that China's overall stocks had surpassed 110 million tonnes in consideration of 30 million tons of stocks by steel plants.
However, analysts and insiders believe the negotiation will drag on beyond the end of June.
According to Luo, China's steel mills lost 5 billion yuan (732 million U.S. dollars) in the first four months this year.
If the CISA compromises, the long contract price would be set at a high level during the peak season, and China's steel plants would suffer more in profit loss resulting from high costs, said Du.
"We have not set a deadline of when the negotiation would end. Even if the two sides had not reached the deal by the end of June, it would not affect the production of China's steel plants," said Shan Shanghua Wednesday.

Domestic prices rise for seven weeks(2009/6/9)

Domestic steel prices continued to rise entering June, marking a 7th week of the upward trend in a row. The prices of construction steel saw the biggest rise last week; medium and heavy pate, large and medium sections rose slightly; and hot rolled sheet remained almost unchanged. The price of 20mm rebar stood at 3,660 yuan per ton on Tuesday, up 48 yuan per ton from late May; 6.5mm high-speed wire rod was 3,624 yuan per ton, up 45 yuan per ton; 3.0mm hot rolled sheet was 3,659 yuan per ton, up 21 yuan per ton; and 1.0mm cold rolled coil 4,432 yuan per ton, up 47 yuan per ton. With more mills restarting their facilities, experts expressed concerns over the future market where no substantial improvements in the domestic hot rolled inventories are expected for the time being.

More mineral deposits to be found in Xinjiang(2009/6/8)

More mineral deposits are expected to be discovered in Xinjiang in the future as hundreds of billions of yuan from the government and nearly two hundreds of domestic and overseas enterprises are spent on the resources exploitation there. A report will be submitted by 2012 about ten potential large deposits 500 to 1,500 meters beneath the earth surface in the Tianshan Mountain, the Altay Mountain, the Junggar Basin, the Kunlun Mountain and the Altun Mountain that may contain 600 million tons of iron ore, seven million tons of copper, 2.5 million tons of lead and zinc, and 900,000 tons of gold.

Shanxi coke price may rise in June(2009/6/5)

The Shanxi Coking Association decided to raise the monitoring price of coke by 60 yuan per ton in June following a rise of 30 to 60 yuan per ton in May. The new price will rise to 1,720 yuan per ton, but experts say local steel producers can afford the moderate rise thanks to their better performances in April. Sales of real estate were increased by 16 percent in March, indicating the acceleration of investment in the sector.

CISA: Price talks may end in late June(2009/6/4)

Rio Tinto said in a statement that Taiwan’s CSC and Dragon have agreed on the same price terms as their counterparts in Japan and South Korea in the 09 iron ore contract prices, adding difficulties to the ongoing negotiations the Chinese side is taking part in. The CISA deputy vice president Luo Bingsheng said China has mapped out a new plan that could lead to closing a deal by the end of June. He stressed the new price should return to the level of 2007, namely slashing by at least 40 percent year-on-year. There would be a surplus of 200 million tons of iron ore stocks this year if traders and producers continue to import iron ore. According to senior officials with Hebei Iron and Steel, there is room for the iron ore prices to further decline and the CISA should stick to its stance.

Steel output may hit year-high in May(2009/6/4)

Statistics showed the CISA-members produced 11.47 million tons of crude steel in the second ten days of May, bringing the total output across the country to 14.78 million tons. Rebar and wire rod are the biggest winners thanks to the decreased stocks and the spike in fixed assets investment. Experts say crude steel output may hit a monthly high of this year in May.

China launches investigation into GO electrical steel imports(2009/6/3)

The Ministry of Commerce said it launched an anti-dumping case into US and Russian imports of grain-oriented flat-rolled electrical steel, a soft magnetic material used in transformers, rectifiers and reactors, from June 1 in response to applications from Wisco and Baosteel, with an investigation period from March 1, 2008 to February 28, 2009. China consumed about 680,000 tons of GO electrical steel last year, and imported 59,000 tons from the US and 79,900 tons from Russia. The total imports from the two countries were 64.74 percent more than those in 2007. The imports in the first two months of this year were up 22.85 percent year-on-year.

Steelmakers in Hebei see profits again(2009/6/2)

In the first four months, steelmakers in Hebei produced 40.97 million tons of steel, 40.46 million tons of steel products and 41.52 million tons of pig iron, up 8.31 percent, 9.99 percent and 12.5 percent respectively. Key steel producers had a year-on-year profit drop of 88.26 percent, 14.58 percentage points lower than 102.84 percent during the first quarter. In April, these producers earned a profit of 371 million yuan, compared to a loss of 62 million yuan in March.

China’s steel output may account for half of world total in 2015(2009/6/1)

A French advisory firm recently claimed world steel output would rise to 2.2 billion tons in 2015 from 1.3 billion tons last year and China’s steel output would account for 48 percent of the world totals. Most experts believed output will edge up a bit in the latter half of this year but there will be no evident signs of recovery next year. Orders with more than 1,000 tons in quantity have dried up in Europe, where mills are competing with each other in thin business.

Shanxi unveils adjustment and revitalization program on metallurgical industry(2009/5/31)

The objectives of the program covering steel include:
1. Control overall output in the province. Pig iron and crude steel output should be restricted to 45 million tons and 40 million tons respectively annually.
2. Eliminate more than 20 million tons of outdated pig iron capacity and 16 million tons of steel capacity by the end of 2011.
3. Build large backbone steel bases centering on Taiyuan, Changzhi, Yuncheng, Linfen and Lvliang.
4. Taiyuan Steel is striving to have a capacity of over 20 million tons by 2011 and 30 million tons by 2015. Its presence in the local steel market will be increased to 75 percent from current 25 percent.
5. Make the level of main facilities domestically advanced;
6. Optimize products structuring;
7. Enhance the level of energy conservation and emissions reduction.

Steel industry posts loss in April(2009/5/26)

Large and medium sized mills posted a loss of 1.87 billion yuan in April, with the number of money-losing mills increased by four from the first quarter. According to the CISA deputy vice president Luo Bingsheng, during the first four months the steel industry made a loss of 5.18 billion yuan, 29 of all medium and large mills suffered from losses. Apparent crude steel consumption was 170.43 million tons, up 11.03 million tons, or 6.92 percent, year-on-year. As of the end of April, the domestic steel price index stood at 95.56 points, down 50.92 points, or 34.76 percent, from the same period of last year. The index was the lowest since 1994.

MIIT mulls plan to improve external environment(2009/5/26)

In order to prevent exports from further sliding, the CISA called on to improve external environment for steel exports on May 22, which has drawn attention from the MIIT. The measures may include a flexible export duty for steel, further adjustment of export rebate rates, a fair tax burden, regulation on import and export orders, and reinforced efforts in monitoring imports and anti-dumping actions. In the first four months, China’s exports of steel slumped 59.7 percent while imports spiked 9.9 percent. The price gap between average export price and import price has declined to 12.15 percent in the first quarter from 27.41 percent last year, indicating an almost lost of household materials to overseas ones in terms of price edge.

Morgan Stanley: Steel prices may stay at low levels(2009/5/25)

It is unrealistic to expect a recovery in steel prices and, from the long run, the prices are likely to stay at the level just a little more than the costs, Morgan Stanley said in a report. Constant expansion and the rising level of imports have offset the recent increase in orders, in particular for long products, putting a cap on the recovering prices. Morgan Stanley remained cautious about the steel industry in Chinese mainland, South Korea and Taiwan Island. The group made forecast about the steel price index in Chinese mainland at $490 per ton in 2009.

Steel industry incurs net loss in the first four months(2009/5/25)

72 key medium and large-sized steel producers had a net loss of 5.18 billion yuan in the first four months of this year following a rising price for five consecutive weeks since mid-April, with nearly 40 percent of mills making a loss. A source with the MIIT said the financial crisis may cause a 50 percent reduction in steel exports in 2009. Steel exports last year accounted for about 10 percent of the total output of 600 million tons. Meanwhile, domestic market remained obscure with supply still outnumbering demand in general. It is not an easy job to eliminate outdated capacity since both institutional and social issues are involved.

CISA denies reports on conclusion of 09 iron ore prices(2009/5/22)

The CISA announced a statement on May 21 to deny media reports that the Chinese steelmakers have agreed on a 30 to 35 percent cut in 2009 iron ore prices and criticize relevant medias for their groundless, irresponsible and unethical reports. The statement said steelmakers in China, Japan and South Korea are in the middle of the 09 iron ore price negotiations in earnest with foreign major suppliers amid the global financial crisis. Authentic and reliable results could only be attained through parties involved in the talks.

Output limits plan faces resistances from small mills(2009/5/20)

The MIIT has issued a notice to curb the excessive growth of steel output nationwide and ordered commercial banks to cut or even halt loans to steelmakers with low efficient capacity, but what the effectiveness of the move would bring to small-sized mills remained unknown. There were two advantages in smaller mills in the face of the economic downturn. First, they can make a swift adjustment on what to produce in accordance with demand. For example, these mills produced more long products that enjoyed fast sales in the first quarter. Second, they can purchase iron ore at a lower price than that agreed by large mills under contract term. According to experts, by these two advantages, the plan may face resistances from smaller mills, which pulled down the market share of key producers to 76.59 percent in March from 79.81 percent a month earlier.

Shanxi to integrate coke industry(2009/5/20)

According to an adjustment and revitalization program on the Shanxi coking industry, the province will limit coke output to 140 million tons in two years and to 120 million tons over the next six years. By 2015, a number of super large coking producers will have been built each with an annual capacity ranging from 5 to 10 million tons. Top ten producers would account for over 60 percent of the province’s total capacity. Coke ovens with a chamber less than 4.3 meters high will be eliminated by the end of 2010 (excluding stamp-charged coke ovens with a chamber in 3.2 meters high or above). Energy consumption to produce one ton of coke throughout the province would reduce to less than 150 kg of standard coal by 2011 and further to 120 kg by 2015.

China’s steel industry may be in red this year(2009/5/19)

Xu Lejiang, chairman of China's largest steelmaker Baosteel Group claimed that China's steel industry may post a loss for 2009 as overproduction persists in a weak global market. Players remained cautiously optimistic about the recent recovery that has lasted for the fifth week as of last week. Mills have been under pressure due to the surge of some imported steel products with a lower price than that of household ones and overcapacity.
Xu said China produced 500 million tons of steel products from a total capacity of 650 million tons last year, which indicated that the problem of overcapacity has become more than prominent. It was the financial crisis that has led to an earlier outbreak of the problem and made it more profound in its implications. It is impossible for the industry to grow at an annual rate of 20 percent as it used to be, he added.

MIIT: Overcapacity may reach 30 percent this year(2009/5/18)

In an emergency notice informed by the MIIT, the steel industry is required to put the work of controlling gross output as the top priority. Local commercial banks should reduce or suspend their loans to low efficient steelmakers and unreasonable expansion projects. The CISA and the CCCMC should work out ways to further reduce the number of iron ore importers. Local authorities are expected to eliminate outdated capacity and facilities ahead of the timetable they agreed with the NDRC.
According to the MIIT, China’s apparent crude steel consumption is estimated at 462 million tons in 2009, up about 10 million tons from last year, while net steel exports would drop by 40 million tons. Therefore, there will be a surplus of 25 to 30 percent in capacity, especially in flat products, against the real demand. Furthermore, the excessive imports of iron ore have added difficulty to mills’ cash flow and made them more exposure to the operational risks.
　

Rescue plan on equipment manufacturing unveiled(2009/5/15)

The State Council released a long-awaited rescue plan on equipment manufacturing with a period from 2009 to 2011. Here are some goals of the plan:
- Enhance the quality of homemade equipment and keep the self-sustaining ratio of domestically produced equipment at 70 percent;
- Strengthen competitive edge in the international market and stabilize the export market shares;
- Satisfy demand with homegrown equipment from the state key projects such as mega kilowatts nuclear power, new energy power, high-speed trains, high-end digit control machines and basic manufacturing equipment;
- Realize localization in nine major industries including steel, auto and petrochemical.

MIIT cracks down on blind expansion(2009/5/14)

The rapid growth of steel capacity encouraged by the loose monetary policy eventually triggered what the CISA called the sternest campaign ever to curb excessive capacity nationwide. In an emergency notice to local authorities that oversee the industry and large steelmakers across the country, the Ministry of Industry of Information Technology (MIIT) suggested that commercial institutors cut or suspend loans to the steelmakers that blindly ramp up capacity regardless the real demand. According to the latest statistics, 72 key medium and large mills produced 127.4 million tons of steel in the first quarter of 2009, up 1.4 percent year-on-year; while crude steel apparent consumption stood at 126.3 million tons during that period, indicating a persistently weak demand and obvious overcapacity. “It is a very dangerous expansion for lack of demand.” said Shan Shanghua, president of the CISA.

Hebei Iron and Steel eliminates pig iron capacity(2009/5/13)

Hebei Iron and Steel Group Handan Steel started to scrap four 300-cubic-meter blast furnaces on May 11 with a total capacity of more than 1.7 million tons, equal to the production scale of a medium sized mill. The move indicated a full start-up of updates project in Handan Steel’s old space.

More BFs to shut down in Sichuan(2009/5/12)

The Sichuan Economic Committee has deiced to inquire into the situation of outdated steel capacities still under operations across the province from May 20 and lay down plans to eliminate them.
According to a program, the province will eliminate blast furnaces with a size of 300-cubic-meter or below, electric furnaces and converters with a size of 20-ton or below by 2010; scrap BFs with a size of 400-cubic-meter or below, EFAs and converters with a size of 30-ton or below by 2011; and shut down a great number of BFs within the next three years.

Concentrates iron ore project launched in Liaoning(2009/5/11)

Wanhua Group succeeded in operating a 300,000 t/y iron ore concentrates project in Chaoyang County, Liaoning on Mary 2, costing 280 million yuan. The group is a non-governmental producer of gold, iron ore concentrates and ferrous metals and is one of the backbone enterprises in the province. The project has gained great supports from the local government that built a 40,000 kilowatts power station with partially self-raised funds of 15 million yuan to supply two million kilowatts per hour of electricity a month for the mine’s normal operations.

Coke price up 50 yuan in Hebei(2009/5/8)

The Hebei Coking Industry Association decided to raise the monitor price of coke by 50 yuan per ton on May 5 following a rise of 30 yuan per ton on May 1. Some mills have already accepted the new prices. Insiders attributed the rise to the supply deficiency and a 50 yuan per ton rise in coking coal price. They didn’t rule out the possibility of further rise in coke price in the future.

Iron ore stocks at ports reach 62 million tons in April(2009/5/7)

Domestic ports of a large scale were expected to handle 9.2 million pieces of containers in April, down 13.4 percent year-on-year; 53.5 million tons of iron ore, up 24.2 percent; 40 million tons of coal, down 7.7 percent; and 15.3 million tons of crude oil, up 9 percent, according to the Ministry of Transport. Iron ore stocks at main ports amounted to about 62 million tons.

China to remove another 100 million tons capacity in three years(2009/5/6)

The NDRC has reiterated the importance of structural adjustments and set timetable for the steel industry to eliminate outdated capacity on its official website. Key tasks on energy saving and emissions reduction this year include: Promote structural optimization and updates, rein in duplicate construction of high energy consuming, high polluting, and low efficient capacity; enhance entry threshold of environmental protection; prohibit financial institutes from lending money to high energy consuming and over capacity sectors; and speed up the elimination of outdated capacity. The country plans to scrap 15 million kilowatts of thermal power stations, 10 million tons of pig iron capacity and six million tons of steel capacity this year, and eliminate another 72 million tons of pig iron capacity and 25 million tons of steel capacity by 2011.

Large magnetite found in Northern China(2009/5/6)

A new vanadium and titanium magnetite was discovered in Chengde City, the largest vanadium and titanium producing base in North China. The ore deposit has an estimated reserve of one billion tons with an average grade of nearly 30 percent. China is the world’s third largest producer of V&T magnetite with resources mainly located in Chengde, Hebei and Panzhihua, Sichuan. 4.5 billion tons of magnetite resources have been found in Chengde, making the region the largest vanadium and titanium base in North China. Vanadium is a main raw material used in the steel industry to enhance steel’s strength, tenacity, ductibility and heat resistance.

China to scrap 72 million tons pig iron capacity in three years(2009/5/5)

Progress has been made in eliminating outdated capacity in China, according to the NDRC. The country should scrap blast furnaces with a size of 300-cubic-meter or below as well as converters and electric furnaces with a size of 20-ton or below on schedule. By 2011, it will have eliminated 72 million tons of out-fashioned pig iron capacity and 25 million tons of steel capacity. Four measures are mentioned to facilitate these goals: Revise and improve industrial policies; set up withdrawal mechanism for backward capacity; promote technical updates among steelmakers; and strengthen efforts in supervision and inspection.

Iron ore demand may diminish 60 million tons in 2009(2009/5/4)

China’s demand for iron ore in 2009 may decrease 60 million tons, or 21 percent, from last year to 350 million tons, said Zou Jian, president of the China Metallurgical Mining Enterprises Association. He added domestic iron ore output would reach 860 to 880 million tons this year, up 20 million tons. In the first quarter, the country imported 131.53 million tons of iron ore, up 20.86 million tons, or 18.85 percent, year-on-year; produced 166.72 million tons of iron ore, up 4.21 million tons, or 2.6 percent. An increase of 5.04 million tons in pig iron output in the first quarter meant an increase of 7.96 million tons of consumption in charged ore. However, China imported 20.86 million tons more iron ore in the period, indicating a surplus of 12.90 million tons of iron ore supplies. As a result, the average landed price of imported iron ore stood at $80.47 per ton, down $50.53 per ton, or 38.57 percent.

Large iron ore resources found in Liaoning (2009/4/29)

A super large iron ore deposit was found 1,100 meters beneath the earth in Benxi city with an estimate reserve of more than two million tons, which would make Liaoning the biggest iron ore producing province in China. The deposit with Fe grade of 34 percent would meet demand from local major steelmakers such as Ansteel, and Benxi Steel for over 50 year. Now the iron ore resources in Liaoning account for one fourth of the country’s totals.

Hebei to eliminate 20 million tons of steel capacity(2009/4/28)

Hu Chunhua, governor of Hebei Province, put forward development goals for the local steel industry at the 32nd executive meeting of the province: Control gross output, curb blind expansion, enhance percentage of hi-tech and high value added products, ensure an annual growth of 15 percent in the industry increment value, hold the percentage of the increment value against provincial GDP at 13 percent, and enhance the industry’s degree of centralization. By 2011 there will be no less than five large mills each with a capacity of over five million tons. The proportion of cold rolled and galvanized in sheet and strip line will add 10 percentage points, while that of narrow strip will reduce 10 percentage points; that of 400MPa high-strength rebar will amount to 70 percent. Domestic and international advanced facilities will account for more than 50 percent. 20 million tons of outdated capacity will be eliminated within three years. Comprehensive energy consumption will not exceed 615 kg of standard coal, new water consumption will be less than four cubic meters, and dust emissions less than 0.9 kg.

More efforts in scraping outdated capacity(2009/4/24)

Minister of Environmental Protection noted more efforts should be done to eliminate obsolete capacity in 13 sectors including iron, steel making, ferroalloy, and coke. In 2009 the power, iron making, steel making and papermaking industries will wash out 15 million kilowatts, 10 million tons, six million tons, and 500,000 tons of outdated capacity respectively. The country will install de-sulfurization capacity of more than 50 million kilowatts at coal-fired power stations and 20 gas de-sulfurization machines at mills’ sintering plants, introduce technology and products adaptable to the state conditions that can curb the pollutant of nitrogen oxide, promote a healthy development of de-nitration industry, and increase the usage of clean energy in the car industry.

Large mills make losses in Q1(2009/4/24)

According to the CISA, domestic medium and large-sized mills made a loss of 3.31 billion yuan in the first quarter, due mainly to the fact of oversupply, compared to a total profit of as much as 47.16 billion yuan in the same period of last year. 20, or 34 percent, of the 72 key mills made a loss. Steel output stood at 124.74 million tons in the first quarter, up 1.74 million tons or equal to 517 million tons annually, much higher than the targeted 460 million tons. China exported 5.14 million tons of steel products, down 50 percent. The diversion of export capacity into domestic market also caused the increased household supply. The production costs have dropped 350 yuan per ton. The prices of domestic iron ore and imported one declined 44 percent and 26 percent respectively whereas coking coal was up 12 percent.

Container sector to use less steel in 2009(2009/4/22)

China’s container sector is expected to experience the worst times in the first half of this year and consume 2.8 to 4 million tons of steel in 2009, down 30 to 50 percent year-on-year, according to Shi Yanqiu, general secretary of the China Container Industry Association. In 2008, domestic production and sales of containers dropped 10.53 percent to 2.32 million pieces (about 3.35 million TEUs) amid the weakening international demand due to the financial crisis, thin businesses, and a soft freight market. She said the recovery of the industry this year will depend upon the revival of the world economy, and whether the business can return to a normal growth rate, the freight market can rebuild confidence, and shipping companies can raise enough money to buy containers.

Steel industry faces period of structuring(2009/4/21)

Baosteel Group chairman Xu Lejiang said at the Boao Forum for Asia 2009 that the outbreak of the financial crisis has made the Chinese steel industry fully exposed to the structuring problems and it is time for the industry to adjust its structure. The industry cannot expect a good prospect unless so much outdated and high polluting capacity is eliminated. As regard to iron ore prices, he noted the prices of primary products should return to the true nature of the goods and be a reflection of scarcity, supply and demand position, and sustainable development of these goods.

Steel prices and exports slumped in March(2009/4/21)

According to the CISA, as of the end of March, the domestic steel price index stood at 97.59 points, down 44.72 points, or 31.42 percent, from the same period a year before, and was lower than the level of 100 points in April 1994 when China first published the steel index. Meanwhile, the country exported 5.14 million tons of steel products in the first quarter of this year, down 54.9 percent year-on-year; and produced 124.52 million tons of crude steel in the period, equal to annualized 504.99 million tons. The CISA attributed the price fall to the slowdown of steel-consuming sectors and high steel output, and reminded mills of several principles as follows. Control gross output and reduce purchase costs of fuel and raw materials; seek greater potentials in the overseas market so as to ease household pressure; pursue industry self-control conventions and guarantee a fair competition order; as well as observe the WTO rules and oppose international protectionism and cheap dumping actions.

Sheet prices fall below costs in Hebei(2009/4/20)

Domestic steel prices have declined for nine consecutive weeks as of this week ending April 17. According to a source with the Hebei Metallurgical Industry Association, concerns were raised that the steel market continued to drop while the capacity in the province has not been completely released. The price of a certain type of sheet has fallen below its costs. Sheet market, as one of the major steel products mainly used in the manufacturing sector such as shipbuilding and auto, collapsed as the shipbuilding industry has slumped deep into a recession due to the financial crisis. Other products with a falling price across the province included rebar, large and medium sections as well as hot and cold coil.

Rizhao: China’s largest port of iron ore imports(2009/4/17)

Rizhao Port remained a position as China’s largest port of iron ore imports by handling shipment of 28.26 million tons in the first quarter, up 16.2 percent year-on-year; and accommodated 37 Capsize vessels each with 160,000-odd dwt in March alone. The port will invest 1.58 billion yuan this year in the building of infrastructure such as large tonnage gantry cranes and ore ship unloaders.

More efforts to crack down environmental issues(2009/4/16)

Several authorities including the Ministry of Environmental Protection recently vowed to curb blind investment under the pretext of expanding domestic demand and sustaining development, prevent the new round of duplicate construction of high-polluting, high energy consuming, and low-efficient projects, tackle a number of outstanding environmental issues that do harm to the public health and sustainable development as well as guarantee a sound environment to fuel the steady and fast economic development.

Low-price iron ore imports to hit spot market(2009/4/16)

The China Customs data showed the country imported 52.08 million tons of iron ore in March, up 5.34 million tons from February and 46.2 percent year-on-year; and imported 131.47 million tons in the first three months, up 18.8 percent. Experts warned the world’s top three iron ore suppliers have changed their tactics in the ongoing iron ore contract price negotiations. While continuing to show no hurry in the prolonged price talks, they have moved to drive domestic and Indian suppliers out of market by offering low-price materials in spot market. The costs of the top three mining giants are said to be at $20 to 30 per ton, a level that is cheap enough to force a good deal of domestic mines to shut down, let along their superiority in quality. The experts suggested domestic mills import iron ore according to their actual demand, continue to develop overseas resources, and strengthen efforts in consolidating assets nationwide.

Surplus coke capacity surpasses 100 million tons(2009/4/15)

The China Coking Industry Association president Huang Jingan said recently coking enterprises across the country are still expanding their capacity in earnest despite a serious imbalance between supply and demand. The current coke capacity has reached 390 to 400 million tons, overshadowing a demand of up to 280 to 290 million tons by over 100 million tons. Besides, exports of coke during the first two months stood at just 100,000 tons, down 93.9 percent year-on-year. On the other hand, as much as 50 million tons of coke capacity is expected to be launched from proposed projects and projects under construction in the next two years. China’s demand for coking coal will reduce more than 50 million tons in 2009 due to the sharp drop of steel and coke output worldwide.

Export market remains tough in April(2009/4/15)

China exported 1.67 million tons of steel products and billet in March, up 7 percent from February, while importing 1.73 million tons, up 24 percent. At 60,000 tons, the country became a net crude steel importer at an interval of over two years. The reasons for this, according to experts, are weak overseas demand and the disappearance of advantages in domestic steel prices. The CISA general secretary Shan Shanghua warned a dim prospect for export orders although the country raised export rebate rates on some steel products from April 1.

New ore deposits found in Anhui(2009/4/14)

The Geological Survey of Anhui Province recently found a super large magnetite deposit and a pyrite ore deposit in the valley of Nihe River, Lujiang, with a proven reserve of 120 million tons for the former and more than 30 million tons for the latter. The combined potential economic value reached more than 40 billion yuan. Meanwhile, a 100,000-ton molybdenum reserve in Shapinggou, Jinzhai County, and an 80,000-ton molybdenum deposit in Huangshanling, Chizhou, were also detected with a potential value of over 30 billion yuan and 20 billion yuan respectively.

China’s March steel exports total 1.67 million tons(2009/4/14)

China exported 1.67 million tons of steel products in March, up 120,000 tons from February and down 59.76 percent from a year earlier. The total exports in the first three months stood at 5.14 million tons, down 54.8 percent. In March, the country imported 1.27 million tons of steel products, up 16.51 percent from February and down 15.33 percent year-on-year, bringing the 3-month imports to 3.23 million tons, down 22.5 percent. The net steel products exports in March stood at 400,000 tons, down 14.89 percent and 2.25 million tons, or 84.91 percent, respectively. China did not export a single ton of billet while importing 460,000 tons of billet, bringing the total imports to 900,000 tons, up 17 times. It exported 50,000 tons of coke in March and 150,000 tons in the first three months, down 94.88 percent. The country’s imports of iron ore hit a monthly high at 52.08 million tons in March, up 5.34 million tons from February and 46.2 percent year-on-year. The total imports in the first three months reached 131.47 million tons, up 18.8 percent.

Coke price down on weak export demand(2009/4/13)

Coke exports via Tianjin port were 3,000 tons, 4,000 tons and 30,000 tons respectively in the first three months of this year, down about 70 percent from a year earlier. Shanxi, a major coke-producing area, exported 44,000 tons of coke in the first two months, down 94.9 percent, including 6,365 tons in February, down 98.1 percent.
Since the end of 2008, the price of coke has slumped as well due to weak demand from downstream sectors. The price may further drop by 100 yuan per ton since 90 percent of coke output is consumed by the steel industry that hasn’t yet shown signs of recovery.

Record iron ore imports despite steel output cut in March(2009/4/10)

Despite a record-breaking iron ore import, China saw a month-on-month decline of nearly two million tons in steel output in March. Inventory, though keeping a trend of downswing, was relatively high compared with actual demand, leaving pressures on the market in the future. In March, China’s import of iron ore reached 51 million tons, hitting a record on both monthly and quarterly basis. Domestic mill has decreased the ratio of consumption of the homegrown iron ore to 30 percent from 60 percent over the past six months, thanks to the falling prices of imported iron ore.

Rio’s 20% price cut proposal rejected by CISA(2009/4/9)

Rio Tinto, the world’s second- largest iron ore producer, offered a temporary 20 percent price cut to Asian steelmakers after annual contract negotiations stalled. But some Chinese mills rejected the discount as too small. Rio’s offer falls short of the 40 percent cut that Chinese steelmakers, the world’s largest buyers of iron ore, are demanding because of falling steel prices. Annual contract talks may take another four months to settle, a source said. China is pressing producers to cut 2009 contract prices to below 2007 levels, or at least a 40 percent reduction for imported ores, the CISA president Shan Shanghua said. As of March 27, the landed price of 63.5 percent grade spot iron ore from India has dropped by 57 percent to current $60 to $62 per ton from the late 2007’s level of $205 per ton.

Steel futures make steady debut(2009/4/8)

A total of 995,860 lots of futures contracts on reinforcing steel bar and 228,988 lots on wire rod have been concluded on the Shanghai Futures Exchange since China launched its first steel futures on March 27, with the transaction amount of 35.15 billion yuan for the former and 7.78 billion yuan for the latter. As of last Friday, the contracts of rebar stood at 77,068 lots, up 64.17 percent from the first trading day; and that of wire rod reached 19,050 lots, up 45.71 percent.
Insiders say the interaction of prices between steel futures and spot market is clearly evident. The market is active in trading, making risk manageable, and operating in a steady mode.

Coke output limited to 50 percent(2009/4/7)

Spurred by mills’ output cuts, coke producers in Shanxi, Shandong and Hebei again decided to limit their output to more than 50 percent. Experts say the price of coke may further drop 100 yuan per ton as 90 percent of coke output is consumed by the steel industry that showed no upturn in sight. Steel producers in Hebei lowered the procurement price of coke by 150 to 300 yuan per ton in March.

Steel industry suffers huge losses in Q1(2009/4/3)

Data showed China’s ferrous metal melting and processing industry had a gross profit of minus 769.02 million yuan in the first two months of this year, down 103.2 percent year-on-year; and the ferrous metal ore mining industry had a gross profit of 2.34 billion yuan, down 65.84 percent. The decline in profits of both industries was far below that of 37.3 percent in the country’s other industries of a large scale. Experts say the weak demand was responsible for the deteriorated margins in the steel industry. As the end of February, stocks of flat product and long product have reached 5.46 million tons and 5.87 million tons respectively. The steel price index continued to fall.

Few mills witness more gains last year(2009/4/1)

11 out of the 12 steelmakers that have released 08 annual reports recorded a dip in net profits. Fushun Steel, a producer of special steel, reported an increase of 46.48 percent in net profits. Among others, Chengde Steel & Vanadium incurred the biggest drop of 93.61 percent from 2007’s 12.72 billion yuan and Baoshan Steel had a net profit of 6.46 billion yuan, down 49.21 percent.
Experts attributed the massive losses to falling demand from domestic and overseas markets caused by the financial crisis and a number of iron ore stocks bought by mills at higher costs.
　

Foreign media： Iron ore suppliers agree on price cuts(2009/3/31)

Foreign media reported that international iron ore suppliers have agreed to cut the price by 40 percent over the previous year, close to the level in 2007, in order to seize market shares. The CISA secretary general Shan Shanghua said upon the new deals, Chinese steelmakers could enjoy a payment discount of 40 percent based on the contract prices last year, with the contract period starting on January 1, 2009. However, Brazil’s Companhia Vale do Rio Doce was reportedly in ignorance of the price-cut news, saying its stance on price terms remained unchanged.

SHFE warns steel futures risks(2009/3/30)

Wire rod and rebar will be traded on the Shanghai Futures Exchange (SHFE) on March 27. A source with the SHFE warned that either steel producers or other investors should fully get to know the trading mechanism, rules and risks of the steel futures to prevent unnecessary losses.
He said steel producers should engage in the steel futures with a main purpose to ensure a steady operation and make sales and profits manageable, instead of making profits through the speculative trading. They should work out interior organization structure, management system, decision-making flow, working flow and risk control measures adaptable to hedging.

Export duties on ferroalloy may be lowered (2009/3/30)

China, the world’s largest ferroalloy producer, is possibly to lower export duties on ferrochrome and ferromanganese in the second half of this year from current 20 percent to assist domestic producers in export businesses, a source with the China Ferroalloy Industry Association said. Meanwhile, the government will soon release a name list of ferroalloy producers that are allowed to bargain with power companies on electricity fees on monthly basis.
China produced 18.25 million tons of ferroalloy last year, up 4 percent year-on-year, and is expected to produced 14 to 15 million tons this year.

China to expedite coking elimination(2009/3/27)

A source with the Ministry of Industry and Information Technology says the country will expedite the elimination of outdated coking capacity and further supervise and control exports. In the last three years of the 11th Five-Year Plan, 50 to 60 million tons of low efficient coking capacity will be scraped. A quite number of coking producers will face the similar situation of mergers and acquisitions to the steel industry, which will lead to a massive closure of those who are lacking competitiveness, lower energy and raw material costs, and less resistance to mergers and acquisitions from local protectionism.

Coke exporters call on duty cuts(2009/3/27)

Experts say the government should lower export duties of coke to 15 percent from the current 40 percent, while increasing export rebates in order to enhance exporters’ competitiveness.
In the long run, export of coke should not be encouraged, for coke is a non-renewable strategic resource. But it is irrational to see coking enterprises suffer from massive losses. Therefore, for the sake of these producers, a moderate reduction in export duties can somewhat help alleviate their burdens.

Chinese firms face hurdles in Australia(2009/3/26)

BEIJING, March 25 -- The Australian government has decided to extend its review of two other Chinese firms' investments in the country's miners just one week after a similar extension was granted to examine Aluminum Corp of China's (Chinalco's) investment in Rio Tinto.
The country's Foreign Investment Review Board announced that it would extend its probe of the takeover of OZ Minerals by China's Minmetals by as long as 90 days from March 24, OZ Minerals said on Monday.
The Minmetals Corp, China's largest metal trader, last month proposed to buy the Australian mining firm for A$2.6 billion ($1.7 billion) in cash to ensure adequate supplies of non-ferrous metals. The Melbourne-based company operates zinc, lead, copper, gold and silver mines in Australia and overseas.
OZ Minerals said it understands the requirement for proper processes to be followed. "It is in the interests of OZ Minerals, its shareholders, employees and all its stakeholders that Minmetals' application is determined as soon as possible," it said. The company has asked its lenders to extend a March 31 debt deadline to Sept 15 to give it time to conclude the deal. If the takeover fails, OZ will be unable to refinance $1.3 billion in debt. Minmetals said yesterday it was "optimistic" it would win approval for the bid from Australia.
Bloomberg quoted Wang Jionghui, general manager of the mineral resources division at Minmetals, as saying that the obstacles to overseas investments would fall because mining companies need capital.
The Review Board announced last Thursday that it would extend its review of Fortescue's planned sale of a stake to China's Hunan Valin Iron and Steel for up to 30 days.
Fortescue said it remains confident that the structure of the share subscription agreement will enable Valin to obtain government approval. Valin plans to pay about $770 million for a 16.5 percent stake in Fortescue under a deal announced last month. A steep fall in the prices of key resources, triggered by the global economic downturn, has provided opportunities for Chinese companies to make overseas investments, analysts said. But such intensive acquisitions may rouse public as well as government concerns at the destination countries. (Source: China Daily)

China’s steel exports dampened on Russian trade action(2009/3/26)

Russia’s Ministry of Industry and Commerce said local producers have filed anti-dumping investigations against nickel stainless sheet under 19 HS codes imported from China. Experts reminded that Chinese exporters should take an active response to the cases since the Russian might lodge the cases with a purpose to protect the local industry, rather than alleged dumping at low prices. The Russia Special Steel and Alloy Customers and Suppliers Association said the country’s consumption of imported stainless sheet accounts for over 70 percent of the total supply of 170,000 to 180,000 tons each year. According to data, China encountered nine remedy trade cases launched by five former CIS countries including Russia, Uzbekistan, Ukraine, Belarus and Kazakhstan in 2008.

Mills see net profits further dip(2009/3/25)

Three mills have reported a minus growth in 2008 results. Bayi Steel posted a net profit of 103.88 million yuan in 2008, down 74 percent from a year earlier; Daye Special Steel had a net profit of 200.88 million yuan, down 38 percent; and Xinxing Ductile Pipe had a net profit of 510.69 million yuan, down 14 percent. With the economy slowing in the latter half of last year, especially in the fourth quarter, the steel industry saw a lowered capacity to make profits. The above three listed mills incurred operational losses to different degrees.

Steel prices go down for six week(2009/3/24)

Domestic steel price index experienced a 6th week of decline with the price movement of different varieties mixed. The price of long product continued to dip, that of flat product stopped falling and that of cold rolled sheet rebounded. Construction steel prices showed signs of recovery in the Beijing market; construction steel, hot rolled coil and cold rolled products rose slightly in the Shanghai area, and construction steel and cold rolled coil also went up in the Guangzhou area.

Coal shipment climbed in Qinhuangdao(2009/3/23)

Qinhuangdao Port completed coal shipment of 10.34 million tons during the first 17 days of March, up 43.4 percent from the same period of last month at 7.21 million tons, equal to 600,000 tons of outbound shipment per day, up 41 percent from daily average of 424,000 tons in February. As of March 18, there were 121 vessels waiting for coal loading in the port, compared to 99 on March 16 and 72 on February 15. Experts say sharp increase in demand from the thermal power sector in the south is responsible for the rebound.

Mills to face another production cuts(2009/3/19)

Experts say the steel industry will face a new round of production cuts on falling demand and overcapacity. A number of small and medium-sized mills began to halt or cut production in February owing to falling steel prices. As of the last week, the domestic steel price index had seen a decline for five consecutive weeks. Baosteel and Wisco also announced plans to lower April prices. 19 of the 20 mills unveiling 2008 business results warned a lower income and only one posted a higher result.

MIIT solicits opinions on steel industry policies(2009/3/18)

The Steel Industry Development Policy has been playing an important role in boosting the structural updates and sustainable development of the steel industry since its announcement and implementation in July 2005. In the light of the State Council’s rescue plan on the steel industry, the Ministry of Industry and Information Industry (MIIT) now plans to revise and amend the policy with an aim to meet the changing situation of macro economy at home and abroad, cater to the new trend of the industry’s development as well as better display its guiding influence to the development of the steel industry. The MIIT is now soliciting opinions on supplement and amendment of the policy from the public including steelmakers. Opinions and suggestions in written form should be submitted to the Policy Development of the MIIT before April 15, 2009.

Address: No.13 West Chang’an Avenue, Beijing
Postal code: 100804
Unit: the Policy Development of the MIIT
Fax: 010-66023282
E-mail: cyjgc@miit.gov.cn

                                                March 7, 2009

Coke prices down 150 yuan(2009/3/17)

Coke producers in Shanxi lowered the monitoring price by 150 yuan to 1,700 yuan per ton in March just one month after they raised the unit price by 80 yuan per ton, according to the Shanxi Coke Industry Association. Meanwhile, these producers increased the limitation of output to 60 to 70 percent. The association urged its members to avoid undercutting among each other and maintain a steady market situation. It also called on a joint purchase of coking coal as raw material in order to lower costs and secure a stable supply.

Iron ore throughput surges in Rizhao(2009/3/16)

In January Rizaho port saw an increase of 122.3 percent in iron ore throughput from the previous month and just down 1 percent year-on-year. This trend continued in February with a rise of 12 percent compared with the figures on both yearly and monthly basis. The quantity of iron ore imported by Rizhao Steel and other small mills accounted for 21 percent of the total imports via the port. Small mills may cut output again since the market has witnessed a 3rd week decline in steel prices, which is possible to cause a higher inventory level at the port. However, the market still has a chance of revival stimulated by the government’s four trillion yuan investment and the release of rescue plans on steel, auto and shipbuilding industries.

Projects halted on environment problems(2009/3/13)

An official with the Ministry of Environmental Protection said as of the end February, the authority has received 195 applications waiting for approval on environmental protection and rejected 14 environment-threatening projects covering chemical, petrochemical, steel, thermal power and papermaking industries, without unveiling the name of these projects. The 14 projects cover a total investment of 104 billion yuan.

Iron ore imports surge in February(2009/3/13)

According to the Customs, China imported 46.74 million tons of iron ore in February, up 43 percent from 32.65 million tons in January, bringing the total imports during the first two months to 79.39 million tons, up 6 percent. However, the price of imported iron ore in March has dropped to $70s per ton from $80 in January, which means the more iron ore traders import, the more losses they will incur.
Besides, domestic mills are again under pressure to slash output due to the recent too rapidly restored capacity and still sagging export markets. Therefore, the prospect is dim for traders who have stockpiled a lot of iron ore materials.

Large coking coal deposit discovered in Inner Mongolia(2009/3/12)

A large high-quality coking coal deposit was discovered in Alashan Zuoqi County, Alashan Prefecture, Inner Mongolia with an estimated reserve of up to 300 million tons after the Inner Mongolia Bureau of Geology and Mineral Resources completed a drilling work stretching 5,122.63 meters.

Production limits voiced in coke industry(2009/3/11)

In view of the falling prices of coke and a lower price of coking coal in the international market, the Hebei Coke Industry has urged its members to limit output to 30 to 40 percent in March while giving priority to quality and services, in order to foster a stable and healthy market situation.

CSSC deepens cooperation with steelmakers(2009/3/11)

China State Shipbuilding Corporation (CSSC) singed ship plate procurement deals with four steelmakers on March 9 in the wake of striking a similar deal with Baosteel Group in early January. The shipbuilder has promised to increase the orders it placed from the four mills that include Shougang, Valin Xiangtan Steel, Chongqing Steel and Shagang Group by 15 percent this year, to help them get over from the current financial crisis. CSSC is currently buying more than 80 percent of ship plate from the country’s largest producers of ship plate also including Baosteel.

Steel capacity slumped in Hebei(2009/3/10)

Some small mills in Hebei saw their profits dropping from the latter half of last year, causing the province’s overall capacity slow by 20 to 30 percent, said Wang Yifang, chairman of Hebei Iron and Steel Group Co., Ltd and also a CPPCC member. But not a single mill has gone bankrupt due to the market reason and those busted were all associated with their failure to meet environmental protection requirements.

Steel industry allies with auto sector(2009/3/10)

More and more carmakers and parts manufacturers have been tying the knot with the steel industry since the end of last year to combat the financial crisis. Among the cooperation included Wisco and BYD Co., Ltd, Jinan Steel Group and the Shandong Association of Automobile Manufacturers covering more than 300 members, Baosteel and China National Heavy Duty Truck Group Co., Ltd as well as Baosteel and Dongfeng Nissan Passenger Vehicle Company.

Q2 market likely to rebound(2009/3/5)

Experts say steelmakers enjoyed a better market in the first quarter than the previous one. Data showed that 71 large and medium steelmakers saw a sharp drop in their losses in January 2009, with the amount falling to one billion yuan from 29.1 billion yuan last December. Steel prices in the second quarter will keep stable, prompted by a traditional midseason of the steel market and the government’s four trillion yuan stimulus plans. The recent falling prices of steel may have a positive effect on the ongoing iron ore price negotiations as the Chinese side could use this as an excuse to lower iron ore prices.

Steelmakers see drop in January losses(2009/3/4)

71 large and medium steelmakers saw a sharp drop in their losses in January 2009, with the amount falling to one billion yuan from 29.1 billion yuan last December. But experts warn the loss coverage in March may further enlarge due to the fluctuation of profits during February and March. Traders and downstream users are most likely to be exposed to the risks of a possible falling price. As a reference, daily crude steel output reached 1.33 million tons in January, equivalent to annualized 485 million tons. The price of hot rolled coil has dropped to 3,200 yuan per ton.

Hebei to scrap 5.15 million tons of pig iron capacity by 2010(2009/3/3)

The Hebei government decided to scrap 5.15 million tons of outdated pig iron capacity and 8.13 million tons of steel capacity by 2010 and increase the minimum size of blast furnaces to be dismantled from 300-cubic-meter to 400-cubic-meter, that of converter from 20-ton to 30-ton in three years. 40-odd non-governmental steelmakers in Tangshan, Hebei have been incorporated into two groups, Changcheng Steel and Bohai Steel, with a steel capacity of 17 million tons and 12 million tons respectively.

Iron ore price talks may stretch on widening price gap(2009/3/2)

Domestic steel prices have fallen to around the same level of December 2008. The landed spot price of imported iron ore into China dropped to $77 per ton, 30 percent lower than $99 per ton under long-term contracts. Experts believe the iron ore price talks between the Chinese side and the top 3 mining groups would last for longer period in view of repeat fluctuation in the steel prices. The daily output in January reached 1.33 million tons, equal to annualized 480 million tons. The market cannot absorb so much new capacity before the four trillion yuan stimulus package takes effect. Iron ore stocks at 19 major ports amounted to 57.74 million tons as of last week, up 430,000 tons from the previous month.

China announces stimulus plans for nonferrous metals, logistics(2009/2/27)

BEIJING, Feb. 25 (Xinhua) -- China's State Council on Wednesday announced support plans for the country's nonferrous metals and logistics sectors.
Presided over by Premier Wen Jiabao, Cabinet members agreed to promote company restructuring and will offer subsidized loans to support technical innovations within the nonferrous metals sector.
The export rebate rates of nonferrous products should be adjusted, said the Cabinet without elaborating.
The establishment of a national reserve system for the industry was also demanded.
The product structure of the nonferrous industry should be adjusted to meet the demand of power, transportation, construction, mechanics and light industries, the announcement said.
Cabinet members agreed to eliminate technically undeveloped producers and avoid the increase of excessive output capacity.
Nine key projects were also decided on as a way to boost the logistics sector, including supplying necessary equipment as well as promoting an industry standard and an information platform.
The plan would also build a special district for logistics development, and boost urban delivery, wholesale and rural logistics.
The logistics industry was a service sector that could give a major boost to production and consumption, as well as provide a great number of job opportunities, said the meeting.
Company merging and restructuring should be encouraged in order to nurture large and modern logistics companies which could compete in the international market.
The development of logistics for energy, mining, automobile, and medical industries and agricultural products should be especially encouraged.
The meeting underlined the development of technical innovations and decided that central and local governments should allocate 100billion yuan within two years to support the promotion and application of innovative products.
Beginning last month, China has unveiled stimulus packages for 10 industries. Previous support packages include the auto, steel, shipbuilding, textile, machinery-manufacturing, electronics and information industries, the light industry and petrochemical sectors.

Steel output restored in January(2009/2/26)

Steel output resumed to 90 percent of normal capacity and some positive signs emerged in the basic raw materials and equipment manufacturing sectors in January, said Li Yizhong, minister of Industry and Information Technology. However, many uncertain factors still existed, including deteriorating exterior environment caused by the spiraling global financial crisis and deep-seated structural problems in the domestic market.

New export duties to be unveiled soon(2009/2/25)

Insiders say China will take measures to adjust import and export duties on steel products to ensure that direct and indirect steel exports account for more than 15 percent of the country’s total output and to regulate policies on fair trade. These measures, which are due to be released in March, are drafted by the Ministry of Finance, together with the National Development and Reform Commission, the State Administration of Taxation, the Ministry of Commerce and the Ministry of Industry and Information Technology.

09 iron ore price should be slashed(2009/2/25)

The price of iron ore should be slashed greatly as there is an obvious phenomenon of overcapacity in the iron ore market, the CISA vice president Luo Bingsheng said in an interview. He added there will be no change in China’s buying iron ore through long-term contracts and Baosteel’s status as a sole representative on behalf of the Chinese side in the iron ore price negotiations. A contract term starting from January 1 of each year is appreciated by the Chinese side judging from the market situation there. The country’s iron ore imports in 2009 might be decreased by 60 million tons from last year, the first decline seen in recent years.

Domestic steel prices further dip(2009/2/24)

Domestic steel prices continued the downward trend last week. The price of construction steel dropped more than 300 yuan per ton in Guangzhou, Wuhan, Chengdu and Xi’an and that of medium plate fell by 300 yuan per ton in Hangzhou, Wuhan, Beijing, Tianjin, Shijiazhuang, Shenyang and Xi’an. Larege- and medium- sized sections saw a decline of 30 to 50 yuan per ton. Hot rolled coil plunged 400 yuan per ton to 3,500 yuan per ton or below in the wake of a weeklong adjustment. The price of 1.0mm cold rolled coil settled at 4,495 yuan per ton, down 186 yuan per ton.

Industrial mergers highlighted by MIIT(2009/2/24)

The Ministry of Industry and Information Technology asked relevant authorities in a notice to boost merger and acquisition moves among the steel, electrolyte aluminum, auto, cement and textile industries, so as to seek a greater development of these sectors amid the financial crisis. To ensure a steady industrial development is regarded as top priority while various kinds of mergers are encouraged. All-out efforts should be given to address overcapacity in the steel, non-ferrous metal, construction materials and chemical industries.

New CISA’s president appointed(2009/2/23)

Deng Qilin, general manager of Wuhan Iron and Steel Group, was elected as new president of the China Iron and Steel Association at the CISA’s 2009 council (extended) meeting on February 19.

Governments buying props up steel production(2009/2/19)

Steel makers didn’t trim output in February mainly due to demand from state-backed projects. Shougang Qian’an plans to produce 250,000 tons of steel in February, Tangshan Steel to produce 420,000 tons and Baotou Steel to produce 452,000 tons, all resumed to normal levels.

Coke makers ease production limits(2009/2/18)

With coke demand slightly increasing, coke producers in Shanxi Province decided to ease production limits to 40 to 50 percent from 60 to 70 percent from February. A source said the limitation couldn’t be completely lifted because the price of coal continues to rise and the steel market remains unsteady. The local coke industry will give priority to the supply to large steelmakers in Northern China and make limited shipment to smaller ones.

Steelmakers see their profits plunge in 2008(2009/2/17)

According to the CISA, domestic steelmakers had a combined profit of just 84.6 billion yuan in 2008, down 43.7 percent year-on-year and a profit and tax of 114.9 billion yuan, down 23 percent. Steel production was slumped caused by rising costs and the weakened market. As of the end of December, steelmakers had a combined stock worth up to 103.72 billion yuan.

Coke prices up in Hebei, Shandong(2009/2/13)

Coke producers in Hebei Province decided to raise their ex-work prices by 50 to 100 yuan per ton to 1,800 to 1,850 yuan per ton (duty unpaid) in February owing to tight supplies and rising costs, according to the Hebei Coking Industry Association. Meanwhile, producers in Shandong also lifted the monitoring price of first grade metallurgical coke to 1,950 yuan per ton and that of second grade metallurgical coke to 1,900 yuan per ton from February 6.

Steel trade down in January(2009/2/12)

In January China imported 870,000 tons of steel products, down 550,000 tons or 38.7 percent year-on-year and 60,000 tons or 6.5 percent from last month while exporting 1.91 million tons, down 2.22 million tons or 53.8 percent from a year earlier and 1.26 million tons or 39.7 percent from last month. The country imported 130,000 tons of billet, up from 80,000 tons last month and hitting a monthly record since 2006; exported just 80,000 tons of coke, down 92 percent; and imported 32.65 million tons of iron ore, down 11.2 percent year-on-year and 5.4 percent from last month.

Railway infrastructure spending requires lots of steel(2009/2/11)

The infrastructure spending of the Beijing-Shanghai High-speed Railway will reach 60 billion yuan this year, which will consume two million tons of steel, 12 million tons of cement and create nearly 600,000 jobs. The 350 km railway will cut travel time to five hours between the two cities.

Steel industry faces grim outlook(2009/2/11)

Out of 19 listed steelmakers, Dalian Jinniu first announced its 2008 results. In 2008 the mill produced 412,700 tons of steel, accounting for 81.89 percent of its output in 2007; had a main business operating income of 3.41 billion yuan, up 0.13 percent; a main business profit of 218.64 million yuan, down 16.15 percent; a net profit of 26.91 million yuan, up 3.12 percent and an earning per share of 0.09 yuan. The mill plans to produce 464,000 tons of steel in 2009, 350,000 tons of steel products and have sales revenue of 3.4 billion yuan.
The mill expected a grim outlook in 2009 as the impact from the global financial crisis will be more serious than people ever imagined. Demand for special steel will shrink from most sectors except the military industry. Meanwhile, the export industry will be hampered by the depreciation of foreign currencies.

Coking industry tends to consolidate(2009/2/9)

China’s coking industry will defiantly experience massive consolidation as small and medium coking plants account for more than 80 percent of the industry and these plants have a scattered layout, a poor technology and management talent, are heavily polluted and lack of competitiveness. The possible mergers may appear in the following four methods.
1. Steelmakers consolidate their captive coking assets;
2. Steelmakers ally with independent coking plants;
3. Mergers are taken place among coking plants;
4. Coal miners consolidate with coking producers.

Steel industry losses 47.6 billion yuan in Q4(2009/2/9)

A source with the CISA said that 71 large- and medium- sized steelmakers lost up to 29.1 billion yuan in December, up 129 percent from November, with some big mills even losing 10 billion yuan each. The industry was expected to suffer a loss of 47.64 billion yuan in the fourth quarter of 2008 due to the decreased value of inventory. Analysts believe, however, the market is gradually recovering and mills are getting in a better shape in their profitability.
The source said an 80-day-long period rebound in the steel prices, which is rare in seven years, indicated a recovery in the market confidence. Besides, China’s daily crude steel output stood at 1.29 million tons in January 2009, compared with 1.22 million tons in December of last year, equivalent to a normal monthly output of some 40 million tons.

Liaoning to produce 42.5 million tons of steel in 2009(2009/2/5)

Liaoning Province plans to produce 42 million of pig iron, 42.5 million tons of crude steel, 43.5 million tons of steel products and 600,000 tons of ten non-ferrous metals in 2009. In 2008, the province completed an industrial added value of 137 billion yuan, produced 40.3 million tons of pig iron, 40.3 million tons of crude steel, 42.4 million tons of steel products and 590,000 tons of ten non-ferrous metals.

December steel output continues to slow(2009/2/4)

China’s crude steel output in December extended the minus growth for the fourth month in a row with a year-on-year drop of 10.5 percent, 1.9 percentage points lower than November; and steel products output was down 1.7 percent, 9.3 percentage points lower than the previous month, according to data from the Ministry of Industry and Information Technology website.

Dealers disturb steel market(2009/2/3)

China’s steel distribution market is confused as there are more than 100,000 dealers tending to follow the market’s ups and downs, a move that always intensifies the fluctuation in the steel market, said Shan Shanghua, secretary general of the CISA. He added the recent rise in steel prices had something to do with the pileups at dealer’s warehouses. Baosteel and Ansteel have set up new marketing policies, in which production is arranged in accordance with demand. This will help the mills improve their adaptability.

Steel market to maintain at low level(2009/2/3)

The Chinese Academy of Sciences forecast in its report that the country’s steel market will maintain a trend of low-supply and low-demand in 2009 and the price of steel will keep at a low level as a whole. The production of main steel products will slow in the first half of this year and grow faster in the latter half. The growth of domestic iron ore production will slow down with the price floating at a low level. The steel industry may end the sharp decline in profitability at the end of 2009.

China's steel producers forecast drastic net profits decline for 2008(2009/2/2)

BEIJING, Jan. 30 (Xinhua) -- China's major listed steel companies forecasted a huge drop in net profit in 2008, mainly due to the plunging steel price, according to the latest annual net profit forecasts.
China's Angang Steel Company Ltd. (Ansteel) reported an estimated 55 percent profit decline. Liuzhou Iron & Steel (Group) Company said annual net profit may drop 98 percent, and San steel Minguang Co. Ltd forecasted a 70 to 100 percent slump.
The weak performance mainly resulted from the shrinking market demand and price decline of both steel and raw materials, said there ports.
According to market data, price for secondary metallurgical coke dropped 50 to 60 percent from its highest point in the first half of 2008, while steel price dipped about 40 percent.
Chinese Academy of Sciences said domestic steel price will stay at a low level this year in a report on China's economic outlook in 2009 last week.
China's steel market will face both "shrinking supply and demand" in 2009, said the report. However, market demand will revive as the economic stimulus package took effect, and steel companies will see the end of profit decline at the end of 2009.

News Analysis: China's steel industry benefits from stimulus, support plan(2009/2/1)

BEIJING, Jan. 22 (Xinhua) -- Excess capacity, low industrial concentration and a lack of access to natural resources have long plagued China's steel sector. These problems have been exacerbated by the impact of the global financial and economic crisis.
When China's State Council, or Cabinet, approved a "rejuvenation plan" January 14 to support the troubled industry, the immediate aim was to deal with the effects of the crisis. However, analysts said, it could also ease the industry's long-term structural problems.
Since the plan was announced, construction steel prices have risen about 60 yuan (8.78 U.S. dollars) to about 3,650 yuan per ton in Beijing and Tianjin, according to Mysteel, a steel information service company.
Prices had been rising since the government's 4 trillion yuan economic stimulus package was announced in November.
From Jan. 14, when the industry package was announced after the market closed, and Monday, the Shanghai Composite Index rose 3 percent. Meanwhile, shares in the biggest steel producer, Baosteel, were up 2.5 percent while the No. 2 producer, Angang Steel, saw its stock rise 3.6 percent.
Chu Xueliang, an analyst with China Jianyin Investment Securities, said the support plans would help solve the persistent problems of excess capacity, low industrial concentration and a lack of raw materials.
FIRST, CUT CAPACITY
Analyst Rong Gang, of Langesteel, a steel information service, said China would consume about 500 million metric tons of steel, assuming the economy grows 8 percent this year. Last year's consumption was estimated at 451 million metric tons.
But capacity exceeded 650 million metric tons at the end of 2008, meaning producers were making too much steel even before the full impact of the crisis was felt.
Analysts believe the global crisis and its impact on China have yet to run their full course, and demand abroad for China's steel products remains weak.
They fear that even small signs of price recovery will prompt shuttered factories to resume production, which would exacerbate overcapacity and weaken prices again.
THEN, RESTRUCTURE
Low industrial concentration is another problem. China's steel sector is big but not strong.
Based on 2007 figures, Chu says, China's top 10 steel producers accounted for just 36.8 percent of the nation's total. The top five producers turned out about 20 percent.
By comparison, according to the International Iron and Steel Institute, the world's single largest producer, Luxembourg-based ArcelorMittal, produced 10 percent of the world's steel in 2006.
With more than 700 companies, many with extremely low output, China is the world's leading steel producer. According to the World Steel Association, in 2007 (the most recent year for which figures are available), China produced almost four times as much as the second-largest producer, Japan, and almost five times as much as the No. 3 producer, the United States.
China accounted for more than one third of 2007 global production.
RAW MATERIAL REMAINS PROBLEM
Something largely beyond China's control is its need for imported raw materials, such as iron ore. The only market power it has in this area is the power to negotiate with suppliers.
Leading steel companies such as Baosteel and Wuhan Iron and Steel each import about 70 percent of their iron ore. However, the huge number of small producers complicates negotiations with iron ore suppliers such as Australia, because the industry doesn't negotiate as a bloc.
NEW SUPPORT PACKAGE
The State Council announced support programs last Wednesday for the vehicle and steel sectors, two of the many industries for which the government is expected to announce specific support packages.
Chu said the steel industry plan includes eliminating obsolete capacity, speeding up innovation, promoting alliances and mergers and cutting export tariffs.
Regulations will favor larger, more efficient blast furnaces with a capacity of at least 1,000 cubic meters of ore. Those with capacities under 400 cubic meters should be closed.
Chu says about 100 million tons of obsolete capacity could be closed by this method, and he expects to see the impact show by 2010.
The government will subsidize loans of about 15 billion yuan to encourage technological upgrading and product rationalization to better meet demand.
Chu predicts China will eventually have six steel giants, each with an annual output exceeding 200 million tons as the support programs give companies a great opportunity to merge with or acquire other companies, which would increase industrial concentration.
Export tariffs on 67 steel products were scrapped Dec. 1 to ease pressure on exporters, according to the China Iron and Steel Association (CISA).
But Chu says industrialists are still hoping for further tax cuts, rebates or exemptions, and it is likely that some of these steps will be taken.
A UN report in December forecast the world economy would only grow 1 percent in 2009, 1.5 percentage points less than in 2008.
A slower global economy would mean reduced demand for steel -- not just in raw form, but also in motor vehicles and household appliances.
Faced with these multiple challenges, the CISA says steel producers must match production with demand and avoid below-cost exports.

MIIT calls for mergers among steel industry(2009/1/24)

The Ministry of Industry and Information Technology (MIIT) pointed out at a press conference that the central government’s policies aiming to expand domestic consumption and ensure a steady growth have taken an initial effect as there are signs of recovery in the steel, auto and chemical sectors. The growth of the domestic economy is expected to speed up in the second half of this year albeit a low one in the first half. The ministry stressed efforts should be done to eliminate backward capacity, boost mergers and consolidation among the steel, electrolysis aluminum, auto, cement, textile and tobacco industries, foster large enterprises with international competitiveness, deepen reforms on telecom system, support medium- and small-sized firms with preferential financial and taxes vehicles.

Mills face decreased vale in inventory(2009/1/23)

Anshan Iron and Steel reported a drop of 55 percent in profits and a preparation for falling inventory value of 1.81 billion yuan last year. Shandong Iron and Steel Group suffered a loss of 320 million yuan in October, 800 million yuan in November and 1.8 billion yuan in December with a whole-year profit of 3.5 billion yuan, down 62 percent from 2007. Other mills also recorded a decline of their net profits with some even at a loss.
Analysts say 32 listed steelmakers had a combined inventory value of 246.3 billion yuna in the third quarter of 2008 including 52.1 billion yuan in Baosteel alone and more than 10 billion yuan each in Tangshan Steel, Benxi Steel, Tisco, Wisco, Baotou Steel and Masteel. With the price of steel products and raw materials falling in the fourth quarter, the decreased value in mills’ inventory will be certainly topped 20 billion yuan.

mainstay sectors slide into a recession(2009/1/20)

Investigations showed apart from speculation activities dominated by the financial capital which boosted BDI index, the host of the Beijing Olympic Games also helped to inflate bubbles in the domestic ocean shipping, shipbuilding and steel industries. In order to avoid transportation limits during the games, many power stations, steelmakers once scrambled to buy in coal and iron ore stocks, a move that has deteriorated the current softening demand.
A great number of shipping capacity is idle because of few demand for cargos. Owing to a quiet market, Qinhuangdao port has so far piled up 9.4 million tons of coal in stock, approaching its limit capacity of 10.6 million tons.
With utilization rate slowing down, the price of corresponding products and raw materials slumped. As of December 2008, the price of steam coal on 5,500 kcal, imported iron ore from Australia and flat products in Qinhuangdao port dropped to 600 yuan per ton, 600 yuan per ton and 3,200 yuan per ton respectively from the peak of 1,100 yuan per ton, 1,600 yuan per ton and 6,500 yuan per ton in July 2008. The recovery in the three bolstering sectors, steel, coal and power, still has a long way to go despite a 10 percent rise in the prices compared with November.

China to explore overseas mineral resources(2009/1/19)

China will encourage domestic enterprises to take part in developing overseas resources projects mainly on oil, nature gas, iron, nickel, chrome, manganese, aluminum, copper and sylvite, according to a National Mineral Resources Program (2008 to 2015) released on January 7. The global financial crisis has beaten down the prices of mineral products and provided a chance for Chinese firms to involve in the international mineral resources exploration.

China unveils support package to auto, steel industries(2009/1/16)

BEIJING, Jan. 14 (Xinhua) -- China's State Council unveiled a long-awaited support package for the auto and steel sectors Wednesday to boost the two "pillar industries".
Under the plan, the government will lower the purchase tax on cars under 1.6 liters from 10 percent to 5 percent from Jan. 20 to Dec. 31 in a bid to stimulate sales.
It will also allocate 5 billion yuan (730 million U.S. dollars) to provide one-off allowances to farmers to upgrade their three-wheeled vehicles and low-speed trucks to mini-trucks or purchase new mini-vans under 1.3 liters from March 1 to Dec. 31. It will also increase subsidies for people to scrap their old cars and will straighten out and cancel regulations that restrict car purchase.
The plan encourages large auto companies, as well as major auto-part makers to expand through mergers and acquisitions so as to optimize resources and improve their competitiveness on the international market.
In the next three years, the central government will earmark 10 billion yuan as a special fund to support auto companies to upgrade technologies, and develop new engines that use alternative energies. The government will offer financial support to promoting the use of energy-saving autos and those fueled by new energies, and support automakers to develop independent brands and build auto and parts export bases.
The plan also urges improvements in the credit system for car purchase loans. More than 93 percent of Chinese vehicles are sold in the domestic market, but less than 10 percent are purchased on credit.
It also requires accelerated upgrading of the steel sector, transforming "big" industry competitors into "strong" international players.
It said the industry needed to eliminate outdated technology, and must not establish new projects that merely add to steel output.
China also needed to increase domestic demand for steel and adopt a more flexible tax rebate policy to keep international markets.
Special funds will be allocated from the central budget to promote technological advancement of the sector, readjustment of products mix and improvements of product quality, according to the plan.

Steel revitalization program released(2009/1/16)

The outline of a steel revitalization program was released by the Ministry of Industry and Information Technology. The program involves seven contents including speeding up structural adjustment and enhancing competitiveness, technology updates, ensuring a steady and orderly market, controlling gross output and eliminating backward capacity, adjusting import and export duties, improving standards on construction steel, using more homegrown steel in the shipbuilding and auto industries as well as lending more money to steel producers.

10 million tons of pig iron capacity to be eliminated by 2009(2009/1/15)

After a year’s effort, China added 12.8 million tons per day of sewage water treatment capacity, surpassing the target of 12 million tons set in 2008; 86 million kilowatts of coal de-sulfurizating facilities, 2.9 times the planned target; shut off 16.69 million kilowatts of small thermal powerhouses, 1.3 times the planned target and eliminated backward capacity in the paper making, cement, iron making, coking, ethanol, monosodium glutamate and citric acid sectors.
In 2009 the country will add 10 million tons of daily sewage water treatment capacity, more than 50 million kilowatts of de-sulfurizating facilities at thermal coal powerhouses and 20 units of gas de-sulfurizating facilities at sintering plants.
China will also eliminate 10 million tons of pig iron capacity, six million tons of steel capacity, 500,000 tons of papermaking capacity and 15 million kw of electricity power this year.
　

First batch of coke export quotas under general trade in 2009 unveiled(2009/1/12)

The Ministry of Commerce released the first batch of coke export quotas under general trade in 2009 in light of the Regulation of the People's Republic of China on the Administration of the Import and Export of Goods on its website for public supervision.
Contact：Industrial Products Export Office of the Foreign Trade Department
Tel：010-65197407/65197729
Fax：010-65197434
E-mail：wm_gongyepin@mofcom.gov.cn
Table of the first batch of coke export quotas under general trade in 2009

Hebei Steel further consolidated(2009/1/4)

Tangshan Steel, Handan Steel and Chengde Vanadium and Titanium, three listed arms of Hebei Iron and Steel Group, jointly announced a share swap plan, in which Tangshan Steel will absorb shares in Handan Steel and Chengde V&T at a conversion ratio of 1:0.775 with Handan Steel and 1:1.089 with Chengde V&T. The merged company will have a crude steel capacity of more than 30 million tons per year, the biggest steel producer in China by output.
Tangshan Steel mainly produces continuous billet and hot rolled narrow strip at stainless steel operations. It produced 2.75 million tons of pig iron, 2.35 million tons of crude steel and 2.57 million tons of steel products in 2007.
　

China mulls ways to perk up nine sectors(2008/12/29)

Relevant authorities should find ways to help boost the steel, auto, ship, petrochemical, textile, light industry, non-ferrous metal, facilities manufacturing and IT sectors, said Zhang Ping, director of the NDRC, in a report to the Standing Committee of the National People’s Congress. The global financial crisis has brought five impacts on China’s economy: 1. Export and investment growth slowed; 2. Industry production slowed and raw material prices and demand from the transportation sector declined; 3. Property and auto markets remained dull; 4. Business environment got worse and employment situation was not optimistic; and 5. The growth of fiscal revenues eased and potential financial risks emerged.
In order to cushion the crisis, the central government has worked out ten measures to expand domestic demand and secure a steady and fast development of the economy.

Iron ore stocks at ports slumped(2008/12/26)

Like Tianjin port, iron ore stocks at Rizhao port, mostly imported from Australia, India and Brazil, declined largely because an increasing number of mills in Shandong, Shanxi, Henan, the south part of Hebei and Shaanxi have restored production with a marginal profit. The government four trillion yuan stimulus package may also have contributed to the rising demand for iron ore. Iron ore price once dropped to 700 yuan per ton from 1,600 yuan per in August but has climbed to 810 to 820 yuan per ton since mid-November.

Many mills to raise prices earlier next year(2008/12/25)

 Shagang, Shougang and Benxi Steel have raised steel prices for January production with more confidence in the future steel market. Shagang is offering a booking price of more than 3,500 yuan per ton in January and will reduce a deposit to 300 yuan per ton from 400 yuan. Shougang is offering a price of 3,550 yuan per ton and Benxi Steel 3,603.6 yuan per ton.
However, experts say demand from end-users remains dull in a quiet market. Many buyers haven’t managed to prepare for winter storage and are sitting out of the market. The market will be running short of momentum later.

China may launch steel futures soon(2008/12/24)

 China may launch steel futures after the Spring Festival with wire rod as the first variety to be traded. Wire rod, rebar and hot rolled coil are currently being traded on the Shanghai electronic exchange market with coil’s daily transaction ranging from 100,000 to 200,000 tons. The country produced 80.38 million tons of wire rod and 101.37 million tons of rebar in 2007. The debut of the steel futures will help control risks and strengthen supervision.

China to support 9 crisis-stricken industries(2008/12/23)

 BEIJING, Dec. 19 (Xinhua) -- China must take more powerful and effective policies to support industrial development, the country's vice premier Zhang Dejiang said at a work meeting concerning national industry and information technology on Friday.
"A stable and rapid industrial development is essential to the country's overall economic advance," Zhang said.
China plans to initiate a policy package in the coming new year to revive nine industries heavily hurt by the unfolding global financial crisis, the Ministry of Industry and Information Technology (MIIT) vowed at the meeting.
The nine industries to receive national support include light industry, textile, steel, non-ferrous metal, automobile, petrochemical, ship-making, electronics and telecommunications.
"China will resort to tariff and trade policies to facilitate export of labor-intensive and core technology-supported industries, and encourage domestic companies to conduct overseas merger and acquisition," MIIT minister Li Yizhong said.
Li stressed the importance of adhering to the country's opening up policy amid international market contraction and emerging trade protectionism.
While supporting domestic companies to tap the international market, Vice Premier Zhang also urged to improve the country's investment environment.
Other major favorable policies to prop up the nine industries include carrying out sound value-added tax reform, setting up special funds to support technological innovation, expanding bank loans especially to small and medium-sized enterprises and increasing government procurement and reserves of major raw materials.
Policies to boost auto development and consumption are also being mapped out, according to Li.
Li urged local industry and information technology officials to work out specific regulations and ensure the effectiveness of these policies.

Liaoning has closed 452 small iron and steel plants in 2008(2008/12/22)

Blast furnace iron melting is the most important way of producing iron in modern industry, accounting more than 95% of the whole production in the world. As an important part of iron and steel production, blast furnace iron melting is developed from ancient shaft furnace iron melting. Though many new methods were developed, blast furnace iron melting survives and develops for its good technological and economic indexes, simple process, large production, high efficiency and low energy consumption.
Blast furnace production is continuous, and a generation of a blast furnace, since launching operation to stop production, could keep on operation for several to tens of years.
Yesterday, Liu Guoqiang, vice stadholder of Liaoning Province revealed the process of energy saving and emission decreasing work in the province, when he attended the ceremony for Bengang to close two blast furnaces.
“The shutdown of No.1 and No. 2 blast furnace has a great effect, as the two furnaces used to produce the famous ‘gen-seng iron’ that has a low sulfur and phosphor and impurity content, while has a good mechanical performance. Till now, Liaoning has closed 452 small-sized iron and steel companies and 80 cement plants and other high pollution and high energy consuming companies.”
“In 2008, Liaoning demolished 14.00 million tons of outdated capacities. But the province will still work on these capacities, while strict the standards for new projects, leading the heavy industries in Liaoning to a better development.” He added.

Over half of steel facilities in Tangshan back to operations(2008/12/12)

More than half of steelmakers in Tangshan have resumed operations since November. As of December 8, the ratio of idled capacity declined to 28 percent from 58 percent in September and October.
Tangshan Guofeng Steel began to trim output in August under the influence of the global financial crisis and only opened 2 out of the 10 blast furnace at the worst time. Hebei Iron and Steel Group also cut output by 20 percent. With the prices of iron ore concentrates and coke leveling off, Guofeng reopened three furnaces in early November and the number of operating facilities was increased to eight in mid-November. Hebei Steel also resumed full capacity after receiving a 1-million-ton order from the Ministry of Railways.
Experts say the overcapacity in the steel industry will continue for a while as the downstream construction, auto and machinery sectors remain slow and domestic new steel capacity is releasing.

Iron and steel companies in Qian’an Hebei Province resume production(2008/12/8)

When the finance crisis sourced from USA came to spread in the world, some of the iron and steel companies in Qian’an City of Hebei Province was influenced. But, since the central government carries out an economy stimulating policy and local companies have taken effective measures to deal with the crisis, iron and steel companies in Qian’an resume production one after another. Till 22nd Nov, 20 out of the 33 blast furnaces in Qian’an have resumed operation, and 16 out of the 25 converters and 8 out of the 13 rolling production lines have been back to production, especially those facilities with a larger capacity. Now the price fro billets has increased to 3,050 Yuan per ton, up by 7.02% from recent low of 2,850 Yuan per ton.
The iron and steel market was strong in the first half of this year, but it became weak since the later part of July to the end of Oct, due to lower demand in domestic market that was influenced by the finance crisis. During that period, the idled facilities in iron and steel companies in Qian’an reached 50% to 60%, even 70% of the capacity. And some of the operational facilities didn’t run at full scale. Due to the weak demand, the billet price once came down to 2,850 Yuan per ton, down by 48.65% from the peak of 5,550 Yuan per ton in April.
Entering Nov, as the steel consumers and the stockists needed to restock, the demand in market revived. On the other side, the high-priced raw materials in iron and steel companies run out, and producers could maintain profit with the materials of lower costs. As idling facilities still costs, it is payable to keep production, especially when the central government carries out demand-enlarging and economy-stimulating policies, and canceled export tax for some products, providing an improved environment by reducing burdens on the producers. The effect of macro policies needs a time, but it will be helpful in a long term, and help the recovery of market confidence. In this connection, the iron and steel market shows signs of recovery.
Spurred by the 4 trillion Yuan investment plan, the market may revive, and the 100 billion Yuan expenditure plan will improve the demand for iron and steel products in Dec, and help reduce the pressure from stock. With the improving confidence in iron and steel market, the prices for iron and steel products will be firmer by the end of 2008, and the profit of those companies may increase by 10%.

Iron ore price talks delayed on dim outlook(2008/12/1)

Iron ore price talks for 2009 between the Chinese side and the three leading miners have yet kicked off. Mills started to cut output from September of this year. The spot price of imported iron ore has been 30 percent lower than annual contract in the past two months. It is too early to tell where the iron ore market will head for as the central government has not unveiled macro regulatory policies for next year. The annual contract price would fall 30 percent if settled down at the end of this year and the decrease rate will be smaller if the talks extend into next year, foreign media forecast.

Credit Suisse ：Steel output recovery may cause iron ore supply shortage by 2012(2008/11/28)

If China’s steel output returns to the previous level spurred by the economic stimulus plan, the global iron ore market would face a supply shortage in 2012, according to Credit Suisse. The iron ore market is currently keeping balanced after miners in Australia and Brazil announced plans to cut output. China’s steel output will grow at a pace of 5.5 percent annually from 2012 and per capita iron ore consumption will increase to 600kg to 650 kg from currently 450kg to 500 kg.

Steel price continues to drop on overcapacity(2008/11/24)

It will take three to six months that the central government’s four trillion yuan package could play a role in the steel market. Therefore, steel prices are unlikely to recover by the end of this year.
Steel price fell 2.7 percent last week, going down 0.9 percentage point further over the previous weak, according to data released by the Ministry of Commerce. The average steel price in October stood at 4,739 yuan per ton, down 16.4 percent from September and lower than that during the same period of last year.

Coking and steel industries manage to tide over tough time(2008/11/24)

Coking plants in Shanxi and steelmakers in North China agreed to sign long-term cooperation agreements to tide over the current tough time. The agreements include: Both sectors build long-term coordinated mechanisms; senior executives from the two sectors hold regular meetings to exchange views on the market situation; a monthly monitoring price for the coke market is necessary and coking plants should guarantee a steady supply and quality of coke for the steel industry; steelmakers should make timely payments in accordance with contracts.

Steel prices continue downward trend(2008/11/21)

Domestic steel prices will continue to drop in the short run due to weakening demand from downstream sectors and high steel inventory. Steel price fell 2.7 percent last week ending November 16, going down 0.9 percentage point further over the previous weak. The average steel price in October stood at 4,739 yuan per ton, down 16.4 percent from September and lower than that during the same period of last year.
The steel market is expected a weak fundamental in 2009 but may recover at the end of 2009 or 2010.

China’s steel exports drop to 4.62 million tons in October(2008/11/19)

Customs data showed that China exported 4.62 million tons of steel products in October of this year, down 2.05 million tons from September, and it imported 1.15 million tons of steel products, with a net steel product export of 3.47 million tons.
The country exported 110,000 tons of billet and 530,000 tons of coke in October, and imported 20,000 tons of billet and 30.62 million tons of iron ore, down 8.58 million tons from September and up 2.86 percent year-on-year.
From January to October, China exported 53.12 million tons of steel products, down 1.2 percent with an export value of $55.6 billion, up 49.8 percent; imported 13.47 million tons, down 5 percent, with a net steel product export of 39.65 million tons. It also exported 12.4 million tons of billet in the first ten months, down 79.8 percent and 11.58 million tons of coke, down 12 percent, with the coke export value of $5.53 billion, up 123.4 percent, while imported 150,000 tons of billet, down 24 percent; and 376.69 million tons of iron ore, up 20.2 percent, with an import value of $53.3 billion, up 108.7 percent.

Mining projects hit by financial crisis(2008/11/14)

Mining projects are finding it more difficult to secure funds as many sectors have been caught up by the financial crisis, a senior official from IFC said at the China Mining Expo. The mining industry should draw three lessons from the current financial upheaval.
1. The business cycle of bulk commodities should be taken into consideration.
2. It is difficult to predicate a short-term price movement in the process of an economic downturn.
3. Investors and governments should be reminded that the driving force of the mining investment depends on minerals’ quantity, location, existing items and public infrastructure.

Capital goods price marks 17th week slide(2008/11/14)

The price of specially monitored capital goods in 36 cities across China dropped 1.3 percent last week ending November 9, according to a forecast from the Ministry of Commerce. The price of chemical products, energy, ferrous metal, farming materials, construction materials, rubber and light industry raw materials dropped, while that of minerals and non-ferrous metal rose. The price of 0.5mm non-oriented silicon steel fell 8.4 percent, while that of iron ore climbed 3.7 percent.

Outdated capacities in high energy-consuming industries in Qinghai will be washed out by 2010(2008/11/13)

According to Several Political Measures for Boosting the Washing out of Outdated Capacities and the Upgrading of Industries issued by Qinghai provincial government, by 2010, Qinghai will demolish all the outdated capacities in high energy-consuming industries. In the recent years, the capacities in some high energy-consuming industries grew rapidly, and the problems of dispersed industry, inefficient use of energy and environment pollution became series. In this connection, Qinghai issued the Measures.
According to the Measures, Qinghai will stop giving approvals to these projects of ferroalloy, silicon carbide, calcium carbide and other high energy consuming and high emission industries, leaving all such projects to be determined by provincial investment management offices. And the existing outdated capacities will be recorded under a completely survey, and then be demolished. Besides, Qinghai will compensate the companies who cut outdated capacities, while increase the prices for electricity and limit the land supply to these capacities.
Meanwhile, the Measure encourages companies of high energy consuming industries to take the remaining heat, and to improve the efficiency through technology upgrading and innovation.

Tangshan to expedite steel merger(2008/11/12)

In order to implement the spirit of the 4th Plenary Meeting of the 7th Hebei Provincial Committee, the Tangshan government will resolvedly boost structural adjustment and energy-saving efforts, expedite merger and consolidation in the steel industry, promote a shift of finished product from construction steel to equipment steel, develop premium strip and sheet, high quality wire rod, brand steel and H sections, improve added value, establish steel futures transaction base and speed up construction of Shougang Jingtang Iron and Steel Plant.

The iron mine projects under construction in China have a capacity totaled 120 million tons(2008/11/11)

According to Zou Jian, chairman of Metallurgical Mines' Association of China, there are 17 iron ore projects under construction in China at present, and the capacity totals 120 million tons. These projects are to launch operation in next 2 to 3 years.
Among these, several projects have a capacity of 10 million tons or more, including Taigang’s Yuanjiacun Iron Mine Project (22.0 million tons), Phase Two of Tanggang’s Sijiaying Iron Mine Project (15.0 million tons), Anhui Huoqiu Iron Mine Project (14.50 million tons) and Baogang’s Baiyun West Mine (10 million tons). Besides, Magang’s Luohe Iron Mine Project has a capacity of 5.0 million tons, and Shougang’s Xingshan Iron Mine Project has a capacity of 4.0 million tons.
According to Zou Jian, the global finance crisis hit the iron and steel industry in China, and slowed the growth in production; therefore the increase in iron ore production in China could meet the growth of iron and steel capacity. The oversea iron ore and ocean freight market will see an end to the period of incredible high profitability but maintain a considerable profit due to the monopoly in supply. From the end of 2008, the iron ore price will gradually become stable.

Mills’ profitability undermined by ailing demand(2008/11/10)

Listed steelmakers saw a year-on-year drop of 6.15 percent in their gross profit in the third quarter of 2008 and a 45.9 percent drop from the second quarter. Mills’ profitability will be further hit in the following two months due to low demand and high inventory in the domestic market.
Analysts attributed the drop to ailing demand. Listed mills’ profitability was better than the industry average and small sized mills were more flexible in cost control than larger ones.
Among the listed mills, flat producers saw a smaller drop of less than 50 percent in profit than that in long producers, who experienced more than 50 percent decline as a whole.
The World Steel Association expressed full confidence in a higher growth of demand for steel than that of GDP in 2009 at the 42nd annual meeting held on October 6, but didn’t make forecast on the worldwide steel market as usual. Sources from the meeting predicated a two to three percent growth in next year’s steel demand, much lower than 2007 and 08.
The growth in the real estate sector, which accounts for 36 percent of total steel consumption, is expected to be zero in 2009; that in the auto sector, which accounts for 4 percent, is estimated at decreased 5.16 percent, lower than 12 percent and 32 percent in 2008 and 07 respectively.

CCIA warns tough time next year(2008/11/7)

The China Coke Industry Association (CCIA) president Huang Jingang said recently that the industry may experience a tough period next year at a time when exports are curbing and investment on real estate remains unclear.
Demand for coke has sharply dropped since July and the price continued downwards for the 3rd month. On the other hand, the price of coking coal is still strong. The coking market meets an acute shortfall of funding.
He added coke plants should control gross production, keep production in pace of demand as well as combine gross amount control with structural adjustments, backward elimination with production cuts and limits and maintenance with production cuts and limits.

Buyers to gain more bargaining power(2008/11/5)

Representatives of mills from China, Japan and Europe will kick off annual iron ore price talk for 2009 in November with the world’s three largest suppliers.
Buyers seem to have gained more bargaining power with mills cutting output amid a weak global economy. As of last week, Chinese iron ore stocks at ports have amounted to 71.92 million tons, up 360,000 tons from the previous week. The CISA vice president Luo Bingsheng pointed out that iron ore inventory in some mills has reached four months.
However, Brazil’s Vale has not changed its $14.2 billion expansion plan next year, claiming China’s demand would rebound in the middle of 2009. Rio Tinto also said the weak demand from China is just a temporary phenomenon as the country will maintain an annual growth rate of 8 to 9 percent. UBS has revised its earlier forecast of a 15 percent drop in 2009 iron ore contract price to 40 percent.

Jining Iron Mine has a reserve of more than 10 billion tons(2008/11/4)

An ultra large iron mine was found in Yanzhou, Shandong Province, but the reserve of the mine, and the grade of iron ore of this mine was revealed recently. What will this discovery do to the iron and steel industry in Shandong, and even in China?
Huang Tailing, deputy director general of Shandong Provincial Bureau on Geology and Mineral Resources, said: “Jining Iron Mine has an estimated reserve of no less than 10 billion tons, the largest iron mine in Shandong till now, and one of the major iron mines in China. Now a land of about 8 square kilometers is under exploration. 17 holes with a depth of more than 1,000 meters will dig, to study the thickness, depth and shape of the orebody through the rock core. ”
Based on the exploration report, the iron ore in this mine has an average iron content of 25.97% to 31.72%. In this connection, the grade of iron ore of the mine is low, but, as the mine has an ultra large reserve, and the mine is a magnetite mine, Jining Mine is worthy mining.
The mine can serve the iron and steel companies in Shandong for 50 years
It is reported that the iron and steel production in Shandong Province totaled 30 million tons per year or so. Estimating that the mine has a reserve of 10 billion tons, and the iron content averages 20%, Jining Mine can serve iron and steel companies in Shandong for 50 years. According to Huang Tailing, the iron and steel companies in Shandong are largely dependent on imported iron ores, and they have a weak tone on price negotiation for iron ores. Having this mine, the consumers in Shandong, or even in China, will be more independent when importing iron ores.
Laigang has a priority on ores purchase
In the 90s of 20th century, the center government of China opened the mine exploration and mining to other economic sectors. As to Jining Mine, several investors has involved in this project. The development of Jining Mine will be funded by the central government, Laigang and so on, and the profit will be divided according to the shareholdings. Besides, according to the contract, Laigang has a priority on ores purchase. But due to that the mine is under exploration, the iron ores distribution is not decided yet.

Inner Mongolia stops construction of calcium carbide and ferro alloy projects(2008/10/30)

According to economy commission of Inner Mongolia Autonomous Region, the government ordered calcium carbide and ferroalloy projects to stop since 20th Oct. According to the Notice of Securing the Target on Energy Saving for 2008 by People’s Government in Inner Mongolia Autonomous Region, local government issued the order, in order to regular the development of calcium carbide and ferroalloy industries and avoid the repeat construction. According to the notice, the projects with main facilities (submerged arc furnace) not constructed will be suspended, and projects that have licenses or approvals but haven’t broken ground should stop construction, and government will stop giving approvals to those new projects.

Many smaller mills shut down in Hubei(2008/10/29)

Hit by slumping demand from the steel market, Wu Junyuan, chairman of Wucheng Steel, had no choice but declare a complete suspension of its 20-year-old steelwork on October 22. As of the same day, the mill has had an inventory of 28,000 tons, equal to tens of million yuan in profit. In September, there was an average loss of 2,000 yuan to sell one ton of steel.
Wucheng Steel is not an exception in Hubei. Most of the 10-odd small-sized steelworks each with a capacity ranging from hundreds of thousand tons to less than one million tons in the province have shut down, with one or two still running but at a low rate of less than 20 percent.
Echeng Steel, a middle-sized mill affiliated with Wisco, also will find it difficult to reverse a money-losing position if the market continues a weak trend. The mill has had some 100,000 tons in stock to date.

Xinjiang cracks down small metallurgical plants(2008/10/28)

The government of the Xinjiang Uygur Autonomous Region held a meeting on October 22 to overhaul local small-sized metallurgical plants. The region dispatched five inspection teams to check and oversee smaller metallurgical plants in 14 cities and prefectures in late September. And to date, the government has shut down 65 out of the 121 smaller metallurgical plants, with 30 whose facilities had been scraped.

A third of ferroalloy plants halt in Sichuan(2008/10/28)

“The difficulties that steelworks are confronting with are spreading to the ferroalloy industry,” according to sources with the Machinery, Metallurgy and Construction Materials Department of the Provincial Economic Commission of Sichuan. “Mills are now reluctant to buy ferroalloy due to the financial turmoil-triggered falling prices of steel. Accordingly, a third of ferroalloy plants in Sichuan are said to have been shut down.
Chuantou Etie produced 83,000 tons of ferroalloy in the first half of this year, had sales revenue of 750 million yuan, up 63 percent and a profit of about 36 million yuan. Entering September, however, the price of ferroalloy has dropped to 9,000-odd yuan per ton from the record of more than 14,000 yuan per ton. The plant’s inventory has reached 4,000 to 5,000 tons until recently.

Huang Jingan: the increase in future production of coke may be 4% to 5%(2008/10/27)