Baosteel Group Corp has cut its borrowing costs by almost 1.5 percentage points, compared with yields in Shanghai, through the sale of the largest corporate yuan-denominated bond in Hong Kong. China’s second-biggest steelmaker raised CNY3.6 billion of so-called “dim sum” notes due in two, three and five years. It is the biggest corporate dim sum bond by a large company, according to Rajeev de Mello of Schroders Singapore. Baosteel is the first China-based non-financial company to sell yuan bonds in Hong Kong. Baoshan Iron & Steel, Baosteel’s publicly traded unit, posted a 51% drop in third-quarter profit to CNY1.24 billion from a year ago. Sales rose 9.7% to CNY56.2 billion. “Baosteel should make efforts to boost its control of iron ore resources to guarantee the raw material supply,” said Sarah Wang, Shanghai-based Analyst with Masterlink Securities Co. “It’s such a large steelmaker, yet its presence on the upstream resources remains low.” China’s annual steel production has surged almost five-fold in the past 10 years to 627 million tons last year, driving appetite for raw materials including iron ore and coal.

Baoshan Iron and Steel Co left January prices for most products flat but raised those for some products modestly, according to its new pricing policy. Analysts said Baosteel’s action indicated that the market may improve gradually from the beginning of next year although demand from the home appliance and auto industries is seen to remain weak. Baosteel, whose price adjustments are seen as a benchmark for the Chinese industry, said it will keep hot-rolled coil prices unchanged but raise cold-rolled coil by CNY100 a ton and electro-galvanized steel prices by CNY100-200 per ton from December’s level. “The willingness of downstream sectors to place huge orders is not strong, so obviously Baosteel doesn’t have the basis to raise prices by a big margin,” Custeel Analyst Hu Yanping said, adding the steel industry still faces huge cost pressure although iron ore prices have fallen. Baosteel has already cut prices for main products by CNY200-300 per ton in December from November. Baosteel also announced it plans to sell some stainless and special steel assets to parent Baosteel Group Corp to optimize asset allocation, according to a filing to the Shanghai Stock Exchange. The assets involved won’t exceed 20% of the company’s latest audited book value. China International Capital Corp Analyst Luo Wei said the disposal will help Baosteel trim losses by CNY900 million and allow it to focus on certain areas, such as the carbon steel business, where it is strong, the Shanghai Daily reports.

China’s first national-level engineering research center for steel construction was unveiled on December 16. Managed by the China Research Institute of Building and Construction Co, a subsidiary of Metallurgical Corp of China (MCC), it is designed to be a top research center for structural steel in the country. According to Li Peixun, Director of the new National Engineering Research Center for Steel Construction, the facility was approved by the Ministry of Science and Technology in April 2007. Over the past four years, MCC experts have been laying the groundwork for new research as they helped establish the center. “They made 17 technological breakthroughs, received 18 patents and two software copyrights while formulating and revising 14 sector technology standards,” he said. “They also published seven books and 58 theses.” The MCC institute also helped set up and renovate four laboratories and organized eight research departments, he said. The new center passed examinations by the Ministry of Science and Technology on April 12. Li said innovation in steel construction is crucial to earthquake resistant buildings, recycling of resources, environmental protection, energy conservation and rapid construction. He added that the center will be devoted to research and development (R&D), offering consultancy services and improving sector standards to lift the nation’s overall level of steel construction.” MCC has seven national-level scientific and technological innovation centers, the China Daily reports.

China Polymetallic Mining said it plans to spend CNY1.55 billion until the end of next year to buy mining rights and to fund development and operating costs. The Yunnan firm said it would weather depressed equity-market valuations to launch a share offering because of its role as a consolidator of the province’s metals-mining sector. “We are designated by the Yunnan government as a consolidator,” said Chief Executive Zhu Xiaolin. “We must be listed to fund acquisitions.” Hatch, an international industry consultant, ranks the company as Yunnan’s largest lead and zinc miner in terms of resources. Yunnan was second among China’s provinces in both lead and zinc reserves last year, and was third in terms of zinc preprocessed ore and fourth in lead ore, according to China Polymetallic’s listing prospectus. The firm, set up in April 2009, started production at its first mine – Shizishan – last October. It had a net loss of CNY245.6 million in this year’s first half and has forecast a full-year loss of CNY246.6 million. Zhu said Shizishan contained silver as a byproduct, in addition to lead and zinc. The earnings margin of the mine in 2013 – the first year of full-scale operation – was projected to be 89.5%. This compares with an average 43.8% for seven rivals. The mine’s net profit margin is expected to reach 65.8% in 2013, ahead of the 28.2% for its rivals. The firm plans to raise daily ore-mining capacity from 700 tons now to 1,000 tons by next year’s second-quarter, and 2,000 tons by next year’s fourth quarter. By the end of next year, the firm plans to spend up to CNY741 million to buy two mines, and then CNY353.2 million to develop them as well as three mines it has either invested in or secured ore-processing rights for. It will also spend CNY457.5 million to fund operations.

China Guangdong Nuclear Power (CGNPC) first made an offer for London-listed Kalahari Minerals in March, a few days before the nuclear disaster struck in Fukushima in Japan. China slowed but did not stop its nuclear policy in response. Now the company has returned with a recommended offer 16% lower, valuing Kalahari at GBP632 million, the Financial Times reports. Success could improve CGNPC’s chances of buying the remainder of Extract Resources, the Australian miner in which Kalahari has a 43% stake. China has 14 working reactors, another 27 under construction – about 40% of the global total – and 50 more on the drawing board, according to the World Nuclear Association. Extract’s chief asset is the Husab uranium project in Namibia, the world’s fourth largest deposit of the mineral. The offer looks a done deal for CGNPC unless Rio Tinto weighs in. Rio owns 14% of Extract and 11% of Kalahari. The offer values Extract at about AUD2.2 billion. The Australian company says it will “consider all available alternatives”. But just as it is difficult to see a counter-offer for Kalahari emerging from anywhere other than an already preoccupied Rio, it is unlikely that any other suitor would have the strategic rationale available to CGNPC. The company is required to make a full takeover offer once it owns more than 20% of Extract, but the securities regulator can grant exceptions. Extract said it had not been party to the negotiations over the Kalahari offer or the proposed Extract offer, including the offer price.