| 02 | May |
| 2013 |
Short news metals
- Baoshan Iron and Steel Co (Baosteel), China’s largest listed steel maker, has shown its resilience amid the economic slowdown, posting a CNY10.39 billion net profit in the 2012 fiscal year, a year-on-year rise of 41.1%. Baosteel generated CNY191.5 billion in revenue, down 14% year-on-year. The fall is mainly due to the divestment of stainless steel and special steel assets, as well as the closure of its Luojing factory.
- Baoshan Iron and Steel (Baosteel) is in talks with Russian steel and coking coal producer Mechel to buy a 25% stake valued at up to USD1.25 billion in Mechel’s mining division. The entire unit may be valued at USD5 billion, with a blocking stake worth USD1.25 billion. Mechel has had to cut investment and put non-core assets on the market to service the USD9.1 billion debt it amassed while expanding operations before the 2008 financial crisis sent steel and coal prices tumbling. The company had said it might sell up to a 25% stake in Mechel Mining to a strategic partner.
- China’s crude steel output reached 191.89 million tons in the first three months of this year, an increase of 9.1% from a year earlier, according to the National Bureau of Statistics (NBS).
| 04 | Apr |
| 2013 |
Short news metals
- Aluminum production in China climbed to a record in January on capacity additions. Production was 1.78 million metric tons, exceeding the previous record of 1.75 million tons in August, said Zhang Chenguang, Analyst at SMM Information & Technology Co.
- China is likely to limit its gold holdings to 2% of its total foreign exchange reserves, said Yi Gang, Deputy Governor of the People’s Bank of China (PBOC). The central bank last made known changes to its gold reserves in 2009, announcing that it held 1,054 metric tons, about 1.8% of its total reserves. The bank hasn’t made any revisions since then. “If the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers,” Yi said.
- Baoshan Iron and Steel Co aims to double its overseas sales to offset severe domestic overcapacity. The company aims to raise overseas revenue from 10% to 20% by 2018. It plans to set up a joint venture in Southeast Asia or South America. The goal could also be achieved through mergers and acquisitions, as well as green field investment.
- The National Development and Reform Commission (NDRC) said China is expected to produce 746 million metric tons of crude steel in 2013, 30 million tons more than last year, resulting in new iron ore demand of 50 million tons. China’s domestic new iron ore capacity is expected to reach 20 million tons this year, while the world’s top three international iron ore producers are expected to have a total new iron ore production capacity of around 100 million tons in 2013.
- Aluminum Corporation of China (Chalco) posted its worst results since going public in 2001, chalking up a net loss of CNY8.23 billion for last year, much more than the average loss estimated by 21 analysts polled by Thomson Reuters. Chalco, the country’s largest producer of aluminum, blamed the loss on a 7% fall in the average selling price of the metal, which led to a CNY6.6 billion reduction in gross profit.
- Fujian province-based Zijin Mining aims to complete one or two acquisitions this year and warned that the unit production cost at its mainstay gold mine will continue to rise owing to the deteriorating grade of ore. Zijin posted an 8.8% drop in net profit to CNY5.21 billion, as revenue jumped 21.7%, mainly on higher output of refined copper. Although revenue from mine-produced gold grew 19% on the back of a 15.5% rise in sales to 33.16 tons and a 3% rise in the average selling price, the gross profit margin slid to 63% from 72.8%, due to a 39.7% jump in production costs to CNY120.8 per gram. Zijin plans to raise mine-produced gold by 2.9% to 33 tons this year, and mine-produced copper output by 9.9% to 115,000 tons.
- A list of 45 Chinese steel enterprises that meet national iron and steel industrial standards was published by the Ministry of Industry and Information Technology (MIIT) in the latest move to tackle excess production capacity that has plagued the sector. The 45 qualified steelmakers include 30 state-owned enterprises like Baosteel and Angang Steel, and 15 private companies, whose combined crude steel output last year reached 300 million tons, or 41.4% of the country’s total steel output. Another 59 steel enterprises didn’t make the list.
| 07 | Mar |
| 2013 |
Short news metals
- Sibanye Gold will seek Chinese investors and look to acquire other gold assets in South Africa, Neal Froneman, its Chief Executive said, on its first day as a listed company. “There are benefits to Chinese partners such as being able to access capital,” Froneman said.
- Leshan Heima Mining Co, a privately-owned mining company in Leshan city, Sichuan province, has spent €15 million on a 75% stake in Lisa Airplanes, a French aircraft builder. “The acquisition was achieved in early February and the company plans to move the production lines to China in two or three years,” said Deng Gang, Director of the Foreign Economic Cooperation Division of the Leshan Commerce Bureau. Leshan Heima Mining Co is in the phosphate rock-trading business. Lisa Airplanes was established in 2004 and focuses on light-sports aircraft manufacture.
- Australia’s Fortescue Metals Group, the world’s No 4 iron ore producer, reported a 40% fall in first-half profit to USD478 million due to weak iron ore prices, but flagged resurgent demand from Chinese steel makers.
- China is requiring its non-ferrous metals industry to improve energy efficiency by 18% by the end of 2015 to conserve resources and reduce pollution. The Ministry of Industry and Information Technology (MIIT) said that the country will be able to save energy equivalent to 7.5 million tons of standard coal if energy use per unit of industrial output in the non-ferrous metals industry were to meet the target. The energy use per unit of industrial output fell 19.6% in the non-ferrous metals industry in the five years through 2010. The Ministry also required the industry to slash emissions of sulfur dioxide, which contributes to the production of acid rain, by 10% during the period. The non-ferrous metals industry used energy equivalent to 151.38 million tons of standard coal in 2011, or 4.4% of China’s total energy consumption.
- Finnish engineering firm Metso has strengthened its presence in China with the acquisition, for an undisclosed amount, of the manganese steel foundry owned by Quzhou Juxin Machinery Co in Zhejiang province. The transaction covers the acquisition of Juxin’s assets as well as Quzhou Chixin Machinery Co, which will be transferred to Metso along with the jobs of 275 workers. The transaction is expected to be completed within six months.
- China’s aluminum inventories reached a record high in February, caused by rapidly growing supply and weak demand in the country, resulting in sharp price drops. The main reason for the increasing stockpiles is the new production capacity in western areas of China. In 2011, China’s 3.4 million tons of new production capacity for electrolytic aluminum was mainly located in Xinjiang. The aluminum sector saw a 92.7% decline in profit to CNY930 million in the past year.
| 07 | Feb |
| 2013 |
Short news metals
- Benxi Steel Group Corp’s sales revenue exceeded CNY100 billion in 2012, up 10% year-on-year. In 2012, its exports contract volume reached 4 million metric tons, up 48% year-on-year, which contributed USD2.3 billion. The company, based in Benxi, Liaoning province, is one of the main iron and steel producers in China with an annual output of 20 million tons of high-quality steel products.
- China’s nickel pig iron output in 2013 may rise 25% more than previously forecast as costs decline, curbing nickel imports, Japan’s top producer of the metal said. China’s output of nickel pig iron, a substitute for low-grade ore from Indonesia and the Philippines, will reach 300,000 metric tons in 2013, said Toru Higo, General Manager of nickel sales and raw materials at Sumitomo Metal Mining Co.
- Chinalco Mining Corp International, a unit of China’s biggest aluminum producer, plans to raise as much as USD435 million in an initial public offering (IPO) in Hong Kong to fund its copper project in Peru. Chinalco Mining, owned by Beijing-based Aluminum Corp of China, plans to use about 30% of the proceeds to develop the USD2.2 billion Toromocho project. Copper consumption in China, the biggest buyer, will expand 4.9% this year, following a 4% gain in 2012.
- China Minmetals Corp has recorded a 37% drop in annual profits to CNY8 billion, which it blamed on falling global commodity prices and a domestic economic slowdown. Revenue last year was CNY325 billion, said President Zhou Zhongshu. He predicted that the era of soaring demand for metals in China had gone, and that companies in the industry will continue to face difficulties in making profits. “The capital-driven growth of the metals industry cannot be sustained in the future,” he added. Zhou said the company’s 2013 target is to keep profits stable at CNY8 billion, with total revenue of CNY320 billion.
- Anshan Iron and Steel Group Corp (Ansteel) turned its losses into profits in December. Chairman Zhang Guangning said the group will make every effort to increase efficiency in 2013. In the first quarter of 2012, the company posted a loss of CNY1.89 billion. In 2011, its losses reached CNY2.446 billion.
- The Aluminum Corp of China (Chalco) warned it would seek legal redress if Mongolia breaks what it says is a loss-making coal supply deal. Mongolia’s state-owned Erdenes-Tavan Tolgoi (E-TT), which runs the 7.5 billion ton Tavan Tolgoi project, wants to renegotiate a deal with Chalco to supply USD250 million of coal. E-TT delayed an IPO of up to USD3 billion, citing problems including the deal with Chalco.
- Wuhan Iron and Steel (Group) Corp, China’s fourth-largest steelmaker by output, is to boost investment in overseas iron ore mines and plans to achieve 100% iron ore self-sufficiency in three to five years. It also wants to abandon its heavy reliance on imported iron ore, which is sold at high prices by the top three iron ore producers. Wisco said in a statement it will “secure part of iron ore resources in Canada and Brazil to achieve self-sufficiency”.
- Baoshan Iron and Steel Co raised prices for main products for the second time in a month in January. The booking prices for March delivery will rise CNY200 a ton for most hot-rolled and cold-rolled products. The Shanghai-based mill raised February prices by CNY160 a ton on January 7. The firm is bullish over demand for March and April, the traditional peak season.
- Aluminum Corp of China (Chalco) said it swung to a full-year loss on falling prices and higher costs for alumina. The company has sought to diversify into coal and iron ore mining to cut its dependence on aluminum smelting.
- China has tightened regulations on gold trading conducted by banks in a move to enhance supervision. The Shanghai headquarters of the People’s Bank of China (PBOC) requires all domestic and foreign banks to report their existing gold trading activities. The new interbank system provides real-time trading data to the regulator.
- Hong Kong’s net gold flow to mainland China jumped 47% last year to a record high of 557.478 tons, indicating robust demand in China, which vies with India to be the world’s top gold consumer. Hong Kong shipped 114.372 tons of gold to China in December, also a record high for monthly exports. The city received 19.644 tons of gold from the mainland in that month. Its total gold shipments to China last year jumped 94% from the 2011 total to over 832 tons, but imports also were six times higher at 274.684 tons, data from the Hong Kong Census and Statistics Department showed.
- Inner Mongolia produced 20,095 kg of gold last year, 20% more than in 2011. Chifeng topped all the cities in Inner Mongolia, with an output of 7,638 kg of gold, up 10% year-on-year. Hohhot had the highest rate of growth, up 73% to 440 kg.
| 10 | Jan |
| 2013 |
Short news metals
- Hebei Iron and Steel Group, China’s biggest steelmaker, will lead a group to buy Rio Tinto Group’s Palabora Mining Co in South Africa for about USD476 million. Rio will sell 57.7% for USD373 million to the group, which includes Industrial Development Corp of South Africa. Anglo American will divest a 16.8% holding for USD103 million. Hebei Steel makes up 35% of the group, General Nice Development has 25%, Industrial Corp of South Africa 20%, and China’s Tewoo Group another 20%. Palabora Mining has magnetite resources used in making steel.
- Two workers were killed and another 13 injured in December after a ladle furnace at MCC Baosteel Technology Service Co in Shanghai toppled as the workers were removing slag from the furnace. The injured workers suffered severe burns.
- Chinalco is planning to level the Toromocho mountain in Peru to exploit is resources of copper, silver and molybdenum worth up to USD50 billion. The town of Morococha, home to 5,000 people, will be relocated, although some villagers do not want to leave. Mayor Marcial Salomé wants Chinalco to pay compensation of USD300 million to the town for the “loss of identity, culture and tradition” from the move. Chinalco bought the land for USD860 million and invested USD2.2 billion in the mine. The old town will be swallowed up by the opencast mine’s crater, from which will be extracted 1 million tons of copper, 10,000 tons of molybdenum and 4 million ounces of silver every year for 35 years.
- China’s steel industry is facing a problem of overcapacity, with steel prices at 1994 levels. “The steel industry is facing an increasingly difficult time, and the surplus capacity is worsening,” said Zhang Changfu, Secretary General of the China Iron & Steel Association (CISA), at the annual meeting of mysteel.com, a steel industry website. The sales margins of China’s major steelmakers averaged a negative 0.18% in the first 10 months of last year, and overall the steel industry is at break-even point, Zhang said.
- Chongqing Iron & Steel says the Chongqing government is granting it CNY500 million in compensation for the forced relocation of its plant to help protect the city’s environment. The firm’s parent, Chongqing Iron & Steel (Group), has undertaken to help it obtain at least CNY1.5 billion from the government to offset the operating losses incurred during the relocation.
- China National Gold Group Corp, the country’s largest gold producer, said in its annual report that its sales reached CNY100.6 billion in 2012, up 27.1% from 2011. Profits of CNY4.45 billion were down CNY55 million year-on-year. Total assets had hit a record-high CNY65 billion by the end of the year, up CNY11.5 billion from a year earlier. The company’s gold reserves reached 1,758 tons, up 374 tons from the previous year.
- The world’s biggest gold producer, Canada’s Barrick Gold, said it had called off talks to sell some of its African assets to China National Gold, a state-owned firm that is the country’s biggest gold miner. Barrick did not give a reason for the failure of the deal, which had been estimated to be worth up to USD3.9 billion.
