Short news metals
Sep-04-2014 By : fcccadmin
- Advanced and environmentally-friendly processing technology took center stage at Aluminum China 2014 in July. Ron Knapp, Secretary General of the London-based International Aluminum Institute, said at the opening ceremony of the Shanghai event that weakening global economic growth presents challenges and offers opportunities to the world’s aluminum industry. More than 500 exhibitors from 30 countries and regions met with about 16,000 professionals and buyer delegates from China and other emerging markets in Asia during the exhibition.
- Rising demand and the closure of some 2 million tons of aluminum capacity between late 2013 and May are likely to shrink an expected surplus of the metal in China this year. Shanghai-based Analyst Wang Chunhui at information provider SMM forecast a surplus of less than 500,000 tons. Some capacity has been restarted as prices recovered. An executive at a state-owned aluminum smelter said that demand and supply would be in balance in 2014. China’s primary aluminum production grew 7.9% from the year before in the first five months of 2014 to 9.59 million tons, lower than an 8.2% rise in the same period last year.
- Chinese steel producers have seen their profit margins surge to the highest in at least 18 months on the back of sharply lower raw material prices and robust demand. The profit rebound, after three years of losses, is also supported by relatively steady steel prices because of unusually low inventory. Hebei accounts for about 30% of China’s steel output capacity and 45% of its spare capacity. Iron ore prices fell 22% in the second quarter because of excessive supply and a 19% rise in imports in the first five months of the year, according to Standard Chartered Analyst Judy Zhu, who expects more price weakness in the current quarter before a rebound in the next.
- China’s gold demand dropped 19.4% in the first half to 569.5 tons, the China Gold Association said. Demand for bullion bars dropped 62% to 105.6 tons, while that for coins and other miscellaneous gold products slumped 44% to 11 tons. Demand for jewelry and industrial usage remained robust during the period, both increasing about 11% to 426.2 tons and 26.8 tons respectively. On the production side, total output rose 9.4% year-on-year to 211.1 tons.
- Geologists have discovered the largest gold deposit so far in China’s Xinjiang region. The deposit, located in Ulugqat, on the border with Kyrgyzstan, has proven gold reserves of 127 tons and potential reserves of more than 200 tons, estimated to be worth more than CNY40 billion. The discovery was made after 20 years of geological surveying by Xinjiang Tongyuan Mining in a 20 square kilometer area 3,100 meters to 4300 meters above sea level.
- Tight supply and stricter vehicle pollution control standards will drive prices of palladium higher this year and next year, even as the industrial metal’s price reached a 13-year peak. Palladium, platinum and rhodium are used in catalytic converters attached to vehicles’ exhaust systems to turn toxic pollutants into less harmful substances. Bank of America analysts projected the annual average palladium price to rise 14.9% to USD834 this year and a further 13.9% to USD950 next year.
- Chinese metals traders have opened offices and hired top talent in Singapore over the past year, aiming to capture opportunities created by the exit of a string of Western banks from the global commodities trading business. They include Maike Metals Group, Awin Resource International, and Kyen Resources. China has long sought more pricing power in commodities as it is the largest consumer of many resources. Chinese firms are now aiming to cut out middlemen and connect with a wider array of producers and users.
- Aluminum product producer China Zhongwang has boosted net profit 18.6% to CNY1.27 billion for the first half from a year earlier. Aluminum extrusion accounted for 99.9% of Zhongwang’s revenue. Most of its revenue, which grew 13.2% to CNY7.95 billion for the six months, came from Chinese sales. About 15.1% of its revenue was booked from overseas sales; this contribution surged 41% year-on-year to CNY1.2 billion, of which CNY1.13 billion came from the United States.
- China Molybdenum, China’s biggest producer of the metal, is seeking more acquisitions after the success of its USD820 million purchase of a Rio Tinto Group copper mine in Australia. Chairman Li Chaochun said that copper was one of the company’s investment priorities. Buying the Northparkes mine, its first overseas copper acquisition, helped it diversify into precious and base metals, as it seeks to become a global mining company. China Molybdenum reported a 66% jump in first-half profit as Northparkes added to production.
- Maanshan Iron & Steel posted a worse-than-expected first-half loss, which more than doubled to CNY730.27 million, from CNY332.83 million in the same period last year. “During the reporting period, the company’s production and sales volume has decreased as compared to the corresponding period last year, while fixed costs have increased,” Chairman Ding Yi said. Operating revenue dropped 21% year-on-year to CNY28.86 billion and net cash flow from operating activities fell 63% to CNY1.39 billion.
Short news metals
Jun-05-2014 By : Gwenda
- China will close more steel and cement plants this year than originally planned to deal with oversupply in capacity, the Ministry of Industry and Information Technology (MIIT) said. This year will see the elimination of 28.7 million tons of annual steel capacity and 50.5 million tons of cement capacity. China’s crude steel output rose to a record high of 779 million tons last year. The Ministry also said 420,000 tons of annual aluminum capacity and 115,000 tons in lead smelting will be eliminated this year.
- A group of workers in China made more than CNY2 million by secretly using a gold-plating bath at an electronics factory in Chongqing and then selling the precious metal.
- Baoshan Iron & Steel Co has lowered product prices for a second straight month, signaling a lack of confidence in near-term demand. It cut hot-rolled steel prices for June delivery by CNY80 a ton and cold-rolled steel prices by CNY100 per ton. This does not reflect seasonal factors as Baosteel has lowered prices for June only twice since 2006. Baosteel is China’s largest listed steel company, and its pricing policy typically serves as a benchmark for the rest of the industry in China. It supplies about half of the nation’s auto sheet market. Baosteel cited lower steel prices when it reported first-quarter net profit fell 7% from a year earlier to CNY1.51 billion.
- The Shanghai Gold Exchange will launch Shanghai Gold – a spot gold trading mechanism similar to Loco London Gold – in Shanghai’s pilot free trade zone (FTZ) this year. Shanghai Gold is a new international pricing mechanism to boost the city’s position as an international financial center, Xu Luode, Secretary General of the Shanghai Gold Exchange said.
- China’s steel industry will face higher financial risks in the second quarter. Zhao Xizi, Chairman of the All-China Chamber of Commerce for Small and Medium-Sized Metallurgical Enterprises, said banks will require at least CNY140 billion of debt to be paid back by steel companies ahead of schedule. Due to overcapacity and ongoing losses, many steel mills chose to continue production simply in order to keep banks from asking them to repay their loans. Industrial analysts said domestic steel companies have an average debt ratio of more than 70%. In the first quarter, 15 of 35 listed steel companies in China reported losses.
- Australia’s Foreign Investment Review Board (FIRB) has given the green light to Baosteel and Aurizon Holdings’ takeover bid for iron ore and coal miner Aquila Resources. The deal still requires approval from more than half of Aquila’s shareholders. Aquila has advised shareholders to take no action, pending an independent review of the offer.
- The port of Qingdao, China’s third-largest foreign trade port, has halted shipments of aluminum and copper due to an investigation by authorities, according to reports, which the port denies. Metal imports have been partly used to raise finance, where traders can pledge metal as collateral to obtain better terms. In some cases the same shipment can be pledged to more than one bank, fueling hot money inflows and spurring a clampdown by the authorities. There might be a discrepancy between documented and physical metal in warehouses of at least 80,000 tons of aluminium and 20,000 tons of copper.
Short news metals
May-08-2014 By : agxadmin
- Chinese firms could have locked up as much as 1,000 tons of gold in financing deals, an industry report said, indicating a big slice of imports has been used to raise funds due to tight credit conditions, rather than to meet consumer demand. The financing-related buying means gold prices could come under pressure if imports were hit by a broader government crackdown on using commodities to raise finance. The country had up to USD160 billion of outstanding loans using commodities as collateral, about 31% of its short-term foreign exchange loans, said Goldman Sachs.
- Tangshan Iron and Steel Group Co (Tangsteel) signed a strategic cooperation framework agreement with Siemens on energy-saving and environmental protection cooperation. Wang Lanyu, President of Tangsteel, told China Daily that the company plans to increase its non-steel business from its current 20% of the whole business structure to 50% within five years. Using Siemens’ technology, Tangsteel will manufacture energy-saving and carbon-emission reduction equipment for steel mills. Tangsteel has an annual output of approximately 20 million metric tons.
- General Nice Development, China’s largest privately-owned steel-smelting raw materials trader, has failed for the fourth time to meet its commitment to buy shares in iron ore miner IRC and may have to defer completing the deal given tight credit conditions. Jay Hambro, Chairman of Hong Kong-listed IRC, an iron ore miner in Russia’s Far East serving northeast China, said General Nice has already completed 72% of the payment and is “fully committed” to completing the remaining HKD451.4 million share purchase.
- Chinalco Mining, the non-ferrous and non-aluminum metals unit of Chinalco, is seeking acquisition opportunities in Latin America for copper projects with long-term return rates of more than 10%. Chief Executive Peng Huaisheng said the region presented more development potential, especially Peru, where the company has been developing the Toromocho copper project since 2007. China imports about 70% of its raw copper ore needs.
- Hong Kong’s Chinese Gold and Silver Exchange Society will start talks in the next two months with the Shanghai Gold Exchange for a potential alliance, President Haywood Cheung said. It would allow China’s gold bourse to access the international market through Hong Kong.
- Baosteel Group Corp President He Wenbo said at a shareholders meeting that Baosteel will focus on its major steel business and accelerate its e-commerce and information technology units. The company was awarded the first online payment license for a company in China’s industrial sector and entered the steel e-commerce business earlier than others. Easterpay had total online payments of CNY5 billion in the first quarter, up 360% year-on-year.
Short news metals
Apr-03-2014 By : agxadmin
- Many Chinese steel companies are having trouble obtaining financing as the China Banking Regulatory Commission (CBRC) said strict credit guidelines would be imposed on mills that were big polluters and users of energy. “Mills may be charged higher interest rates on loans,” said Hu Shunliang, Investor Affairs Representative with Maanshan Iron & Steel. About 40% of the iron ore at China’s ports was subject to financing deals, Mysteel Research estimated.
- Shanghai Bailian Group started publishing a new price index for non-ferrous metals, aiming to create a benchmark in the domestic spot market. The SMEI index is based on spot prices quoted from the Shanghai Metal Exchange electronic platform and also collected from leading producers and traders. The index reflects prices for copper, aluminum, lead, zinc, tin and nickel. It will be published at 11 a.m. every day on the website of the Shanghai Metal Exchange at smechina.com.cn.
- Shanghai’s hot-rolled coil (HRC) steel futures closed little changed on their debut, offering investors another steel-related contract to trade in China. Baoshan Iron and Steel Co’s President Dai Zhihao said the futures will allow the company to better hedge against price risks. The Shanghai bourse introduced steel rebar and wire rod futures in 2009. Shanghai’s rebar is now the world’s most liquid steel futures but restrictions on foreign investment have limited its global reach.
Short news metals
Mar-06-2014 By : agxadmin
- The Hong Kong-based Chinese Gold & Silver Exchange Society is prepared to spend at least HKD1 billion to set up its metal warehouse with a capacity of 1,500 tons in Qianhai, about an hour by car from Hong Kong. A key issue is for the warehouse to be given special status by Beijing so members can freely transfer gold and silver between Hong Kong and Qianhai. China still has capital controls and only 11 Chinese banks are allowed to import gold.
- China’s Long March Capital, a partner of Citic Group, is considering buying South African platinum assets after their value was depressed by strikes. Long March last year teamed up with Citic unit Baiyin Non-Ferrous Metal and the China-Africa Development Fund to complete their buyout of Perth-based Gold One International and indirectly bought a stake in South African-based Sibanye Gold. Anglo American Platinum, Impala Platinum and Lonmin say they have lost HKD3.08 billion in revenue because of a four-week strike by about 70,000 workers. The companies together produce about 75% of the world’s platinum.
- Shanghai’s “steel-trading king” Xiao Jiashou, Chairman of the Shanghai Songjiang Steel Market, who was rumored to have fled the country over debts of CNY3 billion, says he is still negotiating with the banks. Xiao is facing 36 lawsuits filed by the China Minsheng Banking Corp, Ping An Bank and the Industrial and Commercial Bank of China (ICBC). All the cases are related to disputes over loans. By last August, executives at more than 20 steel trading enterprises in Shanghai had been brought before the court by banks chasing loans.
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