Short news metals
September 4, 2014 Category Automotive Metals & Minerals, Short news metals
- 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.
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