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Steel industry still in doldrums

Source: www.chinamining.org   Citation: Global Times   Date: October 29, 2015

Steel products are prepared for export in Lianyungang, East China`s Jiangsu Province on Sunday. Photo: CFP

China`s steel industry continued to struggle in the first nine months of the year, as consumption slumped, prices hit a record low, and oversupply remained a major problem despite a fall in output, an industry body said Wednesday. Apparent consumption of crude steel dropped 5.82 percent year-on-year in the first nine months of 2015 and by 8.65 percent year-on-year in September, the China Iron and Steel Association (CISA) said in a press release. Output of crude steel in the first nine months dropped 2.14 percent year-on-year to 610 million tons, while exports increased 27.2 percent year-on-year to 83.1 million tons, according to the CISA press release.     Steel prices have been dropping for the last four years and constantly hitting new lows, the CISA said. The CISA China steel price index dropped by 28 percent from the beginning of the year to 59.83 points in the third week of October, a new record low. Losses at major Chinese steel makers are worsening, with total revenue for large- and medium-sized corporations falling 19.26 percent year-on-year to 2.24 trillion yuan ($352.4 billion) in the first nine months, according to the CISA. Analysts said the Chinese steel industry is going through the hardest time it has ever experienced, with many companies operating at a loss and in danger of going bankrupt. "This is not a coincidence; it`s an inevitable situation that the Chinese steel industry finds itself in, as the overall economy is facing downward pressure," said Ma Zhongpu, an analyst at Beijing-based industry consultancy chinaccm.com. The steel industry will continue to face difficulties for a long time, as various factors have contributed to the current situation, Ma told the Global Times Wednesday.  The CISA said lower demand, overcapacity, higher production costs and financing difficulties had all contributed to the hard times the Chinese steel industry is facing. According to the CISA, the price of imported iron ore has seen two major rises this year, reaching $58.1 per ton on September 11, an increase of 28.7 percent from July 8, while the price of crude steel has dropped. Chinese steel makers also face difficulties in fundraising even though the country has cut benchmark interest rates and banks` reserve requirement ratio several times this year, the CISA said, noting that the amount of money steel makers borrowed from banks dropped 2.02 percent year-on-year in the first nine months. The CISA said that as demand and consumption of steel in China have peaked, the industry can no longer rely on growth in these areas to solve its problems - instead it must adjust to the new era. Reining in excessive output is essential for addressing the oversupply issue, as it is unrealistic to hope that demand will increase under the current economic climate, Zhu Jimin, executive vice president of the CISA, was quoted as saying in a report posted on the CISA website on Wednesday. But Ma said that just cutting output would not be enough, and that`s why China is making certain investments, such as in infrastructure, to help maintain a certain level of steel demand. Wang Guoqing, director of Beijing-based Lange Steel Information Research Center, noted that investing in infrastructure projects such as high-speed railways and roads could help boost demand to a certain extent. But the construction of many newly approved infrastructure projects has not started yet, partly due to difficulties in raising finance, Wang told the Global Times Wednesday. Experts said Chinese steel makers also need to adapt to the new environment through boosting efficiency and seeking new markets overseas.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^th-25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

China 2016 coal imports could fall a further 25 mln  tonnes

Source: www.chinamining.org   Citation: Reuters   Date: October 22, 2015

Coal shipments to top importer China could fall a further 25 million tonnes in 2016, analysts said on Monday, with foreign suppliers struggling to compete in a massively oversupplied market.

Shipments of coal to China over the first nine months to September fell 29.8 percent to 156.36 million tonnes . Volumes are on track to fall about 60 million tonnes in 2015.

The recent government push to support its domestic market and focus on cleaner energy sources has raised doubts over whether its status as an importer is sustainable.

"We assume a further 25 million tonne drop from China," said Fabio Gabrieli, director of dry bulk analysis at Mercuria Energy Trading, speaking at the Coaltrans world coal conference.

"We believe that next year what China drops is going to impact Indonesian exports," Gabrieli said, adding that Indonesian exports were forecast to fall 20 million tonnes in 2016.

Colin Hamilton, head of commodities research at Macquarie, said he also forecast Chinese 2016 coal imports to drop by around 25 million tonnes and in the long term it was possible they could fall to zero.

In the past, China was one of the world`s largest thermal coal exporters, until around 2004 when rocketing demand at home helped drive the need for imports.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 is held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.

China oil demand grows 10 per cent year over year

Source: www.chinamining.org  Citation: www.oilandgastechnology.net  Date: October 12, 2015

China`s apparent oil demand rose 10.2% in August from a year earlier to 11.19 million barrels per day (b/d), according to a just-released Platts analysis of Chinese government data.

Barring gasoil and naphtha, China`s apparent demand for all other key products¡ªgasoline, liquefied petroleum gas (LPG), jet/kerosene, and fuel oil¡ªsaw double digit year-on-year growth in August.
 
China`s refinery throughput in August averaged 10.49 million b/d, up 6.5% from a year earlier, data from the country`s National Bureau of Statistics (NBS) on September 12 showed.
 
Meanwhile, China`s net imports of oil products surged 131% year on year to 700,000 b/d in August, driven by strong inflows of LPG, fuel oil and naphtha, according to data released September 21 by the General Administration of Customs.
 
During the first eight months of this year, China`s total apparent oil demand averaged 11.14 million b/d, an increase of 8.2% from the same period of 2014.
 
China`s actual oil demand growth could be higher since stocks of key products have fallen, Platts estimates show. "Inventories of gasoil, gasoline and jet/kerosene fell by between 2.5% and 9.7% at the end of August, from end July," said Platts Associate Editorial Director for Asia Oil News Mriganka Jaipuriyar.
 
China`s apparent oil demand is expected to remain steady at 11.1 million b/d for the rest of the year, according to data from Platts China Oil Analytics, an on-line platform for supply/demand, refining margins, volume forecasts, trade flows and the like. However, it indicates that overall growth for 2015 could moderate to just over 5%, given the high base in the fourth quarter of last year.
 
Gasoil

Gasoil is the most widely consumed oil product in China and the nation`s declining economic growth over the last three years has hit gasoil demand.
 
Apparent demand in August rose 3.4% year over year to 3.50 million b/d, but actual demand could be higher given the stock draw down, Platts China Oil Analytics indicate.
 
Stocks of gasoil fell 7.6%, or near 7.5 million barrels, in August from July to an estimated 90.38 million barrels, Platts calculates, based on Xinhua`s China Petroleum Stockpile Statistics.
 
"Some of the government`s stimulus measures implemented in prior months are likely filtering down through the economy," said Song Yen Ling, Platts senior analyst for Asia Pacific oil

markets. "Industrial production growth improved marginally in August, while other indicators such as highway freight traffic also showed positive growth."
 
Up to 70% of the fuel is used in the transport sector while the remainder is used by various sectors - including construction, farming and fishing, and industrial heating - to power machinery.
 
Apparent demand for gasoil rose 3.7% over January to August to 3.58 million b/d.
 
LPG

Demand for LPG surged 27.3% year on year to 1.27 million b/d in August. Growth was supported by import demand from new propane dehydrogenation plants. Net imports of LPG rose 168.5% year

over year to an average 376,000 b/d for the month.
 
Year to date, apparent demand for LPG is up approximately 21.4% versus a year ago to 1.21 million b/d.
 
Gasoline

Apparent demand for gasoline rose 21.6% year over year to 2.75 million b/d, with January-August demand rising 11.4% to 2.69 million b/d.
 
According to Xinhua`s China Petroleum Stockpile Statistics, gasoline stocks fell 9.7% year over year at the end of August, suggesting actual demand could be higher than Platts estimates.
 
Even though overall auto sales contracted in August, China`s sales of gasoline-guzzling MPVs and SUVs, which have been the key demand drivers, rose 10% and 44.5% respectively, year on year, according to data from the China Association of Automobile Manufacturers.
 
Fuel Oil

Apparent demand for fuel oil in August rose 27.20% year over year to 695,000 b/d. Demand for the January to August period rose 14.3% year over year to 952,000 b/d.
 
Net imports of fuel oil rose 58.5% in August on a year-over-year basis to 549,000 b/d, led in large part by a jump in imports of petroleum bitumen blend.
 
Data from the General Administration of Customs showed that bitumen blend imports in August surged 530% year over year.

Platts calculates China`s apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the NBS and Chinese customs. Platts also takes into account undeclared revisions in NBS historical data.
 
The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country`s actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.
 
In view of some significant shifts in Chinese consumption and trade patterns in recent years, Platts has revised its methodology starting July 2015 to include production and net imports of

LPG, as well as imports of petroleum bitumen blend, a popular imported feedstock for China`s teapot refineries.
 
Platts has also refined its calculation of exports of jet fuel and fuel oil to exclude international marine bunker sales and aviation fuel delivered to international flights. This also impacts net imports, and hence apparent demand calculations. 
 
All historical figures used for comparison have also been calculated using the new methodology to ensure consistency.
 
Platts aims to release its monthly calculation of China`s apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts China Oil Analytics or the respective Platts spokesperson. Platts uses a conversion rate of 7.33 barrels of crude per metric ton, the widely-accepted benchmark for markets East of Suez.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.

Rare earth use to soar

Source: www.chinamining.org   Citation: Reuters   Date: September 18, 2015

Chinese rare earth demand is likely to soar by more than 50 percent in the next five years, putting pressure on authorities to relax tough production quotas that have spurred illegal mining and rampant smuggling.

Chen Zhanheng, vice-secretary general of the Association of China Rare Earth Industry, told a conference in Shanghai on Thursday that domestic consumption was expected to rise nearly 9 percent this year to 97,700 tons. Consumption would end the decade at nearly 150,000 tons.

With China expected to export at least 30,000 tons of these minerals through official channels this year, the production cap of 105,000 tons is unlikely to satisfy total demand, meaning that there are still incentives for illegal producers.

"It is not very easy to close all illegal mines and it is very easy for illegal miners to steal from the mines. Costs are low, the mines are scattered and some local governments also protect illegal miners," said Chen.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.

China copper: CIF import trades continue to dwindle as buying thins out

Source: www.chinamining.org   Citation: Platts   Date: September 17, 2015

Spot import trades for London Metal Exchange-registered brands of copper cathode on a CIF China basis continued to dwindle as buying interest thinned out with the arbitrage window closed, industry sources said Wednesday.

As a result, CIF China premiums for copper had slipped by $5-$10/mt week on week, sources said.

Platts lowered the assessment for CFR China copper premiums to $90-$105/mt Wednesday, down from $90-$110/mt last week. The price difference between CIF and CFR is negligible.

A Southeast Asian trader indicated lower CIF China premiums at $100-$105/mt, while another Southeast Asian trader heard the level steady at $100-$110/mt.

"The premium was down slightly by around $5/mt," the first Southeast Asian trader said. "Nothing has changed from last week and demand from China has thinned out as the arbitrage window is closed."

The second Southeast Asian trader said there were no buying inquiries or interest from Chinese market participants.

"Market participants are adopting a `wait-and-see` approach as the arbitrage window has closed," a north China-based analyst said. "In addition, China`s recent economic data has not been good, prompting them to be cautious."

Market participants are waiting for Wednesday`s meeting of the US FOMC to see whether interest rates will rise, the analyst said.

A north China-based source said: "There has been an import loss of around Yuan 300/mt ($47/mt) since last week. This week, it`s still a loss. China`s copper consumption was about 50% of annual global output and China`s economic stability is a great concern to the world."

The source heard CIF China premiums at $90-$100/mt, down $5-$10/mt week on week.

China`s value-added industrial output in August expanded 6.1% year on year, the National Bureau of Statistics (NBS) said Sunday. The growth rate was up slightly from 6% in July.

NBS attributed the higher growth rate to improving performance in key industrial sectors and accelerated growth in high-tech industries.

High-tech manufacturing in August grew 10.5% year on year, with the up 0.9 percentage points from July.

Despite the growth, industrial output still faces heavy downward pressure from flagging demand, NBS said.

Copper prices, which have been hurt by the weak Chinese equity market, remained volatile and weak, sources said.

The Chinese spot copper price stood at Yuan 40,640-40,680/mt Wednesday, compared with Yuan 40,760-40,810/mt a week ago, according to the state-owned nonferrous metals information division Beijing Antaike.

Front-month October 2015 copper futures closed at Yuan 40,980/mt on the SHFE Wednesday, compared with Yuan 41,170/mt a week ago.

On Tuesday, the LME official cash price for copper was $5,288-$5,290/mt, compared with $5,277-$5,280/mt a week ago and $5,323-$5,324/mt Monday.

Chinese spot copper concentrate treatment and refining charges (TC/RCs) remained steady at $90-$100/mt and 9-10 cents/lb respectively, unchanged week on week, industry sources said.

TC/RCs -- fees charged to miners by smelters to treat and refine copper concentrate to produce copper metal -- typically rise when concentrate supply is ample and fall when supply is tight.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.

163 billion cubic meters of shale gas found in Sichuan

Source: www.chinamining.org  Citation: chinadaily.com.cn  Date: September 12, 2015

A technician monitors a control room at a drilling platform in a shale gas field in Weiyuan county, Sichuan province. [Photo by Huang Zhiling/chinadaily.com.cn]

Shale gas reserves exceeding 163 billion cubic meters have been discovered in Southwest China`s Sichuan province.

"They have been proven in two blocks of Weiyuan county and one block of Gongxian county," said Zhou Zeshan, an information officer with PetroChina Southwest Oil and Gasfield Co in Chengdu, Sichuan.

According to Wang Lanshan, a chief geologist in charge of shale gas development in the company, the proven shale gas reserves are tantamount to those of 130 million tons of crude oil because the quantity of heat produced with the burning of 1,255 cubic meters of shale gas is the indentical to the burning of 1 ton of crude oil.

Shale gas blocks in the Sichuan Basin are believed to be one of the most commercial development values in China. Sichuan, whose speed of shale gas development is much higher than in other parts of the country, is expected to produce 2 billion cubic meters of shale gas this year.

"By the year 2020, Sichuan will produce between 5 billion and 8 billion cubic meters of shale gas a year. And one-third of the natural gas output will come from shale gas," Wang said.

A foreman and a visitor pass fracturing trucks in a shale gas field in Gongxian county, Sichuan province. [Photo by Huang Zhiling/chinadaily.com.cn]

Workers drill in a shale gas field in Weiyuan county, Sichuan province.  [Photo by Huang Zhiling/chinadaily.com.cn]

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on October 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.

China curbs conventional gas output, keeps shale target

Source: www.chinamining.org   Citation: Reuters   Date: September 10, 2015

China`s state energy giants are reducing output from conventional natural gas fields as demand growth for the fuel eases to a multi-year low, local media and sources said, although shale gas targets are being maintained.

Sinopec Corp and PetroChina have restricted production at two major conventional fields - Puguang and Anyue - in the Sichuan gas basin, as a cooling economy curbs fuel use by industries like chemical plants and glass and ceramics makers.

By end-August, Sinopec had closed 12 wells at Puguang, one of the country`s largest with annual production capacity of 12 billion cubic metres (bcm), and planned to shut in another 15 wells, the Sichuan Daily reported, citing a Sinopec official at Puguang.

Sinopec said Puguang was pumping at a daily commercial rate of 10 million cubic metres, which was half the amount at the start of the year, as reported by the paper. The production loss was equivalent to roughly 3 percent of national output.

Puguang is competing with rising production at the Fuling shale gas project, China`s first and largest commercial shale discovery, as well as at the nearby conventional Yuanba gas field.

Petrochina has also capped production at the Moxi block of the Anyue field, which is among the country`s largest gas reservoirs tapped onshore in recent years, said a government source who had been briefed by gas companies.

A PetroChina spokesman declined to comment on output curbs, but said production rates at conventional fields were "adjustable based on market conditions".

Official data showed China`s domestic gas output rose 2.6 percent in the first seven months of 2015, down from 6.9 percent annual growth in 2014, and a far cry from average double-digit growth over the past decade.

Despite the reductions at conventional fields, the firms said they remain on track to meet a government-set shale gas target this year, as Beijing tries to replicate the shale boom in the United States.

Hundreds of shale gas wells are planned in Sichuan basin this year to build an annual production capacity of about 7.6 bcm by year-end, or roughly 6 percent of China`s estimated gas output this year.

On average, shale gas costs more than twice that of a conventional deposit, but development is aided by a government grant of 0.40 yuan for each cubic metre of production. The subsidy is set to decrease beyond 2015.

To encourage shale drilling, local authorities in Chongqing municipality, a key shale promoter and where Sinopec`s Fuling project is located, this year advanced subsidies to shale producers at the start of the year instead of at the end of the year, the government source said.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.

China August iron ore imports down 14% on month

Source: www.chinamining.org   Citation: Reuters   Date: September 8, 2015

China imported 74.12 million tonnes of iron ore in August, down 14 percent compared to the previous month, the country`s customs authority said on Tuesday.

Soybean imports hit 7.78 million tonnes, down from a record 9.5 million tonnes in July, the General Administration of Customs said.

Crude oil imports reached 26.59 million tonnes, up 5.55 percent compared to the same period of last year, while oil product exports stood at 3.11 million tonnes, up 13.9 percent on the year.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: www.chinaminingtj.org.