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Coal prices set to stay low on mainland China for next 12 months

Source: www.chinamining.org  Citation: www.scmp.com  Date: August 18, 2014

Mainland miners have been urged to cut their coal output.

Mainland coal prices are expected to stay low for at least the next 12 months after a protracted slump, weighed down by weak demand, environmental constraints, domestic oversupply and rising imports.
    
While further downside is limited as leading domestic miners cut back on output to prevent prices from sinking to loss-making levels, according to some analysts, a meaningful recovery is some way off.
    
Analysts at ANZ last month slashed their forecast for this year`s average seaborne power-station coal by 4 per cent to US$74 a tonne, next year`s by 7 per cent to US$78 and that of 2016 by 11 per cent to US$82, saying "coal markets are awash with coal at a time of soft demand".
    
"But falling new mine investment [in Australia and Indonesia] should mean tighter supply and better prices in 2016 and 2017," it said in a research report.
    
The two nations account for most of the mainland`s coal imports, which, although accounting for only 9 per cent of consumption, has grown robustly in the past few years.
    
Australia has ramped up supply because some miners who committed to costly rail and port facilities built during the commodity boom in 2010 and 2011 are stuck with high payments, and were forced to keep raising output even with prices falling in order to spread the high fixed costs over high sales volume, ANZ said.
    
The bank said further price downside is limited since the current benchmark Australian coal price of around US$70 a tonne is not much higher than the US$60 a tonne break-even production cost of the mainland`s largest and most efficient coal miner Shenhua Group.
    
Prices at the mainland`s largest coal port Qinhuangdao have fallen just over 40 per cent since the downturn in coal prices began in late 2011, and have slid some 22 per cent so far this year.
    
Jefferies Securities analysts said in a research note they believe prices will not materially recover and have yet to bottom out, adding mainland coal demand has "more or less peaked".
    
Increasingly stringent environmental protection regulations mean highly polluting coal-fired power`s competitiveness over subsidised clean energy is slowly being eroded.
    
The latest tightening of emission standards took effect on July 1, forcing operators to spend more to remove pollutants or shut non-complying plants.
    
"As governments globally seek to reduce their carbon dioxide emissions, it looks increasingly likely that `king coal` will lose its crown," ratings agency Standard & Poor`s said in a report.
    
S&P projects the mainland`s coal demand growth to stay at low single-digit percentages before flattening by 2020.
    
Amid oversupply, the mainland`s coal output last year grew 1.4 per cent, or by 50 million tonnes - the lowest in more than a decade, according to data from the China National Coal Association.
    
In this year`s first half, output fell 1.8 per cent year on year. Still, net imports grew 1.5 per cent.
    
The industry`s first-half profit fell 44 per cent from a year before to 51.3 billion yuan (HK$64.48 billion). Of the 36 large miners tracked by the association, 20 were in the red, nine are close to breaking even and over half have cut or delayed paying salaries.
    
Prior to last year, domestic output expanded rapidly after mines were consolidated, and a transport bottleneck was gradually overcome with the completion of new railways.
    
The association`s head, Wang Xianzheng, last month called on miners to cut output by at least 10 per cent to restore the demand-supply balance.
    
The Shanghai Securities News quoted Wang Jinli, chairman of the sales unit of state-owned Shenhua, as saying the company has cut this year`s planned output by 11 per cent.
    
China Coal Energy, the listed unit of the mainland`s second-largest coal miner China National Coal Group, last week said it had cut its raw coal output target for this year by 10 per cent.
    
Given the success of United States energy firms in extracting natural gas trapped in shale rock formations, coal has lost significant market share to this supposedly cleaner energy.
    
If the mainland can emulate the American success, it could quicken coal`s replacement by shale.
    
"A significant decline in coal production and consumption globally is becoming a much more realistic concept," S&P said. "However, the pace and scale of change within the coal industry is far from clear, and investors could potentially remain in the dark for some time."

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s refined copper output up, aluminium at record

Source: www.chinamining.org  Citation: Reuters  Date: August 18, 2014

China`s refined copper production rose 1.6 percent month-on-month in July, increasing for the third straight month as smelters expanded capacity. Strong output in the world`s top refined copper producer and consumer could mean end users may cut their demand for imports. Refined copper production stood at 633,518 tonnes in July versus 623,428 tonnes in June, data from the National Bureau of Statistics showed on Thursday.
    
The July output was up 16.5 percent from a year ago. In the first seven months of 2014, production increased 9.8 percent from the same period last year to 4.25 million tonnes. "More new smelting capacity is set to start production in the second half of the year," said Song Xiaolang, Shenzhen-based analyst at Jinrui Futures.
    
About 600,000 tonnes of smelting capacity was likely to come onstream between July and December after less than 100,000 tonnes had started in the first half of the year, Song said. Strong treatment and refining charges (TC/RCs) for imports of raw material copper concentrates also have been encouraging Chinese smelters to boost refined metal production, Song said.
    
TC/RCs are paid to Chinese smelters from foreign sellers to convert concentrates into refined copper and deducted from the smelters` buying prices. Spot clean, standard copper concentrate traded at TC/RCs of about $110 per tonne and 11 cents per pound this week, compared to about $90 and 9 cents in late June, traders said. TC/RCs usually rise when copper concentrate markets are well supplied. Refined copper output may rise further in August although two medium-scale smelters in the north-eastern region of Inner Mongolia were conducting maintenance currently, Song said.
    
ALUMINIUM, ZINC ON RECORD Production of primary aluminium went up 1.2 percent compared with last month, hitting a second consecutive record as smelters restarted idled capacity. Aluminium production stood at 1.98 million tonnes in July, compared to the previous record of 1.95 million tonnes in June. The July production was up 7.2 percent from a year ago.
    
In the first seven months, aluminium output increased 7.5 percent to 13.5 million tonnes. Production may rise further due to new capacity. State-backed research firm Antaike expects about 3 million tonnes of aluminium smelting capacity to come onstream in the second half of this year, after about 1.6 million tonnes started up in the first half. China`s refined zinc production also hit a record in July, rising 5.3 percent from a month ago to 515,065 tonnes.
    
The July production surged 10.3 percent from the same month last year. Strong prices encouraged output, industry sources said. The most-active zinc futures in Shanghai rose more than 6 percent in July. Production of refined lead fell 13.6 percent on-month to 349,609 tonnes in July due to seasonal weak demand. Nickel stood at 31,530 tonnes in July versus 33,288 tonnes in June. Refined tin was at 15,889 tonnes in July versus 17,087 tonnes.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

Natural gas prices go up

Source: www.chinamining.org  Citation: Global Times  Date: August 13, 2014

Two workers check Sinopec`s natural gas facility in Puyang, Central China`s Henan Province. Photo: CFP

China announced Tuesday a 20.5 percent rise in natural gas price for non-residential use, marking another step in a reform to make the gas prices more market-driven.
    
The price hike is expected to boost imports and output of the cleaner fuel in one of the world`s largest energy consumers, analysts said.
    
Effective from September 1, the gas price for industrial and commercial users will increase by 0.4 yuan ($0.06) per cubic meter, the National Deve-lopment and Reform Commission (NDRC), China`s top economic planner, said in a statement on Tuesday.
    
The price adjustment is based on the amount of gas consumed in 2012, while the price for newly added gas consumption will remain unchanged.
    
After the adjustment, the price of non-residential natural gas will rise to 2.35 yuan per cubic meter at gas stations, according to the Xinhua News Agency`s calculation.
    
The price hike also exempted more sensitive consumers such as households and fertilizer producers.
    
This is the second important step to make the gas price fully market-driven by 2015, the NDRC said.
    
The latest hike came after a similar 15.4 percent increase for non--residential gas consumers in July 2013 when the NDRC launched a new pricing mechanism.
    
"The price hike will benefit gas producers including PetroChina and Sinopec as it will reduce losses of their import business," Wang Xiaokun, a natural gas analyst with consulting firm Sublime China Information, told the Global Times on Tuesday.
    
Under the current pricing system, the gas price is artificially kept lower than the cost of imports as the government fears that higher energy prices will lead to inflation that could jeopardize the economy.
    
However, the government-controlled gas prices discourage importers and producers to increase imports and output to meet the country`s growing demand for cleaner fuel.
    
Market-based gas prices will spur gas imports to meet the growing domestic demand for the cleaner fuel, Wang said.
    
China imported 53 billion cubic meters gas in 2013, accounting for about 30 percent of its total gas consumption, and the demand will further grow given the need to fight against air pollution, the NDRC wrote in the statement.
    
Average gas consumption is growing 15 percent annually in China, and the domestic gas output can no longer meet the demand, according to the NDRC.
    
The price hike is expected to add 44.8 billion yuan in revenues for gas importers and producers, yet it will add pressure on the downstream industrial users, Sun Yang, an analyst at chem365.cn, an energy market intelligence service provider, told the Global Times on Tuesday.
    
"This price adjustment will have no impact on consumers as the price for residential users remains unchanged," the NDRC wrote, noting the rise in costs for industrial users will spur industrial restructuring and eliminate redundant energy-consuming capacity.
    
China`s energy consumption per unit of GDP declined 4.2 percent year-on-year in the first half of this year, the largest fall since 2009, official data showed on Tuesday, marking a significant progress in energy saving and pollution control.
    
Even after the price uptick, the natural gas is still competitively priced compared with its substitutes including fuel and liquefied petroleum gas, and therefore the impact on the industrial sector is limited, the NDRC 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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China says July steel output drops 1.4 pct on month

Source: www.chinamining.org  Citation: Reuters  Date: August 13, 2014

China produced 68.32 million tonnes of crude steel in July, down 1.4 percent from the month before as mills began cutting output during the off-season.
    
The daily production rate amounted to 2.20 million tonnes, down 4.6 percent from a record daily rate of 2.31 million tonnes in June, data from China`s National Bureau of Statistics showed on Wednesday.
    
Large-scale mills slashed average daily production by 2.8 percent to 1.757 million tonnes in the last 11 days of July, its lowest rate since mid April, data from the China Iron and Steel Association (CISA) showed last week.
    
The monthly production figure remains 1.5 percent higher than the same period last year, even though numbers provided by CISA have shown only a negligible increase in apparent domestic steel consumption during the first-half of the year.
    
Much of China`s additional steel output has been sold overseas, with steel product exports in July rising 14 percent on the month to 8.06 million tonnes.
    
Total imports over the first seven months of the year have surged 37 percent to 49.07 million tonnes. Over the same period, China produced 480.76 million tonnes of crude steel, up 2.7 percent on the year.
    
China produced 94.76 million tonnes of steel products in July, up 3.7 percent compared to the same period in 2013, but down 3.4 percent on the month. Production from January to July reached 647.23 million tonnes, up 5.8 percent compared to the same time last 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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s crude oil imports up 7.2% in Jan-Jul to US$ 137.5 bln

Source: www.chinamining.org  Citation: China Knowledge   Date: August 12, 2014

China, the world`s second largest oil consumer after the U.S., imported 175.73 million tons of crude oil in the first seven months of 2014, 7.2% more than in the same period of last year, according to figures from China`s General Administration of Customs.
    
The import value of crude oil for the seven-month period rose 8.1% from a year earlier to US$ 137.5 billion.
    
From Jan to Jul, the country saw its imports of refined oil reach 17.13 million tons, reflecting a decrease of 31.1% year on year. The import value of refined oil went down 29.3% from a year earlier to US$ 13.83 billion in the period.
    
In the month of Jul 2014, the country imported 23.76 million tons of crude oil, while the import value for the month hit US$ 18.69 billion.
    
China imported 1.86 million tons of refined oil in Jul with import value of US$ 1.58 billion.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s coal imports down 2.2% in Jan-Jul to US$ 14.4 bln

Source: www.chinamining.org  Citation: China Knowledge   Date: August 12, 2014

China saw its coal imports went down 2.2% year on year to 182.89 million tons in the first seven months of this year, according to statistics released by the General Administration of Customs.
    
According to the statistics, the import value of coal decreased 15.1% year on year to US$ 14.43 billion in the seven-month period.
    
Meanwhile, China saw its coal exports amount to 4.43 million tons in the first seven months, 116.8% more than in the same period of 2013. The export value of coal totaled US$ 965.06 million, up 88.3% year on year.
    
Last month, China`s coal imports reached 23.03 million tons with import value of US$ 1.72 billion, while its coal exports hit 0.5 million tons with export value of US$ 97.69 million.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

Coal output to be cut

Source: www.chinamining.org  Citation: Global Times  Date: August 11, 2014

Chinese authorities and coal industry association have persuaded domestic coal suppliers to reduce production in a bid to stabilize coal prices, the China Times newspaper reported Sunday, citing an anonymous source with the China National Coal Association (CNCA).
    
The CNCA and coal authorities held several meetings with major coal firms, including China Shenhua Energy Co and China Coal Energy Co, the report said.
    
As a result, Shenhua announced on August 1 that it planned to cut this year`s annual production by 50 million tons, and raised its August coal prices by 4 yuan ($0.65) per ton after nearly two months of cuts.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.

China`s July iron ore imports jump

--- Buyers stock up due to lower costs

Source: www.chinamining.org  Citation: Reuters   Date: August 11, 2014

China`s iron ore imports jumped nearly 11 percent in July from the previous month, customs data showed, as buyers took advantage of lower prices for the steel-making raw material and stocked up, despite weak domestic steel demand.
    
Demand from China has remained resilient, helping to justify surging production from major suppliers such as Rio Tinto and BHP Billiton, which has driven iron ore prices down by around one-third this year.
    
July`s total shipments of 82.52 million tons represented the third highest on record, with steel mills in China continuing to produce at high rates. Margins for steel mills have also improved as a result of lower iron ore and other input prices.
    
"The import numbers are generally pretty volatile and you get up months and down months - the June number looked a little low so July represents a higher number, but if you look at the averages over the quarter, it is pretty much in line," said Graeme Train, analyst with Macquarie in Shanghai.
    
Iron ore prices over July were relatively steady, remaining within a range of $93.60-$98.00 per ton and ending the month at $95.60, up 1.9 percent from the end of June, with spot market activity relatively weak, according to data from The Steel Index.
    
In a report published on Thursday, the China Iron and Steel Association (CISA) said that iron ore oversupply widened in July, adding that it expected prices to continue to edge downward in coming months.
    
The weak prices have helped weed out some high-cost production from the market and benefited Australian producers, who have steadily increased their share of China`s total imports.
    
Anglo-Australian Rio Tinto, the world`s No.2 miner which gets the lion`s share of earnings from iron ore, took advantage of that trend and posted a forecast-beating 21 percent rise in first half profit on Thursday.
    
Australia`s share of Chinese iron ore imports was 61 percent of the total in June and 56 percent in the first half of the year, against about 50.8 percent for the whole of 2013.
    
Shipments to China from Port Hedland, Australia`s main iron ore port, rose 4.8 percent on the month to a record high 30.57 million tons in July, suggesting that Australia`s share of China`s total imports increased further.
    
"The strength in shipments from Australia is knocking out just as many tons from high-cost producers in the global market as it is from high-cost domestic producers," said Macquarie`s Train.
    
According to preliminary estimates by industry consultancy Custeel, average daily steel output in China fell 2.2 percent over the July 21-31 period, suggesting that producers were finally responding to weakness in demand.
    
With steel output starting to decline slightly and iron ore imports still at a relatively high level, a supply glut of the steel-making ingredient could worsen, with imported ore stockpiles at major ports set to rise further in coming months.
    
While port inventories fell for two consecutive weeks to reach 111.95 million tons by August 1, they remain 46 percent higher than at the same time last year, according to data from SteelHome.
    
Chinese steel product exports were strong in July, rising 14 percent to 8.06 million tons, the customs data showed.
    
With actual domestic consumption remaining stagnant this year, producers diverted 97.2 percent of their additional output to overseas markets in the first five months of the year, according to CISA data.
    
British consultancy MEPS said this week that it expected China to export 73 percent of its increased steel output over the whole of 2014.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: www.chinaminingtj.org.