News

China remains largest spot gold trading market

Source: www.chinamining.org   Citation: Xinhua   Date: July 10, 2015

China has retained its position as the world`s largest market for spot gold trading for the eighth year, with growing participation of offshore investors fueling trade growth, the Shanghai Gold Exchange said Thursday.

Trading of gold surged 166 percent in the first half to 17,520 tons, while that of silver jumped 151 percent during the same period to 380,000 tons.

Gold and silver trading totaled 4,764 tons and 525 tons respectively during the period at an international board set up for offshore investors in the China (Shanghai) Pilot Free Trade Zone in September.

The World Gold Council estimates demand for bullion from China and India, the world`s top two buyers, will stand between 900 tons to 1,000 tons this year.

Other than being the world`s largest producer and consumer of the precious metal, China is also striving for a greater say in the pricing of gold.

The Shanghai Gold Exchange will establish a gold fixing system denominated by the Chinese yuan by the end of this year in a bid to compete with London and the US Comex over pricing of the precious metal.

Currently the pricing of gold is dominated by Western markets, as the UK and US account for more than 90 percent of gold trading. China`s onshore gold market accounted for 4 percent in 2013, said ANZ.

"The opening-up of China`s gold market to international investors could provide a sharp boost to trading volumes on the exchange," ANZ chief economist Warren Hogan wrote in a research note in March.

The tendency of the Chinese market to trade at a discount or premium to the global spot price could lure investors to the exchange, with the pricing of the contracts in yuan being another attraction, Hogan 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 to increase investment in Sudan`s oil industry: ambassador

Source: www.chinamining.org   Citation: Platts   Date: July 09, 2015

China`s ambassador to Sudan, Li Lian, says Beijing will increase its investments in the East African country`s oil industry and support its program to increase oil production.

China`s CNPC is the largest investor in Sudan`s oil industry, followed by Malaysia and India.

"CNPC has reduced its foreign investments due to lower global [oil] prices, with the exception of Sudan, for the durability, strength and strategic dimension of the relations between the two countries," Lian was quoted as saying by the state-owned Sudan News Agency, or SUNA, late Tuesday.

"China`s relations with Sudan is considered a model for south-south cooperation," Lian said, after meeting with the Sudan`s oil and gas minister Mohamed Awad Zayid on Tuesday.

Lian did not say how much more Beijing intends to invest in Sudan, but it had invested more than $20 billion in the country before South Sudan`s secession in July 2011, according to Chinese media reports.

During the meeting on Tuesday, Zayid said Sudan aimed to reduce production costs to keep up with the low international oil prices.

"I call upon oil firms to reduce labor costs, expand and increase production activities to achieve high returns," Zayid said.

Sudan`s oil production has dwindled since South Sudan`s secession four years ago.

Prior to the breakaway of the southern part of the country, Sudan used to produce nearly 500,000 b/d of crude oil.

The oil ministry`s medium-term plan is to increase production from the current 133,000 b/d to 320,000 b/d of crude oil in 2017.

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 sets new standards for coal conversion projects

Source: www.chinamining.org   Citation: Reuters   Date: July 08, 2015

China`s energy regulator has released new draft guidelines for projects that convert coal to oil or gas, aiming to commit the sector to the strictest possible environmental standards, it said on Tuesday.

Beijing is looking for alternative sources of growth for its struggling coal sector, with more than 80 percent of domestic mining firms making losses as a result of slowing demand and chronic overcapacity.

Environmental groups have warned that coal-to-gas (CTG) and coal-to-liquid (CTL) projects will do little to cut carbon emissions or reduce pollution.

In a bid to allay concerns about the environmental risks of the process, projects will only be permitted in regions with sufficient water resources, the National Energy Administration said.

It said that any new project needed to be consistent with China`s overall plans to control coal consumption, and would be encouraged to prioritize the use of low-quality coals with high sulfur and ash content to reduce their use elsewhere.

CTL plants would be permitted to use a maximum of 3.7 metric tons of coal for each metric ton of oil produced, while CTG projects would have to use no more than 2.3 metric ton for every 1,000 cubic meters of gas produced, it said.

A decade ago, China encouraged miners and oil firms to establish CTL facilities in a bid to ease dependence on imported crude, and dozens of projects were planned.

But the government went cold on the technology in 2008 after global oil prices retreated, eroding the competitiveness of CTL. The technology also raised concerns about the use of scarce water resources in coal-rich regions like Ningxia and Inner Mongolia.

China`s biggest coal mining firm, the Shenhua Group, launched a CTL project in Inner Mongolia in 2010. The firm aims to bring total capacity at the plant to 11 million metric tons a year by 2020.

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.

Vale-designed megaship docks in Qingdao after China lifts ban

Source: www.chinamining.org   Citation: Global Times   Date: July 06, 2015

A huge iron-ore carrier designed by Brazilian mining company Vale anchored at a port in East China over the weekend, local media reported, signifying that the country`s bulk shipping industry has entered the era of megaships.

Docked at Qingdao Port, East China`s Shandong Province, on Saturday, the carrier, named Yuan Zhuo Hai, is a 400,000-ton vessel bought by China Ore Shipping Pte, a joint venture between China`s two leading shipping companies - China COSCO Bulk Co and China Shipping Development Co, Qingdao Evening News reported.

This is the first time a dry-bulk vessel with a 400,000-ton capacity was permitted to anchor at a port in China, the report said. In 2012, the Ministry of Transport, citing technical reasons, banned huge iron-ore carriers from docking at Chinese ports.

The ban was lifted on Thursday with four ports - Qingdao Port in East China`s Shandong Province, Dalian Port in Northeast China`s Liaoning Province, Tangshan Port in North China`s Hebei Province, and Ningbo Port in East China`s Zhejiang Province - being allowed to accommodate huge dry-bulk ships to join the megaship trend, according to a statement jointly issued by the Ministry of Transport and the National Development and Reform Commission.

"Use of megaships has already become an industry trend, which can help shipping companies reduce operating costs," Wu Minghua, a Shanghai-based independent analyst on the shipping industry, told the Global Times Sunday.

In May, China Ore Shipping signed an agreement with Vale to buy four huge iron-ore ships from its Brazilian partner, according to a press release posted on COSCO Group`s website. The carrier Yuan Zhuo Hai is a part of the deal.

"Generally speaking, a vessel with the capacity of 400,000 tons or above can help cut operating costs by 15 percent to 20 percent," said Wu.

Cost saving is widely regarded as a top priority for domestic shipping companies which have been hurt by the economic downturn since 2014.

Unnamed Barclays analysts were quoted by Financial Times on Friday as estimating that each Vale 400,000-ton vessel, known as Valemax, would boost COSCO Group`s earnings by 11 million yuan per year.

However, Wu noted that the economies of scale will not have an immediate effect due to low shipping rates amid weak domestic demand.

Data from the General Administration of Customs shows that China, the world`s largest buyer of iron ore, imported 70.87 million tons of iron ore in May, down 8.41 percent year-on-year.

Baltic Dry Index (BDI), an economic indicator to measure shipping costs for raw materials such as iron ore, stood at 794 on Thursday, dropping 4.22 percent from a week ago.

The BDI will gradually pick up as China has already rolled out a batch of stimulus measures to boost the domestic economy, Shanghai-based Changjiang Securities wrote in a research note late in June.

As for Vale, Wu believed that China`s policy change is a good news, enabling the Brazilian miner to cut shipping costs to Asian markets and better compete with other global miners.

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.

Shanghai oil & gas exchange starts operations

Source: www.chinamining.org   Citation: chinadaily.com.cn   Date: July 03, 2015

The Ceremony for the Test Run of the Shanghai Petroleum and Natural Gas Exchange

[Photo provided to chinadaily.com.cn]

The Shanghai Petroleum and Natural Gas Exchange (SHPGX), a national-level trading center akin to the Shanghai Energy Exchange and Shanghai Gold Exchange, has started trading in Lujiazui, Shanghai, on July 1.

The center is a platform for spot trading of natural gas, unconventional gas, liquefied petroleum gas, petroleum and other energy products. It adopts a membership system, under which any domestic or foreign member dealer can trade commodities at a listed price or through bidding.

Apart from being the first online trade platform for natural gas and shale gas, the SHPGX is also the first platform, which sees China`s three oil and gas giants, China National Petroleum Corporation (CNPC), the Sinopec Corp and the China National Offshore Oil Corporation (CNOOC), operating on the same exchange, according to Guo Xu, the chief at SHPGX`s construction working panel.

With a registered capital of 1 billion yuan ($159.7 million), the trade center was founded in March 2015 under a strategic alliance between the Xinhua News Agency and the National Development and Reform Commission (NDRC), the nation`s top economic planner. It involves 10 enterprises, including China`s three major oil and gas giants.

The trading center established an oil and gas trade and settlement platform as well as an online service system. Positioning itself as a gas trading hub for China, SHPGX also aims to develop into an Asia-Pacific oil and gas pricing and trading center in the future, said Yu Shaoliang, the vice-publisher of Xinhua News Agency at the launching ceremony.

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.

Construction of China-Russia gas project strengthens energy ties

Source: www.chinamining.org   Citation: Xinhua   Date: July 01, 2015

Construction of the Chinese section of the China-Russia East-Route Natural Gas Pipeline began on Monday, further boosting energy cooperation between the two countries, analysts said.

The Chinese section of the 3,968-kilometer east-route natural gas pipeline originates in northeast China`s Heilongjiang Province and terminates in Shanghai in the east.

It is the largest China-Russia cooperation project and is conducive to diversifying both countries` energy strategy and guaranteeing energy security, Chinese Vice Premier Zhang Gaoli said at the construction commencement ceremony.

The Russian part of the east-route pipeline began construction in eastern Siberia last September. Negotiations on details for a proposed western route are still underway.

"The construction progress of the east route of the pipeline is of great strategic significance. It lifts China-Russia mutual trust and cooperation to a new height," said Professor Liu Yijun with China University of Petroleum.

China National Petroleum Corp (CNPC) and Russian gas giant Gazprom signed a deal for the East-Route Gas Project on May 21, 2014. The 30-year contract will see the east-route pipeline begin providing China with 38 billion cubic meters of natural gas annually from 2018.

Under the bilateral agreement, Russia will export 70 billion cubic meters of natural gas to China every year upon completion of both the east- and west-route gas pipelines.

Strengthening energy cooperation is of great significance to safeguarding the two countries` energy security, said Zhou Dadi, vice director of the China Energy Research Society.

Russia`s energy export to Europe is under great pressure due to the impact of the Ukraine crisis, making it look to the east for a solution, said Feng.

To reduce its reliance on coal and combat pollution, China also needs to import more natural gas, he added.

The gas project is a win-win deal for both countries, said Feng Yujun, head of the Russia Research Institute of China Institutes of Contemporary International Relations.

"The pipeline will provide secure and reliable clean energy for China`s economic development and a long-term stable market for the rich natural gas resources in Russia," he said.

The pipeline is also of great significance for the rejuvenation of the traditional industrial base in northeast China and Russia`s development of the Far East, Feng added.

Aside from natural gas, the two countries should fully utilize the their complementarity advantages to expand all-round cooperation in oil, nuclear energy, coal and electricity.

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.

Russia now China`s largest crude supplier

Source: www.chinamining.org   Citation: China Daily   Date: June 26, 2015

A supply and storage center for crude from Russia in Daqing, Heilongjiang province. Russia became China`s biggest crude supplier in May, overtaking Saudi Arabia, as the global competition for oil intensified.                                                                                                                                                                              [Photo/Xinhua]

Russia became China`s biggest crude supplier in May, overtaking Saudi Arabia, as the global competition for oil intensified.

China imported a record 3.92 million metric tons of Russian crude during the month, or 927,000 barrels a day, according to data from the General Administration of Customs on Tuesday, a 20 percent increase on April.

Saudi Arabia has slipped to China`s third-largest crude supplier, after Russia and Angola.

The Gulf oil giant exported 42 percent less crude to China compared with the previous month to 3.05 million metric tons, the equivalent of 722,000 barrels a day, according to customs data.

Last year, China imported around 33 million tons of crude from Russia, a 36 percent increase compared with the previous year, according to Wind Information Co, a financial research provider.

Gao Jian, an oil analyst at Sublime China Information, a domestic commodity consultancy, said Russia agreed to settle all of its crude sales to China in renminbi earlier this month, which boosted crude exports to the country.

"The application of renminbi in global oil trading will become a trend as global crude supply increases and China becomes an important buyer with a bigger say," Gao said.

According to BP Plc`s annual energy report, the United States is now the world`s largest oil and natural gas producer, and China`s energy consumption growth is slowing because of the country`s control of its energy-intensive industries.

"All those factors have converted the global crude trade from being a seller`s market into a buyer`s market," Gao said.

According to estimates from the Paris-based International Energy Agency, China, which is the world`s second-largest crude user, will account for 11 percent of world demand this year, making it a key target market for major exporters including Russia, Saudi Arabia and Iraq.

Li Yan, a crude analyst with Shandong Longzhong Information Technology Co Ltd, said Saudi Arabia is losing market share because it is having to compete with other suppliers on price.

"Russia`s weak domestic economy needs help from China. The crude trade between the two countries has become an effective tool for their strategic and political cooperation," he said.

It is the first time since October 2005 that Russia has become China`s top crude supplier, but Moscow has been forced into finding new markets for its crude amid Western sanctions over its ongoing conflict with Ukraine.

Energy cooperation between the two countries is not limited to crude.

In November, they signed a 30-year gas supply contract, making China the biggest consumer of Russian gas.

The new supply will come through China`s western border and is in addition to a $400 billion deal between the nations to deliver 38 billion cubic meters of gas annually to China via an eastern route, starting in 2018.

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.

Chinese group warns that possible steel output cuts may depress iron ore prices

Source: www.chinamining.org   Citation: Platts   Date: June 25, 2015

Iron ore prices will be under pressure if Chinese steel mills opt for steel output cuts when experiencing greater losses in the coming months, the China Iron & Steel Association warned in its May monthly iron ore market analysis report released Wednesday.

"Iron ore prices may still be able to narrowly range at $60/dmt CFR China throughout June, however, steel mills may be prompted to cut steel production and conduct maintenance if they are facing greater losses in the coming months," the association said.

CISA, therefore, reminded China`s iron ore market participants including traders and mills` procurement officials to closely monitor demand and supply changes in the iron ore market and adjust their stocks accordingly.

In May, iron ore prices stayed firm as arrivals at Chinese ports dropped compared with a year ago due to shipment delays with the heavy rain especially in Australia in April as well as decrease in supplies as some higher-production cost miners halted or cut iron ore output in April when prices hit years` low, CISA said.

Demand from Chinese steel mills, on the other hand, had been strong, with high operational rates of iron-making blast furnaces at their plants.

Procurement officials from Chinese mills agreed on the possibility of steel output cuts in July-August, a low seasonal demand period for steel products with heavy rains in east and south China and high temperature in north China.

"Steel prices have been declining while iron ore prices have been firmly holding above $60/dmt CFR China in June, but sales has not been so bad, so mills still try to produce as much as they can as this will help to keep per tonne production cost low," an official from a mill in north China`s Hebei province said.

When steel sales declines as well, piling up steel inventories, softening steel prices while steady iron ore prices will only lead to higher losses, thus making little sense for steel mills to hold on to high production levels, he added.

So far, steel production cuts have not been a concern in China, as the latest output figures from CISA showed that daily output of its 88 steel mills was 1.8032 million mt/day, up 2.08% from May 21-31, but mills` steel stocks rose as well by 3% from end-May to 16.31 million mt as of June 10.

Last month, Chinese importers applied for Australian iron ore permits totaling 61.88 million mt, down 4.84% month on month, but 29 million mt of iron ore completed Customs clearance, up 31.8% from April, according to the report.

For Brazil, Chinese participants were granted permits to import 23.67 million mt of iron ore in May, up 35.5% on month, and iron ore cleared at the Customs totaled 8.32 million mt in May, up 73% on month.

For iron ore imports under long-term contracts in May, the volume from Australia totaled 80.22 million mt, up 10.6% month on month, with the 60-63% Fe content iron ore remaining the most popular grades.

The volume from Brazil under long-term supplies reached 18.7 million mt in May, largely unchanged with a mere 1.9% increase from April, with the 60-63% Fe content iron ore also being the most preferred cargoes.

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.