According to preliminary estimation, the gross domestic product (GDP) for the year 2010 was 39,798.3 billion yuan, up by 10.3 percent at comparable prices, or 1.1 percentage points higher than that in the previous year. In terms of growth by quarters, it was up 11.9 percent for the first quarter, 10.3 percent growth for the second quarter, 9.6 percent for the third quarter and 9.8 percent for the last quarter.
Industrial Production Went up Steadily with a Substantial Increase in Economic Efficiency of Enterprises. In 2010, the value added of the industrial enterprises above designated size was up by 15.7 percent, or 4.7 percentage points higher than that in 2009. Of which, the growth in the first quarter was 19.6 percent, that in the second quarter was 15.9 percent, 13.5 percent growth in the third quarter and 13.3 percent growth in the last quarter. Analysis on different types of enterprises showed that the value added of the state-owned and state holding enterprises went up by 13.7 percent; collective enterprises, up by 9.4 percent; share-holding enterprises, up by 16.8 percent; and 14.5 percent growth for the enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan. The growth of the heavy industry was 16.5 percent and that of the light industry was 13.6 percent. Among the 39 industrial divisions, 38 of them witnessed year-on-year growth. In terms of different areas, the growth in eastern, central and western regions went up by 14.9 percent, 18.4 percent and 15.5 percent respectively. The production and sales of industrial products went on well. In 2010, the sales ratio was 97.9 percent for the industrial enterprises above designated size, or 0.2 percentage point higher than that in the previous year.
The total value of imports and exports for the whole year reached 2,972.8 billion US dollars, an increase of 34.7 percent over that in the previous year. The total value of exports was 1,577.9 billion US dollars, up by 31.3 percent; that of imports was 1,394.8 billion US dollars, up by 38.7 percent. The trade surplus was 183.1 billion US dollars, a decline of 6.4 percent over that in the previous year.
Friday, January 21, 2011
Japanese scrap market: domestic prices in line with export ones
20.01.2011 18:11
Export prices in the Japanese steel scrap market have been moving up at slower pace recently. One of the South Korean importers has showed interest in buying a lot of HMS 2 from Japanese scrap collectors at JPY 39,000/t FOB ($474/t FOB, $1 = JPY 82.2), up JPY 500/t ($6/t) w-o-w. Another company, on the contrary, refused to pay more than JPY 38,000/t ($462/t) FOB. Thus, the average market price for Japanese HMS 2 is JPY 38,500/t ($468/t) FOB, which corresponds to the latest contract level of Hyundai Steel made earlier last week.
At the same time, domestic scrap prices in Japan have come close to export ones. During one week period Tokyo Steel increased purchase prices twice. Its subsidiaries are buying domestic material by JPY 500-1,000/t ($6-12/t) higher from January 15 and by JPY 500/t ($6/t) higher from January 21.
In particular, Okayama is offering JPY 38,500/t ($468/t) for HMS 2 for seaborne and overland arrivals (prices are given exclusive of 5% VAT). Takamatsu is ready to pay JPY 36,500/t ($444/t) to local scrap collectors, any type of delivery. Tahara is buying HMS 2 at JPY 37,500/t ($456/t) seaborne arrivals and JPY 38,000/t ($462/t) overland arrivals.
UtsunomiyŠ° has revised its purchase prices upwards only once. It sources the material from the domestic market at JPY 38,000/t ($462/t) overland arrivals, against JPY 37,500/t ($456/t) in early January.
Domestic scrap prices are expected to stay at the current levels till the end of the month. Healthy domestic demand will play into the hands of traders who service foreign contracts and do not want the upward trend to reverse.
EU pig iron market: prices increase
20.01.2011 18:40
European consumers refrain from purchases of pig iron in spite of rapidly growing cost of ferrous scrap. The steelmakers are reluctant to run the risk of buying expensive material amid an upturn in prices in the segment for scrap, which seems short-lived to them. European market participants anticipate that quotations of scrap will roll back in February already. Consumers of pig iron are expected to return to the market for restocking in late January and thus steelmakers have decided to delay purchases until the situation in the segment for scrap becomes clearer.
At the moment, prices for pig iron and high-quality scrap are almost on the same level and some mills are purchasing small batches of the former in the domestic or stockists' market, due to the short delivery time and deferred payment option available. Exporters of pig iron have announced an increase in their quotations after selling small lots of the material at higher prices, and are planning to lift them further.
Market participants inform that some Russian suppliers have sold a small pig iron lot of 3,000 tonnes from Ust-Luga Baltic port at $530/t FOB ($545-550/t C&F ports of Northern Europe). Previously, the transaction prices were at $495-500/t FOB ($520-525/t C&F ports of Spain).
And though new prices have not yet been supported by large contracts, exporters have raised their offers to $560-570/t southern ports of the EU. Currently they have not many arguments to justify their increase, as February production of the material has not yet been sold-out and there are substantial amounts of unsold pig iron available in ports.
Due to this, not all the Russian suppliers stick to upward trend. A contract for low-quality pig iron has reportedly been signed recently at $500/t FOB.
Ukrainian pig iron is available at $495-500/t FOB Black Sea, and there has been a deal reported at this level. The material will be shipped to Belgium, with C&F-price being $540/t.
Thursday, January 20, 2011
Coking Coal May Reach $300 a Ton, McCloskey Says
January 17, 2011, 1:07 AM EST
Jan. 17 (Bloomberg) -- Coking coal may reach $300 a metric ton this year in the spot market as flooding in Australia crimps supply and demand gains in China and India, coal researcher McCloskey Group Ltd. said.
“There will be higher demand for coking coal this year, while supplies are most likely going to be less,” Gerard McCloskey, the founder of the U.K.-based company, said in an interview in New Delhi. “There are more steel capacities coming up in Asia this year and there has been a recovery in consumption in the European Union and U.S.”
BHP Billiton Ltd., Rio Tinto Group, Xstrata Plc and other coking coal producers in Queensland state, which supplies about half of global output, have said they may miss deliveries after Australia’s worst floods in 50 years. Steel usage may rise 5.3 percent this year, the World Steel Association estimates.
Steelmakers including ArcelorMittal and Nippon Steel Corp. may have to pay about 38 percent more than 2010 prices in the spot market if steel gains or hovers at the present level of $700 a ton, McCloskey said yesterday in the interview. The average contract price for coking coal next year will be higher than this year’s average $214.50 a ton, although supplies from U.S., Canada, Mongolia, Indonesia, Russia and Mozambique plug a part of the deficit from Queensland, he said.
Global Demand
Global coking coal demand may gain about 7 percent this year to 245 million tons from about 230 million tons in 2010, said McCloskey, who is attending a three-day steel conference that began yesterday in New Delhi. Shipments may rise to 415 million tons by 2020, he said.
About 15 million ton has already been lost in the Queensland floods, of which a third is thermal coal, said McCloskey. Mongolia may supply 25 million tons to 40 million tons to China, easing the burden, McCloskey said.
Indian steelmakers may double coking coal imports to 60 million tons by 2017 and 90 million tons by 2020 as newer capacities come on stream each year, he said. China’s coking coal imports will probably rise to 110 million tons by 2020 from 37 million tons in 2009 and about 53 million tons last year, he said.
Prices of hard coking coal may reach between $400 and $500 a metric ton after rainfall intensified in Australia’s flood-hit Queensland state, consultant Wood Mackenzie Ltd. said on Jan. 15.
Coal for use in power stations may rise to more than $197 a ton from the current $140 at Australia’s Newcastle port, the world’s biggest coal-export facility, according to an e-mailed report dated Jan. 14. The Edinburgh, U.K.-based company did not provide comparative prices for hard coking coal, or state a time period for the forecast gains.
--Editors: Indranil Ghosh, Alan Soughley
To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net Rajesh Kumar Singh in Delhi at Rsingh133@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
Coking coal prices may hit US$500/ton on Australian floods
News Date 1/20/2011 8:51:37 AM reported by Mike Lo
In the wake of Australian floods crippling coal mine operations, the prices of hard coking coal, raw material of steel production, are expected to hit US$500/ton, according to an analysis made by a well-known research and consulting firm on mining, energy and metals.
It’s known that the current spot prices of hard coking coal were around US$275/ton and the ongoing quarterly contract prices were situated at US$225/ton.
It's obvious that the restricted supply of the hard coking coal has provided a strong support to boost the prices of hard coking coal to reach US$400~US$500/ton.
Meanwhile, the floods across Queensland have damaged 91% of Australia's hard coking coal exports assumed to ship to neighboring Asia Pacific region on a regular basis.
In the wake of Australian floods crippling coal mine operations, the prices of hard coking coal, raw material of steel production, are expected to hit US$500/ton, according to an analysis made by a well-known research and consulting firm on mining, energy and metals.
It’s known that the current spot prices of hard coking coal were around US$275/ton and the ongoing quarterly contract prices were situated at US$225/ton.
It's obvious that the restricted supply of the hard coking coal has provided a strong support to boost the prices of hard coking coal to reach US$400~US$500/ton.
Meanwhile, the floods across Queensland have damaged 91% of Australia's hard coking coal exports assumed to ship to neighboring Asia Pacific region on a regular basis.
WORLD STEEL PRICE TO TOP $US 1000 PER TONNE IN 2011
MEPS Steel News - 17.01.2011
World Average Carbon Steel Price is forecast to exceed $US 1000 per tonne in the third quarter, according to preliminary analysis by the company. This figure compares with an annual average in 2010 of $US 733 per tonne and an ‘all-time’ high in 2008 of $US 1160.
The sharp rise in steel prices will be driven initially by higher input costs for the mills. The Australian floods are limiting supplies of coking coal – pushing spot prices even higher. Iron ore prices are steadily rising due to restricted availability from India. Scrap costs continue to escalate. These are vital ingredients of steelmaking.
Many steel buyers will be lifting their order volumes in an effort to purchase ahead of the impending price hikes. This should enable the mills to lift their margins on sales. All these factors are likely to push the MEPS World Average Carbon Steel Price through the $US 1000 per tonne barrier once again.
The next MEPS Regional and Global forecasts will be available on 31st January 2011 at
The next MEPS Regional and Global forecasts will be available on 31st January 2011 at
Vale sees iron ore output up 50 pct by 2015
* Most of the additional production will serve Chinese market
* Vale building 20-vessel fleet with 400,000 tonnes capacity
HONG KONG, Jan 18 (Reuters) - Brazilian mining giant Vale SA (VALE5.SA:Quote) said it expects total iron ore production to rise 50 percent by 2015, an executive said on Tuesday.
Vale Minerals China Co President Luiz Meriz, speaking at a financial forum in Hong Kong, said Vale was making large investments to increase iron ore production to satisfy growing Chinese demand.
"We expect production to increase 50 percent by the year 2015 when we should be producing about 450 million tonnes of very high quality iron ore," Meriz said, adding that basically all additional production was likely to serve the Chinese market.
The iron ore producer aims to step up its investor profile in Asia after it made a debut on the Hong Kong stock exchange .HSI in December [ID:nTOE6B606C]. Vale is also listed on the New York Stock Exchange, Euronext Paris and the Brazilian BM&F.
Meriz said that with the majority of Vale's reserves located far away from Asia, the mining giant was placing an increasing emphasis on logistics.
"Vale is building a big fleet of more than 20 vessels with a capacity of 400,000 tonnes and they will operate with regular schedule from Brazil to China," he said.
Shares in Vale SA's Hong Kong portion (6210.HK: Quote) were trading up 0.5 percent by 0600 GMT.
(Reporting by Farah Master; Editing by Ken Wills)
Rio Tinto - Fourth quarter 2010 operations review
Chief executive Tom Albanese said: “Running our operations at full capacity was a priority for Rio Tinto in 2010, in an environment of strong prices for most of our commodities. Our success is clearly demonstrated in iron ore where we set new quarterly and annual production records. During the quarter we approved a further $5.5 billion in value-adding growth projects, including the expansion of our Pilbara iron ore operations to 283 million tonnes a year and the first phase of an aluminium smelting pilot plant in Quebec using our new AP60 technology.”
• Rio Tinto’s global iron ore operations set a new quarterly production record at 65 million tonnes (50 million tonnes attributable) and a new annual record at 239 million tonnes (185 million tonnes attributable).
• Mined and refined copper were down nine per cent and six per cent on the fourth quarter of 2009 and down 16 per cent and five per cent on full year 2009, in line with previous guidance.
• Bauxite production increased nine per cent year on year in line with higher demand. Alumina and aluminium production were broadly flat.
• Australian hard coking coal production was up eight per cent on the fourth quarter of 2009 and rose 20 per cent on full year 2009, following increased investment at the Queensland operations. Australian thermal coal production was down nine per cent overall for the year, mainly due to wet weather in the Hunter Valley.
• The force majeure declaration at the four Queensland coal mines remains in place. All the Queensland coal mines are operational but are still constrained in some way by weather impacts, including the impact on third party infrastructure. Rio Tinto is currently unable to provide an estimate of the full impact of this adverse weather or the duration of the force majeure declaration.
• On 8 December, Rio Tinto signed a new agreement with Ivanhoe Mines under which Rio Tinto will assume direct management of the Oyu Tolgoi copper-gold project in Mongolia. The agreement also gives Rio Tinto the right to increase its holding in Ivanhoe to 49 per cent.
• On 15 December, Rio Tinto completed the divestment of its remaining 48 per cent equity holding in Cloud Peak Energy Inc. The total gross proceeds from the secondary offering of $573 million were received in December.
• On 23 December, Rio Tinto announced a A$16 per share cash offer to acquire all of the issued and outstanding shares of Riversdale Mining Limited by way of a recommended off-market takeover offer.
• Rio Tinto approved major capital projects totalling $5.5 billion during the fourth quarter, bringing the full year total of project approvals to $10.8 billion.
All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated
• Rio Tinto’s global iron ore operations set a new quarterly production record at 65 million tonnes (50 million tonnes attributable) and a new annual record at 239 million tonnes (185 million tonnes attributable).
• Mined and refined copper were down nine per cent and six per cent on the fourth quarter of 2009 and down 16 per cent and five per cent on full year 2009, in line with previous guidance.
• Bauxite production increased nine per cent year on year in line with higher demand. Alumina and aluminium production were broadly flat.
• Australian hard coking coal production was up eight per cent on the fourth quarter of 2009 and rose 20 per cent on full year 2009, following increased investment at the Queensland operations. Australian thermal coal production was down nine per cent overall for the year, mainly due to wet weather in the Hunter Valley.
• The force majeure declaration at the four Queensland coal mines remains in place. All the Queensland coal mines are operational but are still constrained in some way by weather impacts, including the impact on third party infrastructure. Rio Tinto is currently unable to provide an estimate of the full impact of this adverse weather or the duration of the force majeure declaration.
• On 8 December, Rio Tinto signed a new agreement with Ivanhoe Mines under which Rio Tinto will assume direct management of the Oyu Tolgoi copper-gold project in Mongolia. The agreement also gives Rio Tinto the right to increase its holding in Ivanhoe to 49 per cent.
• On 15 December, Rio Tinto completed the divestment of its remaining 48 per cent equity holding in Cloud Peak Energy Inc. The total gross proceeds from the secondary offering of $573 million were received in December.
• On 23 December, Rio Tinto announced a A$16 per share cash offer to acquire all of the issued and outstanding shares of Riversdale Mining Limited by way of a recommended off-market takeover offer.
• Rio Tinto approved major capital projects totalling $5.5 billion during the fourth quarter, bringing the full year total of project approvals to $10.8 billion.
All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated
Nickel premiums level despite high prices
19. JAN 2011
"My guts tell me there is still a bit of a shortage on some material," one North American trader told AMM.
Three-month nickel ended LME's official session Wednesday at $26,200 per tonne, up 4.2 percent from $25,135 a week earlier and 39.7 percent above the $18,750-per-tonne price at the start of July last year.
Sales are still slow due to the high prices, sources said, but customers will have to come back to the market at some point, and when they do, traders will push for them to pay premiums at current levels. "They're kind of getting to the point where they have to buy," the trader said.
A second trader agreed that there had been no decrease in premiums even as nickel prices shot up by $1,000 per tonne in one day last week, dismissing a correlation between high prices and lower premiums.
If prices remain at such high levels, though, some sellers would eventually lower premiums to get customers, a third trader said. "People are seeing some of the high prices and will lure customers with lower premiums," he said.
Premiums for melting-grade material are steady at between 35 and 50 cents per pound, while plating-grade premiums are in a range of 65 cents to $1 per pound.
Because prices are increasing so rapidly, customers are less focused on premiums, as they represent a smaller percentage of the purchase price, the first trader said. "As the price is increasing quicker than the premiums, they start to matter less," he said.
The only material that might be affected in the long term would be plating grade, as there seems to be plenty available, he said.
U.S. nickel premiums are steady, with traders expecting consumers deterred by high London Metal Exchange prices to return to buying in the medium term.
"My guts tell me there is still a bit of a shortage on some material," one North American trader told AMM.
Three-month nickel ended LME's official session Wednesday at $26,200 per tonne, up 4.2 percent from $25,135 a week earlier and 39.7 percent above the $18,750-per-tonne price at the start of July last year.
Sales are still slow due to the high prices, sources said, but customers will have to come back to the market at some point, and when they do, traders will push for them to pay premiums at current levels. "They're kind of getting to the point where they have to buy," the trader said.
A second trader agreed that there had been no decrease in premiums even as nickel prices shot up by $1,000 per tonne in one day last week, dismissing a correlation between high prices and lower premiums.
If prices remain at such high levels, though, some sellers would eventually lower premiums to get customers, a third trader said. "People are seeing some of the high prices and will lure customers with lower premiums," he said.
Premiums for melting-grade material are steady at between 35 and 50 cents per pound, while plating-grade premiums are in a range of 65 cents to $1 per pound.
Because prices are increasing so rapidly, customers are less focused on premiums, as they represent a smaller percentage of the purchase price, the first trader said. "As the price is increasing quicker than the premiums, they start to matter less," he said.
The only material that might be affected in the long term would be plating grade, as there seems to be plenty available, he said.
Australian coking coal market: prices surge again
19.01.2011 16:58
First signs of improvement in the situation with coking coal shipments appear in Australia in the second half of January, though it applies to only transport infrastructure so far. For example, on January 16 Australian port Gladstone (annual throughput – 69 mt of coking coal) became fully operational again. Currently, only the raw material from Dawson mine (about 7 mtpy of thermal and semi-soft coking coal), property of Anglo Coal, can be delivered to this port via Moura railway line.
From January 21 to January 25, four lines of Blackwater railway, connecting Gladstone with 14 coal assets, owned by BHP Billiton, Caledon Resources, Ensham Resources, Wesfarmers, Xstrata and Yancoal, will be opened. However, shipments will be minimal, as most of the mines are still flooded. Brisbane port (6.7 mtpy) was opened on January 17, though it will take about a month to restore operation of West Moreton railway line, leading to this terminal.
Forty-six mines are still seeing force majeure in Queensland and mining companies will be able to start dewatering them in a month and a half at earliest. Investment of over $10 bln is needed to eliminate consequences of the flood.
Like last week, there is no Australian coking coal available in the spot market and no deals have been made. At the same time, prices keep growing at a shocking pace. Currently, high quality hard coking coal (ash – 7%, moisture – 7-9%, sulphur – 0.5%, volatiles – 17-20%) is quoted in Australian market at $355-360/t FOB Dalrymple Bay, while last week its prices were $300-320/t FOB.
Offers of semi-soft coking coal (ash – 9%, moisture – 10-11%, sulphur – 0.6%, volatiles – 32%) have reached $250/t FOB Gladstone, against $210-220/t FOB last week. PCI coal (ash – 9%, moisture – 10-11%, sulphur – 0.6%, volatiles – 25-32%) is priced at $258/t FOB Gladstone ($215-225/t FOB last week).
Market participants believe coking coal quotations will grow by at least another $20/t by end-January.
Ural Steel (Russia) to increase pig iron production
19.01.2011 17:52
Russian steelmaker Ural Steel is planning to produce 212,000 tonnes of pig iron in January, 13% up m-o-m. In December, the company produced less pig iron due to low quality of coal. For the same reason, this month actual output may be also lower than the planned one.
The producer has set January production target at 91,500 tonnes, slightly more than in December. Ural Steel is planning to increase annual output of pig iron to 1.05 mt in 2011 (15% up from 2010). Producer's merchant pig iron is mostly exported to Europe, USA and the Far East. Domestic shipments are insignificant.
At the moment, the company's three blast furnaces are operational: BF No.2 (50,000 tpm), BF No.3 (90,000 tpm) and BF No.4 (100,000 tpm). The producer stopped its BF No.1 (62,000 tpm) for maintenance without capacity expansion on May 21 2010. Final date of re-launch of the unit is yet to be set and will depend on how soon the reconstruction is completed and the situation in the market for finished products. Metal Expert estimates, the BF will be recommissioned in mid-2011 at earliest.
February production target has not yet been approved, however, due to shorter working month, the output is expected to decrease by 5-6% compared to planned production in January.
Brazilian pig iron market: prices up again
19.01.2011 18:21
Brazilian pig iron market has faced another price leap. Exporters have managed to sell the material at higher prices amid the upward trend in finished steel products sector of the main import markets as well as expectations that it will persist in Q1.
Two lots of the material have been sold at $520/t FOB from northern ports, by $20/t up from the previous deals. One vessel has been reportedly booked by Nucor and another – by one of the major traders in the world market. Market participants report Nucor was negotiating to sign a contract at $500-505/t FOB, but had to accept a higher price amid rapidly growing scrap quotations in the USA and successful deals with CIS suppliers in the market. The material will be shipped at the end of March.
One of the traders has booked pig iron from the south at $500/t FOB March shipment, by $10-20/t higher than in late December and it will be reportedly shipped to Europe.
Notably, suppliers from south of the country mainly exported the material to the Middle East in 2010, as it did not meet US steel traders’ quality requirements and European ones found prices unreasonable (compared to the CIS levels). However, currently Far Eastern mills are refraining from purchasing Brazilian material because its prices are the least competitive ones.
Quotations are also going up in the domestic market and local steelmakers can buy the material at BRL 670/t ($373/t) EXW now. The exchange rate is $1 = BRL 1.673. Producers say it is unprofitable to ship pig iron within Brazil as its prices are almost equal to production costs.
Noteworthy, the region is still seeing bad weather conditions due to continuous rainfalls. Thus BFs continue to run at low utilization rates – 30-35%.
It is highly probable that new contracts will be signed by the end of January and the most likely destination will be the US market.
Wednesday, January 19, 2011
CIS scrap exports: suppliers strive to prevent prices from falling
19.01.2011 15:47
Russian and Ukrainian exporters are among those few who are negotiating new contracts with Turkish steelmakers this week. While the key European and US suppliers of scrap prefer waiting until the lull in the Turkish market is over focusing on the domestic market, where the buyers are bidding at competitive levels amid seasonal shortage of supply, CIS scrap collectors are making every effort to export their material. In spite of firm demand in Russia and Ukraine, purchase prices are still below the level of export quotations there. However, realizing that the suppliers are ready to reduce prices to sell February offering of scrap, Turkish mills have put too much pressure on exporters, dropping bids to the levels minimally profitable for scrap collectors, thus making the latter suspend sales.
In particular, as quotations to Turkey and purchase prices at ports are moving in opposite directions, exporters of Rostov-on-Don can offer their A3 scrap at $490-495/t C&F ($460-465/t FOB, excluding freight rates of about $31/t). However, while in the second week of January a number of Turkish mills were ready to accept these levels, currently they bid $480-485/t C&F ($450-455/t FOB) at the highest to Azov-Black Sea exporters, which can barely cover the suppliers' expenses.
Prices for scrap are going up at ports, while the exporters in need of attracting additional material to fulfill previously signed contracts compete with the local mills for the available material. At the moment, export quotations of A3 scrap have reached $347/t CPT cash payment and $354/t CPT non-cash payment, $10-15/t up w-o-w.
Prices are also steadily growing at the Ukrainian ports. Offers of A3 scrap have added about $30/t from early January, reaching $364-370/t CPT now.
Ukrainian traders can afford raising them by another $10-15/t, in spite of rapidly decreasing profitability. Although they will hardly reach the $500/t C&F Turkey level this month, some companies, who closed sales at $495/t C&F ($465/t FOB) at the end of the first half of January, are already close to it. Currently, traders are ready to sign contracts even at $485-490/t C&F ($460/t FOB).
Most Russian exporters of the Baltic Sea, who set their prices mainly based on quotations from Europe and the USA, still regret missing an opportunity to sell their A3 scrap at $520-525/t C&F in the beginning of the month, when most of them were out of the market for holidays. Market operators report only one company from St.-Petersburg has managed to sell a batch of high-quality material from its European scrap yard at $525/t C&F. This may be considered a success in view of the fact that several days later another exporter put much effort to sign a contract at $495/t C&F, which is a more appropriate price for the current market conditions. Currently, export prices in St.-Petersburg are at $435-440/t FOB, against $450-455/t FOB in early January, due to an increase in freight rates in January from $55/t to $65/t on the back of growing cost of fuel and lubricants.
Suppliers will not quote their material below this level, as purchase prices for scrap in ports have risen to $344-351/t CPT, against $332-342/t CPT last week.
In spite of a drop in quotations, most exporters expect Turkish mills to bid higher soon, as US and European traders will hardly reduce their offers and the necessity to attract material to sustain production in February will force the steelmakers to sign contracts at the level of $500/t C&F and above.
Chinese coking coal market: suppliers hike prices, buyers confused
19.01.2011 12:06
Chinese consumers of coking coal have had to reduce their purchases in the second half of January, in spite of the fact that they usually restock during this period of the year before national holidays in February. Deals in both domestic and foreign markets have been scarce. The main reason for most Chinese plants to leave the market is skyrocketing prices for the material.
Increase in quotations of coking coal in all the major markets of the world has been prompted by a critical situation in Queensland (Australia), where about 60% of all coking coal mines of the world are located. Repairing of mines and restoring infrastructure after the damage may take from three to five months, which will lead to a notable global shortage of the material, thus affecting its spot and contract prices.
Currently, Australian high-quality hard coking coal (ash — 7%, moisture — 7-9%, sulphur — 0.5%, volatiles — 17-20%) is quoted at $370-375/t C&F Jingtang, though in early January the material was priced at $262-265/t C&F. Semi-soft coking coal (ash — 8%, moisture — 10-11%, sulphur — 0.6%, volatiles — 28-31%) is available at $276/t C&F Huangdao against $205/t C&F in early January. Market operators believe that offers of the material will add another $20-30/t by the end of the month and will keep growing in February, but somewhat more slowly.
US exporters have profited the most from floods in Australia, as desperate Asian consumers have started showing feverish demand for their material. At the moment, US hard coking coal (ash — 6-8%, volatiles — 17-25%, moisture — 8-9%, sulphur — 0.6%) is available to China at $315-325/t C&F Jingtang, against $250-265/t C&F in the fist week of January. In view of the current situation, US coal miners will not stop raising their prices, as competition among Indian, Brazilian, South Korean and Japanese importers, who have no alterative coal sources, is forecast to become stronger in the short term.
Canadian suppliers are also driving their prices up. Their offers of high-quality hard coking coal (ash — 9%, sulphur — 0.5%, volatiles 19-24%) to China have added $55/t on average since early January, reaching $318-323/t C&F Qinhuangdao.
Russian suppliers have increased their quotations of hard coking coal (ash — 9-10%, moisture — 8%, sulphur — 0.7%) to $280-284/t C&F Rizhao, against $249-252/t C&F in early January, but the quantities of Russian material available are extremely small.
The upward trend has been observed in Chinese domestic market too. Prices for hard coking coal in Shanxi, Hebei and Inner Mongolia have reached $283/t EXW (including 17% VAT), while in early January they were quoted at $250/t EXW. Market participants agree that Chinese buyers will focus on local material purchases after the Lunar New Year holidays, which will last from February 3 to February 8. However, in view of high amounts of coking coal required (about 510 mt in 2010) and closure of more than a thousand coal mines in the northern provinces, China will be unable to refrain from imports of the material.
Indian pig iron market: prices keep rising
19.01.2011 13:05
Domestic and export prices keep rising in the Indian market for pig iron.
The rise in Indian export pig iron quotations has been largely caused by an upward trend in the Far East, which is the main sales destination. New export prices for Indian pig iron are regularly set according to results of tenders held by two major producers — Vizag Steel and MMTC.
The former has sold its traditional 30,000 tonnes of the material at $505/t FOB during the latest tender, $30/t up compared to the previous one. Visag Steel is planning to come back to the market in mid-February with new offers at $520-525/t FOB.
MMTC has closed its latest tender in mid-January, with prices for pig iron at $512/t FOB. The company has already announced the next tender, which is held from January 17 to January 25. The producer offers 60,000 tonnes of pig iron to be shipped in the second half of February. Considering the current pace of export price growth, MMTC expects to sell the material at $520/t FOB at least.
Prices in the domestic market are also rising. Local suppliers have already lifted their offers from the levels of the second half of December enough to compensate for their failure to increase quotations last month. At the moment basic pig iron is available in the domestic market at $510-515/t EXW, on average $47/t up m-o-m.
Current export prices have already exceeded their April high — $501/t FOB. In 2010 foreign markets showed more volatility in comparison with the domestic one, with prices falling by more than $100/t after reaching their peak in April, while the local price decrease was smoother and totaled about $60/t.
Quotations are forecast to keep growing further, both in the domestic and foreign markets. Besides, producers of merchant pig iron have another reason to raise offers – substantially higher prices for iron ore and coal, which will certainly affect February production cost.
Indian iron ore market: prices continue to grow
19.01.2011 14:32
Indian suppliers of iron ore keep following the upward trend in mid January and push both export and domestic prices to new highs.
Currently, 63.5% Fe fines are priced at $170-172/t FOB Vishakapatnam, by an average of $8/t up from late December. At the same time, offers of similar material continue gathering pace reaching $175-178/t FOB. The market is seeing rather high buying activity with large number of deals mainly for low-quality material.
Notably, some producers of iron ore have managed to book 62% Fe fines at $168/t FOB, while similar material with 60% and 58% Fe content has been shipped at $146/t FOB and 139/t FOB, respectively.
The main reason for the rise is limited volumes of high-quality material. Besides, already adverse conditions in the market, partially due to export restrictions in Karnataka, may be aggravated by a forecasted decrease in shipments from Odisha state (previously called Orissa). Although it was not officially confirmed, suppliers have made use of the situation and raised prices. The recent information that the duty on iron ore fines and lumps exports is planned to increase to 20% for both types of the material has also added fuel to the fire. Noteworthy, current export duties are 5% and 10%, respectively.
Domestic prices have started growing too, following the export ones. Private mining companies have decided to take upward moves after state-owned company Orissa Mining lifted contract levels to $118/t Ex-mine and $128/t Ex-mine for fines and lumps, respectively. Thus, iron ore fines offered in the spot market have gained $20-25/t on average, and now the material is being sold at $115-120/t Ex-mine. Quotations of lump ore have moved up to $150-155/t Ex-mine (+$10/t to late December levels); 64% Fe pellets are available at $175-190/t EXW.
Market participants forecast the trend will persist due to growing shortage of the material as well as higher prices for finished products in China.
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