China steel mills boost output despite winter curbs

Date Mar 14 2018 15:16:57 Source:SHMET

BEIJING, March 14 (Reuters) - China's daily steel output rose in January and February as mills in the world's top producer raced to take advantage of high prices, even as worries mount about a growing surplus and slowing demand from the construction sector.

    The strong output data on Wednesday helped push prices lower in Shanghai, with rebar construction steel futures hitting their lowest in almost four months, extending their longest losing streak since last summer.

    The production rise came despite Beijing's stringent crackdown on heavy manufacturing in 28 of its smoggiest cities as part of its war on winter smog. Those curbs will be lifted in most regions on Thursday, which marks the end of the four-month winter heating seaon.

    The data will likely draw international scrutiny after U.S. President Donald Trump this month slapped hefty import duties on steel, aimed at curbing Chinese shipments.

    Global producers have for years accused China of exporting its excess metal at bargain prices after huge capacity expansions.

    Chinese mills produced 136.82 million tonnes of crude steel in January and February, up 5.9 percent from a year earlier, data from the National Bureau of Statistics (NBS) showed.

    The NBS only provided combined output figures for January and February due to the distortive effects of the Lunar New Year holiday that sees much of China shut down for a week.

    Daily output was 2.32 million tonnes, up 7.4 percent from December and up more than 5 percent on the same two months last year, according to Reuters calculations.

    It was the highest daily rate since October, before the winter heating season started in November when strict output curbs came into force, and the fastest pace for the first two months of the year on Reuters' records going back to 2015.


    China's push to close older, polluting steel mills drove up local steel prices, encouraging other producers to boost output in anticipation of a seasonal pickup in demand after the holiday period, despite Beijing's output curbs, analysts said.

    Qiu Yuecheng, analyst at steel trading platform Xiben New Line E-commerce in Shanghai, said the output was higher than expected.

    "Mills are ramping up to production driven by solid profits," said Qiu.

    Still, concerns are growing that the post-holiday demand has not materialised.

    Stockpiles of rebar  SH-TOT-RBARINV  hit their highest since 2013 this week and rebar prices have fallen 7 percent so far this month, putting them on track for the biggest monthly fall in 18 months.






Edited by SHMET

Chile attempts to block China from prize lithium asset

Date Mar 14 2018 15:16:16 Source:SHMET

SANTIAGO/VANCOUVER, March 13 (Reuters) - Chile's government has asked antitrust regulators to block the sale of a 32 percent stake in Chilean lithium company SQM  SQM.N   SQM_pb.SN  to a Chinese firm on the grounds it would give it an unfair advantage in the global race to secure resources to develop electric vehicles.

    Chile development agency Corfo, which oversees SQM's lithium leases in the Salar de Atacama, claimed in a 37-page complaint filed on Friday that the purchase of a stake in SQM by "Tianqi Lithium, or any entity related to it directly or indirectly (including companies controlled by the government of China)" would "gravely distort market competition."


    It was unclear if Corfo's complaint, if upheld, would block all potential Chinese bidders for the stake. But it certainly seeks to block Tianqi Lithium  002466.SZ , one of China's top lithium producers.

    SQM and Tianqi are "extremely close competitors ... and were one to acquire an interest in the other - even minority – it would have serious anti-competitive impacts on the market," Eduardo Bitran, the now former head of Corfo, wrote in the complaint.

    Together, Tianqi and SQM, the world's second biggest lithium producer after U.S.-based Albemarle Corp  ALB.N , would control 70 percent of the global lithium market, the document said.

    A combined Tianqi-SQM would be in a strong bargaining position, given the companies' outsized control of the lithium supply, for everything from prices to royalty payments, a source close to SQM said.

    Tianqi, through Talison Lithium which it controls, is also in a joint venture with Albemarle in Australia where they own the world's biggest lithium mine, Greenbushes.

    "The natural obvious buyer (of the SQM stake) are the Chinese ... it does tend to make an industry that is already an oligopoly even stronger to the detriment of potential new entrants," said Chris Berry, an independent energy metals analyst based in New York.



    An equity stake in SQM worth over $4 billion is in play.

    The stake is being sold by Canadian fertilizer company Nutrien Ltd  NTR.TO  - formerly Potash Corp of Saskatchewan - which has to offload its 32 percent interest to meet regulatory requirements after its merger with a rival fertilizer company to create Nutrien. SQM is also a significant fertilizer producer.

    Nutrien is likely reaching out to the new Chilean administration to gauge whether there will be any change in the status of Corfo's complaint, said Edward Jones analyst Dan Sherman, who covers Nutrien.

    But the company would hesitate to take any steps that might prolong the uncertainty and drag out the sale process, since lithium is a hot commodity, he said.

    "I think what they're more concerned about is doing this with reasonable speed. They're still going to get an incredible price for it," Sherman said.

    Nutrien chief executive Chuck Magro said in February that he was aiming to sell the SQM stake by the end of 2018.

    Nutrien spokesman Richard Downey declined to comment.



    As well as Tianqi, four other companies, all Chinese except for global miner Rio Tinto  RIO.L   RIO.AX , were also vying for the Nutrien stake, according to former Corfo head Bitran.

    Rio Tinto declined to comment. Bloomberg reported in January that Rio had dropped out of the bidding after studying information in the data room, quoting unnamed people familiar with the matter.

    Chinese private equity firm GSR Capital was considering a bid for the stake, banking sources told Reuters last November.

    Two other Chinese firms previously seen as potential bidders - state-owned Sinochem Group  SINOC.UL  and Ningbo Shanshan 600884.SS  - have both said that they were not participating.

    Outside of the deep pockets of Chinese firms, another individual buyer may be hard for Chile to find. The block of equity may have to be sold to a number of institutional investors, the source close to SQM said. 



    Chilean antitrust regulator FNE will review the complaint. FNE investigations typically follow a three-part procedure: a six-month admissibility study, the investigation, and a final report and recommendation which can include taking the case before Chile's anti-trust tribunal.

    FNE said the agency would not comment on the specifics of the case.

    A new Chilean government was sworn in on Sunday, two days after the Corfo complaint was submitted. It is not yet known what position the new administration will take on the issue.

    Bitran, an appointee of the previous center-left government, has left his post and his replacement has yet to be announced by the incoming conservative administration.


Edited by SHMET

China preliminary February commodity trade data

Date Mar 13 2018 16:47:59 Source:

March 8 (Reuters) - China's General Administration of Customs released

preliminary trade data for February on Thursday. The tables below show selected commodity and energy trade volumes, compared with the previous month and a year earlier, as well as year-to-date figures.

    The previous month and previous year figures do not reflect official revisions, which have not been provided.

  The percentage changes for year-to-date figures come directly from Customs. All other percentage changes are calculated by Reuters. Net figures are calculated by Reuters, including the percentage changes, even for year-to-date.

    Detailed final figures from Customs with a further breakdown will be released later in the month.




                                                      Feb                       Year to date

_____________________tonnes       pct chg        $/tones         pct chg


  Crude oil                 32.26     40.64     -20.6     31.78       1.5         72.90      10.8

  Refined products    2.61      2.87        -9.0        2.39         9.2        5.49        10.0

  Fuel Oil No. 5-7      1.09       1.62       -32.8      1.09        -0.2        2.71        21.7

  Natural gas              6.94      7.77       -10.7      4.92        41.0       14.68      36.7


  Crude oil                   0.04      0.39      -90.5      0.05       -26.0        0.44      -19.0

  Refined products     3.48      4.12      -15.4      4.26       -18.2        7.61       4.6

Net Imports:                                                                               

  Crude oil                   32.22     40.25     -19.9     31.73       1.6       72.47      11.0

  Refined products      -0.87     -1.25      30.2      -1.87      53.3       -2.12       7.2




                                                   Feb                       Year to date

_____________________ tonnes       pct chg        $/tones         pct chg


Unwrought copper       352,000   440,000     -20.0   340,000       3.5     794,000       9.8

Copper ores                                                                                

& concentrates         1,452,000  1,620,000    -10.4 1,430,000      1.5    3,074,000    12.7


Unwrought aluminium                                                                         

and products             372,000     440,000       -15.5   260,000       43.1    817,000    25.8





China's Zijin Mining interested in Serbian copper mine RTB, Belgrade says

Date Mar 13 2018 16:15:39 Source:Reuters

BELGRADE, March 12 (Reuters) - China's Zijin Mining Group Co. Ltd. has expressed interest in buying loss-making Serbian copper miner and smelter RTB Bor, which the Balkan state has been trying to sell for the past decade.

    President Aleksandar Vucic on Monday met representatives of the Chinese firm, who expressed an intention to invest several hundred million dollars in the business, his office said in a statement.

    Serbia has tried and failed three times since 2007 to sell the debt-laden mining complex, which suffered a long period of neglect during the Balkan Wars of the 1990s and the country's subsequent international isolation.

    Last week, Energy Minister Aleksandar Antic said Belgrade would launch a tender for the privatisation of RTB Bor by June, and that a precondition for prospective buyers would be an investment of between $300 and $330 million.

    The prospective investor would also have to address environmental risks.

    Vucic's office said Zijin Mining  601899.SS  would be welcome to participate in the tender. "The representatives ... said they have serious development plans both for the RTB Bor company and the region," it said.

    China views Serbia as part of its One Belt, One Road initiative, which is aimed at opening new foreign trade links for Chinese companies. 

    It has invested over $1 billion so far in the Balkan country- a candidate for European Union membership - mostly in soft loans, infrastructure and energy projects. 

    To speed up reforms and spur growth, as recommended by the International Monetary Fund, Serbia must dispose of remaining state-run companies.

    In 2016, a Serbian court approved a plan for the restructuring of RTB Bor, writing off 90 percent of its unsecured debt.

    The Chinese embassy in Belgrade and representatives of Zijin Mining were not immediately available for comment.


Edited by SHMET

Shanghai aluminium slips to lowest since Dec 2016 on oversupply fears

Date Mar 13 2018 16:07:36 Source:Reuters

BEIJING, March 13 (Reuters) - Shanghai aluminium prices fell more than 2 percent on Tuesday, slipping below the 14,000 yuan ($2,213) a tonne mark for the first time since late 2016, just two days before winter output restrictions on Chinese smelters are due to be lifted.

    China ordered smelters in 28 northern cities to cut aluminium output by at least 30 percent from mid-November to mid-March as part of an anti-pollution campaign.

    Argonaut Securities analyst Helen Lau said the March 15 restart had already been priced in, but new smelting capacity in China was adding even more supply to the market.

    "I'm sure a lot of these new smelters are keen to increase their production to full capacity as early as possible," Lau said, looking to recover their investment, even at low prices.

    The new plants may be able to break even below 14,000 yuan a tonne, she added. Many Chinese smelters are losing money at current price levels, industry sources say.



    * SHFE ALUMINIUM: The most traded May aluminium contract SAFcv1  on the Shanghai Futures Exchange (ShFE) was down 2.1 percent at 13,835 yuan at 0344 GMT. It earlier touched 13,820 a tonne, its lowest since Dec. 26, 2016.

    * LME ALUMINIUM: Three-month aluminium  CMCU3  on the London Metal Exchange (LME) edged up 0.1 percent to $2,092.50 a tonne, after closing down 1.4 percent in the previous session, its lowest in almost three months. 

    * COPPER: Three-month copper on the LME  CMCU3  edged down 0.1 percent to $6,907.50 a tonne and ShFE copper  SCFcv1  fell 0.4 percent to 51,840 yuan a tonne.

    * CHINA MINISTRIES: Top metals consumer China said it will merge its banking and insurance regulators and create a new agricultural and rural village ministry, a parliament document released on Tuesday showed, in the biggest ministry shake-up in years.

    * CANADA: Canadian Prime Minister Justin Trudeau promised aluminum and steelworkers on Monday he would defend them against possible U.S. tariffs and called U.S. President Donald Trump to stress that "mutually beneficial" cross-border supply chains should be preserved. 

    * JAPAN: Some Japanese aluminium buyers have agreed to pay a premium of $129 per tonne for shipments from global producers in the April to June quarter, reflecting soaring U.S. spot premiums, two sources directly involved in the pricing talks said on Monday. 



    * Asian stocks stalled on Tuesday as Wall Street shares lost steam, while the dollar sagged on the back of declining U.S. yields.



Edited by SHMET