China's 2017 iron ore imports hit record high, steel exports down

Date Jan 12 2018 14:36:26 Source:Reuters

    SHANGHAI, Jan 12 (Reuters) - Chinese iron ore imports fell 11 percent in December from the previous month, but full-year shipments were at a record high, customs data showed on Friday, as the world's top consumer of the commodity bought more raw materials to ramp up steel output.

    Arrivals for December dropped to 84.14 million tonnes, down from 94.54 million tonnes in November, data from the General Administration of Customs showed. 

    Full-year shipments rose 5 percent to a record of 1.075 billion tonnes, exceeding 1 billion tonnes for a second year.

    Chinese steel mills have increased production on the back of a strong recovery in steel prices that has pushed profits to their highest in nearly two decades. 

    "The 5 percent annual increase is within our expectations,” said Wang Di, an analyst with CRU in Beijing. 

    "Big miners have expanded their production and shipments, while China's crackdown in the first half of the year on illegal furnaces that use scrap for production spurred demand for seaborne iron ore. Appetite for imported iron ore from Chinese steel mills remains strong," Wang said. 

    Demand for higher quality iron ore, imported mainly from Australia and Brazil, has also been driven by China's pollution crackdown, traders said.

    Chinese steel rebar futures SRBcv1 have nearly tripled from all-time lows touched in late 2015. Prices for the rebar contract surged 46 percent last year and nearly 75 percent in 2016. Chinese iron ore prices  DCIOcv1  in 2017 jumped 16 percent and more than quadrupled the year before that. 

    Iron ore import demand and steel output in 2018 are expected to be at 1.12 billion tonnes and 838 million tonnes respectively, the China Metallurgical Industry Planning and

Research Institute said last month. 

    Australia on Monday said it expects iron ore prices to average $51.50 a tonne this year, down 20 percent from 2017, because of rising global supply and moderating demand from top importer China as its steel sector shrinks. 



    Chinese steel exports rose to their highest in four months, up 6 percent to 5.67 million tonnes in December from November, the customs data showed. 

    However, the full-year exports tumbled 30.5 percent to 75.43 million tonnes from 2016, as strong domestic steel prices and high profit at home led to a drop in shipments abroad. 

    Steel imports hit 1.2 million tonnes in December, up from 1.14 million tonnes in the previous month. Total imports for the year held almost steady at 13.3 million tonnes. 


Edited by SHMET

Indonesia hopes to finalise Freeport contract talks by June

Date Jan 12 2018 14:32:29 Source:Reuters

    JAKARTA, Jan 11 (Reuters) - Indonesia hopes to finalise contract talks with Freeport McMoRan Inc FCX.N over the Grasberg copper mine by June, although divestment issues are still unresolved, a mining ministry official said on Thursday.

    Indonesia and Freeport formed a framework agreement in August to transfer the company's rights to Grasberg to a new mine license system from an existing contract of work. Under the change, Freeport promised to divest 51 percent of its Indonesian unit to the government. 

    However, details of the divestment still need to be ironed out by Freeport, the State Owned Enterprises Ministry and the Finance Ministry, Bambang Gatot, the Coal and Minerals Director General at the Energy and Mineral Resources Ministry, told reporters at a briefing.  

    "The main issue that hasn't been resolved yet is divestment," Gatot said. 

    An official at the finance ministry declined to comment. 

    Other issues under consideration include the development of another domestic copper smelter, an investment stability agreement and the extension of Freeport's operations up to 2041, he said.

    State-owned mining holding company PT Inalum has been appointed by the government to acquire the Freeport stake.

    Grasberg is the world's second-biggest copper mine and is located in the eastern Indonesian province of Papua.

    The divestment may involve liquidation of a joint venture that Freeport Indonesia (PT-FI), operator of Grasberg, formed with Rio Tinto RIO.AX RIO.L in 1996. 

    Under that venture, Rio has a 40 percent interest in PT-FI's Grasberg contract, which entitles them to a 40 percent share of all production after 2022. Rio has held talks with Indonesia about a possible exit to the venture.

    Gatot also mentioned that Freeport exported 921,000 tonnes of copper concentrate in 2017, and has a quota to ship up to 1.1 million tonnes through to Feb. 16, noting that the company has not applied for any new quota yet. 

    "They haven't applied for a recommendation (for an extension of exports) yet," Gatot said, referring to Freeport and fellow copper miner Amman Mineral Nusa Tenggara, a unit of Medco Energi Internasional  MEDC.JK . 

    A Jakarta-based spokesman for Freeport said the company was preparing to apply for a new export recommendation soon, but declined to comment on the contract talks.

    Amman shipped 560,000 tonnes of copper concentrate in 2017, Gatot said.



Edited by SHMET

Shanghai nickel hits 2-month high on tight stocks, output concerns

Date Jan 11 2018 17:04:26 Source:Reuters

    BEIJING, Jan 11 (Reuters) - Nickel prices on the Shanghai Futures Exchange (ShFE) climbed by more than 1 percent to their highest in two months on Thursday, as concerns over low stock levels and production outages lent support to the market.

    "Nickel cathode in the  ShFE  warehouses is very tight... so there is some possibility to squeeze  broker  selling positions," said Xu Aidong, chief nickel analyst, Antaike. 

    Deliverable ShFE nickel warehouse stocks stood at 48,920 tonnes as of Jan. 5, compared with over 90,000 tonnes a year ago. 

    Four nickel mines in the Zambales region of the Philippines, a key nickel exporter, remain shut on environmental grounds, an official said on Thursday, while Japan's Sumitomo Corp  8053.T  has suspended output at a mine in Madagascar following a cyclone.

    "The four mines in Zambales are still not allowed to resume production," said Wilfredo Moncano, director of the Philippine Mines and Geosciences Bureau. "No extraction, no new mining activities. What's only allowed is hauling of ores from their stockpiles."



    * SHFE NICKEL: The most traded Shanghai nickel contract  SNIcv1  finished up 1.1 percent at 101,430 yuan ($15,587.83) a tonne, its highest close since Nov. 8.

    * LME NICKEL: Benchmark nickel  CMNI3  on the London Metal Exchange (LME) was down 0.50 percent at $12,870 a tonne, as of 0720 GMT, partly reversing Wednesday's gains, when it touched $13,200 a tonne, its highest since June 2015. 

    * MADAGASCAR: Sumitomo said on Thursday the company and its partners Sherritt International Corp  S.TO  and Korea Resources Corp  KOREC.UL  halted output at the Ambatovy nickel mine in Madagascar on Jan. 4, the day before Cyclone Ava hit the area. 

    * ALUMINIUM: The most-traded aluminium contract on the ShFE SAFcv1  closed up 1.2 percent at 15,210 yuan per tonne, and was up 1 percent in London  CMAL3 . "This was a metal that you couldn't give away 36 hours ago but now it seems the selling from the index rebalancing is viewed as very digestible," broker Marex Spectron said in a note on Thursday. 

    * DUNKIRK: Liberty House, the industrial arm of British steel tycoon Sanjeev Gupta's GFG Alliance, has made a binding offer for miner Rio Tinto's  RIO.AX   RIO.L  aluminium smelter in Dunkirk, France, the largest in Europe.      

    * COPPER: Three-month copper on the LME  CMCU3  was up 0.1 percent at $7,163 a tonne, building on its 0.7 percent gain in the previous session. The most-traded SHFE copper contract  SCFcv1  closed up 0.4 percent at 55,110 yuan a tonne.

    * CHINA: Tongling Nonferrous Metals Group  000630.SZ , one of China's top copper smelters, will suspend production at its Jinguan Copper unit for three days from Friday for repairs, a source familiar with the matter said.

    * PERU: The government of Peruvian President Pedro Pablo Kuczynski is evaluating a $2.4 billion railway project to transport mineral concentrates from a copper-rich Andean region to the Pacific coast for export.      

    * COBALT: Democratic Republic of Congo is considering more than doubling royalties on cobalt, a key ingredient in lithium-ion batteries, under a new mining code nearing parliamentary approval, the mines minister said on Wednesday.  



    * The New Year rally in Asian shares petered out on Thursday due to concerns about rising U.S. protectionism, while bonds rebounded after China's regulator called a report about Beijing slowing or halting of its U.S. bond buying possibly wrong.






Edited by SHMET

Alcoa Canada workers' union rejects contract offer

Date Jan 11 2018 17:03:31 Source:Reuters

     Jan 10 (Reuters) - Unionized workers at Alcoa Corp's  AA.N  aluminum smelter in Becancour, Quebec rejected the company's latest contract offer.

    About 80 percent of the workers rejected the contract offer but the president of the local steelworker's union urged the company to continue negotiations.

    The company and United Steelworkers had agreed in November to resume contract talks with a government-appointed conciliator. 

    Becancour produces 430,000 metric tonnes of aluminum annually. Alcoa owns 74.95 percent of Becancour with Rio Tinto Alcan  RIO.L   RIO.AX  holding 25.05 percent. 

Edited by SHMET

Chinese steel futures extend gains, but demand worries drag

Date Jan 11 2018 17:02:55 Source:Reuters

     SHANGHAI, Jan 11 (Reuters) - Chinese steel futures rose for a third day on Thursday after Beijing ramped up efforts to restrict new steel production to sap overcapacity and help clear pollution, but worries over demand capped gains.

    The most active rebar on the Shanghai Futures Exchange SRBcv1 edged up 0.1 percent to 3,838 yuan ($589.81) a tonne.

    China has issued stricter rules on building new steel production capacity to replace obsolete facilities, a move that helped push steel prices into positive territory this week.

    "The latest government rules to rein in building new capacity continued to restore sentiment, and there are signs of steadiness - at least for semi-finished steel prices - this week after a big dive a week ago," said Kevin Bai, an analyst with CRU in Beijing.

    But slower winter demand will continue to weigh on prices before the Lunar New Year holidays next month, Bai added.

    Physical prices for rebar dropped 350 yuan to 3,960 yuan a tonne last week, according to CRU assessment.

    Iron ore on the Dalian Commodity Exchange DCIOcv1 on Thursday had dropped 0.4 percent to 556 yuan a tonne.

    Coke DCJcv1 fell 0.5 percent to 2,029.5 yuan a tonne, while coking coal DJMcv1 closed 0.7 percent higher at 1,377 yuan a tonne after a slight dip during early trade on Thursday. 

    Iron ore for delivery to China's Qingdao port.fell $0.16 to $78.31 a tonne on Wednesday, according to Metal Bulletin. 

($1 = 6.5072 Chinese yuan)


Edited by SHMET