Both the key API2 (CIF ARA) and API4 (FOB Richards Bay) derivatives posted higher trading volumes year-on-year, with API2 up nearly 15% to more than 1.6 billion mt and API4 increasing 16% to 328.5 million mt.
Trading volumes for all other trading derivatives, including Newcastle swaps settling on the globalCOAL index, more than doubled year-on-year to 340.5 million mt.
The increase in annual trading volume would have come in higher if not for the drop in December activity, which was down sharply from the strong trading volumes in November of 267.9 million mt, a 10-month high.
Total December trading volumes fell 7.2% on-year to 121.8 million mt, the lowest monthly total in 2012 and well below the previous calendar year low of 150.7 million mt in July.
API2 volumes in December slumped 22% on-year, and down 46% on-month to 78.9 million mt. API4 derivatives volumes in December bucked the trend, rising 9.2% from December 2011, although they were down 19.7% from November to nearly 20 million mt.
Source: Platts
India Imposes 20% Import Tax on Chinese Hot-Rolled Flat Steel
India, the world’s third-largest steel consumer, imposed a 20 percent tax on imports of some varieties of the alloy from China to protect local producers. The shares of Tata Steel Ltd. (TATA) and its domestic rivals surged.
The duty on hot-rolled flat products of stainless steel will last for 200 days, the customs department said in a Jan. 4 notification posted today on its website. The taxes will also apply to steel products having a minimum nickel content of 6 percent and those containing chromium, with or without the presence of other elements such as molybdenum and titanium, the notice said.
Indian steelmakers are contending with imports as global demand falters, prompting producers in China, South Korea and Japan to tap overseas markets. Imports from April to November surged 19.6 percent to more than 5 million metric tons, India’s steel ministry said on Dec. 6.
“More and more countries are raising trade barriers amid the weak global economy,” Li Xinchuang, president of China’s Metallurgical Industry Planning & Research Institute, said by phone. “I am quite concerned about this and don’t see any reason why India should impose a 20 percent import tax,” said Li, who is also a deputy general secretary of the China Iron & Steel Association.
Shares of Tata Steel, the nation’s biggest producer, rose as much as 3.4 percent to 448.10 rupees and traded at 438.40 rupees as of 3.27 p.m. in Mumbai. Steel Authority of India Ltd. (SAIL), the second-largest producer, rose as much as 6.8 percent to 101.75 rupees, while JSW Steel Ltd. (JSTL), the third-biggest, jumped as much as 4.7 percent to 866.40 rupees.
Last year, China exported about 45,000 tons of hot-rolled stainless flat steel to India, or 5.4 percent of China’s global shipment of the product, worth about $134 million, said Xu Xiangchun, Beijing-based chief analyst with researcher Mysteel.com.
“It’s quite a small amount to affect Chinese producers,” Xu said.
Source: Bloomberg
The duty on hot-rolled flat products of stainless steel will last for 200 days, the customs department said in a Jan. 4 notification posted today on its website. The taxes will also apply to steel products having a minimum nickel content of 6 percent and those containing chromium, with or without the presence of other elements such as molybdenum and titanium, the notice said.
Indian steelmakers are contending with imports as global demand falters, prompting producers in China, South Korea and Japan to tap overseas markets. Imports from April to November surged 19.6 percent to more than 5 million metric tons, India’s steel ministry said on Dec. 6.
“More and more countries are raising trade barriers amid the weak global economy,” Li Xinchuang, president of China’s Metallurgical Industry Planning & Research Institute, said by phone. “I am quite concerned about this and don’t see any reason why India should impose a 20 percent import tax,” said Li, who is also a deputy general secretary of the China Iron & Steel Association.
Shares of Tata Steel, the nation’s biggest producer, rose as much as 3.4 percent to 448.10 rupees and traded at 438.40 rupees as of 3.27 p.m. in Mumbai. Steel Authority of India Ltd. (SAIL), the second-largest producer, rose as much as 6.8 percent to 101.75 rupees, while JSW Steel Ltd. (JSTL), the third-biggest, jumped as much as 4.7 percent to 866.40 rupees.
Last year, China exported about 45,000 tons of hot-rolled stainless flat steel to India, or 5.4 percent of China’s global shipment of the product, worth about $134 million, said Xu Xiangchun, Beijing-based chief analyst with researcher Mysteel.com.
“It’s quite a small amount to affect Chinese producers,” Xu said.
Source: Bloomberg
Vitol Group signs Memorandum of Understanding with Coal of Africa
The Vitol Group of Companies is pleased to announce the signing of a binding Memorandum of Understanding ("the MOU") with Coal of Africa Limited. Under the terms of the MOU, which the Company will be operating under from the date of the agreement, Vitol has been appointed as the Company's exclusive marketing agent for all export thermal and coking coal for a period of eight years, except for the Makhado product where the marketing period is five years from the start of production. The coal available under this MOU excludes all coal subject to current agreements that are in place as well as any coal off-take that may be agreed with the Company's strategic equity partners.
In addition, an agreement has also been reached between CoAL and Grindrod whereby Grindrod has agreed that, whilst CoAL's option to take up capacity for any Phase 4 Expansion at the TCM export terminal in Maputo ("TCM") remains intact, CoAL is no longer obliged to fund its own share of the capital for the Phase 4 expansion.
CoAL CEO, John Wallington said, "This MOU not only formalises our strategic relationship with Vitol but also provides CoAL with access to a global marketing network that will greatly assist the development of export markets for our coking and thermal coal products as we bring our Vele and Makhado projects online. In addition, our growing relationship with Vitol will assist CoAL with mitigating any take or pay obligations at TCM as we develop both Vele and Makhado and begin exporting."
Bob Finch, Head of Vitol Coal, said "We are delighted to have entered into this partnership with CoAL. It expands our coal trading portfolio and reaffirms our commitment to the South African coal industry, as well as helping to develop the activities of TCM and underpinning the Phase IV expansion plans."
Source: Vitol Inc.
In addition, an agreement has also been reached between CoAL and Grindrod whereby Grindrod has agreed that, whilst CoAL's option to take up capacity for any Phase 4 Expansion at the TCM export terminal in Maputo ("TCM") remains intact, CoAL is no longer obliged to fund its own share of the capital for the Phase 4 expansion.
CoAL CEO, John Wallington said, "This MOU not only formalises our strategic relationship with Vitol but also provides CoAL with access to a global marketing network that will greatly assist the development of export markets for our coking and thermal coal products as we bring our Vele and Makhado projects online. In addition, our growing relationship with Vitol will assist CoAL with mitigating any take or pay obligations at TCM as we develop both Vele and Makhado and begin exporting."
Bob Finch, Head of Vitol Coal, said "We are delighted to have entered into this partnership with CoAL. It expands our coal trading portfolio and reaffirms our commitment to the South African coal industry, as well as helping to develop the activities of TCM and underpinning the Phase IV expansion plans."
Source: Vitol Inc.
Australia's FMG postpones loading of iron ore term cargoes: sources
Australian iron ore exporter Fortescue Metals Group deferred the loading of some of its long-term contractual iron ore cargoes due to equipment issues, customers of the miner told Platts Monday.
A Singapore-based customer said there were "quite a few" parties affected by cargo delays, and that he had been told by FMG that these were brought about by problems with some equipment.
He added that some of the cargoes delayed were supposed to have loaded in November, while most were December-loading shipments.
"Most delays ran into the month after, but some parcels that were supposed to load in November will only load in January," the source said.
An upstream source familiar with cargoes loading from Port Hedland, from where FMG loads and ships iron ore, also said he heard the delays were a result of equipment-related issues that had slowed down production.
A trading house in northern China that has long-term contracts with FMG said it has a 170,000 mt shipment of 56.7%-Fe Super Special fines which were supposed to have loaded in December, but the loading schedule had been changed to late-January.
"FMG said they have to postpone the delivery because of heavy rains in the area," said the trading source.
But the upstream source said rainy weather had not affected the loading process of the cargoes.
A source close to the matter said that only a few long-term customers were affected by the delays.
"FMG is stepping up their production to meet the demand of their customers as much as they can," said the source.
FMG is Australia's third largest iron ore exporter.
Source: Platts
A Singapore-based customer said there were "quite a few" parties affected by cargo delays, and that he had been told by FMG that these were brought about by problems with some equipment.
He added that some of the cargoes delayed were supposed to have loaded in November, while most were December-loading shipments.
"Most delays ran into the month after, but some parcels that were supposed to load in November will only load in January," the source said.
An upstream source familiar with cargoes loading from Port Hedland, from where FMG loads and ships iron ore, also said he heard the delays were a result of equipment-related issues that had slowed down production.
A trading house in northern China that has long-term contracts with FMG said it has a 170,000 mt shipment of 56.7%-Fe Super Special fines which were supposed to have loaded in December, but the loading schedule had been changed to late-January.
"FMG said they have to postpone the delivery because of heavy rains in the area," said the trading source.
But the upstream source said rainy weather had not affected the loading process of the cargoes.
A source close to the matter said that only a few long-term customers were affected by the delays.
"FMG is stepping up their production to meet the demand of their customers as much as they can," said the source.
FMG is Australia's third largest iron ore exporter.
Source: Platts
Base metals may perform well
The recent rally in base metal prices found no follow-through and sustaining the momentum was looking more difficult, due to no improvement in the fundamentals. The macroeconomic sentiment, however, has improved lately with the US government successfully avoiding the fiscal cliff effect. Since metals are the barometer for economic sentiment and weakness, they are bound to be benefited. Upbeat Chinese economic data will also be supporting sentiment and prices. Earlier this week, China’s HSBC manufacturing purchasing manager’s index for December rose to 51.5, a 19-month high. Portfolio rebalancing could also help support prices, as some markets expect the red metal’s price to rise higher due to economic optimism. These could be swept higher but are likely to ease as we approach the Chinese lunar new year.
The builds in LME, SHFE and Chinese-bonded copper stocks so far suggest that price could get capped on the upside, despite a resolution to the US fiscal cliff.
LME inventories have risen almost every day since the beginning of December and are up 54,000 tonnes so far. SHFE inventories were up 8,300 tonnes in December and Chinese bonded stocks have also continued to rise. Aluminium, nickel, zinc and tin stocks are also rising, reflecting markets in surplus in the fourth quarter of 2012. In the year so far, LME zinc stocks have risen a whopping 407,000 tonnes, much higher than this year’s surplus of 195,000 tonnes. We believe this reflects off-warrant metal being warranted and put into financing deals. There was certainly enough of a surplus in 2011 to generate this volume of metal, with the 2011 surplus of 409,000 tonnes. LME nickel stocks, meanwhile, have risen 47,000 tonnes in 2012 so far, which fits with our estimate of this year’s surplus of 79,000 tonnes, with the remaining metal believed to have been stocked in China. Lead has outperformed the rest of the complex and is the only metal to still be holding on to recent highs. While the lead fundamental outlook for 2013 is constructive, the recent economic optimism should only add to the positive outlook.
We expect the base metals complex to outperform the non-agri commodity complex this year, on the back of positive macroeconomic sentiment, revival of growth in the two of the world’s largest economies, China and the US, and receding worries over the Euro zone. As we grow optimistic about the prospects of base metals, it is prudent to consider the risk factors to our view. One, we consider the Euro zone to be a matter of worry even in 2013. Two, the quantitative easing programme by the US Federal Reserve could be withdrawn, the main catalyst for the revival in growth. Three, high stocks might cap the upside for prices. Therefore, though we maintain our bullish outlook on the back of the positive macroeconomic sentiment, we remain cautious on the risk factors and recommend booking profits at all levels during this rally, as prices could get volatile due to news flows.
Resistances will be seen at $8,250/tonne for LME and close to $455 in MCX. For the year, we expect copper to average $8,700/tonne and $475 in MCX. Aluminium could also rise on the back of optimism in the base metal complex. We expect prices to average $2,000/tonne in LME and $135 in MCX for the year. Nickel could average $18,000/tonne and in MCX, we expect prices to average $1,025 in 2013.
Source: Business-Standard
The builds in LME, SHFE and Chinese-bonded copper stocks so far suggest that price could get capped on the upside, despite a resolution to the US fiscal cliff.
LME inventories have risen almost every day since the beginning of December and are up 54,000 tonnes so far. SHFE inventories were up 8,300 tonnes in December and Chinese bonded stocks have also continued to rise. Aluminium, nickel, zinc and tin stocks are also rising, reflecting markets in surplus in the fourth quarter of 2012. In the year so far, LME zinc stocks have risen a whopping 407,000 tonnes, much higher than this year’s surplus of 195,000 tonnes. We believe this reflects off-warrant metal being warranted and put into financing deals. There was certainly enough of a surplus in 2011 to generate this volume of metal, with the 2011 surplus of 409,000 tonnes. LME nickel stocks, meanwhile, have risen 47,000 tonnes in 2012 so far, which fits with our estimate of this year’s surplus of 79,000 tonnes, with the remaining metal believed to have been stocked in China. Lead has outperformed the rest of the complex and is the only metal to still be holding on to recent highs. While the lead fundamental outlook for 2013 is constructive, the recent economic optimism should only add to the positive outlook.
We expect the base metals complex to outperform the non-agri commodity complex this year, on the back of positive macroeconomic sentiment, revival of growth in the two of the world’s largest economies, China and the US, and receding worries over the Euro zone. As we grow optimistic about the prospects of base metals, it is prudent to consider the risk factors to our view. One, we consider the Euro zone to be a matter of worry even in 2013. Two, the quantitative easing programme by the US Federal Reserve could be withdrawn, the main catalyst for the revival in growth. Three, high stocks might cap the upside for prices. Therefore, though we maintain our bullish outlook on the back of the positive macroeconomic sentiment, we remain cautious on the risk factors and recommend booking profits at all levels during this rally, as prices could get volatile due to news flows.
Resistances will be seen at $8,250/tonne for LME and close to $455 in MCX. For the year, we expect copper to average $8,700/tonne and $475 in MCX. Aluminium could also rise on the back of optimism in the base metal complex. We expect prices to average $2,000/tonne in LME and $135 in MCX for the year. Nickel could average $18,000/tonne and in MCX, we expect prices to average $1,025 in 2013.
Source: Business-Standard
Iron-ore nears 15-month high, tops $150/t on China demand outlook
China steel futures hit their highest in more than six months on Monday, backed by a revival in demand in the world's top steel consumer that has fuelled a buying spree for raw material iron-ore and lifted prices to levels last seen in October 2011.
Baoshan Iron and Steel, China's biggest listed steelmaker, said it will raise prices for key products for a third straight month in February, reflecting rising raw material costs and a better outlook for steel demand.
China's recovering economy is largely behind the optimism. Data last week showed manufacturing activity in the world's No 2 economy was at its strongest since May 2011.
"Many are expecting improved demand for steel in the first quarter so most mills continue to produce at full scale and there has been somewhat a shortage of spot iron ore cargoes in the market," said a Shanghai-based iron-ore trader.
Most iron-ore cargoes sold via spot tenders had been snapped up by big traders anticipating a further run-up in prices, spurring caution among mills wary of rising raw material cost.
The most-traded rebar contract for May delivery on the Shanghai Futures Exchange touched a session high of 4 047 yuan ($650) a ton, its loftiest since July 6. By the midday break, it was up 0.6% at 4 013 yuan.
Prices of rebar, used in construction, have rebounded by over a quarter from September lows. But iron-ore has far outperformed steel, surging 77% since hitting three-year troughs in September.
Benchmark iron-ore with 62% iron content <.IO62-CNI=SI> jumped 2.3% to $153.30/t on Friday, the highest since mid-October 2011, according to Steel Index. Rising prices of iron-ore, particularly those from top supplier Australia, are prompting some Chinese steelmakers to look for cheaper cargoes elsewhere.
"We are getting more enquiries from clients asking whether we have cheaper iron ore from other sources which they didn't consider in the past," said another trader from Shanghai.
"They're looking for cargoes from Malaysia, Indonesia and some South American countries like Mexico and Chile because they're trying to reduce their cost."
Source: Reuters
Baoshan Iron and Steel, China's biggest listed steelmaker, said it will raise prices for key products for a third straight month in February, reflecting rising raw material costs and a better outlook for steel demand.
China's recovering economy is largely behind the optimism. Data last week showed manufacturing activity in the world's No 2 economy was at its strongest since May 2011.
"Many are expecting improved demand for steel in the first quarter so most mills continue to produce at full scale and there has been somewhat a shortage of spot iron ore cargoes in the market," said a Shanghai-based iron-ore trader.
Most iron-ore cargoes sold via spot tenders had been snapped up by big traders anticipating a further run-up in prices, spurring caution among mills wary of rising raw material cost.
The most-traded rebar contract for May delivery on the Shanghai Futures Exchange touched a session high of 4 047 yuan ($650) a ton, its loftiest since July 6. By the midday break, it was up 0.6% at 4 013 yuan.
Prices of rebar, used in construction, have rebounded by over a quarter from September lows. But iron-ore has far outperformed steel, surging 77% since hitting three-year troughs in September.
Benchmark iron-ore with 62% iron content <.IO62-CNI=SI> jumped 2.3% to $153.30/t on Friday, the highest since mid-October 2011, according to Steel Index. Rising prices of iron-ore, particularly those from top supplier Australia, are prompting some Chinese steelmakers to look for cheaper cargoes elsewhere.
"We are getting more enquiries from clients asking whether we have cheaper iron ore from other sources which they didn't consider in the past," said another trader from Shanghai.
"They're looking for cargoes from Malaysia, Indonesia and some South American countries like Mexico and Chile because they're trying to reduce their cost."
Source: Reuters
China’s Finished Steel Demand Holds Up In 2012
MEPS predicts that Chinese mill output of finished steel for sale in 2012 will climb to 706 million tonnes – up 6.8 percent, year on year. Apparent consumption is expected to expand by 5.7 percent to reach 680 million tonnes.
The majority of increased demand has come from the construction sector – building of affordable homes, some real estate activity and investment in new railway projects. This has resulted in strong activity for the supply of hot rolled long products.
Statistics show that reinforcing bar consumption will rise by 16 percent in 2012 compared to the figure in the previous year. Double digit gains will occur in the wire rod segment. Solid growth will also be seen for structural sections.
In contrast, the flat rolled products sector, as a whole, will report only modest growth. This is, mainly due to the collapse in demand for new ships – creating lower requirement for steel plates. The market for hot rolled coil and coated sheets, used in the construction industry, held up quite well, throughout most of 2012.
MEPS forecasts a similar pattern developing in 2013. All the signals from the new government are that future investment policies will be similar to those in the recent past. Urbanisation and infrastructure investment are likely to be the main platforms for growth.
The steel companies are expected to maintain a strong positive balance of trade in steel products in 2013. The figure will turn out to be near 20 million tonnes in 2012. A similar figure is anticipated in the following year.
Source: MEPS
The majority of increased demand has come from the construction sector – building of affordable homes, some real estate activity and investment in new railway projects. This has resulted in strong activity for the supply of hot rolled long products.
Statistics show that reinforcing bar consumption will rise by 16 percent in 2012 compared to the figure in the previous year. Double digit gains will occur in the wire rod segment. Solid growth will also be seen for structural sections.
In contrast, the flat rolled products sector, as a whole, will report only modest growth. This is, mainly due to the collapse in demand for new ships – creating lower requirement for steel plates. The market for hot rolled coil and coated sheets, used in the construction industry, held up quite well, throughout most of 2012.
MEPS forecasts a similar pattern developing in 2013. All the signals from the new government are that future investment policies will be similar to those in the recent past. Urbanisation and infrastructure investment are likely to be the main platforms for growth.
The steel companies are expected to maintain a strong positive balance of trade in steel products in 2013. The figure will turn out to be near 20 million tonnes in 2012. A similar figure is anticipated in the following year.
Source: MEPS
POSCO, first in global competitiveness among global steel companies
POSCO once again proved high competitiveness by demonstrating solid results even amidst global economic stagnation and the crisis of the global steel industry.
Up to the third quarter of 2012, POSCO marked approximately 2~6% more than the average operating profit of global steel companies. POSCO also ranked first in terms of market value of global steel companies.
With the steel industry facing difficulties due to economic stagnation and oversupply, POSCO was able to achieve these results as it focused on sales of `World First World Best` products which are high value added strategic products.
Sales percentage of World First World Best products continuously increased since the second quarter. The company focused on sales of high value added products, with increased sales in overseas exports of steel plates for automobiles and energy.
POSCO`s credit rating, provided by the three major international major credit agencies, ranked highest among all global steel companies. Despite the global recession, the company was highly evaluated for maintaining stable profit and sound financial structures, leading to high growth potential.
Further strengthened financial soundness also stood out. At the end of the third quarter, unconsolidated debt ratio decreased by 4.3% from last year to 35.9%, and debt to equity ratio increased by 2.3% to 73.6%.
Researcher Gyeongjun Kim, a steel specialized analyst of Eugene Investment & Securities, said, ``POSCO is further increasing highly profitable products such as steel materials for automobiles and energy from the current 34%. The company is expected to maintain high profitability compared to competitors.``
Meanwhile, World Steel Dynamics, the world`s leading steel information service, selected POSCO as the `world`s most competitive steel company` among 35 global steel companies for three consecutive years. WSD evaluated 23 factors including technology innovation, production scale, profitability, and cost definitiveness and selected POSCO as the best.
Further, POSCO ranked 30th in the `Global 100 Most Sustainable.
Corporations` ranking announced by the World Economic Forum based in Switzerland. This is the top ranking of all global steel companies, as well as the top ranking among Korean companies, demonstrating highest competitiveness.
Source: POSCO
Up to the third quarter of 2012, POSCO marked approximately 2~6% more than the average operating profit of global steel companies. POSCO also ranked first in terms of market value of global steel companies.
With the steel industry facing difficulties due to economic stagnation and oversupply, POSCO was able to achieve these results as it focused on sales of `World First World Best` products which are high value added strategic products.
Sales percentage of World First World Best products continuously increased since the second quarter. The company focused on sales of high value added products, with increased sales in overseas exports of steel plates for automobiles and energy.
POSCO`s credit rating, provided by the three major international major credit agencies, ranked highest among all global steel companies. Despite the global recession, the company was highly evaluated for maintaining stable profit and sound financial structures, leading to high growth potential.
Further strengthened financial soundness also stood out. At the end of the third quarter, unconsolidated debt ratio decreased by 4.3% from last year to 35.9%, and debt to equity ratio increased by 2.3% to 73.6%.
Researcher Gyeongjun Kim, a steel specialized analyst of Eugene Investment & Securities, said, ``POSCO is further increasing highly profitable products such as steel materials for automobiles and energy from the current 34%. The company is expected to maintain high profitability compared to competitors.``
Meanwhile, World Steel Dynamics, the world`s leading steel information service, selected POSCO as the `world`s most competitive steel company` among 35 global steel companies for three consecutive years. WSD evaluated 23 factors including technology innovation, production scale, profitability, and cost definitiveness and selected POSCO as the best.
Further, POSCO ranked 30th in the `Global 100 Most Sustainable.
Corporations` ranking announced by the World Economic Forum based in Switzerland. This is the top ranking of all global steel companies, as well as the top ranking among Korean companies, demonstrating highest competitiveness.
Source: POSCO