September 2023
Iron Ore & Steel
Iron ore CBS August 2023 – Prices drop on fading China optimism
Source: S&P Global
In the monthly Iron Ore Commodity Briefing Service (CBS) report, S&P Global Commodity Insights discusses the iron ore market within the broader macroeconomic environment and provides supply, demand and price forecasts for a rolling five-year period. In the monthly Iron Ore Commodity Briefing Service (CBS) report, S&P Global Commodity Insights discusses the iron ore market within the broader macroeconomic environment and provides supply, demand and price forecasts for a rolling five-year period.
Key findings:
- The Platts IODEX 62% Fe iron ore price fell 11.1% from a three-month high July 25 to $103.75 per dry metric ton (dmt) Aug. 3 as the market was underwhelmed by the support announced for the domestic economy during China’s July 23–24 politburo meeting.
- Steel mill margins in China moved back into negative territory in early August, helping to keep a lid on the premium from high-grade iron ore fines.
- Chinese demand for overseas iron ore held steady from late July into early August amid tightening domestic supply, although purchases from port stocks by mills are starting to wane as mills in Shandong province scale back their sintering operations. FULL STORY
Iron ore price rises as output in Chinese steel mills hits highest since October 2020
Source: Mining
Iron ore prices rose on 24 September helped by higher hot metal output data in China. According to Fastmarkets, benchmark 62% Fe fines imported into Northern China rose 1.01% to $119.49 per ton. The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 0.89% higher to 852 yuan ($116.66) a metric ton. The benchmark October iron ore on the Singapore Exchange was up 0.77% at $117.45 a ton as of 0726 GMT. Daily hot metal output among the 247 steel mills surveyed climbed by 0.1% on the week to 2.49 million tons as Sept. 28, the highest level since October 2020. Analysts at the National Australia Bank, however, said in a note that they expected to see downside risk to prices at current levels. “Prices of raw materials will be under some downward pressure as long as the steel market remains weak,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures. FULL STORY
Iron ore prices head into China holidays facing downside risks
Source: Reuters
Iron ore heads into a week-long Chinese holiday hiatus with prices elevated and mixed signals as to the strength of demand in the world’s largest importer of the steel-making raw material. Iron ore futures traded in Singapore ended at $120.77 a metric ton on Thursday, up slightly from the prior close of $120.67. The price has eased slightly from the recent peak of $123.37 a metric ton on Sept. 15, but remains 17% above the low of $103.21 hit on Aug. 3. The price action has been mirrored in domestic contracts traded on the Dalian Commodity Exchange, which ended at 851.5 yuan ($116.64) a metric ton on Thursday, up slightly from the previous close of 844.5 yuan. Dalian futures are down from the Sept. 15 peak of 873 per metric ton, but up 18.6% from the recent low of 718 yuan on Aug. 9. The recent rally has been driven by the fundamentals of strong imports and lower port inventories, as well as a lift in sentiment from some signs of recovery in the key housing sector, such as rising new bank loans. FULL STORY
Iron ore prices are adjusting amid a slowdown in demand ahead of the holiday in China
Source: GMK center
January iron ore futures, the most traded on the Dalian Commodity Exchange, for the period September 22-29, 2023, fell by 2.5% compared to the previous week – to 851.5 yuan/t ($116.64/t ). This is evidenced by Nasdaq data. On the Singapore Exchange, quotations of basic October futures as of September 29, 2023 decreased by 0.3% compared to the price a week earlier – to $120.77/t. Thus, iron ore quotations are decreasing for the second week in a row after reaching the peak on September 15, 2023 – $123.37/t (Dalian Commodity Exchange). Since then, prices have fallen 5.4%, but they are still 17% higher than the low reached on August 3 ($103.21/t). FULL STORY
Robust exports, stable domestic demand keep China’s steel production strong in 2023
Source: S&P Global
During January-August, China’s net exports of semi-finished and finished steel totaled 651.88 million mt, up 19.84 million mt from the same period of 2022, China’s customs data showed Sep. 21. Over the same period, China’s crude steel production reached 712.93 million mt, up 18.07 million mt from a year earlier, the latest data from the National Bureau of Statistics showed. “The growth of steel exports even exceeded the growth of production, suggesting the incremental steel production so far this year has been consumed by overseas markets,” one export trading source said. Some market sources said overall global steel demand had been sluggish, but competitive Chinese steel prices, coupled with efforts to boost the “Belt and Road” projects, led to robust exports from China so far in 2023. However, China’s steel exports might retreat in September-October from August level but remain relatively high compared with the same period of last year, according to trading sources. The Chinese government is likely to go easy on steel output cuts for 2023, given concerns over economic growth, and thus declines in China’s crude steel production in the coming months may be milder than a year ago, capping the upside for Chinese steel prices, and continue to benefit China’s steel exports, they added. FULL STORY
Coal
Sixteen Killed in Accident at State-Owned Cola Mine in China’s Guizhou Province
Source: US News
Sixteen people were killed in a coal mine accident in Panzhou city in southwestern China’s Guizhou province on Sunday, according to a filing by the mine’s owner, Guizhou Panjiang Refined Coal Co , with the Shanghai Stock Exchange on Monday. Rescue operations at the mine are under way, and a team has been dispatched to Guizhou province to guide the efforts, state media outlet Xinhua reported on Monday. All coal mines in Panzhou city have suspending production for a day, according to Shanghai-based commodities consultancy Mysteel. Guizhou’s mine safety administration told Reuters it did not have information on the situation. The area has a total production capacity of about 52.5 million metric tons per year of mostly coking coal, representing about 5% of China’s coking coal production capacity, according to Mysteel. The state-owned company, also called Guizhou Panjiang, has ordered safety inspections at all of its mines and has taken measures to ensure safe production, the exchange filing added. FULL STORY
Appreciating power demand to drive coal imports further in September
Source: Businessline
India’s coal imports by the Power sector are expected to appreciate in September 2023 over last month aided by higher demand forcing Power Ministry to direct plants to import 4 per cent for blending with domestic stocks on account of an anticipated coal shortage of 7 mt in H2 FY24. A senior government official said domestic coal based (DCB) power plants are facing a shortage of coal as the electricity demand has risen due to heat and humidity. Imports are expected to surpass the August 2023 levels. According to energy intelligence firm Kpler, India’s thermal coal imports rose 8.5 per cent m-o-m to 12.30 mt last month. However, on an annual basis in-bound shipments were lower by 17 per cent. FULL STORY
Global coal demand set to remain at record levels in 2023
Source: IEA
Continued strong growth in Asian economies offsets declines in Europe and North America, highlighting need for stronger policies and investments to accelerate growth of clean energy. Global coal consumption climbed to a new all-time high in 2022 and will stay near that record level this year as strong growth in Asia for both power generation and industrial applications outpaces declines in the United States and Europe, according to the IEA’s latest market update. Coal consumption in 2022 rose by 3.3% to 8.3 billion tonnes, setting a new record, according to the IEA’s mid-year Coal Market Update, which was published today. In 2023 and 2024, small declines in coal-fired power generation are likely to be offset by rises in industrial use of coal, the report predicts, although there are wide variations between geographic regions. FULL STORY
Chinese demand drives deals at world’s largest coal conference
Source: Reuters
China’s burgeoning appetite for thermal coal shipments due to a surge in electricity demand and a spike in domestic prices of the polluting fuel has spurred a flurry of deal making at the world’s largest industry conference in Indonesia. Traders supplying China and officials from mining companies in top exporter Indonesia eager to strike deals thronged the conference hall in Bali’s Nusa Dua resort for the three-day Coaltrans conference that ended on Tuesday. China’s imports of the power generating fuel are expected to rise 100 million tonnes to a record 329 million tonnes this year, and by another 49 million tonnes in 2024, Rodrigo Echeverri, head of commodities research at Noble Research said in a presentation made at the conference. FULL STORY
Top emitters coal, oil & gas methane emissions
Source: Mining
China is building two-thirds of the coal-fired electricity generation capacity currently under construction globally, and this may not be as disastrous for the climate as it sounds. The world’s largest producer and importer of coal has 136.24 gigawatts (GW) of coal-fired generation under construction, according to data released in July by the Global Energy Monitor. This represents 66.7% of the global total of 204.15 GW, and China is streets ahead of second-placed India, with 31.6 GW being built and third-placed Indonesia with 14.5 GW. These three countries represent 89% of the coal-fired plants currently under construction, and it’s not a coincidence that all of them have large populations, growing energy demand and vast domestic coal reserves. FULL STORY
China to revise mine safety law after fatal accidents
Source: MIning
China’s mine safety administration is drafting revisions to the country’s mining safety law, an official said on Monday, after two coal mine accidents killed more than 60 people this year. The law, implemented in 1993 and revised in 2009, has some “prominent problems”, Xue Jianguang, a director at the State Administration of Mine Safety, told a press briefing. He did not disclose further details of the planned changes or when they would be implemented, but he described the revision as “comprehensive”. China’s coal mines are among the most dangerous in the world. A gas explosion in northwestern Shaanxi province in August caused 11 deaths and an open-pit mine collapse in northern China’s Inner Mongolia region in February resulted in 53 fatalities. China’s cabinet this month prohibited the construction of new coal mines with complex geology and capacity below 900,000 metric tons per year. Smaller mining operations are considered to be particularly high risk. FULL STORY
Soybean
China’s soybean stocks decline for the fourth week in a row
Source: UkrAgroConsult
China’s soybean stocks fell by 5% to 4.6 million tons in the week ended September 23, according to CNGOIC (China National Grain and Oil Information Center). According to experts, this is the fourth weekly decline in a row, which indicates high demand for oilseeds from processing plants. In particular, from 17 to 23 of the current month, the volumes of soybean processing increased by 5% to 2.2 mln tonnes, which is also 5% higher than in the same period a year earlier. FULL STORY
China’s August soybean imports jump 31% from a year earlier
Source: HELLENIC SHIPPING NEWS
China imported 9.36 millionmetric tons of soybeans in August, customs data showed on Thursday, jumping 31% from a year ago, as large purchases of cheap Brazilian beans continued to reach the world’s top buyer of the oilseed. Total soy arrivals in the first eight months of the year reached 71.65 million metric tons, up 17.9% year-on-year, the General Administration of Customs data showed. FULL STORY
China August soy imports from Brazil up 45% on year ago
Source: HELLENIC SHIPPING NEWS
China’s soybean imports from Brazil rose 45% in August from a year earlier, data showed on Wednesday, as a huge crop produced by the South American nation this year continued to flow to the world’s top buyer. China imported 9.09 million metric tons of the oilseed from Brazil last month, according to the General Administration of Customs showed, almost all of the 9.36 million tons of total soybeans that arrived in China during August. FULL STORY
China consolidates its position as Brazil’s biggest corn and soybeans buyer
Source: Fastmarkets
Brazil exported 9.3 million tonnes of corn and 8.4 million tonnes of soybeans in August, with China as the main buyer of corn and soybeans, official customs data analyzed by Fastmarkets Agriculture showed. While China has been the biggest buyer of soybeans for a long time, it is new to take the lead in corn, as shipments started less than a year ago. Brazil exported a total of 8.4 million tonnes of soybeans in August, below the 9.5 million tonnes shipped in the previous month but above the 5.9 million tonnes from the same month last year. FULL STORY
China big weekly buyer for U.S. soybeans
Source: UkrAgroConsult
China accounted for most of the U.S. soybean export sales during the week ending September 21st. The USDA says China bought nearly 600,000 tons of U.S. beans, nearly all of the week’s reported purchases, but overall demand remains limited as Brazil holds a large share of the global market due to a price advantage. Corn, sorghum, wheat, and beef export sales were also up on the week. Export demand is influenced by several factors, including the strength of the dollar relative to other currencies and seasonal changes to supply. The USDA’s next set of supply and demand estimates is scheduled for October 12th, but that would be delayed if the federal government shuts down. FULL STORY
China soybean imports may have peaked
Source: World Grain
China’s soybean imports will slow down and eventually decline through 2030 as a result of slower livestock production growth, continuous improvement in farming practices and widespread adoption of low soymeal inclusion rate in feed formulas, according to a recent Rabobank study. China is the world’s largest soybean importer, accounting for over 60% of global trade, with soybean imports mainly driven by crushing for feed production. Therefore, future imports primarily will be influenced by the outlook for feed demand and the soymeal inclusion rate in feed rations. FULL STORY
China August soy imports from Brazil up 45% on year ago
Source: HELLENIC SHIPPING NEWS
China’s soybean imports from Brazil rose 45% in August from a year earlier, data showed on Wednesday, as a huge crop produced by the South American nation this year continued to flow to the world’s top buyer. China imported 9.09 million metric tons of the oilseed from Brazil last month, according to the General Administration of Customs showed, almost all of the 9.36 million tons of total soybeans that arrived in China during August. FULL STORY
China’s feast on Brazilian soybeans leaves US smaller share
Source: yahoo/finance
China’s voracious appetite for South American soybeans has continued into a period typically dominated by the US, an ominous sign for that nation’s growers as their harvest begins. Importers have booked at least 20 cargoes from Brazil and Argentina over the past two weeks for delivery to China during October, November and into December, according to people familiar with the matter. Chinese buyers were already snapping up Brazilian beans for delivery in the fourth quarter as far back as July. FULL STORY
China to import soybeans in unprecedented volume: USDA
Source: Milling Middle East & Africa
China is forecasted to import a record volume of soybeans in 2022-23, although an increase in domestic production could dampen totals in the 2023-24 marketing year, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture. According to the report, Soybean imports are estimated at 101 million tonnes due to relatively lower prices and the revival in demand for soybean meal and vegetable oil following the lifting of COVID-19 restrictions. The recovery in imports was further supported by ample supply from Brazil. FULL STORY
Energy
China gas demand seen up 8% on economic recovery, easing fuel cost – CNOOC research
Source: REUTERS
- Recovery in industrial demand and lower global prices expected to see China’s 2023 gas demand grow by 8%
- 2023 LNG imports to grow 10.9% on last year
- 2023 piped gas imports expected to rise c. 10.7%, driven by Russian supply
- 2023 domestic gas output seen up 4.6% on last year TIANJIN, China, Sept 21 (Reuters) – China’s natural gas demand this year is expected to grow by 8% from 2022, an analyst from state-owned oil major CNOOC’s research division said, a pace higher than analysts’ forecasts on the back of cooling gas prices and China’s economic recovery. FULL STORY
China calls for “orderly” growth in natural gas use draft policy
Source: REUTERS
China’s National Energy Administration called for the “orderly growth” of natural gas usage in a draft policy released on Thursday, reaffirming an industry guideline that focuses on supply security. China, the world’s biggest energy user, wants to boost the usage of natural gas as a key bridge fuel to reach its 2060 carbon-neutral goal, but it also wants to pace the growth of the sector to avoid supply shortages or get caught out by price shocks like last year’s spike caused by the war in Ukraine. FULL STORY
Russia will sell natural gas to China at almost a 50% discount compared to European buyers
Source: yahoo/finance
- Russia expects to sell gas to China at almost half the price compared to European buyers, Bloomberg reported.
- Gas for China will average $271.6 per 1,000 cubic meters in 2024, versus $481.7 for buyers in Europe and Turkey.
- The move marks the latest sign that Russia and China’s economic ties are still deepening. A new economic outlook revealed that Russia expects to sell gas to China at a steeply discounted rate over the next three years, far below the price European buyers will pay, according to a Bloomberg report. FULL STORY
Russia expects to sell gas to China at half the price for Europe
Source: Bloomberg
- Average pipe gas price to China seen at $271.6 in 2024
- Flows via Power of Siberia to China linked to oil prices Russia expects to sell its pipeline natural gas to China at almost half the price for Europe in the next three years.The gas price for China is expected to average $271.6 per 1,000 cubic meters next year compared with an average of $481.7 for clients in Europe and Turkey, according to the economic outlook through 2026 filed to Prime Minister Mikhail Mishustin on Friday and seen by Bloomberg News. FULL STORY
China’s CNPC drives hard bargain for impending Power of Siberia 2 gas deal with Russia
Source: S&P Global
- Deal could be signed as early as this year if price talks conclude
- Power of Siberia 2 likely to be cheaper than most new LNG imports for China: S&P Global
- Russian gas currently cheapest pipeline gas supply into China State-run China National Petroleum Corp., or CNPC, is negotiating to bring down the price of gas supply under the proposed Power of Siberia 2 pipeline amid expectations that a deal could emerge as early as this year if the parties agree, according to multiple sources. FULL STORY
China’s oil imports surge in August as fuel exports, inventories rise
Source: REUTERS
- Crude imports jump 30.9% from last year to 12.43 million bpd
- Natural gas imports up 22.7% from last year
- Refined fuel exports rise month-on-month China’s crude oil imports surged in August, customs data showed on Thursday, as refiners built inventories and increased processing to benefit from higher profits from exporting fuel. FULL STORY
Oil markets’ decades-long dependence on China could be ending
Source: CNBC
- China’s demand for oil is set to peak by the end of the decade — and with its economic recovery still in limbo, how much can the global oil markets still rely on China?
- Facts Global Energy’s Chairman forecasts that in the next three to five years, China’s demand for oil will peak. Wood Mackenzie holds the same projections. China’s demand for oil could peak by the end of the decade — and with its economic recovery still in limbo, can global oil markets continue to rely on China? FULL STORY
Chinese demand buoys global crude oil prices despite real estate slump
Source: NIKKEI Asia
Oil prices hit $89 per barrel in New York on Tuesday, as continued production cuts by OPEC countries and a post-pandemic rebound in economic activity — especially in China — fuel a surge in prices worldwide. European benchmark Brent crude oil futures continued their recent climb, briefly reaching $92.38 per barrel on Tuesday, the highest level since last November. FULL STORY
China is about to shake up the oil futures market
Source: Bloomberg
- Yuan-denominated contract begins trading in Shanghai Monday
- Domestic futures start 25 years after idea was first mooted It’s taken a quarter of a century, but China finally has its own oil futures. At 9 a.m. local time on Monday, crude contracts began trading on the Shanghai International Energy Exchange. FULL STORY
Malaysia: is boosting palm oil flow to China defeat for EU?
Source: DW
Malaysia intends to double the quantity of palm oil it exports to China, in an effort to counterbalance the EU’s push to cut down on its own imports. The European Union (EU) intends to phase out imports of palm-oil-based biofuel by 2030 — while deforestation legislation adopted in Brussels earlier this year will impose considerable administrative burdens on palm oil exporters wanting to sell their goods in the bloc. FULL STORY