By Muyu Xu and Josephine Mason| 2017-09-18 15:43:43

China’s steel output is expected to grow 3 percent to 5 percent in 2017 compared with last year, said a trade body official on Saturday, despite the closure of small outdated mills as surging prices prompted larger players to turn out more metal.The world’s largest steel producer will make about 840 million tonnes of crude steel this year, said Qu Xiuli, vice president at China Iron and Steel Association (CISA). Last year, the country produced 808 million tonnes of steel.Steel output at member steel firms of the association - each with annual capacity of more than 1 million tonnes - rose 6.8 percent in the first seven months this year, while small steel mills saw a 2 percent drop in production from last year.That comes after Beijing’s crackdown that shut 120 million tonnes of low-tech steel capacity in the first half of this year and a continuing series of environmental inspections in an effort to curb pollution."The Chinese steel sector is upgrading and the industry concentration ratio is rising," said Qu.Of the 808 million tonnes of steel produced last year, only about 36 percent was produced by the top 10 largest steel mills in China, and their portion is expected to increase this year.China has been striving to streamline its heavy industries to reduce debt burdens and produce more high value products.Export prices for steel products in the first seven months of the year rose 43.3 percent to $686 a tonne compared to the same period last year, accroding to CISA.Shanghai benchmark steel rebar prices gained nearly 50 percent this year, hitting a 4-1/2-year peak at 4,194 yuan ($640.31) a tonne in early September, as the market was boosted by expectations of tight supply due to rigorous capacity cutbacks and the environmental checks.The price increases have led to booming profits at Chinese steel mills."The net profits of Chinese steel firms have raised 390 percent in the first seven months this year to over 70 billion yuan. We expect to see at least 100 billion yuan in profits by the end of this year," said Qu.Reporting by Muyu Xu and Josephine Mason; Editing by Tom HogueSource: Reuters

By Manolo Serapio Jr| 2017-09-15 10:35:55

The gap between high-grade and low-grade iron ore shot to a record this week as China’s intense environmental clean-up pushed more steel producers to use higher quality material to boost output.The increased appetite for higher grade iron ore has helped strengthen the market share of top suppliers Australia and Brazil to more than 80 percent of China’s total iron ore imports, forcing shippers of lower grade material to offer steeper discounts to draw buyers.Higher quality ore produces more steel for each tonne that is processed, and can reduce emissions as less coke is used in production.Iron ore with 62 percent iron content traded at $76.56 a tonne on Wednesday, a premium of $29.75 over ore with 58 percent iron content, according to prices published by Metal Bulletin.That was the highest gap between the two grades since price records that date back to August 2011."Definitely the inquiries from our clients are now for medium to high-grade iron ore. There’s less interest in low-grade,” said a Shanghai-based iron ore trader.Underlining increased appetite for premium iron ore, China’s Dalian Commodity Exchange said on Wednesday it will adjust the quality standards for deliveries of iron ore to meet market demand for high-grade ore."Steel mills prefer using higher grade iron ore so they can produce more steel,” said a trader in Beijing who sells Australian shipments. “Demand is more active than before.”Steel output in China, the world’s largest consumer and producer, surged to a record 74.59 million tonnes in August, trumping the previous all-time monthly high in July.An infrastructure push has helped boost Chinese steel demand this year, lifting construction steel prices by more than half and fattening producer margins. As authorities shut makers of lower quality steel, those left standing increased output to chase rising prices.The premium on iron ore lump - higher quality ore that can be fed directly to a blast furnace unlike iron ore fines that need to be processed first - hit a record high of about $25 a tonne on Sept. 8, according to Mysteel consultancy.As more mills opt for premium ore, suppliers of lower quality material have been deepening discounts, traders said.An Australian exporter of lower grade ore to China has increased its discount on cargoes this month to 35 percent off the benchmark price from 30-32 percent previously, said the Shanghai trader. Indian suppliers of low-grade material are also offering similar discounts, he said.Reporting by Manolo Serapio Jr.; Editing by Richard PullinSource: Reuters

By DAVID SCUTT| 2017-09-11 00:00:00

Chinese crude steel output has gone from strength to strength this year, hitting record highs in each of the past two months.However, as seen in the chart below from the Commonwealth Bank, that strength entirely reflects improved domestic demand rather than demand from abroad.Chinese steel exports have been crunched, falling by 30% year-on-year in August, continuing the downward trend that began a year earlier."China’s steel exports have been responding to trade barriers put in place by the US, India and the EU, as they try to protect their respective domestic steel industries,” says Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank.Even with that sharp decline, Chinese crude steel output has risen by around 5% from January to July, something Dhar says reflects strong steel mill margins and resilient domestic demand."The increase in output is notable because of the headwinds facing China’s steel exports,” he says."End-user demand remains resilient as Chinese stimulus continues to flow through China’s commodity intensive sectors. China’s manufacturing sector is still expanding, while infrastructure investment continues to grow strongly.”The gains in steel prices have also underpinned demand for iron ore and coking coal, helping to explain the strong rebound in prices from the levels seen in mid-June.While he expects both factors will continue to support domestic steel demand in the months ahead as policymakers look to shore up growth before a leadership transition in mid-October, he says that steel prices will probably weaken in the latter parts of the year."Steel prices should fall from current levels by year end, as the supply additions prove too much for actual demand,” says Dhar, noting that he only expects a modest 2% increase in Chinese steel consumption this year.However, he admits that view “may face risks” as authorities implement steel production cuts between mid-November and mid-March in order to improve air quality in northeastern provinces.Source: www.businessinsider.com.au 

By Yang Yi| 2017-09-07 11:16:21

North China's Hebei Province has set up more stations to precisely monitor pollutants in the air as its new efforts to fight against smog.Since the beginning of this year, Hebei provincial environment protection department has ordered several cities to install devices to collect air pollution data, aimed at setting up a province-wide network.Handan, one of the first group of cities to trial the precision of monitoring network, has installed 196 stations for air data collection, said officials with the city's environment protection bureau.Sensors have been put up near key industrial plants, main thoroughfares and airways in the city to collect data on six main types of pollutants: sulphur dioxide, nitrogen dioxide, carbon monoxide, ozone and two sizes of particulate matter.Dust and volatile organic chemicals sensors have been installed near large construction sites and gas stations."If certain data goes high, our staff will respond immediately, track the source and send inspectors to intervene," said Gao Feng, deputy director of Handan environment monitoring center."In July, several monitoring stations reported high carbon monoxide levels. We immediately studied the data, and found the source of pollution was a steel factory to the north," he said."The steel factory is far from the city, and if it were not for the data, it would be hard to tell the cause," he added.Hebei is aiming for a 40 percent cut in PM 2.5 (airborne particles smaller than 2.5 microns in diameter) density by 2020 compared to 2013 levels, through slashing excessive industrial capacity.Source: Xinhuanet.com

By Nectar Gan| 2017-09-05 00:00:00

Teams led by ministerial-level officials are completing inspections of environmental protection efforts across China, with the results having already affected the promotion prospects of thousands of officials.The teams, made up of officials from the Ministry of Environmental Protection, the Communist Party’s anti-graft watchdog and its personnel arm, began the first of four rounds of inspections in July last year after an earlier pilot project in Hebei province.The fourth round, which began last month, will complete coverage of mainland China’s 31 provincial-level regions.Some 18,000 polluting companies have been punished so far, with fines totalling more than 870 million yuan (US$132.2 million) handed out, and more than 12,000 officials disciplined.The two party agencies involved in the inspections, the graft-busting Central Commission for Discipline Inspection and the Central Organisation Department, are arguably the two most important in determining officials’ promotion prospects.The scope and severity of the crackdown on lax enforcement of environmental standards has been unprecedented, as has been the response from local governments, who have traditionally turned a blind eye to environmental violations as long as they contributed to local economic growth.Some local governments were so worried about the inspections that they ordered many factories to shut down before inspectors arrived. Some factory owners have complained the tough approach was not fair because they were not given time or help from authorities to install costly equipment, while workers complained of losing their jobs.This was in stark contrast to the past, when enforcement officers from the ministry were often met with defiance and resistance, including being barred from entering the factories and sometimes even illegally detained."The central environmental inspection teams are different. They are like the ‘imperial envoys’,” said Professor Junjie Zhang, director of the Environmental Research Centre at Duke Kunshan University.The power of the central inspection teams lay in their authority to hold local officials, especially municipal and provincial party bosses, responsible for environmental problems, he said, which was something the ministry alone had been unable to do.The punishments handed out range from public criticism and demotion to removal from office and other disciplinary actions.Professor Zhu Lijia, a public policy expert at the state-run Chinese Academy of Governance, said such punishment would adversely affect officials’ political prospects because party rules barred them from promotion for between six months and two years – depending on the kind of punishment they received.Environmental protection has become a key performance indicator for officials in recent years as the central government tries to address acute pollution caused by decades of unchecked economic growth which has increasingly fuelled social discontent and resentment.The weight given to environment protection in officials’ performance evaluations was rising across the country, Zhu said, adding that in smog-plagued Beijing it currently accounted for about 30 per cent of their score.With a key party congress due to start in the middle of next month, officials hoping for promotion are especially sensitive about the central environmental inspections.Tianjin was reprimanded by inspectors in July for manipulating air quality monitoring data, temporarily blocking sewage outfalls and fabricating meeting documents. The city’s environmental protection work had “obviously fallen short of the central authorities’ requirements and its status as a municipality directly under the central government”, the inspectors concluded.Their stern censure carried so much weight that Tianjin party secretary Li Hongzhong – one of the top contenders for the party’s powerful Politburo at the congress – immediately called a meeting of the city’s top officials to discuss how to act upon the feedback given by the inspection team.A week later, in a show of his determination to clean things up, Li was seen on the city’s television news bulletins making “unexpected calls” on polluting factories and catching an aquarium factory secretly carrying on production despite having been ordered to shut down."The central environmental inspection team’s feedback is a decree given to Tianjin by the party’s central authorities,” he said. “Our obligation and responsibility is to ensure its out and out implementation, without the slightest room for bargaining.”Xinjiang party boss Chen Quanguo was also reported by official media this week as having personally supervised the clean up of a polluted reservoir, a problem pointed out by inspectors during their visit to the far-western region.Zhang said the officials’ reactions showed the central environmental inspections were effective as a short-term measure, but an unsustainable approach in the long term."The question is, why were the officials held accountable only after central authorities sent inspectors to look into the problems? Everything was written clearly in the laws and regulations, but why weren’t they implemented?” he asked."The central inspections cannot go on forever. It is the implementation of the environmental laws – or more broadly speaking, the rule of law – that needs to be strengthened.”Source: South China Morning Post

By Muyu Xu| 2017-09-04 13:50:13

China’s steel rebar futures jumped to their highest in four and a half years on Monday, extending the previous session’s gains on concerns that a furnace fire might spark a new round of safety inspections and closures, tightening supply.The most-active rebar futures on the Shanghai Futures Exchange rose as much as 5 percent on Monday to hit 4,194 yuan ($639.87) a tonne, their highest since February 2013, as reports of a fire at Bengang Steel Plates Co’s new blast furnace startled the market.Spot rebar prices picked up 0.9 percent to 4,310.42 yuan a tonne on Friday, showed data from Mysteel website.The furnace fire is estimated to affect 4,500-5,000 tonnes of daily steel output at Benang, a subsidiary of government-backed Benxi Iron and Steel Group Co. Beyond the impact on Benang itself, analysts and investors worry the incident could trigger stricter safety inspections at mills, bringing production halts and intensifying a supply shortage."Under the pressure of strict environmental policy, expectation of tight supply has offset concerns over weak demand downstream which is also likely to be affected by inspections,” analysts from Orient Futures wrote in a note.The rebar price rise was also supported by strong manufacturing activity data released on Friday, with the Caixin/Markit Manufacturing Purchasing Managers’ Index picking up to 6-month high.The potential impact of environmental and safety checks is overshadowing a number of industries in the world’s second-biggest economy. Last week, China’s State Administration of Work Safety said it will carry out nationwide safety inspections since this month in various industries, including coal, chemical, transportation and construction.Meanwhile, to meet politically crucial 2017 air quality targets, the Ministry of Environmental Protection (MEP) said it will launch a new round of inspections starting from September till the end of March.Steel production in smog-prone Beijing-Tianjin-Hebei region will be limited during winter. Mills in some cities, including top steel producer Tangshan, have been ordered to cut capacity by as much as 50 percent in polluted days.Meanwhile, the most-traded January iron ore contract on the Dalian Commodity Exchange rose nearly 1 percent to 583 yuan a tonne by 0307 GMT.Reporting by Muyu Xu and Beijing Newsroom; Editing by Kenneth Maxwell

By Economic Times| 2017-09-01 10:17:26

NEW DELHI: India is expected to impose anti- dumping duty on imports of certain colour coated steel products from China and European Union to protect the interest of domestic players from below-cost in-bound shipments.In its final findings, the directorate general of anti- dumping and allied duties (DGAD) has recommended the duty on imports of "colour coated/prepainted flat products of alloy or non-alloy steel" from China and EU.Essar SteelBSE 0.41 % India Ltd and JSW SteelBSE -1.62 % Coated Products Ltd had jointly filed the application for initiation of the anti- dumping investigations.DGAD has suggested that the duty should be the difference between the landed value of the steel products and USD 822 per tonne.In its findings, DGAD concluded that the product has been exported to India at below the normal value due to which the domestic industry has suffered material injury.The authority "recommends imposition of definitive anti- dumping duties on the imports," DGAD has said in a notification.These steel products offer resistance to corrosion along with barrier protection. It is used in many applications and sectors including construction, roofing, walling, panelling, cladding and decking, automotive, white goods and appliances and furniture.While DGAD recommends the duty to be levied, the finance ministry imposes it.Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports.As a counter-measure, they impose duties under the multilateral World Trade Organization (WTO) regime.Anti-dumping measures are taken to ensure fair trade and provide a level-playing field to the domestic industry. They are not a measure to restrict imports or cause an unjustified increase in cost of products.India has initiated maximum anti-dumping cases against below-cost imports from China.Source: The Economic Times

By shanghaidaily.com| 2017-08-31 09:43:11

CHINA has promised to cut average concentrations of PM2.5 airborne particles by more than 15 percent year on year in the winter months in 28 northern cities to meet key smog targets.In a 143-page winter smog “battleplan” posted on its website yesterday, the Ministry of Environmental Protection said the new target, for the October-March period, would apply to Beijing and Tianjin, along with 26 other cities in the smog-prone provinces of Hebei, Shanxi, Shandong and Henan.China’s efforts to control pollution have often roiled the prices of steel, iron ore and coal with output routinely curtailed as a result of emergency smog regulations and inspection campaigns.China is under pressure this year to meet its 2017 air quality targets. It aims to cut 2012 levels of PM2.5 by more than a quarter in the Beijing-Tianjin-Hebei region and bring average concentrations down to 60 micrograms per cubic meter in the Chinese capital.But PM2.5 averages rose in the first seven months of the year as a result of near record-high smog in January and February, which China blamed on unfavorable weather conditions.Experts still believe, however, that China remains on course to meet the 2017 targets set out in a groundbreaking air quality action plan published by the government in 2013."Actually, air quality from April to June was among the best over the last five years in Beijing, and we still have confidence in achieving the target,” said Shelley Yang, a project manager at the Clean Air Alliance of China, a non-profit organization that includes academic, government and corporate organizations that “care about clean air."The government is leaving nothing to chance, with some of China’s smoggiest cities under pressure to complete annual steel and coal closure targets by the end of September and implement tougher restrictions in the following months.By October, big steelmaking cities such as Tangshan and Handan must have plans in place to cut output by as much as 50 percent to limit smog during the winter heating season from November.The region is also under pressure to eliminate thousands of coal-fired boilers, further restrict road haulage of coal and ensure power generators, steel mills and coking plants complete upgrades aimed at controlling emissions before heating systems are switched on.Hebei is responsible for a quarter of China’s steel output, with Tangshan alone producing around 100 million tons a year. Neighboring Shanxi is China’s biggest coal producer, with more than 900 million tons of annual output.Source: Shanghaidaily.com

By Ishita Chigilli Palli| 2017-08-29 10:18:59

U.S. President Donald Trump last month rejected a Chinese proposal to cut steel overcapacity, despite the endorsement of some of his top advisers, the Financial Times said, citing people familiar with the matter.Beijing proposed cutting steel overcapacity by 150 million tonnes by 2022 in a deal twice rejected by Trump, who instead urged advisers to find ways to impose tariffs on imports from China, the paper said, citing the sources.The deal was endorsed by U.S. Commerce Secretary Wilbur Ross a week before U.S. and Chinese officials held a high-level economic dialogue, the FT added, citing a U.S. official and another person familiar with the matter.White House spokeswoman Natalie Strom declined to comment on the “purported internal discussions” between the president and his cabinet members when contacted by Reuters.Last week, American steel industry executives appealed to Trump for immediate import restrictions in a letter seen by Reuters, saying the industry was suffering the consequences of government inaction.Total steel imports through July were up 22 percent from the same period a year ago, the American Iron and Steel Institute said in a report.Pressure over trade between China and the United States seems likely to grow in future and Beijing should prepare, China's hawkish Global Times newspaper said on Tuesday."China should not overly focus on the Trump administration's actions," it said in an online editorial. "Instead, it should begin drafting retaliatory measures against the United States so as to gain an upper hand."Reporting by Ishita Chigilli Palli in Bengaluru, David Lawder in Washington and John Ruwitch in Shanghai; Editing by Peter Cooney and Clarence FernandezSource: Reuters

By United States Steel Corporation| 2017-08-25 11:12:14

American steel industry executives have appealed directly to President Donald Trump for immediate import restrictions in a letter seen by Reuters, as a U.S. Commerce Department steel national security probe languishes and steel imports surge back to 2015 levels.Senior executives from 25 U.S. steel and steel-related companies sent the letter to Trump late on Wednesday saying the industry was suffering the consequences of government inaction but this could change with his "bold leadership" and "America First" vision."The need for action is urgent. Since the 232 investigation was announced in April, imports have continued to surge," the executives said in the letter."Immediate action must meaningfully adjust imports to restore healthy levels of capacity utilization and profitability to the domestic industry over a sustained period," they wrote.The Commerce Department has delayed the release of its recommendations from a "Section 232" investigation into whether steel imports pose a threat to national security, which could lead to Trump imposing broad quotas or tariffs on steel imports.The American Iron and Steel Institute (AISI), an industry trade group, on Wednesday reported that total steel imports through July this year were up 22 percent from the same period a year ago, with imports taking 28 percent of the U.S. market.Imports captured 30 percent of the U.S. market in June, according to Commerce Department data compiled by the institute. Steel imports dipped briefly last year due to Commerce Department anti-dumping and anti-subsidy duties imposed on steel products from China and some other countries.Wednesday's letter followed last week's departure of White House chief strategist Steve Bannon, who had been a vocal advocate for steel tariffs and other trade protections in the administration's internal debates over trade.The executives from companies including Nucor, U.S. Steel, ArcelorMittal and DTE Energy said the sustained surge of steel imports into the United States had "hollowed out" much of the domestic steel industry and was threatening its ability to meet national security needs."Your leadership in finding a solution to the crisis facing the steel industry is badly needed now. Only you can authorize actions that can solve this crisis and we are asking for your immediate assistance," they wrote.Under the Cold War-era law authorizing the steel national security probe, Trump would have 90 days to act once the Commerce Department submits its probe.AISI president Tom Gibson, who also signed the letter, told Reuters the industry was trying to keep the issue "front and center" while Trump administration officials deal with a lot of other issues from North Korea to fiscal policy.He said that domestic steel producers' capacity utilization rate is hovering around 75 percent, as steelmakers from South Korea to Turkey target U.S. demand to soak up their excess output."Over the long term, that is not a sustainable level," Gibson said.Source: United States Steel Corporation