January 2023
Iron Ore & Steel
China’s steel consumption decreased for the second year in a row
Source: AISU steel
For the second year in a row, the rate of steel consumption in China decreased, reaching 914 million tonnes in 2022, a decline of 3.3% compared to 2021, equivalent to 31 million tonnes, and by 8.3% compared to 2020, equivalent to 83 million tonnes. In 2022, China’s crude steel production decreased by 2.2% compared to 2021, reaching 1.01 billion tonnes. This is due to the slowdown in the economy and the decline in the real estate market in the country. According to the China Iron and Steel Association (CISA), in 2023, China is expected to witness a recovery in overall economic activity, therefore, a recovery in demand for steel products. However, the global economy still faces recessionary risks, and international markets are currently challenging. FULL STORY
China’s daily crude steel output in early January
Source: GMW
BEIJING, Jan. 26 (Xinhua) — China’s major steel mills saw their average daily output of crude steel grow 0.51 percent in early January from that recorded in late December 2022, industrial data showed. The daily crude steel output stood at 1.93 million tonnes in early January, according to the China Iron and Steel Association. Major steel producers churned out a total of 19.26 million tonnes of crude steel in the period, the data showed. During this period, daily production of pig iron went down 0.4 percent, while that of rolled steel lost 8.68 percent, the data showed. FULL STORY
Shanghai to ban new capacity in steel industry in 2023
Source: SteelOrbis
Shanghai is strictly prohibiting the addition of new steel production capacity in 2023, aiming to ensure that crude steel output only decreases and does not increase, as announced by Shanghai municipal government. Meanwhile, by 2030 the usage of scrap will increase to 30 percent, while it will be increased to 15 percent by 2025. On the other hand, Shanghai will strictly control coal consumption. For instance, the total consumption of coal will decrease by five percent by 2025. At that time, Baowu Group’s Shanghai production base will speed up the transformation from blast furnace steelmaking to electric arc furnace steelmaking production. FULL STORY
China to keep stable price of iron ore, other materials in 2023
Source: Global Times
China’s top economic planner said it will tighten supervision of iron ore pricing and crack down on illegal activities, to keep the market stable, a move that signals authorities are ramping up efforts to maintain price stability after the global market rallied on the nation’s reopening from pandemic. In a Sunday statement, the National Development and Reform Commission (NDRC) said that it has summoned some iron ore information providers over publication of outdated or false “news” that confused the public and had an adverse impact on the market. The providers were urged to carefully verify data and ensure they don’t drive up prices. FULL STORY
China’s 2023 iron ore output seen higher as new projects come online
Source: S&P Global
China’s iron ore output in 2023 is expected to rise 3.5% from the previous year to 238 million mt as miners commission new production capacity, an analyst with investment bank Orient Securities said Nov. 29, in a development that could help slightly cut back the country’s huge iron ore purchases in the longer term. Miners faced challenges during 2021-2022 as new projects got delayed due to the pandemic and on strict mining safety measures that capped Chinese iron ore output growth, according to the analyst. FULL STORY
Iron ore price rises while China warns against speculation
Source: Mining
The iron ore price rose on Wednesday as investors bet on surging demand for the steel ingredient as China’s economy reopens. According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $113.60 a tonne Wednesday morning, up 3.1%. China’s state planner on Wednesday issued its third warning this month against excessive speculation in iron ore, adding it will increase supervision of the country’s spot and futures markets. Companies should not engage in price gouging and speculation, said the National Development and Reform Commission (NDRC), in a post on its official WeChat account. FULL STORY
Coal
First Australian coal cargoes since end of ban to enter China in Feb
Source: Mining
China is set to receive at least two cargoes of Australian coal in early February, according to traders and shiptracking data, the first since an unofficial ban on imports in place since 2020 was lifted earlier this month. Coal traders will be paying attention to how easily the shipments pass customs for signs that the informal ban is truly over and in the hopes of sending more Australian coal to China. Australian thermal coal for power generation and metallurgical coal for steelmaking are favoured by Chinese consumers for their high-quality. China’s coal demand is forecast to rise in the upcoming months amid an expected economic rebound after Beijing rolled back its draconian zero-COVID strategy. FULL STORY
Xinjiang increases coal output by 25 pct in 2022 to ensure energy supply
Source: Xinhua
Northwest China’s Xinjiang Uygur Autonomous Region posted strong growth in coal output in 2022 as it moved to ensure the country’s energy supply. The region produced 400 million tonnes of raw coal last year, up 25 percent year on year, according to the Xinjiang regional development and reform commission. Xinjiang is China’s fourth-largest coal-producing region. Currently, it has a proven coal reserve of 450 billion tonnes, or one-fourth of the country’s total, ranking second after Inner Mongolia. Its output growth rates over the past two years far exceeded that of the three leading coal-producing regions of Shanxi, Shanxi, and Inner Mongolia. FULL STORY
China to speed up construction of coal power plants this year
Source: bloomberg
China is planning to accelerate construction of coal and natural gas-fired power plants this year, even as massive investment in renewables means clean power will dominate generation capacity. Some 70 gigawatts of fossil fuel capacity will be added in 2023, up from 40 gigawatts last year, according to a report released by the China Electricity Council, the power sector’s top lobbying group. The target comes as Beijing places more emphasis on energy security due to power shortages and volatile global fuel prices. FULL STORY
China’s coal imports likely to increase in 2023 to stabilize prices
Source: Hellenic shipping news
Coal industry in China and abroad expect stronger trade in the fuel, a reliable source of power for reviving economy, as China aims to ramp up energy supplies and stabilize prices.With the lifting of pandemic restrictions, border reopening and business resumption, China is gearing up to recover rapidly from pandemic, which will offer more opportunities to fuel producers such as Indonesia, Mongolia and Russia, all leading coal exporters. FULL STORY
China’s Shanxi targets 2023 coal production of nearly 1.37 bln tonnes
Source: Xinhua
China’s coal-rich province of Shanxi has set a coal production target of nearly 1.37 billion tonnes for 2023, according to a government report released at the ongoing annual session of the provincial people’s congress.In 2022, Shanxi’s average daily coal output reached 3.56 million tonnes, providing 620 million tonnes of thermal coal for another 24 provincial-level regions in China, the report said. FULL STORY
Soybean
SunSirs: China domestic soybean market continued to decline in January 2023
Source: SunSirs
According to the monitoring data of SunSirs, after the New Year’s Day, the domestic soybean market fluctuated and fell. At the beginning of the month, the average price of domestic soybean market was 5,600 RMB/ton; On January 28, the average market price of domestic soybeans was 5,400 RMB/ton, down 3.57%.After the New Year’s Day, the demand for terminal soybean products turned weak, and some national storage depots successively lowered the purchase price of domestic soybeans, which was dominated by multiple negative effects. FULL STORY
Soybean growth hits record high
Source: CHINA DAILY
A mix of methods, including crop rotation and intercropping, have been used to expand the growing area for soybean and rapeseed, which are central to making cooking oil and animal feed, agriculture officials said on Wednesday. There were 10.26 million hectares of soybeans on the mainland last year, the largest amount since 1958 and an increase of 1.82 million hectares year-on-year, Zeng Yande, chief agronomist of the Ministry of Agriculture and Rural Affairs, said at a news conference held by the State Council Information Office in Beijing. FULL STORY
China’s soybean market official open to foreign traders
Source: CHINA DAILY
Eight soybean-related futures and options, including No 1 Soybean, No 2 soybean, soybean meal and soybean oil, are officially open to foreign traders at the Dalian Commodity Exchange on Monday in Dalian, Liaoning province. “It is the first time for the DCE to introduce overseas traders in the full soybean commodities,” said Fang Xinghai, vice chairman of China Securities Regulatory Commission, in a video message. FULL STORY
China’s soybean imports expected to slow down and eventually decline through 2030
Source: Feed
China will reduce the amount of soybeans it imports over the next seven years, in progressive fashion, due to slower livestock production growth, continuous improvement in farming practices, and widespread adoption of a low-soymeal inclusion ratio in feed formulations nationwide, finds a Rabobank report. “The inclusion rate of soymeal in feed rations is projected to drop. as the Chinese government is launching a soymeal reduction campaign aimed at lowering the dependence on imported soybeans to ensure food security,” reported Lief Chiang, senior analyst, grains and oilseeds, Rabobank. FULL STORY
China to boost soybean self-sufficiency to diversify, stabilize supplies amid market recovery: MOA
Source: Global Times
China’s Ministry of Agriculture and Rural Affairs (MOA) met on Thursday with soybean industry participants, urging them to boost domestic cultivation, production and sales to further stabilize supplies of soybean, an important strategic good, as the nation expects a market rebound. Experts said that this is a follow-up effort by the government to improve the self-sufficiency rate of soybean supplies. China aims to balance the risks of heavy reliance on any single source, including the US, which provides about one-third of China’s total soybean supplies. FULL STORY
Study: 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’s grain import volume declines in 2022
Source: GRAIN CENTRAL
THE CHINESE Yuan value of grain imported by China last year rose by 13.7pc, but the quantity actually declined by 10.7pc compared to 2021 as an appreciating United States dollar pushed up the cost of imports and China’s strict COVID lockdown eroded domestic demand, particularly from the stockfeed industry. Total imports of grain such as soybeans, corn, wheat, barley and sorghum was 146.9 million tonnes (Mt) in 2022, according to the General Administration of Customs. While it was less than the previous year, it still rated second to the record 164.5Mt of grain imports in the 2021 calendar year. The quantity imported was equal to 21pc of domestic grain production and soybeans remained the biggest single item on the Chinese shopping list, making up 62pc of incoming shipments. FULL STORY
Energy
Oil climbs after drone attack in Iran, China’s pledge to promote consumption
Source: REUTERS
Oil prices climbed in early Asia trade on Monday, supported by tensions in the Middle East following a drone attack in Iran and as Beijing pledged over the weekend to promote a consumption recovery which would support fuel demand. Brent crude futures rose 54 cents, or 0.6%, to $87.20 a barrel by 0115 GMT while U.S. West Texas Intermediate crude was at $80.22 a barrel, up 54 cents, or 0.7%. FULL STORY
China’s reopening may not lead to a major jump in oil prices
Source: Oil Price
The reopening of the Chinese economy is unlikely to be combined with major stimulus programs. Transportation accounts for just 54 percent of China’s oil consumption, compared to 72 percent in the US and 68 percent in the European Union.China is buying oil at a major discount from Russia. China has undergone three distinct phases in its reaction to COVID-19 since the Wuhan Municipal Health Commission reported the first small cluster of cases of ‘pneumonia’ in Wuhan city in Hubei Province on 31 December 2019. FULL STORY
Oil up on expectations of demand rebound in China
Source: Mehr News Agency
Oil prices rose on Wednesday over expectations of a strong rebound in demand from China, the world’s largest crude importer, while an expected rise in US crude oil stockpiles limited further price upticks, media reported.International benchmark Brent crude traded at $86.58 per barrel at 09.56 a.m. local time (0656GMT), a 0.52% increase from the closing price of $86.13 a barrel in the previous trading session, Anadolu Agency reported. FULL STORY
Russia boosts oil exports to India and China
Source: REUTERS
Exports of Urals and Kazakhstan Export Blend Crude Oil (KEBCO) brands are expected to surge by 50% this month compared to December, due to growing demand in Asia and soaring global energy prices, Reuters reported on Tuesday. According to the outlet’s calculations and traders’ data, about 70% of Urals shipments set sail from the Baltic ports of Primorsk and Ust-Luga are heading to India. The world’s third-biggest oil consumer has remained Russia’s top importer of crude for several months, enjoying deep discounts offered by Moscow. In December, Russian exports to India surged to a five-month high, the outlet said. FULL STORY
US mulling oil export ban to China, a fresh political trick with little impact expected for China’s energy market supply: expert
Source: Global Times
The US House of Representatives passed a highly politically driven bill on Thursday aimed at banning crude oil trade with China, once again in the name of national security, as the country deals with high inflation. Experts said that the ban, if implemented, would have no real consequences for China’s oil supply, given the diversified sources and the very limited share of the US oil in the Chinese market, and warned that it could further complicate China-US trade relations, which have already been clouded by various export restriction policies imposed by the US in recent years. FULL STORY
China’s economic recovery may keep natural gas market tight, top exporter says
Source: Bloomberg News
China’s economic recovery could keep the natural gas market tight this year, said Australia’s biggest exporter. The real impact of Beijing’s exit from“zero Covid” is yet to be seen, said Meg O’Neill, chief executive officer of Wood side Energy Group Ltd. China’s LNG imports,which slumped last year due in part to the virus policy, are expected to eventually pick up. FULL STORY
Jiangsu LNG terminal exports 10 billion cu m of natural gas
Source: NANTONG CHINA
The PetroChina Jiangsu LNG Terminal at Yangkou Port – located in Rudong county, administered by Nantong city in East China’s Jiangsu province – is really moving things up these days when it comes to exports of natural gas. By 8 am, on Dec 28, the facility had exported 10 billion cubic meters of natural gas in the year to date. That made it the first time in the 11 years since the terminal started operating that annual gas transmissions topped 10 billion cu m, which is equivalent to the annual gas consumption of 50 million households. FULL STORY
China liquefied natural gas (LNG) imports industry report 2022: analysis 2018-2022 & outlook 2023-2032
Source: InvestorsObserver
With the global economy gradually moving towards low-carbon and environmental protection, the LNG market size has grown rapidly in recent years. China has insufficient local LNG reserves and therefore needs to import a large amount of LNG every year. In 2021, China’s LNG imports reached 78,789,500 tons, up 18.13% year-on-year, with an import value of US$44.075 billion, up 89.64% year-on-year. According to the publisher’s analysis, from January to October 2022, China imported 50,505,300 tons of LNG, down 21.60% year-on-year, and imported US$40.817 billion, up 34.28% year-on-year, due to the COVID-19 outbreak. FULL STORY
Oil ends higher as traders focus on China; natural-gas prices mark lowest finish since May 2021
Source: Market Movers
Oil futures rose Wednesday, with investors and analysts fixated on prospects for a pickup in crude demand from China after the country shed COVID curbs that were seen curtailing consumption by one of the world’s largest energy importers. Natural-gas futures, meanwhile, extended a January plunge to mark their lowest finish in about 20 months. FULL STORY