February 2023
Iron Ore & Steel
Iron ore extends losses on temporary production curbs in Tangshan
Source: Reuters
Dalian and Singapore iron ore futures extended losses on Monday on concerns over near-term weaker demand, after steel production hub Tangshan was required on Saturday to shutter some capacity in response to heavy pollution. Tangshan’s government said it would launch a level 2 emergency response from Sunday to deal with the forecast of heavy air pollution this week. The northern city is one of China’s top steel producers. It was not clear how long the production restrictions would last. The city of Handan, also a key steel producer, implemented similar curbs from Sunday. The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime traded 2.53% lower at 885.5 yuan($127.14) a tonne. FULL STORY
Iron ore inches higher on China demand hopes
Source: Reuters
Iron ore futures crept higher on Feb 17, stretching their gains for the week, as hopes grew that top buyer China would roll out more supportive policy measures for its economy at the annual National People’s Congress session next month. Improved sentiment also lifted prices of steel and other steelmaking inputs in China, while Dalian iron ore scaled a contract high after trading range-bound in recent days.
The most-traded May iron ore on China’s Dalian Commodity Exchange DCIOcv1 rose as much as 2.1% to 890 yuan ($129.76) a tonne. It has gained more than 3% so far this year and is on track for a second consecutive weekly rise. FULL STORY
Iron Ore CBS February 2023 – Prices ease as China optimism fades
Source: S&P Global
The S&P Global Platts IODEX 62% Fe iron ore price rose to a seven-month high of $129.80 per dry metric ton at the end of January before pulling back as optimism fades on a buildup of steel stocks in China. China’s property sector remains in the doldrums, with new residential floor space under construction and real estate investment down 39.8% and 10.0% year over year, respectively, in December. We expect China’s full-year steel production to fall 0.7% in 2023 due to the slumping property market. Further buoyed by the broader benefits of China reopening, we have moderately upgraded our average iron ore price forecast to $123.11/t for the March quarter and $117.53/t for 2023. FULL STORY
Iron ore prices jabbed higher by prongs of China demand, supply woes
Source: Reuters
The spot price of iron ore is being pushed higher in a pincer move of stronger Chinese demand and lower supply from the world’s two biggest exporters of the steel raw material. The spot price of benchmark 62% iron ore for delivery to north China, as assessed by commodity price reporting agency Argus, rose to $128.80 a tonne on Monday, just shy of the peak so far in 2023 of $129.50 reached on Jan. 30. The gains are being driven by restocking by steel mills in China, which buys about 70% of global seaborne iron ore and produces half of the world’s steel. Iron ore inventories at Chinese ports rose to 140.9 million tonnes in the week to Feb. 17, up from 138.35 million the prior week, and up from the pre-winter low of 130.2 million from the week to Oct. 14. FULL STORY
China aims to increase the use of scrap in steel production
Source: GMK center
China aims to increase the use of domestic and imported scrap in steel production. This issue was discussed during the relevant national conference, informs SteelMint. Increasing the use of ferrous scrap in the steel industry is necessary for the country to achieve its decarbonisation goals. Representatives of the steel industry, scrap metal disposal associations and authorities noted that, in addition to quarantine measures and the economic downturn, several other factors affect the use of scrap metal. In particular, these are problems with taxation. There are many small enterprises operating in the scrap metal processing sector, which mostly operate in cash. Thus, the state loses on VAT collection. The problem was to be solved by a government resolution. However, the government’s actions have increased the tax burden on processors, and they are still evading billing. FULL STORY
Coal
The 22 February 2023 landslide at a coal mine at Alxa League, China
Source: AGU
On 22 February 2023 a large landslide occurred at an open cast coal mine in Alxa League in Inner Mongolia, China. It appears that this landslide has killed 53 people, the remains of six of whom have been recovered to date. A further six people were rescued. Of course these numbers need to be treated with skepticism. The landslide appears to have occurred in a sequence of two events. The first, smaller, failure occurred at 13:00, followed by a second, larger, landslide at 18:44. The failure is remarkable for a series of videos that have emerged. FULL STORY
China starts buying Australian coal as unofficial ban ends
Source: S&P Global
China has started buying Australian coal this month, signaling the end of an unofficial ban that ran for over two years, according to market sources and S&P Global Commodity Insights data. S&P Global reported last month that three Chinese state-owned power plants — China Datang Corp., China Huaneng Group Co and China Energy Investment Corp. — as well as steel producer China Baowu Steel Group Corp. have received intimations from the government to import Australian coal. FULL STORY
China coal mine disaster May hit supply as demand recovers
Source: Bloomberg
A deadly accident at a coal mine in Inner Mongolia could test China’s ability to supply the fuel necessary for its economic recovery. The collapse at an open-pit mine in the Alxa League region left two dead and over 50 missing, according to local media, in what could prove to be the worst accident of its kind in years. A spate of fatalities at mines in 2021 led to a nationwide safety campaign that disrupted operations and curbed supply, and the latest disaster will bring those efforts back to the fore, Morgan Stanley analysts including Sara Chan said in a note on Thursday. FULL STORY
China expands coal use despite climate pledge
Source: JakartaPost
China last year approved the largest expansion of coal-fired power plants since 2015, according to a study published February 27, despite its vow to begin phasing down use of the fossil fuel in just three years. The coal power capacity that China began building in 2022 was six times as much as that in the rest of the world combined, the report by the Centre for Research on Energy and Clean. FULL STORY
China approves new coal power with capacity of entire UK fleet
Source: Bloomberg
China massively accelerated its coal power plans in 2022, quadrupling the number of new permits and approving new capacity equivalent to all the UK’s plants combined. Local governments permitted 106 gigawatts of new plants, the most since 2015, according to a report from the Centre for Research on Energy and Clean Air and Global Energy Monitor. Construction has already begun on 50 gigawatts, six times more than in the rest of the world combined, the researchers said. FULL STORY
Soybean
GT on the spot: How China can achieve strategic soybean security in an increasingly complex geopolitical environment
Source: Global Times
Soybeans, accounting for the highest proportion of China’s food imports, were mentioned eight times in China’s No.1 central document of 2023 issued on February 13, more than any other food crop that is mentioned. Meanwhile, in this key policy document released by the central government, new expectations were outlined for soybeans, as well as for China’s vast northeastern region, the country’s main soybean-producing area. FULL STORY
Progress seen in domestic soybean production
Source: CHINA DAILY
Tang Renjian, director of the Central Rural Work Leading Group Office, said on Tuesday that steady progress has been made in growing soybeans on barren saline and alkaline land, which will help make the nation more capable of expanding domestic production of soybean crops that have been heavily dependent on imports. “The pilot programs in some areas have yielded good results,” said Tang, who is also the minister of the Ministry of Agriculture and Rural Affairs. FULL STORY
Exclusive: US soybean industry pleased with phase 1 trade deal fulfillment, hopes trade continue to offer win-win results
Source: Global Times
US trade in farm goods, with soybeans as a pillar, set records last year with US exports of $36.4 billion to China, growing year-on-year for a second year, US government data showed. The figures show the significance of China’s huge market and resilient demand and the commitment to the bilateral phase one trade deal in driving up trade flows. FULL STORY
US shipped US$36.4 billion worth of farm goods to China in 2022, soybean exports reach new high
Source: efeedlink
The data shows the importance of China’s sizable market, steadfast demand, and dedication to the bilateral China-US phase one trade agreement in boosting trace flows. Experts urged the US Biden administration to abandon its zero-sum game and decoupling policy against China and put more positive momentum into the sustainable and healthy development of bilateral economic and trade ties. The trade activities show how the joint efforts of both sides in implementing the trade deal achieved win-win outcomes, they said. FULL STORY
China to plant more soybean, oil crops in drive to ensure grain supply
Source: YICAI
China aims to strengthen grain production and ensure supplies by stepping up efforts to plant more soybean and oil crops, according to a key annual government policy document. China will support the development of rotational planting of grain and soybean in the northeast and northern Huang-Huai-Hai Plain, as well as develop and use saline-alkali soil to grow soybean, according to the No. 1 central document released yesterday. FULL STORY
China to plant more soy, speed up GMOS to ensure food supply
Source: Successful Farming
China will increase its efforts to boost the output of soybeans and edible oils, state media reported late on Monday, citing a key rural policy document, as it continues to push for greater self-sufficiency in its key food supplies. The world’s top soybean buyer is trying to lower its heavy reliance on imports of the oilseed as the COVID pandemic, growing trade tensions, and increasing climate disasters raise concerns about feeding its 1.4 billion people. FULL STORY
China likely to buy more US Gulf soybeans in Q1 amid South American supply woes
Source: S&P Global
World’s biggest soybeans importer China is likely to buy more-than-usual volumes of the oilseed from the US Gulf in February and March as harvest delays in Brazil and a severe drought in Argentina affect supplies, market sources said, likely supporting the basis prices. Purchasing the cheaper oilseed from South American suppliers has become increasingly strenuous in recent weeks, as harvest delay has plagued the Brazilian trade flow and drought has enticed the Argentinian farmers to hoard their stocks, China-based crushers said. FULL STORY
Researchers unveil soybean nutrients distribution map in China
Source: Xinhua
Researchers from the Chinese Academy of Agricultural Sciences (CAAS) recently mapped the geographic distribution of soybean nutritional compositions in China. Researchers believe that the study, which was published in the journal Food Research International, provides scientific evidence for guiding the construction of high-quality soybean production bases in China. FULL STORY
Energy
Sinopec expects China’s oil demand to recover in Q2
Source: CHINADAILY
China’s Sinopec Corp expects demand for refined oil products to recover in the second quarter as COVID-19 outbreaks in the country are gradually controlled, and sees full year oil consumption reaching positive growth. Asia’s biggest oil refiner has cut its refining runs since the second half of March and is maintaining an “optimal” refinery operation ratio of around 85 percent, compared with 92.6 percent earlier in the year, Sinopec officials said at a briefing on Thursday. FULL STORY
China’s largest oil-gas field reports record output
Source: CHINADAILY
Changqing Oilfield, China’s largest oil-and-gas field, has produced over 60 million tonnes of oil equivalent of crude oil and natural gas so far this year to hit a record high. Located in northwest China’s Erdos basin, the oilfield has produced 24.5 million tonnes of crude oil and 44.5 billion cubic meters of natural gas (equivalent to about 35.5 million tonnes of crude oil) as of 10 am Sunday, according to the oilfield’s production headquarters. FULL STORY
China’s Tarim oilfield sees record output of oil, gas equivalent
Source: XINHUA
The Tarim oilfield of China National Petroleum Corporation (CNPC), China’s leading oil and gas producer, produced a record 33.1 million tonnes of oil and gas equivalent in 2022, said the company. The figure marked a year-on-year increase of 1.28 million tonnes of oil and gas equivalent. To date, the annual oil and gas equivalent output of the field has increased by over one million tonnes for six consecutive years, according to CNPC’s Tarim oilfield company. FULL STORY
World’s first GST membrane LNG storage tank enters operation in China
Source: Global Times
A project with the world’s first on-land GST membrane full containment liquid natural gas (LNG) storage tank located in Hejian, North China’s Hebei Province, was officially delivered after 100 days of trial operation, further optimizing local clean energy structure, Hudong-Zhonghua Shipbuilding (Group) Co, one of the builders of the storage tank, told the Global Times on Sunday. The project has secured natural gas needs for 800,000 local households during 2022 winter following entering trial operation in October 2022. The daily processing capacity of the project can exceed one million square cubic meters, reducing 58,100 tons of carbon emissions each year compared with coal. FULL STORY
Venture global and China gas sign two long-term LNG agreements
Source: LNG INDUSTRY
Venture Global LNG and China Gas Holdings Limited, a leading natural gas operator in China, has announced that the wholly-owned subsidiary China Gas Hongda Energy Trading Co., Ltd and Venture Global, have signed two 20-year LNG sales and purchase agreements (SPA). Under the deals, China Gas will buy 1 million tpy of LNG on a free on board (FOB) basis from Plaquemines LNG and another 1 million tpy from the CP2 LNG export facility, both in Louisiana. FULL STORY
Gas markets remain tight due to China’s uncertain LNG demand and further Russian supply cuts
Source: TIMETURK
Global natural gas markets are expected to remain tight in 2023, with demand remaining broadly flat as uncertainty surrounds China’s LNG demand and with the possibility of further gas supply cuts by Russia, according to a new report released on Tuesday by the International Energy Agency (IEA). Despite an estimated drop in gas consumption of 1.6% in 2022, natural gas markets worldwide continue to tighten. FULL STORY
China set for record crude oil imports in 2023 – analysts
Source: Reuters
China is expected to import a record amount of crude oil in 2023 due to increased demand for fuel as people travel more following the dismantling of COVID-19 controls and as a result of new refineries coming onstream, analysts said. The prospect of strong demand from the world’s biggest importer will be another bullish factor for an oil market already supported by the OPEC+ producer group’s output cuts and western sanctions on Russian exports. FULL STORY
Russia boosts oil exports to China – Bloomberg
Source: RT News
China has further increased purchases of Russian oil in January, Bloomberg reported this week, citing data intelligence firm Kpler.According to the report, Beijing imported an average of 1.66 million barrels of crude and fuel oil from Russia daily in January, which is more than the previous record set in April 2020. Kpler data showed that China bought the entire monthly loading of Russian ESPO grade oil, as well as Arctic grades and flagship Urals grade oil. FULL STORY
Oil prices dip as traders wait for Chinese demand to rebound
Source: OIL PRICE
Brent crude was trading at $82.66 per barrel at the time of writing, and West Texas Intermediate was at $75.94 per barrel, both down by less than a percentage point from Friday’s close. Last week, Russia was reported to have plans to reduce crude oil exports from its western ports by as much as 25% next month. This prompted expectations of tighter global supply, especially since the report came soon after an official statement that the country’s oil production would be reduced by half a million barrels per day in March. FULL STORY
Asia’s crude oil imports hit record high but China’s oil imports decline
Source: Export Genius
Asia’s imports of crude oil reached a record high in January 2023, but the strength wasn’t driven by China, with the world’s biggest buyer actually recording a decline.According to a report, Asia’s total imports of crude oil were 29.13 million barrels per day (bpd) in Jan 2023 from 26.22 million bpd reported in Dec 2022. China’s imports of crude oil were 10.98 million bpd in Jan 2023, down from 11.37 million bpd recorded a month before. FULL STORY
China’s gas demand is a bigger worry for Europe than Russia cutoff
Source: EnergyNow
Europe’s gas supplies could be hit harder by a bigger-than-expected jump in Chinese demand this year than from a complete halt in Russian flows, according to the International Energy Agency. While Chinese demand is the “big unknown,” a bullish scenario could see the country’s liquefied natural gas imports surge as much as 35% in 2023 if costs fall further and its economy expands quickly, the IEA said in a quarterly report. That would boost global competition for the fuel and may push prices back up to the “unsustainable” levels seen last summer, it said. FULL STORY