April 2023
Iron Ore & Steel
China’s talks down already weakening iron ore amid cloudy outlook
Source: Reuters
The spot price of iron ore tumbled to a four-month low as Beijing once again talked down the key steel raw material, but as usual the question is whether the intervention will lead to sustained lower prices. The spot price for benchmark 62% iron ore for delivery to north China, as assessed by commodity price reporting agency Argus, dropped to $110.25 a tonne on April 21, the lowest since Dec. 20. FULL STORY
Iron ore and steel price slide questions strength of China recovery
Source: Reuters
After a stellar start to the year there are signs that the key steel and iron ore sectors are losing momentum in China, raising concerns as to the strength of the rebound in the world’s second-largest economy. Prices across the steel complex have been retreating in recent sessions, while China’s imports of iron ore appear to be moderating after a fast start to the year. China produces more than half of the world’s steel and buys about 70% of global seaborne iron ore, one of two key raw materials for steel, the other being coking coal. The spot price for benchmark 62% iron ore for delivery to north China, as assessed by commodity price reporting agency Argus, ended at $118.80 a tonne on Monday, the lowest since Jan. 9. FULL STORY
China’s Property Pain Deflates ‘Overhyped’ Iron Ore Market
Source: Mining
After a bullish start to 2023, iron ore is struggling with the reality that China’s property sector — the steelmaking material’s largest demand driver for two decades — is still far from a robust recovery. Iron ore dipped below $100 a ton at 23 April for the first time since early December, becoming the biggest victim of a bearish mood across industrial metals. The main culprit is a weaker-than-expected peak construction season, which runs from April through June, highlighting China’s uneven rebound. FULL STORY
China’s cut iron ore output by 5% y/y in March
Source: GMK Center
Iron ore production in China in March 2023 decreased by 5% compared to March 2022 – to 86.4 million tons. SteelMint reports about it with the reference to data from the National Bureau of Statistics of China (NBS). In January-March 2023, iron ore mining remained at the same period in 2022 – 243.26 million tons. At the same time, iron ore import to China increased by 9.8% y/y in the first quarter – up to 294.33 million tons. In March, China imported 100.23 million tons of iron ore, which is 10.6% more compared to February 2023 and 14.8% compared to March 2022. FULL STORY
China’s huge steel capacity beleaguers steel market, government to order output cuts soon
Source: S&P Global
China’s fast-rising steel production but slowly recovering end-user demand has continued to squeeze steel profit margins in April, with mills still showing no signs of cutting back on production. Mill sources said China’s steel capacity was too huge, but demand had more or less plateaued, and thus in order to retain market share, it was difficult for Chinese mills to voluntarily cut their production even when they were running at a loss. According to calculations of S&P Global Commodity Insights, China’s pig iron and crude steel capacity has been still marking a modest growth for 2023, as some of the replaced iron and steel making facilities were closed long time ago, mainly during 2017-2019. FULL STORY
China’s Property Pain Deflates ‘Overhyped’ Iron Ore Market
Source: GMK Center
In 2022, the apparent consumption of steel in the country, the expert noted, will reach 910 million tons. Excess capacity remains a serious problem for China. The level of Chinese steelmaking capacity is expected to reach 1.25 billion tonnes this year. The authorities intend to control the level of their utilization, in addition to the introduction of production limits for the steel industry, which should affect prices through regulation of supply. China’s steel demand improved in the first three months of 2023, and this year-on-year trend is likely to continue during 2023, Zhang Qiusheng noted. Average steel prices, according to the expert, reached their peak in March, and he predicts the next one for November-December 2023. In general, during the current year, prices will fluctuate between 300-400 yuan ($43.6-58). FULL STORY
China will limit steel production to the level of 2022 in 2023
Source: GMK Center
China intends to publish a plan that requires local steel producers to ensure that production this year does not exceed the level of 2022 (1.018 billion tons). Bloomberg informs about it.The move, expected by the end of April, reflects officials’ concerns about weak demand for steel, but the sources said it does not require drastic cuts of specific percentages. The compromise refers to different views on the economic outlook for 2023. The goal of the level of emissions per ton of products will remain as a regulatory mechanism. FULL STORY
Coal
China has already approved more new coal in 2023 than it did in all of 2021
Source: Greenpeace
Provincial governments in China approved at least 20.45 gigawatts (GW) of new coal in the first three months of 2023, according to official approval documents, while frequently citing energy security concerns. This redoubled coal investment comes at the expense of desperately-needed improvements to China’s electric grid and energy storage capacity that would make it easier for existing capacity to meet periods of high energy demand. “The 2022 coal boom has clearly continued into this year. Summer is around the corner, and there’s a long list of energy infrastructure fixes needed all around China. But throwing more coal at the wall isn’t one of them. China’s electric grid doesn’t lack generation capacity. The grid lacks adequate flexibility and responsiveness. These problems will continue to inhibit electricity transfer and storage until we face them head on,” said Greenpeace East Asia climate and energy campaigner Xie Wenwen. FULL STORY
China accounts for two thirds of world’s planned new coal power
Source: Reuters
China accounted for more than two thirds of the world’s proposed new coal-fired power by the end of 2022, with 366 gigawatts (GW) of additional capacity either being planned or under construction, research showed on 6 April. U.N. Secretary General Antonio Guterres has urged countries to stop building new plants and phase out coal consumption completely by 2040 in order to slash climate-warming carbon emissions and keep global temperature rises within 1.5degrees Celsius above pre-industrial levels. FULL STORY
China doubles down on coal ahead of potential summer blackouts
Source: Reuters
China plans to accelerate the approval of new coal mines and fast track the construction of already approved mines to support its baseload energy supply during demand spikes Liang Changxin, an official from the National Energy Administration (NEA), said on April 12. Peak energy demand is expected to exceed1.36 billion kilowatts this summer, representing a “significant increase on last year” Liang added. Some provinces could face power cuts this summer as a result, the NEA official warned. China’s energy consumption typically spikes in the summer months due to household demand for air conditioning. This, combined with a related slump in power from hydro sources due to low rainfall, led to a wave of blackouts across southwest China last year. FULL STORY
Coal Prices May Rise Again In Second Quarter Of FY24 On China Stocking
Source: Enerdata
China has decided to extend zero tariffs on coal imports, which were introduced in April 2022, until the end of 2023. In April 2022, in a context of concerns of supply disruptions and domestic energy security, the Chinese Ministry of Finance announced cuts in import tariffs for all types of coal to zero from 1 May 2022 until 31 March 2023. Before April 2022, import tariffs stood between 3% and 6%, but stood at 0 for Indonesian coal. The country became a net importer of coal in 2009 and net imports have been increasing rapidly since 2015, reaching 335 Mt in 2021, as rising demand is boosting imports and cutting exports. According to the Chinese General Administration of Customs, China’s coal imports fell by 9.2% to 293.2 Mt in 2022 (335 Mt in 2021). In the first two months of 2023, coal imports surged by 71% (compared to the same period of 2022) thanks to cheap thermal coal imports from Indonesia and Mongolia and the easing of COVID-19 restrictions. FULL STORY
Robots Help ‘Smart Mines’ Drive China’s Coal Build-Out
Source: Bloomberg
Deep beneath the earth’s surface in a remote corner of northern China, a mechanical monster comes to life. Two massive discs armed with dozens of metallic teeth begin spinning against a solid wall, spraying dust and shiny black chunks of coal. Engineer Zhang Luoxun watches it all from an airy office about 300 meters above. Cameras and sensors connected to an underground 5G network feed live images and information on everything from mine shaft stability to air quality to Zhang and his colleagues above ground. FULL STORY
Energy
China’s LNG imports to show small rebound in 2023: KEMP
Source: NATURAL GAS WORLD
China’s liquefied natural gas (LNG) imports fell sharply in 2022 because of the disruption caused by lockdowns to control the coronavirus epidemic and the massive exit wave of infections when they were lifted. As the epidemic fades, resurgent manufacturing and service sector activity will increase gas consumption and is likely to tighten LNG supplies available to Europe ahead of winter 2023/24. FULL STORY
SOEs’ LNG storage tanks boost nation’s green goals
Source: CHINADAILY
In recent years, China’s State-owned enterprises, or SOEs, have been stepping up construction of storage facilities for liquefied natural gas or LNG to further enhance the country’s natural gas storage capacity. China Oil& Gas Pipeline Network Corp, China’s largest energy infrastructure owner, which is also known as PipeChina, announced the successful raising of four LNG storage-tank domes in Longkou, Shandong province, on Dec 15. FULL STORY
PetroChina signs LNG deal with Malaysia’s Petronas
Source: REUTERS
PetroChina International Co Ltd said it has signed a sales and purchase agreement with Malaysia’s Petronas to buy liquefied natural gas (LNG). The deal, signed on April 17, is the pair’s first medium-to-long-term LNG sales and purchase agreement, PetroChina said in a statement on Tuesday without providing further deal details. FULL STORY
Chinese firm takes stake in Qatar LNG project
Source: CHINADAILY
China Petrochemical Corp said on Wednesday it will take a stake in the expansion of Qatar’s North Field liquefied natural gas, or LNG, project. QatarEnergy will transfer 1.25 percent of its stake in the North Field LNG expansion to the company in a milestone for both parties following the signing of a long-term LNG contract in November, China Petrochemical Corp said. FULL STORY
China gas holdings signs two 20-year LNG supply deals with venture global
Source: MarketScreener
China Gas Holdings , one of China’s largest independent gas distributors, has agreed to two 20-year liquefied natural gas (LNG) supply contracts with U.S. exporter Venture Global, adding to a flurry of deals signed between China and the U.S. since 2021. China Gas Holdings, via its wholly owned subsidiary China Gas Hongda Energy Trading Co, would buy a total of two million tonnes per year of LNG from Venture Global under the two contracts, the company said in a statement. FULL STORY
A golden week for China air travel May stem oil price drop
Source: Bloomberg
Global oil traders are fixated on the next milestone in China’s economic recovery, when travelers pack their bags and head to the airport for the Golden Week holiday in early May. Some 170 million Chinese holidayed abroad in 2019, before the pandemic struck. That figure sank to less than 9 million last year at the height of China’s lockdowns. FULL STORY
China and Russia look to challenge the Petrodollar
Source: OILPRICE
The U.S. dollar, which has been the currency of choice in oil trade since the 1970s, is still the dominant currency in the market. While the Chinese currency has made inroads in global trade, the yuan accounts for just 2.7% of the market. Several deals and summits in recent weeks signaled that China and Russia are moving to try to sideline the U.S. dollar. The increasingly closer relations between China and Russia and the Chinese push to make its currency more relevant on the global markets are challenging the dominance of the petrodollar. FULL STORY
Global oil demand on course for record as China’s economy rebounds
Source: The Guardian
Global demand for oil this year is on track to rise to a record 101.9m barrels per day as China leads an economic surge among developing nations, the world’s leading energy body has forecast. The International Energy Agency’s predicted daily average for 2023 is 2m bpd higher than last year’s figure. FULL STORY
Sinopec starts world’s largest green hydrogen plant
Source: CHINADAILY
Construction began on Tuesday on the world’s largest green hydrogen project, generated from solar energy, in the Xinjiang Uygur autonomous region, to aid China’s move toward sustainable energy, said its operator China Petroleum and Chemical Corp. The project is also China’s first 10,000-ton level solar-generated green hydrogen demonstration project. FULL STORY
China’s crude oil imports surge, but fuel exports jump even more
Source: HELLENIC SHIPPING NEWS
China’s imports of crude oil surged to the second highest on record in March, capping off a strong first quarter as the world’s biggest importer of the fuel re-opened its economy. Customs data on Thursday showed China imported 52.3 million tonnes of crude in March, the most since the all-time high of 53.18 million in June 2020. FULL STORY
Soybean
GM corn, soybean earn safety approval after pilot program
Source: CHINADAILY
Genetically modified corn and soybean involved in a pilot program have obtained safety certificates for production and application after an assessment of food and environmental safety that lasted nearly 10 years. “The application of traits that resist pests and tolerate herbicides and drought has improved the competitiveness of genetically modified crops, such as corn and soybean, in production cost, price and quality,” Qian Qian, director of the Chinese Academy of Agricultural Sciences’ Institute of Crop Sciences, said in an interview with Xinhua News Agency. FULL STORY
China makes an effort to reduce soybean imports
Source: UkrAgroConsult
China’s soybean imports have likely peaked, which has “profound” implications for oilseed and grain markets, according to a global food and agriculture bank. The Chinese government has launched a campaign to reduce the country’s reliance on imported soybeans. FULL STORY
CFR China soybean basis hits a record low on weaker local demand and a bumper Brazil harvest
Source: TRIDGE
The CFR China soybean basis hit a historical low after reaching close to the 0 cent/bushel mark on April 10 amid weaker domestic demand and falling negative FOB premiums in Brazil where a bumper soybean crop is expected and selling progression from farmers is seen lagging. Platts, part of S&P Global Commodity Insights, assessed the soybean CFR China M1 basis at 5 cents/bushel over May(K) contract on Chicago Board of Trade (CBOT) April 10, the lowest for a front-month Brazil shipment. FULL STORY
China farm official expects little growth in soybean planting this year
Source: The Pig Site
China’s soybean acreage may only slightly increase this year, an official said on Thursday, suggesting output is unlikely to match last year’s jump due to soft prices, reported Reuters. The world’s top soybean importer launched a major effort to increase its production of the oilseed in 2022 amid concerns over its heavy reliance on imports. Output increased almost 24% to 20.3 million tonnes. FULL STORY
China soybean imports grow 8%
Source: Feed & Grain News
In March, China’s soybean imports rose 7.9% from the same month a year earlier as buyers in China stocked up ahead of expected strong demand. According to reports, the General Administration of Customs noted total imports for the month came to 6.85 million tonnes, down 2% from February’s 7.04 million tonnes. FULL STORY
China’s soybean imports from US jump in March
Source: MarketScreener
China’s soybean imports from the United States rose 43% in March, data showed on Friday, as delays in harvesting in top supplier Brazil prompted buyers to seek more U.S. beans. The world’s top buyer of soybeans imported 4.83 million tonnes of the oilseed from the U.S., versus 3.37 million tonnes a year earlier, General Administration of Customs data showed. FULL STORY
China food security: focus on increased domestic soybean production amid self-sufficiency drive
Source: South China Morning Post
China is aiming to increase soybean production this year as part of efforts to achieve greater food self-sufficiency amid escalating geopolitical tensions. Beijing has doubled down on efforts to improve agricultural production and planting, elevating its significance to a political task and making soybean production a criteria to be used to judge the performance of officials, according to the State Council on Thursday. FULL STORY
GRAINS-Soybeans ease on dismal Chinese demand, corn faces pressure
Source: REUTERS
Chicago soybean futures slid on Friday, with the market poised for a weekly decline, as slowing demand from top importer China and lacklustre U.S. weekly exports weighed on prices. Corn inched higher but was on track for its biggest weekly decline in eight months on forecasts of favourable weather in the U.S. Midwest, which will allow planting to accelerate. FULL STORY