IRON ORE & STEEL
IRON ORE SHIPMENTS BUOY RECORD EXPORTS
Source: Hellenic Shipping News
Iron ore shipments to China struck another record high in April, helping to lift overall Australian exports to a historic peak of $36 billion.
The Australian Bureau of Statistics said preliminary figures show the nation’s trade surplus was $10.1 billion, the third highest goods surplus on record. Despite ongoing frictions with China, exports to the Asian giant rose by a further four per cent. Metalliferous ores to China reached $10.9 billion, driven by a further rise in iron ore shipments to $10.6 billion – both record highs for the second month in a row. FULL STORY
IRON ORE PRICES DROP AFTER CHINA WARNS OF 'EXCESSIVE SPECULATION'
Source: Financial Times
The price of steelmaking ingredient iron ore fell sharply after China signalled it would focus on efforts to cool soaring prices, warning of “excessive speculation” as concerns grow over rising inflation.
The National Development and Reform Commission, China’s economic planning agency, said on May 24th that it would crack down on monopolies in commodities markets, the spread of false information and hoarding. That message rippled through markets on May 24th, with the main futures contract for iron ore dropping 7 per cent on China’s Dalian exchange to Rmb1,049 ($163) a tonne. It has fallen almost 20 per cent since hitting a record high earlier this month. The aluminium futures contract for July delivery dropped 3 per cent on the Shanghai exchange. FULL STORY
AUSTRALIAN IRON ORE COULD BE THE NEXT ITEM TO FEEL THE PINCH OF SOUR RELATIONS
Source: Global Times
Chinese industry participants are diversifying their sources of bulk commodities in an attempt to cut reliance on Australian imports, in the wake of rising trade tensions ignited by the Morrison administration's hostile policy toward China.
Industry experts said that Australian iron ore could be the next item to get embroiled in the diplomatic spat. Australian coal exports to China have fallen sharply since last year. On May 24th, the average price of 20-millimeter third-grade rebar on the market reached 5,168 yuan ($803.93) per ton, down 87 yuan per ton from April 30, according to MySteel monitoring, amid the tightened regulations on bulk commodities and other factors. FULL STORY
AUSTRALIA EXPECTS IRON ORE PRICES TO STAY ABOVE $100 PER TONNE UNTIL MID-2021
Australia expects iron ore prices to stay above $100 per tonne until mid- 2021 before decreasing to $75 per tonne by the end of 2022.
Its outlook for the next six months is supported by strong demand from China even as that from many other countries remains below 2019 levels, the country’s Department of Industry, Science, Energy & Resources said in its resources and energy quarterly report released on Monday December 21. A buyer source in southern China told Fastmarkets that the strong performance of the Chinese steel sector was supporting iron ore prices. FULL STORY
COMMODITIES BOOM SENDS BULK SHIPPING COSTS TO DECADE HIGHS
Source: Financial Times
Rates for ships carrying commodities that fuel global industries and keep the world fed have soared, raising hopes of a turnaround in fortunes for the embattled dry bulk shipping sector.
Roaring Chinese demand for iron ore, a key steel ingredient, a return to strength for manufacturing in the rest of the world and under-investment in new vessels in recent years have powered a sharp increase in prices for dry bulk carriers, which transport unpackaged raw materials in large holds. FULL STORY
IRON ORE PRICES EXPECTED TO REMAIN STRONG AMID TIGHT SUPPLY
Source: Mining Review Africa
Iron ore was a clear commodity outperformer in 2020, owing to the substantial increase in demand driven by China’s infrastructure stimulus and given the supply constraints. Amid initial fears that the price rally would lose traction in 2021, ratings agency Fitch Ratings expects the annual average iron ore price rally to remain strong.
This is driven by the continued tight market supply, which is expected to continue for some time with new projects only compensating for depleting mines; demand in China is expected to reduce from 2022 with pandemic related stimulus tapering off and the long-term plan to transition to a consumer-led economy, while other parts of the world are expected to compensate with broadly flat global demand post 2021. FULL STORY
CHINA STEEL BODY SEES PRICES STABILISING, HELPED BY CRACKDOWN ON SPECULATION
Chinese steel prices are expected to stabilise as demand softens in the near term and a round of government inspections aims to stop speculation and irregularities, the China Iron and Steel Association (CISA) said on May 24.
Prices in the world's top steel producing country surged in April and have fluctuated this month, driven by robust domestic demand, rising raw material costs and a global easing of liquidity, according to the CISA. China's steel price index jumped 9.25% to 148.88 by the end of April compared with a month earlier, data compiled by the steel body showed. FULL STORY
CHINA TO STRENGTHEN COMMODITY PRICE CONTROLS IN FIVE-YEAR PLAN
China will strengthen price controls on iron ore, copper, corn and other major commodities in its 14th five-year plan for 2021 to 2025 to address abnormal fluctuations in prices, the state planner said on May 25.
The country will also step up monitoring and analysis of commodity prices such as crude oil, natural gas and soybean, the National Development and Reform Commission (NDRC) said in a statement. The NDRC also said authorities would “reasonably adjust cotton target price levels” and stick to the country’s minimum purchase price policy framework for rice and wheat, it said. The government buys these grains from farmers at a minimum price when the market drops below that level. FULL STORY
COAL HITS A THREE YEAR HIGH DESPITE CHINA TRYING TO CONTROL PRICES
Commodity prices buffeted by the Chinese Government’s crackdown on speculative trading are reversing losses made earlier this week with coal leading the way up.
Thermal coal used to produce electricity rose above $100 a ton on Monday and was last trading at $106/t, the highest in three years. Strong demand for power in China coupled with a slowdown in local coal production has combined with a ban on Australian coal imports to create perfect conditions for the price to continue rising. FULL STORY
CHINA'S COAL OUTPUT RISES IN FIRST FOUR MONTHS
Source: Hellenic Shipping News
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed on May 24th.
The Jan.-April volume increased by 12.5 percent from the level in the same period of 2019, putting the annual average growth of the past two years at 6.1 percent, according to the National Bureau of Statistics (NBS). FULL STORY
CHINA'S AUSTRALIAN COAL BAN DISTORTS PRICES
Source: Argus Media
China's ban on Australian coal imports is distorting thermal coal trade flows and creating unprecedented price imbalances in the market as the high demand summer season approaches.
The situation has resulted in prices of low-calorific value (CV) Indonesian coal rising above higher-CV Australian material, an unprecedented situation that will likely cause problems for Chinese buyers during the summer months when air-conditioning rises sharply and pushes up power demand. The situation is also fuelling concerns among Chinese consumers of a potential looming supply crunch, after tight coal supplies last winter resulted in electricity rationing. FULL STORY
CHINA SAYS IT WILL STABILISE COMMODITY MARKET, ASKS COAL PRODUCERS TO HIKE OUTPUT
China will strengthen its management of commodity supply and demand to curb "unreasonable" increases in prices and prevent them being passed on to consumers, the country's cabinet said on Wednesday, as it urged coal producers to boost output.
Prices for commodities such as coal, steel, iron ore and copper - of which China is the world's biggest user - have surged this year, fuelled by post-lockdown recoveries in demand and easing liquidity globally. But they extended recent losses after the cabinet's latest comments. China will step up adjustments on the trade and stockpiling of commodities and reinforce inspections on both the spot and futures markets. FULL STORY
THE COAL WAR: WHY HAS CHINA TURNED ITS BACK ON AUSTRALIAN COAL?
Source: Mining Technology
China’s ban on imports of Australian coal has triggered a crisis, leaving a $14bn a year industry hanging by a thread.
In June 2020, Malta-built bulk carrier vessel the Topas left the Queensland port of Hay Point, bound for China with a cargo of 90,000 tons of coal. The journey was not expected to be particularly difficult, as such coal shipments between Australia and China have formed a cornerstone of both countries’ economies and industries. Moreover, they have created an industry worth $14bn a year, as China has historically looked to its neighbour to satisfy its massive appetite for coal.
However, the Topas only unloaded its cargo in March this year, after a wait of 269 days in limbo floating off the Chinese coast, as growing political tensions between the two massive coal traders all but put a stop to Chinese imports of Australian coal. FULL STORY
CHINA'S RECORD SOYBEAN DEMAND FORECAST TO SUPPORT PRICES TILL 2022: SOURCES
Source: S&P Global
China's robust demand forecast for soybeans is likely to boost international soybean prices, at least until 2022, market sources told S&P Global Platts May 13.
The country's soybean imports forecast for 2020-21 marketing year (October-September) has been revised up 2 million mt on April estimate to an all-time high 100.4 million mt, the Chinese Supply and Demand Estimates report said May 12. While 2021-22 demand is projected at an unprecedented 102 million mt, the report said.Since China accounts for over 60% of global soybean trade, any rise in the country's oilseed import is likely to support international beans prices, which have already surpassed 2020 levels by a big margin. FULL STORY
CHINA'S APRIL SOYBEAN IMPORTS JUMP 11% ON YEAR AS DELAYED CARGOES ARRIVE
Traders and analysts pointed out that China’s April imports were still affected by delay in Brazil. shipments will be even higher in coming months. Crush margins are improved, but still pressured by high soy prices.
China’s soybean imports in April rose 11% from the same month a year earlier, boosted by the arrival of some delayed Brazilian cargoes, customs data showed on Friday. China, the world’s top importer of soybeans, brought in 7.45 million tonnes of the oilseed in April, up from 6.714 million tonnes a year earlier, according to General Administration of Customs data. FULL STORY
CHINA IMPORTS 73% OF RECORD BRAZILIAN SOYBEAN EXPORTS IN APRIL
Some 73% of the all-time record 17.4 million mt of soybeans exported from Brazil in April were bound for China, with the states of Mato Grosso and São Paulo as the main origins, official customs data showed on May 6.
Cargos heading to China totalled 12.6 million mt, the highest volume on record and 2 million mt higher than last year. Other major destinations were the EU, whose Brazilian bean imports amounted to 1.6 million mt in April, as well as Mexico and Turkey, with just over 400,000 mt each. FULL STORY
CHINA MAKES 5th LARGEST PURCHASE OF U.S. CORN, BRAZIL SOY EXPORTS HIT MONTHLY RECORD
Bloomberg writers Breanna T Bradham, Michael Hirtzer, and Dominic Carey reported on Friday that, “China made one of its biggest purchases of corn in U.S. history, a sign that its buying spree of grain off of world markets isn’t over.
The Asian country bought 1.36 million metric tons for the marketing year that begins Sept. 1, according to the U.S. Department of Agriculture. That comes on top of more than 20 million tons it already bought in the current season as it looks to rebuild a growing hog herd that was previously decimated by African swine flu. FULL STORY
WHY CHINA WILL BE THE WORLD'S LARGEST OIL REFINER IN 2021
Economic growth returned to China in late 2020, and with it came capacity expansion for oil refineries. Four Chinese refinery projects in development could make up more than the entire capacity of the UK.
In the global refining industry, COVID-19 has exposed a seismic shift. While China’s oil refineries forge ahead with capacity expansion, many western-based refiners have retrenched. As China again hits the stimulus pedal, this year it is expected to officially surpass the U.S. as the world’s largest oil refiner according to the International Energy Agency (EIA). This can be partly explained by China’s head start in recovering from the pandemic. While much of the world remains under varying states of lockdown, China’s economic growth hit 6.5% in the fourth quarter of 2020, meaning that it grew 2.3% for the full-year. It is the only major economy to have expanded in 2020. FULL STORY
CHINA DEPLOYS OFFSHORE OIL PRODUCTION RIG IN SOUTH CHINA SEA
Source: South China Morning Post
Lufeng 14-4 central platform set to go into operation by end of the year, CNOOC says. It will enhance China’s large-scale offshore oil and gas equipment construction and installation capabilities, company says.
The float-over installation of China’s largest independently designed offshore crude oil production platform has been completed, China National Offshore Oil Corporation (CNOOC) said on May 20th. The Lufeng 14-4 central platform, which is located in the South China Sea about 200km (124 miles) southeast of Hong Kong, is set to go into operation at the end of the year. FULL STORY
GLOBAL CRUDE OIL BULLS ARE RUNNING PAST CHINA, INDIA BEARS
Asia may be a late arrival to the impending crude oil party. The oil market is largely convinced that a strong recovery in demand is imminent, based on the view that the world is recovering from the coronavirus pandemic and economies are rebounding.
Although this may be true for North America and Europe, the top oil-consuming region of Asia is looking somewhat less optimistic, with crude demand in top importers China and India presenting a mixed outlook. FULL STORY
Whilst every effort has been made to ensure the accuracy of the information contained herein, Inchcape Shipping Services accepts no liability nor makes any representations or warranties of any kind, express or implied, as to its completeness, accuracy, reliability or suitability.