red   China Steel Exports Surging to Record as Demand at Home Wanes
    China's exports of steel products during the first seven months of the year have surged to a record as domestic consumption falls amid increasing demand from the U.S. and Europe. The world's biggest producer exported a record 49.1 million metric tons of steel products from January through July, an increase of 37% from the same period last year, according to Bloomberg calculations based on data released by China's General Administration of Customs. Exports in July were 8.06 million tons, a 14% increase from the previous month and near the record in May.
China's domestic steel demand in July fell 2.9% from the same month last year and net exports as a share of domestic production was 9.5%, the highest since 2008, Ivan Szpakowski, analyst at Citigroup, wrote in a note. Finished steel demand will grow 2.3% in the U.S. and 1.4% in the European Union this year, the bank said in a July 13 report.
“This year has been a great year for steel demand in the developed world,” Graeme Train, a Shanghai-based analyst at Macquarie Group Ltd., said by telephone. “We've seen big increases year-on-year in most regions so conditions have just aligned to allow the Chinese to export a lot of material. It has the capacity, and with raw material prices coming off China has been the biggest beneficiary.”
Iron ore, the chief raw material along with coking coal for making steel, for immediate delivery into China's Tianjin Port was $96 a dry ton, according to the Steel Index Ltd.
Prices hit $89 on June 16, the lowest level since September 2012.
red   Latin America Second Only to South Korea as Importer of Chinese Finished Steel
    China exported 4Mt of finished steel to Latin America during the first half of 2014, according to Alacero, the Latin American Steel Assocation. Latin America was the second biggest customer of Chinese finished steel manufacturers next to South Korea. The 2014 figure of 4Mt was 65% higher than in 2013 when the figure was just 2.4Mt. World Chinese finished steel exports reached 36.9Mt during the period, which was 39% higher year-on-year than in 2013. Latin America accounts for 5% of global finished steel consumption and 11% of Chinese finished steel exports (9% in 2013).
While South Korea is the main destination for Chinese finished steel products, the gap between it and Latin America is decreasing. During the first half of 2013, South Korea accounted for 18% of Chinese finished steel exports. In 2014 the figure dipped to 17%. In June Latin America imported 687kt of Chinese finished steel, 25% less than in May (855kt) but 4% more than June 2013 (569kt).
Brazil received the lion's share of Chinese finished steel between January and June 2014 (1.1Mt) followed by Chile (615kt) and Central America (506kt). Paraguay increased its Chinese finished steel imports by 242% followed by Mexico (+155%), Columbia (+121%), Argentina (+120%) and Brazil (+84%).
According to Alacero, "It is worth noticing that even when Central America represents 5% of the Latin American total consumption, these countries received 13% of Chinese finished is possible that Central America is being used for trade triangulation to other countries of the region. Thus, China's presence could be higher than that registered." During the first half of 2014, Latin America imported 2.7Mt of Chinese flat steel, which accounted for 67% of all Chinese finished steel imported. It imported 978kt of alloyed steel sheets and coils (37%), 558kt of cold-rolled coil (21%) and 552kt of hot galvanized steel (21%). Where Chinese long products were concerned, Latin America imported 1Mt of wire rod (597kt) and bars (375kt).
red   China Issues Iron Ore Import Licenses for 102.24 Mt in July 
    The China Iron and Steel Association announced recently that in July this year China's Ministry of Commerce issued iron ore import licenses for a total of 102.2441 million tonne, down 2.60% MoM valued at USD 9.029 billion. In the first 7 months of the year, iron ore import licenses were issued for a total of 729.8798 million tonne, valued at USD 79.828 billion. In July this year, the iron ore import licenses issued by China for Australian and Brazilian iron ore amounted to 60.9880 million tonne and 22.5656 million tonne respectively, down 4.02% and up 33.14% MoM. In the January to July period, the iron ore import licenses issued by China for Australian and Brazilian iron ore totaled 276.2010 million tonne and 135.4226 million tonnes respectively. Licenses issued for imports of South African iron ore in the given month amounted to 3.4017 million metric tonne, down 42.51%, valued at USD 322 million, while licenses issued for iron ore from other countries amounted to 4.5960 million metric, valued at USD 374 million. In the January to July period, the import licenses issued by China for iron ore from South Africa and other countries amounted to 34.2803 million tonne and 61.2633 million tonne respectively.
red   Process Improvements at Baosteel Desheng
    Baosteel Desheng Stainless Steel has contracted Hatch Ltd to conduct a process improvement study at its FeNi plant in Fuijan Province, China. The study will examine opportunities to reduce the flux in its operations. The FeNi plant has four rotary kiln – electric furnace (RKEF) lines with an annual nickel capacity of about 20kt. Several issues with flux addition, reductant coal, rotary kiln operation, and furnace operation were identified by the Hatch team and Baosteel Desheng implemented the improvements on a step-by-step basis. The recommendations were supported by a performance guarantee from Hatch. Investigations began in January 2014 and the final report was issued by Hatch in March. Following the implementation of the report's recommendations, Baosteel Desheng reported in May that the flux addition has been eliminated, which means an annual operating cost savings of about RMB50 million (US $8 million) for the plant if four RKEF lines stay in operation. A kiln operation study is now being considered by the steelmaker, which was also strongly recommended by Hatch's flux study report.
red   China's Steel Industry Burdened by Overcapacity at Shutting Plants
    SCMP reported that the mainland's chronically oversupplied steel sector will take years to restore balance in the demand supply equation and this will come about from bankruptcies of privately owned firms, amid weak demand and prices, tighter pollution controls and stringent credit conditions. Sharp falls in the prices of raw materials such as iron ore and coking coal helped boost the steel sector's profits in the first half of the year but analysts said, until local governments showed they were serious about curtailing overcapacity, the industry would only be marginally profitable at best.
Ms Vanessa Lau analyst of Sanford Bernstein said, "China is still many years away from addressing overcapacity the government is closing excess capacity in order to tackle environmental problems, rather than trying to help the economics of the steel sector."
After visiting steel mills and local government officials in Tangshan, Ms Lau said, industry figures suggested only 500,000 tonnes of capacity in small plants had been mothballed, a drop in the bucket compared with the city's shutdown target of 40 million tonnes by 2017 accounting for 30% of its capacity.
Tangshan accounts for half of Hebei province's steel output, which in turn counts for about a quarter of the national total. Better profitability has encouraged large plants to lift output with their blast furnace utilisation rate rising to 97% from 86% in March. Medium sized and large steel mills tracked by the China Iron and Steel Association posted a combined net profit of CNY 7.48 billion up 133% YoY. Still, the net profit margin was a meagre 0.41%. Excluding noncore operations, they racked up a loss of CNY 660 million in steel related operations.
The association said, the difficult conditions would persist due to weak demand, excess capacity, tight credit supply and rising environmental protection costs. H1 domestic steel consumption grew only 0.4% mainly due to a fall in property construction investment growth to 14.1% from 20.3% in the same period last year. The H2 demand outlook was not good, weighed down by a 16.4% fall in new home construction starts adding increasing trade disputes could crimp exports. Construction accounts for just over half of steel demand. The industry is estimated by the Ministry of Industry and Information Industry to have 200 million tonnes of excess capacity, or a fifth of the total. Mr. Paul Bartholomew, the managing editor of industry publication Platts, expected this year's new blast furnace capacity addition to fall to between six million and 10 million tonnes from 24 million tonnes last year. The capacity-cut target set by Beijing for last year was 10 million tonnes. Margins have improved, but they are still very meagre, so the incentives for new capacity are definitely waning.
This section is a compilation from various company press releases, business dailies &
trade publications.