red   China Steel Mills have No Cash to Meet Smog Standards : Industry Body
    Credit controls imposed on China's debt-ridden steel sector have left many producers unable to afford upgrades needed to survive the country's war on pollution, and 80 million tonnes of capacity could shut in two years, an industry official said as reported by Reuters.
Zhao Xizi, chairman of the All-China Chamber of Commerce for Small and Medium-Sized Metallurgical Enterprises, said “in some regions, around 70 percent of firms could not pay for the renovations needed to meet tough new environmental standards, and with loans to the steel sector cut by around 10 percent since the beginning of the year, banks have been unable to help”. Poor economic conditions and chronic overcapacity brought Chinese steel prices to their lowest point in 20 years in the first quarter of this year, and a nationwide campaign to tackle pollution has also raised costs and helped put hundreds of plants on the brink of bankruptcy.
Zhao, speaking recently at a conference in Tangshan, China's biggest steel producing city, said as much as 80 million tonnes could be forced to shut in the next two years alone, meaning that China will meet its closure targets with relative ease.
“You can draw this conclusion: if all these policies are brought in and all local governments implement them, there will be a large number of enterprises forced to close this year and next year, involving 80 million tonnes of capacity," he said. He said from the second half of this year, around 200 private steel firms with capacities of less than 1 million tonnes a year would face power and water prices designed to drive smaller players out of the market, putting 60 million tonnes of capacity at risk of closure. An additional 70 million tonnes of low-quality steel production is also expected to be shut and replaced, he said. While China plans to cut its steel capacity by a total of 27 million tonnes this year, it still saw a net capacity increase of 4.68 million tonnes over the first quarter, Zhao said. China's total steel production capacity is estimated at around 1 billion tonnes, much higher than last year's total output of 779 million tonnes.
red   China Iron Ore Futures Post Biggest Daily Gain
    Chinese iron ore futures jumped after a four day slide as steel mills in the world's top consumer of the two commodities picked up buying, while a fragile outlook for increasing supplies is expected to cap gains as reported by Reuters.
A fall in iron ore prices to a seven-week low on Monday has encouraged steel mills to step up purchases, but mills are cutting buying prices in the face of emerging oversupply and high stockpiles at ports. "Steel mills are buying a bit more than last week, but prices for some transactions of port inventories have already dropped to below $100 a tonne as the stockpiles are too high," said an iron ore trader in coastal Shandong province.
On the Dalian Commodity Exchange, benchmark iron ore futures for September delivery rose 1.6% to CNY 746 per tonne by the midday break. The contract is down 17% so far this year. According to data compiled by Steel Index, iron ore for immediate delivery to China edged up 0.3% to USD 103 per tonne after touching USD 102.70 recently, the lowest since September 14th 2012.
Traders said that Rio Tinto sold a cargo of 170,000 tonnes of 61% grade Australian Pilbara iron ore fines at AUD 102.20 per tonne. A 100,000 tonne cargo of 62% grade Australian fines was sold at AUD 103.50 per tonne on Monday, compared with a smiliar deal struck at AUD 105.80 per tonne a week ago.
An iron ore trader in coastal Shandong province said that "Steel mills are buying a bit more than last week, but prices for some transactions of port inventories have already dropped to below USD 100 per tonne as the stockpiles are too high."
An iron ore trader in Beijing said that "The market sentiment remains bearish as all the focus is on more and more supplies from overseas and we don't see any favourable factors coming soon.”
red   Tangshan Steel Exports Up 36% in April
    Tangshan Steel exported 312,600 tonnes of steel products in April up 35.5% from the same month last year. The steelmaker gained share in the international markets by accelerating upgrading and internationalization of its products and strengthening efforts to expand customer base.
Meanwhile, it worked actively to adjust product mix. As a result, its high value added products successfully made foray into overseas market, including super thin hot rolled coil, high end welding wire, hard wire, automotive steel, structural galvanized steel, etc.
red   Zhejiang Pledges to Slash Steel Capacity by 3 Mt
    According to a recently released plan on resolving overcapacity in the province's steel sector, Zhejiang province, in eastern China, pledges to slash steel capacity by more than 3 million tonnes within five years and capacity utilization rate is expected to rise to above 80%.
According to the plan, the number of steelmaking enterprises in Zhejiang will also be reduced by more than half. Specific measures shall be focused on the following six aspects: strictly controlling new steel capacity projects and cleaning up illegal projects in steel industry that are underway or have been built; actively promoting industrial layout adjustments in the sector and enhancing innovation capability of steel enterprises and supporting steel enterprises to carry out structural adjustments including mergers & acquisitions, technological innovation and backward capacity elimination, etc.
Zhejiang will promote the relocation of Hangzhou Steel away from the city and structural adjustments in steel industry in Wenzhou and Lishui, speed up the construction of steel industrial bases in Wenzhou, Huzhou, JIaxing, Lishui and Quzhou, etc. and enhance the initial establishment of long term mechanism to resolve excess capacity in steel industry.
red   Steel Industry PMI Jumps above 50% Threshold in April
    According to data released by China Steel Logistics Professional Committee of CFLP, the purchasing manager's index of Chinese steel sector rose 8.4 percentage points from a month earlier to 52.6% in April, the first reading above 50% since September last year.
Both new orders and new export orders sub indices reached above the 50% level and purchasing price index saw a big rebound from low level, showing signs of a recovery in China's steel market which remained in recession for a long period of time.
Data also showed that the steel industry production index expanded to 53.0% last month after remaining below 50% for six months in a row, up 13.3 percentage points from March and both purchasing volume and raw material inventory sub indices saw a pickup in April.
An industry analyst said that many steel mills resumed operations on improved profitability driven by a rapid rebound in steel prices in early April, which led to further rises in steel production. It's noteworthy that the purchasing price index jumped 17.3 percentage points to 46.1% in April from March but still stayed below the 50% level, a signal that the raw material market continued running at low level and thus there is lack of cost support for the steel market. The analyst also said that the fundamentals of China steel market remains weak, but market demand is expected to increase on the back of the implementation of government measures to maintain stable economic growth and speed-up of construction of a series of infrastructure and livelihood projects.
red   Handan Steel Exported 1180 Tonnes Galvanized Steel Products to UK
    Recently, Handan Steel, subsidiary of Hebei Steel, signed a contract with the United Kindom of exporting 1180 tonnes of passivation galvanized steel products, which is the first order after this kind of product was developed.
It is known that the product meet the European Standard, whose breadth is 1250 mm, thickness is 0.5 mm to 1.45mm. And the steel grade is DC01+ZE.
red   China Steel Industry in Crisis – MIIT
    China's steel industry is confronted with severe overcapacity, sluggish demand, strengthened enforcement of environmental protection and falling profits.
Feng Fei director of industrial for policy division of the Ministry of Industry and Information Technology said that "China's steel industry is having a tough time. The long-awaited recovery has yet to come and protracted weakness badly hits many steel companies and traders.”
Mr Feng said that China's crude steel production rose 2.4% YoY to more than 200 million tonnes in the Q1 but the overall situation for China's steel sector
was rigorous due to sustained price declines. The daily crude steel production in March hit record high at 2.266 million tonnes. Steel companies were having difficulties in business operations on rising output and weak prices.
Wang Xiaoqi vice chairman of China Iron and Steel Association said that China's steel industry recorded a loss of CNY 2.3 billion in the Q1 of this year.
Notably, the main business reported deficits of CNY 4.1 billion. Wang elaborated further that though it was a tough year in 2013, the sector posted a profit of CNY 22.9 billion. It achieved investment income of CNY 17.8 billion and main business income of CNY 5.1 billion.
In the first two months of this year, the steel industry's main business posted a loss of CNY 4.7 billion.
The situation failed to reverse for the Q1 despite an improvement seen in March.
red   Steel Industry Growth Rate Down by 6.7% - NDRC
    According to statistics from the National Development and Reform Commission, China produced 202.7 million tonnes of crude steel in the Q1 of this year up 2.4% from the same period of 2013. The growth rate was down 6.7 percentage points from the previous year.
Output of steel products from January to March 2014 amounted to 261.41 million tonnes, an increment of 5.3% from a year earlier, slowing 7.0% points; output of coke fell 0.4% YoY to 114.33 million tonnes, compared to a 9.1% gain in the same period last year; and output of ferroalloy reached 9.34 million tonnes up 10.6% YoY which was 4.5 percentage points lower than the growth rate recorded in the same period last year.
Meanwhile, iron ore imports in the first three months of this year totaled 222.01 million tonnes, representing YoY growth of 19.4%. Exports of steel products during January to March grew 27.0% to 18.33 MT and imports gained 11.3% to 3.59 million tonnes both on annual basis.
Steel prices maintained downtrend. Data showed that China composite steel price index averaged 95.4 points in March, down 12.6 points YoY and down 1.5 points from the prior month. The average price of 6.5 mm high speed wire rod, 20 mm medium plate and 1.0 mm cold rolled coil in March hit CNY 3,313 per tonne, CNY 3,488 per tonne and CNY 4,314 per tonne down 11.4%, 11.7% and 10.3% respectively from a year earlier and down 1.7%, 0.9% and 1.7% from the previous month. In the first two months of this year, China steel industry achieved a profit of CNY 16.64 billion down 24.8% from year ago level. To be specific, ferrous metals mining and dressing industry posted a profit of CNY 9.47 billion decreasing by 3.6% from a year ago; steel smelting and processing industry recorded a profit of CNY 5.25 billion down 46.3% YoY.
red   China's MCC to Invest $347m in Iranian Steel Project
    China's Metallurgical Group Corporation (MCC) will invest $347 million to build a steel plant with an annual production capacity of one million tons in Iran's southwestern province of Chaharmahal-Bakhtiari. The Sepid Dasht steel plant project will create about 1,000 direct jobs and 10,000 indirect jobs, the IRNA news agency reported recently. The deal was signed in Tehran by National Iranian Steel Company Managing Director Mohammad Khandadash-Pour and MCC Director for International Affairs Zuo Yuman. MCC has announced that it is ready to invest €1.8 billion in seven steel projects in Iran, according to Iranian Mines and Mining Industries Development and Renovation Organization Director Mehdi Karbasian. Iran was the biggest producer of crude steel in the Middle East in 2013, according to a press released by the World Steel Association.
red   Shagang to Hold Steel Plate Prices
    China's steelmaker Shagang has announced its price list in the domestic market for May. The company decided to remain its prices for medium heavy plates unchanged while relatively stable demand has prevented prices from falling. However, the company will hike prices for hot rolled coils by CNY 60 per tonne. After the adjustment, its prices for Q2 2035 HRC with thickness of 5.5 mm are at CNY 3,460 per tonne those for Q2 2035 steel plates with thickness of 20 mm are at CNY 3,580 per tonne. The above prices include 17% VAT
    This section is a compilation from various company press releases, business dailies &
trade publications.