Oman's crude oil exports to China have continued to soar amid the economic giant’s rising demand for energy and its increasing reliance on Middle Eastern oil supplies.
The sultanate's oil exports to China jumped 17.7 percent to 100.9mn barrels in the first half of 2014 from a year ago. China accounted for 70 per cent of Oman's oil exports and 60 per cent of its total production during the period, latest statistics of the National Center for Statistics and Information (NCSI) showed.
Oman's total oil exports however decreased by 5.2 percent to 143.9mn barrels in the first six months of 2014, against 151.7mn barrels a year ago, while production increased by one percent to 170.8mn barrels.
China imported 77.6mn barrels of Oman’s oil in 2009, and this surged to 180.8mn barrels by 2013.
Global commodity bulls might want to think of setting up a temple to Indian officials.
On Monday, India's top court declared illegal the 200-odd licenses for coal mines that the government had awarded between 1993 and 2010, arguing these were handed out arbitrarily. It's possible some of the domestic power and metals firms who own these mines will eventually get them back. Still, investors don't feel too great about the uncertainty, especially while the notoriously byzantine Indian judiciary decides what to do about the illegal mines.
This local uncertainty presents an opportunity for international coal investors, who currently struggle with too much supply. If the mines in question remain shut, power plants would suddenly need imported coal to make up 38 million metric tons of projected coal production, according to government figures. That's equivalent to 88% of the excess capacity in seaborne thermal coal this year, according to estimates by Wood Mackenzie. Steel mills would need an extra 14 million tons of coking coal, which should cover the oversupply in that market.
It's possible the decision will only target the mines belonging to private firms, not those associated with local governments. In that scenario, India would still gobble up a third of the excess capacity in seaborne coal and all of the extra coking coal supply. This could put a floor on some coal prices, and boost companies such as Singapore-listed Noble Group, N21.SG -0.73% which exports coal from Indonesia.
The court's move on coal mirrors a similar situation with Indian iron ore. Starting in 2011, Indian courts began banning iron ore exports. India's contribution to seaborne trade in iron ore has plummeted to 2% from 10%.
India can only assist coal and iron ore for so long. The overcapacity in both commodities could worsen next year. Plus, Indian Prime Minister Narendra Modi might use this week's court ruling to implement promises to improve how minerals are extracted and allocated.
Yet supporters of these downbeat commodities should count the few blessings they get. While China slows down demand and international miners struggle to curtail supply, India is one country that's answering their prayers.
According to data released by China Customs, the country’s imports of high carbon ferrochrome totaled 137,531 tons in July, increasing by 24.6% year on year.
In July, the imports from South Africa totaled 91,536 tons, jumping by 77.6%; those from Kazakhstan were at 23,924 tons, falling by 32.9% and those from India were at 12,218 tons, slumping by 40.8%, all compared to the figures in the same month of a year ago.
India to hike iron ore royalty, miners may struggle to pass on extra cost
New Delhi: The cabinet has agreed to raise the royalty rates for iron ore and other minerals, a mining ministry official said, raising the cost for domestic miners, and potentially making imported ore more attractive. There is a danger for miners that they will be unable to pass on the cost fully to steel mills due to weaker global prices, and the competition from imports, traders said.
The royalty on iron ore, or the percentage of sales paid to state governments, would increase to 15 per cent from 10 per cent, a spokesman for the mining ministry said. That would lift the cost for miners by 150 to 250 rupees per tonne ($2.50-$4.00), said Dhruv Goel, managing partner at industry consultancy SteelMint.
"But they will not be able it pass it on completely to steelmakers for the reason that imports will be cheaper and people will prefer imports over domestic ore," said Goel.
The last time the royalties were adjusted was in 2009. A 30 per cent tax on iron ore exports and higher freight charges have made Indian ore less competitive overseas. Courts' imposition of curbs on mining in key producing states Karnataka and Goa have also slashed supplies from India, which used to be the world's third biggest exporter of iron ore. The mining bans have forced some Indian steel producers to import ore. JSW Steel, India's third-largest steelmaker, said last month it will import 6 million tonnes of iron ore this fiscal year compared with no shipments a year earlier.
Global iron ore prices have fallen by nearly a third this year, standing at $91.90 a tonne on Thursday, amid a glut stoked by increased shipments from top suppliers Australia and Brazil.
BHP Billiton and Rio Tinto are in a fight to the death with Chinese iron ore producers, the latest manifestation of which is BHP chief executive Andrew Mackenzie's weekend declaration that he will dramatically expand Pilbara production.
As reported by The Australian this morning, Mackenzie has told the market not to expect prices to go back above $US100 a tonne, and at the same time has revealed a plan to increase production to 290 million tonnes per year, at a cost of about $US3.5 billion.
Mackenzie knows the price won't go back above $US100 because he is largely responsible for it being $US92. Global overcapacity of steel is estimated to be 334 million tonnes, according to Morgan Stanley, and it is increasingly likely that steel output and iron ore demand will fall. Yet BHP is increasing production. Why? To drive the price down and send Chinese producers to the wall.
The iron ore spot price has fallen 35 per cent this year not because of a collapse in Chinese demand, but because of increased output by the big three -- BHP, Rio and Vale.
Growth in Chinese demand for iron ore is slowing -- from 9 per cent last year to 5 per cent this year -- and the profitability of China's steel mills has collapsed. China's iron ore miners are also underwater. Research house GaveKal Dragonomics estimates the average cost of production of the Chinese miners at $US125 per tonne. The spot import price is currently at $US91.90.
In the past when the import price fell below the cost of production, Chinese miners -- supplying about a third of China's iron ore market -- temporarily shut down production to allow the price to rise again. But not this time: the Chinese miners and the big three western producers are responding to the price decline and falling demand growth by ramping up production, not cutting back. They are in a war of attrition.
Says Michael Komesaroff of GaveKal: "The basic reason seems to be that this time, Chinese mine-owners know that if they shut down, it will not be just for a few months but forever. With their backs to the wall, Chinese miners are looking for any way possible to keep operating for just a while longer."
They are pleading for support from local governments, and getting it, as a regional employment policy. But with many local governments as broke as the miners, that can't go on forever. And most of the mines are privately owned, very expensive underground operations and they don't have the access to capital needed to modernise their operations, turn them into open cuts or to last long operating at a loss.
BHP, Rio and Vale are in a very strong position, and they know it. They are all very efficient low-cost iron ore miners and, unlike the Chinese, they are making money at current prices.
Now Andrew Mackenzie is turning the screws with a big increase in production. Along with Sam Walsh at Rio and Murilo Ferreira at Vale, he believes that by flooding the market with iron ore, they can drive the Chinese producers out of business, along with a range of nuisance producers in Australia and elsewhere.
But with government support, the Chinese miners could keep going for a few years yet, which is why Andrew Mackenzie is counselling the market not to expect a rapid recovery in the iron ore price.
But if, or perhaps when, they eventually close, the price will go well above $US100 a tonne and stay there.
TATA Sponge has started importing iron ore for the first time, in the face of a severe shortage of the raw material, even as the lingering crisis of iron ore shortage is also being felt at its parent company TATA Steel.
Mr DP Deshpande MD of TATA Sponge said that "We have made our first import of ore and the shipment is lying at Paradip port and it would start moving to our plant at Joda soon. It's an irony as our plant is situated at the heart of the iron ore industry and just few kilometers away from good quality of iron ore, yet we are importing."
The ore for TATA Sponge comes from TATA Steel's captive mines in Odisha, but with the parent company itself forced to close these over regulatory and legal issues, and the steel maker itself being forced to either import or even source iron ore from other domestic suppliers like NMDC, there is no alternative for the company.
TATA Sponge, which has its manufacturing facility at Joda of Keonjhar district in Odisha, manages to survive just because it has an assured buyer in TATA Steel, which consumes its entire sponge iron production.
The marketing year doesn’t end until Aug. 31, but China has already accomplished a feat never before seen in agricultural imports, according to the U.S. Grains Council. That’s because according to Chinese customs and the USDA, the country has imported more than 3 million metric tons each of U.S. corn, sorghum and distiller’s dried grains with solubles (DDGS).
China began the marketing year with a rapid pace of corn purchases, but announced Nov. 13, 2013, a zero tolerance for Syngenta’s MIR 162 trait, which ground Chinese imports from the U.S. to a halt. This slowdown in corn imports nonetheless created a surge in sorghum imports. China may take more than 30% of the U.S. sorghum production for the marketing year.
Market complexities aside, U.S. Grains Council says one thing remains constant – end users love the quality and value of imported feed products. Huge import margins remain for corn, sorghum and DDGS due to high domestic price support policies. Despite several years of production increases and a record crop last year, corn prices in China continue to rise.
Also, demand for high-quality corn continues to outpace available supply. According to the most recent USGC data, theoretical import margins into southern Chinese ports are almost $180 per ton.
“Factoring in China importing 7.5 million tons of U.S. soybeans last month, if this were baseball, you could say China has ‘hit for the cycle,’ getting a single, a double, a triple and a home run in the same baseball game,” says Kevin Roepke, USGC director of trade development in China. “The demand is clearly there. This is quite a historic moment, especially when you consider all of the challenges.”
Positive article on DRYS just out a few minutes ago on Valuewalk. Unable to post it, just google the title.
Iran’s crude oil exports to its largest client China grew 40.6 percent in July year-on-year, Chinese customs data show.
According to the figures released on Thursday, China imported 558,865 barrels per day (bpd) of crude oil from Iran last month. The July crude oil imports from Iran were up five percent month-on-month.
China’s top refiner Sinopec Corp is a main buyer of Iran’s crude oil.
Iran has seen a rise in its oil exports following the implementation of an interim nuclear deal between Iran and the five permanent members of the UN Security Council – the United States, France, Britain, Russia and China – plus Germany over Tehran’s nuclear energy program as of January.
The Geneva deal sealed between Iran and the six countries last November provided Iran with some sanctions relief in exchange for the country agreeing to limit certain aspects of its nuclear energy program.
At the beginning of 2012, the United States and the European Union imposed sanctions on Iran’s oil and financial sectors with the goal of preventing other countries from purchasing Iranian oil or extending insurance coverage for tankers carrying Iranian crude.
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), holds the world’s third-largest proven oil reserves.
Singapore (Platts)--22Aug2014/556 am EDT/956 GMT
China imported 55.37 million mt of iron ore from Australia in July, up 33.5% year on year and 10% from June, data released Friday by the General Administration of Customs showed.
A trader source in Zhejiang said Australian miners like Fortescue Metals Group were selling more iron ore into China as they had ramped up their output and were giving deeper discounts to China buyers in July.
Australia's Fortescue Metals Group reached a 155 million mt/year production capacity target in end March this year, Platts reported earlier.
"When FMG offered a 15% discount for their flagship 56.7% Fe Super Special Fines product for July, many Chinese buyers [took it up]," said the Zhejiang trader.
"Chinese end-users also preferred to use more Australian ores in their furnaces as they were already used to it and and that explained why there was an increase inflow of ore to China from Australia," he added.
Australia was the largest supplier of iron ore to China, accounting for 60% of total imports in June.
China's imported a total of 82.52 million mt of iron ore in July, up 10.7% from 74.57 million mt in June.
Imports from Brazil, China's second largest iron ore supplier, totaled 14.12 million mt in July, up 7.46% year-on-year and 14.15% month-on-month, the data showed.
all you can eat at $3.21 - $3.22 a share. Get 'em while they're hot. When they run out, they're gone forever.
It looks like they are not going to let the price rise today, so its a good time to get some shares on the cheap just before Golden September and Silver October.
Urbanisation drive on mainland expected to push up the fuel’s imports at Qinhuangdao port, which is seen as a barometer of economic health
Qinhuangdao, home to the mainland’s largest coal port that has been called an indicator of Asia’s biggest economy, is set for record commodity deliveries over the next three years as urbanisation boosts demand for the fuel.
Shipments of mainly coal and ores via the port may rise by 20 million to 30 million tonnes by 2017, said Xing Luzhen, the chairman of Qinhuangdao Port. Supplies hit a record high of 279 million tonnes in 2011.
Power demand on the mainland, the world’s largest energy consumer, is accelerating as a growing rural population uses more household appliances and as urban residents buy more electric cars, according to Xing. The country depends on coal for 66 per cent of its energy, data from the National Energy Administration show.
“Qinhuangdao port’s coal business will keep rising together with China’s coal consumption, a trend that may last for at least the next 20 years,” Xing said.
The port, the delivery point for about 40 per cent of the mainland’s seaborne coal, is a barometer of the economy, former premier Wen Jiabao said in 2008. Gross domestic product rose 7.5 per cent in the April-June period from a year earlier, the first acceleration in three quarters.
Qinhuangdao Port, listed in Hong Kong, also operates two facilities in the Bohai Rim in the mainland’s northern area and had a record throughput of 365 million tonnes in 2013. Its new terminal in Caofeidian, with an annual capacity of 50 million tonnes, may begin trial operations this year, Xing said.
The company offers integrated services in container cargo, crude and oil products as well as liquid chemicals. It began as an independent dry-bulk facility that relied on coal for 90 per cent of its business until 2002. The fuel’s share of total volumes handled declined to about 70 per cent last year, mainly displaced by container cargoes and metal ores, according to Xing.
Qinhuangdao Port will benefit from having stable contracts of as long as 10 years that cover about 70 per cent of throughput, according to Xing.
The company, which made one of the six largest Hong Kong initial public offerings last year, will report first-half earnings on August 22.
“Every year we’re looking at buying overseas ore and coal ports,” Xing said, adding they studied facilities in Europe and Canada.
China Import: Iron Ore Imports Rising Sharply, To be Steady in August
Aug. 12, 2014
Iron Ore imports is rising sharply and is espected to be steady in August.
In July 2014, imports of iron ore and concentrates of China was 82.52 million tons, an increase of 12.82 percent on a YoY basis and an increase of 10.67% compared with that of last month; average unit price of imported iron ore and concentrates was U.S. $92.28/ ton, a decrease of 22.10% on a YoY basis and a decreaseof 9.96% compared with that of last month. In July 2014, influenced by the improved operation of steel mills, the profitability of the domestic crude steel production goes high. As a result, high operating rates makes great contribution to higher iron ore imports.