Coal output in China, the world's largest coal producer, continued to decline in the first ten months of 2015, as the impact of clean air and renewable energy policies began to weigh on the industry, official data showed on Tuesday.

China's coal production fell 3.6 percent year on year to 3.05 billion tonnes in the first ten months, according to figures from the National Development and Reform Commission (NDRC).

http://en.chinamining.com.cn/News/2015-11-25/1448415010d74621.html

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China’s imports of thermal coal—including bituminous, sub-bituminous coals and lignite -- plunged 26.5% year on year and down 20.6% on month to 9.18 million tonnes in October this year, according to the latest data released by the General Administration of Customs.

Of this, imports from Australia fell 49.3% on year and down 35.7% on month to 2.45 million tonnes.

Imports from Indonesia rose 2.8% on year but decreased 16.8% on month to 5.69 million tonnes.

China’s didn’t import thermal coal from Russia during the same month.

Lignite imports in October were 3.61 million tonnes, down 9.2% from the year prior and down 22.09% from the month before.

China’s thermal coal imports over January-October amounted to 110.11 million tonnes, falling 34.2% from a year ago.

Lignite imports during the same period were 40.94 million tonnes, down 24.5% from the year prior, with imports from top supplier Indonesia at 38.7 million tonnes, down 23.3% year on year.
 
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China’s coking coal imports fell 43.4% year on year and down 22.2% from September to 3.08 million tonnes in October – the third straight monthly and the second consecutive yearly drop, showed the latest data from the General Administration of Customs (GAC).

Imports from top supplier Australia dropped 47.9% from the previous year and down 24.4% from a month ago to 1.63 million tonnes in October – the fourth consecutive month-on-month fall.

Buying interests of Australian materials were negatively impacted by the cancelation of Australian import tariff from January 1, 2016, which may cut CIF cost by 10-20 yuan/t.

Coking coal imports from Mongolia – China’s second largest supplier – fell 19.5% on month and down 40.4% on year to 0.69 million tonnes during the same month.

Canada exported 0.51 million tonnes of coking coal to China in October, down 30.7% on month and down 7.5% on year.

Over January-October, China’s coking coal imports fell 20.8% on year to 39.48 million tonnes.

Top supplier Australia exported a total 21.23 million tonnes of coking coal to China during the same period, down 11.8% year on year.

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Australia has urged China's leadership to speed up the environmental testing of coal imports amid concerns from Australian exporters that the new standards were acting as a barrier to trade, sources reported, citing talks between Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang on the sidelines of the East Asia Summit.

China has imposed new standards on the coal it uses for power generation to try to cut emissions of sulphur dioxide, nitrogen oxides, particulate matter and mercury, and reduce the nation's chronic and severe air pollution.

"China has imposed – and we respect their doing so – strong environmental limits, regulations on coal, principally directed at reducing the level of sulphur in the coal that they burn to counter pollution," Mr. Turnbull said.

Mr. Turnbull went in to bat for Australian coal, pointing out its high quality and stressing Australia wanted to avoid "delays" in the annual $9 billion in coal exports to China caused by the new testing regime.

"Australian coal generally has very low sulphur, so there's no bad news in that for Australian coal exporters.

During the talks, Li assured the Prime Minister that China's economy would continue to grow at "about 7%" and that there would be an ongoing demand for Australia's resources, including coal, even as his economy became more consumption driven.

"There have, however, been some administrative difficulties in a way that the testing has been managed and the Premier Li Keqiang and I had a very good discussion about that and how we may be able to expedite the testing so that Australian coal exporters and, indeed, Chinese importers of Australian coal, will not be inconvenienced or have their activities disrupted."

Mr. Li accepted these concerns when he "acknowledged the high quality" of Australian coal, officials said, and gave a commitment towards "streamlining" the testing process.

Both Mr. Turnbull and Mr. Li also assured each other that their respective domestic processes were in train to ratify the China-Australia Free Trade Agreement and have it in force before Christmas.

http://en.sxcoal.com/0/135424/DataShow.html

With the Netherlands on track to miss its climate goals for 2020, the Dutch government is coming under pressure to order the closure of the nation's coal plants.

A group of 64 climate scientists on Monday called for the shuttering of all 11 plants, including three that came online this year and cost 5.5 billion euros ($5.85 billion).

Dutch coal use is at a record high in 2015 and it supplies up to a third of the country's electricity needs.

"It's high time the Netherlands finally sends a clear signal on sustainability," the scientists wrote in an open letter. "It will put an end to the paradox that one of the countries that has the most to lose from climate change is doing the least about it."

Two-thirds of the country's 17 million population lives below sea level and would be vulnerable to rising sea levels in a warming world.

The new coal plants were built during a period of economic stagnation as the government slashed subsidies for renewable energy and looked to cheap sources, including relatively efficient coal plants and plants powered by gas from the Groningen field, Europe's largest.

Parliament is due to debate with Prime Minister Mark Rutte strategy for the U.N. climate summit that starts in Paris on Monday and a majority is now backing the scientists' call.

Rutte's conservative VVD Party opposes the idea while its junior coalition partner Labour has endorsed it.

Just 5.6 percent of Dutch energy came from renewable sources in 2014, according to an annual energy review published in October, and the country will miss a "binding" 2020 target of 14 percent.

The Netherlands' target was set below the European Union-wide renewables target for 2020 of 20 percent, a concession granted due to the relatively large Dutch industrial base, centred around the port of Rotterdam. Neighbouring Germany, with a similar profile, reached 30 percent from renewables in 2014.

In June, a court found the Dutch government had also fallen behind on its goals under the Kyoto protocol on CO2 emissions and ordered it to cut output by 25 percent from 1990 levels by 2020 -- a more ambitious target than the 17 percent Rutte's government had been following.


Read more at Reutershttp://www.reuters.com/article/2015/11/24/climatechange-summit-netherlands-idUSL5N1202RZ20151124#zTXCJ7aZ2ZOJyV4W.99

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According to officials at the Energy and Mineral Resources Ministry, Indonesia's coal miners are cutting production by 20 percent this year, battered by persistently weak prices for the fossil fuel around the world.

Mr Bambang Gatot, the ministry's director general of minerals and coal, said that "It doesn't seem like we will achieve the target of 425 million metric tons of production this year. As long as commodity prices are still low, production will be under pressure."

The government's benchmark price of coal has fallen nearly 15 percent since the start of the year to USD 54.42 per ton, marking the biggest decline since 2009.

Mr Adhi Wibowo, the ministry's director of coal business development, said that the drop in demand was mostly seen in orders from overseas, with local demand for the commodity holding steady.

Neither official would identify the companies that had opted to cut production.

According to ministry data, coal production in Indonesia reached 322.5 million tons between January and October this year, down 13 percent from the same period last year.

http://steelguru.com/coal/indonesia-to-miss-coal-production-target-this-year/439831#tag

Premiums for iron ore pellets - the highest-quality steelmaking raw material - have sunk this month despite the loss of a fifth of global supplies after a Brazil mine disaster, underscoring the industry's deep glut.

Even a permanent closure at the flood-hit Samarco mine would be unlikely to boost pellet premiums, analysts and traders said, with other miners able to boost supply and Chinese steel mills eager to cut costs by using cheaper ore.

"It's probably the least sensitive time for a supply issue," said Mark Pervan, global head of commodity research at ANZ.

Iron ore prices .IO62-CNI=SI have tumbled nearly 40 percent this year, hitting a decade low at $43.40 a tonne on Tuesday on oversupply and falling Chinese steel demand.

The premium that steel mills pay for pellets has also been falling, and has continued to slide since a tailings dam owned by Samarco burst on Nov. 5, unleashing 40 million cubic meters of mud on the valley below and killing 11 people with 12 still missing.

Samarco, jointly owned by BHP Billiton and Vale SA, produces between 25-30 million tonnes a year of iron ore, mainly pellets, selling to China, Europe, the Middle East and Japan.

The premium for iron ore pellet for delivery to China fell to $12.25 per dry metric tonne as of Nov. 18, continuing a steep decline from early October when it stood at $19.30, according to pricing agency Platts.

Voluntary output cuts in other industrial commodities have had little impact. A pledge by major Chinese zinc smelters to slash nearly 20 percent of total production next year had a short-lived boost to prices that are still near multi-year lows.

'THINGS ARE THAT BAD'

"If there was ever an excuse for prices to rise it would have been now, but things are that bad that the market brushes this news aside," said a London-based trader on the Samarco disruption.

Pellets, processed ore that can be fed directly to a blast furnace, are a high-end product and make up only a tiny proportion of the seaborne iron ore trade. China imported 19 million tonnes last year, or 2 percent of its total purchases, according to commodity consultancy CRU.

Widening losses among Chinese steel mills has prompted them to look to cheaper ore, cutting costs despite reduced productivity, said a Singapore trader.

"Mills that are under long-term contracts with Samarco will be quite happy to see Samarco stop supplying," said a Shanghai-based trader.

Outside China, Japan's biggest steelmaker, Nippon Steel and Sumitomo Metal Corp, has secured alternative suppliers, a spokesman said, but declined to give details. Japan's second-ranked JFE Steel declined to disclose backup plans.

Vale could ramp up pellet production from other mines to fill any gap arising from Samarco, while other suppliers such as Russia's Metalloinvest and Bahrain Steel could bridge any shortfall, said Mitchell Hugers, analyst at BMI Research.


Read more at Reutershttp://www.reuters.com/article/2015/11/25/ironore-pellets-idUSL3N1312BL20151125#j6qfAuIsixrMH3Rr.99

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While equity markets are pre-occupied with what is, in the longer term, ultimately a trivial question of whether or not BHP Billiton and Rio Tinto can maintain their dividends in the face of commodity prices that are in a fresh tail-spin, the real issue is what the renewed bout of low-price pressure means for second and third-tier players.

The iron ore spot price fell again yesterday, to $US43.89 a tonne, its lowest level in about six years, prompting more fears of an industry apocalypse (even though the average price for the three decades to 2007, before the financial crisis and China’s massive stimulus program, was about $US32 a tonne).

The source of the collapse in iron ore prices, as it is for much of the depressed nature of commodity prices more generally, is the weakening of China’s demand for the raw materials of its industrialisation as a combination of a shift in its economic strategies and the loss-making over-production generated by its previous strategies coincide.

The impact on iron ore, the commodity of arguably the most significance to Australia, is being leveraged by the still-growing production of the commodity even as demand is shrinking.

BHP and Rio are the companies most obviously, or at least most visibly, affected because of their status as two of the three big seaborne iron ore producers; a position exacerbated for BHP in particular by the debate about its progressive dividend policy and its sustainability.

The ultimate reality for both companies is that their dividends are discretionary. BHP has made it clear, and Rio has said similar things (albeit under less pressure), that its dividend policy is flexible and can be ditched under pressure. Its balance sheet and credit rating are the priority.

That gives BHP, and Rio, a lot of flexibility to respond to big adverse shifts in the direction of their cash flows.

Both have very high-quality balance sheets and both are at the low end of the cost curve and at the upper end of the quality curve in almost everything they produce. In the case of iron ore, they are the low-cost producers.

In some respects, while it will cause them some pain (in the form of lower earnings and cash flows and potentially an even greater backlash from investors if they abandon their dividend policies) BHP and Rio might not mind the latest break in already-depressed commodity prices, particularly iron ore.

There are a lot of higher-cost producers across the suite of commodities, but particularly in iron ore, that have kept producing despite prices that have tumbled below their overall costs.

Positive operating cash flows and the costs of closure have kept a lot of uneconomic and sub-economic production in the market even as a lot more new low-cost volume has kept entering it.

A big fall in prices, sustained for six months to a year, might not be good news for the BHPs and Rios in the short term but would bring forward the much-needed rebalancing of supply and demand in the longer term.

Higher-cost producers with weak balance sheets won’t survive if commodity prices stay where they are or fall further -- which they will unless those weaker producers disappear.

The iron ore market illustrates the wider picture.

A price below $US40 a tonne isn’t inconceivable – it would represent a return to the long-term trends that long-established producers like Rio and BHP used to predicate their investment on. At those levels, only Rio and BHP would generate meaningful profits – but those profits would still be high-margin and would still be very meaningful.

That’s why it would be in their interests for the price to fall, in the short term, to whatever level is necessary to drive out excess and higher-cost supply and re-balance the market.

http://www.businessspectator.com.au/article/2015/11/25/resources-and-energy/why-lower-iron-ore-price-good-bhp-and-rio?utm_content=SocialFlow&utm_campaign=EditorialSF&utm_source=BusinessSpectator&utm_medium=Twitter

ET reported that a delegation of Indian steel majors comprising of SAIL, JSW, Tata Steel, Bhushan Steel, RINL and Essar etc met commerce and industry minister Ms Niramala Sitharaman on Tuesday to discuss issues arising out of dumping of steel by China, Japan and Korea and sought more measures to counter the flood of steel products.

The delegation wants the government to fix a floor price for steel imports as it alleged that domestic steel firms had no relief despite the government imposing safeguard duties in September, anti-dumping duty in June and raising import duty in August.

The delegation said that China reduced steel prices by 40%, after India imposed a 20% safeguards duty on some imported steel products in September

Citing the steel sector's outstanding debt at INR 600,000 crore, members of the delegation said the sector's previous quarter losses amounted to INR 4,000 crore.

A commerce mintsry official said “However, the minister has asked these companies to substantiate the need for more support by data and asked them to work towards making the sector more competitive.”

He added that Ms Sitharaman told the delegation that the interest of the user industry has also to be balanced. He said that the government has not given any immediate assurances to the steel companies due to lack of data.

http://steelguru.com/steel/indian-steel-majers-call-for-floor-price-mechanism-to-thwart-cheap-imports/439868#tag

ArcelorMittal’s South African unit priced its fully-underwritten R4.5 billion ($320 million) equity cash call at more than a 50% premium on Tuesday, sending its shares soaring.

The unit of the world’s largest steel maker will sell nearly 700 million new shares at R6.50 each, a 56 premium to ArcelorMittal South Africa’s closing price on Monday.

Shares in ArcelorMittal jumped 40% to R5.84 shortly after the announcement.

http://www.mineweb.com/news/iron-and-steel/arcelormittal-south-africa-prices-cash-call-at-big-premium/

TMK, Russia's largest maker of steel pipes for the oil and gas industry, said on Tuesday it made a net loss of $74 million in the third quarter due to a $94 million hit from adverse foreign exchange rate moves.

Financial results of TMK, controlled by businessman Dmitry Pumpyansky, have been dented in dollar-terms by the rouble weakening and lower pipe sales in the United States.

For 2015 as a whole, TMK said it expected a decrease in overall pipe sales, revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA).

Its third-quarter revenue was down 21 percent quarter-on-quarter to $917 million, with EBITDA down 27 percent to $125 million. Net debt fell by $238 million from the end of June to $2.6 billion at the end of September.

For the final quarter of 2015, however, the company expects stronger financial results compared with the third quarter, partially due to seasonally higher demand for OCTG - pipes for the oil and gas industry in Russia.

U.S. demand for OCTG will remain low until the end of 2015 as drilling volumes continue to decline, TMK said. It added a gradual recovery of the North American pipe market was not expected until the second half of 2016, subject to oil price growth, increase in drilling volumes and inventory reduction.


Read more at Reutershttp://www.reuters.com/article/2015/11/24/russia-tmk-results-idUSL8N13J1V220151124#BcqfJYvdFquXQWh7.99

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