Mark Latham Commodity Equity Intelligence Service

Monday 6th July 2015
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    Oil and Gas

    Saudi Line in the Sand: Asian markers at $58.

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    Saudi Asia quote for Light crude below $60.
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    Progress in Iran talks but difficult issues remain -Kerry

    Iran and the United States have made "genuine progress" on a nuclear deal but there are several difficult issues to resolve and Washington is ready to walk away from the talks if need be, U.S. Secretary of State John Kerry said on Sunday.

    "We have in fact made genuine progress but ... we are not yet where we need to be on several of the most difficult issues," Kerry told reporters. "If we don't have a deal and there is absolute intransigence and unwillingness to move on the things that are important (for) us, (U.S.) President (Barack) Obama has always said we're prepared to walk away."

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    CNOOC's new output to lift China's oil production from 2014 record

    China's crude oil output looks set to rise this year from a record in 2014 as new production from third largest producer CNOOC helps to counter reductions from its two bigger rivals.

    Output growth from China would add to a global glut even as exporters such as the Organization of the Petroleum Exporting Countries (OPEC) and Russia produce at near record highs and U.S. shale producers keep ramping up output.

    While there is no official Chinese production outlook, information from the biggest state oil companies indicates the nation's output will rise slightly in 2015, largely due to increased production from CNOOC Ltd, the listed unit of state-owned China National Offshore Oil Corporation.

    "What we have spent in the last few years has laid the foundation for the production growth this year," said an employee with CNOOC's investor relations department who asked to remain unnamed. CNOOC spent 107 billion yuan ($17 billion) on capital expenditures in 2014.

    Despite recent cost cuts, CNOOC has said it has already added at least 40,000 bpd of crude output this year. And it aims to increase daily domestic oil and gas output in China by at least 135,000 barrels of oil equivalent by the end of 2015, according the company's 2015 outlook.

    China, the world's fourth biggest oil producer, raised its output in the first five months of this year by 1.8 percent from a year ago to 4.25 million bpd, compared with growth of just 0.1 percent over the same period in 2014.

    In 2014, China produced an annual record 4.2 million bpd.

    Combined output from CNOOC and smaller producers was up 16 percent from a year ago by end-April, according to a biweekly report from the official Xinhua news agency.

    China's two largest producers, PetroChina and Sinopec Corp, have both announced cuts.

    PetroChina plans to shrink its worldwide output by 1.5-1.6 percent in 2015 - about 40,000 bpd - with more than 70 percent of the cuts to come in China.

    Sinopec's output in China is set to fall 30,000 bpd, or about 3.5 percent, to around 820,000 bpd this year, according to its annual report.
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    Indian Tycoon Plans to Invest $2.5 Billion in Brazil Oil and Gas

    Videocon Industries Ltd., an Indian maker of consumer electronics with ambitions to become a major energy producer, plans to invest as much as $2.5 billion over three years in Brazilian oilfields, Chairman Venugopal Dhoot said.

    The scope for oil from its blocks in the South American country is four times higher than the largest field in India and the company will pursue expanding its energy operations there, the billionaire said in an interview in London.

    “It is just the beginning,” said Dhoot, who sold Videocon’s 10 percent stake in a Mozambique natural gas field for $2.5 billion to two state-owned Indian explorers in 2013.

    Dhoot, 64, is seeking to reposition Videocon as an oil & gas explorer with stakes in at least eight hydrocarbon blocks in countries including Indonesia and East Timor. It is exploring “more and more,” with mergers and acquisitions being one of the key opportunities, the company said in its annual report last month.

    Videocon owns stakes in 10 exploration blocks in Brazil through a joint venture with an upstream unit of Indian refiner Bharat Petroleum Corp. Many of them are operated by state-owned Petroleo Brasileiro SA, which is selling assets to reduce debt that stands at an industry-high of $125 billion.

    Petrobras invited a small group of international companies with offshore experience to bid for stakes in some concessions, including pre-salt blocks, people with knowledge of the matter said last month.
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    Pacific Rubiales Holders Delay Vote on Eve of Proxy Deadline

    Pacific Rubiales Energy Corp. delayed a shareholder vote on its proposed takeover at the request of the would-be buyers just prior to the proxy vote deadline.

    Mexico’s Alfa SAB and Harbour Energy Ltd. asked for the meeting to be pushed back to July 28 from July 7, Pacific Rubiales said in a statement. The delay is meant to give Pacific shareholders more time to consider the offer, Alfa said in an e-mailed response to questions.

    Voters had until Thursday to send in proxy votes opposing the deal to an investor group led by O’Hara Administration Co., and until Friday to deliver proxies in favor of the offer. The new proxy deadline is July 24.

    The O’Hara group holds almost 20 percent and is opposing the C$6.50-per-share offer on the grounds it undervalues Latin America’s biggest non-state-owned oil producer. 

    “The bidders are entitled to postpone the meeting by 15 days,” Ian Robertson, VP Communications Kingsdale Shareholder Services, which represents Pacific Rubiales, said in an e-mailed response.

    In an interview Wednesday, Alfa Chief Financial Officer Ramon Leal said the outcome of the vote was “very uncertain.”

    Two-thirds of total votes and a simple majority of votes other than Alfa and its affiliates at the meeting are needed for the deal to close, according to a May 21 statement.

    O’Hara is threatening to exercise so-called dissent rights, which would breach a condition that holders of not more than 5 percent do so. Pacific Rubiales says Alfa and Harbour can forgo the dissent-rights condition.
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    Pertamina plans $25bn investment for upgrading Indonesian oil refineries

    Indonesian oil and natural gas firm Pertamina intends to invest $25bn to upgrade four main oil refineries in the country.

    The upgrades are being planned to provide for the rising crude oil demands and are located in Cilacap, Central Java; Balikpapan, East Kalimantan; Balongan, West Java; and Dumai, Riau, reports Jakarta Post citing

    Pertamina processing director Rachmad Hardadi was cited by the Indonesian news portal as saying that the developments will continue till 2021.

    "Indonesia's consumption reaches 1.6 million barrels of crude oil per day."

    Rachmad said: "Indonesia's consumption reaches 1.6 million barrels of crude oil per day."

    Pertamina will co-ordinate with strategic partners for the upgrade initiatives without giving up its majority stake.

    Japan based JX Nippon Oil and Energy and Saudi Arabian oil giant Saudi Aramco had earlier expressed interest to participate in the upgrade projects for the refineries, reports The Jakarta Post.

    JX Nippon Oil is already a part of the Balikpapan refinery upgrade project which aims to increase its daily production capacity to 360,000 barrels from its present capacity for 260,000 barrels. The firm is likely to sign the potential agreement for the project with Pertamina in November.

    State-owned Pertamina operates six refineries in the country along with refineries in Kasim in West Papua and Plaju in South Sumatra.
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    Egypt raises gas price paid to Italy’s Eni and Edison

    Egypt has raised the prices it pays Eni and Edison for the natural gas they produce in the country, an official with state-owned gas company EGAS said on Sunday.

    The agreements mark the latest move by Egyptian authorities to improve terms for foreign oil and gas businesses in the hope that more competitive pricing will encourage investment in the energy-hungry country.

    “The Oil Ministry signed a deal that amended the price for gas with Eni to a maximum $5.88 for every million British thermal unit and a minimum of $4, based on amounts produced. This is up from $2.65,” the EGAS official told Reuters on condition of anonymity.

    The official said that another deal had been signed with Edison for a price of $5.88 per million British thermal units, up from $2.65.

    The amended prices will apply to gas produced from new discoveries, the official said.

    Egypt last month signed a $2 billion exploration deal with Eni.

    Oil minister Sherif Ismail said in March that Egypt had agreed to pay BP and RWE Dea more for their Egyptian production.
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    Alternative Energy

    French renewables power grid pilot shows limits of batteries in Europe

    A major pilot project by Europe's largest power network operator to integrate power from rooftop solar panels into the grid has shown that battery storage of renewable energy is not yet economically viable in Europe.

    The conclusion is a sobering one for proponents of sun and wind energy because as more of it comes on tap, better storage will be needed to keep the power produced when it is sunny and windy so it can be used at other times.

    The 30 million euro "Nice Grid" pilot is one of the biggest in a European Union-backed "Grid4EU" scheme in which France's EDF, Italy's Enel, Spain's Iberdrola Czech Republic's CEZ, Sweden's Vattenfall and Germany's RWE are testing the power grids of tomorrow.

    In the Mediterranean village of Carros on the outskirts of Nice, EDF's power grid unit ERDF has connected compact batteries to solar panels on rooftops and utility-size batteries to its local power distribution network.

    The technology works perfectly but the pilot has shown it is still too expensive for wider rollout.

    "The economic model of the batteries is not mature yet," Philippe Monloubou, chief executive of French grid operator ERDF utility told Reuters.

    A quarter of Europe's power already comes from renewables. This may rise to 50 percent by 2030. But the intermittent nature of solar and wind power requires flexible grids, the ability to respond to the ups and downs of demand and, crucially, cheaper power storage.

    French company Saft, which sold the batteries for the Nice pilot, has already installed 80 MW of battery storage around the world, mainly in remote areas in Canada, South America and Africa, or on islands where they compete with expensive diesel generators as a back-up source of power.

    But in Europe, they come up against cheaper back-up power from gas-fired power plants and large, efficient grids.
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    Google's interesting memo on renewables.

    Google’s boldest energy move was an effort known as RE<C, which aimed to develop renewable energy sources that would generate electricity more cheaply than coal-fired power plants do. The company announced that Google would help promising technologies mature by investing in start-ups and conducting its own internal R&D. Its aspirational goal: to produce a gigawatt of renewable power more cheaply than a coal-fired plant could, and to achieve this in years, not decades.

    Unfortunately, not every Google moon shot leaves Earth orbit. In 2011, the company decided that RE<C was not on track to meet its target and shut down the initiative. The two of us, who worked as engineers on the internal RE<C projects, were then forced to reexamine our assumptions.

    That realization prompted us to reconsider the economics of energy. What’s needed, we concluded, are reliable zero-carbon energy sources so cheap that the operators of power plants and industrial facilities alike have an economic rationale for switching over soon—say, within the next 40 years. Let’s face it, businesses won’t make sacrifices and pay more for clean energy based on altruism alone. Instead, we need solutions that appeal to their profit motives. RE

    Consider an average U.S. coal or natural gas plant that has been in service for decades; its cost of electricity generation is about 4 to 6 U.S. cents per kilowatt-hour. Now imagine what it would take for the utility company that owns that plant to decide to shutter it and build a replacement plant using a zero-carbon energy source. The owner would have to factor in the capital investment for construction and continued costs of operation and maintenance—and still make a profit while generating electricity for less than $0.04/kWh to $0.06/kWh.

    That’s a tough target to meet. But that’s not the whole story. Although the electricity from a giant coal plant is physically indistinguishable from the electricity from a rooftop solar panel, the value of generated electricity varies. In the marketplace, utility companies pay different prices for electricity, depending on how easily it can be supplied to reliably meet local demand.

    “Dispatchable” power, which can be ramped up and down quickly, fetches the highest market price. Distributed power, generated close to the electricity meter, can also be worth more, as it avoids the costs and losses associated with transmission and distribution. Residential customers in the contiguous United States pay from $0.09/kWh to $0.20/kWh, a significant portion of which pays for transmission and distribution costs. And here we see an opportunity for change. A distributed, dispatchable power source could prompt a switchover if it could undercut those end-user prices, selling electricity for less than $0.09/kWh to $0.20/kWh in local marketplaces. At such prices, the zero-carbon system would simply be the thrifty choice.

    Unfortunately, most of today’s clean generation sources can’t provide power that is both distributed and dispatchable. Solar panels, for example, can be put on every rooftop but can’t provide power if the sun isn’t shining. Yet if we invented a distributed, dispatchable power technology, it could transform the energy marketplace and the roles played by utilities and their customers. Smaller players could generate not only electricity but also profit, buying and selling energy locally from one another at real-time prices. Small operators, with far less infrastructure than a utility company and far more derring-do, might experiment more freely and come up with valuable innovations more quickly.

    Similarly, we need competitive energy sources to power industrial facilities, such as fertilizer plants and cement manufacturers. A cement company simply won’t try some new technology to heat its kilns unless it’s going to save money and boost profits. Across the board, we need solutions that don’t require subsidies or government regulations that penalize fossil fuel usage. Of course, anything that makes fossil fuels more expensive, whether it’s pollution limits or an outright tax on carbon emissions, helps competing energy technologies locally. But industry can simply move manufacturing (and emissions) somewhere else. So rather than depend on politicians’ high ideals to drive change, it’s a safer bet to rely on businesses’ self interest: in other words, the bottom line.

    In the electricity sector, that bottom line comes down to the difference between the cost of generating electricity and its price. In the United States alone, we’re aiming to replace about 1 terawatt of generation infrastructure over the next 40 years. This won’t happen without a breakthrough energy technology that has a high profit margin. Subsidies may help at first, but only private sector involvement, with eager money-making investors, will lead to rapid adoption of a new technology. Each year’s profits must be sufficient to keep investors happy while also financing the next year’s capital investments. With exponential growth in deployment, businesses could be replacing 30 gigawatts of installed capacity annually by 2040.

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    Precious Metals

    Rhodium slides to its lowest in more than a decade

    Rhodium prices slid to their lowest level in more than a decade on Friday, suffering along with other platinum group metals from perceptions that the metal, widely used in the car industry, is in plentiful supply.

    Rhodium RHOD-LON fell to $790 an ounce on Friday, its weakest since March 2004, extending three months of declines.

    Among its sister metals, platinum also reached its lowest in more than six years this week, and palladium its weakest since the middle of 2013.

    All three have been under heavy selling pressure after failing to capitalise on an unprecedented five-month strike among platinum miners in major producer South Africa last year, which indicated availability of substantial above-ground stocks of the metals.

    "Clearly there's a good deal of metal in the market. South African producers are back at full production, and they're getting as much metal out of the door as possible to improve their cash position," Mitsubishi analyst Jonathan Butler said.

    "(Rhodium) is a much more fundamental market than the other platinum group metals," he said. "I think where we are now reflects the lack of any significant bid in the market, or any significant industrial demand growth."

    Rhodium prices have tended to be volatile over the last decade, rallying to a peak near $10,000 an ounce in 2008 before dropping sharply as the global financial crisis hit industrial metals demand.

    Some 80 percent of global rhodium demand comes from the automotive sector, which uses the metal in catalytic converters. Most of the remainder is consumed by the chemical, electrical and glassmaking industries.
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    Base Metals

    Metals investors look for miners to cut supplies to lift prices

    Investors in industrial metals will keep a close watch on miners' results in coming weeks for possible announcements of production cutbacks that could bolster weak prices. "What will be very important over the next few weeks is whether we start to see some supply responses emerging during the corporate results period," said Nicholas Snowdon, metals analyst at Standard Chartered in London. 

    Iron ore, aluminium and zinc will get the most attention after a slide in prices that is pressuring the bottom line of some mining groups. Spot iron-ore shed more than half of its value in the 12 months to April, but has since rebounded by about 15% to $54.10 a tonne. 

    "Over the past six months Vale, BHP and Rio have independently suggested either cuts to existing production, holding back sales and/or the slower ramp up of growth volumes," Citi analyst Heath Jansen said in a note. "Stronger guidance from the companies on volumes could potentially drive lower volatility in the iron-ore price." 

    On April 30, Brazil's Vale, the world's top iron-ore producer, said it was considering reducing forecast iron-ore production by up to 30 million tonnes over the next two years. 

    Among base metals, the main focus will be on aluminium and zinc, analysts said. "Aluminium tops the list in terms of potential and much needed production cuts in the Western world. Also in the zinc market, we're seeing zinc mine production growing at the fastest pace in several years," Snowdon said. "Given the positioning in base metals, which have swung firmly to short side, if you do see some significant production cut announcements, that could be a trigger for some short covering," he added. 

    Top producer Rusal of Russia said in April it might idle 200 000 tonnes of capacity while US group Alcoa said the month before it was reviewing 500 000 tonnes of smelting capacity. On Tuesday, Alcoa said it would permanently close its Pocos de Caldas smelter in Brazil, which has capacity of just below 100 000 tonnes per year. The plant, however, has been idle since May 2014 so the move will not reduce current production levels. 

    Nickel is another candidate after prices on the London Metal Exchange slumped this week to a six-year low of $10,795 a tonne, down by nearly half from a peak last year. 

    "We are deep into the all-in cost curves for metals, with maybe the exception of copper," said Robin Bhar, head of metals research at Societe Generale in London. "But no one wants to be the first to cut because that hands an advantage to the other producer. Everybody's looking over their shoulders looking to see who will cut." 

    The reporting season of major mining and metals groups kicks off on July 8 when Aloca posts second quarter earnings.
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    Supply of quality copper concentrate shrinks, sows seeds of price support

    Supply of high quality copper concentrate shrank more than expected in the first half of this year due to output delays in top miner Chile, squeezing the pipeline for metal producers and likely supporting prices later in 2015, traders said.

    Production from two of four mines in Chile that churn out clean, standard concentrate was stalled in the first half as the country was hit by floods, while the world's top mine, Escondida, has not tendered surplus concentrate for months, the traders and mining sources said.

    Smelters blend clean concentrates with supply from mines that suffer from impurities such as arsenic, which have become more common as miners dig deeper into the earth's crust.

    "The concentrate element is tightening up which will eventually flow through to a tighter refined market," said analyst Colin Hamilton at Macquarie in London

    Benchmark LME copper has shed 8 percent this year as China demand slows, plumbing six-year lows in January. It traded at $5,800 a tonne on Friday.

    President Yukio Uchida of JX Holdings told Reuters that production at Chile's Caserones mine, in which it holds a majority stake through its smelter, had been slow.

    "Copper output at Caserones came at a low level for the January-June half due to the problem of slag disposal on site and floods in Chile," he said, without giving a specific figure.

    But Uchida added that the firm was on track to expand output to full capacity in August or September, and that it was maintaining its forecast production of 90,000 tonnes of copper concentrate this year.

    Elsewhere in Chile, the Sierra Gorda mine, owned jointly by Japan's second-largest copper producer, Sumitomo Metal Mining (SMM), and Polish producer KGHM Polska Miedz, began commercial-scale production six months behind schedule at the end of June.

    Sumitomo said this week that it still planned to produce 123,000 tonnes of copper from the mine's concentrate this year, up from 11,000 tonnes in 2014.

    Shipments from the world's biggest copper mine, Escondida, jumped in the first quarter, but fell 9 percent in April from a year earlier, Chilean customs data shows.

    "They don't have any extra tonnes to tender ... I think they'll probably try to make their end of June number, to try and maintain their guidance, but I expect their production numbers for the second half to be poor," a trader said.
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    China’s rate cuts to slow copper demand even further - Report

    China’s recent moves to cut interest rates could “significantly reduce” its demand for copper, affecting global producers, a paper published by Peking University HSBC Business School warns. According to the article, there is strong evidence to conclude that copper stocks have been piled up at warehouses mainly “to facilitate a carry trade under capital controls.”

    By “carry trade” they mean that speculators have been borrowing dollars to buy Chinese assets, and they often do so with leverage and through convoluted means, some involving use of copper or iron ore as collateral.

    The bet is that the Yuan will strengthen, generating a near certain profit on the exchange rate. But this has gone badly wrong as the central bank intervenes to force down the exchange rate.

    “Due to the importance of the Shanghai copper holdings for the global copper market, any unwinding or change in interest rate differentials will have significant impact on global commodity market pricing and trading,” warn the authors, Zhang Xiao, a fixed-income analyst with BNP Paribas, and Christopher Balding, associate professor at the Graduate business school.

    Citing to data from the Shanghai Futures Exchange, which monitors Chinese stocks, they show that the amount of copper stored in the country jumped from 4% of global stock in 2009 to 38% last year.

    According to the paper, for every 1 basis point increase in the onshore-offshore interest rate differential, copper carry trade positions increase by $1.5 million. The problem, it adds, is that during that very same period there were not changes in industrial production to justify such a large variation in inventory.

    Copper’s fortunes depend not only on demand from China, though the nation is the world's largest consumer, accounting for 42% of global trade. The red metal is also highly needed on the build-out of the electricity grid, as well as wiring used in cars and consumer goods.
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    Tiger Resources announces debt refinancing with Taurus

    Tiger Resources Limited last week announced that it has agreed terms with Taurus Mining Finance Fund for the refinancing of Tiger's existing secured debt facilities and arrangement of a new facility to fund potential debottlenecking works at the Company's Kipoi Copper Project in the Democratic Republic of Congo.
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    Flood of Chinese exports sinks aluminium prices

    The Australian reported that the outlook for aluminium is looking severely pressured for the next few years as excess capacity in China shows no sign of easing, resulting in a more downbeat outlook for Australian-listed miners Rio Tinto, South32 and Alumina. Last week, Macquarie took the knife to its aluminium price forecasts to the end of the decade, while Macquarie and UBS cut their forecasts for alumina, the main ingredient in aluminium.

    It said “Unlike most commodities, aluminium supply continues to grow at a rapid pace. With Chinese exports now likely to play a sustained and growing role in the global market in future years, the whole market has been radically altered.”

    Macquarie slashed its 2016 to 2020 forecasts by 10 to 20 per cent and is not expecting prices (now at near six-year lows of $US1700 a tonne) to average more than $US1800 in any year until the end of the decade. For alumina, second-half ­prices have been cut from a range of between $US350 and $US380 a tonne to between $US325 and $US350 a tonne.

    It said “Chinese (aluminium) production now sits at 31.3 million tonnes a year, up 16 per cent year-on-year, and with about 6 million tonnes of capacity growth still in the pipeline, it is fair to say the aluminium market remains and will continue to remain dominated by Chinese growth. This has cause significant structural changes in the aluminium industry, which has unwound the producer optimism seen through 2014.”
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    Steel, Iron Ore and Coal

    Iron ore price fall a sign China's economic might waning

    Iron ore prices dropped to the lowest in more than two months, sending shivers through the mining industry and heightening worries that Chinese economic activity is slowing just as ore piles up at its ports.

    China uses more than a billion tonnes of iron ore a year to make steel - 14 times the consumption of the United States - but Beijing's efforts to shift the economy to consumer-led growth means steel consumption is peaking faster than expected.

    "It's clear China can no longer consume all the iron ore that's out there, so something's got to give," said James Wilson, a sector analyst for Morgans Financial in Perth

    Iron ore delivered to China stood at $55.80 a tonne, its weakest since late April, Reuters data showed. The most traded iron ore futures on the Dalian Commodity Exchange followed, slumping to the lowest since April 24 of 402.5 yuan ($64.86) a tonne.

    Iron ore stocks at 42 Chinese ports rose 1.7 percent to 81.97 million tonnes by Friday from a week before, data from industry consultancy Umetal showed.

     Shipments from Australia's Port Hedland to Chinese ports rose 3 percent to 32.61 million tonnes in June from a month earlier, the latest port data showed. The June increase at the world's biggest iron ore terminal helped sweep iron ore exports for the fiscal year to June 30 to 21 percent higher to a record 439.6 million tonnes. Of that, 373.24 million tonnes were destined for China, according to the Pilbara Ports Authority.

    Steel consumption in China from January to May tumbled an alarming 8 percent from a year before, according Zhao Chaoyue, an analyst with Merchant Futures in Guangzhou. "China's real steel consumption will fall further over the rest of this year," he said.
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    Fortescue offers first spot iron ore cargo: customers

    Australian miner Fortescue Metals Group Friday offered for the first time an iron ore cargo on a spot basis, customers of the producer told Platts.

    FMG usually sells its iron ore material through long-term contracts to its customers.

    Any spot reselling is then done by the customers themselves, with FMG not having made any spot appearance until now.

    "FMG already told us [Thursday] that they would offer [57.9% Fe] Kings fines on COREX Friday," a Shanghai-based trader said. "This is the first offer on a spot platform for them."

    FMG did not respond to emailed requests for comment on the matter Friday.

    The miner is offering Kings fines on the COREX platform at $2/dmt CFR Qingdao over the July average of the Platts 62% Fe IODEX assessments.

    Several customer sources also confirmed the formula used for FMG offers.

    The Baltic Exchange C5 Index rate is subtracted from the average of the IODEX assessments, an iron content adjustment is applied, following which the term discount of 4% for Kings fines is calculated for the cargo.

    Thereafter, the freight is added back on, and the $2/dmt premium is placed on top of that value.

    The trader added that, as early as in the first quarter of this year, FMG had already talked about plans to offer cargoes on spot trading platforms.

    "They should be continuing to push out more cargoes onto the spot market from now on and we can expect to see them on the trading platforms."
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    Iran steelmakers request import duty hikes, cite cheap China steel

    Iranian steelmakers have asked the government to raise import duties for certain steels by up to 40 percent as protectionism in the global steel sector gathers pace amid a flood of cheap sales mostly from top producer China.

    "We have asked the government to raise import duties by up to 40 percent on flat steel products. For long products we plan to ask for duties of up to 30 percent," said Bahador Ahramian, a board member of the Iran Steel Producers Association (ISPA).

    Earlier this year, Iran raised import duties on certain steel imports to between 10 and 20 percent in response to a request from ISPA and in line with the government's bid to diversify the economy away from oil.

    Tehran is anxious to protect its steel and iron ore sector, which it sees as a strategic because it supplies dozens of related industries, including construction and oil, and indirectly employs millions of people.

    "We do not have proper anti-dumping duties in place in Iran and we hope these measures will function like anti-dumping duties in practice. Most of the steel imports into Iran are coming from China," added Ahramian.
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    China key steel mills daily output up 1.2pct in mid-Jun

    Daily crude steel output of key Chinese steel producers increased 1.18% from ten days ago to 1.76 million tonnes over June 10-20, showed data from the China Iron and Steel Association (CISA).

    The association didn’t publish the estimate of China’s total daily output during the same period.

    As of June 20, total stocks in key steel mills stood at 17.46 million tonnes, up 7.04% from ten days ago and up 5.37% from the month before.

    During June 10-20, prices of the six major steel products all posted declines from the previous ten days, with rebar prices averaging 2,211.7 yuan/t, down 2.7% from ten days ago, showed data from the Ministry of Commerce.
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