Members of the Organisation of Economic Cooperation and Development (OECD) struck a deal on Tuesday to restrict subsidies used to export technology for coal-fired power plants, ending months of wrangling.

Representatives of the world's richest countries agreed a deal to end export credits for inefficient coal plant technology to take effect from Jan. 1, 2017, with a review in 2019 that could allow the deal to be strengthened.

This week's talks at the Paris-based OECD were viewed as a final chance to end export credits for coal, the most polluting of fossil fuels, before the two-week United Nations climate summit on a global deal to curb climate change begins on Nov. 30, also in Paris.

A senior Obama administration official who participated in the talks said Tuesday OECD countries have financed over $35 billion worth of coal plants over the past seven years.

"This is a landmark agreement that's the culmination of a long process," the official said.

While the United States already restricted coal technology exports, the new OECD agreement would force countries like Japan and South Korea to limit theirs for the first time. The European Union plans to end domestic coal subsidies by 2018.

Japan, wary of regional competition from China, had been at the vanguard of opposition to phasing out coal export credits that benefit companies such as Toshiba Corp.

But prospects for a deal improved after Japan agreed to a compromise proposal with the United States last month.

Tuesday's deal modified that agreement and would limit lending for coal plants to the most efficient coal-fired power plants using ultra-supercritical technology.

A compromise provision tabled by South Korea and Australia added an exception to allow the construction of smaller, less efficient "supercritical" coal plants of up to 500 megawatts in developing countries.

It would allow some exemptions in emerging economies where up to 90 percent of the country has electricity access, including India, Indonesia, the Philippines and South Africa.

"The agreement is a victory for multilateral efforts to address climate change though it's a limited victory," said Steve Herz of the Sierra Club, adding that countries like Korea, Japan and Australia "continue to put their interests ahead of global cooperation."

He added that the deal has the potential to remove around 850 previously eligible coal plant projects out of the global pipeline,

The coal industry has said coal is still a necessary energy source, especially in poor countries that have few other options.

At a meeting in Turkey this week, leaders of the world's largest economies, the G20, reaffirmed their commitment "to rationalise and phase out inefficient fossil fuel subsidies".


Read more at Reutershttp://www.reuters.com/article/2015/11/17/oecd-coal-subsidies-idUSL8N13C47920151117#jvJIXoYQ7J9CdtLD.99

Chinese miners are facing difficulties in selling coal into the international market, due to reputation crisis, government intervention and the 3% export tariff, said Huang Teng, a coal expert with Beijing LT Consulting Co., Ltd. during the third Global Thermal Coal Resource & Market Summit.

China’s coal exports started in 1978 and boomed in the following decades, with export volume peaking at 94 million tonnes in 2003, ranking second in the world after Australia.

Since the late half of 2003, China’s coal exports started to plunge to meet growing domestic demand on the back of rapid economic growth. Coal exports dropped to 8 million tonnes per year or less.

Customs data showed China exported 4.54 million tonnes of coal in the first ten months of the year, falling 6.5% on year but up 12.9% on month. Total exports in 2014 stood at 5.74 million tonnes, down 23.5% on year.

However, oversupply has getting increasingly serious in China’s domestic market since 2012, due to the expansion of mine capacities vis-à-vis a slowdown of domestic economy and increased supply of alternative energy sources.

Domestic producers had to resort to export to relieve sales pressure. In fact, the demand from international market does exist, according to Huang.

Data showed China’s neighbors have a total 650 million tonnes of coal demand each year, with India, Japan and South Korea at 200 million, 190 million and 130 million tonnes, respectively. Besides, Taiwan, Thailand and Malaysia also have a demand of 70 million, 20 million and 20 million tonnes each year, separately.

But Chinese miners still faced problems to sell coal to these potential buyers, Huang said.

First, Chinese coal producers need to reshape their reputations in the international market to win acceptance after their defaults in the past "Golden Decade" of the coal industry over 2003-2011, which is still impacting buyers’ enthusiasm.

Second, the Chinese government doesn’t encourage large-scale export of coking coal, due to the scarce resource. The export quota system, which only allows five companies to export coal at present, also greatly weakened the export enthusiasm.

Third, the country levies a 3% export tariff on coal, without returning the 17% VAT for producers, which added miners' financial burdens.

In addition, the export quality management system has been outdated after limited exports over the past 10 years, and has to be reestablished, Huang said.

Based on the above reasons, China’s coal export would be hard to increase extensively in the short run, let alone to help support domestic prices and save the beleaguered sector, Huang concluded.

Analysts said the reenter of Chinese coal into the international market would intensify global oversupply, resulting in a slump of global coal prices.

As thus, Chinese coastal consumers may import more, imposing more sales pressure on domestic producers.

http://en.sxcoal.com/0/135081/DataShow.html

The price of iron ore fell to within shouting distance of all-time lows on Tuesday as worries about oversupply continue to dog the market and steel prices in top consumer China fall to record lows.

Benchmark 62% Fe import price including freight and insurance at the Chinese port of Tianjin fell 3.2% to $45.80 a tonne, the lowest since July 8 and down 9.5% in a month.

Today's peg is also the second lowest on record since The SteelIndex began tracking the spot price in November 2008. Iron ore traded at $44.10 a tonne on July 8 this year, before bouncing back more than 9% the very next day. Today's price compares with record highs above $190 a tonne hit in February 2011.

Ore with 62% content delivered to Qingdao tracked by the Metal Bulletin fared even worse, dropping 4.5% to $45.58 a tonne on Tuesday, also the lowest since the record on July 8, according to Metal Bulletin.

China forges 46% of the world's steel and consumes for more than 75% of the world's seaborne iron ore trade, but overproduction and unprofitability at the country's giant state-owned mills have seen steel prices in decline for years.

Shanghai rebar prices dropped to a record low on Tuesday with the most active May futures contract exchanging hands for 1,748 yuan or $275 a tonne.

The scale of the oversupply in this market is such that small supply disruptions are only creating shortlived rallies, if at all

The decline in Chinese steel consumption is accelerating with use falling –5.7% to 590.47 million tonnes in the January to October period, industry group China Iron and Steel Association said on Friday. That's tracking way below estimates by the  World Steel Organization which forecasts steel demand in China will shrink by -3.5% this year.

Last month the chairman of one of the largest steelmakers Shanghai Baosteel's Xu Lejiang, said the country's steel demand is weakening at "unprecedented speed" and forecast nationwide output may eventually slump 20%, mirroring similar developments in Europe as the US and markets matured. The view from inside the country is in contrast to projections by the Big Three which sees slow but sustained growth through 2020.

The slowdown in China comes at just the wrong time for producers as a flood of new supply hits the market.

The big three producers – Vale, Rio Tinto and BHP Billiton – have been following a scorched earth policy of raising output and slashing costs to weather low prices and push out competitors.

The decline in the price of iron ore has also not been arrested by disruptions from the suspension of mining by Samarco, a Vale/BP joint venture in Brazil, following a deadly tailings spill. The dam burst also damaged a nearby Vale mine and the company said that up to 19 million tonnes of annual output is affected.

Those losses will be more than made up by Vale's gigantic S11D project in the Amazon which the Rio de Janeiro-based company said will deliver ore – 95 million tonnes of it every year –way under budget and bang on time at the end of 2016.

Vale's ambitions are more than matched by the other majors. After a near 15% year-on-year surge in output in the third quarter Rio is well on its way to reach 360 million tonnes in the next few years, while BHP Billiton which grew production 6% last quarter is on target to grow capacity to 290 million tonnes per year some time during 2017.

World number four producer Fortescue Metals added 5% to its targeted output hitting a rate 165 million tonnes per year in July.

Unlisted miner Hancock Prospecting's Roy Hill is set to ship its first ore from its Pilbara mine which has a 55-million tonnes-a-year capacity early next year. That would place it within shouting distance of Anglo American which is predicting 53 million tonnes for this year before its Minas Rio mine ramps up to capacity of 26 million tonnes in 2016–2017.

“The floor of this market is in the hands of the top five mining companies. We will need to see more cuts before there is a sustained recovery.”

http://www.mining.com/iron-ore-price-craters/

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Coal and iron ore producer Cliffs Natural Resources Inc said it would temporarily halt all operations at its Northshore iron ore mine in Minnesota by Dec. 1, aiming to reduce costs at a time when miners are hit by weak prices and low demand.

Cliffs said it expects the Northshore mine and United Taconite processing facility to be idled through the first quarter of 2016 and that inventory at both mines was adequate to meet current customer demand.

Cliffs shares were down 3.7 percent at $2.59 in early trading on Tuesday. The stock had fallen 62.3 percent this year.

The company, which has previously idled the United Taconite mine, said it will continue to operate the Hibbing Taconite mine in Minnesota and the Tilden and Empire mines in Michigan.

Cliffs and other U.S. miners have been hit by a drop in demand from steel mills and weak iron ore prices due to excess supply from big miners such as Vale SA, Rio Tinto Plc and BHP Billiton Plc.

"The historic high tonnage of foreign steel dumped into the U.S. continues to negatively impact the steel production levels of our domestic customers," Cliffs Chief Executive Lourenco Goncalves said on Tuesday.

U.S. steel companies in June had filed a complaint with the U.S. government over cheaper imports of corrosion-resistant steel from China, India, Italy, South Korea and Taiwan.

Goncalves said Cliffs will immediately ramp up production by restarting idled facilities "as soon as the unfairly traded steel problem subsides and domestic steel production recovers to normal levels".

The company expects that idling the two operations will cost it $9 million per month.


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Financial Review reported that anger in the Brazilian city of Mariana about the Samarco tailings dam disaster is turning to action, with an Indian tribe affected by the tragedy blocking a key iron ore railroad line owned by Vale.

Many of the 350 members of the Krenak tribe who live on the banks of the Rio Doce in Minas Gerais, hundreds of kilometres downstream from the disaster site, have put on war paint and camped out on the Vale do Rio Doce railroad line that passes near their village, leading Vale to shut down iron ore shipments and other train traffic until the problem is resolved.

According to the G1 news site, Krenak chief Geovani Krevak said the murky, red-tinged slurry clogging the river water, their only source of potable water, had been undrinkable for a week. "Like us, now the trees and the animals also don't have any water. The river dies, we all die."

Though the 650 or so survivors from the smashed district of Bento Rodrigues of Mariana have been quickly and peaceably resettled in hotels and have been told they will be relocated to new homes "soon", anger is growing and public protests are being called as the red-tinged iron ore slurry continues its polluting journey to the Atlantic Ocean about 500 kilometres away along one of Brazil's most important rivers, the Rio Doce.

Samarco said the Krenak tribe had been given 8000 litres of mineral water, 140 water cisterns and a water truck to help them get through the situation. For its part, Vale said it was negotiating with the Krenak to re-establish ore shipments on the line.

http://steelguru.com/mining/indian-tribe-blocks-iron-ore-rail-line-of-vale-protest-at-disaster/439375

Chinese steel prices hit record lows on Tuesday amid prolonged worries over shrinking demand in the world's top consumer that market sources say has forced one of the country's largest private producers to cease output.

The shutdown by Tangshan Songting Iron & Steel, with an annual capacity of 5 million tonnes, would be one of the biggest in the sector's years-long downturn as the world's No.2 economy slows, traders and analysts said.

The company, located in the northeastern city of Tangshan, did not answer repeated telephone calls. An official with the local government of Tangshan said it was "dealing with the issue right now in accordance with related law and regulations", without specifically stating the company had ended production.

Chinese social media showed photos and videos that were apparently of hundreds of disgruntled workers gathered outside a local government building in Qian'an, Tangshan, demanding help in the face of the closure.

A shutdown would highlight the sector's woes and fuel concerns that more closures are on the way, with a raft of mills already shuttering output.

While cuts in output would remove some of the surplus capacity that has weighed on prices, traders said the latest shutdown dented overall sentiment on the outlook for the Chinese economy.

On Tuesday, Chinese steel prices plumbed a record low of 1,748 yuan a tonne, down nearly 37 percent since the beginning of this year. That has also hit demand for steelmaking ingredient iron ore .IO62-CNI=SI, already down over 30 percent in 2015.

"I think there will be more closures in China and no capacity additions. Steelmakers and local governments don't have the incentive to build new capacity," said Wang Li, an analyst at CRU Group in Beijing.

"Generally people think that to close a steel plant would be quite difficult in China and maybe unlikely, but the fact is closures are increasing and quicker than people's expectations."

Tangshan, which is 200 km (124 miles) east of Beijing and produces more steel a year than the United States, has tens of small steel mills and has been on the frontline of China's campaigns to tackle overcapacity and pollution.

The city has pledged to reduce its annual crude steel capacity by 28 million tonnes from 2013 until 2017, roughly a fifth of its total.

Around 15 million tonnes of steel capacity in Tangshan has been shut down so far, said Cheng Xubao, an analyst with industry consultancy Custeel said.

"Local governments want to help, but they are not able to help all. More mills could shut down as demand keeps weakening. Mills are not afraid of losses, but they are worried that there is no demand."

Apparent steel consumption in China, the world's biggest producer and consumer, fell 5.7 percent to 590.47 million tonnes in the first 10 months of the year, the China Iron and Steel Association (CISA) said.


Read more at Reutershttp://www.reuters.com/article/2015/11/17/china-steel-tangshan-idUSL3N13C2BB20151117#ZRE3VslgCZctudzV.99

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China is actively taking measures to cut steel capacity and is looking to strengthen talks with other countries to solve steel trade disputes, China's commerce ministry said on Tuesday.

China's steel industry, the world's biggest, has been blamed by overseas steel mills for causing them hurt by exporting indiscriminately at unfair prices.

The nation is expected by analysts to ship a record 100 million tonnes-plus of steel products abroad this year to offset shrinking domestic demand amid a slowing economy.

"The overcapacity is a common issue facing the global steel industry which is under restructuring. China is actively taking measures and optimising the industry structure, including slashing large capacities," Shen Danyang, spokesman for the Ministry of Commerce, told reporters at a briefing.

Chronic overcapacity and falling demand has helped drive Chinese steel prices to their lowest level in decades, forcing domestic mills to cut output and some to shut down permanently due to heavy losses and debt.

World steel producers have complained on several occasions about Chinese steel exports. In the latest instance, nine international steel associations said in a joint statement earlier this month that the Chinese government played a big role in its steel sector and it remains a non-market economy.

Shen refuted the claims of the associations, saying such concerns should not be used to engage in discriminatory trade practices and steel trade tensions should not be linked with the status of Chinese economy.

"I don't think steelmakers in China are subsidised and the government's attitude towards the steel industry makers is very clear: Those that are not competitive should be closed," said Wang Li, an analyst with CRU in Beijing.


Read more at Reutershttp://www.reuters.com/article/2015/11/17/china-steel-exports-idUSL3N13C2UJ20151117#EQQb0c5DkK7T3WHr.99

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Mr Seshagiri Rao, Joint Managing Director and Group CFO, JSW Steel  speaking about the outlook for the steel market going forward said even after the imposition of state guard duty, imports haven’t fallen, adding that in fact imports grew by around 42 percent this fiscal. He said “In order to avoid the safe guard duty, the Chinese are under pricing the products, so there has been no relief for the domestic steel producers as such. There is need to introduce different tariffs across the supply chain to combat the problem of imports into India.”.

http://steelguru.com/steel/india-needs-different-tariffs-to-combat-steel-imports-mr-seshagiri-rao/439288#tag