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SYDNEY, Sept 1 (Reuters) – Steel-related contracts again led the base metals complex higher on Friday, gaining momentum from a positive outlook for Chinese industrial activity.

China’s manufacturing activity expanded at the fastest pace in six months in August, buoyed by a surge in export orders and higher prices, according to the private Caixin manufacturing purchasing managers index.

The official Purchasing Managers’ Index (PMI) released on Thursday rose to 51.7 in August from 51.4 the previous month.

* NICKEL LEADS: Shanghai Futures Exchange nickel was among the biggest gainers, with the most active contract ending 1.7 percent higher at 94,650 yuan ($14,395) a tonne. London Metal Exchange three-month nickel was lifted 0.8 percent to $11,895 a tonne. The contract is trading at its highest since November 2016, according to Thomson Reuters data.

Nickel is chiefly used in making stainless steel.

“The PMIs were all positive and that’s reassuring people that China’s steel industry is on track,” said a commodities trader in Perth. “That’s pushing the steel-related metals higher.”

The official Purchasing Managers’ Index (PMI) released on Thursday rose to 51.7 in August from 51.4 the previous month.

Chinese rebar steel futures rose more than 5 percent on Friday – its biggest one-day gain since April 2016. It also hitting its highest since early 2013 during the session.

*CHINA SMOG: China plans to conduct 15 rounds of inspections during its new campaign to curb smog during winter, the environment ministry said on Friday, as the country strives to meet politically important air quality targets.

* ZINC UP: The most traded Shanghai Futures Exchange zinc contract closed 1.4 percent higher, while LME zinc was a more modest 0.4 percent higher at $3,158.50 a tonne. Zinc is used in galvanizing steel against rust.

* SHFE ALUMINIUM: ShFE aluminium, used widely in construction and aerospace, also found support, rising 1.8 percent. LME aluminium was trading 1 percent firmer at $2,138.50 a tonne, the highest since early 2013.

* LME COPPER: LME copper was up 0.4 percent to $6,818 a tonne The contract touched a peak of $6,872 on Thursday, the highest since September 2014.

* SHFE COPPER: The most-traded copper contract on the Shanghai Futures Exchange ended up 0.3 percent.

* SPECULATION: A speculative frenzy triggered by a falling dollar, tighter supplies and healthy demand in top consumer China have in recent weeks propelled prices of industrial metals to multi-year highs.

* INDONESIA CHEERS: Indonesia’s government left no doubts as to who it believes got the better deal in its landmark agreement with Freeport McMoRan Inc on the future of the Grasberg copper mine.

* MINE BOOST: Canadian miner First Quantum Minerals Ltd said on Thursday it would boost its stake in unit Minera Panama SA to 90 percent in a deal valued at $635 million to increase its copper mining operations.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS

($1 = 6.5753 Chinese yuan)

China’s steel futures slightly pulled back from a steep fall during morning trade on Monday, dragging down steelmaking raw materials, on technical selling and as investors took recent industry association and government statements as a cue to book profits.

Iron ore and coking coal had their biggest one-day falls in about three months amid concerns about slowing demand from the steel industry as Beijing ramps up its environmental inspections.

Some investors viewed the steel market’s failure to breach the 4,000 yuan per tonne mark on Friday, following several near-misses, as a bearish technical signal, analysts said.

The most-active rebar futures on the Shanghai Futures Exchange edged up 0.2 percent to 3,932 yuan ($592.15) a tonne, after touching an intraday high of 3,960 yuan a tonne earlier in the session.

A broad statement about supply-side reform issued by the National Development and Reform Commission (NDRC) on Friday was viewed as another effort by the government to curb speculative buying, which the authorities believe has fuelled the recent rally.

In the statement, it said it will reinforce capacity cutbacks in steel sector while keeping supply and demand in balance, downplaying worries about tightening supplies of product as Beijing ramps up its environmental inspections across heavy industry and closes low-grade mills.

It followed a similar report from China’s industrial association last week.

The statements “show the clear intention to keep prices stable. Any further price rallies will probably be curbed by government policy,” Orient Futures said in a research note.

Data showing a slower pace of buying also suggested that the market was more bearish. Weekly purchases of construction steel product in Shanghai, which typically reflects downstream market demand, fell 5.7 percent to 29,530 tonnes last week from a week earlier, according to Orient Futures.

“Property and infrastructure projects have been slowing down due to heavy rain and a typhoon in southern China,” said Xu Bo, analyst at Haitong Futures.

Typhoon Hato, a force 10 typhoon, pummelled southern China last week and killed nine people in Macau. Another storm “Pakhar” has landed in coastal provinces during the weekend.

The most-traded iron ore futures on the Dalian Commodities Exchange lost 2.8 percent to 572.5 yuan a tonne on Monday, posting its biggest one-day loss since June 1.

“The latest round of the restocking process at steel mills is almost done, which will weaken demand in the coming days,” Xu said.

The January coking coal contract fell 2.3 percent to 1,471 yuan a tonne on Monday. Coke futures closed nearly 1 percent higher at 2,476 yuan a tonne.

Source: Reuters (Reporting by Muyu Xu and Josephine Mason; Editing by Richard Pullin and Sherry Jacob-Phillips)

A worker works at a steel factory in Dalian, Northeast China’s Liaoning province. [Photo/VCG]

BEIJING – China’s steel prices have begun to rise, but an industry group tried to calm the market Tuesday, saying the increase will be limited as new production capacity is set to ease supply.

The steel price index climbed to this year’s peak of 106.49 at the end of July, lifted by higher iron ore costs, improved demand as well as lower supply due to government policies to cut steel overcapacity and enhance environmental protection, China Iron and Steel Association (CISA) said on its website.

The country’s crude steel output rose 5.1 percent year on year to 492 million tons in the first seven months this year, while apparent consumption of crude steel increased 10.9 percent to 450 million tons, according to CISA data.

Although production restrictions amid tighter enforcement of environmental rules during the winter heating season will cap supply in the coming months, expanding competitive capacity will help contain large price rises, the CISA said.

China has been striving to close small mills that churn out low-quality steel made from scrap metal, this year, leading to decreased supply.

The crackdown on the small low-end furnaces, accounting for 4 percent of total steel output, came as Beijing aims to cut excess capacity, tackle pollution and improve safety measures at these mills.

SOURCE: Xinhua

Laborers work at a steel plant of Shandong Iron & Steel Group in Jinan, Shandong province, China, July 7, 2017.(Stringer)

BEIJING (Reuters) – China’s steel output hit a monthly record in July at 74.02 million tonnes, up 10.3 percent on a year ago as mills in the world’s top producer continued to ramp up production even as Beijing intensified its war on smog.

July’s figure was ahead of the previous monthly record of 73.23 million tonnes set in June, official data showed, underlining concerns about oversupply in the market.

In the first seven months of the year, steel output totaled 491.55 million tonnes, up 5.1 percent, data from the National Statistics Bureau showed.

Activity in the sector normally slows during the summer months when building construction eases off due to the heat.

“However, due to Beijing’s crackdown on low-end rebar and capacity cutbacks in the steel sector, mills are spurred by rallying profits to work with full capacity,” said Xu Bo, steel analyst at Haitong Futures.

“Steady demands from infrastructure also gave support to steel prices, which encourages mills to churn out more products,” Xu said.

The most-traded rebar futures SRBcv1 contract has gained nearly 50 percent this year, peaking at 4,016 yuan ($603.15) a tonne last week before retreating to 3,841 yuan a tonne by 0335 GMT on Monday.

The data will likely fuel worries in the United States and Europe that China’s efforts to cut excess capacity in bloated heavy industry are not leading to a drop in supplies, which foreign rivals say are flooding international markets.

China has been pushing to clean up its inefficient manufacturing sectors for years as part of its war on smog and supply-side reform.

This year it has sought to curb output of low-grade steel like rebar used in construction, leading to a surge in prices as investors bet on tight supplies.

But it has also allowed steel mills to expand plants if they comply with stricter environmental standards, which has offset much of the capacity reductions.

SOURCE: Reporting by Muyu Xu and Josephine Mason; Editing by Kenneth Maxwell and Richard Pullin. (Reuters)

◊As China keeps breaking promises, American steel needs support◊

© Getty Images

It emerged this week that the Chinese government has been taking action to make sure that the Chinese Communist Party is the ultimate decisionmaker at dozens of state-owned Chinese businesses. The Financial Times reported that more than 30 Chinese state-owned companies have had their by-laws amended to state that the Communist Party provides “direction” on key decisions.

So much for western hopes that China would progress rapidly to become a market economy after joining the World Trade Organization in 2001.

The Trump administration needs to keep this dynamic in mind as it considers whether to apply Section 232 protection for the U.S. steel and aluminum industries. Section 232 of the 1962 Trade Expansion Act empowers the federal government to take action, including tariffs and/or quotas, to protect an industry if that industry is vital to U.S. national security and is threatened by unfair trading practices.

Today, these vital industries are at risk due to overproduction in China. In the case of steel, China’s excess capacity today exceeds the total of U.S. production. Chinese overcapacity weighs on the world market, driving down steel prices and threatening the profitability and sustainability of the U.S. industry. That threatens our national security capability, because steel, in many different forms, is vital to our military — on land, in the sea and in the air.

There’s no question that the root cause of the world’s steel overcapacity is a Chinese industry that is massively subsidized by the Chinese government. Those subsidies, running into the hundreds of billions of dollars, have enabled China to build up a huge (and highly polluting) steel industry, and keep it going despite billions in losses.

China has promised again and again to reduce production and mothball steel mills and furnaces. Yet each year, steel production continues to rise. The World Trade Organization is unable to pressure China in any meaningful way.

It’s not just steel and aluminum that have suffered as a result of foreign mercantilist practices. Foreign support of targeted industries has led to the decline of many of our manufacturing and agricultural industries. On the civilian side, this has led to large-scale unemployment and the decay and desolation of many once-prosperous towns and cities.

On the defense side, this has led to serious erosion in our defense capability. Our production and research capabilities depend on having sizeable markets to support the costs of world-class American products. Yet, past administrations have refrained from enforcing our trade laws out of fear they would be labeled protectionist.

Some critics of Section 232 action argue that U.S. action could lead to a tit-for-tat “trade war” in which other countries take action against us. Yet other countries’ use of national interest provisions has not produced such reprisals. On the contrary, if the U.S. refuses to take action today, it will be seen as a signal that the trade distortions of foreign subsidies will be free to continue and grow.

The growth of trade distortions and violations of the principles of free trade by China and other nations have led to a situation in which the U.S. is today running a trade deficit of some $550 billion a year. The U.S. has run deficits for more than 40 consecutive years, a record in modern economic history. Those deficits have in turn led to industrial decline, increased unemployment, stagnant living standards and other social and economic ills.

It’s time to take action before our defense capability is irremediably damaged.

Critics say the U.S. has a responsibility as the so-called leader of the free world to ensure an open and fair trading system. In our view, the U.S. has a responsibility to restore the fair trading system that once existed but no longer does. That responsibility means standing up for the principle that every nation has the right to safeguard its national security, and every nation has the obligation to respect the rules of free trade.

The world is looking to the U.S. and waiting to see it show the leadership for which it was once respected and celebrated.

Dan DiMicco is the former CEO of Nucor Steel. He was a Trump trade advisor during his campaign and also part of the Trump transition team.

SOURCE: BY DAN DIMICCO, OPINION CONTRIBUTOR – 08/18/17 10:20 AM EDT

The China Iron and Steel Association (CISA) said that prices for steel futures weren’t driven by demand or supply reduction, but “over-interpretation, or even misinterpretation” with regards to capacity cuts, clean-ups of illegal steel production and environmental protection policies.

The association warned that some traders drove up prices for their own profits by making exaggerated conclusions that steel prices will soar in the second half of 2017.

Some investors were spooked by the official warning. Benchmark steel rebar futures traded in Shanghai tumbled 3.5 per cent to 3,830 yuan a metric ton, giving up this week’s gains. Iron ore futures listed on the Dalian Commodity Exchange plunged 5.2 per cent to 533.3 yuan a ton, on track for their biggest single-day loss in nearly three months. The acceleration in the sell-off was also triggered by rumours that the Shanghai Futures Exchange may raise margin requirements for steel rebar contracts if trading volumes remain high.

The strongly-worded announcement came after the price for the most actively traded steel rebar in Shanghai hit a five-year high earlier this week and it indicated rising scrutiny from authorities over the sharp rallies that roiled China’s commodities markets, from steel rebar to iron ore and aluminium. It also underscores Beijing’s fixation with market stability ahead of a top-level leadership reshuffle this fall.

China launched a supply-side reform for the steel and coal industries in 2016 to reduce excessive production. Trade tension with the U.S. and E.U. remains heated. Beijing’s crackdown on illegal steel capacity this year further stoked expectations of tightening supply, fuelling rallies on spot and futures markets.

“Speculations in steel-related metals has been a common scene thanks to strong influx of funds,” said Fan Qingtian, an analyst at Nanhua Futures Co., “However, the government has strong incentive to tame the rally if the price surge risks stoking inflation and affect people’s [livelihoods].”

On Friday, the benchmark steel rebar traded in Shanghai slipped 0.2 per cent to 3,961 yuan a metric ton and the iron ore futures listed on the Dalian Commodity Exchange recovered to trade 0.2 per cent lower at 562 yuan a ton. Steel rebar futures have surged nearly 40 per cent this year, while hot-rolled coil, a key steel product, has also risen more than 20 per cent since the beginning of 2017.

The CISA summoned futures companies, steel companies and consulting firms on Wednesday to analyse reasons behind the “abnormal price movement,” according to the statement.

SOURCE FROM: YIFAN XIE, Dow Jones

• China’s steel prices are on the rise
• In March, Beijing announced plans to slash steel capacity by 50 million metric tons this year in efforts to tackle pollution and curb excess supply
• Higher prices translates to better profits for industry, but it also means increased costs for sectors like construction that use much of the alloy

Talk about a roller coaster. Chinese steel prices are falling this week after spiking to record highs last week as a series of curbs targeting speculative trading kick in.

Starting Tuesday, one of China’s biggest commodities derivatives markets is raising transaction fees to 0.05 percent of the total value, from 0.01 percent, on steel rebar futures contracts for delivery in October 2017 and January 2018. The Shanghai Futures Exchange is also limiting intraday positions on those contracts to 8,000 lots.

Source From: Sophia Yan, CNBC

Talk about a roller coaster. Chinese steel prices are falling this week after spiking to record highs last week as a series of curbs targeting speculative trading kick in.

Starting Tuesday, one of China’s biggest commodities derivatives markets is raising transaction fees to 0.05 percent of the total value, from 0.01 percent, on steel rebar futures contracts for delivery in October 2017 and January 2018. The Shanghai Futures Exchange is also limiting intraday positions on those contracts to 8,000 lots.

An employee works at a steel factory in Dalian, Liaoning Province, China, July 4, 2016.
China Daily | Reuters
An employee works at a steel factory in Dalian, Liaoning Province, China, July 4, 2016.
The October 2017 contract has slipped a bit over 2 percent so far this week to 3,880 yuan per metric ton, but remains up 35 percent for the year.

Chinese steel has rallied steadily this year, but high trading volume and a recent price surge has worried authorities. Increased oversight on the metal underscores Beijing’s priority to maintain market stability in a sensitive political year, and its continued efforts to iron out the country’s history of boom-and-bust cycles in commodities trading. China is both the world’s largest producer and consumer of steel, so price fluctuations can hit the world’s second-largest economy on all sides.

All of this “will continue to affect market sentiment this week, as the commodities market is mostly policy driven,” wrote UOB Kay Hian analyst Sandra Huang in a research note. “We think the government is targeting to curb speculative trading in the futures market, rather than in the spot and stock markets.”

The scrutiny on commodities is not going away. The Shanghai Stock Exchange has formally asked companies including Anyang Iron and Steel and Fangda Coal for comments on steel prices, the impact of cuts to capacity and production, and clarity regarding company profitability, according to filings. Earlier this month, official state media said the Shanghai exchange would strengthen its oversight of any corporate actions and issues that may pose financial risks to the market.

On Friday, the China Iron and Steel Industry Association said in a strong statement that the jump in steel futures was driven by speculation over the impact of coming capacity cuts, not fundamentals. It also said it had convened meetings with industry to analyze the “abnormal” price fluctuations.

Beijing is aiming to cut steel capacity by up to 150 metric tons by 2020, and major rust belt provinces are meant to scale back production this winter in efforts to lower air pollution. Analysts said last week that recently announced targets related to those cuts had contributed to the surge in pricing.

But given the series of curbs introduced over the last few days, analysts said they expect more action to come from authorities and for the current pricing downtrend to continue in steel, impacting other commodities.

“Basically, retail traders in China have taken this to mean the highs have been seen,” said Chris Weston, chief market strategist at IG. “Clearly, there has been a liquidation of long positions from the bulls … I would be cautious here and be keeping a firm eye on iron ore futures as the selling could accelerate.”

The September 2017 iron ore contract traded on the Dalian Commodity Exchange is trading 4 percent lower so far this week.

China’s top steel firms were all down Tuesday morning in early trade, led by a 3 percent drop in Maanshan Iron and Steel shares traded in both Shanghai and Hong Kong.

scouce: CNBC

On May 16, 2017, the Deputy Secretary for Foreign Trade of the Ministry of Foreign Trade of the Argentine Ministry of Production of the Ministry of Foreign Trade of the People’s Republic of China, in accordance with the Ministry of Commerce of the People’s Republic of China, informed Albania of the high-speed steel hand-saw blade originating in China (Western: hojas de sierramanuales rectas de acero Rápido, Nancheng tax code: 8202.91.00 and 8202.99.90) anti-dumping review investigation and evidence collection stage has ended, the enterprises involved can refer to the investigation documents, and from the date of receipt of the notice within 10 working days to submit the final testimony.

April US service center shipments of 310.9 million short tons, down 4.2%, down 5.7%.

4 at the end of the US Metal Service Center steel stocks reached 719.4 short tons, down 6%, the chain fell 0.3%. According to the number of days of supply, steel stocks at the end of April rose to 2.3 months supply. At the end of March 2017, the US service center stock was 2.2 months supply, and the supply of 2.4 months at the end of April 2016.