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Maximising returns: Chinese mills to ramp up output before curbs bite again

China’s steel producers are eager to unleash their mills’ capacity when this winter’s output curbs end next month, hoping for a repeat of last year’s record profits based on high margins and less competition as outdated plants were closed. China shut down up to half of its steel production this winter in 28 cities in the country’s manufacturing heartland in the north as part of an anti-pollution campaign. With margins still encouraging full output, China’s pent-up steel production should erupt when the curbs expire on March 15. Because of the ...

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European thermal coal traders change strategy as Q2/Q4 contracts flip into contango

The front half of the CIF ARA thermal coal futures curve has shown a move into contango recently as low demand in the spot market has continued to pull the prompt contracts down, affecting trading strategy. The spread between the Q2-18 contract and the Q4-18 contract first flipped from backwardation to contango earlier in the month and was in a contango of 30 cents Monday, having been backwardated $2.40 on the first day of trading in 2018. Sources attributed the drop at the front of the curve to a slow ...

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China’s benchmark power coal price edges down

China’s benchmark power coal price went down slightly during the past week partly due to shrinking demand from coal-fired power plants. The Bohai-Rim Steam-Coal Price Index, a gauge of coal prices in northern China’s major ports published weekly, dropped to 575 yuan (around 90 U.S. dollars) per tonne from 576 yuan a week ago, according to Qinhuangdao Ocean Shipping Coal Trading Market Co. Ltd. The price was also lower than the 587 yuan in the same period last year. Power coal prices had been rising during the past weeks because ...

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Why the commodity rally will get back on track

Are we in the early stages of a sustained rise in commodity prices? And what does it mean for the US dollar? We posed these questions a year ago when robust global economic growth was driving commodity demand and the US dollar was starting to tip over from a 15-year high. The two are inextricably linked, though which is the horse and which the cart is not always clear. The recent disruption in financial markets suggests it’s worth a fresh look at the relationship. Over the past couple of years, ...

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Nigerian state oil firm spent $5.8 bln on fuel imports since late 2017

Nigeria’s state oil firm said it had spent $5.8 billion on fuel imports since late 2017, as it combats a fuel shortage that has left people queuing for hours at filling stations and hobbled an already-struggling economy. “The corporation’s intervention became necessary following the inability of the major and independent marketers to import the product because of the high landing cost which made cost recovery and profitability difficult,” the Nigerian National Petroleum Corporation (NNPC) said in a statement. The price of gasoline is a highly charged subject in Nigeria, Africa’s ...

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GRAINS-Wheat hits 2-week low, soybeans ease from 7-month peak

Chicago wheat prices slid for a third session on Wednesday to mark a two-week low, pressured by plentiful world supplies and crop-friendly weather in some key exporting countries. Soybean prices inched down, but stayed close to their highest in nearly seven months on concerns that dry weather in Argentina could cause production losses. The Chicago Board of Trade most-active wheat contract had fallen 0.6 percent to $4.46-1/2 a bushel by 0252 GMT, its weakest since Feb. 6. Soybeans were down 0.5 percent at $10.21-1/2 a bushel after climbing to their ...

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Australia’s FMG links plan to increase iron ore grade to Eliwana development

Australian iron ore miner Fortescue Metals Group reiterated Wednesday it was pinning its hopes of increasing the grade of the majority of its products to more than 60%-Fe on the development of its Eliwana mine. Newly appointed CEO Elizabeth Gains reiterated the company’s target of increasing its ore grade, which it announced last November, was linked to the replacement of its Solomon Hub Firetail operation. “We are in the final feasibility around Eliwana in the Western Hub as the replacement for Firetail,” Gains, who replaced Nev Power as CEO, said. ...

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Guptas’ Optimum Coal Risks Suspension as Workers Protest

South Africa’s Optimum Coal mine, linked to the politically connected Gupta family, will be suspended if managers fail to comply with the site’s social and labor plan. Workers protested Wednesday over the uncertainty at the operations. The Department of Mineral Resources conducted an inspection on Feb. 8 and Optimum Coal must take measures to reach compliance within 60 days of a pending order, the ministry said by email. The National Union of Mineworkers said it went on strike because key questions have yet to be answered at the mine. “What ...

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Strong South African coal bids boost markets amid tight supply

Colombian coal arbitrage to India opening CIF ARA prices gain $5 over two days South African coal markets continued to be in tight supply Tuesday, helping Atlantic physical prices gain $1 despite quiet activity during the Chinese holiday period. A bid and offer was heard for April-loading at $99/mt, respectively, for FOB Richards Bay 6,000 kcal/kg NAR coal, a day after an April-loading cargo traded at $98/mt. A trading source said trading activity was originating from a single source. “No one else is paying anywhere near this level,” one trade ...

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Wesfarmers continuing review of its remaining coal asset

Australian conglomerate Wesfarmers said on Wednesday that the sale of its Curragh coal mine, in Queensland, would be completed in the second half of the year and confirmed that it was continuing the strategic review of its remaining coal asset, a 40% interest in the Bengalla mine, in New South Wales’ Hunter Valley. The company, which has businesses such as hardware chains Bunnings, Coles supermarkets and department stores Kmart, Target and Officeworks in its fold, in December announced the sale of its largest coal asset for $700-million. MD Rob Scott ...

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Fortescue: Half Year Financial Results to 31 December 2017

Net profit of US$681 million and interim dividend of A$0.11 per share Fortescue has released its FY18 half year results reporting a net profit after tax of US$681 million and Underlying EBITDA of US$1,828 million. HIGHLIGHTS • Safety TRIFR of 3.1, a 3 per cent improvement on the prior comparable period • Net profit after tax of US$681 million and Underlying EBITDA of US$1.8 billion • 84.5 million tonnes (mt) of ore shipped • US$12.11 per wet metric tonne (wmt) C1 cost, a 7 per cent improvement compared to HY17 ...

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Turkish ferrous scrap import market nudges higher on continued demand

The Turkish ferrous scrap import market continued to shrug off uncertainty surrounding the US Department of Commerce’s Section 232 recommendations Tuesday, as strong domestic steel rebar buying offset tepid export demand. A global merchant sold 17,000 mt of Heavy Melting Scrap 1/2 (80:20) and 5,000 mt of rails ex-UK at a composite price of $355/mt CFR to an Iskenderun-based steelmaker for second-half of March shipment. Using prevailing market differentials, this normalized to $355.50/mt CFR against S&P Global Platts methodology. Consequently, Platts’ daily assessment of Turkish premium deepsea HMS 1/2 (80:20) ...

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Indonesia: Government to set new coal price formula next week

The Energy and Mineral Resources Ministry plans to introduce a new price formula for domestic coal sales by next week at the latest, despite the ongoing disagreement between state electricity firm PLN and local coal miners. Since earlier this month, the ministry has been in discussion with PLN and local coal miners regarding the new price formula for coal supplied to PLN under the domestic market obligation (DMO). The new formula is needed to help ease PLN’s financial burden amid increasing global coal prices. Coal accounts for more than 57 ...

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Glencore: Preliminary Results 2017

Highlights Glencore’s Chief Executive Officer, Ivan Glasenberg, commented: “Our performance in 2017 was our strongest on record, driven by our leading Marketing and Industrial asset businesses. “Marketing Adjusted EBIT exceeded $3 billion for the first time since 2008 and Industrial Adjusted EBITDA rose 60% to $11.5 billion. The benefit of higher commodity prices combined with a continued strong unit cost performance is reflected in enhanced mining margins within our metals and energy operations. “Our strong cash flow generation is reflected in a 49% increase in funds from operations to $11.6 ...

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Japan receives no offers for regular feed-wheat, barley tender

Japan’s Ministry of Agriculture said it received no offers for feed-quality wheat or barley in a simultaneous buy and sell (SBS) auction that closed late on Wednesday. The ministry had sought 120,000 tonnes of feed wheat and 200,000 tonnes of feed barley to be loaded by May 31 and arrive in Japan by July 31 in the tender that is usually conducted weekly. It sought similar quantities of each grain to be loaded and shipped during the same period in a similar tender that will be held on Feb. 28. ...

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