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China’s thermal coal futures fall after government intervention

China’s most active thermal coal futures prices fell more than 4 percent in morning trading on Wednesday, on track for the biggest one-day drop since November 2016, following news of government intervention to cool the red-hot market. Thermal coal futures fell to 588.8 yuan ($92.37) per tonne by 0250 GMT, extending a more than 3 percent fall in the overnight trading session as investors rushed to close out long positions and pile on short bets. Reuters reported on Tuesday that China’s state planner ordered utilities this week to stop stockpiling ...

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Iron ore quality differentials evolve as market fundamentals shift

Since January S&P Global Platts quality differentials for the gangue elements such as alumina, silica and phosphorous have evolved to reflect changing market fundamentals. The alumina differential soared 100% from $1.50/dmt in January 2018 to $3.00/dmt in May 2018. Phosphorous has also seen large increases from a steady $1.30/dmt throughout the last quarter of 2017 to $2.50/dmt on May 18, where it has remained. The most extreme moves have been seen across both silica differentials, but especially the high silica band of 6.5-9%, which collapsed from $7.00/dmt in January to ...

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Shanghai rebar falls to 1-month low on glut worries, technical selling

China’s construction steel rebar futures fell to a one-month low on Wednesday, as supply glut concerns continued to weigh on market sentiment, offsetting the impact of overcapacity inspections. The most-active rebar contract for October delivery on the Shanghai Futures Exchange closed down 1.4 percent at 3,531 yuan ($553.44) a tonne, having earlier touched 3,511 yuan, its lowest since April 23. Worries over a supply glut came as the utilisation rate at steel mills rose to 70.17 percent last week, a level seen before winter curbs took effect in early November, ...

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The selloff in Chinese steel and bulk commodity futures is getting even uglier

The selloff in Chinese steel and bulk commodity futures is getting even uglier. Here’s the scoreboard as at the mid-session break on Wednesday. SHFE Rebar ¥3,514 , -1.90% DCE Iron Ore ¥452.00 , -1.63% DCE Coking Coal ¥1,168.50 , -5.19% DCE Coke ¥1,953.50 , -4.64% The October rebar contract in Shanghai is currently down 1.9% at 3,514 yuan, a one-month low. It has been as high as 3,705 yuan just four sessions ago. The weakness in steel prices is also weighing on iron ore, coke and coking coal prices, its ...

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South African coal prices kept high on unclear outlook

Uncertainty continued to cloud the South African coal market Tuesday as reports of national utility Eskom needing to purchase material typically dedicated to the export market, coupled with supply tightness and a strongly bid index, had sources uneasy on the sustainability of current high price levels. Platts FOB Richards Bay 5,500 kcal/kg NAR 7-45 day price had been on a strong run since the end of March, recently peaking at $89.60/mt on Thursday, from $76.10/mt at the end of March. The record price levels had met with consumer resistance in ...

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Queensland royalties to get boost from strong met coal demand, stable prices: QRC

Strong demand and stable prices for metallurgical coal have led Australia’s Queensland Resources Council to lift its forecast for coal royalties for the state, although it warned that rail operator Aurizon’s decision to reduce train services could see the sum take a hit. The council now projects record coal royalties of A$3.7 billion (US$2.8 billion) for the 2017-2018 (July-June) fiscal year, QRC said Tuesday, up A$536 million from the government’s December estimate. QRC chief executive Ian Macfarlane said the higher projection reflected strong international demand for metallurgical coal and stable ...

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Brazil imposes countervailing duty on some Chinese steel, but delays implementation

Brazil’s Camex trade secretariat has imposed a countervailing duty of up to $425.22/mt flat-rolled steel from China for five years.” In a posting Monday on Brazil’s official gazette, Camex verified the existence of “subsidies on exports of hot-rolled flat products from China to Brazil and damage to [Brazil’s] domestic industry arising from such practice.” Camex has delayed the tariff for up to one year in the “public interest,” it said. The CVD would potentially harm economic cooperation between Brazil and China and prevent “the increase of trade flows with China,” ...

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India takes U.S. steel tariffs complaint to the WTO

India has launched a complaint against the United States to challenge U.S. President Donald Trump’s tariffs on steel and aluminium, a filing published by the World Trade Organization showed on Wednesday. Indian officials told Reuters last month that their government would open a WTO dispute if the country’s firms were not granted an exemption. Trump imposed the tariffs in March, levying 25 percent on steel imports and 10 percent on aluminium. He said they were justified by national security concerns and therefore outside the WTO’s remit. India, China, Russia, Japan, ...

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Derailments pummel Kumba Iron Ore’s export sales

Kumba, SA’s largest iron-ore producer, told overseas customers it could not meet contractual supply agreements because of an unusually high number of derailments on the railway line linking its Northern Cape mines to the Saldanha port. The incidents contributed to a 1% drop in the company’s export sales in the first quarter compared with the same period a year earlier. International sales fell 12% from the previous three months. Kumba had declared force majeure on March 14, which remained in force, CEO Themba Mkhwanazi said on Tuesday during a media ...

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Beijing orders utilities, miners to help cool red-hot coal market: sources

China’s state planner ordered utilities this week to stop stockpiling thermal coal and told miners to slash prices, two sources familiar with the matter said, the government’s first direct intervention to cool coal prices since mid-2016. The National Development and Reform Commission (NDRC) asked miners at a meeting to bring spot coal prices back under 570 yuan ($90) per tonne by June 10, from current levels of as much as 650 yuan per tonne, the sources said. Miners were also told to increase supplies under long-term contract by 200 million ...

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Tighter at the top: taking a look at the premium end of iron ore’s two-tier market

The 21st of May marks the start of a big week for iron ore – SGX week. This year, three members of the Wood Mackenzie iron ore team will travel to Singapore for iron ore’s marquee event. One theme sure to be widely discussed at the event is iron ore’s two-tier market – the divergent spread in price between high Fe content ores and low Fe content ores. The premium for high-grade ores averaged 23% in 2017 – the average for the five years prior was 9%. Likewise, the penalty ...

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U.S. farmers plow ahead with plantings as China trade war fears ebb

U.S. farmers said they would push ahead with plantings planned before U.S.-China trade tensions eased and, now that the two countries have resumed talks, take a wait-and-see approach to President Donald Trump’s promises for more sales to China. Over the weekend, the world’s two largest economies pledged to keep talking about how China could import more energy and agricultural commodities from the United States to narrow a $335 billion annual U.S. goods and services trade deficit with Beijing. The agreement came after Trump threatened to impose up to $150 billion ...

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This Iron Mountain Looks More Like a Molehill

The global iron ore market is quivering in the shadow of a mountain of rust building up in China. Investors should put that in a bit of perspective. Since the end of 2015, the inventory of iron ore at Chinese ports and tracked by consultancy Shanghai Steelhome Information Technology Co. has roughly doubled, from 80 million metric tons to about 160 million tons. Even compared to the period in 2011 and 2012 when the market was running red-hot, the stockpile is up by 50 percent or so. That looks like ...

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Iron ore market dynamics are shifting beneath calm facade

The seaborne iron ore market appears to be in something of a sweet spot currently, with largely steady demand and prices that have been flatlining for the past couple of months. Of course, another way of saying that a market is enjoying relatively stable and good times is that it’s boring, but in iron ore there is plenty of action bubbling beneath the seemingly calm exterior. It’s not so much that iron ore prices or volumes are expected to shift dramatically in the coming months, it’s more that structural changes ...

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China steel nears lowest price in a month on demand worries

China’s steel prices fell to their lowest in nearly a month on Tuesday, extending losses into a third session on worries about weakening demand amid strong supply in the world’s top producer of the material. Those concerns offset news that the country’s state planner will send out eight inspection teams to check that shuttered excess capacity has not been restarted and that low-grade steel is not being produced. Benchmark Shanghai prices for rebar, a steel product mainly used in construction, dropped 1.1 percent at 3,573 yuan ($560.38) a tonne. Earlier ...

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