China iron ore falls more than 2 pct as physical appetite wanes
19 December 2016
Chinese iron ore futures dropped more than 2 percent on Friday as steel prices lost ground in afternoon trading, with steel mills holding off on buying the raw material in the physical market after recent rapid gains.
But steel prices could bounce back as China sustains efforts to curb overcapacity in the sector by limiting credit and fighting pollution.
Iron ore on the Dalian Commodity Exchange closed down 2.4 percent at 591.50 yuan ($85) a tonne. It hit a nearly three-year high of 657 yuan on Monday.
“We’re just hearing on the physical side that buying appetite for iron ore has waned at the ports,” said Kelly Teoh, iron ore derivatives broker at Clarksons Platou Futures.
“I think the steel mills are just holding off on buying at the moment.”
The most-active rebar on the Shanghai Futures Exchange fell 2.2 percent to end at 3,293 yuan a tonne, after rising to 3,409 yuan in morning deals.
The construction steel product still gained about 1 percent for the week, having touched a 32-month peak on Monday.
China’s banking regulator said banks must strictly control credit to coal and steel firms that are violating capacity cuts, the latest in a series of regulations aimed at reducing loans to industries struggling with overcapacity.
Since November, China’s crackdown has focused on producers of low-quality steel that use induction furnaces which consume steel scrap as raw material.
“The total supply loss from induction furnaces may account for 5-6 percent of Chinese crude steel production, and this could create potential upside to steel prices into 2017 if implementation is comprehensive and sustained,” Goldman Sachs analysts said in a report.
China’s fight against smog has also forced mills to curb steel output. Environmental authorities have advised 23 northern cities to issue red alerts, the highest possible air pollution warning, on Friday evening, against the “worst” smog the country has experienced since autumn, state media said.
Both iron ore and steel prices “will remain resilient over 2017, following strong gains in 2016, as additional Chinese infrastructure spending will tighten the market,” according to BMI Research, a unit of Fitch Ratings.
That should support iron ore prices over the next six to nine months although BMI said it sees a “relapse later in 2017-2018 stemming from a slowdown of the country’s construction activity and the oversupplied seaborne iron ore market.”
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 2.9 percent to $81.50 a tonne on Thursday, according to Metal Bulletin. The spot benchmark was nearly flat so far this week after gaining 5 percent last week.
Source – Reuters
Sustainable steel making for “Make In India” and achieving Paris climate deal targets
ND Rao, PMAI
Exclusive
26 September 2016
|
India blessed with around 30 billion tons of Iron Ore Resource base (as on 2015), 20% High Grade, 30% Medium Grade & balance 50% Low Grade ore. All medium & low grade ores require to be processed through washing & beneficiation plants to enrich ore quality for use in Steel making. Iron ore beneficiation & pelletisation plants with total capacity around 116 MTPA & 85 MTPA respectively have come up in the country to use these low grade iron ore fines. It is expected the steel consumption will increase to around 150 kg/person/yr from existing level of 60 by 2030, which amounts around 200 million tons steel production. It is estimated by 2060, India will be a develop country with a population of 1600 million & highest in the world. Considering present 100 million Tons Steel production & 85 million Tons of Pellet production per year, following CO2 emissions can be reduced per year for sustainable steel making. Mining – As per FIMI, around 100 million tons of iron ore fines stocks are available in our country. Existing Iron ore Beneficiation units shall use these fines’ dumps, which in turn reduce further mining & reduction in CO2 emission by 0.09 Mil. Tons (0.9 KgCO2/t X 100 Mil. Tons) Pipeline – Around 24 MTPA Iron ore slurry is being transported through underground pipeline from various Beneficiation Plants to respective Pellet Plants. It reduces CO2 emission by 0.8112 Mil. Tons (33.8) Kg CO2/t X 24mil. Tons) per annum comparing to road transport Agglomeration – 85 MTPA Iron ore pellet production will reduce CO2 emission by 19.55 Mil. Tons ((230) Kg CO2/t X 85 Mil. Tons) per annum comparing to sintering process. Iron & Steel Making – By use of 85 MTPA Iron ore pellets for iron & steel making will reduce CO2 emission by 26.7 Mil. Tonnes ((1255-941) Kg CO2/t X 85 Mil. Tonnes) per annum comparing to the use of sinters. In total; around 47.15 Million Tons of CO2 emission per year can be reduced by changing to sustainable technology in Steel making value chain. In order to ratify Paris climate deal, Steel makers have to reduce carbon foot print to achieve the below target set in Paris Climate deal * CAPPING TEMP RISE < 2 deg C * 35% REDUCTION IN EMISSION LEVELS BY 2030 FROM 2015 LEVEL * $2.5 Trillion ESTIMATED INVESTMENT REQUIRED * 40% OF OVERALL ENERGY MUST BE NON-FOSSIL FUEL BASED BY 2030 * ABOVE 25 Yrs OLD COAL BASED POWER PLANTS TO BE SHUTDOWN * 34,278 Mw TO BE CLOSED. * TOTAL COAL BASED CAPACITY 211,640 Mw (2015 CEA) |
|
|
|
Leave a Reply
Want to join the discussion?Feel free to contribute!