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Crude futures to debut next month

Source: www.chinamining.org   Citation: Reuters   Date: September 6, 2015

Contract to reflect country`s growing importance in setting global price of oil

China may launch a global crude oil futures contract as early as October to compete with the existing London Brent and the United States` West Texas Intermediate benchmarks, three sources said, as it pushes ahead with reforms to open up its oil markets.

The long-awaited crude contract would better reflect China`s growing importance in setting crude prices, as well as boost the use of the yuan in which it will be traded, although volatile global trading conditions and China`s recent interference in stock markets have raised some concerns.

The Shanghai International Energy Exchange, also known as INE, circulated a draft of the futures contract to market participants last month, saying the launch could happen as early as October, the sources who saw the draft told Reuters.

China, the world`s second-biggest oil consumer, has already begun to loosen its grip on the physical oil sector this year by granting quotas for imported crude to privately owned refiners for the first time, surprising market participants with the speed of reform.

"The development of a futures market is closely linked to the physical market," INE said in a statement issued to Reuters in response to questions about the new contract.

"The more physical players participate, the better the liquidity of the futures market will be."

The launch of Shanghai crude futures won State approval last year and would be the first Chinese contract that allows direct participation by international investors.

A Shanghai-based contract will compete in the crude futures market, which is worth of trillions of dollars and is dominated by two contracts, London`s Brent LCOc1, seen as the global benchmark, and WTI CLc1, the key US price.

Oil traders said Chinese crude futures would eventually compete against Brent, which is priced off small and declining oil fields in the British North Sea, and can be affected by factors with no relationship to Asia.

INE said that it aimed to have overseas investors, oil companies, and financial institutions participating in its crude futures trading.

"If China`s crude futures don`t immediately attract enough liquidity and markets are still as volatile as now, then traders could get really burned and would quickly stop trading Chinese crude futures," said one oil trader, who would likely start dealing Chinese crude futures.

Recent market interference was also a concern, although he noted China`s iron ore and coal futures markets were running smoothly despite similar price routs to oil.

For futures to work, traders need a widely traded physical market from which prices for futures contracts can be derived.

Granting independent refiners access to oil imports will put pressure on China`s three State-owned oil majors, PetroChina, Sinopec and China National Offshore Oil Corp, which already face headwinds from collapsing oil prices, a stock market rout and corruption charges.

"These changes are coming much faster than we anticipated," said an official with one of the big three State-owned energy companies. "Reforming and opening up the oil market is the new fashion in Beijing."

The government has so far granted a total of seven independent refiners quotas for 715,800 bpd of imported crude, roughly 11 percent of the total crude imports, and more are likely to follow.

"The liberalization of the Chinese oil market will provide more favorable market conditions for the launch of crude oil futures," INE said.

Given the reforms and increased competition, HSBC advised its clients to be "cautious toward the share price potential of China`s oil majors."

Citigroup expects crude demand from the seven independent refineries to more than double to 815,000 barrels per day by the end of 2015.

At least eight more refiners have already applied for quotas, and another 15 are expected to apply, the bank said.

The reforms would advance competition by putting pressure on China`s national oil firms, said Philip Andrew-Speed, head of energy security research at National University of Singapore.

"The private sector has grown in China not so much by privatization, but by squeezing the State sectors so they become either better performing or irrelevant," he said.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

More efforts being made to upgrade rare earth production

Source: www.chinamining.org   Citation: China Daily   Date: September 1, 2015

China`s rare earth producers say they have increased their efforts at upgrading product ranges and shifting toward downstream businesses due to a glut in supplies of the raw materials, including those produced by illegal mining.

"We have been putting more effort into innovation and technology in downstream products," said Gan Mei, director of public affairs for Tianhe (Baotou) Advanced Tech Magnet Co.

"But many rare earth miners have been forced to shutdown production in the past three to five years because of ongoing price wars and excessive production."

The Baotou-based firm is a unit of Tianhe Magnets, a producer of magnets made of rare-earth alloys, such as neodymium iron boron.

Gan said the company, which used to be just a rare earth smelter, has continued spending around 4 percent to 5 percent of revenue on research and development even as the market hit leaner times.

Its rare earth-produced magnets are widely used in the wind-power, electric vehicle and military sectors.

She said 30 percent to 40 percent of its products are exported to countries including Germany, Italy, Russia and South Korea.

There is huge potential for rare earth product application, especially in the electric car industry, as many cities across the country suffer from heavy air pollution, she said.

The Ministry of Industry and Information Technology has taken a series of measures to promote the transformation and upgrade of the rare earth sector, with financial support to promote integration, for instance, between industrialization and research.

The policies have been frequently targeting key rare earth-producing areas such as Baotou, and encourage the upgrade of relevant production standards.

Chen Chuandong, an expert at Baotou Research Institute of Rare Earths, said one of the challenges companies have faced is the huge cost often involved in R&D.

"When market prospects are good, Chinese companies that are busy making money can be unwilling to invest in innovation or product upgrade," he said. "But of course, also when the market is struggling, there is a reluctance too because they are suffering falling profits or even losses."

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

China`s 10 nonferrous metal output up 9.4% in Jan-Jul

Source: www.chinamining.org   Citation: China Knowledge  Date: September 1, 2015

The output of the ten nonferrous metals gained 9.4% from a year earlier to 29.49 million tons in the first seven months of this year, according to the latest report released by the National Development and Reform Commission (NDRC).

According to the statistics, the country`s aluminum electrolytic output grew 12% year on year to 18.33 million tons in the seven-month period, while the output of copper, Zinc and alumina oxide expanded 9.1%, 10.4% and 12% over the previous year to 4.41 million tons, 3.58 million tons and 32.88 million tons, respectively.

Meanwhile, the output of lead shed 3.9% year on year to 2.27 million tons during the seven-month period.

Last month, the average prices of aluminum electrolytic, lead, Zinc and copper futures on the Shanghai Futures Exchange saw a decline to RMB 12,498, RMB 13,141, RMB 15,552 and RMB 41,939 per ton, retreated 3.9%, 1.4%, 6.1% and 6% from a month earlier, respectively.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

No end in sight for coal industry`s four year winter

Source: www.chinamining.org   Citation: chinadaily.com.cn   Date: August 25, 2015

Faced with falling prices and weak demand in a slowing economy, coal companies will find it an opportune time for mergers and acquisitions, industry experts said on Tuesday. [Photo/China Daily]

China Shenhua Energy Co Ltd (China Shenhua) and China National Coal Group Corp (China National Coal), the two largest coal producers in China, posted their first half year`s result for 2015, with China Shenhua`s net profit declining for three consecutive years and China National Coal Group Corp posting a loss for the first time since 2012.

According to the statements, China Shenhua`s net profit fell 37.4 percent to 20.87 billion yuan ($3.26 billion). China National Coal posted a loss of 965 million yuan ($150.93 million). This is the first time the company posted a loss in the first half since 2012.

China`s economy is facing growing downward pressure, demand for energy, especially traditional energy sources like coal, is waning, both sale price and quantity are down, and drops in profit for coal companies such as China Shenhua and China National Coal are inevitable, said Lin Boqiang, Professor at Energy Research Center of Xiamen University. "China Shenhua has its own coal mine, rail road and port, its cost should be lowest in China, if China Shenhua`s profit is declining, other coal producers must be facing even tougher situations."

The price of coal has been falling for three years, with the price of a ton of coal in Qianghuangdao port dropping more than 50 percent from 860 yuan per ton in 2011 to 410 yuan per ton, while the price for coking coal dropped almost 60 percent from 2100 yuan per ton to 900 yuan per ton.

As coal prices tumble, the industry`s future is gloomy. Domestic coal producers made a profit of 20.5 billion yuan in the first half of 2015, only 10 percent of the same period of 2012, according to Lu Junling, the deputy bureau chief of National Development and Reform Commission.

The disappointing performance of China Shenhua and China National Coal reflected an industry still facing an uphill battle. Sluggish economic growth and overproduction still haunts the industry in China and this winter for coal producers may last longer.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

Iron ore, steel futures slip in rout of risky assets as Chinese demand ebbs

Source: www.chinamining.org   Citation: Reuters   Date: August 25, 2015

Domestic iron ore and steel futures fell sharply on Monday, hitting their downside limits as they were caught up in a broad-based selloff of risky assets that was sparked by fears that a cooling Chinese economy could spark a global slowdown.

Other commodities from copper to oil fell to their lowest levels since 2009 and Asian equities plummeted, led by Chinese stocks, which dived more than 8 percent. Global markets also fell.

The spot price of iron ore, the biggest commodity produced by global miners Vale, Rio Tinto and BHP Billiton, has rebounded by more than one-quarter from a decade low of $44.10 per ton reached in July.

But a slowing Chinese economy could put the focus back on a global glut that has pulled iron ore prices down for a third year running amid shrinking steel demand in China.

"In a broad way, it feels like we`re back where we started in 2009. Things are shaky to the extent where all the progress we`ve made in the past years looks to have been erased," said Howie Lee, analyst at Phillip Futures in Singapore, on the rout in risky assets.

The latest data on China, released on Friday, showed its factory sector contracting this month at its fastest pace in more than six years.

That number weighed further on sentiment toward the Chinese economy, said Helen Lau, analyst at Argonaut Securities in Hong Kong.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

China to `take rightful place` in gold market

Source: www.chinamining.org   Citation: China Daily   Date: August 17, 2015

The Shanghai Gold Exchange is to launch the yuan-denominated gold index this  year, predicted to increase China`s gold pricing power. (Photo provided to China Daily)

Growth in the global gold market is shifting from West to East and China should further liberalize its gold exchanges. This will allow international participation with the country finally "taking its place" in the world market, said Roland Wang, managing director for China at the World Gold Council.

Wang pointed out that the expansion of strong gold trading hubs in Asia will improve price discovery, liquidity, transparency and efficiency. This in turn will transform the landscape of the gold market which will benefit China.

One catalyst for China`s increasing gold pricing power is the much-talked-about yuan-denominated gold index, expected to be launched by the Shanghai Gold Exchange by the end of this year.

This new gold index will provide competition to the London Gold Fix, which is currently the global reference point for the industry, meaning that gold buyers and sellers will look to the benchmark to determine the exact price of their specific trade.

The Shanghai Gold Exchange was established in 2002 to centralize China`s gold trading. It now consists of a Main Board for Chinese traders and an International Board, which is dedicated to foreign investors.

Currently the Main Board and International Board are separate from each other because the yuan is not freely convertible and China`s capital controls mean financial trades made by domestic and foreign traders have to be separate in order to help maintain currency control.

But once the yuan can be freely converted, the two boards are expected to merge and the SGE will become a gold exchange center globally, with Shanghai taking its place as one of the three major international gold exchanges, alongside New York and London, Wang said.

While China is a big consumer of gold globally, it still lacks pricing power.

Wang said Chinese banks need to increase their participation in international gold exchanges so that the demand and supply of gold in China can be reflected in prices in global markets.

"China`s lack of international participation tends to directly affect China`s competition for gold price-fixing power," Wang added.

"Only by involving Chinese financial institutions in the global gold fix mechanism, and by advancing (yuan-) denominated commodities to encourage foreign investors to conduct business in the China market, can China increase its gold price-fixing power accordingly."

One major milestone in China`s participation on international gold exchanges is Bank of China becoming the first Chinese lender to join the London Gold Fix, among seven other banks.

Administrated by the ICE Benchmark Administration Ltd, the London Gold Fix is a twice daily electronic auction held in London which determines the benchmark gold price.

Wang said this move by the Bank of China will reinforce the connection between the Chinese and overseas markets, with the international gold price better reflecting supply and demand in China, as well as promoting the internationalization of the Chinese gold market.

"Bank of China`s participation in the Gold Fix is the first step for China being the largest gold market in the world, and to become a gold trading center along with London and New York," Wang said.

In the long term China`s increasing gold pricing power globally will fuel the yuan`s internationalization. The International Board of the SGE looks certain to offer a range of yuan-denominated products in future for foreign investors to trade in, which in turn will increase liquidity for the yuan internationally.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

China LPG prices continue to edge lower on seasonal demand lull   

Source: www.chinamining.org   Citation: Platts   Date: August 17, 2015

Imported and domestically produced LPG prices continued to edge lower across southern and eastern China this week amid bearish market outlook and the seasonal lull in demand, local trade sources said Friday.   

Import cost for cargoes arriving in the first half of September was estimated below Yuan 3,000/mt ($468.68/mt) CFR China, based on recent Asian refrigerated LPG values, which was lower than the current spot prices in the domestic market, according to traders.   

This is believed to have dampened buying interest and exerted downward pressure on spot prices this week, trade sources noted.   

In China`s southern Guangdong province, imported LPG cargoes of mixed propane and butane were said to have traded at around Yuan 3,350-Yuan 3,400/mt in the wholesale market this week, down slightly by Yuan 50/mt from Yuan 3,400-Yuan 3,450/mt in the previous week.   

"We are not optimistic about the price in the near future ... import cost for later arrivals have dropped to around Yuan 3,000/mt or even lower," a trader said.   

"Besides, LPG supply is ample amid weak seasonal demand, which has discouraged buying interest as well," he noted.   

Four refrigerated cargoes, totaling around 110,000 mt, were reported to have arrived in Guangdong province this week, up slightly from around 103,000 mt seen in the previous week, according to updated shipping data from Beijing-based energy information provider JYD Commodities Hub.   

Domestically produced LPG was said to have traded at Yuan 3,300-Yuan 3,400/mt in the region this week, also down by around Yuan 50/mt from last week.   

Trading activities remain thin as many buyers continued to maintain relatively low inventory levels amid a bearish market outlook, traders added.   

In eastern China, both imported and domestically produced LPG was said to have traded at around Yuan 3,550-Yuan 3,650/mt and Yuan 3,500-Yuan 3,600/mt, respectively, in the region this week, down by about Yuan 50/mt from a week ago as well.   

Bearish market outlook and weak demand were also cited as main reasons behind the fall in spot LPG prices in the region this week, according to traders.

Demand for feedstock LPG from petrochemical plants was said to have faded further this week due to lower crude prices, which also exerted downward pressure on residential-use LPG prices, local traders said.   

Feedstock LPG was heard to have traded at around Yuan 3,650-3,750/mt in East China this week, down by around Yuan 100/mt from last week.   

Petrochemical plants in China typically use domestically produced LPG as feedstock to produce MTBE and alkylate, which are blended to produce gasoline.   

Feedstock LPG contains more alkenes than residential use LPG.

 About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.

Gold strengthens on demand for safe-haven

Source: www.chinamining.org   Citation: Global Times/Agencies   Date: August 14, 2015

Rally could be short-lived if U.S. dollar continues to gain ground

Gold rose for a fifth session in a row on Wednesday to trade near a three-week high, benefiting from safe-haven demand as risky assets slid after China`s devaluation of the yuan stoked fears of a currency war.

China`s surprise 2 percent devaluation of the yuan on Tuesday was seen as a move to bolster a flagging economy.

The move hit global equities, prompting some investors to seek safe-haven assets such as gold, which has now recovered more than 3 percent from a 5.5-year low of $1,077 that the precious metal hit in late July.

Asian stocks and emerging market currencies tumbled on Wednesday after China allowed the yuan to fall sharply for a second day.

Spot gold rose as much as 1 percent to its highest since July 20 at $1,119.80 an ounce in earlier trade and was up 0.8 percent at $1,117.76 by 0920 GMT.

"The only reason gold may benefit will be purely from a safe-haven perspective," said OCBC Bank analyst Barnabas Gan.

But if China`s action indeed spurs a currency war, every currency would depreciate and the dollar would continue to strengthen, said Gan, eventually weakening gold.

Gan also said the weaker yuan would make it more expensive for China, the world`s top consumer, to import gold, potentially extending weak Chinese demand that has been the case since 2014.

U.S. gold for December delivery gained 0.5 percent to $1,113.10 an ounce.

China`s currency devaluation is unlikely to distract the U.S. Federal Reserve from a domestic economy that appears increasingly ready for higher interest rates, economists and Fed watchers said.

That could limit gold`s upside potential. A looming hike in U.S. interest rates had weighed on non-interest yielding bullion.

"We are still looking for a rate hike this year despite all that`s happened," Gan said.

Spot silver dropped 0.4 percent to $15.22 an ounce after hitting a one-month high on Tuesday. Platinum was steady at $984.70 an ounce, having touched a three-week high overnight, while Palladium was little changed at $601.90.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2015 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2015. We invite you to join the event and to celebrate the 17^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2015, please visit: m.balanzskin.com.