China exported an average of 23%
more magnesia in H1 2014 when compared to the previous year,
ringing a bell of positivity through the market.
Figures obtained by
IM show that exports of fused magnesia (FM)
increased by 10%, to 164,217 tonnes in H1 2014. Top importing
countries in order were the US, Japan, South Korea, Belgium and
Holland. However, lower H1 FM prices, at Chinese renimbi (Rmb)
5,000/tonne ($810/tonne*), meant that the average export value
increased by just 0.7% year-on-year (y-o-y), according to
Chinas Ministry of Information and Technology (MIIT).
For caustic calcined magnesia
(CCM), exports from China rose a significant 33% in H1 2014
when compared to the same time last year, with 38,813 tonnes
exported. Again, lower prices meant the value of the exports
only increased by 26.4%. According to MIIT, CCM prices averaged
Rmb 660/tonne ($107/tonne).
Top importing countries of CCM were
Holland, US, Japan, Taiwan and New Zealand.
Dead burned magnesia (DBM) exports
were 27.9% higher than those recorded in H1 2013, with 281,981
tonnes exported to the US, Holland, Japan, South Korea and
Iran. Average DBM prices were at an average of Rmb 750/tonne
($121.5/tonne), down 5% y-o-y in H1 2014. In terms of value,
revenue derived from the exports were up 23%.
News that China is cracking down on
the smuggling of magnesia is filtering though the popular
press, with reports in Japan detailing the arrest of 30 Chinese
traders suspected of smuggling magnesia in July.
The traders were apprehended after
customs officials found that false documents were being used to
transport magnesia from Liaoning province by truck to
Lianyungang port in Jiangsu province, according to Japan
Liaoning province hosts the Chinese
companies known to be among the largest refractory producers in
the country including Haicheng Houying, Huayu, Yingkou Qinghua,
Jinlong and Liaoning Zhongxing.
Last year the provinces
Special Resource Protection Office said that it was working to
And, in October last year
IM reported on the customs officials which
were clamping down on tax evasion by Chinese - and foreign
-industrial minerals producers (See October 2013).
Customs documents shown to
IM suggested that companies were
under-declaring the value of shipments of bauxite, calcined
kaolin, graphite and magnesia.
But while headlines suggest that
the government is cracking down on smuggling, sources say that
the anti-corruption drive has extended even further and has now
placed a ban on all opening ceremonies or dinners related to
any government departments.
Industrial minerals demand slowing
Statistics released by Chinas
Ministry of Land and Resources in late July suggested that
domestic demand for industrial minerals was slowing.
According to a report submitted by
the governmental organisation, Chinese mineral production
showed a slight increase in H1 2014, when compared to the same
period in 2013.
In graphite, which was highlighted
in the report, production was down 15% when compared to the
same period last year.
Chinese mining capacity is at 1.2m
tonnes, but last year it had an output of 540,000 tonnes,
accounting for 45% of capacity. Production in the first six
months of the year, however, was at 180,000 tonnes.
There are a number of reasons for
the reduced capacity. Certainly it points to a reduction in
demand, but it also highlights the effect of the consolidation
in the industry.
World Steel Association
results show positive trend
Global crude steel production in
July increased by 1.7% y-o-y, to 136.8m tonnes, with growth in
the US, Asia and Middle East countries, according to figures
released today by the World Steel Association (worldsteel).
Production in the US grew by 2.3%
y-o-y in July 2014, at 7.6m tonnes, while the Asian crude steel
industry posted a 1.7% growth compared with the same month in
2013, driven by China, up 1.5% y-o-y, India, up 1.7% y-o-y, and
South Korea, up 6.2% y-o-y.
With a 68.3m tonne output, China
remains the worlds largest steel producer.
Global capacity utilisation ratio
in July was 75.4%, 2.9% lower compared with the previous month
this year and 1.2% points lower compared with July 2013.
In the countries highlighted as being the heaviest importers
of refractory magnesia (DBM and FM) average steel production
shifted up by 1.2% year-on-year (y-o-y) in the US; by 11% in
the Netherlands (but this is somewhat skewed by the fact March
2013 steel production was so low); by 9.2% in South Korea and
by 1% in Japan.