mar 21

Smog and mirrors? China’s steel capacity cuts were fake, report says.



When it comes to steel, China is faking it.

Faced with global condemnation for flooding world markets with cheap steel, China announced last year it had implemented ambitious cuts in steel capacity.

But a new report by Greenpeace East Asia and Chinese consultancy Custeel says that number was largely smoke and mirrors. Many of the plants China says it closed down were already idle, while production was restarted elsewhere and brand new plants opened.

In fact, China’s steel industry actually saw a net increase in operating capacity equivalent to twice Britain’s total capacity, the report concludes.

That’s bad news for the air in Beijing, but it could also inflame China’s trade relations with the United States and the European Union, which have repeatedly accused China of dumping cheap steel abroad and damaging their own steel industries.

Tens of thousands of European steelworkers demonstrated last year in Brussels and in Germany against cheap Chinese steel.

“Impressive as they seem, China’s current steel capacity reduction targets won’t suffice to limit oversupply, as local governments maneuver to shield zombie steel mills and minimize the impact of the policies,” said Lauri Myllyvirta, Greenpeace global coal campaigner.

“Global markets are awash with steel and the people of northern China continue to choke on the industry’s major byproduct, smog. Increasing steel capacity makes neither economic nor environmental sense.”

China, which accounts for half the world’s steel production, has a total capacity of 1.1 billion metric tons (1.2 billion U.S. tons): It has announced plans to eliminate 100-150 million metric tons (110-165 million U.S. tons) of annual production over the next five years, but cutting capacity has so far done little to rein in output and exports.

Last year, it said it had far exceeded its initial target to cut capacity by 45 million metric tons (50 million U.S. tons), recording cuts of around 85 million metric tons (94 million U.S. tons).

But the report says that 73 percent of the announced cuts in capacity were already idle — in other words the plants were not operating. Only 23 million metric tons (25 million U.S. tons) of cut capacity involved shutting down production plants that were operating.

At the same time, some 54 million metric tons (59.5 million U.S. tons) of capacity were restarted, and 12 million metric tons (13 million U.S. tons) of new operating capacity came online.

mar 14

Spiralling raw material cost lift WFA

White fused alumina spot prices rose amid higher raw material cost, but increases in China are steeper compared with elsewhere as continuing environmental pressure restricted output amid stronger domestic demand.

Spiralling raw material cost is lifting white fused alumina (WFA) spot prices as Chinese producers raised their offers, market sources told IM.

Alumina is the key raw material used to produce WFA, and recent restocking from Chinese aluminium smelters have pushed prices up by about 40% since October.

Chinese domestic alumina prices was assessed at a range of 2,700-2,850 yuan ($390-412)/tonne on a delivered in China basis, up from 2,650-2,800 yuan a week earlier, according to IM’s sister publication Metal Bulletin on Thursday November 24.

Driven by the uptrend in China, alumina prices elsewhere in the world is also rising. Inferred alumina index on a FOB Brazil basis, the reference for European smelters, was calculated at $318.47/dry metric ton, up $17.02/ton compared to a fortnight ago, according to Metal Bulletin this week.

As smelters’ alumina purchased volume are often much bigger compared with WFA producers, with the average standard cargo size at 30,000-35,000 tonnes, the former could secure lower volume-related prices.

One WFA producer in China has quoted alumina prices as high as 3,000 yuan ($433.50)/tonne, and he had to raise his WFA offers to reflect higher raw material and production cost.

Spot refractory-grade WFA (99.0% Al2O3 min, in 25kg bags) prices were assessed at €650-680/tonne on a CIF Europe basis, up €27.50/tonne compared with the previous week, according to IM’s assessment on 24 November.

Materials for spot delivery in Germany traded in the region of €680/tonne on a DAP basis, one Europe-based producer told IM.

Stronger demand, reduced supply in China

Due to the Chinese government’s anti-pollution crackdown on many production facilities in China since July, many fused-alumina plants that did not meet environmental standards were shut down. The shut down were particularly severe in Henan province, one of the main regions for fused-alumina production.
As a result, reduced WFA supply amid firm domestic demand is supporting prices in China, producers in the country said.

Chinese-origin WFA were trading in the region of 5,000 yuan (€682.45)/tonne on an ex-work basis within China, according to two suppliers.

Many expect strict anti-pollution checks to remain in China for the long-term, and consequently, the restricted production is expected to support WFA prices in the country.

In contrast, WFA supply in Europe were not disrupted and the region remained well-supplied amid weak refractory demand. Consequently, European product prices did not receive the strong boost like its Chinese counterpart.

China is one of the biggest fused alumina producer in the world.

mar 06

South African chromite production falls in October

Monthly production of chromite with 44-48% Cr2O3 content was down both on a sequential and year-on-year basis, as reduced mining capacity is denting overall sales volumes.

South African output of high-purity chromite fell in October after a surge in the previous month, while the latest output remained some 15,000 tonnes below the same time in 2015, government data provided to IM shows.

Total production of chromite with 44-48% Cr2O3 content stood at 181,847 tonnes in October, marking a 7% decrease year-on-year (y-o-y). This follows capacity shutdowns that took place in the country during the 2015/16 phase of weak markets.

The October output fell also on a sequential basis after production peaked in September to close to 188,000 tonnes, a record-high for 2016 to date.

Total sales, including domestic and exports, stood at 122,418 tonnes for the month. This was 12% down on September and almost one-quarter (24%) below October 2015 sales.

Sources active in the chrome industry in South Africa told IM this week that “supply will remain below 2015 levels for the foreseeable future”, citing the closure of a number of mines and processing operations, such as Dilokong Chrome and MTI.

“Availability is particularly tight for the underground-mined ores, as underground mines were the first to close when prices were low due to high operational costs,” one local producer told IM.

Shipping operations at the country’s main ports – Richards’ Bay and Durban – were affected by low availability of vessels in the late months of 2016, prompting delays as sellers were unable to secure cargo space on ships.
Exports accounted for over 60% of total volume sales in October.

Domestic sales generated a turnover of South African rand (Zar) 83.6m ($6.3m), while exports were worth Zar 191.1m. At the same time, both the local and export markets have remained a notch below the levels of trade seen in late 2015, further showing that the overall mining capacity in South Africa has shrunk in size.

The export market for chromite meanwhile remained quiet and stable over the past fortnight against the levels it reached at the end of December.

Suppliers ascribed the lack of business to the impending Chinese New Year holiday period, which starts 27 January.

In the words of a European supplier, “China was instrumental in driving prices upwards last year, both for met and non met chrome”.

“We’ll have to see what strategies they put forward after the holidays,” he added.

IM is currently tracking prices of chemical chromite, 46% Cr2O3, wet bulk at a range of $430-440/tonne FOB South Africa, unchanged compared with previous weeks.

Foundry grade chromite, 46% Cr2O3, wet bulk, is meanwhile priced at a range of $410-450/tonne FOB South Africa.

The surge in export prices in the second half of last year prompted miner Afarak Trading to look to reopen its opencast mine in Mecklenburg, the company confirmed to IM this month.

The company is also looking to develop an underground operation at the site, with a view to fill part of the gap in supply of underground-extracted LG chrome ore. Works are expected to start soon.

South Africa is world’s largest supplier of chrome ore, which is used in a number of metallurgical and non metallurgical applications alike. While low-grade UG2 chrome ore (usually with a 40-42% Cr2O3content) is one of the main met grades, non met industries including chemicals, foundry and refractories employ higher-purity chromite, with a chrome content above 44%.

Some LG chrome of 44% Cr2O3 and above is also used in met applications.

Besides South Africa, other producers of the mineral include India, Kazakhstan, Turkey and Pakistan.

mar 02

El pasado 23 de febrero tuvieron lugar en la sede de ANFRE en Madrid la Junta Directiva, la Asamblea General, y las reuniones de los Comités Técnico y de Montadores.

El pasado 23 de febrero tuvieron lugar en la sede de ANFRE en Madrid la Junta Directiva, la Asamblea General, y las reuniones de los Comités Técnico y de Montadores.


Como viene siendo habitual en las últimas reuniones hemos tenía aforo completo. Tenemos que agradecer, una vez más, a los asociados de ANFRE su asistencia y apoyo incondicional, ya que sin cada uno de ellos ANFRE no sería posible.

En estas reuniones hemos intentado organizar el trabajo de todo el año e ir cerrando asuntos pendientes de reuniones anteriores. Desde el Comité de Montadores se están dando las últimas pinceladas del Curso de Montadores que pretendemos lanzar para finales de 2017.

De esta reunión ha salido también un acuerdo de Colaboración con la Sociedad Española de Cerámica y Vidrio, acuerdo que esperamos sea muy gratificante para ambas partes.

Queríamos aprovechar estas líneas para desearle lo mejor a uno de nuestros Asociados, Primitivo Castro. Después de su apoyo incondicional y su participación activa en la Asociación durante muchísimos años, ha llegado el momento de la merecida jubilación. Esperamos de todo corazón que esta nueva etapa de su vida sea tan satisfactoria como la anterior. Recordarle que ANFRE siempre le recibirá con los brazos abiertos.

Una vez finalizadas las reuniones los asociados se han podido relajar durante la comida ofrecida por ANFRE.

Agradecemos de nuevo vuestra asistencia y apoyo, esperamos seguir contando con todos vosotros.

Os esperamos en Junio.

feb 27

A Review of the Refractories Industry

The historian R.G. Collingwood believed, as do many others, that only by studying the past can the present and perhaps future be better understood. Whilst most people have a good grasp of where they currently are, almost everyone would ideally like to have more information to try to establish where they may be going in the future.

It often helps to look back at the past, to see how the present situation has evolved from it and the factors an trends which perhaps may still bear an influence on circumstances in the future…


More information. Download .PDF

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