China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
Mining and commodities giant Glencore (LON:GLEN) said Friday it is cutting production at its Australian coal mines by 15% this year amid weak global demand, low prices and oversupply.
The move is the most significant response so far to weak coal prices by one of the world’s largest exporters. It follows the Swiss company’s decision to shut its mines for three weeks over the Christmas period.
While Glencore did not mention job cuts, several reports indicate that up to 120 positions at firm’s 13 Australian mines could be affected as a result of the cuts, which will include scaling back some operations and deferring projects.
In the past two and a half years, the firm has laid off roughly 3,000 workers from its Australian coal business as, like its peers, it has been hit hard by an ongoing slump in commodity prices.
In 2015 Glencore plans to slash spending on its mines to between $6.5bn and $6.8bn — down from a previously expected $7.9bn.
The company’s annual output in Australia — including figures from its partners at its mines — is about 100 million tonnes, and the global seaborne market is 1.1 billion tonnes.
The Chinese factor
A drop in demand is also weighing on coal miners’ latest decisions. Consumption of the fossil fuel in China, the world’s biggest consumer, fell in 2014 for the first time in 14 years, WSJ.com reports. Plunging oil and gas prices also play a part in hindering demand, as some users can switch fuels when they get cheaper.
