China copper smelters plan to cut output after margins fall
The output cuts underscore the industry’s struggle with a shortage of feedstocks caused by recent mine production setbacks.
According to Chinese customs data released on Tuesday, the country imported 512,000 tonnes of coal – mainly the steelmaking variety – from North Korea in September. Volumes were down 71.6% from the same month last year as Beijing institutes the latest round of UN sanctions on the rogue regime.
While the UN Security Council ban on Pyongyang’s sale of coal, iron ore, lead, lead ore and seafood are only due to come into force this month, China began to enforce the restrictions in mid-August. The September coal cargoes were valued at $44 million which translates into $86 a tonne, a deep discount to the ruling price for metallurgical coal.
In the past China skirted embargoes against North Korea on humanitarian grounds
Coal imports for the first nine months of 2017 totalled 4.83m tonnes. Last year China imported 22.4 million tonnes of anthracitic coal that can be used as an alternative to coking coal in the steelmaking process from North Korea, a nearly 15% rise from 2015. That placed the Asian country just behind in Australia as China’s number two supplier of met coal.
In the past China skirted embargoes against North Korea on humanitarian grounds, saying a ban would hurt ordinary citizens of the impoverished country, but pressure on Beijing has increased as Kim Jong-un’s nuclear missile program advances.
Coking coal is trading nearly $140 a tonne below its mid-April peak when the price of jumped to highest since the second quarter of 2011 due to disruptions related to cyclone Debbie in the state of Queensland.
But most producers would probably be happy with today’s price around $178. In November 2015, the spot price fell to a record low of $75 a tonne. Coking coal averaged $121 a tonne in 2016 and $90 the year before.
China’s imports of iron ore and lead concentrate from North Korea also fell sharply in September, back to levels last seen at the start of the decade according to Reuters calculations.
Lead ore and concentrate shipments came in at just 1,321 tonnes, worth $1.18 million, down 84% from a year earlier. Iron ore shipments plunged 98% to just over 3,000 tonnes, worth about $55,000. Chinese exports of gasoline and diesel to North Korea have fallen to close to zero.
