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.
The first round of China’s much-anticipated state metal reserves auctions needed only one of two days allotted for all the copper and aluminum on offer to be sold, notices on the bidding platforms and two industry sources said.
In a rare move aimed at cooling a rally in metal prices that has pushed up raw material costs for Chinese manufacturers, the National Food and Strategic Reserves Administration said last month it would sell 50,000 tonnes of aluminum, 30,000 tonnes of zinc, and 20,000 tonnes of copper on July 5-6.
The aluminum was split into around 200 lots, with the auction of the last 250 tonnes taking place at 7:52 p.m (1152 GMT) on Monday, a notice on the bidding platform operated by state-owned Norinco showed.
The buyers were not named, although only manufacturers and fabricators were allowed to bid.
One source at a state-run metals firm following the auctions said the aluminum was sold at around 18,075 yuan ($2,797) a tonne, a 5.3% discount to aluminum’s settlement price on the Shanghai Futures Exchange (ShFE) on Monday.
For copper, bidding began at 8 a.m. Beijing time (0000 GMT)and the last lot of 146 tonnes was auctioned just 75 minutes later, according to the China Minmetals Corp platform hosting the sales.
“It was grabbed within seconds,” said a second source following the auctions, who works at a copper wire maker. He put the sale price at around 67,700 yuan a tonne, a 1.6% discount to the price of ShFE copper for delivery in August.
No notices for zinc sales were visible but the first source said the metal was sold at around 21,000 yuan a tonne, versus a ShFE zinc price of about 22,000 yuan.
In a statement on Wednesday, the reserves administration confirmed it had put a total of 100,000 tonnes of metal on the market on July 5 and said it would continue to release state reserves in the near future.
($1 = 6.4616 Chinese yuan renminbi)
(By Tom Daly; Editing by David Evans and Jason Neely)
Comments