HIGHLIGHTS: China turbulence; Anglo American asset sale; German energy law fight

Editor Vera Blei looks at the main news covered by Steel First this week.

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It has been a turbulent week for Chinese steelmakers.

Reports emerged that private mill Xilin Steel had run up debts exceeding 10 billion yuan ($1.6 billion) and was close to bankruptcy. The mill denied the reports.

Fangda Special Steel suspended share trading amid reports linking its chairman with a high-level corruption probe.

Standard Bank said in a research note that the Chinese steel industry was undergoing micro-restructuring and experiencing a “flight to quality” as a result of enforced debt restructuring and environmental cost pressures.

Our latest issue of China Insight looks at price movements, production levels and profitability of larger mills and small-scale steelmakers and mines.

Mining
On the mining side, South African mining major Anglo American is looking to divest a number of assets to boost shareholder returns.

Anglo American plans to enter the iron ore derivatives market and is looking into hiring a team to trade financial iron ore products by the end of the year.

The Metal Bulletin Iron Ore Index for 62% Fe material closed the week at 96.11 per tonne cfr Qingdao, up $0.30 week-on-week.

Brazil
Not only World Cup football drew our attention to Brazil.

After Brazilian steel and iron ore producer CSN confirmed that it is in talks for the possible purchase of Severstal North America, most analysts we spoke to were sceptical about such a plan.

In the country’s domestic market galvalume prices have dropped by 10%, under pressure from imported material, and there is a growing expectation of local mills being forced into offering discounts next month.

Europe
In Europe, Tata Steel will cut 400 jobs at its UK Port Talbot plant to improve its competitiveness.

Germany’s steel industry has reacted strongly against the newly approved legislation on renewable energy.

ArcelorMittal said it could face an additional €144 million ($197) in energy costs in Germany if a tax surcharge exemption for self-generated electricity is removed in two years’ time.

Elsewhere, we interviewed the ceo of Ukraine’s Mariupol port, who remains optimistic and outlines future growth plans despite the continuing unrest and political uncertainty in the country.

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