China’s Crude Oil Imports (Current & Forecasts)


Top 5 things in Today’s Market:

  1. Upward revision in U.S. growth expected, eyes on durable goods
  2. Pound under pressure on election jitters
  3. Oil recovers slightly after brutal OPEC induced sell off
  4. Japanese CPI increases for 4th straight month; China eyes yuan fixing
  5. Global stocks mixed ahead of U.S. holiday weekend

For further info on these subjects:


After OPEC has brought the decision on extending the output cuts, China’s refiners now have to slow their purchases of oil, for the next 2 months.

China is the world’s top Oil buyer. Interesting fact is that country’s appetite for crude oil fell. Leveling the 8.4 million bpd in April. While in March it reached the top of 9.2 bpd. This will also impact the country’s demand.

Shandong’s individual and independent refiners are facing pressure to cut their production because profit margins are now lower. This is happening due to Beijing’s custody. Beijing aims to refresh taxes and shifting policies, and balance the country’s economy this way.

Some of the refiners have even begun the seasonal work.


State Oil majors

China’s state Oil majors plan to put up new refining capacities till the end of this year. This way they aim to replace some import losses.

However, the lower country’s appetite and the demand which is slightly losing its upward momentum lead to a certain conclusion: China’s oil market is possibly slowing the movement.  

“There will be more shutdowns in June, July and possibly August. It’s seasonal but also because the market is not doing well and stocks are plentiful.” (Said manager of one Independent refining company.)

These independent refiners participate in China’s crude demand with 12 %. Since 2015, when they won the rights to import oil – they have been enjoying high profits. Doing so by selling diesel and gasoline throughout Asia. And at the same time expanding domestic sales in unique competition with state firms.

In January this year, Beijing put a ban on all the independents possibilities to export the fuel. This way it was openly  favoring the big state-owned refiners. And it squeezed margins for independents. Beijing  tensed custody on tax practices.

“Some refineries had rushed to buy crude in the first quarter, worried that they could be penalized for slow use of import permits.”

“There were some over-purchases of crude earlier as (plants) were unsure of the quota policy. Now inventories are high everywhere.” (Wang)


Further Imports

“Policy headwinds, domestic competition from SOEs (state-owned enterprises) and insufficient storage infrastructure at major port cities will cap imports.”

Observing the inventories in Shandong, diesel’s were pretty high compared to gasoline. Wang (official of one independent refinery) has said that his plant has plans to shut the 90,000 bpd crude units. All of that through July, aiming to improve the current situation.



China’s state oil companies plan to strengthen the crude oil imports from August onward. Doing so by activating new refineries in Yunnan and Huizhou with combined capacity of 460,000 bpd.

There are some other Country’s projects which will stimulate the crude oil imports in middle-term.

Towards April and May, Beijing has gave permissions for 6 independent refiners to import crude oil. Total permits were around about 280,000 bpd. Some of these approvals are still preliminary, but worth mentioning is that they had the influence over market.

Harry Liu, an analyst at consultancy IHS Markit, estimated China’s total imports have fallen to around 8 million bpd at present, but could climb back to around 8.5 million bpd from around August. (Reuters)

“CNPC and CNOOC will contribute the bulk of the increases in refinery runs later this year. Teapots’ contribution will be smaller as the environment for them to grow has got much tougher this year.” Liu said.


April Copper imports in China: Fall of 41% due to tighter financial regulation

May 23rd; Main events in financial market:

  • Sterling slips after deadly Manchester terror attack
  • Global stocks mixed in cautions trade
  • Oil price oscillates as OPEC meeting draws closer
  • Euro zone business activity rises at fastest pace since 2011
  • Bitcoin keeps growing; tops $2,200

For further info on these subjects, visit:


The monthly analysis

Firstly, if compared to a period of year ago, China’s refined copper imports fell by 41%. This shows that traders buying power was affected by strained access to credit.

The China’s imports of refined copper fell down to 202,645 tonnes previous month. It is the lowest level seen since February. And compared to March levels, it sees the 18 % down.

Observing the January – April period, China’s refined copper imports have slumped. Coming to the lower levels of 31 percent compared to the last year. Those were impacted partly byChina’s credits & because short-term interest rates and banks became more reluctant to lend.

“In general, metals traders have been suffering from rising financing costs, fierce competition and a slowing economy.” Said JP Morgan in a report.


Chinese banks & credits

“While Chinese banks have anecdotally been maintaining existing credit lines for metals-based companies, it has become increasingly hard to get approval for new lines of credit.” (Reuters)

China’s top leadership and their officials have set list of priorities in country’s economy, aimed for this year. The main priority is indentifying the containment of financial risks and asset bubbles. Due to this, China has elevated the short-term interest rates.

It continued with imports of more copper scrap. Those imports were up in the first four months of the year, for 18 percent. That happened after the surge in prices of late last year encouraged and gave a support to a flood of scrap metal back into the market.


Concentrate imports

Observing the copper concentrate imports: They continued to grow, even in April. When compared to a period of year ago, they were up 7.7 percent. And they are in line with the year’s trend.

The slight decline in production happened in Chile, caused by a strike earlier this year. But this was more than offset by almost 60 percent jump in imports from Peru. Which than compensated the amounts, and brought a certain balance to the market. However, China’s imports went way lower.

China’s exports of refined copper fell in April from the same month year earlier. But on the other side, they are now at nearly 125,000 tonnes . Which is up 65 percent if observed year to date.

Copper is one of the most ”popular” amid base metals and their trade. China has definitely set a list of priorities in order to stabilize the market. And precisely wants to see if the parts of financial regulation are doing fine with the market aims. What is the key which will connect all the market participants, and bring the balance to country’s imports, exports, trades, production, and all the accompanying businesses, the time will soon show.



The deficit of zinc concentrate affecting China’s industry; it will increase refined zinc imports

Refined zinc imports

Starting with this month, China has the plans to increase refined zinc imports. As vanishing global supplies have a big impact on the local zinc outputs; they aim to cover the deficit by boosting the refined zinc imports.

Observing the China’s refined zinc production, in April it came to the lowest levels in more than 2 years. It happened due to the end up of some major mines in Australia. As well as in Ireland; This closure of important mines suffocated the China’s concentrate supplies. Which were of huge value for China’s industry.


Mining and heavy industry

Most noteworthy, the China’s ‘war on pollution’ also impacted the outputs in a way it restrained them firmly. Beijing is giving a huge efforts in mining and heavy industry; aiming to clear its environment, and pay attention to the ecological aspect of its production.

This will inspire customers for refined zinc to search their supplies overseas. It will likely lead to Boosting international prices, which this week leveled the lowest points since November.

“It is starting to bite.”

“The tightness is pretty much upon us.” said an analyst from ANZ Research.

“We are looking for zinc to push back to $2,800 in the second half … The zinc market is set to stay tight over the short to medium term. This certainly should provide a bit of a reality check for the bears.”

According to market data, and some analysts opinions, the zinc market price is to go up in forthcoming period (short to medium term), providing some kind of a reality check in markets.

Imports of refined zinc, from China’s guaranteed zones, could afterwards be resold on the local market for a profit. This week’s price leveled to $45; near the strongest since January 2016. In January 2016 the country shipped in around 60,000 tonnes of refined metal.

– China brought in just 25,600 tonnes in March and total imports are down by two thirds this year. (Reuters)

Most market participants have yet been turning to local exchange stocks. SHFE zinc stock fell for 50% since February. To the amount about 100,00 tonnes; which makes them the lowest since February 2015.


‘War’ on pollution

In the meantime, ‘war on pollution’ is slowly driving into its fourth year. The idea of the concept is to attenuate the environmental damage caused by periods of glowing & fast economic growth in China. Which will likely affect the production of base metals.

– “The Chinese government is going to put a lot of pressure (on metals producers) to reform from an environmental perspective,” said the head of metals at a China commodity trade house. (Reuters)

“Definitely we are going to see companies with limited domestic availability of concentrate. We should see some opportunities for imports of refined metal,” he said, declining to be identified as he was not authorized to speak with media.

In conclusion, it is important for Beijing to focus on its ”environmental health” and the clear blue skies, but these concepts are firmly going to impact the base metals production. And as well, the base metal prices, and global supply. The forthcoming period, short to medium term will definitely bring the higher global prices for zinc, as China also plans to boost the refined zinc imports.

The long term results will come themselves, it is the time who will show.

SHFE morning trade: Copper up due to Lower production in Chile


Main Economic Events Today:

  • China Industrial Production y-o-y fell to actual 6.5%, while expected was 7.1%
  • United Kingdom Prime Minister Theresa May Speaks

This Week:

  • Empire State, Philly Fed Manufacturing for May
  • April China Industrial Production
  • Euro Zone Q1 GDP – Revised Reading
  • K. April CPI, Employment & Retail Sales
  • Japan Preliminary First Quarter GDP


Shanghai Futures Exchange

Firstly, copper prices on the SHFE recovered during morning trading on May 15. Due to the news that China had announced more funding for its One Belt One Road initiative. Copper price was as well impacted by reports of lower production in Chile.

The most-traded July copper contract on the SHFE rose 210 yuan per tonne to 45,240 yuan per tonne as of 10:59am Shanghai time.

Secondly, Chinese president Xi Jinping said One Belt One Road plan aims to connect China with Europe, Asia and Africa through various infrastructure projects.

 “The Belt and Road initiative, which was first proposed in 2013, offers the world’s second largest economy a chance to consolidate its political presence in the region. Additionally, the initiative provides China’s battered commodity intensive sectors, many of which are struggling to contain overcapacity, a lifeline to remain relevant for years to come.” (CBA Commodities)

“China has already committed $50 billion to date and that could grow exponentially in the next 5 years. The initiative, which could cost over $1 trillion, is clearly positive for commodity consumption. We note that construction will take place over decades. Realistically gather momentum in the 2020s and will inevitably face roadblocks from political interests of the 60 countries involved.”  (Metal Bulletin)

Thirdly, Cochico announced that copper production in Chile in 1H17 was down 14.6% year-on-year to 1.19 million tonnes, due to the strikes occurring during the period.

LME’s three-month copper contract was up $13 per tonne to $5,581 per tonne as of 03:55am London time.

SHFE, LME copper stocks fall 

Observing the open interest of the July copper contract, it was at around 219,134 position on Monday morning. Following, losses in the SHFE-LME arbitrage held at around $80 per tonne last week. Demand is keeping healthy levels due to the peak season. 
Also, deliverable copper stocks at SHFE-approved warehouses fell 20,238 tonnes or 9.4% week-on-week to 194,993 tonnes as of Friday May 12.
In the meantime, LME copper stocks fell by 7,350 tonnes to 329,375 tonnes on May 12.

Base metals broadly lower; Aluminium bit higher 

Fourthly, the SHFE July aluminium price rose 1.05% or 145 yuan to 13,975 yuan per tonne. Following, SHFE July zinc price dipped 0.09% or 25 yuan to 21,590 yuan per tonne.
Observing the July lead price, it slipped 1.05% or 170 to 15,965 yuan per tonne.
In conclusion, the SHFE September nickel price was 180 yuan or 0.23% lower at 76,830 yuan per tonne. And finishing with the SHFE September tin price who fell 1,240 yuan or 0.87% to 140,990 yuan per tonne. 

Currencies & data

The Brent crude oil spot price up 0.85 to $51.62 per barrel. Texas light sweet crude oil spot price also gained 0.79 to $48.59 per barrel.
Observing the Shanghai Composite, it was up 0.36% to 3.094.53. Most noteworthy, US Empire State Manufacturing Index and NAHB Housing Market Index will be released later today. The dollar index decreased 0.01% on Monday morning to 99.19.

Russian exports; Gas and Oil production

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Russia expects balance in Oil market; in case production cut prolongs


Alexander Novak said Global Oil markets will come to a balance soon. If the production cuts extend till the early 2018; or late 2017. Entering the winter of 2018, a supply-demand will find its equilibrium.

“Judging from the current dynamics in the decline of the oil and oil products inventories, the markets will see such decline in inventories by the end of 2017 – early 2018. Which will lead to cuts in inventories to a five-year average.” (Reuters)

Despite currently cutting the production, global inventories are still high. They lead the crude back below $50 per barrel. Those were the oscillations earlier this month and it is constantly putting pressure on OPEC to extend the cuts to the rest of the year.

Russia’s Energy Minister Novak said that OPEC countries and other leading oil producers would discuss extending the deal. Considering the second half of the year or “maybe even further than that”.

Parameters of the agreement should not be changed. In a way that further cuts are very likely.

Novak added that Russia will  retain output cuts of 300,000 barrels per day. From the level of October 2016 as stipulated by the December 2016 deal.

”Russia’s oil output forecast of 549-551 million tonnes for this year remained the same. But it could change depending on the outcome of oil producer nation talks in Vienna later this month.”


Russian Natural Gas Exports to China


Alexei Miller today said Gazprom hopes to agree the main terms of natural gas exports to China from the Russian Far East, in 2H17.

The supplies of natural gas, coming from the Russian Far East should be an extension of an already signed 30-year contract on exporting. 38 billion cubic meters of natural gas going to China, from Siberian deposits.


OPEC losing its pricing power?


According to some CNBC news, Commerzbank said that OPEC is losing its power over market. It has limited impact on Oil prices, since it secured a deal to curb outputs. The global energy market is well shaken, and it is a big question whether OPEC will succeed to rebalance it in 2H17.

“The fairly short-lived effect of production cuts on oil prices shows that OPEC’s market impact via ‘supply control’ is very limited. We have been pointing out for years that OPEC has lost its ‘pricing power.” (Commerzbank)

“Even so, OPEC is unlikely to give away on cut extensions, it will extend the agreement instead.” Weinberg said.

Eugen Weinberg is a head of commodities research at Commerzbank.

“The relentless increase in U.S. shale supply has counterbalanced the production cuts that OPEC and Russia agreed on. And so, there is still a skepticism within supply and demand balance.” (CNBC)





Weaker Chinese data; U.S. aluminium sector asks Britain & EU to unite against China


U.S. Representatives

Spokesman of the U.S. aluminum industry are speaking to EU counterparts. They have written to British Prime Minister Theresa May. Asking urgent action against “massive illegal subsidies” in China that bluster Western jobs.

Trade lawyers and some governments accuse China of unfairly subsidizing major industries in breach of the rules of the World Trade Organization (WTO). While China became part of the World Trade Organization in 2001.


Shifting focus to Aluminium


U.S. this year has reversed the focus to aluminum. Following European and U.S. action to protect their steel industries from China speaking about steel and copper of earlier times.

It has lodged a query with the WTO and launched an investigation into whether Chinese imports compromise national security.

“The WTO and U.S. and European leaders must act quickly to ensure a fair playing field.” Michael Bless, CEO CENX.O, told a news conference in London yesterday. China says it supports the work of the WTO.

  • The aluminum industry, represented by the China Trade Taskforce, has written to May urging her “to actively engage with the WTO on this matter and press for action”.

“A strong WTO that acts swiftly in situations such as this will be a vital part of securing Britain’s post-Brexit future” (Reuters)

The prime minister’s office had no immediate comment.

The industry leaders were also speaking to Brussels officials and to the Russian government. This floated the idea of an OPEC-style body for the aluminum industry.

They could not endorse that, but it was an

“acknowledgement of the severity of the issue”.


China’s Act


When China, the biggest aluminum consumer, joined the WTO it represented just over 10 percent of aluminum production worldwide. Now it is the world leader, accounting for more than 50 percent of global output and China’s Hongqiao has overtaken Russia’s Rusal as the biggest producer, while the U.S. and European sectors have gathered.

Industry body European Aluminium said the number of primary European aluminum smelters fell by nearly 40 percent between 2002 and 2015.

Trade lawyers say the ascendancy of China’s aluminum sector defies commercial logic as it faces higher bills for energy than the U.S. and Europe. It has the biggest input costs.

“China has no natural advantages other than illegal state support,” Alan Price of Washington law firm Wiley Rein said. (Reuters)


Main areas


Century Aluminum, which is majority-owned by Glencore, reported a first-quarter net loss. Part of the justification for the U.S. investigation into whether Chinese aluminum is a threat. It is that Century’s smelter in Kentucky is the only producer of high-purity aluminum required for U.S. combat aircraft.

In Europe, the main concern is how to maintain smelting capacity as part of a strong value chain, creating thousands of indirect jobs, rather than security, European Aluminium said in an email.

EU trade ministers, meeting in Brussels next week, are expected to discuss new rules on dealing with anti-dumping, which are likely to have most impact on Chinese imports.

In conclusion, the idea of OPEC-like association in the Aluminium market would impact prices in a really good way. That would make producers happy. But it will also have a great impact on Chinese economy. Mostly their imports, and also their production.


SHFE morning report; weaker U.S. and Chinese data

Important Facts about Today’s Market:


  • New Zealand Employment Change QoQ rose to actual 1.2% (forecast 0.8%)
  • Germany Unemployment Change – 30K actual (forecast -10K)
  • UK Construction Purchasing Managers Index (PMI) fell to actual 52.2(forecast 52.4)
  • The US ADP Nonfarm Employment Change to actual 263K (forecast 187K)
  • Also US ISM Non-Manufacturing PMI fell to 55.2 (forecast 57.0)
  • US Crude Oil inventories to -3.641M while exp. was -1.661M
  • FED Statement & FED Interest Rate Decision




Base metals today on the Shanghai Futures Exchange were broadly lower during Asian morning trade, as desolate economic data from China and the USA weighed on market sentiment.

US Car sales

Firstly, under-performance in US car sales during April combined with China’s weaker PMI data has left market participants concerned over weaker economic growth in these two countries, according to a Shenzhen-based senior analyst. 

Secondly,the perceived weakness has dampened market sentiment and sent the base metals prices into retreat this morning.

“Prices drifted lower as investors fretted about weaker than expected manufacturing activity in China. Metals also fell as US carmakers reported steeper-than-expected US sales declines, suggesting demand will be weaker in that region.”

Thirdly, sales at all six of the biggest automakers in the USA fell again in April, with each company’s figures coming in below analysts’ estimates resulting in the fourth consecutive month of falling sales in aggregate, according to National Australia Bank (NAB). (Metal Bulletin)

“On Monday, March US personal spending figures disappointed (0.0% compared with 0.2% expected) and now the new drop in car sales confirms the view that not all is well with the US consumer. The recent soft US data releases are challenging the view that a rebound in activity should be expected in [the second quarter].”



Meanwhile, China has also had its fair share of disappointing data this week.

Following, China’s official NBS manufacturing PMI fell to 51.2 in April from 51.8 in March and below market expectations of 51.6, while the country’s non-manufacturing PMI also dropped to 54.0 in April from 55.1 in the previous month. Additionally, China’s Caixin manufacturing PMI fell to 50.3 last month from 51.2 in March.

“These three numbers taken together point to the same issues, that there is a slowdown in new domestic orders, export orders are falling, there is rising unemployment and a fundamental weakening in business confidence. Also, looking at the extreme, we may have to face the fact that the Chinese economy may be starting to embrace a downtrend,” Bands Financial Ltd said on Tuesday.


Copper price dips

SHFE June copper contract stood at 46,610 yuan per tonne as of 03:48 London time. Down 180 yuan compared with the previous session’s close.

“Tightened credit in China during April will continue to put pressure on copper prices,” China’s Galaxy Futures said on Wednesday.
After suffering a mild downturn in April, copper is facing more headwinds going into May, according to INTL FCStone Inc analyst Edward Meir.
“The market finds itself in somewhat of a soft spot going into [the second quarter] given that the big events driving values higher last quarter, namely the Escondida and Grasberg outages, are now behind us and the next wave of labour negotiations will not take place until later this year,” Meir said. (M.B.)

In conclusion, workers at PT Freeport Indonesia have continiued a month-long strike. At the world’s second-largest copper mine Grasberg. The strike is expected to hinder expansion plans at the mine.Strikers are persistent, it is the 3rd day of protests.




How North Korea gets its oil from China



UN Security Council decides whether to tighten the sanctions screws on North Korea. The country’s increasingly isolated government could lose a lifeline provided by state-owned China National Petroleum Corp (CNPC).

For decades, the Chinese oil giant has sent small cargoes of jet fuel, diesel and gasoline from two large refineries in the northeastern city of Dalian. And also some other nearby plants across the Yellow Sea. All to North Korea’s western port of Nampo. Nampo serves North Korea’s capital, Pyongyang.

Firstly, CNPC controls the export of crude oil to North Korea, an aid program that began about 40 years ago. Crude goes through an ageing pipeline that runs from the border town of Dandong to feed North Korea’s oil refinery. The Ponghwa Chemical factory in Sinuiju on the other side of the Yalu river. It splits the two nations. The plant makes low-grade gasoline and diesel.

There are some unreported details about CNPC’s deals with Pyongyang. About how it came to dominate that business. Explaining the two countries’ relationship. What’s at stake, as decades of close ties sour badly because of growing concerns about North Korea’s missile and nuclear programs.



Donald Trump’s administration


U.S. President Donald Trump’s administration is focusing its North Korea strategy on tougher economic sanctions. Possibly including an oil embargo. Also a global ban on its airline, intercepting cargo ships. Finally punishing Chinese banks doing business with Pyongyang.

Secondly, North Korea imports all its oil needs, mostly from China and a way smaller amount from Russia.

It bought about 270,000 tonnes of fuel last year, according to China’s customs data.



Oil Embargo & North Korea trade


In North Korea, diesel is critical for farming, especially at this time of year. Ahead of the planting season and also around October for harvesting. Gasoline is mainly used by the transport industry and the military.

The Global Times, a Chinese magazine whose stance does not necessarily reflect official policy, earlier this month raised the possibility of cutting oil shipments to North Korea if it were to conduct another nuclear test.

  • “China could potentially be convinced to cap volumes like they did with coal. At the United Nations Security Council as part of a new sanctions resolution following another nuclear test.” (Reuters)

“CNPC has all along been really politically minded among state energy firms, aiming for that role of North Korea’s dominant supplier even if the business makes little money.”

Any loss of the North Korea trade will have only a tiny effect on Dalian. Dalian’s two refineries having a combined capacity to process over 600,000 barrels of crude oil per day. Which is about 40 times North Korea’s requirements.

Pyongyang’s increasing nuclear and ballistic missile tests have already put the brakes on the trade. Beijing quietly suspended a decades-long aid program of 50,000 tonnes annually of aviation fuel in 2013. The government officially announced a ban on jet fuel only, last June.

Russia appears to have replaced China as the top supplier of jet fuel.


Chinese steel exports to U.S. causing national security issues?





U.S. President is launching an investigation about whether the steel imports from foreign countries affects U.S. national interests.

“Steel is critical to both our economy and our military. This is not an area where we can afford to become dependent on foreign countries.”

Firstly, China is the largest national producer. It makes far more steel than it consumes. Secondly, it is exporting the excess output overseas. ” This often leads undercutting domestic producers.”

Trump is pressuring China to do more to rein in an increasingly belligerent North Korea. Which is the unusual step of setting to steel investigation. Two presidents discussed this subjects earlier in Florida. Trump said that he would consider possibility of using trade as a lever to coax China to do more.


Opinions on matter


“Everything they export is dumping.” (Derek Scissors, Asian economist.)


Following, Chinese exports have risen. “Despite repeated Chinese claims that they were going to reduce their steel capacity.” said Ross. Ross was labeled “Mr. Protectionism” for his history of owning businesses protected from foreign competition. “If the Commerce inquiry finds the U.S. steel industry is suffering from too much steel imports, I will recommend retaliatory steps.” That could also include tariffs.


Trump ordered a probe under Section 232 of the Trade Expansion Act of 1962. This lets the president impose restrictions on imports for reasons of national security.


In October 2001, a Commerce Department investigation found “non probative evidence.” Saying that imports of iron ore and semi-finished steel threaten to impair U.S. national security.

The amounts of steel imported, even though big, cannot represent

the national security problem. It is simply called trading” said an analyst.

Steel shares had raised after Trump won the November election amid promises for increased infrastructure spending.

On Thursday shares of steel makers closed between 4 and 8.5 % higher. Steel Dynamics Inc (STLD.O), AK Steel Holding Corp (AKS.N), Cliffs Natural Resources Inc (CLF.N), Allegheny Technologies Inc (ATI.N) and other.


Steel Profits in US


The United States has nearly 100 plants that make millions of tons of steel annually. Government tried to protect them with WTO regulations. Then came Trump and said this has to be put on another level.

“The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American steel industry.”

Also, Nucor Chairman John Ferriola said that the steelmakers welcomed the president’s move.

“We look forward to continuing to work with the president and Secretary Ross. To ensure our trade laws are enforced so that U.S. manufacturers can compete on a level-playing field.”

“There is no doubt that steel plays a role in our national security and the manufacturing of U.S. weapons systems.” (Jeff Bialos, who has worked on steel trade cases in the past.)


“But the Department of Defense only consumes a small portion of domestic steel output. And this has decreased over the past decade as composites technology has advanced,” Bialos said.


Scissors said the United States has other ways to take on China over steel trade issues, other than invoking national security.


“Talking about it as a national security issue – I don’t think it’s necessary and I don’t think it’s justified,” he said.


China is creating a state-owned consortium to discuss about Saudi’s Crown Jewel Aramco


Saudi Aramco

Most popularly known as Aramco, is a Saudi Arabian national petroleum and gas company. Firstly, it is based in Dhahran. Its value has been estimated between US$1.25 trillion and US$10 trillion. Which makes it the world’s most valuable company.

Secondly, Saudi Aramco has the world’s largest proven crude oil reserves. Estimated at more than 260 billion barrels. It also has the largest daily oil production. It owns, operates and develops all energy resources based in Saudi Arabia.


Vision 2030

Saudi Arabia’s Deputy Crown Prince, Mohammad bin Salman, has accepted a report from the consulting firm of Mc Kinsey & Co. Named entitled Vision 2030. Seems as his blueprint for turning the Saudi economy from oil. Laying the foundations for advanced private sector. Following, he has also decided to sell a 5-10 percent stake in the country’s national oil company.

Through an initial public offering. A number of international investment banks think the IPO and Aramco’s market capitalization will be in the vicinity of two trillion dollars. Therefore, newly listed company with the largest market capitalization on the planet.

Financial and industry experts do IPOs determination and the pricing of shares. On the basis of the company’s economic and financial data. And prevailing market conditions.

In the case of a ‘standard’ oil company, this would be based on extensive geological findings of retrievable reserves. And ultimately on discounted annual earnings of the company after all applicable taxes. Would these requirements and projections be followed in the same format for an Aramco IPO? Probably not. Because the calculations would require extensive intrusion into Saudi Arabia’s perception of a number of highly queasy covenants.


China State-Owned Consortium

China is gathering a consortium that will act as a headstone financier in the initial public offering of Aramco. People present at this meeting will possess high prudence of the discussions. This consortium includes state-owned oil giants and banks and its sovereign wealth funds.

Saudi Aramco is a key exporter to China together with Russia’s Rosneft. With potential $100 billion equity sale that would be the world’s largest to date.

Chinese possible investment, makes it more probably that the national energy giant would search for a listing in Asia. With Hong Kong instantly the favorite among stock markets in the region.

“The IPO will help decide which country can secure the crude supplies from the company and Saudi Arabia going forward.


“The company would consider participating in the IPO depending on market conditions.” (Wang Dongjin’s words.) Sinopec says the oil giant would discuss the IPO with Aramco.


Asia Register

In conclusion, Saudi authorities plan to list up to 5 percent of Aramco. On the Saudi stock exchange in Riyadh, and also one or more international markets.

Also, the $100 billion IPO price tag is based on Aramco being valued at $2 trillion. There are different versions about valuation of this giant.

“The Saudis are serious about Asia. They can maintain market share there. At the end of the day, Aramco needs to sell its oil. This is just another way of guaranteeing a long-term market.” (Reuters)