Iron Ore Coal & Coke Billet Scrap Ferroalloy Freight Latest News Analysis Data MYSTEEL RAW MATERIAL DEPARTMENT Mysteel Raw Materials Daily Bringing you the latest updates on raw materials markets www.mysteel.net Tuesday, August 2, 2016

Currency Exchange 1 USD = 6.6277 CNY 1 USD =1.3265AUD 1 USD=3.2648 BRL ISSUE 292

USD/DMT Mysteel IO Index (62% Fe Australia) Today's Highlight 80 70 Steel mills raise steel prices 60 50 Steel prices rose again. Shagang Group issued the early August’s adjustment 40 policy of steel prices on Aug 1th. Rebar price increased by 70 yuan/ton and 16- 30 25mm Spot rebar’s ex-factory price came to 2480 yuan/ton. Coiled rebar price 20 10 increased by 30/ton and 8-10mm spot coiled rebar’s strike price stood at 2530 0 yuan/ton. High speed wire price came to 2480 yuan/ton, up 30 yuan/ton. Hot- rolled coil products’ prices reached 2800-2830 yuan/ton, up 20 yuan/ton. Jul-15 Jul-16 Jan-16 Jun-15 Jun-16 Oct-15 Apr-15 Apr-16 Sep-15 Feb-16 Dec-15 Aug-15 Nov-15 Mar-15 Mar-16 May-15 May-16

USD/tonne Mysteel IO Index VS Mysteel Shanghai Rebar Index USD/dmt Iron ore price hits high 500 80 Iron ore future price 1609 hits three-month high of 486.5 yuan per tonne 450 70 400 60 in Dalian commodity exchange market, and is set to end July with a second 350 consecutive monthly gain, defying market expectations that iron ore would be 300 50 250 40 dragged down by increased supply in 2H16. Iron ore has advanced as higher steel

200 30 prices encouraged stronger steel output and iron ore consumption. 150 20 100 50 10 [Aug 2] Mysteel Market Price Summarization 0 0 Iron Ore Price Chg Mysteel Shanghai Rebar Index Mysteel IO Index (62% Fe Australia) Mysteel Australian fines 62% Fe Index, CFR, US$/dmt 61.5 +0.25 Mysteel Australian fines 62% Price Index Price, FOT, Yuan/wmt 462 +5 Yuan/ton Rebar Closing Price VS Rebar Index Yuan/ton Domestic concentrates 66% Fe, Yuan/dmt, tax incl. 535-545 - 3500 500 DCE Iron Ore Futures Main Contract Closing Price, Yuan/mt 485.5 -0.21% 3000 400 Coal & Coke 2500 300 200 2000 Tangshan prime coking coal, Yuan/ton 760 - 100 1500 Shanxi PCI coal, Yuan/ton 430 - 0 Shanxi 1st grade Metallurgical Coke, Yuan/ton, ex-works 940 +60 1000 -100 500 -200 Billet 0 -300 Tangshan square billet, 150x150 mm Yuan/t, 150x150 mm, ex- works 2,110 +30 Scrap

Price Spread Rebar Closing Price Rebar Index Jiangsu scrap price, 6-8mm, Yuan/ton 1,420 - Ferroalloy MYSTEEL RAW MATERIALS DAILY Ferrosilicon, 75-A, Northwest China, Yuan/ton 4,500 - Silicon Manganese, Mn65Si17, Yuan/ton 7,200 - Vice GM of Raw Materials Department: Zhang Yong (Evan) (+86-21-26093209) Rebar Mysteel Shanghai Rebar Price Index, HRB 400, Yuan/ton 2,439 +12 Mysteel Raw Materials Daily Editors: SHFE Rebar Futures Main Contract Closing price, Yuan/ton 2,514 +0.76%

Valeria Cheng (+86-21-26095538 [email protected]) Mysteel Domestic Iron Ore Conference Site Visit + Workshop + Main Conference Cylin Cui (+86-21-66896547 [email protected]) Quinta Wang (+86 -21-26093621 [email protected]) Date: September 5-9 2016 Kimmy Hu(+86-21-66894661 [email protected]) Vicky Zou([email protected]) Service I Date: 5th-6th Sep, 2016 Mysteel Visit to Domestic Steel & Mining Enterprises based in Tangshan Province Service II Date: 7th Sep, 2016 Due Diligence Workshop Service III Date: 8th-9th Sep, 2016 2016 China Domestic Iron Ore Industry Chain Summit

For more info, please contact [email protected]

01 Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016

Iron Ore Market Report Mysteel Iron Ore Index [Aug 2]The seaborne iron ore market moved up on Tuesday. Currently, price index of 62% Australian fines Mysteel Iron Ore Index (USD/dmt) stood at CFR $61.50/dmt, up $0.25/dmt (MTD average at $61.38/dmt); index of 58% Australian fines reached Product Grade Index Change CFR $51.25/dmt, up $0.15/dmt; and index of 65% Brazilian fines index was at CFR $68/dmt, up $0.50/dmt. Australian fines 62% 61.5 0.25 Australian fines 58% 51.25 0.15 Australian iron ore miner Rio Tinto closed a tender of a cargo of 61% PB fines at $60.56/dmt, up from Brazilian fines 65% 68 0.5 last tender of $58.51/dmt, with laycan during August 24-September 2. Besides, BHP had a private bid negotiation that a cargo of 90,000 mt Newman fines was traded at $61.9/dmt on 62.7% Fe basis, with Mysteel Iron Ore Port Price Index (Yuan/wmt) laycan during August 16-25. There was one deal landing on the iron ore trading platform. A shipment of Product Grade Index Change 160,000mt 62.5% Vale fines was dealt at a premium of $1.2/dmt plus NOR average index based on +/- 5 ETA Australian fines 62% 462 5 days on Corex, with B/L on July 20. Australian fines 58% 387 -

Offers on the seaborne iron ore market perked up on Tuesday with active traders’ offers, but most steel mills Brazilian fines 65% 523 - held a wait-and-see attitude, which led to less trading volume. Recently, the supply of high-grade MNP is Mysteel Lump & Pellet Premium (USD/dmtu) ample, and miners are still quoting for arrivals in late-August, buyers had more room to bargain. Grade Product Index Change 62.5% Lump 0.187 - As for the spot port iron ore market, dealers generally hiked offers affected by trending up iron ore futures 63% Pellet 14 - on the DCE, but the actual trading volumes are less due to steelmakers’ wait-and-see stand. At present, it 65% Pellet 22 - was heard that blended fines and Newman fines in the port of were traded at Yuan 395/wmt and Yuan 480/wmt, respectively; Indian fines in the were dealt at Yuan 331/wmt; PB fines, [Jul 28]Mysteel Per 1% Differentials, Unit: US$/dmt Brazilian coarse fines, super special fines and PB lump in the port of were settled at Yuan 460/wmt, With $/dmt change Yuan 470/wmt, Yuan 365/wmt and Yuan 560/wmt, respectively. Min-Max 60- 1.05 - Iron ore futures on the Dalian Commodity Exchange (DCE) dipped after an increase on Tuesday. The most Per 1% Fe 63.5%Fe liquid contract night market opened low at Yuan 485/dmt on the night market, with a slight decrease on Mysteel Iron Ore Survey the day market to Yuan 483.5/dmt, finally it was closed at Yuan 485.5/dmt, up 2.75% against settlement price last session, with open interest decreasing 41,000 lots. [Jul 29] Imported Iron Ore Port Stock, Mt 45 Sample in China Elsewhere, spot prices of square billet in Tangshan stood at Yuan 2,110/mt ex-stock (in cash, incl. tax) after a Port Stock Jul 29 Jul 22 Change rise of Yuan 30/mt on Monday. Total 108.64 108.84 -0.20

Australian Ore 59.93 58.86 +1.07 According to Mysteel’s statistics, China’s iron ore inventory at 45 main ports stood at 109.37 millon tonnes, up 730,000 tonnes from last Friday, with daily offtake volume at 2.45 million tonnes, down from last Brazilian Ore 22.95 24.28 -1.33 Friday’s 2.546 million tonnes. Stocks had a great change in the port of Caofeidian port, Lanshan port and Ore for trading 34.51 32.84 +1.67 Majishan port, while overall inventories at other ports declined. Besides, offtake volume is at a low level as Pellet 3.18 3.65 -0.47 the opening of the conference of the 40th anniversary of the Tangshan earthquake had an obvious impact Concentrate 5.03 5.24 -0.21 on Jingtang and Caofeidian ports’ shipping, causing that the national offtake volume had a further drop. Lump 13.65 13.87 -0.22

In general, blast furnace operating rate is expected to reach above 8% as steel mills that cut production previously have successively resumed production recently, coupled with steelmakers’ rosy profitability, thus [July 28] Steel Mill Iron Ore Stock, Mt iron ore price is estimated to climb in the short term. 64 Sample China based steel mills -Written by Quinta Wang Imported Ore Day Change Imported sinter feed stock 22 -1 Industry Dynamics Domestic Ore Domestic pellet feed stock 6 -1 Steel mills raise steel prices Changzhi Company of Shougang Group also adjusted the products’ [Jul 28] Blast Furnace Feed Ingredients Share Steel prices rose again. Shagang prices on July 29th. The prices of 64 Sample China based steel mills Group issued the early August’s high speed wire and coiled rebar all adjustment policy of steel prices on increased by 30 yuan/ton and the Share Change Aug 1th. Rebar price increased by 70 price of rebar rose by 20 yuan/ton Pellet 11.36% -0.51% yuan/ton and 16-25mm Spot rebar’s compared with the previous day. Lump 12.37% +0.09% ex-factory price came to 2480 yuan/ Sintered Ore 76.27% +0.42% ton. Coiled rebar price increased Recently, the steel prices in the East, by 30/ton and 8-10mm spot coiled Central and Southwest regions have [Jul 22] Domestic Iron Mines Operation Rate rebar’s strike price stood at 2530 lifted obviously. Last week’s data 70 Sample China domestic iron ore producers yuan/ton. High speed wire price indicated that the average prices Total Jul 22 Change came to 2480 yuan/ton, up 30 yuan/ of construction steel, hot-rolled Concentrate output, 10k ton per 7.8 - ton. Hot-rolled coil products’ prices coil, cold rolled coil, and section day reached 2800-2830 yuan/ton, up 20 increased by 35 yuan/ton, 45 yuan/ Capacity utilization rate 42.9% -0.2% yuan/ton. ton, 35 yuan/ton, and 50 yuan/ton Stock in beneficiation plant,mt 900,000 -30,000 02 Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016

W-o-W. Meanwhile, the billet price also [Aug 2] Mysteel Iron Ore Index, Unit: US$/dmt had a rebound at the end of the last Product Grade FOB CFR Index Change Activity MTD average week. Australia fines 62% 57.5 61-62 61.5 0.25 High 61.38 Australia fines 58% 47.25 50.75-51.75 51.25 0.15 Medium 51.18 The market transaction was relatively Brazilian fines 65% 59 67.5-68.5 68 0.5 Medium 67.75 positive on Monday. Mysteel estimates Indian fines 63.50% 53.7 61.2-62.2 61.7(*) 0.25 Low 61.58 that in the short term, the cutting Indian fines 58% 41.75 48.25-49.25 48.75(*) 0.1 Low 48.7 excessive production capacity in supply Indian fines 56% 38.85 45.35-46.35 45.85(*) 0.1 Low 45.8 side will support the steel market. Indian fines 52% 27 33.5-34.5 34(*) - Low 34

-Edited by Vicky Zou Product Grade FOB CFR Index Change Activity Newman fines 62.50% 57.7 61.2-62.2 61.7 0.25 High PB fines 61.00% 56.95 60.45-61.45 60.95 0.25 High Angang Steel to issue second Mac fines 60.80% 55.75 59.25-60.25 59.75 0.25 Medium medium term notes this year JMBF 61.30% 55 58.5-59.5 59 0.25 Medium PB lumps 62.50% 69.45 72.95-73.95 73.45 0.25 Low Angang Steel Company Limited has Newman lumps 63.20% 70.2 73.7-74.7 74.2 0.25 Low announced that it will issue 2 billion Mac lumps 62.50% 68.7 72.2-73.2 72.7 0.25 Low yuan unsecured medium term notes Yandi fines 57.30% 46.65 50.15-51.15 50.65 0.15 Medium with a maturity of 5 years on the Robe Valley fines 57.00% 45.6 49.1-50.1 49.6 0.15 Medium SSF 56.70% 44.75 48.25-49.25 48.75 0.15 Medium interbank market, and the collected FB Fines 58.30% 46.4 49.9-50.9 50.4 0.15 Medium fund will be used to repay the bank SSFG 62.50% 52.05 60.55-61.55 61.05 0.25 Medium loans. This will be the issuer's second SSFT 62.50% 52.45 60.95-61.95 61.45 0.25 Medium medium term notes this year. The BRBF 63.10% 61.45 62.95-63.95 63.45 0.25 Medium IOCJ 64.50% 58.85 67.35-68.35 67.85 0.5 Medium corporation said in a statement that Indian fines 63/62% 51.65 59.15-60.15 59.65(*) 0.25 Low the notes will be issued at the face Indian fines 62/61% 49.8 57.3-58.3 57.8(*) 0.25 Low value, and the coupon rate determined Indian fines 61/60% 47.7 55.2-56.2 55.7(*) 0.25 Low in the process of bookbuilding. China Indian fines 60/59% 46.5 53-54 53.5(*) 0.25 Low Chengxin International Credit Rating Indian fines 55/54% 34.95 41.45-42.45 41.95(*) - Low Indian fines 50/50% 23.6 30.1-31.1 30.6(*) - Low Co., Ltd has rated the issuer and notes Lump Premium 62.5% 0.187$/dmtu at AAA and AAA, respectively. The rating Pellet Premium 63% 14$/dmtu agency's view is the issuer has strong Pellet Premium 65% 22$/dmtu repayment ability and not affected by external economic factors, the possibility [Jul 28]Mysteel Per 1% Differentials, Unit: US$/dmt of default is considered lowest. Haitong Within Min-Max $/dmt Change Securities Co., Ltd has been mandated as lead underwriter and bookrunner. China Per 1% Fe 60-63.5%Fe 1.05 - Construction Bank Co., Ltd will be the joint lead underwriter. [Aug 2] Mysteel Iron Ore Port Spot Price Index (yuan/wmt) Meanwhile, the company's 1 billion yuan Product Fe Origin Loading Port Index Chg Activity Mtd avg Medium unsecured medium term notes with a Australia fines 62% Australia Qingdao 462 5 459.5 maturity of 5 years has confirmed its Australia fines 58% Australia Qingdao 387 - Medium 387 coupon at 4.50%. 1 qualified institutions Brazil fines 65% Brazil Qingdao 523 - Medium 523 with total RMB 1 billion had subscribed [Aug 2] Port Price Discount and Premium (Yuan/wmt) to this issue. Both the highest and Caofeidian Jingtang Zhenjiang Fangcheng Product Rizhao Port lowest asking bid were 4.50%. Port Port Port Port Port Port 62% Australia fines 16 2 2 - - 11 4 -Edited by Mysteel.net 58% Australia fines 26 9 9 - - 16 6 65% Brazilian fines 8 -8 -8 - - 10 5 Note: Iron ore price hits high 1. Mysteel defines FOT-based price of 62% Fe Australian fines, 58% Fe Australian fines and 65% Fe Brazilian fine on as Mysteel Iron Ore Port Price Index 2. The Index aims to reflect the tradable prices of iron ore on main ports of China Iron ore future price 1609 hits three- 3. Mysteel Iron Ore Port Price is a free on truck price with tax included 4. Unit: Yuan/wmt month high of 486.5 yuan per tonne 5. Payment: Cash settlement 6. Minimum Pirce change: 1 Yuan/ton in Dalian commodity exchange market, 7. Data Collection Period: From 8:30 to 17:30 and is set to end July with a second 8. Index Publish Time: 17:45 each workday consecutive monthly gain, defying [Aug 2] Market Price of Imported Iron Ore on Port (Yuan/mt) market expectations that iron ore would Change be dragged down by increased supply in 61.5% PB fines on Caofeidian Port, Yuan/wmt 455-465 - 2H16. Iron ore has advanced as higher Spread of 61.5% PB fines on Caofeidian Port and 61.5% PB fines forward price -2 - steel prices encouraged stronger steel 62.5% PB lumps on Tianjin Port, Yuan/wmt 575-585 - output and iron ore consumption. 62.5% PB lumps on Rizhao Port, Yuan/wmt 560-570 - Property boom and higher government spending on infrastructure and power 03 Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016 generation has led to an increase in [Aug 2] Market Price of China Domestic Concentrates demand of steel. Price Change 66% domestic concentrate, Tangshan, wet basis, ex-work, Yuan/ton, tax-exl. 435-445 - After a global round of commodity Spread of 61.5% PB fines and 66% Tangshan concentrates speculative frustration, China dialy -10 +15 crude steel output remained at record [Aug 2] Forwards Price of Non-mainstream Ore ($/dmt) level, which provided strong support to Product Grade Origin CFR Chg the boost of iron ore prices. In the next Pellet feed 65% Ukraine/Russia 70-71 0.5 12 months, the iron ore may see rally, Pellets 63% Ukraine/Russia 76-77 - as China credit expansion will be on Pellets 65% Ukraine/Russia 86-87 0.5 Pellet feed 66% Iran 67.75-68.75 0.75 the back of the iron ore output. Based Pellet feed (HS) 66% Iran 65.25-66.25 0.75 on the latest release PMI data, the Sinter feed conc. 66% Iran 65.75-66.75 0.75 infrastructure expense has not shown Sinter feed conc. (HS) 66% Iran 63.75-64.75 0.75 any sign of slowing down. In the next Magnetic fines 62/61% Iran 44.5-45.5 0.25 few months, China steel demand may Magnetic fines 61/60% Iran 43.5-44.5 0.25 keep high. Magnetic fines 60/59% Iran 42.5-43.5 0.25 Hematite fines 62/61% Iran 42.5-43.5 0.25 -Edited by Mysteel.net Hematite fines 61/60% Iran 41.5-42.5 0.25 Hematite fines 60/59% Iran 40.5-41.5 0.25 Rebar prices to decline Indonesia crude fines 50% Djakarta 29.5-30.5 +0.5 Indonesia iron sand 56/55% Djakarta 35.5-36.5 +0.5 Continuous increase has shown on Malaysia crude fines 54% Kuantan 31.5-32.5 +0.5 rebar future prices in recent days Low grade high Fe nickel ore 49% Philippine 22-23 +0.5 and the main contract 1609 stood at Low grade high Fe nickel ore 50% Philippine 23.5-24.5 +0.5 2500 yuan/tonne during yesterday’s [Aug 1] SGX IO Swaps Settlement Price ($/dmt) transaction. Several factors account for Contract DSP Change (%) this. Some of electronic furnace plants 16-Aug 59.72 4.40% in Jiangsu Province are faced with the Q4 16 55 5.10% environmental examination and some Q1 17 51.78 5.40% shut down. But the analysts point out Q2 17 49.33 5.50% that influenced by the environmental Q3 17 47.14 5.70% protection, the rebar price is expected Cal 17 48.42 5.60% to rise but with limited margin. The Contract Volume (lots) Volume (mt) Open Interest(lots) short-term speculation will lead to the Swaps 318 159,000 30,118 decline of the rebar price. TSI Futures 43,735 4,373,500 550,828 TSI Options-Swaps - - 41,970 Steel future prices ramp up TSI Options-Futures 1,200 120,000 760,104 [Aug 2] Mysteel Iron Ore Swaps Curve ($/dmt) Ministry of Environmental Protection Mysteel Indicative Curve of SGX TSI 62% Iron Ore Swap has made the following deployments Outright Spread on the said inspection in accordance Aug 59.90/60.40 Aug/Sept 1.35/1.85 with the Opinions of the State Council Sep 58.30/58.80 Aug/Oct 3.10/3.60 on Reducing Overcapacity and Oct 56.55/57.05 Aug/Q4 4.50/5.00 Overcoming Difficulty in Development Nov 55.15/55.65 Sept/Oct 1.50/2.00 of the Iron and Steel Industry. In March Q4 55.15/55.65 Oct/Nov 1.15/1.65 2016, the treatment of the iron and Q1 51.65/52.15 Q4/Q1 3.25/3.75 steel industry was included in the Q2 49.15/49.65 Q1/Q2 2.25/2.75 Outline of National Environmental Cal17 48.30/48.80 Q2/Q3 1.75/2.25 Supervision and Inspection in 2016. Cal18 43.70/44.20 Cal17/Cal18 5.20/5.70 In May 2016, the steel industry Trades Today Aug $60.10, $60.05; Sep $58.45, $58.50;Oct $56.65; Q4 $55.25,$55.50; Q1 $52.00; Aug/Sept was covered by the environmental $1.55 inspection on key industries, and Mysteel brokerage business contact Tel: +86-021-26093315 local governments were required William:[email protected]; Chirs:[email protected]; Jack: [email protected] to straighten out and canvass the [Aug 2] Iron Ore Transaction/Tender iron and steel makers between June Tender: and October 2016. The first batch of 1)Rio Tinto closed a tender of a cargo of 61% PB fines at $60.56/dmt, up from last tender of inspectors has been assigned to eight $58.51/dmt, with laycan during August 24-September 2. provinces, including Nei Monggol, Hei 2) BHP had a private bid negotiation that a cargo of 90,000 mt Newman fines was traded at Longjiang, Shanxi, Henan, Guangxi, $61.9/dmt on 62.7% Fe basis, with laycan during August 16-25. Yunnan, Ningxia. Inspectors will spend one month overseeing environmental Transaction: moves by local governments from 1) A shipment of 160,000mt 62.5% Vale fines was dealt at a premium of $1.2/dmt plus NOR average index based on +/- 5 ETA days on Corex, with B/L on July 20. 04Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016

July 12 to August 19. Steel mills in these Coal and Coke regions will be influenced and the total Met Coke production of these regions will reduce Change due to shutdown of some steel mills. [Aug 2] Tangshan 2nd grade met coke price (Yuan/mt) 960-990 - [Aug 2]Tianjin port quasi-first grade met coke price (Yuan/mt) 1,050- Environmental protection has a limited - 1,060 effect on the steel production. First, the [Aug 2] DCE coke futures 1609 close price 1,127.5 +1.67% influence of environmental protection [Jul 29] Stock in Tianjin Port (Mt) 1.93 +0.06 on steel production will not last long. [Jul 29] Independent coking plant (N.China) capacity utilizaiton rate 82.6% down Second, supply of the steel over China [Jul 29] Independent coking plant (N.China) average coke stocks (mt) 217,500 down will not decrease. Third, some steel mills [Jul 29] Independent coking plant (E.China)capacity utilization rate 83.9% down will invest in the environment-friendly [Jul 29] Independent coking plant (E.China) average coke stocks (mt) 19,700 up equipment to meet the standards thanks Coking coal to the bullish steel market. Fouth, most [Aug 2] Lvliang coking coal price, A9.5S0.6V20G>90 (Yuan/mt) 650 - of steel mills operated with the medium [Aug 2] Tangshan prime coking coal price,A11S1V27G85Y18 (Yuan/mt) 760 - frequency furnace before shutdown, [Aug 2] Imported Australian coking coal, A9V25S0.5G85Y17 (Yuan/ton) 760 - exerting little effect on the production. In [Aug 2] DCE coking coal futures 1609 close price 787 +0.9% addition, steel mills will get prepared for [Jul 29] Imported coking coal stock in China ports (Mt) 10.651 -5.6% the environmental inspection. [Jul 29] Coking coal total stock in 50 sample steel mills (Mt) 5.748 -0.8% [Jul 29] Coking coal total stock in 100 sample independent coking G20 4.903 -10.7% plants (Mt) [Jul 29] Average coking coal stock (Mt) 4.90 -10.75% TheG20 Summit’s influence will continue [Jul 29] Average coking coal days of consumption (Days) 10.14 -5.32% to influence Hangzhou even after the meeting is over. Local steel spot prices PCI will be boosted but future prices are [Aug 2] Shanxi Yangquan PCI coal price,Q6500S<1A10-11V11HGI>65 505 - uncertain. (Yuan/mt) [Aug 2] Russian PCI, A10,V10,Q7400,HGI65 (CIF, USD) 76 +1 From the perspective of supply and [Jul 29] PCI stock in 50 sample steel mills (Mt) 1.8995 +1.5% demand, though affected by the Steam Coal environment protection and G20, the [Aug 2] Qinhuangdao steam coal FOB price, Q5500 (Yuan/mt) 435 - decline on supply is limited. Due to the [Aug 2] Australian steam coal price Q5500, A<22,V>25,S<1, MT10 (CIF, 54.5 +0.5 hot weather, the rate of building new USD) properties has shrunk in recent two [Aug 2] ZCE steam coal future 1609 contract close price 437.2 +1.53% months. The kick-off of some projects [Jul 29] Steam coal stock at (Mt) 2.80 -8.35% will be delayed because of G20. [Jul 29] Steam coal stock at Caofeidian port (Mt) 1.83 3.98% Generally speaking, the steel prices are [Jul 29]Steam coal stock at Guangzhou port (Mt) 1.632 -5.39% expected to decline after ramping up. [Jul 29] Steam coal stock at SDIC Jingtang port (Mt) 0.501 -19.58% [Jul 29] Steam coal stock at Bohai-rim four ports (Mt) 10.036 -2.48% -Edited by Mysteel.net

Billet Mexico imposes anti-dumping Yuan/t Chg duties on Taiwan, China steel [Aug 2] Tangshan square billet, Yuan/t, 150x150 mm, ex- 2,110 +30 works Mexico has imposed provisional duties on flat-coated steel imports from China and Taiwan as part of struggling steel industry, including new import duties, anti- an anti-dumping investigation, the government said on Friday, dumping quotas and enhancing customs controls to enforce the in its latest move to protect the Latin American nation's steel quotas. The investigation was requested by the Mexican unit of industry. steel producers Ternium, the government said.

In a statement published in the government's official gazette, -Source:Reuters the economy ministry said the duties on the steel from Taiwan would be for $0.563 per kg. Iron Ore Miners Shrug Off Doomsday Calls Boosted by Price Rally For China, the duties were set at varying levels for certain companies: $0.4385 per kg for Tangshan, $0.1926 per kg for Any investor who ignored the bearish calls on the iron ore sector Baoshan Iron and Steel Co , $0.3468 per kg for Beijing Shougang would have doubled their money this year just by betting on Cold Rolling Co, $0.4188 per kilo for Shougang Jingtang and the shares of the world’s fourth-biggest exporter, Fortescue $0.4385 per kg for the other exporters. Metal Group Ltd.

In recent months, Mexico has taken several steps to protect its The gains have been driven by an unexpected price rebound 05Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016

amid rising steel exports and government stimulus in China. Scrap The Bloomberg Intelligence Index of 27 producers has surged [Aug 2] Domestic Scrap Market 56 percent this year, beating a 3 percent gain in the MSCI Price Chg World Index, while ore futures in Singapore have posted a 42 Jiangsu, Zhangjiagang Scrap, 6-8mm, Shagang 1270 percent jump. 1,420 - (Yuan/mt) Shanghai Scrap, 6-8mm (Yuan/mt) 1,310 +10 “Irrespective of where the market goes we are continuing to Guangzhou Scrap,6-8mm (Yuan/mt) 1,420 -50 make strong margins,” Fortescue’s Chief Executive Officer Nev [Aug 2] Imported Scrap Market Power said in an interview last month with Bloomberg TV. The H2, Japan, FOB (JPY/ton) 19,500 - company, which has jumped 139 percent this year, will report HMS 1&2, 80:20, US (CFR US$/ton) 225-230 - this month that its full-year profit margin rose to 42 percent, [Aug 2] Pig Iron according to UBS Group AG. Price Chg Three of the world’s four largest producers are scheduled Steelmaking pig iron,Shanxi L8-L10, ex-work, tax incl. 1,660 - (Yuan/mt) to report results in August, after Brazil’s Vale SA last month Casting Pig Iron, Z18 (Yuan/mt) 1,880 - posted second-quarter earnings that beat analysts’ estimates. The No. 1 shipper has gained 46 percent this year. The largest [Aug 2] U.S. producer, Cliffs Natural Resources Inc., is the biggest Ferroalloy gainer in Bloomberg Intelligence’s index and has advanced Price Chg almost four-fold as it swung to profit in the second quarter. Ferrosilicon, 75-A (Yuan/mt) 4,500 - Silicon Manganese, Mn65Si17 (Yuan/mt) 7,200 - Iron ore posted back-to-back quarterly increases this year Australian Mn Ore, Mn44 (USD/mt) 58 - for the first time since 2013, touching $70.46 a metric ton High Chrome FeCr, Cr55 (50 base price) ( Yuan/mt) 6,000 - in April, the highest since January 2015, and outpacing Trace Carbon FeCr, FeCr55C6 ( Yuan/mt) 12,500 - advances by gold and nickel. The steelmaking ingredient is Imported Cr Ore*, Cr50% (USD/mt ) 42 - being supported by increased demand in China, driven by the With help from iron ore, its biggest earning unit, third-biggest infrastructure and property sectors, as well as the country’s strong exporter BHP will see underlying earnings in the June half steel exports, according to Fortescue. jump by 88 percent, compared with the previous six months, according to the average of three analysts’ estimates compiled “At the start of the year the absolute worst case scenarios by Bloomberg. were being priced in,” Evan Lucas, a Melbourne-based market strategist at IG Ltd., said by phone. “There have been a number Rio, the second-largest supplier, is forecast to book a drop in of large sell calls on iron ore that have been quite badly wrong.” full-year underlying earnings to $3.3 billion in 2016, although this is up from an estimate of $2.5 billion in April, according to The price trajectory has defied even some of the biggest data compiled by Bloomberg. London-based Rio is scheduled producers’ expectations with BHP Billiton Ltd. and Rio Tinto to report earnings in the six months through June on Group predicting in April the rally would fizzle out as rising supply Wednesday. swamped demand. Goldman Sachs Group Inc. raised its short- term forecasts in May and then again last week after earlier Revisions to the forecasts “have clearly demonstrated that the warning that iron ore would retreat to $35 a ton by year-end on market was underestimating commodity prices” earlier this oversupply and slowing steel demand growth. Citigroup Inc. also year, Sydney-based UBS Group AG analyst Glyn Lawcock said lifted its forecasts in June. by phone. In a July 27 note, Goldman said investors had been confused this year by the apparent contradiction between Expectations on earnings have been revised upward due to iron rising iron ore inventories and “resilient” cash prices. ore’s rally, even though they remain a long way from the height of China’s demand boom, when BHP racked up record profits of ‘Better Results’ $23.6 billion in fiscal 2011. An earnings reprieve risks complacency from producers on Fortescue’s full-year profit is forecast to rise more than 150 efforts to reduce costs and strengthen balance sheets, said percent to $795.8 million in the 12 months ended June 30 from Paul Mitchell, consulting firm Ernst & Young LLP’s Sydney- a year earlier, according to the average of 17 analysts’ estimates based global mining and metals advisory leader. “The worry compiled by Bloomberg. In January, the average forecast was for you’d have is that people say we’re over the worst and we $347 million. The producer reports August 22. can take the pressure off a little bit,” he said.

“We should see better results” this month from iron ore miners, While the median forecast for 2017 among 12 analysts’ said Matthew Keane, an analyst with Argonaut Securities Ltd., estimates compiled by Bloomberg is for iron ore to slip to from Perth. “They have all had pretty substantial wins in terms of average $45 a ton, Sanford C. Bernstein & Co. said in a report the cash costs. With lower costs and better iron ore prices, they dated July 27 that prices may find support over the next 12 are obviously going to expand margins.” months as expanded credit in China helps to underpin steel production. 06Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEELMYSTEEL RAW RAW MATERIAL MATERIALS DAILY DAILY FRIDAY TUESDAY APR AUGUST24 2015 2, 2016 “The negative view, on what the iron price Freight Market was going to do, overshot the mark,” said [Aug 1] International Freight Jim Beyer, CEO of Perth-based Mount Gibson Loading Port Discharge Port Vessel Type Freight Chg Iron Ltd., which has advanced 67 percent W.Australia Qingdao Capesize 3.877 -0.05 this year. And it’s likely that forecasts of Brazil Tubarao Qingdao Capesize 8.618 - prices headed much lower in the longer- Indian Paradip N.China Supramax 7-8 - term will also be proven wrong, according Indian Haldia+Paradip N.China Supramax 7.5-8.5 - to Beyer. “The downward trend has broken” Indian Goa-Anchorage N.China Supramax 7.5-8.5 - and there’s a strong case ore will continue to Indian Goa-Mechanical N.China Panamax 5.5-6.5 - trade around its current range, he said. Iran Abbas/BIK N.China Handymax 10-11 - S.Africa Richards/Saldanha China Capesize 7-8 - -Source: Bloomberg S.Africa Richards/Saldanha China Panamax 9-10 - Indonesia Kalimantan China Panamax 4-5 - Indonesia Kalimantan China Supramax 4.5-5.5 - Northeast China domestic iron ore [Aug 1] Singapore Fuel Price ($/mt) market maintains calm IFO380 IFO180 MDO The domestic iron ore market in Northeast Price Chg Price Chg Price Chg China stayed stable. Chaoyang was at 350- 220 +2 232 +2 365 - 360 yuan/ton (wet basis, excl. tax), Liaoyang [Aug 1] China Coastal Iron Ore Freight (Yuan/mt) was at 360-370 yuan/ton (wet basis, excl. Route Shipsize(mt) Rate Chg tax). Although imported iron ore price turned Zhoushan to River Ports 5k-10k 18-19 +1 upward, steel mills in Northeast China Qingdao/Rizhao to Yangtze River Ports 20k-30k 22-24 +1 didn’t adjust the purchase price. Ling Steel Beilun to Yangtze River Ports 30k-40k 21-22 +1 started picking up price for winter’s stocks, [Aug 1] Freight Index while traders showed that it was difficult to Index Chg implement the procurement of 50,000 tons for short supply in West Liao, plus mines BDI 650 -6 increased the price. In addition, steel mills in BCI 757 -11 East Liao expressed that they wouldn’t adjust BSI 667 -4 the price for the first ten days of this month [Aug 1] Voyage Charter Transaction Report ($/mt) as the current price is suitable for purchase. Discharging To sum up, steel mills in those regions with Vessel Vol(mt) Route Delivery Time Rate Rate Charterer production restriction returned to normal (mt/hour) production gradually, plus steel mills gained Zosco Shaoxing 170000 Dampier - Qingdao Aug 14-17 $3.80 30000sc Rio Tinto rosy profits, hence, it is estimated that iron ore price has room to climb up in the near term. China Economy News Flash

1. The purchasing managers' index (PMI) came in at 49.9 in July, slightly lower than June's 50, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing. China's manufacturing sector posted a slight drop in July due to the flood season and weak demand, official data showed Monday. Nomura Securities Zhao Yang believes that China's official PMI weakened dragged by a slowdown in the fixed-asset investment and flood disaster in the south China. Since the economy is still under a downward pressure, it is likely to axe RRR in August and have an interest rate cut in the second half of this year.

2. Caixin China's manufacturing PMI stood at 50.6 in July, back to expansionary territory for the first time since February 2015, up than the previous reading of 48.6. HSBC Qu Hongbin commented that Caixin China's manufacturing PMI was higher than expected, driven by the taking effect of measures to keep steady growth, the improving infrastructure investment, coupled with the manufacturers actively introducing new products, they are all the main reasons for the strong reading this month.

3. De-capacity is not the ultimate goal for the steel industry, the steel industry needs to promote works in two other aspects in co- ordination with de-capacity. First, mergers and acquisitions must be implemented to promote strategic and breaking restructuring; the second is to promote the transformation and upgrading of the industry, through technological upgrading, strengthening enterprise management, etc., to improve operational efficiency, said Feng Fei, Deputy Minister of Ministry of Industry and Information Technology.

4. The Ministry of Industry and Information Technology, the Ministry of Finance, the People’s Bank of China, and China Banking Regulatory Commission H decided to carry out the work of industrial and financial cooperation pilot cities. The goal is, by 3 years or so, to basically establish and orderly operate the docking mechanism of the industrial information and financial institutions, to further improve the capability of the financial services industry, to have fine interactions between the industry and finance, to healthily develop key industries and to effectively enhance the core competitiveness of enterprises.

-Edited by Quinta Wang 07 Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016 Raw Materials Market Weekly View [Jul 18-22] Benchmark prices on domestic spot markets Products (spec.) 22-Jul 29-Jul WOW WOW % Spot ore imports (PB Tianjin) 447 470 +23 +5.15% Domestic ore concentrate 525 535 +10 +1.90% Coking coal 740 740 - - Coke* 960 975 +15 +1.56% Steelmaking pig iron 1660 1660 - - Casting pig iron 1880 1880 - - Scrap* 1300 1340 +40 +3.08% FeMo60 64,000 64,000 - - FeV50 9100 9100 - - Billet 20MnSi 2120 2200 +80 +3.77% Billet Q235 2000 2080 +80 +4% Imported Iron Ore Market Imported Iron Ore Stockpiles at China's Main Port unit: 10,000t AUS PB 61.5% fines price at Tianjin Port

Brazilian ore Australian ore Total Iron Ore Stockpiles 1200 FOV,yuan/tonne (wet) 12000 1100

1000 10000 900

8000 800 700 6000 600

4000 500 400 2000 300

200 0 2013/7/29 2013/9/29 2014/1/29 2014/3/29 2014/5/29 2014/7/29 2014/9/29 2015/1/29 2015/3/29 2015/5/29 2015/7/29 2015/9/29 2016/1/29 2016/3/29 2016/5/29 2016/7/29 2013/11/29 2014/11/29 2015/11/29 Currently, Mysteel iron ore index of 62% Australian fines edged up by $2/dmt week on week to CFR$60.05/dmt with month-to-date average at $57.06/dmt. Mysteel imported iron ore port spot price index reached Yuan 448/wmt, up Yuan 16/wmt from last Friday. Supply During July 18-24, shipments from Australia and Brazil reached 20.83 million tonnes, decreasing 1.90 million tonnes week on week. Thereinto, Australian shipment dipped 1.17 million tonnes week on week to 13.85 million tonnes and there were 11.23 million tonnes shipped into China, down 772,000 tonnes, while Brazilian shipment totaled 6.98 million tonnes, down 7.305 million tonnes week on week. Arrivals in the six main northern ports came in at 11.334 million tonnes during July 18-24, down 1.20 million tonnes week on week, among which Australian shipment stood at around 7.4913million tonnes and Brazilian shipment reached about 2.0527 million tonnes. Inventory According to Mysteel’s statistics, iron ore inventory at 41 main ports stood at 105.60 million tonnes, down 560,000 tonnes from last Friday, with daily offtake up to 2.546 million tonnes from last Friday’s 2.542 million tonnes. Demand Sintered ore inventory is low as production cut of sintering machine strengthened in Tangshan, cut most steel mills will resume production in the end of this month with the 40th anniversary of the Tangshan earthquake coming to a close. A number of large-sized blast furnace restarted operation after routine inspection, but a large-sized blast furnace that planned to resume production continued ceasing output as profitability eroded in inland China. Overall, operating rate will be back to around 80% as increasing steelmakers’ restoring production. Market views Iron ore market rallied steeply this week, with futures and spot markets rebounding. However, steelmakers’ sentiment is actually weak based on actual transactions, and they are a lack of confidence to future market as they maintained raw material inventory at a low level in spite of current rosy profitability. In addition, Tangshan-based production cut policy has already come to an end, and steel mills recovered sintering machine production, so next week the procurement is likely to pick up on a weekly basis, and the iron ore market is expected to improve in the coming week. Freight Market

BDI, BCI, and iron ore shipping rates since Jan 2014 The dry bulk freight market trended down this week. Currently, 35 5000 Tubarao-Qingdao W.Australia-Qingdao BDI(R) BCI(R) BDI was closed at 665, down 61 points, or 8.4% from last week; 4500 30 BCI reached 780, 126 points or 13.91% lower than last week. US$/tonne 4000 25 3500

3000 At present, Brazil-China freight stayed at USD$8.677/wmt, down 20 2500 USD0.205/wmt, or 2.31% from last week (150,000-180,000 mt), 15 2000 that from W. Australia to China was at $3.911/wmt, down $0.173/

10 1500 wmt or 4.24% (150,000-180,000 mt) week on week. 1000 5 500 Panamax vessels dived this week. So far, BPI stood at 719 0 0 points, 131 points or 15.41% lower than last week; BSI reached 676, down 25 points, or 3.57% from last week; BHSI came in at 2013/7/29 2013/8/29 2013/9/29 2014/1/29 2014/2/28 2014/3/31 2014/4/30 2014/5/31 2014/6/30 2014/7/31 2014/8/31 2014/9/30 2015/1/31 2015/2/28 2015/3/31 2015/4/30 2015/5/31 2015/6/30 2015/7/31 2015/8/31 2015/9/30 2016/1/31 2016/2/29 2016/3/31 2016/4/30 2016/5/31 2016/6/30 2013/10/29 2013/11/29 2013/12/29 2014/10/31 2014/11/30 2014/12/31 2015/10/31 2015/11/30 2015/12/31 396, 17 points, or 4.99% higher than last week.

Voyage charter was lackluster in Southeastern Asia. Currently, freight from Indonesia to ports based in Southern China stayed at USD$2.5-3.5/wmt (70,000-80,000 mt) and USD$3.5-4.5 /wmt (50,000-60,000 mt). 08Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016 Domestic Iron Ore Market 66% Iron Ore Concentrate Price in Tangshan, The domestic iron ore market presented ups and downs. Steel mills in North China Province (dry basis) affected by environmental protection and extreme weather would restart production 1300 and they restock this week, hence the demand turns better and iron ore price shows yuan/tonne 1200 the upward trend. With the price spread between imported and domestic iron ore 1100 narrowing down, it is estimated that domestic iron ore price may move up slightly.

1000

900 Northeast China The domestic iron ore market in Northeast China stayed stable. Chaoyang was at 350- 800 360 yuan/ton (wet basis, excl. tax), Liaoyang was at 360-370 yuan/ton (wet basis, 700 excl. tax). On account of the small decline of imported iron ore last week, plus steel 600 mills didn’t adjust the purchase price, hence, it doesn’t look likely for iron ore price 500 to move up. However, most mines in Northeast China still got rosy profits at current

400 price, so mines’ production and shipment stood stable. From this week, steel mills affected by environmental protection policy and serious weather start resuming 2013/7/29 2013/9/29 2014/1/29 2014/3/29 2014/5/29 2014/7/29 2014/9/29 2015/1/29 2015/3/29 2015/5/29 2015/7/29 2015/9/29 2016/1/29 2016/3/29 2016/5/29 2016/7/29

2013/11/29 2014/11/29 2015/11/29 production and the market demand turns better, therefore, iron ore price may show upward trend. It is estimated that there is probability for iron ore price to pick up in the near term.

North China Hanxing domestic iron ore market performed stable. Hanxing domestic conc. 66% Fe price is 560yuan/ton (dry basis, excl. tax, ex-works). For Beijing region, domestic conc. 64% Fe price is 460 yuan/ton (wet basis, excl. tax, ex-works), and domestic conc. 64% Fe price is 440 yuan/ton, (wet basis, excl. tax, ex-works). Hanxing suffering the floods turned better compared with several days ago. Local mines have started selling, however, as some roads still rushed to repair and main streets showed traffic jams, the sales volume didn’t have a large amount. Due to transportation, steel mills with low stocks had difficulty to purchase domestic iron ore. Meanwhile, the floods posed little impacts on imported iron ore, hence they chose to purchase imported iron ore to make sure the normal production. In addition, Hanxing domestic iron ore market had flat transactions, leading to the price keeping calm. It is predicted that Hanxing domestic iron ore market stands consolidated in the near term. Shanxi domestic iron ore market turns calm with passable trading volumes. Currently, the price of concentrates on 65% basis in Daixian stays at 375 yuan/ton (wet-basis, excl. tax); the price of concentrates on 65% basis in Fanshi is 370 yuan/ton (wet-basis, excl. tax); and the concentrates on 66% basis in Licheng goes to 540 yuan/ton (dry-basis, excl. tax).Today, Taiyuan and other regions have returned to smooth transportation, so did mines’ sales and steel mills’ purchase, and some steel mills started purchasing a large amount. In addition, due to some roads to Hebei still showing traffic jams, mines in Shanxi decided to take steel mills in Shanxi as main target consumers. Besides, as Shanxi market price was lower than that of ports and other regions, so steel mills preferred local domestic iron ore with higher price advantage. In light of construction materials and port spot market moving up, it is estimated that Shanxi domestic iron ore market keeps consolidated or climbs up in the near term.

East China Iron ore domestic returned to normal shipment gradually with small rise in the short term. For heavy rainstorm in North China plus Tangshan entering into the strengthening stage of production restriction, the market reflected the bullish sentiment to iron ore price. Although production restriction may curb the raw materials’ demands in the short term, it also triggers the wave of re-stocks to some extent after the end of limitation in the long term. It is said that some mining enterprises plan to push up the iron ore price in the near term. . Currently, Anhui Huoqiu was at 550 yuan/ton (dry-basis, incl. tax, ex-works) and Luzhong was at 585 yuan/ton (dry-basis, incl. tax, ex-works) and Zibo was at 585 yuan/ton (dry-basis, incl. tax, ex-works).

South China South and Central China iron ore market presented weak and stable. Currently, the price of concentrates on 64% basis in Heyuan, Guangdong stays at 360-370 (dry- basis, incl. tax, ex-works); the price of concentrates on 63% basis in Daye, Hubei is 400-420 yuan/ton (dry-basis, incl. tax, by bank acceptance, ex-works); and the concentrates on 63% basis in Hainan goes to 335 yuan/ton(dry-basis, excl. tax, by cash, ex-works), down 15 yuan/ton. Recently, hard-hit mines in Hubei have finished maintenance and planned to resume production this week. Other mines almost produced as their orders with normal production. Steel mills still purchased as they needed. Due to weather clearing up, the daily offtake of riverside and southern port performed climbing up and stocks in steel mills also increased, which poses pressure on domestic iron ore price in the near term. It is predicted that South China iron ore market operates stably this week.stayed rosy, and the daily offtake of riverside and southern port kept flat. It is predicted that South China iron ore market operates stably thisweek. Second-grade Metallurgical Coke Price in Tangshan, Hebei Coke Market in China 1800 yuan/tonne The domestic coke market this week, a strong rise, the weekend

1600 steel increase 30 yuan / ton, this week, coke enterprises actively follow up. North China Puzhang 20-30 yuan / tons, coke 1400 enterprises for environmental protection increased, combined

1200 with steel pre stocking problems, so active procurement, to focus Qiting price provides an opportunity. In addition, the northwest, 1000 southwest and other places also have raised 20-30 yuan / ton. The Henan area because of environmental protection to increase efforts 800 to limit production, some enterprises with this week rose 30 yuan 600 / ton. Steel procurement prices in Shandong rose 30 yuan / ton, turnover of the atmosphere can be. At present, the enthusiasm of 2013/7/29 2013/9/29 2014/1/29 2014/3/29 2014/5/29 2014/7/29 2014/9/29 2015/1/29 2015/3/29 2015/5/29 2015/7/29 2015/9/29 2016/1/29 2016/3/29 2016/5/29 2016/7/29 2013/11/29 2014/11/29 2015/11/29 09 Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016 the steel mill inquiry higher, coking coal is also expected to rise, so the rise of coke is still a probability event.

29 Mysteel net port coke inventory: Tianjin Port 193 6, Lianyungang 7 increased 0.3, Rizhao Port 39 increased 0.5, Qingdao Dongjiakou port 24 minus 1. Unit: million tons

North China

This week in Shanxi coke prices continue to rise, the mainstream market this month, rose a cumulative 30-60 yuan / ton, with the Hebei some mainstream coke prices continue to lift up, Shanxi coke prices also rise with the intention, is expected in August coke prices will continue to rise. Logistics, the pre transport affected by heavy rain, the province is now the province of coal transportation basically to restore stability, cross provincial traffic congestion is still serious. In terms of production, environmental protection and coking coal resource constraints, coke enterprises operating rate decreased significantly, there is a slight decline in coke stocks, in the short term, coke prices continue to rise in the overview of the larger, but the range is limited. Hebei coke market's overall performance is good, the price of coke has continued to rise situation, cumulative adjustment twice, amplitude in the 50-60 yuan / tons, of which Handan cumulative increase in 50 yuan / ton, while the Tangshan and Xingtai in 60 yuan / ton, heavy rain led to the production of coke enterprises is subject to varying degrees of impact, transportation situation is not optimistic, steel stocks showed low, within a short time the area of focus city will continue strong trend.

NW. China

This week in the northwest by limiting the impact of environmental protection, low operating rate of coke enterprises. Price, the price of Shenhua coke, coke prices around the surrounding phenomenon, the overall price of coke is strong. The market outlook continues to impact the production and observation of steel production situation in Hebei.

E. China

This week in East China coke market once again led the 30, two price 980-1000, a newspaper 1030-1050. This week due to weather factors and environmental policies and other factors, steel stocks are always at a low level, while coking plant coke production is limited, the price of coke once again pulled up. East China market outlook is expected to continue to explore the coke prices will continue to rise.

Central China

Henan this week, coke prices temporarily stabilized, by limiting the production of environmental protection effect of coke enterprises operating rate as a whole to maintain a relatively low level, but the coke shipments acceptable, coke enterprises mostly without the backlog of inventory, balance production and sales.

SW. China

This week southwest southwest coke market performance is good, the 26 day of Yunnan and Guizhou coke prices 30 yuan / ton. Steel price shock upstream raw material market to support, shortage of coking coal resource prices rise, the coke prices and production costs continue to rise, multiple factors forced up the price of coke, is expected to short-term in the southwest area of focus city will hold strong running posture.

Ports

This week, a slight increase in coke stocks, turnover continued to rise, CSR62 FOB price of 159.5 U.S. dollars. Imported Coal Market in China The imported coal market went stable and good deal.

Imported coking coal Australian first-tier coking coal is at the price of CNY740-750/t FOB, Second-tier coking coal is at the price of CNY730-740/t FOB, lean coal is at the price of CNY570-580/t FOB. Canadian coking coal at the price of CNY750-760/t FOB. Mongolia No3. Cocking coal is at the price of CNY450/t.

Imported Thermal coal Thermal coal imports this week, the market continues to be strong. Australia premium low-vol PCI A9.5V11-13S0.5HGI85 is at price of $75/t. Indonesia coal Q3800 is at price of $29.5/t FOB. Q4700 is at price of $43/t FOB. Australia Q5500 is at price of $49.5/t CIF. 10 Copyright © Mysteel.net, 2016. All Rights Reserved MYSTEEL RAW MATERIALS DAILY TUESDAY AUGUST 2, 2016 Domestic Ferroalloy Market

Domestic Prices for FeMn, FeCr and continues to enforce after the environmental protection inspecting groups leave, imported Mn Ore and Cr Ore yuan/tonne yuan/MTU so that production and capacity release slow, thus demands for manganese ore High carbon FeMn65(L) will be suppressed and manganese ore market will suffer challenges. Demand and High carbon FeCr50(L) 65 9100 Australian Mn44 Ore(R) supply condition is the main reason for market trend, whether high grade ores Imported Cr50 Ore(R) 55 8100 or South African ores, the market price will fluctuate under the rule. Some steel

45 mills tender for siliconmanganese have been sure, basically at the price of Yuan 7100 7100/mt or more. In August, tight supply for siliconmanganese will be hard to get 35 6100 relieved. SiMn market continuing at high level will be possible, which can have 25 5100 some supports for manganese ore price. It is estimated that manganese ore price

4100 15 will keep at high level next week, and the market will still perform strong in the

3100 5 backdrop of lacking high grade ore. Jul-13 Jul-14 Jul-15 Jul-16 Jan-14 Jan-15 Jan-16 Sep-13 Sep-14 Sep-15

Nov-13 Nov-14 Nov-15 Siliconmanganese Domestic siliconmanganese offers continued to increase Mar-14 Mar-15 Mar-16 Special alloys: Mo-series The domesticMay-14 FeMo market maintainedMay-15 a steady rise May-16 and market confusedly, and the market retail price has been over Yuan 7000/mt. Steel mills participants were cautious optimism. By Friday, FeMo60 was quoted at 65,000-67,000 yuan/ expanded August procurement, difficult to buy, at the price of Yuan 7100/mt. The mt in Jinzhou. Mo concentrate ore 40-45% was quoted incl.tax at 880-890 yuan/mtu and Mo port manganese ore offers continued to increase, which some high grade ores oxide offered at 980-990 yuan/mtu in Luanchuan.This week steel mills successively carried such as Australian ore offered Yuan 50/dmtu, and the spot goods were tight. At the out the public bidding for August,market participants were cautiously optimistic and agreed present, domestic siliconmanganese offered at the range of Yuan 6850-7350/mt that the market still have uptrend.Taken results from several typical mills FeMo tender into ex-work and prompt payment in north China, while the ex-work price in south consideration,it would be a foregone conclusion for purchase price sharply rising in August. China is Yuan 6800-7100/mt, and the offer is Yuan 7000(cash)-7300/mt in three The rising purchase prices boost confidence of FeMo enterprises.And summer had an influence provinces of northeast China. The market offer for FeMn60Si14 is Yuan 5200-5400/ on bull market.Producers were more cautious to operate.According to the source,at present the mt. international molybdenum market also appeared a contrarian rally matching up with domestic bull molybdenum market ,boosting market sentiment. Vanadium-series The domestic vanadium market sharply went up this week. By Friday, the domestic ferrovanadium mainstream offer Billet, Scrap, and Pig Iron Diagram

Q235 and 20MnSi Billet Prices in Tangshan, Hebei Province was at 58,000-59,000 yuan/mt, vanadium-nitrogen alloy offer at 84,000-88,000 yuan/mt, Q235 and 20MnSi Billet Prices in Tangshan, Hebei Province

V2O5 98% flake market offer at 50,000-51,000 yuan/mt(cash, by acceptance).Earlier this week yuan/tonne yuan/tonne vanadium market was relatively stable but got into a frenzy which varieties of vanadium market 3200 3200 offer jumped sharply.According to the downstream buyers,recently vanadium rising faster than expected increased purchasing difficulty.Buyers and sellers were more cautious in clinch deal. 2700 2700 There were many Fev producing enterprises stopping operation which led to less production.The 2200 spot market relatively was caught into shortage of Fev resources. Tungsten-series The tungsten 2200 20MnSi Billet market remained stable this week and tungsten concentrate market had a uptrend apparently. 1700 Q235 20MnSiBillet Billet At present, FeW80-A/C was offered at 127,000-128,000 yuan/mt, while FeW70 was quoted at 1700 Q235 Billet 120,000 yuan/mt.By Friday, as 65% wolframite concentrate offered at Yuan 70,000-72,000/ 1200

1200 mt in Jiangxi and Hunan. Tungsten mines did not sell for long term ,leading to market supply 2013/7/29 2013/9/29 2014/1/29 2014/3/29 2014/5/29 2014/7/29 2014/9/29 2015/1/29 2015/3/29 2015/5/29 2015/7/29 2015/9/29 2016/1/29 2016/3/29 2016/5/29 2016/7/29 2013/11/29 2014/11/29 2015/11/29 tensions. It is becoming more difficult for traders to purchase and limited by their stock,traders Steelmaking, Casting Pig Iron and Ductile Cast Iron Prices in 2013/4/29 2013/6/29 2013/8/29 2014/2/28 2014/4/30 2014/6/30 2014/8/31 2015/2/28 2015/4/30 2015/6/30 2015/8/31 2016/2/29 2013/10/29 Yicheng,2013/12/29 Shanxi Province2014/10/31 2014/12/31 2015/10/31 2015/12/31 were not willing for sales and continued to raise offer prices.The tungsten market was in thin 3500 trade and prices was at chaos. It is predicted that the Mo-series market will remain firm, and the yuan/tonne vanadium market will continue to rise, while Tungsten-series market will remain steady uptrend 3000 Steelmaking pig iron next week. Casting Pig Iron The imported manganese ore market continued to keep strong this week. The ductile cast iron Manganese ore 2500 price of Australian lumps has offered over Yuan 50/dmtu, up Yuan 10/dmtu than last week;

Gabon ore offered Yuan 48/dmtu, up over 10 Yuan/dmtu;South African semi-carbonate ore 2000 offered Yuan 38/dmtu, up Yuan 7/dmtu than last week. It was ever estimated that the increase might slow with high grade ores were shipped to the ports, but the market performed much 1500 stronger than expected. Manganese ore supply polarized. High grade ore reduced the shipment to the ports,while South African ore supplied in larger numbers. The actual stockpiles of high 1000 grade ores were less than 50,000 mt, and salable Australian lumps to arrive at the ports next 2013/7/29 2013/9/29 2014/1/29 2014/3/29 2014/5/29 2014/7/29 2014/9/29 2015/1/29 2015/3/29 2015/5/29 2015/7/29 2015/9/29 2016/1/29 2016/3/29 2016/5/29 2016/7/29 week is in smaller numbers. South African ore accounted for 80% of stockpiles of manganese 2013/11/29 2014/11/29 2015/11/29 ore at Tianjin port, and there will be more South African manganese ore to arrive at the port. The 6-10mm Steel Scrap Price in Tangshan, Hebei Province total stockpiles at Tianjin port declined fast, except for Ghana ore, the current manganese ore stockpiles are around 1.2 million mt. Manganese ore demands are changeable. That how long the 2600 yuan/tonne, excl VAT production suspension and reduction will last after environmental protection inspecting groups entered will decide the future demands for manganese ore. Sources said that environmental 2100 protection inspecting groups will leave in mid-August, then whether it means those enterprises who stopped and reduced production can start production, whether the local governmental 1600 supervision will further enforce, all these questions are uncertain. In other word, the true demands for manganese ore can be changeable. It is likely that demands for manganese ore 1100 will increase as manganese alloy producers reproduce in large numbers in order to pursue profits once the environmental protection inspecting groups retreat, then the manganese ore 600 market will receive powerful supports. Anther possibility is that local governmental supervision 2013/7/29 2013/9/29 2014/1/29 2014/3/29 2014/5/29 2014/7/29 2014/9/29 2015/1/29 2015/3/29 2015/5/29 2015/7/29 2015/9/29 2016/1/29 2016/3/29 2016/5/29 2016/7/29 2013/11/29 2014/11/29 2015/11/29 11 Copyright © Mysteel.net, 2016. All Rights Reserved Iron Ore Coal & Coke Billet Scrap Ferroalloy Freight Latest News Analysis Data MYSTEEL RAW MATERIAL DEPARTMENT To Order Mysteel Raw Materials Daily USD 3,000 for one year subscription

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