Metals: Shanghai copper prices were down 4.2% WoW and inventories decreased3.5% WoW. Shanghai aluminum prices were up 1.5% WoW and inventories wereup 3.6% WoW. Key news of the week: Nanshan Aluminum plans to investRmb5.7bn to a million-ton alumina project in Indonesia.
Rebound of national cement price continued. The average cement price (nationwide) increased 0.3% week on week to RMB325.21/tonne last week. Cement prices in parts of Jiangsu, Shanghai, Yunnan and Guizhou were up RMB10-30/tonne, while no major regions saw cement prices decline. Daily shipment volume in Jiangsu, Shanghai, Anhui and Jiangxi recovered to the normal level in early September. However, market demand in other areas was still relatively weak, at around 60%-80% of the normal level, due to a new round of environmental protection inspections and unfavourable weather such as typhoon and rainstorms. The average inventory level (nationwide) decreased to 64.19%.
Gold: Price was up 0.6% WoW to US$1,320/oz.
Coal prices increased slightly. The comprehensive average price index for Bohai- Rim Steam Coal (Q5500K) was up RMB1/tonne to RMB580/tonne last week. The index was up 12.6% on a year-on-year (YoY) basis.
Steel: Shanghai HRC and CRC prices were down 2.6% and 1.3% WoW,respectively. Shanghai rebar was down 0.7% WoW and Tangshan billet priceswere down 2.1% WoW. Long steel inventories at traders were up 3.3% WoW,while flat steel was flat WoW. Key news of the week: Beijing, Tianjin and Hebeireleased detailed plans for winter production cuts, Tangshan and Tianjin to limit50% steel production.
Temporary production suspension of TCCI’s Yingde plant should benefit CR Cement in the short term. TCCI [1136.HK; NR] announced that during the early hours of September 10, the main voltage step-down substation equipment at its Yingde plant caught fire. There were no injuries or casualties but the entire plant suffered from power interruption and was temporary incapable of production. As TCCI’s Yingde plant accounted for about 8% of Guangdong’s clinker capacity, its temporary suspension should benefit CR Cement [1313.HK; BUY] and Anhui Conch [914.HK; HOLD] in the near term. In particular, about 30% of CR Cement’s clinker capacity is located in Guangdong. (Note: For the analysis on the merger between CNBM [3323.HK; HOLD] and SINOMA [1893.HK; NR], please refer to a separate note published today.)Cement stocks under coverage up 1% on average. Best performer Anhui Conch rose 3% last week. BBMG [2009.HK; HOLD] was the weakest among our coverage stocks, which dropped 2%.
Cement: Prices were up 3.4% WoW to Rmb352/t as of September 15. Key news ofthe week: Beijing – Cement and other building materials to halt operation duringheating season.
Coal: Prices (5,500kcal) were up 2.1% WoW to Rmb623/t as of September 18.
Qinhuangdao inventory decreased 3.5% WoW to 5.41mnt. BSPI was flat WoW atRmb583/t. Key news of the week: Hebei to complete “coal to gas/electricityupgrade” in 1.8mn households by end-October.
Paper: Linerboard prices were up 9.4% WoW to Rmb5986/t, and corrugatedmedium prices were up 9.3% WoW to Rmb5872/t, as of September
- US OCCprices were down 10.2% WoW to US$220/t, while domestic OCC prices were up6.3% WoW to Rmb2648/t. Key news of the week: Lee & Man invests Rmb1.3bn toadd two new 300kt production lines of linerboard.
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