China has been shifting its economic gears in recent years, and one of the most intriguing and commercially profitable trends of this shift is the "first store plus debut" model — a strategy that is fast becoming the catalyst for an unprecedented surge in consumption. At the third plenary session of the 20th Central Committee of the Communist Party of China in July 2024, the blueprint introduced for boosting consumption highlighted the "debut economy" as an initiative aimed at reducing restrictive measures, increasing public consumption and fueling economic growth.
In line with this vision, the Central Economic Work Conference in December reaffirmed the importance of fostering this model as one of the main initiatives to boost consumption in 2025. What makes this approach so captivating is its remarkable ability to tap into China's "submerged markets", turning them into powerful engines of consumption. With first-tier cities such as Beijing and Shanghai leading the charge, the "first store plus debut" model has facilitated the debut of products by hundreds of new stores, stimulating consumption in ways that are both fresh and vibrant. In 2024 alone, such cities saw the opening of more than 900 first stores, which has somewhat reshaped the retail and consumer landscape.
With competition intensifying in first- and second-tier cities, brands are increasingly turning to third- and fourth-tier cities, especially the so-called submerged markets in search of new growth opportunities. This shift is fueled by a change in consumer spending habits.
Management consultancy firm McKinsey has forecast that by 2030, China's personal consumption will reach a staggering 65.3 trillion yuan ($8.9 trillion), with more than 66 percent of the growth coming from lower-tier cities and towns.
The submerged markets — often overlooked by businesses in favor of more established, wealthier urban centers — are now seen as the next frontier of rising consumption, and the "first store plus debut" model has become the best way of harnessing the latent potential of these markets, delivering products and experiences that once could only be found in metropolises. Brands are no longer simply opening stores; they're opening doors to innovative consumption experiences.
To understand why the "first store plus debut" model works so well in these markets, we must look at the evolving consumer demand. Rising disposable incomes, coupled with increasingly sophisticated tastes, have created a fertile ground for brands willing to offer something new. The first stores appeal to consumers in smaller cities, as they offer trendy goods, high-end home appliances and personalized dining experiences.
Take Starbucks for example. In a strategic move, it ensured that smaller cities and rural areas accounted for about 33 percent of its stores by 2023 in China. As Liu Wenjuan, Starbucks China chief operating officer, said, consumers in county-level markets show strong brand loyalty, making them ideal for business expansion. Similarly, other major brands are opening their first stores in such areas to make profits by meeting local demands and filling the market gaps.
Debut products — the launch of limited-edition products or new offerings — cater to a growing demand for novelty and uniqueness. A limited-edition product may not just fulfill a need; it could also give consumers reason to feel ahead of the consumption curve.
From the supply-side perspective, the "first store plus debut" model is revolutionizing the retail ecosystem in submerged markets. Traditionally, such places were dominated by small local retailers without the scale or innovation capacity needed to create a modern, consumer-driven retail market. It is in such an environment that the first stores of companies introduced advanced store management practices, digital marketing and a sophisticated supply chain, impressing consumers and drawing them in larger numbers.
An apt example of such a store is Super Ming. The company, adopting a bulk retail model in submerged markets, shows how innovation can boost sales even in lower-tier cities. Its first stores introduced innovative merchandising strategies, such as shelving products not in demand. By integrating online and offline platforms, Super Ming offers a seamless shopping experience while leveraging big data to optimize inventory and product selection. During product launch, the company collaborates with local media, influencers and businesses to generate a buzz, creating a holistic retail ecosystem that benefits everyone.
"Submerged markets" used to be plagued by information asymmetry, with consumers having limited access to the latest products, and brands struggling to reach potential consumers. The internet has broken that barrier, enabling the "first store plus debut" model to gain traction.
Today, brands can use social media platforms and targeted online advertising to bring news of their first store's opening and product launch directly to consumers in smaller cities. This digital-first approach has been driving the online buzz and discussions, while offline stores become experiential hubs. When consumers engage with these brands, they don't just shop; they experience, discuss and share their encounters, creating an organic word-of-mouth promotion for the store and its products.
The most remarkable aspect of the "first store plus debut" model is its ability to catalyze entire ecosystems, as the opening of bricks-and-mortar stores generate high footfall, enhancing the profile of shopping districts and encouraging others to invest in real estate. A product launch creates more synergy, as it involves a complex supply chain. Consumer excitement generated by the first release boosts the demand for after-sales services, repairs and complementary products, forming a complete economic loop, helping revitalize the submerged markets.
Looking ahead, the potential of the "first store plus debut" model in submerged markets is huge. With continued growth and rising incomes, consumer spending in these markets, too, will grow. And the digital transformation will further streamline access to information, empowering consumers to make more informed decisions and engage with the latest products and trends.
With the "first store plus debut" model continuing to help upgrade consumption, submerged markets are likely to become a driver of economic recovery. By giving consumers in smaller cities the tools, experiences and opportunities to participate in the consumption economy, the model has the potential to reshape China's economic landscape.
The author is a professor of Nankai University College of Economic and Social Development.
The views don't necessarily reflect those of China Daily.
https://www.chinadaily.com.cn/a/202501/23/WS67917e62a310a2ab06ea8b2b.html
The Russian port of Kozmino is a reliable earner for the nation's oil and gas sector, pumping out 900,000 barrels a day of premium Siberian crude for Chinese buyers. Kozmino's ESPO blend has consistently sold at full-rate market prices despite two years of Western sanctions, with few interruptions. That now appears to be changing due to U.S. sanctions on the "dark fleet," the collection of obscurely-owned, aging tankers that circumvent the G7 "price cap" on Russian crude exports.
Earlier this month, the Biden administration imposed blocking sanctions on 180 Russian vessels, including about 160 tankers. The package targeted ships operated by state-owned Sovcomflot, as well as a collection of older ships held by anonymous firms. U.S. Treasury blocking sanctions create serious compliance risks for any entity that interacts with the sanctioned vessel, and a key stakeholder in the "dark fleet" trade - Shandong Port Group, the giant Chinese refining complex - let it be known that it would no longer accept sanctioned tankers.
This package of sanctions covered about three-quarters of the tanker fleet that serves the short run between Kozmino and coastal ports in China, including Shandong. According to Bloomberg, the anchorage near the Kozmino loading terminal is now filling up with idle vessels, with nine tankers sitting just offshore - many more than normal.
Even if Russia is able to source new unsanctioned tonnage to continue the trade at normal volume, the price of transport will go up. Given the clear risk of a vessel getting sanctioned for calling at Kozmino, Aframax charter rates for the run have skyrocketed, with brokers reporting prices of up to $5-7 million for a single voyage.
More sanctions may be coming under the Trump administration. Over the past two days, President Donald Trump has suggested that Russian President Vladimir Putin needs to negotiate an end to his war in Ukraine, and that more penalties are possible if he doesn't.
"I think he's destroying Russia by not making a deal. I think Russia's going to be in big trouble. You take a look at their economy. You take a look at inflation in Russia," Trump said Monday.
In conversation with reporters on Tuesday, Trump said that it "sounds likely" that if Putin does not begin peace talks, more sanctions might be on the table.
https://maritime-executive.com/article/tanker-sanctions-hit-russia-s-kozmino-oil-export-terminal
Citi on Wednesday raised its oil price outlook for 2025 due to geopolitical risks centred on Russia and Iran, but noted prices were likely to ease through the second half of the year.
“The oil outlook could see heightened, sustained geopolitical risks in Iran/Russia-Ukraine potentially wipe out the 2025 oil balance surplus, but the Trump administration appears intent on dealmaking,” the bank said in a note.
Citi expects Brent crude to average $67 a barrel in 2025, up from a previous forecast of $62. It also said it was lifting its average WTI crude forecast to $63/bbl, without giving its former view.
It added that it was revising up its quarterly Brent forecasts to $75/bbl in the first quarter, $68/bbl in the second, $63/bbl in the third, and $60/bbl in the fourth, also without specifying its previous expectations.
The Biden administration on Jan. 10 sanctioned more than 100 tankers and two Russian oil producers, leading to a scramble by top buyers China and India for prompt oil cargoes and a global rush for ship supply as dealers of Russian and Iranian oil sought unsanctioned tankers.
U.S. President Donald Trump has since laid out a sweeping plan to maximise oil and gas production, including declaring a national energy emergency to speed up permitting, rolling back environmental protections, and withdrawing the U.S. from the Paris climate pact.
Citi said the timing and nature of President Trump’s actions regarding Iran and Russia could be defining features of the oil market and pricing during 2025. It forecast a surplus of 0.8 million barrels per day for the year.
(Reporting by Ishaan Arora and Ashitha Shivaprasad in Bengaluru; Editing by Jan Harvey)
New Delhi: Global oil and gas prices will soften, and supplies become plentiful, benefiting Indian consumers, as US President Donald Trump seeks to encourage drilling, lift permitting restrictions and export more energy to the world, industry executives said."If President Trump does what he's been saying, the drilling will get a boost in the US. Shale production can be quickly ramped up and the US has got a lot of shale resources. This would increase the inflow of capex in upstream and add to global supplies," said Mukesh Surana, CEO, Ratnagiri Refinery & Petrochemicals Ltd. In the long term, higher US oil output can "moderate OPEC+ power to manage the global oil market," Surana said. "Increased US exports may also displace OPEC+ supplies in some markets. This will not only soften prices but, more importantly, may also lead to a recalibration of strategy by OPEC+ and other producers."At his inauguration on Monday, Trump outlined his energy priorities. "We will bring prices down... and export American energy all over the world," he said.
Oil prices have fallen about $2 to $79 per barrel in two days. Expected lower crude prices will cut refiners' costs but may not quickly translate into cheaper petrol and diesel at the pump, executives said, adding that retail prices will decline only if international rates are low for a long time. Trump projected himself as a "unifier" in his inaugural speech, and this has made some industry executives believe that the Ukraine war could end soon. If Russian gas is allowed to flow to Europe the way it did before the war, LNG prices will significantly fall, an executive at a gas marketing firm said. Some Indian refining and gas marketing executives expect crude and LNG prices to fall as much as 20% if the war ends. An oil price decline will also benefit domestic gas consumers as the rates of most of India's long-term LNG imports are linked to oil.Trump has said he would "end the Green New Deal" and "revoke the electric vehicle mandate", the Biden administration's flagship policies. How other countries react to this will be important for the evolution of the green energy sector, an industry executive said."More drilling and increasing output are just the supply side of the equation. The equally important element is demand, which will be influenced by how EVs and other alternatives to oil, penetrate the energy space," said Surana. "Ultimately, demand-supply balance will be determined by the market forces, country's priorities, policy push and technological advancement in competing areas.
"The global energy crisis between 2021 and 2023, a result of the pandemic and the war, brought back focus on investments in the oil and gas industry, which was getting deprived of capex in the preceding years due to lower energy prices and a shift towards climate-friendly policies across several countries.
Saudi oil giant Aramco's chief executive Amin Nasser has said he sees the oil market as healthy and expects an additional 1.3 million barrels per day of demand this year.
Speaking to Reuters on the sidelines of the World Economic Forum in Davos, Nasser was responding to a question on the impact of US President Donald Trump's energy decisions, which could increase US hydrocarbon output.
Oil demand this year will approach 106 million barrels per day after averaging about 104.6 million barrels per day in 2024, he said.
"We still think the market is healthy - last year we averaged around 104.6 million barrels (per day), this year, we're expecting an additional demand of about 1.3 million barrels - so there is growth in the market," he said.
Asked about US sanctions on Russian crude tankers, he said the situation was still at an early stage.
"If you look at the impacted barrels, you're talking about more than 2 million barrels," he said. "We will wait and see how would that translate into tightness in the market, it is still in the early stage."
Asked if China and India have sought additional oil volumes from Saudi Arabia on the back of the sanctions, Nasser said Aramco is bound by the levels the kingdom's energy ministry allows it to pump.
Saudi Arabia has been pumping at about three quarters of its output capacity, as part of agreements with OPEC+ to support the market.
"The kingdom and the Ministry of Energy is always looking at balancing the market. They take that into account when they give us the target of how much we should put in the market," he said.
Aramco is working with MidOcean, an LNG firm in which it took a 51% stake, and "looking at expanding our position globally in LNG," without giving details, Nasser said.
Saudi oil giant Aramco’s chief executive Amin Nasser said on Tuesday he sees the oil market as healthy and expects an additional 1.3 million barrels per day of demand this year.
Speaking to Reuters on the sidelines of the World Economic Forum in Davos, Nasser was responding to a question on the impact of US President Donald Trump’s energy decisions, which could increase US hydrocarbon output.
Oil demand this year will approach 106 million barrels per day after averaging about 104.6 million barrels per day in 2024, he said.
“We still think the market is healthy … last year we averaged around 104.6 million barrels (per day), this year, we’re expecting an additional demand of about 1.3 million barrels … so there is growth in the market,” he said.
Asked about US sanctions on Russian crude tankers, he said the situation was still at an early stage.
“If you look at the impacted barrels, you’re talking about more than 2 million barrels,” he said. “We will wait and see how would that translate into tightness in the market, it is still in the early stage.”
Asked if China and India have sought additional oil volumes from Saudi Arabia on the back of the sanctions, Nasser said Aramco is bound by the levels the kingdom’s energy ministry allows it to pump. Saudi Arabia has been pumping at about three-quarters of its output capacity as part of agreements with OPEC+ to support the market.
“The kingdom and the Ministry of Energy are always looking at balancing the market. They take that into account when they give us the target of how much we should put in the market,” he said.
Aramco is working with MidOcean, an LNG firm in which it took a 51 per cent stake, and is “looking at expanding our position globally in LNG,” without giving details, Nasser said.
https://gulfbusiness.com/saudi-aramco-sees-additional-oil-demand-in-2025/
Prices of Canadian and U.S. West Texas Intermediate crude oil to Asia jumped after shipping costs rallied on concerns that wider U.S. sanctions on the Russian fleet are tightening ship availability, trade sources said on Tuesday.
Asian refiners face a margin squeeze as their costs of crude and shipping have spiked since Washington earlier this month imposed sweeping new sanctions targeting Russian insurers, tankers and oil producers.
Discounts for Canadian crude exported via the Trans Mountain pipeline (TMX) and delivered to China in April have narrowed $1-$2 a barrel from the previous month, the sources said.
China’s Rongsheng Petrochemical, top buyer of Canadian TMX crude, bought Access Western Blend (AWB) crude cargoes from TotalEnergies unit Totsa and CNOOC at $2-$3 a barrel below June ICE Brent for April delivery, they said, versus deals at about $4 a barrel discount for March.
The Chinese refiner also bought a Cold Lake cargo from Macquarie at a discount of about $1.70 a barrel to June ICE Brent for April delivery, the sources said.
Another Chinese refiner, Shenghong Petrochemical, also bought a Cold Lake cargo from BP at similar levels, they added.
Similarly, offers for U.S. West Texas Intermediate (WTI) Midland crude have jumped close to $6 a barrel to dated Brent for deliveries to North Asia, the sources said, although trade has slowed as the current trading cycle is coming to an end.
The cost of chartering a Very Large Crude Carrier (VLCC) capable of carrying 2 million barrels of oil from the U.S. Gulf Coast to China exceeded $10 million on Monday, data from a shipbroker showed, a jump of nearly $4 million since Jan. 10 when the U.S. imposed additional sanctions on Russian producers and more than 100 tankers.
U.S. major Exxon Mobil tentatively chartered a VLCC from the U.S. Gulf Coast to China for February for $10.1 million on Friday, ship broker data showed.
Japan’s Mitsui & Co chartered a VLCC from North Sea to South Korea for $9.95 million for late January, according to shipbrokers, about $3.6 million above previous such deals.
June Goh, a senior analyst at market intelligence firm Sparta Commodities, expects Asian refiners to secure supply by snapping up cargoes from West Africa, Brazil and Canada, although they have become more costly due to higher freight costs and rising premiums.
This could erode refiners’ margins and lead to more refinery run cuts, she added.
Strong buying from China and India also pushed spot premiums for Middle East crude to their highest in more than two years last week.
(Reporting by Florence Tan and Siyi Liu in Singapore, Arathy Somasekhar in Houston; Editing by David Gregorio)
WASHINGTON - US President Donald Trump said on Jan 22 he would add new tariffs to his sanctions threat against Russia if the country does not make a deal to end its war in Ukraine, and added that these also could be applied to "other participating countries."
In a post on Truth Social, Mr Trump modified comments he made on Jan 21 that he would likely impose sanctions against Russia if President Vladimir Putin refused to negotiate an end to the nearly three-year invasion.
"If we don't make a 'deal,' and soon, I have no other choice but to put high levels of Taxes, Tariffs, and Sanctions on anything being sold by Russia to the United States, and various other participating countries," Mr Trump said.
Russia's embassy in Washington and mission to the United Nations in New York did not immediately respond to a request for comment.
Mr Trump's post did not identify the countries that he considered participants in the conflict, or how he defined participation.
The Biden administration had already heaped heavy sanctions on thousands of entities in Russia’s banking, defence, manufacturing, energy, technology and other sectors since Moscow’s full-scale invasion of its neighbour began in February 2022.
Earlier this month, the US Treasury hit Russia's energy revenues with its hardest sanctions yet, targeting oil and gas producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that are part of the so-called shadow fleet of tankers aimed at evading other Western trade curbs.
Mr Trump has sought to use the threat of tariffs to achieve non-trade goals, including threatening Mexico, Canada and China with duties to push them to stop illegal migration and the flow of the deadly opioid fentanyl into the United States.
Those three countries are the top US trading partners. But Russia is far down the list, with US imports from Russia falling to just US$2.9 billion (S$3.9 billion) through the first 11 months of 2024 from US$29.6 billion in 2021.
The US stopped importing Russian oil after its invasion, but still imports some precious metals, including palladium used in automotive catalytic converters.
As for other participants, the Biden administration had imposed sanctions against entities in China, North Korea and Iran for aiding Russia's war effort.
Mr Trump said he was "going to do Russia, whose Economy is failing, and President Putin, a very big FAVOR. Settle now, and STOP this ridiculous War!" REUTERS
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Russian President Vladimir Putin has announced plans for a gas pipeline to Iran, a move that could see Moscow export up to 55 billion cubic meters of gas exports annually in a long-term arrangement.
These plans come against the backdrop of souring relations between Russia and the West due to Russia's ongoing invasion of Ukraine, a move that disrupted the global energy supply chain in 2022.
While the ambitious project seeks to open an alternative market for Russia’s gas after Europe significantly reduced gas imports from Russia, it would not help Moscow to export more than it did before the Invasion of Ukraine. Nevertheless, it would offer an additional market for Russia’s hydrocarbons.
The capacity for the ambitious pipeline is largely equal to the total volume that once was exported from Russia to Germany via the damaged Nord Stream 1 pipeline. The new pipeline deal comes after an agreement was reached between Gazprom of Russia and Iran's NIGC to provide Russian gas to Iran in a memorandum of understanding signed in June 2024.
Initial supplies may amount to 2 bcm a year, with an option for the pipeline to transit through Azerbaijan, Interfax news agency reported, citing Russian Energy Minister Sergei Tsivilev.
Iran has the second-largest gas reserves in the world, but U.S. sanctions have limited access to technology and hindered the development of its gas exports.
The new pipeline also potentially reopens the door for plans of extending the Iran-Pakistan gas pipeline, a project in which Russia has long expressed interest but has been held back by sanctions and political disputes.
Until 2009, India was also involved in that project but drew back under U.S. pressure. A political rivalry between India and Pakistan has further complicated the development of the cross-border pipeline.
https://www.pipeline-journal.net/news/russian-president-putin-announces-plans-gas-pipeline-iran
CANBERRA, Jan 22 (Reuters) - Chicago corn, soybean and wheat futures dipped on Wednesday, after rallying in the previous session when Donald Trump's first full day as U.S. president passed without him following through on promises to impose tariffs on agricultural trade.
Still, corn and soybeans were near multi-month highs, supported by dry conditions that threaten production in Argentina and rain in Brazil that is slowing the start of the soybean harvest.
Wheat, however, was not far from last year's lows amid weak demand.
FUNDAMENTALS
* The most active corn contract on the Chicago Board of Trade (CBOT) was down 0.6% at $4.87-1/4 a bushel at 0249 GMT after rising to a 13-month high of $4.91 on Tuesday.
* CBOT soybeans dipped 0.5% to $10.61-3/4 a bushel after reaching a 4-month high of $10.68 in the previous session.
* Wheat fell 0.4% to $5.56-1/2 a bushel. Prices have struggled to rise far from last year's low of $5.14.
* Traders said Tuesday's rally was largely because Trump did not immediately impose tariffs on imports from multiple countries. He did say, however, that he was considering imposing 25% duties on imports from Canada and Mexico from Feb. 1.
* Corn and soybean prices had already been rallying thanks in part to writedowns of 2024 U.S. corn and soybean production earlier this month.
* Those writedowns by the USDA triggered a rush of speculative buying, with funds now holding net long positions in both crops.
* Showers in Argentina, a big corn and soy exporter, have not alleviated concerns that an ongoing drought could further harm crop yields.
* Meanwhile, too much rain in Brazil's top grain-producing state, Mato Grosso, has hampered the start of soybean harvesting.
* However, soybean supply is plentiful, with the Abiove oilseed group raising its production estimate for the 2024/25 season in Brazil - the world's top soy producer - by 3 million metric tons to 171.7 million tons.
* S&P Global Commodity Insights projected on Tuesday that U.S. farmers would increase their corn planting and decrease their soybean planting this year.
MARKETS NEWS
* Global stocks gained as a flurry of new policies from Trump combined with robust corporate earnings to bolster investor optimism, while tariff uncertainty kept the dollar near two-week lows.
Bullion extended gains from Monday and silver futures briefly spiked after Trump’s comments. Mexico is the top miner of silver, and it is unclear whether the tariffs would apply to imports of the metal.
The possibility of both silver and gold being caught up in the sweeping tariff measures has whipsawed the market in recent weeks, driving premiums for futures deliverable in New York to elevated levels.
“Continued uncertainty will keep the roller coaster from coming to a stop,” said Daniel Ghali, senior commodity strategist at TD Securities. Money managers may continue to buy bullion to hedge against uncertainty after boosting their bullish wagers last week, according to Ghali.
Investors were also weighing the outlook for inflation, with Trump’s domestic agenda of tax cuts and increased spending potentially pointing to ongoing price pressures this year. That may limit the Federal Reserve’s ability to keep easing monetary policy. Higher borrowing costs typically pose a headwind for bullion, as it does not pay interest.
Gold set a series of records in 2024, with gains driven by the Fed’s pivot to looser monetary policy, geopolitical tensions, and central-bank buying. The precious metal may yet receive a further boost from demand for haven assets amid concerns about the new US president’s immigration policy, as well as scope for increasingly fraught relations with other nations.
Spot gold was up 1.3% to $2,744.45 an ounce as of 12:06 p.m. in New York. The Bloomberg Dollar Spot Index was little changed. Silver, platinum and palladium all advanced.
(By Yvonne Yue Li)
https://www.mining.com/web/gold-price-climbs-as-trump-stands-by-plans-for-mexico-canada-tariffs/
“I do think that we have really good chances now to progress that project,” chief executive Jakob Stausholm told the Financial Times. “We have made a lot of progress.”
Development progress on the mine remains tied up in US courts, partly due to opposition from Native American groups. The mine’s development would create a massive crater, impacting a sacred site where Arizona’s San Carlos Apache tribe conducts religious ceremonies.
Stausholm noted that Rio Tinto remains in discussions with Native American tribes, emphasizing the company’s commitment to United Nations principles that require obtaining full consent from Indigenous groups before proceeding with mining on traditional lands.
Rio Tinto owns a 55% stake in the Resolution project, while BHP holds the remaining 45%. The deep underground mine, once operational, is projected to produce up to 1 billion pounds of copper annually.
Copper ambitions
The world’s second largest miner has been expanding its copper business to meet an anticipated surge in global demand that could outpace supply.
Its massive Oyu Tolgoi copper mine in Mongolia, which began underground production in 2023, is expected to become the world’s fourth-largest copper mine by 2030.
As part of its growth strategy, Rio Tinto has formed partnerships with other major players in the copper industry, including Chile’s state-owned copper producer Codelco.
Rio has also teamed up with First Quantum Minerals (TSX: FM) to advance the La Granja project in Peru, ranked as the world’s fifth-largest copper deposit.
The company is also testing innovative technologies to extract copper more sustainably. Its Nuton bioleaching technology, developed in partnership with Arizona Sonoran Copper (TSX: ASCU), aims to recover copper from tailings.
The Resolution copper mine is among several projects expected to benefit from Trump’s regulatory policies, which include fast-tracking approvals for companies investing over $1 billion in the US.
https://www.mining.com/rio-tinto-bets-on-trump-support-for-long-stalled-arizona-copper-mine/
(Bloomberg) -- Zijin Mining Group racked up record annual profit after a growth burst that made the Chinese firm as big as global commodities giant Glencore Plc., although it has softened its output targets for this year.
Net income for 2024 rose 52% to 32 billion yuan ($4.4 billion), the company said in a preliminary results statement on Tuesday. Zijin’s market capitalization is now roughly on par with Glencore after it ramped up copper output and enjoyed record-high gold prices last year.
But there are signs of a slowdown in the immediate pace of expansion, with Zijin lowering its output target for copper by about 6% to 1.15 million tons. The foray into lithium has also faltered: it produced very small volumes last year and slashed its production goal for 2025 by around 60% to 40,000 tons.
“The company has strategically reduced production targets given the sluggish earnings outlook in the near-term,” Bloomberg Intelligence analysts Michelle Leung and Grant Sporre said in a note. But it’s still on track to reach its five-year targets by 2028, they said, and could deliver compound annual earnings growth of 30% from 2023 to 2025.
Zijin’s shares fell 1.5% in Hong Kong.
Zijin has grown aggressively in the past decade, becoming a major global copper supplier by building out big new projects in the Democratic Republic of Congo and in China. Like rival miner Rio Tinto Group, it has made lithium a key pillar of its future ambitions, aiming to become one of the world’s biggest producers.
The lithium push has been stymied by a torrid market, and last year it postponed two new projects in Argentina and western China. A near-90% slump in prices of the battery metal from 2022 has forced swathes of companies worldwide to rein in their expansion plans or cut output.
While some analysts forecast a smaller global surplus of lithium this year, the ongoing rout has hurt margins for miners, hammered listed producers and fueled a spurt of dealmaking. Last week, Zijin announced plans to buy a stake in a domestic lithium and potash miner, Zangge Mining Co., for $1.9 billion.
https://finance.yahoo.com/news/china-zijin-vies-glencore-record-054934052.html
Iron ore futures declined on Wednesday, weighed down by concerns that U.S. President Donald Trump could impose higher tariffs on Chinese imports.
The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 0.44% lower at 800.5 yuan ($109.94) a metric ton, ending a nine-session rally.
The benchmark February iron ore (SZZFG5) on the Singapore Exchange fell 1.1% to $103.6 a ton by 0726 GMT.
Trump did not immediately impose tariffs upon his inauguration, which supported prices on Tuesday, said Chinese consultancy Galaxy Futures.
However, Trump later said his administration was discussing a 10% punitive duty on Chinese imports, underscoring his longstanding desire for broader duties.
The uncertainty about tariff policies is causing the market to retract, Galaxy Futures said.
Amid the potential tariff hikes, Chinese policymakers are intensifying efforts to stimulate a faltering economy that is already grappling with a prolonged property crisis, high local government debt and weak consumer demand.
A more conservative and considered approach by Trump implies Chinese authorities may scale back support packages, said Atilla Widnell, managing director at Navigate Commodities.
Chinese and Hong Kong stocks also weakened after Trump's tariff threats, with the real estate sector, 000952 leading declines onshore with a 3.4% drop.
Still, there is rekindled enthusiasm among homebuyers due to the government's recent targeted policy support, said Chinese consultancy Lange Steel, citing Kang Yi, head of the National Bureau of Statistics.
Other steelmaking ingredients on the DCE declined, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 0.82% and 0.37%, respectively.
Steel benchmarks on the Shanghai Futures Exchange traded mixed. Rebar RBF1! shed nearly 0.8% and hot-rolled coil EHR1! declined 0.72%, while wire rod (SWRcv1) and stainless steel HRC1! gained 0.56% and 0.53% respectively.
($1 = 7.2812 Chinese yuan)
Coking Coal Market:
The price of low-sulfur primary coking coal in Linfen is 1,400 yuan/mt. The price of low-sulfur primary coking coal in Tangshan is 1,500 yuan/mt.
Regarding raw material fundamentals, coal mines have entered the holiday period, leading to a gradual decline in production. However, due to shrinking profits, coke enterprises have reduced their enthusiasm for raw material procurement, focusing mainly on restocking as needed. In summary, coal mines show limited willingness to lower prices, with the overall market remaining stable.
Coke Market:
The nationwide average price of Grade I metallurgical coke (dry quenching) is 1,845 yuan/mt. The nationwide average price of Quasi-Grade I metallurgical coke (dry quenching) is 1,705 yuan/mt. The nationwide average price of Grade I metallurgical coke (wet quenching) is 1,490 yuan/mt. The nationwide average price of Quasi-Grade I metallurgical coke (wet quenching) is 1,408 yuan/mt.
In terms of supply, coke enterprises are experiencing shrinking profits, with some incurring losses. However, overall production remains at previous levels, and coke inventories at coke enterprises continue to accumulate. On the demand side, with Chinese New Year approaching, the market is gradually entering holiday mode, and steel mills are primarily purchasing coke as needed. In summary, the coke market is expected to remain stable in the short term. 【SMM Steel】
https://news.metal.com/newscontent/103151514/[SMM-Daily-Review-on-Coal-and-Coke]-20250122