China allows yuan swaps trade by banks

Monday, 31 Jan 2011, Reuters

SHANGHAI - China will permit designated banks to trade yuan/foreign currency swaps on behalf of their clients from March 1, the country's foreign exchange regulator said.
Non-bank clients will be allowed to sign agreements now and exchange yuan and foreign currencies, and their interest rates, at a future time, the State Administration of Foreign Exchange said late on Sunday. Currently only banks can trade yuan/foreign currencies swaps.
The reform is part of China's efforts to expand yuan business to help regionalise and eventually globalise the currency.

Under US pressure to allow the currency rise faster, Beijing has also vowed to make the yuan more flexible and market-oriented as the country gradually deregulates its capital markets.
Developing derivatives based on exchange rates will give Chinese banks and companies badly needed tools to hedge currency risks as the yuan gradually becomes more volatile in the future in line with those reforms.

"The notice on business related to yuan/foreign currency swaps of bank clients is issued in order to allow domestic economic entities to hedge risks," the SAFE said in a statement on its website, www.safe.gov.cn.
Bank branches would also be allowed to perform yuan/currency swaps on behalf of clients under the precondition that they are authorised to do so by their headquarters, the SAFE said.
Interest rates agreed to be exchanged in the swaps must not exceed the limits set by the People's Bank of China (PBOC), among other provisions set by the forex regulator, which comes under the central bank.

The PBOC is launching more derivatives linked to the yuan's exchange rate and interest rates, such as those based on the yen , the euro , the dollar , international bonds and bank deposits, as it eyes more hedging tools for Chinese companies.
For now, the yuan has moved in an average range of about 100 pips per day. While its movements are now much wider than during the time of a de facto peg before June 2010, they are still far too small to create real demand for hedging.
China's official interest rate system is completely controlled by the government, with deposits allowed to be set slightly lower than PBOC benchmarks, while lending rates may be slightly higher. (sourced:reuters)

Chinese country wise silicon sheet import in 2010

Monday, 31 Jan 2011
It is reported that China country wise silicon sheet import during January to December 2010 total 976,148 tonnes which Japan topping the table.

Country	Dec'10	2010	Share
Total	82,463	976,148
Japan	49,351	510,816	52.33
South Korea	9,330	177,997	18.23
Taiwan Region	17,014	176,251	18.06
China	3,052	33,659	3.45
France	1,078	26,040	2.67
Russia	1,852	23,703	2.43
Germany	348	12,668	1.30
Czech	145	4,803	0.49
UK	20	2,474	0.25
US	109	2,441	0.25
Poland	0	1,459	0.15
Hong Kong	0	1,246	0.13
Malaysia	0	435	0.04
South Africa	0	316	0.03
Sweden	48	315	0.03
Brazil	0	294	0.03
Singapore	0	235	0.02
Italy	16	174	0.02
Belgium	0	151	0.02
Holland	73	148	0.02
Slovak	19	125	0.01
Spain	0	122	0.01
Canada	0	105	0.01
Mexico	0	70	0.01
Philippines	0	67	0.01
UAE	0	21	0.00
Swiss	0	1	0.00
Thailand	0	1	0.00

In tonnes

(sourced:mysteel.net, for more infor visit mysteel.net, real time access to China steel new)

Zhongyuan Special Steel to invest CNY 1 billion in technical updates

Monday, 31 Jan 2011

It is reported that Zhongyuan Special Steel intends to invest a sum of CNY 1.11 billion to update techniques used in the production of components used in heavy duty cleaning equipment.
The investment includes a construction expense of CNY 401 million, equipment procurement and installation expenses totaling 640 million and CNY 68 million in other expenses.

The project which started at the end of last year is scheduled to be completed within two years. Separate technique updates for smelting metal systems, forging system and supplementary equipment require a total cost of CNY 709 million and construction begins in June this year.(sourced:stcn.com)

ArcelorMittal withdraws from the financing program of Valin Steel

Saturday, 29 Jan 2011
It is reported that Hunan Valin Steel Co Ltd finally released its non public offering plan after twists and turns. The issue price is set at 5.57 per share equal to the net asset value per share of 2009. And the number of the objects of the directional add-issuance is reduced from two to one, Hunan Valin Iron and Steel Group Co Ltd.

Early in 2008, Valin Steel had launched the directional add-issuance program, but had not gotten written approval from China Securities Regulatory Commission until last September end. The plan has been adjusted for several times and it was put off again and again owing to its stock price long moving below its slated directional add issuance price under the backdrop of government controls on steel sector and market recession.

More unfortunately, at the moment of the coming of the deadline of three months effective for the issuance, ArcelorMittal which agreed to acquire the incremental shares by cash withdrew from its earlier decision. Now, one company is left to take the bleeding deals, Valin Group.
The number of shares was once cut from 600 million set in 2008 to 550 million adjusted in June 2010 and now has again been trimmed to 278 million.

The closing price of January 26 posted at CNY 3.86 a discount of about 30.7% compared with CNY 5.57 the directional add issuance price. (sourced:21cnhr.gov.cn)