London copper pauses on Monday as Freeport eyes exports

 London copper opened flat on Monday after a two percent gain last week, stalling on news that major miner Freeport was set to resume concentrate exports from Indonesia after a six-month halt.

Freeport-McMoRan Inc clinched a deal with the Indonesian government on Friday allowing the miner to resume copper concentrate exports from the country, effectively ending a six-month tax dispute and paving the way for more miners to follow suit.

A resumption in exports could help ease a significant shortage in refined supply for the first part of the year, but the market would still likely experience a deficit this year, said Helen Lau, senior mining analyst at UOB-Kay Hian Securities in Hong Kong.

"The Freeport export will not really change the global supply picture, it is too small," she said.

Freeport exports should inject around 110,000 tonnes of metal to the market, easing a 400,000 tonne deficit seen in the first five months of the year, she said.

"In the second half, the demand situation may improve a little. I see support at $7,000 but I’m not expecting significant gains to $7,500 because we still need to take into consideration China is slowing."

Three-month copper on the London Metal Exchange was little changed at $7,124.75 a tonne by 0301 GMT from the session before, when it notched a 0.7 percent drop. Prices rose two percent last week for the fifth weekly advance in six.

The most-traded September copper contract on the Shanghai Futures Exchange slipped by 0.6 percent to 50,530 yuan

($8,200) a tonne, falling from an 11-day high hit the session before.

Later this week, Wednesday's U.S. gross domestic product reading and jobs data on Friday will help markets to judge the strength of the economy's rebound and the likely speed of the Federal Reserve's return to more conventional monetary policy. The Fed meets on Tuesday and Wednesday.

A mixed reading on the health of U.S. business investment on Friday suggested the economy may not have rebounded as strongly in the second quarter as previously believed, but it offered hope for the rest of 2014.

Data from Beijing is expected to confirm China's economy picked up in July.
Hedge funds and money managers trimmed net-long positions in copper markets, the Commodity Futures Trading Commission said on Friday.

Speculators lowered net long positions in copper from more than eight year highs, by 4,888 lots to decrease the industrial metal's net long to 44,107 contracts.
In other metals, LME lead approached its highest in 7 months, climbing just dollars short of its late December peak of $2,289 a tonne.

Lead has been piggy-backing on gains in sister metal zinc , which on Friday printed its fifth consecutive three-year top on prospects of a shortage in raw ore supply. In Shanghai, lead prices careened up more than 3 percent.

"It's nothing fundamental," said a strategist at a bank in Shanghai. "It's just reacting to the gains in zinc."
Source: Reuters

Brent slips below $108 as Mideast tension cools on Gaza lull

 Brent crude slipped below $108 a barrel on Monday as fighting between Israel and Hamas Islamist militants subsided in Gaza, but some analysts said falls may be limited.

Geopolitical tensions in the Middle East eased for now after Hamas said it backed a 24-hour humanitarian truce. U.S. President Barack Obama had called for a ceasefire but there was no sign of any comprehensive deal to end fighting with Israel. 
September Brent crude fell 50 cents to $107.89 a barrel by 0321 GMT after a 1 percent gain last week.

U.S. crude futures for September delivery dropped 52 cents to $101.57 a barrel after ending last week 1 percent lower.

"Oil markets are going down because of a ceasefire for 24 hours in Israel and Gaza," said Ken Hasegawa, a commodity sales manager at Newedge Japan. "This has definitely put some pressure on oil."

Hasegawa said oil prices were expected to stay in a range of $105-$110 for Brent and $100-$105 for West Texas Intermediate.

Oil remained underpinned by tension in hotspots such as Libya and eastern Ukraine despite ample supply of crude and oil products globally.

"I would expect to see some buying support around these levels it is trading at right now," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney.

"We are still keeping a very, very close eye on what's happening in the Middle East at the moment, so that should say oil prices are quite well supported."

Libyan Special Forces and Islamist militants clashed over the weekend, resulting in at least 36 deaths in Libya's eastern city of Benghazi.
The United States and the European Union prepared more economic sanctions on Russia over the Ukraine conflict, where fighting has intensified in the east.
Global markets may also see more oil exported out of Iraqi Kurdistan after the U.S. Coast Guard cleared a tanker to unload a cargo off Texas on Sunday. A State Department official signalled that Washington would not intervene to block delivery of the controversial crude.
Investors are gearing up for more economic data from the United States later this week, including second-quarter GDP figures, to gauge the health of the world's largest economy.

"There's going to be very strong economic data coming out of the U.S. and perhaps traders are doing a little bit of position-squaring before the data comes out," Le Brun said.
Source: Reuters

Fighting complicates Ukraine crash probe, U.S., EU prepare Russia sanctions

 Fierce fighting in eastern Ukraine where a Malaysian airliner was downed further complicated an investigation on Sunday as Europe and the United States prepared economic sanctions on Russia over the conflict.

At least 13 people were killed in clashes between Ukrainian troops and pro-Russian rebels that raged in five areas around the wider region.

International monitors said they had abandoned plans to visit the crash site because of fears it was not safe, even though Malaysia said earlier that rebels had agreed to provide access.

Ukraine said it was trying to dislodge the rebels, but denied it was fighting near the crash site, saying the separatists had put the monitors off by falsely claiming that the army was operating nearby.

Russia dismissed U.S. allegations it was about to hand over more missiles to the separatists, who Western leaders say almost certainly shot the airliner down by mistake with a Russian-supplied surface-to-air missile.

The separatists deny any involvement and Moscow says it has not supplied them, suggesting Ukrainian forces were to blame.

"Kiev is trying to destroy the evidence of a crime by its army," separatist leader Aleksander Borodai said, referring to a Ukrainian army offensive some distance from the site on Sunday.

With European states trying to minimise the impact of any future sanctions against Russia on their own economies, the U.S. State Department sought to bolster the case for robust action by releasing images it said showed Russian forces had fired across the border at the Ukrainian military in the last week.

The images, which show marks on the ground at what the State Department said were launch sites and impact craters around Ukrainian military locations, indicated fire from multiple rocket launchers, the department said.

It also said the images offered evidence that Russia-backed separatists inside Ukraine had fired on Ukrainian forces using heavy artillery supplied by Russia.

The Russian Foreign Ministry said Foreign Minister Sergei Lavrov and U.S. Secretary of State John Kerry had agreed on the need to ensure a swift ceasefire in what it described as an "internal conflict".

But the State Department said Kerry did not accept Lavrov's denial that heavy weapons from Russia were contributing to the conflict and urged him "to stop the flow of heavy weapons and rocket and artillery fire from Russia into Ukraine, and to begin to contribute to deescalating the conflict."

Kerry also underlined U.S. support for a mutual cease-fire verified by the Organization for Security and Cooperation in Europe and reaffirmed Washington's "strong support for the international investigation" into the downed airliner, the State Department statement added.


MORE MISSILES?

Washington said on Friday another transfer from Russia to Ukrainian separatists, this time of heavy-caliber multiple-launch rocket systems, appeared to be imminent and that Russian forces were slowly building up along the Ukrainian border.

Russia said recent international inspections had revealed no evidence of Russian military violations, without giving details.

Members of the European Union, spurred into action by the deaths of 298 people in the airliner, were expected to try to reach a final deal on Tuesday on measures including closing the bloc's capital markets to Russian state banks, an embargo on arms sales and restrictions on dual-use and energy technologies.

The EU added new names on Friday to its list of individuals and companies facing travel bans and asset freezes over their alleged involvement in Ukraine and could agree to extend the list further as early as Monday. 

Washington, which has taken the lead in imposing individual and corporate penalties on Russia, said on Friday it was likely to follow up on any new EU move with more sanctions of its own.

The Ukrainian government said its forces were advancing towards the crash site to try to free it from the rebels, who have impeded the work of international monitors and whom Kiev accuses of tampering with evidence pointing to who shot it down.

Only a few international experts have so far been able to get to the site, access to which is negotiated with the rebels.

"All our troops are aiming to get there and liberate this territory so that we can guarantee that international experts can carry out a 100-percent investigation of the site and get all proof needed to deduce the real reason for this tragedy," said Andriy Lysenko, a spokesman for Ukraine's Security Council.

International monitors said the fighting itself could affect the crash site, underlining the growing complexity of trying to establish who shot down Malaysia Airlines flight MH17.

In Donetsk, Alexander Hug, deputy head for the OSCE monitoring mission in Ukraine, said monitors would not visit the site on Sunday.

"The situation on the ground appears to be unsafe ... we therefore decided to deploy tomorrow morning," Hug, flanked by Dutch and Australian experts, told reporters. "Fighting in the area will most likely affect (the) crash site," Hug said.

An OSCE spokesman said the group would try again on Monday.

The separatists are still in control of the area where the plane was shot down earlier this month but fighting in the wider eastern regions of Donetsk and Luhansk has been heavy as Ukrainian government forces try to drive them out.

It was raging in at least five places on Sunday and Donetsk region health officials said 13 people were killed in fighting in the town of Horlivka, known as Gorlovka in Russian.

Lysenko said troops were advancing east from the town of Makievka towards Shakhtarsk, around 25 km (16 miles) from the crash site. Shakhtarsk residents said air strikes hit the town.

"Our military is advancing, fighting goes on every day, every night, they have already liberated two-thirds of the territory," Lysenko told a news conference in Kiev.

But Ukrainian Foreign Minister Pvalo Klimkin said the Ukrainian army was respecting a no-fight zone within 20 kilometres from the site. 


AGREEMENT

Earlier, Malaysian Prime Minister Najib Razak said an agreement reached with separatist leader Borodai would "provide protection for international crash investigators" to recover human remains and ascertain the cause of the crash.

The OSCE has provided a team to monitor the site in advance of an investigation, but Najib said a full team of investigators was needed to ensure any human remains left there were removed.

"We also need a full deployment of investigators to have unfettered access to the crash site so we can understand precisely what happened to MH17. I hope that this agreement with Mr Borodai will ensure security on the ground, so the international investigators can conduct their work," he said.

"Three grieving nations", Malaysia, Australia and the Netherlands, had formed a police group to secure the site, he said in a statement issued by his office. The Netherlands and Australia said the mission would not be armed.

Among the 298 people who died aboard the Boeing 777 on its flight from Amsterdam to Kuala Lumpur on July 17 were 193 Dutch nationals, 43 Malaysians and 28 Australians.

Malaysian experts have said they believe at least 30 investigators will be required to cover the full site of the crash, in addition to Dutch investigators and an expert from the United Nations' civil aviation body, the ICAO.

In the Australian capital, Canberra, Prime Minister Tony Abbott said an unarmed police mission led by the Netherlands and made up of about 49 officers would travel to the site. Officials said a total of 170 Australian police were deployed in Ukraine.

As U.S. kicks off crude exports, Iran casts a shadow in Asia

The United States faces an awkward rival in its first attempts in 40 years to export crude oil - Iran.

Iran, whose economy has been throttled by Western sanctions that have halved its crude shipments, is now selling higher quality and cheaper oil to China that leaves little room for the U.S. crude to enter the world's top energy consumer.

While buyers in Japan and South Korea have been willing to trial a U.S. grade of the super-light crude known as condensate, China has already locked in annual contracts with Tehran and is not expected to take any U.S. oil in the short-term.

With U.S. producers looking to open a trade route to sell surplus condensate from the U.S. shale boom, worries about quality and legal issues have added to doubts about how much of the oil the rest of Asia can take.

"China gets condensate from Iran, which is much cheaper than that from the U.S.," said a Singapore-based trader with a European trading company. "They might get involved at a later stage but they will not be at the forefront."

Condensate won export approval from U.S. officials in June as long as it has been minimally processed, softening a decades-old ban on selling U.S. crude abroad.

The light oil can be cracked in a processing plant called a splitter to make petroleum products and petrochemicals, or blended with heavier crude for use in refineries.

South Korea and Japan have purchased the first condensate from the United States. Mitsui & Co <8031.T> bought a cargo from Enterprise Product Partners for loading this month and has onsold it to South Korean refiner GS Caltex  sources said.
Refiner Cosmo Oil Co <5007.T> has also bought a cargo of U.S. condensate that will load in late August for arrival at the Yokkaichi refinery in Japan in October, a source said.

Japan and South Korea, which together account for just over half of Asia's 1.1 million-barrels-per-day (bpd) in condensate splitter capacity, are seen as more open to trying the United States as an alternative supplier.

Enterprise has also signed a short-term contract with another Japanese trader, Mitsubishi Corp <8058.T>, with a first loading likely in September.

IRAN COMPETITION

Asian buyers have been waiting to see if the U.S. oil is suitable and if exporters can price it competitively given it has to be shipped a further distance than competing grades from the leading regular suppliers Qatar and Australia.

"They are testing the waters so we're not expecting huge volumes this year," said Richard Gorry, managing director of energy consultancy JBC Asia.

Showing the competition U.S. exports face, Iran exports about 55 percent of its roughly 250,000 bpd of South Pars condensate output to two Chinese buyers at deep discounts under annual contracts.

Since U.S. and European Union sanctions were eased late last year in exchange for Iran curbing nuclear activities, Tehran's exports have risen about 30 percent to 1.25 million to 1.3 million bpd, much of this as South Pars shipments to China.

Some of the Iranian condensate could be sold as low as $5 a barrel below Dubai quotes or about $8 a barrel cheaper than Qatari grades.

U.S. condensate would likely have to be priced lower than the similar Qatari grades to attract buyers, traders said.

Qatar is the biggest supplier of condensate to Asia at about 450,000 bpd, followed by Iran. Australia and East Timor together produce nearly 170,000 bpd, with most of the output heading to Asian markets, according to trade sources.

Higher shipping costs compared with the short distance from the Middle East will deter India from buying U.S. condensate, according to sources at Indian refiners.


LEGAL, QUALITY CONCERNS

Another issue is uncertainty over the future of U.S. regulations on condensate exports.

Two U.S. senators have questioned the U.S. Commerce Department's approval, saying exports may violate a ban in place since the Arab oil embargo of the 1970s. Refined products, such as gasoline and diesel, are not restricted.

"What happens if some ruling appears and penalises the buyers?" asked a trader at a North Asian refiner. "Also, there's not much economics in it so why take the risk?"

Asian users are also concerned that U.S. condensates may vary widely in quality as they will be come from fields scattered across shale formations such as the Eagle Ford in southern Texas, from which Enterprise pulls its oil.

The U.S. oil is expected to be more commonly used as a blend stock by refiners, limiting the amount available for 350,000 bpd of new splitter capacity coming online in Asia this quarter.
Source: Reuters

WSJ: Asían Markets mostly higher on Monday

      The WSJ reports "Asian markets were mostly higher on Monday, with banks giving a boost to Shanghai, while Australia continued to be weighed down by continued geopolitical concerns.

The Shanghai Composite rose 1.4% on a strong performance by banking stocks.Industrial and Commercial Bank of China 601398.SH +1.99% added 1.7% on its plans to raise as much as $12.9 billion of preferred shares. Upbeat economic data showing that China's industrial profits picked up in June also provided support.

In Hong Kong, the Hang Seng Index was up 0.6% and the Hang Seng China Enterprises Index rose 0.5%.

The Nikkei rose 0.5% as the dollar maintained the 0.5% gain it made against the yen last week. The dollar was little moved in Asia, at ¥101.81.

Elsewhere, South Korea's Kospi added 0.4% as the market extended gains after last week's government announcement of a stimulus package.

A number of markets were trading at their highest levels in years. Hong Kong and Australian stocks hit multiyear highs last week and Japan ended Friday at its highest level in six months. In particular, upbeat economic data from China has supported gains in stocks.

Australia's S&P/ASX 200 lost 0.2% after Wall Street fell on disappointing corporate earnings. Geopolitical tensions continued to weigh on sentiment, with the continuing turmoil in Ukraine and the breakdown of a cease-fire in Gaza over the weekend".

Peking University report: Top 1% owns a Third of China's Wealth

Peking University has released a report on China's livelihood development. It details the massive breadth of China’s social inequality, which has become a widespread source of anger in the country.

The report, released late Friday, revealed that the richest one percent of Chinese households held more than one-third of the nation’s wealth. Meanwhile, at the other end of the spectrum, the poorest 25 percent of households owned only 1 percent of the country’s property value.

According to the study, Chinese households on average had a net worth of 439,000 yuan, equivalent to about $71,000 in 2012, up 17 percent from the level in 2010. The report also showed nearly 75 percent of Chinese household wealth came from owning real estate. It also said that China’s wealth inequality was fuelled largely by the disparity in wages in cities and rural areas.

Source: CCTV News

North China: Farming suffers severe drought

CCTV News

A drought of record proportions. In Shangnan county of Shaanxi province, the only local water source -- the Xianhe reservoir -- is experiencing a severe water shortage. It’s left some 60,000 residents in the county struggling to get make do.

"We need to reuse the water from washing, cleaning and cooking just to flush the toilets," Local resident Yu Xia said.

The town’s tap water has been suspended for over a month. Instead, each day, the local government sends 30 trucks to fetch water from a river located 20 kilometers away, after treatment, the water is deliver to each home. But with still no precipitation expected in the near future, maintaining this routine could become an even more daunting task.

Meanwhile, Pingdingshan city in Henan province is seeing its worst drought in 30 years. Rainfall is down 90 percent from the previous year, making it the dryest year since 1975. Twenty-one reservoirs used for agricultural irrigation have dried up. And farmers are becoming desperate to save their crops.

Over 860,000 hectares of agricultural fields in Henan have been affected by the drought weather. Local authorities have launched an emergency response plan, using some 5,000 motor-pumped wells to irrigate the fields.

In Xinjiang Uygur Autonomous Region and Inner Mongolia Autonomous Region, parched grasslands have meant hungry and thirsty livestock.

"In order to make up for the lack of grass, we will buy grass from other parts of the country and make full use of our own agricultural straw. We need to provide 3 million tons of grass for our 6 million livestock animals," Niu Zhengfu, vice chief of Yili Autonomous Prefecture, Xinjiang, said.

In Inner Mongolia Autonomous Region, the local government is also mobilizing funds and personnel to dig up wells and build water pipelines to keep the water flowing until Mother Nature can take over again.

Xinhua: More Chinese Internet Companies should Go Abroad

Xinhua.
During his trip to Brazil last week, Chinese President Xi Jinping, together with his Brazilian counterpart Dilma Rousseff, witnessed the launch of the Portuguese version of China's Baidu search engine.
It is not the first time that a Chinese Internet company has launched a non-Chinese search engine, but it is the first time that a Chinese state leader has helped promote its services.
More Chinese Internet companies should compete internationally, as they now have the ability and can make the world's cyber environment more balanced and just.
Thanks to over three decades of rapid industrialization, China has become one of the biggest exporters, and its exports have upgraded from primary goods and light industrial products to mechanical and electrical products, and now high-speed railway systems and nuclear power plants.
During Xi's visit, China and Argentina agreed to build a heavy water reactor power station in the South American country. And earlier in Brazil, the two countries agreed to cooperate in high-speed railway construction.
But this time, Internet services are on the Chinese leader's marketing list. From products to services, it shows China's industrial structure is changing.
Recent years have witnessed rapid development in China's Internet sector and other high-tech emerging industries, which has pushed the number of Internet and mobile Internet users to over 600 million, the biggest number of netizens of any country. Among the top 10 websites in 2012, only one website was based in China, but in 2013, four China-based websites entered the top-10 list.
Not only Baidu.com, but also qq.com, sina.com and other websites, have won abundant users in China and other countries that are home to Chinese speakers. Alibaba.com and taobao.com are among the world's top B2B and B2C/C2C platforms in terms of trading volume and number of clients.
Chinese Internet companies are starting to get their voices heard worldwide, as they now have the capacity to provide services outside the country.
In addition, Chinese Internet service companies going abroad has strategic significance, as search engines are highly monopolized by a few websites and the international community is rightly concerned over cyber security after Edward Snowden's leaks about intelligence project PRISM.
Breaking the information monopoly and building a fairer and safer cyberspace have become the need and consensus of many countries, bringing new opportunities for Chinese Internet service providers.
However, these companies face a long journey to really internationalize. They must study the preferences, customs and interests of Internet users overseas, and they also have to face established Internet giants' advantages in brands, technology and customer groups.
A small step for Chinese Internet companies going abroad will probably have a big impact on the computerized world, and also provide an opportunity for cooperation between newly emerging markets.