Dis­as­ter trig­gers rise in com­mod­ity prices

China Daily (Canada) - - TIANJIN BLASTS - By DU­JUAN du­juan@chi­nadaily.com.cn

Com­mod­ity prices, in­clud­ing iron ore, in­creased af­ter last week’s fa­tal blasts in Tian­jin af­fected oper­a­tions at the city’s port.

The ex­plo­sions oc­curred on Aug 12 at ware­houses in the Bin­haiNewArea close to Tian­jin Port.

Iron ore was priced at $56.75 a met­ric ton on Tues­day, a 1.34 per­cent rise from a week ago, ac­cord­ing to Platts Iron Ore In­dex, a bench­mark as­sess­ment of the spot price for phys­i­cal iron ore.

Driven by weak­en­ing de­mand for iron ore from China and other emerg­ing economies, prices bot­tomed at $44 a met­ric ton last month.

Fol­low­ing dis­rup­tions to sup­plies by the Tian­jin blasts, iron ore rose to $57 a ton at Qing­dao Port, another ma­jor trad­ing port in north­ern China, last Thurs­day — the day af­ter the ex­plo­sions.

“The iron ore price might con­tinue to rise in the fu­ture, mainly be­cause of the yuan’s de­pre­ci­a­tion,” said Zhang Tieshan, a se­nior an­a­lyst at in­dus­trial in­for­ma­tion provider Mys­teel.com. “The blasts’ ef­fect on the iron ore price will be short-term.”

Zhang said the ex­plo­sions will have a longer-term ef­fect on the de­vel­op­ment of Tian­jin Port be­cause they showed that man­age­ment had failed to pre­vent the dis­as­ter, rais­ing doubts over whether the port had been grow­ing too fast.

Ac­cord­ing to JYD Online Corp, a bulk com­mod­ity con­sul­tancy in Bei­jing, iron ore stocks at Tian­jin Port stand at about 7.1 mil­lion tons, ac­count­ing for 8.73 per­cent of the na­tional in­ven­tory.

Tian­jin­Port is a com­pre­hen­sive trad­ing port with ma­jor busi­nesses in cargo, crude oil, iron ore and coal.

It is the largest ex­port port for cok­ing coal and the sec­ondim­port port for iron ore in the coun­try.

Be­sides iron ore, the fu­tures price of sugar rose by 1.51 per­cent and that of cot­ton by 0.08 per­cent onMon­day.

Xue Qun, an an­a­lyst at Shan­dong Longzhong In­for­ma­tion Tech­nol­ogy Co Ltd, a con­sul­tancy fo­cus­ing on petroleum and chem­i­cal prod­ucts, said, “Oper­a­tions at Tian­jin Port are still sus­pended.”

She said ship­ments pre­vi­ously sched­uled for Tian­jin have been trans­ferred to other ports and it is not known when the port will re­open.

“If Tian­jin Port re­mains closed for too long, costs for down­stream pro­cess­ing com­pa­nies will in­crease, as they have to ob­tain sup­plies from else­where,” Xue said.

Tian­jin Port is a key dis­tri­bu­tion cen­ter for crude, re­fined and fuel oil. Many trad­ing and lo­gis­tics com­pa­nies are lo­cated in the area.

The blasts will af­fect the dis­tri­bu­tion of oil from the port to neigh­bor­ing ar­eas in­clud­ing He­bei and Shan­dong prov­inces and the In­ner Mon­go­lia au­ton­o­mous re­gion.

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