Steel
China's steel and iron ore prices are rising fast as the nation faces downside macroeconomic risks, Hexun reported. In China, iron ore prices have risen over 10% since July and steel prices have risen to 5.9% to 3,590 yuan/ton.

China's crude steel output in the first 10 days of July declined to 2.08 million tons per day, down 4.5% from the previous 10-day period, the China Iron & Steel Association said. This marks the first fall in 10-day crude steel output in 2 months as steel mills of all sizes cut production. The latest figure translates into 760 million tons per year, which is off from 800 million tons in May and 787 million tons in June but still higher than 709 million tons in 2012. Crude steel output rose 10% year on year to 376 million tons in 1H 2013

Coal
The spot price for 5,800kcal coal declined by 5 yuan to 625 yuan/ton in the week through July 21, 2013 in the Chinese port city of Qinhuangdao, according to Sxcoal.com The spot price for 5,500kcal coal fell by the same amount to 580 yuan/ton, and the Bohai Bay coal index dropped by 9 yuan to 583 yuan/ton in the week. Coal inventory levels declined at independent power producers and were flat at Qinhuangdao. Total coal inventory at six coastal independent power producers rose to 20.1 days from the previous week's 19.4 days. Coal inventory in Qinhuangdao rose to 6.98 million tons from the previous week's 6.92 million tons.

Natural Gas
China's natural gas imports jumped 24.6% year on year to 24.7 billion cubic meters in 1H 2013, accounting for 30.3% of total consumption during the same period, the National Development and Reform Commission said. The import-dependence percentage rose from 28.9% in 2012. In 1H 2013, natural gas consumption was up 13.1% year on year to 81.5 billion cubic meters; domestic natural gas production was up 9% year on year to 58.8 billion cubic meters. Analysts say the strong growth was despite a non-peak season as the Chinese government pushed ahead stepping up the use of cleaner energy. Demand for natural gas is expected to rise faster in 2H 2013, and may possibly result in a shortage.

Oil
China's crude oil production grew 3.2% year on year to 103.31 million tons in 1H 2013, and refined oil consumption rose 4% year on year to 126.54 million tons, the National Development and Reform Commission said. In 1H 2013, gasoline consumption was up 12.2% year on year while diesel consumption was down 1.7% year on year. As of the end of June 2013, refined oil stockpile increased by 460,000 tons from a month earlier to 970,000 tons, remaining at a relatively high level.

China's refining margins in July are the best month year-to-date with official retail gasoline and diesel prices raised by more than 3% on July 20 and oil demand rising on seasonal factors in the summer, JPMorgan said, after meeting with Sinopec and PetroChina. The official price increases of 315 yuan/ton for diesel and 325 yuan/ton for gasoline widen JPMorgan's theoretical Chinese refining margin to $5-6/barrel, the highest in the year to date. According to Sinopec and PetroChina, the Chinese government is willing to give more refining margins gradually with the new pricing mechanism to close the gap between crude feedstock costs and refined product prices.

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