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Economy

  • Mongolia’s largest aimag, Umnugobi, has acquired the status of a “strategic aimag”, with its three strategically important deposits contributing significantly to the country’s economy. It is also one of the few aimags that do not accept any subsidy from the state budget.
  • An article in our Mongolian section last month, read together with its updated version in English in the present issue, will give hope to all who look forward to Mongolian State-owned enterprises functioning to their full potential, contributing more to the nation’s GDP, in both absolute and comparative terms.
  • The very first speech made by the new Prime Minister, Ch.Saikhanbileg, gave people hope that the Government under his leadership indeed has a well thought out “recipe” to tackle the economic crisis.
  • According to figures released by the Mining Ministry, the mining sector was responsible for 18.5% of Mongolia’s GDP in the first six months of 2014. It also made up 66% of the industrial sector, 83.2% of total exports, 17.5% of the national budget and 81% of foreign direct investment.
  • The Mongolian capital market is in its development stage. Chris MacDougall, Managing Director, Investment Banking at Mongolian Investment Banking Group, explains to MMJ about the future of the country’s capital market and the main services of his company, which is a new player in the field.
  • Fitch Ratings has revised the Outlooks on Mongolia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to Negative from Stable and affirmed the IDRs at ‘B+’. The Country Ceiling is affirmed at ‘B+’ and the Short-Term Foreign-Currency IDR at ‘B’. The issue ratings on Mongolia’s senior unsecured foreign- and local-currency bonds are also affirmed at ‘B+’.
  • According to China Iron & Steel Association (CISA), China Iron Ore Price Index (CIOPI, April 1994=100, 62% Fe content) for the third week (16 - 22) of September 2012 turned out to be 358.37 with a slight increase by 0.04 points from the previous week. Hike in domestic iron ore price positively affected the index while imported iron ore price continued to decrease. Domestic iron ore (concentrate, 62% Fe content) index increased by 8.04 from the previous week to 325.41. Average price of domestic iron ore was RMB 837.33, up RMB 20.67 (2.5%), same. Meanwhile, imported iron ore (fines, 62% Fe content) index was 376.36 with a decrease by 4.31 points, same. The price of imported iron ore was CFR US$101.65 per tonne, down US$1.17 (1.1%) or RMB 754.36 per tonne (including tax), down RMB 7.34 (1.0%). Fine (62% Fe content) price at the spot market was US$106 - 107 (CFR China) per tonne. After turning up in the second week of September, it has remained almost flat.
  • The seaborne coking coal market was unchanged Wednesday as several Chinese market participants gave indicative bids at current levels. Platts assessed both premium low-vol and mid-vol hard coking coal with 64% CSR (coke strength after reaction) unchanged at $140.50/mt FOB and $124/mt FOB Australia respectively. Purchasing managers at two large Chinese mills said prices for Australian premium material were exhibiting some signs of stability. One said high production costs would stop prices from dropping any further, although he added that prices have “no chance” of rebounding as the Chinese steel market remains fragile. Conversely, a Chinese trader said prices could pick up if there is a sustained rebound in billet and iron ore prices. Continued industrial action at BHP Billiton Mitsubishi Alliance’s Australian mines could also bolster the market, he added. A mining source said supply might also tighten because “almost all the Australian miners have started to cut production.
  • = Price gap between imported ore (including tax) and domestic ore expands to about RMB 55 =

    According to China Iron & Steel Association (CISA), China Iron Ore Price Index (CIOPI, April 1994=100, 62% Fe content) for the second week (10 - 14) of September 2012 turned out to be 358.33 with a decrease by 17.58 points (4.7%) from the previous week, which hit the lowest level since CISA started to announce CIOPI from September 2011 for four consecutive weeks. Domestic iron ore (concentrate, 62% Fe content) index decreased by 5.73 from the previous week to 317.37. Average price of domestic iron ore was RMB 816.66, down RMB 14.73 (1.8%), same.
  • China’s coal imports fell for the first time this year in August compared with the year-ago level, as overseas coal is losing its price advantage over domestic supplies following the recent price falls and sluggish demand in China. Coal imports, including lignite, amounted to 20.44 million tonnes in August, slumping 15.8% from the month before, and down 0.7% from one year ago, showed the latest data from the General Administration of Customs.This is the first year-on year drop since the beginning of 2012 and the second consecutive drop on a month-to-month basis.
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