It was said from Yao Jian, spokesman of China’s Ministy of Commerce (MOC), that the detention of employees of Anglo-Australian mining giant Rio Tinto on spying charges is an individual case and will not hurt Sino-Australian trade at a press briefing Wednesday.

It would also not affect China’s foreign trade and foreign investment as China had been improving its legal system, said Yao.

He said the two countries were important trade partners and had sound cooperation in raw materials, agriculture and free trade talks.

China had been improving its foreign investment environment, said Yao.

He said China would further lower the threshold of foreign investment and improve industrial and regional policies to attract overseas investment.

Data from China’s Ministy of Commerce Wednesday showed China’s foreign direct investment (FDI) dropped by 17.9 percent to 43 billion U.S. dollars in the first half year on year.

Hebei Iron & Steel Group (Hebei Steel) has overtaken industry “dragon head” Baosteel in terms of output, giving it the clout to share the platform with the Shanghai producer in price setting and negotiations with overseas ore suppliers, after a major restructuring late last year.

Figures from the Ministry of Industry and Information Technology showed that Hebei Steel has displaced Baosteel from the top slot in May with a total output of 3.15 million metric tons. Baosteel produced 3.13 million tons of steel products that month.

The latest count, of course, is unlikely to have any material impact on the ongoing Baosteel-led price negotiations with foreign ore suppliers. But industry analysts said the rise of Hebei Steel is significant to the future development of the industry, especially when the company is embarking on the second stage of restructuring by grouping together its three listed subsidiaries and two privately held units to form a mega steel conglomerate with a public listing.

As earlier reported, the proposed merger calls for the acquisition by the principal listed subsidiary, Tangshan Iron and Steel, of the assets of the other listed subsidiaries, Handan Iron and Steel and Chengde Xinxin Vanadium and Titanium Co. When the transaction is complete, Tangshan will be the sole remaining listed entity of Hebei Iron.

In the second stage of the restructuring, Hebei Steel said it would inject the quality assets of its unlisted subsidiaries, Wuyang Iron and Steel and Xuanhua Iron and Steel, into the remaining listed arm.

The proposed transaction, if it goes through, will catapult Tangshan Steel into the forefront of steel producers with an estimated annual output in excess of 30 million tons, challenging Baosteel for the top spot among the nation’s steel producers.

As for now, Baosteel still remains the king of the road.

“I don’t think by producing a little more steel Hebei Steel can challenge Baosteel’s dominant position in the steel sector,” said Nie Xiuxin, a senior industry analyst with Ping An Securities.

As China’s barometer of the steel industry, Baosteel boasts not only of giant output, but also enjoys advantages in research and development, metallurgical technology, and production innovation. All these factors should also be taken into consideration when valuing a steel company’s industrial status, and as such Baosteel’s position is insurmountable in the short term, said Nie.

The overall steel turnover of China takes up nearly half of the global total. However, China’s say in the international steel industry is still very limited. “That is quite similar to the situation of Hebei Steel and Baosteel,” she added.

Wang Zhaohua, analyst, Guodu Securities, said Baosteel’s position is hard to replace. “At present, everyone in the steel industry follows Baosteel in terms of management, technical development and price adjustment,” he said.

According to Wang, around 30 to 40 percent of Hebei Steel’s products are low-end construction steels. In contrast, Baosteel concentrates more on high-end steel sheets, used in automobiles and electronic home appliances.

Baosteel targets to become the world’s second largest steel producer by 2012, with a projected annual production of 80 million tons.

It is announced Monday that Baoshan Iron & Steel Co., China’s largest steel maker, raised its August steels prices by 300-500 yuan/ton.

According to the report, Baosteel has adjusted up the ex-factory price of its hot-rolled steel products by 300-500 yuan/ton and that of cold-rolled steel products by 500 yuan/ton for next month.

After the price adjustment, Baosteel’s August price for SPHC 2.75-3.0 mm hot-rolled steel sets at 4,042 yuan/ton (pretax), and SPCC 1.0 mm cold-rolled steel price at 4,876 yuan/ton (pretax).

It is reported that the company’s August price policy will be executed from August 13.

It is reported that many Chinese listing metals firms have released their half-year performance guidance reports in succession since July, and almost all forecasted losses for the first half year but said the metals sector started to show signs of recovery in the second quarter.

Among the companies having issued their guidance, Yunnan Copper Co., Yunnan Aluminum Co., Yunnan Tin Co., Sino-platinum Metals Co. estimated losses of 120 million yuan, 110-120 million yuan, 40 million yuan, 3.3 million yuan, respectively, in the first half year, while Henan Zhongfu Industry Co. (600595.SH) predicted a year-on-year drop of 73.84 percent in its net profits.

According to their reports, the nonferrous metals sector’s losses were mainly due to the sharp fall of prices and demand of metallic products on the international market amid the financial crisis.

Despite the expected losses for the metals sector on the whole, quite a few companies had achieved profits in the second quarter, but their Q2 profits could not make up the losses in the first quarter.

Yunnan Copper Co. said that it made profits in the second quarter as prices of copper products were on the rise in that period. Yunnan Aluminum Co. also made breakeven in April-June period.

Yunnan Tin Co. noted that its selling prices and sales volume in the second quarter gained marginally from the first quarter and its performance was on the mend.

Thanks to the government’s supportive policy, aluminum demand from power grid construction, railway and transportation sectors has been increasing since February, according to Henan Zhongfu Industry Co., which performance picked up month on month in the first half year.

It is reported from China Metallurgical News that Qinghai Province, which located in Northwest China, plans to expand its local steel industry in 3 years.

In order to fulfill the targets during 2009 to 2011, the province projects to improve the production of iron ore fines by enhancing mine constructions

1. To specialize in specialty steel
2. To give temperate development of common steel
3. To gear up the building of 1 million tonnes per year stainless steel production base
4. To promote the regulations in steel industry development.

Among the five targets, Qinghai will give priorities:

A. To extent the fines capacity to over 3 million tonnes per year to ensure the need of local steel production

B. To the R&D of high value-added specialty steels like bearing steel, gear steel, tool & die steel and heat-resisting, cold-resisting, corrosion-resistant steels.

C. To the 1 million tonnes per year reduced iron project or the integration of 2 million tonnes per year steel project in Geermu, aiming to produce construction steels and other products like CR sheet, seamless pipes and cold forming section steels.

D. To the building of 1 million tonnes per year stainless steel and the development of local nickel mines and processing companies.

Besides, according to local and central policies local governments will strictly control the ferroalloy production capacity and speed up the elimination of 12500 KVA and below submerged arc furnaces to promote the industrial concentration.