Japan's production of crude steel fell 13.6 per cent in May from a year earlier to 7.97 million tons, marking the fifth consecutive month of on-year drops, the Japan Iron and Steel Federation saidlast week. That figure reflects a 4.3 per cent rise from April, the industry group said.

Of the total, production by converters dropped 14.3 per cent to 5.25 million tons, marking the fifth straight year-on-year decline, while output by electric furnaces slipped 12.1 per cent to 2.72 million tons, the seventh consecutive monthly fall, the group said.

Production of ordinary steel fell 13.8 per cent on year to 6.52 million tons, while specialty steel output fell 12.3% on year to 1.45 million tons, the group said.

South Korean firm to cut steel output

South Korea's steel giant Pohang Iron & Steel Co. (PKX), or Posco, said last week it will reduce steel production for the first time to curb falling export prices amid increased exports. The company plans to cutproduction this year by around 1.7 million metric tons from production of 26.43 million tons last year.

Demand in the country is falling amid the sluggishness of car, electronics and construction industries that have been badly hit by South Korea's economic downturn. "Although our steel production will be reduced, the amount of total sales won't be greatly affected because of the recent weakness of the South Korean won versus the U.S. dollar," said a Posco spokesman.

China aluminum production to rise

China's consumption of aluminum will continue to grow because of increasing demand from the packaging and auto industries, but aluminum production will be able to meet domestic demand and the country may even become a net exporter of the metal, said Lu Xiaoming of the state Xinhua News Agency's China Metals publication, at the Financial Times World Aluminum Conference in Londonlast week. "Based on demand and supply situations, China already does not need to import primary aluminum. This year, Chinalooks very much to be a net exporter of primary aluminum, and its net exports will probably increase to the order of 250,000 tons per year before 2000," said Lu.

Oman firm seeks partner

An international consortium which is planning to set up a $2.4 billion aluminium smelter in Oman is still looking for a technology provider for the 480,000 tonne capacity plant. "As a consortium we are still looking for a technology provider," said a member of the group, which includes New York-based Charus Enterprises, British generator National Power, what used to be called China National Non-Ferrous Metals (CNNC) and Oman's WJ Towell.

US Firm Kciser Aluminium Corp was initially looking to provide the technology, but pulled out of the plans last year, consortium members have said. "There are a number of technology providers out there and Dubal is certainly one of them. We are in discussions with a number of them," a group partner told Reuters.

Copper may not fall further

The world's second largestcopper producer, The Broken Hill Pty Co Ltd, said last week the copper price may have bottomed because if it fell any further producers would start shutting down their operations. "The price is low, but I don't believe it can get much lower because that would really start to shut down production at quite a rate," BHP chairman Jerry Ellis told a business luncheon.

BHP itself said in February it planned to slash production at its Pinto Valley mine in Arizona to 35 million pounds a year from over 190 million pounds. Ellis said physical stocks of many of the base metals were falling but at the moment markets like the London Metal Exchange were out of step with the fundamentals of supply and demand.

Gold Corp refining JV

Australia's largest gold refiner, Gold Corp, said its proposed refining joint venture with rival Golden West Refining Corp Ltd underscored a global restructuring of the gold industry. "It's becoming more and more competitive, the margins are decreasing and it's important to remainglobally competitive," Brian Bath, managing director of Gold Corp, said.

Gold Corp earlier said it had reached a non-binding joint venture agreement with Golden West to co-refine gold and silver to address in part rationalisation in the industry. If it proceeds, the combined operation would be the largest refiner of gold and silver in Australia. Gold Corp, through its Australian Gold Refineries arm, so far this year has refined more than 200 tonnes of gold, equal to two-thirds of Australia's total output.

Asia-Pacific steel output eases

Australia's largest steel producer and exporter, The Broken Hill Pty Co Ltd (BHP), said that steel production in the Asia-Pacific region had eased, particularly in Japan. "Clearly production of steel in the region has now come off the boil," said BHP chairman Jerry Ellis. "(Production) -- it's still at a fairly significant rate in China, it's still at a good rate in Korea...(but production is) at a declining rate in Japan," Ellis told a Committee for the EconomicDevelopment of Australia (CEDA) luncheon.

The key factor for steel output was how Japanese officials dealt with the economic problems there. Ellis said the outlook for metals prices generally was still uncertain, but "maybe with more downside than upside".

Indonesia to quit tin producers' group Indonesia will quit the Association of Tin Producing Countries (ATCP) in August because it regards the group as ineffectual, a government source said last week. "Indonesia will quit as a member of the ATPC in August because the organisation is ineffective in raising prices," the source told Reuters. Indonesia is one of the world's biggest tin producers. Malaysia, a founder member of the group, has also been talking of leaving the ATPC but no formal announcement has been made.

Other members include Bolivia, China and Nigeria. Thailand and Australia left the organisation in 1996. The last annual meeting of the ATPC was held in the Nigerian capital of Abuja last September.Bank's decision on gold lauded

TheWorld Gold Council Chairman Don Morley said the European Central Bank's decision to hold only 10 to 15 per cent of its reserves in gold was not bad news for the precious metal. "There had been rumours it would be zero and there were rumours it would be 25 per cent. It ended up in the middle. On balance, it was where reasonable commentators had expected it," he told a news conference in Dubai. ECB President Wim Duisenberg said the bank's council had reached a consensus that 10 to 15 per cent of the central bank reserves would be in gold. Analysts said the figure was below market expectations, which sent gold prices sharply lower. "I do not think it is a negative result for gold.

Australian mineral exports fall

Australian export earnings from minerals and energy fell by four percent, or A$414 million, in the March quarter to A$9.87 billion, the Australian Bureau of Agricultural and Resource Economics (ABARE) said last week. But while down in the quarter, export earnings were up by 17 percent, orA$1.411 billion, on the March quarter 1997.

The main reason for the quarterly fall in earnings was significantly lower export volumes. ABARE executive director Brian Fisher said this reflected seasonally lower production levels.

Russia's nickel firm to sustain output Leading Russian metals producer Norilsk Nickel plans to keep output steady this year despite weakness in metals markets, Vsevolod Generalov, chairman of the board, told the annual shareholders meeting. "Despite the fall in metal prices we are not planning a significant reduction of output in 1998 and in subsequent years," he said.

But he added that the company would continue a cost cutting process, and this could be done partly by temporarily halting, but maintaining in good order, surplus capacity. "We are planning to mothball smelters in Severonikel as well as surplus units in Pechenganikel," he said, referring to Norilsk subsidiaries in the north.

(Compiled from Reuters and agencies)