The iron ore price rose on Friday as traders returned from the New Year holidays feeling optimistic about potential demand recovery in China.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $128.03 a tonne during morning trading, up 0.3% compared to Thursday’s closing, the highest since October 12.

Iron ore’s most-active May contract on China’s Dalian Commodity Exchange ended daytime trading 1.4% higher at 719 yuan ($112.78) a tonne, rising for a fourth straight session and touching 725.50 yuan earlier in the day.

“The current rise in raw materials and the limited production during the Winter Olympics have boosted steel prices to a certain extent, but the demand side is still weak,” Sinosteel Futures analysts said in a note.

China is expected to curb mills’ operations in its steel production hubs to ensure clean air during the Beijing 2022 Olympics next month.

But analysts said hopes for an easing of steel production controls after the Games have helped underpin iron ore, along with some restocking demand ahead of the Chinese Spring Festival holidays starting January 31.

“After the Winter Olympics, there is an opportunity to relax the production limit (for steel),” analysts at Zhongzhou Futures said in a note.

(With files from Reuters)

Nevada-based Allegiant Air has said it will buy 50 new Boeing 737 MAX jets as the ultra-low-cost airline, which mainly relies on used Airbus aircraft, aims to switch supplier and strategy amid a post-pandemic travel rebound.

The jets are worth $5.5 billion and will be delivered in several steps. The airline will take delivery of an initial batch of planes next year, while the remaining deliveries are scheduled throughout 2024 and 2025, Chief Financial Officer Greg Anderson told Reuters on Wednesday.

According to Anderson, the new jets are expected to add seating capacity and 20% fuel savings compared to Allegiant’s older Airbus aircraft.

The carrier reportedly agreed to purchase 30 737 MAX 7 aircraft and 20 737 MAX 8-200 aircraft, making it the launch customer for that larger variant in the US.

The company “has experienced one of the strongest recoveries of US airlines,” Jefferies analyst Sheila Kahyaoglu said, as quoted by the agency, adding that the latest order is evidence of post-pandemic confidence in leisure travel “vastly outperforming corporate travel.”

“With this deal, and these new MAX aircraft, it will provide the ability to grow into 400 more routes,” Anderson said.

For Boeing, the deal is a much-needed boost after two of its key medium-haul customers, Qantas and several affiliates of Air France-KLM, switched to Airbus in December. Shares of the aerospace giant surged 1.3% on the news, while the stock of airline parent Allegiant Travel dropped around 8%.

The 737 MAX was universally banned from taking to the skies after two deadly accidents in late 2018 and early 2019, which claimed 346 lives.

In October 2018, Lion Air Flight 610 crashed into the Java Sea 13 minutes after takeoff, killing 189 people. In March 2019, Ethiopian Airlines Flight 302 crashed near the town of Bishoftu just six minutes after takeoff, killing all 157 people on board.

It took Boeing several years to get the troubled aircraft back in the sky by addressing security concerns and obtaining vital approvals from aviation regulators across the world.

I thought I knew what it was to be black in American until I met a reindeer herder in a more remote part of Mongolia. A grandmother there was so fascinated by the three members of the group with dark skin that she pulled us out from the rest of the group and gestured to take a picture.

I could tell the rest of the group felt extremely awkward. Race and culture is a very touchy subject in the U.S. and the conversation about how we continue living with those differences continues. But I realized this wasn’t the U.S. and the attention strangers were paying to my race was about something else.

Taking a step back, I was able to put things into context. For all I knew, I may have been the only black woman in Mongolia at the time. I thought about what my best friend told me to remember before I left home: “Ignorance does not mean harm.” It was not the fault of the young girl in the market that she had never seen anyone that looked like me and wanted to touch my hair. This didn’t make the old woman a bad person because she wanted to take a photo of black people. In her long life, she had never seen anyone who looked like me. It was an exposure that she did not understand because she had never seen it.

As one of three black students on the trip, my biggest challenge was navigating the reaction of people native Mongolians to my race.

Mongolia is a landlocked country between Russia and China and has one of the smallest population densities in the world. The capital Ulaanbaatar is the only major city and the overall population is very homogeneous.

It was my third day in an environment that was still completely foreign to me. We were shopping at the well-known Black Market, a huge flea market in the middle of Ulaanbaatar where you could buy anything from traditional Mongolian deels, a tunic-like garment, to sunglasses and food. It is also a hotspot for pickpockets. That is why I was nervous when I felt something tickle the back of my head. However, as I turned around, I saw a young girl holding onto the bottom of my braid. She wore glasses and a light pink dress. Her family stood behind her, watching for my reaction. I felt shocked and confused, uncomfortable suddenly being the center of attention. In that moment, there was nothing I could do but smile awkwardly. When I look back, I think that even without a language barrier between us, I would have still reacted the same way.

These experiences gave me another purpose in Mongolia. As the only black person the Mongolians who I encountered may ever meet, it was up to me to teach them about my culture. It also broadened my perspective on race outside of the American context, which is all I had ever known up to that point.

Being in Mongolia forced me to learn about cultural appreciation, respecting differences and educating others. I went from feeling singled-out to seeing an opportunity to engage with the Mongolian people in a different, unexpected and important way.

Jadeen Samuels is a senior high school student in New York.

According to the General Customs Administration, total foreign trade turnover has reached USD 16095.8 million, which shows an increase of USD 3220.5 million or 25 percent compared to the same period of the previous year.

The export amount has exceeded the import’s by USD 2398.5 million, showing positive indicator in the foreign trade balance. Exported goods and raw materials amounted to USD 9247.1, 22 percent increase compared to the same period of the previous year.

In the total export, the export of mineral products made up 81 percent, jewelry and precious stones—11.1 percent, plant-origin products—1.0 percent, finished food products—0.5 and textile items 4.0 percent.

In 2021, the country exported crude oil, iron ore, copper and zinc concentrate to only China, and 92 percent of coal to China. 84.6 percent of unprocessed or semi-processed gold was exported to Switzerland, and 15.4 percent-to the South Korea.

Last year, 82.6 percent of the total export was supplied to China, 9.4 percent -- to Switzerland, 2.8 percent – to Singapore, and 2.4 percent --to the Republic of Korea, which means the export to these countries accounts 97 percent of the total exports.

Energy-hungry China is reportedly looking to boost its purchases of natural gas from Russia due to the ongoing trade row with Canberra, which may put at risk deliveries from Australia, China’s number one gas supplier.

China, the world’s largest natural gas consumer, heavily relies on energy imports. In 2020, the country purchased 43% of its gas requirements from abroad, including 89 billion cubic meters of liquified natural gas (LNG) and 46 billion cubic meters of pipeline gas, according to data revealed by the General Administration of Customs.

The trade data compiled by Refinitiv shows that Australia was China’s biggest supplier of gas in the first nine months of last year, followed by the US, another country whose relations with Beijing have been in steady decline in recent years.

A second supply channel with Russia “will partly meet China’s rising demand and also help diversify its imports,” according to Tian Miao, a senior analyst with Everbright Sun Hung Kai, as quoted by SCMP.

Trade and diplomatic tensions between China and Australia have been increasing for several years, especially after Canberra banned Chinese vendors from its 5G rollout. The situation worsened when Australia backed a US call for an international probe into Beijing’s alleged role in the Covid-19 outbreak.

As a result, Beijing has slapped high tariffs on Australian wine, while China’s purchases of Australian coal reportedly dropped by an enormous 89.7% from January-November 2021. The Australian government has retaliated by killing two deals under China’s Belt and Road Initiative between the state of Victoria and China.

Russian natural gas is currently being sent from Far-Eastern Yakutia to China through the Gazprom-operated Power of Siberia pipeline, which first became operational in December 2019. Meanwhile, the projected Power of Siberia 2 gas pipeline is expected to pump 50 billion cubic meters of gas annually to northern China.

“Just as it makes sense for the EU to use [liquefied natural gas] as a political hedge… it makes sense for China to use Russian pipeline gas as a political hedge or backup for its high reliance on LNG – large amounts of which come from Australia and the United States, with whom Beijing’s relations have deteriorated over the past years,” said Henning Gloystein, director of energy, climate and resources at Eurasia Group, as quoted by SCMP.

So far, the ongoing dispute between Canberra and Beijing has not extended to LNG or iron ore. However, Australia received no new long-term supply contract from China in 2021, according to data tracked by market intelligence provider OilChem.net, which also disclosed that some of its market share had been eroded by Qatar, Russia and the US.

Bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted, Goldman Sachs analyst Zach Pandl said in a research note to clients.

Citing bitcoin’s $700 billion market capitalization, compared to the around $2.6 trillion worth of gold owned as an investment, Goldman Sachs said that the cryptocurrency currently has a 20% share of the “store of value” market.

Bitcoin will “most likely” become a bigger proportion over time, Goldman Sachs said, in a list of 2022 predictions.

In a hypothetical scenario in which bitcoin grabs a 50% share of this market, its price would reach just over $100,000, the note said.

Bitcoin was trading around $46,073 on Wednesday, having struggled to make gains after falling sharply in early December. In November, it had hit an all-time high of $69,000.

“Bitcoin may have applications beyond simply a “store of value” – and digital asset markets are much bigger than Bitcoin – but we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns,” Pandl wrote.

The term “store of value” usually describes assets which can maintain their worth over time without depreciating, such as precious metals or some currencies.

Goldman Sachs restarted its cryptocurrency trading desk in 2021.

(By Elizabeth Howcroft; Editing by Saikat Chatterjee)

At an irregular meeting today on January 6, the Cabinet approved the strategy and structure of the Ministry of Economy and Development and the Ministry of Digital Development and Communications, which will soon be established.

The Ministry of Economy and Development will consist of seven departments and eight divisions in charge of matters, including policy planning for development, region and industry, development financing, development research and analysis, trade and economic cooperation with 80 job positions.

The Ministry of Digital Development and Communications will consist of six departments and eight divisions in charge of matters such as implementation of digital development policy, communications policy, and cyber safety policy with 87 job positions.

During the meeting, the Communications and Information Technology Authority of Mongolia (CITA) and the National Development Agency have been dissolved.

Jan. 6 (Xinhua) -- Mongolia's foreign trade turnover increased to 16.2 billion U.S. dollars in 2021, up 25 percent from the previous year, data released by the Mongolian Customs General Administration showed Thursday.

The country registered a foreign trade surplus of 2.4 billion dollars, said the administration.

Mining products accounted for 81.3 percent of the mineral-rich country's total exports in 2021, it said.

Chinese President Xi Jinping’s colossal infrastructure project - Belt and Road Initiative (BRI) -plans to create a vast network of roadways, railways, oil and gas pipelines, and streamlined border crossings stretched from East Asia to Europe. Although Xi launched BRI in 2013, it has been devised on decades of experience to expand China’s global strategic footprint. Within BRI, China-Mongolia-Russia Economic Corridor (CMREC hereafter) is the shortest land corridor between Mongolia and its neighbours that opens up alternative transit routes to facilitate trade and investment in the Eurasian region. Moreover, CMREC involves China, Mongolia, and Russia, all of whom have comprehensive strategic partnerships with each other.

On 11th September 2014, Xi proposed a trilateral regional initiative to link China’s BRI, Mongolia’s Development Road Initiative (referred to as Steppe Road), and Russia’s Trans-Eurasian Railway Network. As a buffer state between China and Russia, Mongolia’s geostrategic location is crucial for linking the BRI, Steppe Road, and Trans-Eurasian Railway network to provide economically viable export routes for three countries – for Chinese manufactured items; for Russian oil and gas; and for Mongolian natural resources such as coal, iron, silver, copper, crude oil, and gold. On 23rd June 2016, China, Mongolia, and Russia signed a tripartite agreement in Tashkent to build CMREC projects, which aim to improve transport connectivity through road, rail, and port construction; and cooperation in trade, investment, energy, agribusiness, communication technology, environment and ecological protection.[i]

The paper tries to assess the transport and connectivity aspect of the CMREC, in particular the section of Tianjin-Ulaanbaatar-UlanUde Central Route that passes through Mongolia, its current status and its geopolitical dimensions.

The Tianjin-Ulaanbaatar-UlanUde Central Route (Central Route hereafter) has a single-track railway freight corridor as well as an international roadway between China, Mongolia, and Russia. This single-track railway freight corridor was built by the Soviet Union that has been in use for many decades. In 2018, China completed the construction of the international roadway for transit trucking service along the central route. The Central Route connects UlanUde (Eastern Siberian City) and Ulaanbaatar (Mongolian Capital) to the Tianjin port via Erenhot (a Chinese border town in Inner Mongolia). Mongolia has been over-dependent on this Central Route to import and export to China.[ii]

While Mongolia allowed China to construct roadways along the Central Route, the up-gradation of the single-track railway freight corridor into a double-track electrified railway freight corridor did not happen due to geopolitical competition between China and Russia.[iii] China has adequate capital and finance to upgrade this single-track railway freight corridor. But, the ground reality indicates that all Chinese railroad projects are only on paper in Mongolia, awaiting implementation.[iv] For better access to China’s vast market, technology, labour, and infrastructure, there have been constant demands by some groups of Mongolian people to allow the narrower Chinese track gauge (1435 mm) in Mongolia. Russia does not allow the change in railroad standards as it is a matter of geopolitical influence, considering that any infrastructure development project has always had the dual-use potential for civil-military purposes.[v]

Russia was critical of Chinese investments in Mongolia for many years. Ultimately, a tripartite consensus has been reached to upgrade the Tianjin-Ulaanbaatar-UlanUde Central Route into a double-track electrified railway line by 2030. However, the precondition is to use the Russian locomotives in the up-gradation process, which will be bought on the additional loans from the Russian Banks. A few years back, the Mongolian Parliament approved building two Chinese railroad projects with narrower track gauge standard (1435 mm) from the Tavan Tolgoi coal mine and Khuut coal mine to the Erenhot border port. In 2020, however, the Supreme Court of Mongolia overturned the decision regarding narrowing the gauge for the railroads; therefore, Mongolia remains strictly committed to a 1520 mm broader track gauge favouring the existing Russian-Mongolian rail system. In other words, the traditional Russian-Mongolian military and technical ties check and balance the Chinese geostrategic influence in the CMREC freight corridor projects in general.[vi]

It is worth mentioning that Mongolia’s trade route with the world passes through the Erenhot port (a Chinese port in Inner Mongolia) that has been transformed into an important rail freight hub. At Erenhot port, China has built massive infrastructure and railroad facilities to increase the passing capacity and total cargo volume annually. With 8000 freight trains this year, Erenhot port became a significant transportation channel that carries cargo up to Malaszewicze in Poland. The Erenhot port now serves 53 China-Europe freight trains to deliver goods in ten European countries.[vii] Already, 1497 freight trains passed through the port with 10.2 million tonnes of cargo until July 2021.[viii] But the problem lies on the Mongolian side of the international border due to the incompatibility between the Russian-Mongolian rail track gauge (1520 mm) and the Chinese rail track gauge standard (1435 mm). It takes a longer time in overall border transit because of the required change in bogies of the freight trains.[ix] Beyond the Tianjin-Ulaanbaatar-UlanUde Central Route Railroad Corridor, there are ideas on paper about Tavan Tolgoi Railroad Project that seeks to link Mongolia’s Tavan Tolgoi Coal Mine to the Erenhot port. There is hardly any progress in implementation that has been made so far. The non-upgradation of the Central Route Railway Freight Corridor limited Mongolia’s regional trade and impacted its economic development to its full potential.

Economically, Mongolia has been trying to integrate with other regional economies. Within the first ten months in 2021, Mongolia’s foreign trade with 151 countries was around a total trade volume of USD 13.2 billion. During the same period, Mongolia exported 86 per cent of its total exports to China, while the total imports were 39.7 per cent from China.[x] In 2017, when Mongolia signed the USD 5.5 billion bailouts by the International Monetary Fund (IMF), the Chinese debt of USD 2.743 billion was approximately 10 per cent of its external debt of USD 27.43 billion. In 2020, however, Mongolia’s nominal external debt of USD 28.91 billion was around 220 per cent of its total GDP of USD 13.14 billion.[xi] The rapidly increasing Chinese debt resulted in Mongolia’s reluctance to sign any major investment deal with China. In addition, Mongolia’s quest to diversify its trade and investment portfolio can be driven towards reducing its overdependence on the Chinese economy in the long run. In this backdrop, Mongolia did not permit three Chinese banks (Industrial and Commercial Bank of China, Export-Import Bank of China, Bank of China) to operate and finance the infrastructure projects in Mongolia.[xii]

To make sense of contemporary Mongolian policy-making, one needs to briefly look at the Mongolia-Russia relations too. Mongolia was never a part of the erstwhile Soviet Union. In the 1940s-50s, the joint construction of the Trans-Mongolian Railroad Network (2200 kilometres long) was done by the Soviet Union and Mongolia. Since then, Russia inherited 50 per cent ownership in Trans-Mongolian Railroad Network. Now, any railroad track up-gradation project requires Russia’s prior involvement or approval. Russia’s military and technical ties make Mongolia a geostrategic buffer state to safeguard the security interests of its Far Eastern region. After adopting the 1992 Constitution, Mongolia institutionalised its military neutrality considering the security interests of Russia and China. However, in reality, Russia’s traditional military and technical ties with Mongolia are stronger than Mongolia’s present relations with China.[xiii]

To sum up, Mongolia looks to Russia as a security provider traditionally while now considering China as an economic opportunity with caution to avoid its debt-trap diplomacy and increasing trade deficit in China’s favour. Russia’s debt cancellation, free visa regime, and vaccine diplomacy won the heart and minds of Mongolians. But, Russia finds itself in a tight spot to match China’s increasing economic footprint in Mongolia, a common concern for both Russia and Mongolia.[xiv] Recently, Mongolia welcomed the construction of Central Route Roadways by China as well as the improved fuel supplies and haulage services along the Central Route. However, the main challenges, such as Mongolia’s landlocked location as a geostrategic buffer state, low financing, and rail gauge incompatibility between Russian and Chinese standards in Mongolia, have been the main reasons behind the delayed implementation of the CMREC projects. Given the traditional Sino-Russian strategic competition in Mongolia, perhaps short and mid-term investments from India, Japan, South Korea, European Union, and others could help develop Mongolia as a pivotal transit and logistic hub for the Eurasian region.[xv]

By: Dr. Sudeep Kumar, Research Fellow, Indian Council of World Affairs, New Delhi.