Chinese Steel Market Highlights – Week 3, 2018

Seaborne iron ore prices in China witnessed fall till mid of this week before edging up towards the weekend. Similarly domestic billet prices in China fell towards the beginning of the week and then picked up towards the weekend.

Meanwhile, flat steel export offers decline marginally over week buying and re-bar export offers rose slightly amid gains in domestic billet market. Coking prices declined further with resumption of coal mining in Australia after New year holidays.

According to National Bureau of Statistics, China’s crude steel output in CY17 was recorded at 831.73 MnT up 5.7% Y-o-Y basis in CY’17 against 786.88 MnT in CY’16. Also nation’s finished steel exports witness significant decrease of 31% Y-o-Y to 75.43 MnT as compared to 108.53 MnT in previous year same period.

Seaborne iron ore prices moved up towards the weekend – Seaborne iron ore prices in China fell in beginning of the week amid falling semi-finished and finished steel prices. However towards the weekend, the prices inched up. Fe 62% fines prices climbed to USD 76.7/MT, CFR China on 19 Jan’18 which was at USD 77.85/MT, CFR China in the beginning of the week.

Spot lump premium moved up to USD 0.096/DMT, CFR China. Pellet premium increased by USD 2.6/MT W-o-W to USD 41.9/DMT, CFR China.

Coking coal prices started falling amid slack demand- Australian coking coal offers have started falling on account of slack demand from overseas buyers.However buyers have adopted wait and watch mode and expecting further fall in coking coal export offers from Australia.

Also,domestic coking coal prices in China have dropped which will compel the buyers to prefer domestic rather than going for exports.

Thus, Australian sellers will have to bring down their export offers to match the price difference in order to push Chinese and Indian buyers to import.

Currently, Premium HCC prices were assessed at around USD 236.50/MT FoB Australia, which was heard at USD 259.25/MT last week.

Chinese billet export offers declined by USD 10/MT – Chinese billet export offers witness decline this week by USD 10/MT and are heard at USD 515/MT FoB China.Last week the offers was in range of USD 525/MT FoB basis.

Chinese domestic billet prices in Tangshan (China) moved up towards the end of the week and stood at RMB 3,690/MT (ex-works, including 17% VAT) compared to RMB 3,600/MT in the starting of the week.

China HRC export offers decline marginally amid sparse trading- Chinese HRC export offers decline marginally owing to weak demand prevailing among overseas buyers. Towards the weekend offers moved up marginally.

Currently HRC commercial grade ASTM A36 export offers are prevailing in the range of USD 570/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.
Prices of HRC in domestic market was assessed at RMB 4,040-4,080/MT (Northern China) including VAT & other taxes.

Major mills in China have also lowered their HRC export offers and are heard in the range of USD 575-580/MT FoB basis.

Chinese Re-bar export offers rises over strong futures-Owing to rising futures and positive sentiments in billet market,Chinese rebar export offers gained the momentum by USD 5/MT.

Currently, nation’s re-bar export offers are at USD 560/MT on FoB basis.Last week the same stood at USD 555/MT,FoB basis.

However, markets participants mentioned that bids were heard at USD 555/-560MT FoB basis. Although buyers are anticipating hike in export offers in near term over hike in domestic re-bar prices.

Steel Raw Material & Finished Steel Prices in China

Source-SteelMint Research