China Steel Market Highlights – Week 4, 2018

This week Chinese steel market was filled with mixed sentiments over volatility ahead of new year holidays approaching in the month of February. Flat steel export offers likely to increase for March deliveries and re-bar export offers reported decline amid sparse trading.Also coking coal prices declined further as overseas buyers are expecting maximum fall prices.

 Seaborne iron ore prices increased towards weekend – Iron ore fines (Fe 62%) index fell from USD 75.9/MT, CFR in beginning of week to USD 74.25/MT, CFR on Thursday. On Friday, it again increased to USD 75.05/MT, CFR owing to last minute restocking interest by steel mills

Spot lump premium moved up to USD 0.158/DMT, CFR China. Pellet premium increased by USD 1.2/MT W-o-W to USD 43.1/DMT, CFR China.

Iron ore stock at Chinese major ports decreased by 1.3 MnT to 153.13 MnT against last week recorded stock of 154.43 MnT.

Coking coal prices Continue falling over subdued demand- Australian coking coal offers have started falling amid weak buying and subdued demand from overseas buyers.Since buyers have adopted wait and watch mode and expecting further fall in coking coal prices.

Absence of active buyers has made sellers no other option other than bringing down their spot prices.

Currently, Premium HCC prices were assessed at around USD 212/MT FoB Australia,move down significantly by USD 36/MT which was heard at USD 248/MT last week.

Chinese billet export offers moved up marginally – Chinese billet export offers went down marginally by USD 5/MT and are heard at USD 530-535/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 this week and stood at RMB 3,710/MT (ex-works, including 17% VAT) compared to RMB 3,690/MT against end of last week.

Chinese HRC export offers increase over anticipation of positive demand-Chinese HRC export offers reported increase for March deliveries amid anticipation of optimistic demand in domestic market.This week Chinese mills have raised HRC export offers by USD 10/MT W-o-W basis.

Currently HRC commercial grade ASTM A36 export offers are prevailing in the range of USD 580-590/MT,FoB China.However buyers are bidding on lower side.Payment are made on letter of credit basis for 1,000-10,000 MT.

Also,Chinese New Year Holidays is scheduled from 15th Feb and steel mills will remain closed for one week which may lead to rise in HRC export offers in near term.

Chinese Re-bar export market remain muted over sparse trading-Chinese rebar export offers reported decline this week amid sparse buying activity in global market.

Currently, nation’s re-bar export offers are at USD 550/MT on FoB basis. Last week the same stood at USD 560/MT,FoB basis. Also east China’s Shagang Steel lowered its long steel prices for 3rd time this month.

However,markets participants mentioned that bids were heard at USD 550-555/MT FoB basis.

Steel Raw Material & Finished Steel Prices in China

Source-SteelMint Research