Chinese Steel Market Highlights – Week 13, 2018

This week Chinese steel market started showing bullish sentiments owing to gains in domestic market. Increase in futures and gains in domestic market leads to uptick in steel prices.Flat Steel and Rebar export offers witness uptrend this week.However Coking coal offers moved down amid excess supply along with subdued demand from China.

China’s key steel producing region Hebei has recently released its new capacity cut plans for three years starting from 2018 to 2020. The province plans to cut steel capacity of 10 MnT in 2018, another 10 MnT in 2019, and 20 MnT in 2020 in order to keep the region’s steel capacity within the limit of 200 MnT by the end of 2020. It has also vowed to remove all the zombie enterprises by the end of 2018.

Wu’an, a part of Handan city in northern China’s Hebei province, ordered local steel mills Tuesday to cut their blast furnace utilization rate by 40-50% during the non-heating season.

Chinese spot iron ore prices remain range bound – China spot iron fines prices remained stable throughout the week. Trade activities remained thin. Iron ore fines (Fe 62%) index stood at USD 63.1/MT, CFR China by the week close.

Spot pellet premium edged up to USD 44.5/MT, CFR China. Spot lump premium was assessed at USD 0.19/DMT, CFR China.

Iron ore inventories at Chinese major ports increased by 0.8% W-o-W to 161.68 MnT.

Coking coal offers fell amid excess supply over slumped demand-Australian coking coal offers registered decline owing to sluggish demand, increased supply and weak buying from major importing nations.

On the other side Australian coking coal producers have accumulated the unsold inventories over lesser demand for coal from China since their steel plants are running on lower rates.

Meanwhile higher production of coking coal from China in turn decline in coking coal offers from Australia.

Currently,Premium HCC prices was assessed at around USD 196.50/MT FoB Australia. Last week the offers were heard at USD 207.5/MT FoB basis.

Chinese billet domestic offers increased towards the weekend – Domestic spot billet (150*150mm, Q235) prices in Tangshan, China assessed at RMB 3,510/MT by the week close against RMB 3,370/MT in the beginning of this week. Prices mentioned are including 17% VAT.

However Chinese billet export offers declined sharply after plunge in steel futures last week. Few trades of Chinese billets were reported with South East Asian nations at USD 530-535/MT, CNF (equivalent to USD 510/MT, FoB China).

Chinese HRC export offers rose marginally – Despite having a weak opening this weak, Chinese HRC export offers rose marginally over gains in domestic market. Increase in futures along with bullish sentiments in domestic market results to increases in HRC exports offers from China.

Currently Chinese HRC price assessment is in the range of USD 580-595/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

Meanwhile prices in the domestic market are gauged at RMB 3,820- 3,840/MT D-o-D basis in Eastern China (up by RMB 40/MT) D-o-D basis and RMB 3,790 – 3,810/MT (up by RMB 50/MT) in Northern China.

Chinese Re-bar export offers move up over rising futures-Nation’s re-bar export offers witness upward momentum amid gains in futures market.

Currently,nation’s re-bar export offers are at USD 555-560/MT on China.However market participants are expecting the prices to be on lower side which is around USD 530-540/MT FoB basis.

Meanwhile prices in the domestic market are heard at RMB 3,550-3,600/MT,D-o-D basis up by RMB 60-90/MT (Eastern China) and RMB 3,710-3,740/MT up by RMB 30-40/MT(Northern China).

Chinese Iron and Steel Prices Week 13

Source-SteelMint Research