Chinese Steel Market Highlights- Week 14, 2018

This week Chinese steel market remain largely stable in domestic and export market amid national holidays. Chinese steelmakers are on holiday from 5th April for long weekend on the occasion of Tomb Sweeping festival and will resume their operations from next week.

However in the beginning of the week prices showed upward momentum but remained stable during the week.Coking coal offers remained range bound.Although re-bar and flat steel export offers moved up marginally and iron ore prices  fell slightly

According to the recent reports, China’s Wu’an, a country-level city administered as a part of Hebei province has ordered its ten major steel companies to operate at 50% of production capacity as a part of new measures to control pollution from Apr’18 to Sep’18. These new orders came shortly after China’s winter heating season ended in Mar’18.

The city has also directed its coking industry to reduce output by 25% over that period, while power and cement firms must cut production by around 20%.

Chinese spot iron ore prices fell slightly – China spot iron fines prices fell marginally in the 1st half of the week and then remained flat amid holidays. Trade activities remained dull amid bearish market sentiments. Iron ore fines (Fe 62%) index stood at USD 63.0/MT, CFR China by the week close against USD 65.4/MT, CFR in the beginning of this week.

Spot pellet premium assessed at USD 44.5/MT, CFR China. Spot lump premium was assessed at USD 0.188/DMT, CFR China.

Coking coal offers remain range bound- Australian coking coal offers have slightly increased this week. Currently,Premium HCC prices was assessed at around USD 197.50/MT FoB Australia. Last week the offers were heard at USD 196.50/MT FoB basis.

After the news of DBCT who has declared the force majeure due to the occurrence of the tropical cyclone, Iris results to decline in coking coal prices.Also,before declaration of the force majeure, there were at least 20 vessels in queue at the DBCT. Although cyclone has now receded but moisture levels at stocks have gone up.

Billet export offers from China move up – Domestic billet (150*150mm, Q235) prices in Tangshan, China are assessed at RMB 3,460/MT (including 17% VAT) against RMB 3,500/MT in the beginning of this week. However amid holidays, assessment has remained flat towards the weekend.

However Chinese billet export offers increased after increase in futures. Chinese billet export offers were heard at USD 520/MT FoB against last week’s assessment of USD 510/MT, FoB .

Chinese HRC export offers edge up in beginning of this week- China’s HRC export offers inched up in the beginning of the week.However after showing marginal rise,prices remain unchanged owing to stability in domestic market amid festive holidays from 5th April on the occasion of Tomb Sweeping Festival.

Currently Chinese HRC price assessment is in the range of USD 585-605/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

Prices of HRC in the domestic market are gauged at RMB 3,850-3,900/MT (ex-works) in Eastern China and at RMB 3,840-3,870/MT in Northern China.

Chinese Re-bar export offers inched up marginally –Nation’s re-bar export offers inched up in the starting of the week over rising futures.However after showing rising trend prices remain stable during the week amid holidays.

Currently,nation’s re-bar export offers are at USD 540-575/MT on China.However market participants are expecting the prices to be on lower side which is around USD 525-540/MT FoB basis.

Meanwhile prices in the domestic market are heard at RMB 3,650-3700/MT (Eastern China) and RMB 3,730-3,750/MT up by RMB 30-40/MT(Northern China).

Chinese Iron and Steel Prices Week 14

Source-SteelMint Research