Chinese Steel Market Highlights – Week 18, 2018

Chinese steel market showed upward momentum post labour holidays scheduled in the beginning of the week. Post holidays, mills resumed their operations with rise in prices along with increase in futures. Domestic steel prices in China increased over low inventories. China’s Shagang Steel also hiked rebar & wire rod prices for early May. Flat Steel and re-bar export offers inched up marginally. Coking coal prices remained stable and iron ore prices fell towards the weekend.

China’s Xuzhou city in Jiangsu province has also issued orders to extend production cuts in ‘Non-heating season’ in a bid to meet state air quality standards. As per the market sources, at least three steel mills having combined steel capacity of 4.25 MnT pa in the Chinese city of Xuzhou in Jiangsu province have currently suspended their operations amid local authority orders to shut down plants until they meet tough anti-pollution rules.

Chinese spot iron ore prices fell sharply towards weekend – China spot iron fines prices declined from USD 66.8/MT, CFR China in the beginning of the week to USD 66.3/MT, CFR by Friday. Seaborne iron ore prices also fell following decline in ferrous futures after China’s Dalian Commodity Exchange (DCE) opened up its futures market to overseas investors.

Spot pellet premium edged up this week and is assessed at USD 43.3/MT, CFR China. Few market participants expect pellet demand in China to pick up in coming days after Labour day amid sintering restrictions.

Spot lump premium was assessed at USD 0.17/DMT, CFR China.Iron ore inventory at Chinese major ports was recorded at 160.3 MnT, up 1 MnT than a week ago.

Coking coal offers remain stable  this week – Australian coking coal prices remained stable this week.Also Chinese steelmakers have resumed their purchases which can lead to active buying and improved demand for coal from Australia.

During this month, imports of the coal by Indian steel makers are also expected to increase as they are planning to pile up the coal inventories ahead of the monsoon season.

Currently,Premium HCC prices was assessed at around USD 179/MT FoB Australia which is similar to previous week’s price levels.

Chinese billet export price assessment increase following domestic price hike – Chinese billet export offers have edged up this week to USD 540-545/MT, FoB China, up by USD 5/MT W-o-W. Domestic billet prices in China increased post Labor day holidays amid reduced steel inventories. Towards the end of this week, price of Q235 billet in Tangshan increased to RMB 3,710/MT (incld 17% VAT), up RMB 30/MT D-o-D.

Chinese HRC export offers uptick over increased prices in domestic market- China’s HRC export offers increased by USD 5-10/MT amid bullish sentiments prevailing in futures market post labour day holidays.This resulted in Chinese HRC prices in domestic and export market to increase.

Currently Chinese HRC price assessment is in the range of USD 590-615/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.Last week the offers stood at USD 585-605/MT FoB China.

Major mills in China have kept HRC export offers on higher side which is around USD 615/MT FoB basis.

Prices of HRC in the domestic market are gauged at RMB 4,180-4,200/MT (ex-works) in Eastern China and RMB 4,080-4,100/MT in Northern China.

Chinese re-bar export offers inch up slightly – Nation’s re-bar export offers inched up slightly however mills are selling more product locally over higher profit margins in domestic market.

Currently,nation’s re-bar export offers are at USD 545/MT FoB China.However major mills are offering on higher side which is around USD 580-585/MT FoB basis.

Meanwhile prices in the domestic market are heard at RMB 4,060-4,100/MT(eastern China) and RMB 3,910-3,940/MT (Northern China).

Although market participants are expecting that rebar prices may go up further amid improved demand from construction sector in China.

Chinese Steel Market Highlights – Week 18, 2018

Source: SteelMint Research