Chinese Steel Market Highlights- Week 28, 2018

This week Chinese steel market remained abuzz with China’s top steel-making city,Tangshan in Hebei province ordering steel mills, coke producers and utilities to cut output in summer season. This resulted in sharp increase in rebar futures.

According to the recent data released by General Administration of customs, Chinese finished steel export volumes drop by 14% to 35.45 MnT in H1CY18 against 41.01 MnT in H1CY17 amid production cuts and increased sales in domestic market.However on monthly basis the same inch up by 1% to 6.944 MnT in Jun’18 which was 6.88 MnT in May’18.

This week Chinese steel market was consumed with mixed sentiments as prices in domestic market increased and export offers remained on lower side. Flat steel export offers witness sharp decline and rebar export offers remain steady over weak demand.Billet export offers remain stable.Spot iron ore prices in China remain range-bound and coking coal prices fell amid weak buying from Chinese steel buyers.

Chinese spot iron ore prices remain range bound  – Chinese spot iron ore prices opened up this week at USD 63.25/MT, CFR China and rebounded to USD 63.8/MT, CFR China towards week end Iron ore inventory at Chinese major ports stood at 156.18 MnT, down by 0.2 MnT W-o-W.

Spot lump premium was majorly stable at USD 0.32/MT, CFR. Spot pellet premium increased and was assessed at USD 63.75/MT, CFR China.

Coking coal offers moved down by 10/MT over low purchases from China – Seaborne coking coal offers decline by USD 10/MT amid dull demand from steelmakers in China. New output restriction policy on steel and coke in summer season may reduce the demand of coking coal in near term.This in turn result to lower coking coal prices from Australia.

Thus sellers in Australia have started liquidating the stocks and are providing material in concessions.

Thus currently,Premium HCC prices were assessed at around USD 189/MT FoB Australia compared to USD 199/MT FoB basis last week.

Domestic billet prices in China moved up – Domestic billet prices in China have edged up towards week close after witnessing fall throughout the week. Prices are assessed at RMB 3,780/MT (including VAT) for 150*150mm Q235 grade against close of RMB 3,680/MT (including VAT) a week before. Chinese billet export price assessment was heard stable at USD 510-515/MT, FoB.

Chinese HRC export offer witness sharp decline- Chinese HRC export offers witnessed sharp decline of around USD 10-15/MT W-o-W.

Meanwhile imposed USA tariffs on Chinese steel products lead to fall in nation’s HRC export offers this week.

Currently Chinese HRC export offers heard around USD 575-580/MT,FoB China.However last week the offers are in range of USD 585-590/MT FoB basis.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 4,260-4,280/MT (ex-works) in Eastern China and 4,150-4,160/MT (Northern China).

Also with output restriction policy in Hebei and Tangshan region in order to curb pollution may lead to  reduced supply and higher prices in domestic market.However export offers may pick up in near term over surge in domestic prices.

Chinese Re-bar exports offers remain steady –Nation’s re-bar export offers remained steady amid weak demand from construction sector.

Meanwhile as per market reports,Chinese steel rebar futures hit 10 month high on falling inventories and anticipation of tight supplies over announced production cuts. China’s rebar inventory at 28 big cities came to 4.39 MnT, down 4.4% W-o-W. On similar lines, wire rod inventory fell 6.3%, as per data maintained with SteelHome.

Currently, Chinese re-bar export offers are at USD 550-552/MT FoB China. However last week the offers are assessed at similar range.

Meanwhile prices in the domestic market stood at RMB 4,060-4,100/MT in (Eastern China) and RMB 3,980-4,020/MT in (Northern China).

Chinese Iron and Steel Prices Week 27,2018

Source- SteelMint Research