Chinese Steel Market Highlights – Week 35, 2018

This week Chinese steel market characterized by fall in domestic steel prices over increased supply in domestic market.This in turn results to drop in exports offers from China.

Flat steel export offers registered decline. Rebar export offers remain range-bound over weak buying.Coking coal offers inch down amid softening of demand among end users in China.Billet export offers continue to remain steady.However iron ore prices witness slight decline by the weekend.

Chinese spot iron ore prices decline marginally – Chinese spot iron ore prices opened up this week at USD 65.85/MT, CFR China and decreased to USD 65.75/MT, CFR China towards the week end.

Spot lump premium increased by USD 0.0084/DMTU this week to USD 0.2900/DMTU, CFR, amid improved demand. However, lump prices are expected to stay firm amid sintering restrictions in China along with uptrend in coke prices.

Lump inventory at Chinese major ports has witnessed rise this week to 21.60 MnT, as against 21.50 MnT a week before.

This week spot pellet premium for Fe 65% grade pellets assessed at USD 87.50/DMT, CFR China up by USD 3.30/DMT W-o-W against USD 84.2/DMT in previous week.

Coking coal offers inch down- Seaborne coking coal offers move down marginally owing to inactive buying.However higher met coke prices kept market sentiments positive and improved buying from end users in China.

Although port queues and import restrictions hampers buying activity from steelmakers in China.

Currently Premium HCC prices are assessed around USD 183/MT FoB Australia.Last week the offers was in range of USD 184.13/MT FoB basis.

Chinese domestic billet prices move down– Domestic billet prices in China have come down throughout this week. Current spot price assessment is at around RMB 4,060/MT (including VAT) for 150*150mm billet Q235. Chinese billet export price assessment remained mostly stable at W-o-W at USD 535-540/MT, FoB basis.

Chinese HRC export offers decline over falling domestic prices-This week Chinese HRC export offers decline in line with falling HRC prices in domestic prices.Increase in supply results to decline in domestic prices in China

Currently Chinese HRC export offers heard around USD 575-580/MT, FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

However last week Chinese HRC export offers was hovering around USD 585-590/MT FoB China.

Domestic HRC prices dropped by RMB 60-80/MT W-o-W basis.Prices of HRC in the domestic market are gauged at RMB 4,330-4,350/MT (ex-works) in Eastern China and 4,250-4,260 /MT in Northern China.

Meanwhile nine blast furnace  have resumed their normal production which was restricted to 50% in summer season.

Thus Chinese mills have kept HRC export offers on lower side amid dull demand in overseas market.

Chinese Re-bar export offers remain range-bound -This week Chinese rebar export offers remain range bound over plunge in rebar prices in domestic market.

Currently,Chinese re-bar export offers are at USD 567/MT FoB China. Last week the offers was hovering in the range of USD 565/MT FoB basis.

Major mills are offering on higher side which is around USD 605/MT FoB China.However market participants are expecting decline in prices in near term.

Domestic rebar prices stood at RMB 4,380-4,430/MT in (Eastern China) and RMB 4,330 – 4,360/MT in (Northern China).

Rebar prices are expected to decline further amid weak demand in construction sector.Also mills have not yet started recent production cuts as announced in Tangshan region in China.Thus increase in supply may also results to further downside in prices.

Chinese Iron and Steel Prices Week 35,2018

Source-SteelMint Research