Chinese Steel Market Highlights – Week 44, 2018

This week Chinese steel market reported downtrend in domestic prices along with lower offers in export market. Flat steel export offers recorded significant drop W-o-W basis over thin trades and decline in domestic prices.

Although rebar export offers remained steady on weekly basis. Spot iron ore prices dropped over volatility in prices. Billet export offers remain on lower side and coking coal offers soften further over slowdown in buying activities from Chinese steelmakers.

Chinese spot iron ore prices inch down by weekend- Chinese spot iron ore prices opened up this week at USD 76.80/MT, CFR China and reduced to USD 74.1/MT, CFR China towards the week end. Market reports indicated that with fines restocking coming to an end, buyers have hold back purchases and booking material at higher offers in anticipation of further decline in prices in coming days.

Iron ore inventory at Chinese major ports reduced to 141.65 MnT, down 2.2 MnT against 143.85 MnT last week.

Spot pellet premium for Fe 65% grade pellets assessed at USD 71.35/DMT, CFR China down by USD 1/DMT W-o-W against USD 72.35/DMT in previous week.

Spot lump premium has witnessed increase this week to USD 0.3409/DMTU, amid tight supply since it remained stable for past two weeks at USD 0.3350/DMTU. Lump demand in Chinese market remains strong in winter heating season and demand expected to remain supported with Chinese government unlikely to give relaxation on environmental control.

The lump inventory at Chinese major ports reduced to 16.6 MnT this week as against USD 17.2 MnT last week.

Coking coal offers move down gradually – Seaborne coking coal offers is inching downwards as Chinese mills are waiting for clarity on winter production cuts as implementation has not yet started and most steels mills are still running at full capacity.

Meanwhile stringent port restrictions in Southern and Northern China are expected to be enforced until the end of the year, as more quotas will be allocated to thermal coal cargoes in the winter.

Currently Premium HCC prices is assessed around USD 218.25/MT FoB Australia. Last offers was hovering in range of USD 219.50/MT FoB basis.

Chinese domestic billet prices fall – Domestic billet prices in China have come down amid soft demand. Current spot price assessment is at around RMB 4,010/MT (including VAT) for 150*150mm billet Q235 against RMB 4,060/MT in last week.

Chinese HRC export offers slide further – Chinese HRC export offers is persistently showing downtrend over sluggish buying in export market.Meanwhile thin trades in domestic market is collectively pulling down steel prices from China.

Currently HRC export offers from China is assessed around USD 530-535/MT FoB basis. In the beginning of the week the offers was at USD 535-540/MT FoB basis.

Domestic HRC prices witness decline by RMB 130-140/MT on weekly basis and are hovering at at RMB 4,030-4,050/MT (ex-works) in Eastern China and down by RMB 50-60/MT W-o-W basis and are heard at RMB 4,030-4,040 /MT in (Northern China).

Meanwhile Chinese steelmakers are expecting further fall in HRC offers in export market after adjustment of rebate rates.

Chinese Re-bar export offers inch down slightly– Nation’s re-bar export offers inch down  this week since domestic rebar prices remain range bound.

Currently, nation’s re-bar export offers are at USD 577/MT FoB China.Last week rebar export offers was assessed at USD 578-580/MT FoB basis.

Major mills in China are offering rebar export offers at USD 585/MT FoB basis.

Domestic rebar prices remain unchanged on D-o-D basis and is assessed at RMB 4,650-4,690/MT in (Eastern China) and RMB 4,460-4,500/MT in (Northern China).

Chinese steel makers are expecting dull demand in rebar in upcoming months due to bad weather conditions in China.

Chinese Iron and Steel Prices Week 44,2018

Source- SteelMint Research