China Steel Market Highlights – Week 51,2018

This week Chinese steel prices witness uptrend amid expectation of improved demand post production cuts as the buyers have started restocking the material in China.However gains in domestic market lead to upsurge in export offers from China. Also this week, China’s central bank announced targeted policy to increase lending to small and private firms.

Flat steel and re-bar export offers witnessed uptick over surge in domestic prices.Iron ore prices increased through out the weekend.coking coal prices remained stable this week over adverse weather conditions in Australia.

Chinese spot iron ore prices witness surge by the weekend – Chinese spot iron ore prices opened up this week at USD 70.5/MT, CFR China and increased to USD 72.15/MT towards the weekend. Fines prices have picked up amid expectation of better steel market as mills have started restocking activities which will continue till mid-January. The Iron ore inventory at Chinese major ports reduced to 136.90 MnT against 137.10 MnT in previous week.

Spot lump premium witnessed increase this week –  This week lump premium stood at USD 0.3721 /DMTU as against USD 0.3200/DMTU last week. The preference for lumps is rising amid sintering cuts announced in city of Tangshan.

Spot pellet premium drop as fines index moves up -Spot pellet premium for Fe 65% grade pellets assessed at USD 45.85/DMT, CFR China this week, down by USD 3.25/DMT W-o-W against USD 49.10/DMT /DMT in previous week.

The pellet premium has dropped this week over surge in iron ore prices on weekly basis.Besides this, mills are preferring more of domestic concentrates to produce pellets as it is less expensive compared to imported pellets.

Meanwhile Pellet inventory at major Chinese ports depicted rise to 2.85 MnT this week as against 2.8 MnT a week before.

China Crude ROM in Nov’18 hit Highest in CY’18-According to National Bureau of Statistics, China has witnessed crude iron ore production at 68.89 MnT in Nov’18, highest in CY’18 against 68.82 MnT in Oct’18.In Jan-Nov’18 the same stood at 724.63 MnT down 40% against 1212.38 MnT in similar time frame of previous year.

Coking coal prices remain stable – Seaborne premium-grade coking coal prices from Australia remain largely stable amid severe weather conditions in Queensland.

However in China buying interest has slowed down, as most purchase requirements have already been fulfilled earlier in consideration of bad weather conditions in Australia.

Thus,premium HCC coking coal prices are heard around USD 226/MT FoB Australia.However last week coking coal prices remained at similar levels.

Domestic billet prices in China edge up – Domestic billet prices in China moved up towards end of this week following announcement of steel capacity cuts in Tangshan and Xuhzou. Current assessment for billet stands around RMB 3,500/MT (including VAT).

Chinese HRC export offers inch up by the end of week – Chinese HRC export offers inch up by the weekend over increase in domestic prices.

Currently HRC export offers from China is assessed around USD 480-485/MT FoB basis.However last week the offers was in range of USD 475-480/MT FoB basis.

Meanwhile prices of HRC in the domestic market raised by RMB 100/MT on weekly basis and presently domestic HRC is assessed around at RMB 3,810-3,820/MT (ex-works) in Eastern China which was RMB 3,710-3,720/MT in previous week.

Chinese re-bar export offers reported surge over gains in domestic market- Nation’s re-bar export offers move up slightly over higher prices of billet in domestic market.This week re-bar export offers surge by USD 5-10/MT on weekly basis.

Currently, nation’s rebar export offers are at USD 485-490/MT FoB China. Last week rebar export offers was assessed at USD 475-480/MT FoB basis.

Domestic rebar prices moved up RMB 20-30/MT on weekly basis and is assessed at RMB 3,800-3,830/MT in (Eastern China) as compared to RMB 3,780-3,820MT (Eastern China) in beginning of the week.

Chinese steel market Highlights – Week 51,2018

Source- SteelMint Research