Chinese Steel Market Highlights- Week 34, 2019

This week Chinese steel prices witnessed further downside amid volatile futures,weak domestic demand and lower bids from overseas buyers.

Thus,limited trades in both domestic and overseas market weighed on HRC and Rebar export offers from China.Billet export offers remained stable despite weakening domestic prices.Iron ore prices and Coking Coal offers also witness further decline on weekly basis.

Spot iron ore prices remain volatile –Chinese spot iron ore prices opened this week at USD 89/MT and closed at the end of this week in similar lines.However on daily basis prices were on 23rd Aug increased by around USD 4/MT D-o-D to USD 88.95/MT, CFR China.

As per data compiled by SteelHome consultancy,Iron ore inventory at major Chinese ports increased to 124.65 MnT last till 23rd Aug as compared to 123.15 MnT a week ago. FMG increased its discount for SSF low-grade fines for the month of Sep’19 to 11% from 6% in Aug’19.

Spot pellet premium increased W-o-W -: Spot pellet premium for Fe 65% grade pellets assessed at USD 30.5/MT, CFR China as against USD 27.10/MT, CFR China a week before.

Pellet inventory at major Chinese ports increased by 0.3 MnT to 4.9 MnT, move up on weekly basis compared to 4.6 MnT last week.

Spot lump premium move down on weekly basis- This week spot lump premium decreased to 0.125/DMTU against the last week assessment at USD 0.1550/DMTU. Steel mills are losing confidence to use lumps as the steel margins are weak amid sluggish demand.

Coking coal offers inch down marginally W-o-W basis- Seaborne low-volatile hard coking coal prices inch down further on weekly basis despite moderate trading activities from China

However, on the other side Indian buyers reluctant to make any bookings owing to poor sales and tedious demand hovering in domestic market.

Few industry experts anticipated that coking coal supply to tighten in the coming months,with large Australian miners reducing their output.This may result to uptick in coking coal offers from Australia.

Currently offers for the Premium HCC grade are assessed around USD 153.00/MT FoB which was USD 155.50/MT FoB Australia in preceding week.

China’s domestic billet prices tumbled by RMB 60/MT- This week Chinese domestic billet prices in Tangshan settled at RMB 3,410/MT, down RMB 60/MT against last week owing to volatile futures and bearish sentiments prevailing in domestic market.

Chinese HRC export offers continued to remain on downside- This week Chinese HRC export offers further declined by around USD 15/MT over reduced downstream demand and lower bids from overseas buyers.

Currently nation’s HRC export offers stood at USD 470-475/MT as against 485-495/MT FoB in previous week.

On weekly basis domestic HRC prices in China stood at RMB 3,700-3,720/MT in Eastern China (Shanghai) down by RMB 10-20/MT as against 3,720-3,730/MT in previous week.

Chinese rebar export offers continue to fall further- This week nation’s rebar export offers further fell by USD 10-15/MT on weekly basis.Higher inventory levels pulled down rebar prices in China.Also lower rebar export offers failed to stimulate buying interest among overseas buyers.

On an average basis currently nation’s rebar export offers stood at USD 470-480/MT FoB China which was around USD 485-495/MT FoB basis last week.

Meanwhile domestic rebar prices stood at RMB 3,660-3,690/MT (Eastern China) registered decline by RMB 10/MT against RMB 3,670-3,700/MT (Eastern China) a week ago.

Chinese Steel Market Highlights- Week 34, 2019

Source- SteelMint Research