The country’s steel market prices gained upward momentum as the government’s financial stimulus, and rising demand after floods boosted market sentiments.
HRC and rebar export offer continue to remain upside following domestic gains. Iron ore prices remain stable and coking coal prices continue to remain volatile.
China spot iron ore price picked almost stable during the week- Chinese spot iron ore prices opened at $109.50 t this week, increased to $111.2 during the week and retreated to $ 109.55/t towards the weekend.
The prices remained supported amid decent steel margins, improving weather conditions in southern China and the expectation of improving steel demand post the rainy season. As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports increased to 115.05 mn t as against 112 mn t assessed a week ago.
Spot pellet premium up w-o-w- Spot pellet premium for Fe 65% grade pellets assessed at $ 12.5/t up against $ 10.75/t last week. Gradual improvement in domestic demand in India may lead to a further uptick in the prices in the longer term.
As per data compiled by SteelHome consultancy pellet inventory at major Chinese ports increased to 9.5 mn t as against 9.1 mn t assessed a week ago.
Spot lump premium fell steeply on oversupply concerns- Spot lump premium witnessed this week at $ 0.0550/dmtu down as against $ 0.660/dmtu assessed last week. Lump prices have witnessed a fall amid oversupply. Absence of stringent environmental regulations and awaited winter season failed to increase lump prices.
Coking coal price remains volatile- Seaborne coking coal prices remain volatile this week on lower bids indicated by Chinese market participants, as most of the buyers were struggling with limited import quotas.
According to market sources, spot buyers were heard to have been eagerly awaiting the result of a tender for Australian PLV recently issued by a major Chinese steelmaker.
However, as per weekly assessment, latest offers for the Premium HCC grade have been reported at around $111.50/t FoB Australia, which was $107/t FoB in the previous week.
Also, India’s coking coal inventories remain high. There is hope that by the end of the monsoon season during Sep-Oct months may lead to increased seaborne coking coal buying in Q3 FY21 if the impact of COVID-19 remains under control.
Domestic billet price shows continual rise this week- This week, Chinese domestic billet prices closed with a rise of RMB 10, against last week’s closing. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,420/t ($488/t) in Tangshan, inclusive of 13 % VAT.
HRC export offer rises further on continual domestic gains- The export offers from major steel mills increased further by around $10/t this week on the back of decent domestic gains.
Currently, the export offer stands at $475-480/t FoB China compared with $465-470/t FoB basis a week ago.
In similar lines, domestic prices also witnessed an increase by RMB 50-60/t to RMB 3,930-3,950/t (Eastern China) in comparison with RMB 3,870-3,900/t (Eastern China) in the preceding week.
Rebar export offer witnesses further increase– Mills raised their export offers by $3-5/t during the week as domestic prices gained momentum. However, the importers continue to bid on the lower side at around $440/t FoB China basis.
Current week offers were assessed at $465-475/t FoB China compared with $462-470/t FoB basis in the previous week.
Domestic prices also increased by RMB 50/t on the back of recovering demand after floods to RMB 3,610-3,640/t (Eastern China), compared with RMB 3,560-3,590/t (Eastern China) last week.
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