The nation’s finished steel market continued to remain volatile with mixed sentiments on higher inventories and fluctuations in the futures market during the week. China’s Tangshan has announced some production cuts in order to improve the air quality during Aug-Sep ’20. HRC export offers continued to rise however rebar export offers were unchanged due to low bids from importing nations. Iron ore prices dropped slightly. Coking coal prices inched higher with a couple of deals which were concluded recently.
Chinese spot iron ore prices dropped slightly during the week-
Chinese spot iron ore prices opened at $124.45/t CFR China this week and fell to $123.25 t towards the end of the week. However, the prices continue to remain on higher side amid supply tightness of Australian medium grade fines and robust steel demand outlook considering investments announced in the infrastructure sector. Amid tight stock levels of mainstream mid-grade Australian fines at Chinese ports, Chinese mills are in the process of switching blends to reduce their reliance on mainstream Australian mid-grade fines.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports dropped to 115.8 mn t this week as against 117.15 mn t assessed a week ago.
Spot pellet premium up w-o-w-
Spot pellet premium for Fe 65% grade pellets assessed at $ 6.50/t as against $4.5/t last week. Low alumina pellet witnessed support due to increased efficiency and cost-effectiveness.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports fell to 10.6 mn t as against 10.9 mn t assessed a week ago.
Spot lump premium declines further on high inventory-
Spot Lump premium witnessed this week at $ 0.0380/dmtu as compared to $ 0.0400/dmtu assessed last week. The lumps prices have witnessed a fall due to less stringent environmental regulations. Several trader sources raised the possibility of grinding lump ores into fines to reduce lump stockpiles and achieve a higher resell price.
Coking coal price rises on a weekly basis-
Seaborne coking coal price has increased marginally during the latter half of the week, with a couple of fresh bookings done consecutively on Wednesday and Thursday.
China-delivered coking coal prices have remained relatively flat due to a lack of transactions, as buyers are still struggling with limited import quotas and lengthy waiting times for material unloading at Chinese ports.
The Indian market observed an increase in enquiries for spot cargoes of seaborne coking coal, although there has not been any significant improvement in steel product sales.
Latest offers for the Premium HCC grade are assessed at around $108.25/t FoB Australia, which was $106.75/t FoB Australia in the preceding week.
Domestic billet prices stable w-o-w-
This week, Chinese domestic billet prices remained identical to last week’s closing. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,400/t ($495/t) in Tangshan, inclusive of 13 % VAT. The bids for imported billet in China were between $420-430/t, CFR, for non-ASEAN billets, unchanged against last week.
HRC export offers increased during the week-
The mills raised HRC export offers by $5/t this week on decent quantities booked for the Oct delivery shipments. The current week offers stand at $510-520/t FoB China as compared with $505-515/t FoB basis a week ago.
The domestic market prices, on the other hand, fell by RMB 50-70/t and stood at RMB 3,990-4,020/t (Eastern China) in contrast with $4,060-4,070/t (Eastern China) a week back.
Rebar export offers remain unchanged on the week-
The Chinese mills kept their export offers at $480-485/t FoB China against the previous week. The overseas importers continued to bid as low as $ 460-465/t FoB China basis amid the availability of cheaper alternatives from other exporting nations.
Domestic market prices, however, witnessed an increase by RMB 30/t to RMB 3,640-3,670/t (Eastern China) in comparison with RMB 3,610-3,640/t a week ago.
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