The nation’s steel market depicted mixed sentiments in the short working week ahead of the Golden Week holidays (1- 8 Oct). The autumn-winter production restrictions to improve air quality was another factor that stoked differences in the buyers’ opinion. The weakened state of the future market improved mid-week as the same started attracting gains on the eve of the holiday period.
The rebar prices gained in both the overseas and domestic market amid boost provided from the improved restocking activities in the domestic market. Spot iron ore prices recovered this week after a decline in the previous week. HRC prices fell in both the markets on an anticipated increase in the inventories after holidays and a lower buying interest. However, Coking coal prices remain largely stable ahead of the holidays.
Chinese spot iron ore price picked up amid restocking demand-
Chinese spot iron ore fines prices opened at $117.05/ t this week, increased to $123.15/t towards the end of the week. The prices picked due to restocking ahead of 1 week golden week holidays in China. However, amid high prices for iron ore fines over the past quarter, end-users have increased their sinter feed usage of concentrates as a cost-efficient high-grade alternative.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports increased to 122.65 mn t this week as against 120.3 mn t assessed a week ago.
Spot pellet premium almost stable on improved buying interest-
Spot pellet premium for Fe 64% grade pellets assessed at $16.85 /t this week down by $0.85/t w-o-w.
The prices fell slightly for the week, however; buying interest is on higher side amid expectations of higher direct feed demand after the Chinese Golden Week holidays. Recovering European demand was seen as supportive for high-grade pellet price levels on tightening supply availability for the Chinese market.
Spot lump premium increased on supply concerns-
Spot Lump premium witnessed this week at $0.0820/dmtu as compared to $0.0735/dmtu assessed last week. Lump premium rose on the back of sintering controls in Tangshan. With an increase in pellet premiums over the previous weeks due to thin seaborne supply, lump premiums moved up due to its better cost-efficiency.
Coking coal prices stable amid holidays–
Seaborne coking coal prices have remained mostly stable since last week, despite halted trading activities in the Chinese spot market.
Ex-China trading activities were also limited, especially as Indian buyers preferred waiting to assess market conditions after the Chinese holidays.
The spot FOB Australia market, however, saw firm bids and offers for premium-grade cargoes with November laycan; although, some Australian sellers reportedly withheld offers, creating ambiguity about near-term price outlook.
The latest offers assessed for the Premium HCC grade continue to hover at $139.00/t FOB Australia.
Domestic billet prices continued to face down-trend-
Chinese domestic billet prices, before holidays, settled with a drop of RMB 30/t, against last week’s closing, making it the second consecutive fall after a decline of RMB 40/t in the preceding week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,300/t ($485/t) in Tangshan, inclusive of 13 % VAT.
HRC export offers fell with a lower buying interest-
The decline of $5/t in the nation’s HRC export offers was fuelled by low buying interest among the overseas buyers. The overseas procurement rates came down on anticipation of a reduction in offers post the National holidays with an increase in inventories.
The current week export offer stood at $500-505/t FoB China.
In similar lines, the domestic prices also witnessed a fall of RMB 30/t to RMB 3,810-3,830/t (Eastern China). The sellers had reduced their offers to fuel buying interest with the market closing mid-week.
Rebar export offers gained on increased domestic restocking activities-
The rebar export offers went up by $5-10/t backed by the increased procurement rates in the domestic market. The offers stood at $485-495/t FoB China in contrast with $480-485/t FoB basis a week back. However, the overseas buyers continued to bid much lower at $460/t FoB China, leading to no trades.
The domestic rebar prices also increased by RMB 30/t to RMB 3,630-3,660/t (Eastern China) as the restocking activities picked up from the construction sector ahead of the holidays.
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