This week the country’s steel market remained volatile amid steep changes witnessed in the futures market. However, the domestic prices of finished-steel products have continued their upward climb on higher raw material prices.
Chinese spot iron ore price increased on restocking demand- Chinese spot iron ore fines prices opened at $176.9/ t this week, dropped to $163.05 mid-week, and increased to $166.5/t towards the weekend. The iron ore markest saw increased volatility as sentiment was hit by concerns over the new coronavirus strain in Europe and resurgence of cases, although iron and steel fundamentals remain steady. Towards the weekend, restocking demand picked up again leading to a price rise.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports recorded at 126.95 mn t this week as against 126.35 mn t assessed a week ago.
Vale in its recent press release dated 23rd Dec ’20 notified the restart of Samarco along with restart of operations at the Germano, located in Mariana, Minas Gerais, and Ubu, located in Anchieta, Espirito Santo, Complexes. The operation resumption begins with 7-8 mn t capacity. In the next five years, the miner expects to reach 14-16 mn t capacity followed by about 22-24 mn t capacity in next 9 years.
Spot pellet premium up amid supply concerns- Spot pellet premium for Fe 65% grade pellets assessed at $41.9 /t up against last week prices at $29.7/t. The prices for iron ore pellets continued to surge on limited supply and the overall strength of prices for iron ore fines. Relatively tighter supply for high-grade pellets continued to be observed in China with available volumes largely secured by Non-Chinese buyers.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports increased to 7.1 mn t this week as against 6.9 mn t assessed a week ago.
Spot lump premium up w-o-w- Spot Lump premium witnessed at $0.1300/dmtu as against $0.1250/dmtu last week. Market participants saw increasing-price support for seaborne lump premiums on improving lump liquidity at the port as well as rising prices for pellets.
Domestic billet price up by RMB 190/t w-o-w- This week, the billet prices in the Tangshan market (northeast China) settled with a rise of RMB 190, against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,880/t ($594/t) in Tangshan, inclusive of 13 % VAT.
Coking coal prices were slightly up this week amid moderate year-end demand- The spot market continued to witness transactions concluded at higher price levels to Chinese end-users. Market participants expect China-delivered coking coal prices to continue rising on supply tightness and increased winter re-stocking needs.
However, the Indian market is not expected to see significant spot purchases until at least late January.
The latest offers for the Premium HCC grade are assessed at around $101.50/t FOB Australia, which was $100.00/t FoB basis a week back.
HRC export offers continued uptrend on higher domestic realizations- HRC producers have been offering at price levels higher by $30-40/t this week. However, the offers fell from the highs of $700-720/t FoB China with a downward slide in the futures market.
The current assessed offers stand at $690-700/t FoB China as compared with $650-670/t a week back. Higher raw material prices and better domestic market realizations have kept the offers from sliding further.
In the domestic market, HRC price was up by RMB 50-100/t to RMB 4,670-4,740/t (Eastern china) as against RMB 4,620-4,640/t (Eastern China) in the previous week. The buyers however have attained a wait-and-watch approach in anticipation of a decline in prices in upcoming days.
Rebar export offer moves up further on the week- Rebar manufacturers continued to increase their offers and offered at $620-640/t FoB basis this week, backed by higher realizations in the domestic market amid future gains at the beginning of the week. The prices have jumped up by around $50 from $570-595/t FoB basis a week ago. However, Christmas festive holidays weighed on the buying interest from importing countries during the week.
Domestic market prices spiked up by RMB 140/t to RMB 4,070-4,100/t compared to RMB 3,930-3,960/t a week ago. Early gains in the futures market and restocking by billet buyers resulted in the price hike.
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