- Iron ore and pellet imports hit a record high in CY ‘20
- Finished steel exports down in CY ‘20
- Finished steel imports at 20.24 mn t, ascend by 39% y-o-y in CY ’20
- Coking coal prices hit a 3-month high
China spot iron ore price increased during the week- Chinese spot iron ore prices opened at $171.1/ t this week and increased to $172.8 towards the weekend. Cargoes with high Fe content and low impurities saw rising prices due to strict quality requirements amid high coke prices. High Fe content is associated with high steel margins. However, the steel margin stood under pressure due to rising raw material costs and a weak demand season for construction steel in winter.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports was recorded at 124.8 mn t as against at 124.25 mn t assessed a week ago.
Spot pellet premium up on limited supplies- Spot pellet premium for Fe 65% grade pellets assessed at $ 46.65/t, up against last week prices at $ 45.75/t. The prices for pellets surged on the back of tight supply. Robust Indian domestic demand and limited spot supply of pellets into China resulted in a surge in prices this week. Also, limited pellet alternatives kept the prices supported in the market.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports dropped to 6 mn t this week as against 6.2 mn t assessed a week ago.
The steel imports in China saw a sharp decline during Dec ’20 amid soaring global steel prices, especially billets. The billet export prices across the globe had reached new highs.
Also Iron ore and pellet imports hit a record high in CY ‘20.
Spot lump premium up on high buying interest- Spot Lump premium witnessed at $0.3415/dmtu as against $0.3130/dmtu last week. Market participants saw increasing-price support for lump premium due to tight coke and pellet supply. Despite the sharp rebound in lump premiums, procurement demand for lump remained firm as the peak season for direct feed usage continued.
Coking coal prices hit a three-month high- Seaborne coking coal prices surged by $10.5/t this week to a near three-month high with a sell tender concluding at a higher level.
Firm bids were reported for this tender from $103/t to above $110/t FoB Australia, according to market sources. Alongside limited spot demand from end-users in Europe, North Asia and India, Chinese traders continue looking for reselling opportunities, aggravating oversupply concerns of premium coking coal.
Meanwhile, heavy rainfall in Australia’s coking coal hub of Queensland could affect mining operations or railway transport, while the recent resurgence of Covid-19 infections in China’s Hebei province might affect steel production.
The latest offers for the Premium HCC grade are assessed at around $123.00/t FoB Australia, which was at $102.00/t FoB basis in the preceding week.
Domestic billet prices inch-up on the week- Domestic billet prices up by RMB 10 ($1.5) w-o-w. This week, the billet prices in the Tangshan market (northeast China) settled with a rise of RMB 10 ($1.5), against last week. The price of commonly traded Q235 billet 150mm diameter was reported at RMB 3,810/t ($590/t) in Tangshan, including 13 % VAT.
HRC export offer falls on soft domestic prices- HRC export offer fell by $40/t w-o-w basis at $640-710/t FoB China compared to previous week’s offer at $680-710/t FoB China. Buying-interest in the overseas market dipped in anticipation of further reduction in export offers, while importers slashed their bids to $630/t FoB China in contrast with the previous week’s $665-675/t FoB basis.
The domestic market prices were reported at RMB 4,550-4,560/t (Eastern China) with a significant decline of RMB 130-170/t w-o-w in contrast with RMB 4,680-4,730/t (Eastern China) a week ago. This comes on the back of static market activities due to lower demand from downstream industries over increasing COVID cases in the country.
Further, finished steel imports surged by 39% to 20.24 in CY ’20 contrasted against 12.30 mn t in CY ’19. However, finished steel exports declined by 17% annually to 53.65 mn t in CY ’20 as against 64.35 mn t in the previous year.
Rebar export offers moved up w-o-w- Rebar producers have increased their offers to $635-655/t FoB China against $625-645/t FoB basis a week back. Although the Chinese mill offers have been attractive, the buyers still remain on side-lines in anticipation of further decline in offers. Buyers are showing their buying intent at around $625/t FoB basis.
In the domestic market, prices witnessed a subtle decline of RMB 60/t w-o-w basis and stood at RMB 4,020-4,060/t (Northern China) compared to RMB 4,080-4,120/t (Northern China) a week back.
Sellers had to cut their offers to stimulate buying interest as the pressure to destock ahead of the Chinese New Year holidays came into play while COVID-19 cases started increasing in a few regions of the country. Further, construction sites turned to need-based procurement in anticipation of further decline in prices.
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