This week, China’s domestic steel prices witnessed an uptrend alongside improved demand, rise in futures and recent developments in Tangshan region. Major mills in Tangshan shall get upgraded to level C in carbon emissions, which means they are subject to lesser strictness in production curbs.
However, HRC export offers remained on the downside initially but recovered towards the weekend.
1. China spot iron ore prices rise: Chinese spot iron ore fines Fe 62% prices opened at $110.20/tonne (t) CNF China for the week and assessed at $118.25/t, CNF China towards the weekend. Seaborne iron ore prices rose due to increased demand for medium-grade fines.
Production of domestic concentrate decreased for the week while inventory levels increased due to limited demand. Sources said demand was still weak as production restrictions remained in place. However, traded prices for domestic concentrate in Tangshan rose in the week as an improved market outlook supported prices.
Iron ore inventory at major Chinese ports stood at 157.5 million tonnes (mn t) this week, up 1.5 mn t as against 156 mn t a week ago, as per data maintained by SteelHome.
a) Spot pellet premiums inch up w-o-w: Spot pellet premiums for Fe 65% grade were assessed at $52.45/t, inching up against $52.05/t last week. Since lumps are cost efficient compared to pellets, the proportion of lump usage and its demand in the short-term may increase, said a China-based trader source.
b) Spot lump premiums stable w-o-w: Spot lump premiums were stable w-o-w at $0.1350/dmtu. According to sources, the market waited to see how government policies would play out.
2. Shagang Steel hikes scrap purchase prices twice: Shagang Steel announced a hike in scrap procurement prices for the second time this week. The steel producer raised prices of HMS (6-10mm) by RMB 100/t ($16/t) to RMB 3,440/t ($540/t) for all grades delivered to headquarters, including 13% VAT, effective 13 Dec’21.
3. Coking coal offers unchanged w-o-w: Seaborne coking coal prices remained mostly unchanged on FOB basis this week amid tight supply. Weather-related concerns in Australia continued to weigh on market sentiments and spot prices.
Enquiries were heard from India for premium coking coal but no deal was reported to have been concluded.
The latest price for the premium HCC grade is assessed at around $341.50/tonne (t) FOB Australia, unchanged against previous week.
4. China’s billet prices rise towards weekend: Steel billet prices in China’s Tangshan witnessed an increase of RMB 50/t ($8/t), w-o-w. Domestic billet prices stood at RMB 4,360/t ($684/t), inclusive of 13% VAT on 17 Dec’21. According to data maintained with SteelMint, the Chinese rebar futures contract for May’22 delivery closed at RMB 4,505/t ($707/t) on 17 Dec’21, a sharp rise of RMB 183/t ($29/t), w-o-w.
5. HRC export offers up towards weekend: HRC export offers stood at around $770-780/t FOB China as assessed on 14 Dec’21. However, towards the mid-week, the announcement by China’s Ministry of Finance on export and import duties for CY’22 , boosted market sentiments, pushing export offers from major mills to $785-810/t FOB. On the other hand, bids from buyers were heard as low as $755/t FOB.
In the domestic market, HRC is being traded at RMB 4,930-4,980/t (773-781/t) eastern China, up RMB 150-170/t as against RMB 4,780-4,810/t ($750-754) eastern China in the previous week. A sharp increase in HRC futures boosted sentiments in the market, leading to a rise in trade activities. According to data maintained with SteelMint, the Chinese HRC futures contract for May’22 delivery closed at RMB 4,701/t ($737/t) on 17 Dec’21, a sharp rise of RMB 264/t ($41/t), w-o-w.
Meanwhile, a leading steel producer, Baosteel rolled over HRC (SS400) offers at RMB 6,311-6,469/t ($990-1,019/t) including tax, for Jan’22 bookings.
6. Shagang Steel lifts longs offers: Shagang Group, China’s leading long steelmaker, raised its list prices by RMB 150-200/tonne ($23.5-31.4/t) from the prior ten days for domestic sales over 11-20 Dec’21.
Current prices:
- Rebar 16-25mm: RMB 5,000/t ($784/t)
- Wire rod 6-10mm: RMB 5,210/t ($817/t)
- Coiled rebar 8-10mm: RMB 5,300/t ($831/t)
All prices are on ex-mill basis.
Domestic rebar offers in the week were assessed at around RMB 4,690-4,730/t ($736-742/t) northern China, down RMB 10-20/t on the week despite an uptrend in futures. Last week, offers were at around RMB 4,700- 4,750/t ($737-745/t) northern China.
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