Chinese steel prices witnessed a downward trend admist falling futures and weak demand on adverse weather conditions. Raw material as well as finished steel prices reduced w-o-w.
In addition to the above, the world’s top steel manufacturer, Baosteel, slashed its monthly carbon flat steel prices for June 2022 sales by RMB 100 ($15/t), sources informed SteelMint. A steep drop in global prices from key countries amidst lower bids and improved domestic HRC supplies with the easing of lockdown restrictions have resulted in a lowering of offers by the steelmaker.
Monthly export-import statistics
i) Steel export volumes stood at 4.98 million tonnes (mnt) in April 2022, up a marginal 1% as against 4.95 mnt in March 2022.
ii) Steel import volumes edged down by 5% m-o-m to 0.96 mnt in April from 1.01 mnt a month back.
iii) Iron ore (including pellets) imports were recorded at 86.06 mnt in April, down by 1% against 87.28 mnt a month ago.
Product-wise sentiments
1. China spot iron ore prices inch down w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $128.1/t CNF China for the week and were at $127.35/t, CNF China towards the weekend. Seaborne iron ore prices fell as bearish market sentiments dented the iron ore demand outlook.
Seasonally, steel demand is usually dull over June-August, due to the rainy season in South China in June and higher temperatures in July and August, as per sources.
Iron ore inventory at major Chinese ports stood at 145.35 mnt this week, decreasing by 3.65 mnt as against 149 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium down w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $37.25/t, down against $45.55/t last week. Lump demand faced further pressure on thin steel margins and falling pellet premiums.
b) Spot lump premium down w-o-w: Spot lump premium stood at $0.2700/dmtu, down as against $0.2735/dmtu last week.
2. Coking coal largely stable: In the Australian coking coal market this week, ArcelorMittal kept its 75,000 t Australian coking coal auction unawarded but this caused price volatility in the market and ultimately Australian Premium HCC prices saw a net drop of $2/t. The latest prices for the premium HCC grade was assessed at around $515/tonne (t) FOB Australia against $517/t FOB a week ago.
3. China’s billet prices fall towards weekend: Steel billet prices in China’s Tangshan witnessed a sharp fall of RMB 100/t ($15/t) w-o-w. Prices stood at RMB 4,660/t ($686/t), inclusive of 13% VAT, on 13 May. According to data maintained with SteelMint, the Chinese SHFE rebar futures contract for October 2022 delivery closed at RMB 4,670/t ($688/t) on 13 May 2022, witnessing a sharp fall of RMB 64/t ($9/t) w-o-w.
4. HRC export offers decline w-o-w: China’s HRC export offers declined by $30/t to $820/t, as compared to $850/t in the previous week. Buyers adopted a wait-and-see approach witnessing sharp losses in HRC futures during the week.
China’s HRC futures contract for October 2022 delivery on the Shanghai Futures Exchange (SHFE) closed at RMB 4,709/t ($694/t) on 13 May 2022, a sharp fall of RMB 221/t ($33/t) w-o-w.
The recent pledge by China’s National Development and Reform Commission (NDRC) over production cuts, tightening of monetary policy and adverse weather conditions weighed on market sentiments this week, pushing domestic HRC prices down RMB 150/t ($22/t) to RMB 4,800-4,830/t ($707-711/t) eastern China, compared to RMB 4,950-4,980/t ($729-734/t) eastern China, a week ago.
5. Domestic rebar prices fall w-o-w: China’s domestic rebar prices fell by RMB 160-170/t ($24-25/t) to RMB 4,860-4,900/t ($716-722/t) northern China against RMB 5,030-5,060/t ($741-745/t) northern China last week. Heavy rainfall in some regions of China and disruption in logistics have impacted the market this week resulting in weak demand.
6. Shagang’s long steel prices remain unchanged: Steel product prices remained unchanged for mid-May 2022 sales. Current prices of long steel products are:
- Rebar (16-25 mm): RMB 5,350/t ($790/t)
- Wire rods (6-10 mm): RMB 5,310/t ($784/t)
- Coiled rebar (8-10 mm): RMB 5,400/t ($797/t)
- All prices are on ex-mill basis, including VAT.
7. Shagang Steel lowers scrap prices by $16/t: China’s Shagang Jiangsu Steel reduced scrap procurement prices twice this week. The company reduced prices by RMB 100/t ($16/t) for all grades. Post-two revisions, prices of HMS (6-10mm) stood at RMB 3,920/t ($577/t) delivered to headquarters, including 13% VAT.
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