This week steel prices remained largely stable w-o-w amid weak demand from end-users. However, iron ore prices increased w-o-w due to a positive development in the market.
The average daily crude steel output of CISA-affiliated mills stood at 2.14 mnt in mid-September 2022. The average daily finished steel output was at 2.09 mnt, up 3.51% m-o-m and 8.76% y-o-y.
Steel inventory at Chinese mills in mid-September 2022 stood at 17.66 mnt, up by 596,500 t or 3.50% m-o-m, as per CISA data. Inventory rose by 331,800 t in the first 10 days of the month, and by 6.36 mnt compared with the beginning of the year. Inventory increased by 4.35 mnt, or 32.77% as against the same period of last year.
Product-wise sentiments:
1. China spot iron ore prices edge up w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $97.7/t CNF China for the week and assessed at $99.6/t, CNF China towards the weekend. Seaborne iron ore prices also increased after a positive development for the iron ore market from Chinese steel data.
The data had a positive impact on the iron ore market and may indicate an increase in the steel demand, with expectations that demand will be sustainable in the short term. Iron ore inventory at major Chinese ports stood at 137.8 mnt this week moved down by 2.5 mnt as against 140.3 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium increases w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $24.45/t, moved up as against $21.6/t last week.
Pellet premiums continued the upward momentum as seaborne pellets witnessed robust demand from Chinese buyers amid concerns over supply shortage in China market going forward.
b) Spot lump premium up w-o-w: Spot lump premium stood at $0.1040/dmtu, an increase as against $0.1020/dmtu last week.
2. Coking coal prices rise by $8/t w-o-w: Coking coal prices remain rangebound w-o-w at $259/t FOB Australia. Rains in Australia and closure of major miner, Teck Resources’, Elkview Mine, for two months resulted in the price rise this week.
3. China’s billet prices edge down towards weekend: Steel billet prices in China’s Tangshan fell marginally by RMB 10/t ($1/t) w-o-w. Prices stood at RMB 3,650/t ($512/t), including 13% VAT on 23 September. According to data maintained with SteelMint, China’s SHFE rebar futures contract for January 2023 delivery closed at RMB 3,766/t ($528/t) on 23 September, a rise of RMB 80/t ($11/t) w-o-w.
4. HRC export offers down $20/t w-o-w: Lower bids from buyers amid tumbling SHFE HRC futures and depreciation of Chinese currency weighed on the export offers, as a result China’s HRC (SS400) export offer fell by $20/t w-o-w to $575/t FOB China against $595/t a week ago.
The expected third consecutive interest rate hike by the US Federal Reserve along with weaker than expected demand in the domestic market have pushed HRC prices down by RMB 10/t ($1/t) w-o-w to RMB 3,960/t ($556/t) in the northern China as compared with RMB 3,970/t ($557/t) a week ago.
5. Domestic rebar prices unchanged w-o-w: China’s domestic rebar prices remained unchanged w-o-w at RMB 4,130/t ($579/t) in western China amid drop in raw material costs and weak demand from end-users.
6. Shagang Steel rolls over long steel prices: China’s Shagang Steel has kept construction steel prices unchanged for late-September 2022 sales. Effective prices:
- Rebar (16-25 mm): RMB 4,200/t ($589/t)
- Wire rods (6-10 mm): RMB 4,310/t ($605/t)
- Coiled rebar (8-10 mm): RMB 4,400/t ($617/t)
- All prices are on ex-mill basis, including VAT.
7. Shagang Steel trims scrap prices by $3/t: China’s Shagang Steel has cut scrap purchase prices of scrap by RMB 20/t ($3/t). Post revision, HMS (6-10 mm) prices are at RMB 3120/t ($438/t) delivered to the headquarters, including 13% VAT.
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