This week steel prices across all product categories in China showed an upward trend as the National Health Commission (NCH) announced further relaxation to ease Covid restriction this week. Gains in HRC and rebar prices on Shanghai Futures Exchange (SHFE) have also boosted the market sentiments.
Product-wise sentiments-
1. China spot iron ore prices increase w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $114.65/t CNF China for the week and were assessed at $117.35/t, CNF China towards the weekend. Seaborne iron ore prices rose with market participants holding expectations of more stimulating policies to help boost the economy.
Several sources also stated that mills are focusing on purchasing more at portside rather than seaborne because it is less expensive, and with COVID-19 infections rapidly spreading, purchasing interest may be slower as well.
Iron ore inventory at major Chinese ports stood at 133.65 mnt on 29 December 2022, down by 1.85 mn t as against 135.5 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 $16.65/t, down as against $17.05/t last week.
b) Spot lump premium remains stable w-o-w: Spot lump premium stood at $0.12/dmtu, unchanged against $0.12/dmtu last week.
Seaborne lump premiums remained stable as several participants continue to voice similar views with regards to lump’s weak demand.
2. Coking coal prices rise w-o-w: Coking coal prices rose by $14/t w-o-w to $295/t FOB against $286/t FOB last week. This came amid positive sentiments of trade resumption between Australia and China.
3. China’s billet prices rise sharply w-o-w: Steel billet prices in China’s Tangshan rose by RMB 50/t ($7/t) w-o-w. Prices stood at RMB 3,780/t ($548/t), including 13% VAT, on 30 December. Hike in futures and finished steel prices have supported billet prices, SteelMint observed. China’s SHFE rebar futures contract for May 2023 delivery closed at RMB 4,105/t ($595/t) on 30 December, a sharp increase of RMB 100/t ($14/t) w-o-w.
4. HRC export offers inch up w-o-w: China’s HRC export offers rose by $5/t w-o-w to $605/t FOB as against $600/t FOB last week. The export market remained almost quiet for this week, as most buyers were on holiday.
Domestic HRC prices edged upwards by RMB 20/t ($3/t) w-o-w to RMB 4,060/t ($589/t) compared with RMB 4,040/t ($586/t) following ease in Covid-19 restrictions and gains in HRC Futures, which lent support to spot prices.
HRC futures on the Shanghai Futures Exchange (SHFE) surged by RMB 112/t ($16/t) w-o-w to RMB 4,138/t ($600/t) as on 30 December 2022.
5.Domestic rebar prices increase w-o-w: China’s domestic rebar prices increased by RMB 100/t ($14/t) w-o-w to RMB 4,020/t ($583/t) from RMB 3,920/t ($568/t) last week. Prices increased w-o-w due to further relief in Covid-19 measures by National Health Commission (NCH), which supported market sentiments.
6. Shagang Steel raises scrap purchase prices: Shagang Steel increased scrap buy prices for the first time this week by RMB 80/t ($12/t) for all grades of scrap. Post-revision, HMS (6-10 mm) prices stood at RMB 3,120/t ($452/t) delivered to headquarters, including 13% VAT, effective from 30 December 2022.
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