China Market Highlights: Week 17 (18 Apr – 24 Apr)

Upcoming production cut in China’s Tangshan city leads to price surge in iron ore, billet and HRC prices this week.

Iron Ore

This week iron ore prices hit 16-month high at USD 68.7/MT, CFR China amid sharp surge in Chinese spot steel prices.

With the upcoming International Horticulture expo in Tangshan, China, mills there will be required to cut steel production by 30% over 22-26 April and by 50% from 27 April to 3 May in order to improve air quality. Also if this does not improve the air quality to required standard, more cuts will be implemented in the city. This has led to increased demand for both steel and iron ore.

The week ended with iron ore prices at USD 66.6/MT, CFR China as the bullish sentiments subdued ahead of weekend.

Billet

Chinese domestic billet offers have reached to the level of RMB 2,640/MT (USD 406/MT) this week at 20-month high level. The demand for steel has increased and market participants have started stocking up material due to the production cuts planned with the upcoming horticulture expo. However, prices retreated to RMB 2,560/MT (USD 396/MT), ex-Tangshan towards the end of week 17.

HRC

Following billet prices, China’s domestic HRC prices also reached 20 month high at RMB 3,200-3,230/MT (USD 495-499/MT), ex-Shanghai, including VAT of 17%. However, towards the weekend price retreated by USD 3-5/MT.

Chinese HRC export offers also surged by USD 20-30/MT this week. Export offers for 2.5mm HRC are assessed at USD 420-430/MT, FoB China.

China’s Market Price Summary as on 23 Apr’16