- HRCs, billet tags up, rebar down w-o-w
- Steel inventories up 5% w-o-w in early May
China’s steel market displayed mixed trends this week. Notably, domestic prices of hot-rolled coils (HRC) and billets increased w-o-w, while rebar witnessed a marginal drop. However, in the raw materials segment, spot iron ore prices edged up but coking coal stayed firm over the week.
The China Iron and Steel Association (CISA) has announced that the total steel inventory at key Chinese enterprises stood at 16.06 million tonnes (mnt) in early-May 2025. Inventory levels increased by 770,000 tonnes (t) or 5% from 15.29 mnt in late-April 2025.
1. Iron ore spot prices inch up higher: The benchmark price of iron ore fines (Fe 62%) increased by $2.5/t w-o-w to $101.1/t CFR China on 16 May as against 9 May. The upward movement was fuelled by strengthening market momentum following a macro-economic boost. Robust mill outputs, strong profit margins, and increased finished steel demand contributed to market support.
a) Spot pellet premium dipped w-o-w: Spot pellet premium for Fe 65% grade fell largely by $0.6/t w-o-w to $12.00/t CFR China on 16 May.
b) Spot lump premium edges down: Spot lump premium decreased by 0.005/t to $0.1570/dmtu on 16 May.
2. Coking coal prices stay firm w-o-w: Australian premium hard coking coal (PHCC) prices held steady w-o-w at $191/t FOB, supported by supply constraints. Meanwhile, northern Chinese steelmakers cut metallurgical coke prices on 13 May due to weaker demand, lower coal costs, and expectations of reduced steel demand during the monsoon.
3. Chinese billet prices edge up by RMB 40/t ($6/t): Steel billet prices in Tangshan, China, increased by RMB 40/t ($6/t) w-o-w to RMB 2,950/t ($402/t), including 13% VAT, on 16 May as against 9 May. The market witnessed a sharp rebound in steel billet tags, regaining momentum lost in previous weeks, driven by improved demand, particularly for downstream products, and optimism surrounding recent tariff cuts. Meanwhile, SHFE rebar futures also gained RMB 60/t ($8/t) w-o-w, reaching RMB 3,082/t ($428/t).
4. Domestic HRC prices rise w-o-w: Chinese HRC offers rose by RMB 10/t ($1/t) to RMB 3,180/t ($441/t) from RMB 3,170/t ($440/t) a week ago, following the uptrend in SHFE futures. SHFE HRC futures increased by RMB 68/t ($9/t) to RMB 3,240/t ($449/t) on 16 May against RMB 3,172/t ($440/t) on 9 May. This increase is attributed to improved trade ties, easing concerns over weak manufacturing demand and export pressure.
Moreover, China’s HRC export offers rose by RMB 8/t ($1/t) w-o-w to RMB 458/t ($64/t) against RMB 450/t ($62/t) a week ago as trade tensions ease and the yuan remains stable.
5. Domestic rebar prices fall w-o-w: China’s rebar offers fell slightly by RMB 10/t ($1/t) w-o-w to RMB 3,240/t ($449/t) from RMB 3,250/t ($451/t) last week. However, SHFE rebar futures (October 2025 contract) stood at RMB 3,118/t ($432/t) on 15 May, up by RMB 82/t ($11/t) from 3,036/t ($421/t) as of 9 May.
China’s Shagang Steel has rolled over long steel product prices for mid-May sales. Revised prices of rebars, coiled rebars and wire rods are as follows:
- Rebars (16-25 mm): RMB 3,300/t ($458/t)
- Coiled rebars (8-10 mm): RMB 3,410/t ($473/t)
- Wire rods (6-10 mm): RMB 3,320/t ($460/t)
Outlook
In the short term, market sentiment remains range-bound. Moreover, improved trade relations have lifted export confidence, possibly prompting a brief rise in overseas shipments. Therefore, Chinese steel prices are expected to stay on an upward trajectory.
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