Q1 CY17 was characterized by hike in iron ore prices in China along with semi-finished and finished steel prices. Improved demand and prevailing bullish sentiments boosted price hike.
We at SteelMint have analyzed the price trends, import/export and production figures of key steel making raw materials and finished steel for Q1 CY17 along with quarterly comparison with Q4 CY16 and Q1 CY16.
However, the key factors that are weighing on Chinese steel prices for Q2 CY17 are stagnant domestic steel demand, announced capacity cuts and environmental regulations to curb sub standard steel production.
Steel Prices in China rose significantly in Q1 CY17 – Backed by increase in finished and semi-finished steel prices, spot iron ore prices in China increased 20% Q-o-Q and 77% Y-o-Y in Q1 CY17. To the contrast, coking coal (Premium HCC) offers have come down by 34% Q-o-Q in Q1 CY17 amid softening Chinese demand.
Prices of domestic pig iron & billet in China moved up both on quarterly as well as yearly basis in Q1 CY17.
Finished steel prices in China remained high in Jan & Feb’17, and then witnessed a downward movement in Mar’17. In Q1 CY17, domestic rebar prices averaged at RMB 3,448/MT, up 71% Y-o-Y. Chinese HRC export offers climbed 11% Q-o-Q and 67% Y-o-Y in Q1 CY17.
In line with decline in domestic steel prices, steel export offers also fell in Mar’17. Reason cited was dull buying interest from domestic as well as overseas buyers along with higher inventories.
China’s monthly crude steel output touched highest ever in Mar’17 – Monthly crude steel production in China touched all time high at 72 MnT in Mar’17. In Q1 FY17, country’s crude steel production jumped 5% Y-o-Y to 201 MnT from 192 MnT in Q1 CY16. However on quarterly basis, crude steel production has remained stable.
China iron ore imports up 12% Y-o-Y – China imported 271 MnT iron ore in Q1 CY17 against 241 MnT, thus up by 12% Y-o-Y.
China Steel Prices: Q1 CY17 vs Q4 CY16
| Commodity | Delivery | Size/ Grade |
Unit Prices | Q1 CY17 |
Q4 CY16 |
Q-o-Q (%) | Q1 CY16 | Y-o-Y (%) | Remark |
| Coking Coal | FoB Australia | Premium HCC | USD/MT | 172 | 261 | -34 | 77 | 123 | – |
| Iron ore | CNF China | Fines, 62, Australia |
USD/MT | 85 | 71 | 20 | 48 | 77 | – |
| Iron ore | CNF China | Fines, Fe 61.5%, Australia |
USD/MT | 83 | 70 | 19 | 47 | 77 | – |
| Iron ore | CNF China | Fines, 65, Brazil | USD/MT | 87 | 73 | 19 | 49 | 78 | – |
| Iron ore | CNF China | Fines, 63.5, Brazil | USD/MT | 83 | 70 | 19 | 47 | 77 | – |
| Iron ore | CNF China | Lumps, 64/63, South Africa |
USD/MT | 92 | 83 | 11 | 58 | 59 | – |
| Pig Iron | Del Warehouse | Steel grade, L10 | RMB/MT | 2,672 | 2,340 | 14 | 1411 | 89 | Prices include VAT |
| Manganese Ore | CNF China | Lump, Mn:44% | USD/DMTU | 5.39 | 8.26 | -35 | 2.37 | 127 | – |
| Chrome Ore | CNF China | Conc 40-42%, S. Africa, South Africa |
USD/MT | 384 | 316 | 22 | 107.12 | 258 | – |
| Billet | Ex-Tangshan | 150*150mm, Q235 | RMB/MT | 3,025 | 2,527 | 20 | 1,717 | 76 | Prices include VAT |
| Billet | FoB China | 150*150mm, Q235 | USD/MT | 420 | 370 | 14 | 263 | 60 | – |
| Rebar | Ex-Shanghai | 16-25mm, HRB 400 | RMB/MT | 3,448 | 2,876 | 20 | 2,015 | 71 | Prices include VAT |
| Rebar | FoB China | Commercial | USD/MT | 450 | 390 | 15 | 285 | 58 | – |
| Wire rod | Ex-Shanghai | Ф6.5-10, HRB 300 | RMB/MT | 3,400 | 2,940 | 16 | 2,195 | 55 | Prices include VAT |
| Wire rod | FoB China | 6.5mm | USD/MT | 457 | 400 | 14 | 285 | 60 | – |
| HRC | Eastern China (ex-warehouse) | 2.75mm, Q235/ SS400 |
RMB/MT | 3,725 | 3,350 | 11 | 2,180 | 71 | Prices include VAT |
| HRC | FoB China | 2.5mm SS400 | USD/MT | 501 | 451 | 11 | 300 | 67 | – |
| CRC | Eastern China (ex-warehouse) | 1.0mm ST12/SPCC | RMB/MT | 4,577 | 4,275 | 7 | 2,920 | 57 | Prices include VAT |
| CRC | FoB China | 1.0mm SPCC | USD/MT | 580 | 531 | 9 | 342 | 70 | – |
| Plates | Eastern China (ex-warehouse) | 5.5mm, Q235/S400 | RMB/MT | 3,580 | 3,175 | 13 | 2,185 | 64 | Prices include VAT |
| Plates | FoB China | 5-10mm, SS400 | USD/MT | 474 | 430 | 10 | 280 | 69 | – |
Source: SteelMint Research
China: Steel Production & Export: Q1 CY17 vs Q4 CY16
| Particulars | Country | Q1 CY17 | Q4 CY16 | Q-o-Q (%) | Q1 CY16 | Y-o-Y (%) | Remarks |
| Production | |||||||
| Crude Steel | China | 201 | 202 | -0.50 | 192 | 5 | – |
| Import | |||||||
| Coking Coal | China | 6.231* | 15.77 | – | 11.42 | – | *Till Jan’17 |
| Iron Ore | China | 271 | 262 | 3.44 | 241 | 12 | – |
| Steel | China | 2.18* | 3.37 | – | 3.12 | – | *Till Feb’17 |
| Export | |||||||
| Met Coke | China | 1.6* | 2.7 | – | 2.41 | – | *Till Feb’17 |
| Steel | China | 20.7 | 22.8 | -9.21 | 27.82 | -0.26 | – |
Provisional data
Fig in MnT
Source: SteelMint Research
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