China Steel Market Highlights – Week 1, 2019

This week Chinese steel market witness bearish market sentiments with softening steel prices and slow demand in domestic market after New Year holidays. Thus export offers also showed marginal correction this week following decline in domestic market.

Chinese HRC export offers remain stable and rebar export offers decline over ample supply. Coking coal offers decline over inactive trades from China.However iron ore prices witness uptrend as mills started restocking the material.

The Ministry of Ecology and Environment, the Ministry of Commerce, the National Development and Reform Commission, and the General Administration of Customs jointly issued a notice on the adjustment of the Catalogue of Imported Waste Management, which will move 8 kinds of solid wastes such as steel scrap, copper scrap and aluminum scrap from ‘The Catalogue of Non-restricted Imported Solid Wastes Usable as Raw Materials to the Catalogue of Restricted Imported Solid Wastes usable as Raw Materials’, taking effect from July 1, 2019.

The adjustments on restricted import of solid waste include: cast iron waste and scrap, other alloy steel waste and scrap, tin-plated steel waste and scrap, steel scrap generated during machining (refers to lathing, planning, milling, grinding, sawing, filing, shearing, punching ), unlisted iron and steel scrap, iron and steel scrap ingots for remelting, other copper scrap and other aluminum scraps.

Chinese spot iron ore prices inch up – Chinese spot iron ore prices opened up this week at USD 72.35/MT, CFR China and increased to USD 73.45/MT towards the weekend.The prices were favored due to mills restocking activities which are expected to continue till mid-January.

However, the prices remained stable W-o-W as restocking for lower grade fines over medium and high grade was preferred due to approaching Lunar new year Holidays.

Spot lump premium witnessed stable W–o-W at USD 0.3721 /DMTU. Iron ore lump inventory witnessed at 15.65 MnT this week, as against 15.25 MnT a week ago.

Spot pellet premium moves up slightly this week-: Spot pellet premium for Fe 65% grade pellets assessed at USD 44.9/DMT, CFR China this week, up USD 0.65/DMT against USD 44.25/DMT a week before.

The pellet premium has picked up this week amid stability in iron ore prices on weekly basis. However, mills preferred more of domestic concentrates to produce pellets as it was comparatively less expensive than imported pellets.

Coking coal prices inch down amid New Year holidays-Seaborne premium-grade coking coal prices inch down owing to New year holidays prevailing in China.Meanwhile trading activity remains muted in China which lead to fall in coking coal offers from China.

Meanwhile buyers in China resist buying over ample supply in hand and high inventory levels at most of the steel mills.

Thus,premium HCC coking coal prices are heard around USD 209/MT FoB Australia. However last week coking coal prices was at USD 220/MT FoB basis.

Chinese HRC export offers remain firm- Chinese HRC export offers remain firm this week amid moderate sentiments prevailing in domestic market.

Currently HRC export offers from China is assessed around USD 475-480/MT FoB basis.However last week the offers was in similar range only.

Meanwhile prices of HRC in the domestic market decline by RMB 170/MT on weekly basis and presently domestic HRC is assessed around at RMB 3,640-3,650MT (ex-works) in Eastern China which was RMB 3,810-3,820/MT in previous week.

However Chinese steel makers are expecting demand to pick up in the month of March.

Chinese re-bar export decline over increased supply-Nation’s re-bar export offers witness decline this week over softening sentiments in billet market.

However sluggish demand lead to increased inventories among the mills in turn results to lower rebar export offers from China.

Currently, nation’s rebar export offers are at USD 465-476/MT FoB China.Last week rebar export offers was assessed at USD 485/MT FoB basis.

Domestic rebar prices plunged by RMB 100/MT on weekly basis and is assessed at RMB 3,800-3840/MT in (Eastern China) as compared to RMB 3,700-3,750MT (Eastern China) in previous week.

Chinese steel market Highlights – Week 1,2019

Source- SteelMint Research