Chinese steel prices across all product categories saw an upward trend as the State Council relayed its intent on boosting domestic demand. Moreover, further easing of Covid restrictions and improved demand from both the domestic and overseas markets lifted the sentiments this week.
The average daily crude steel output of CISA-affiliated mills stood at 1.98 million tonnes (mnt) in early-December, down 2.06% from late-November.
- Steel inventory at CISA mills stood at 15.34 mnt in early-December, down 37,600 tonnes (t) or 11.54% from 17.30 mnt in late-November.
- Compared with early-November, inventory declined by 1.38 mnt, or 8.25%.
- Inventory rose by 1.99 mnt or 14.98% compared to the year-ago period.
Product-wise sentiments-
1. China iron ore spot prices increase w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $110.25/t CNF China for the week and assessed at $112.7/t towards the weekend. Asian iron ore prices rose on improved seaborne trading activity. However, some market participants were inclined to adopt a wait-and-watch stance.
While China is in the middle of easing its Covid-19 lockdowns, mixed views were seen from market participants on takeaways from the country’s annual Central Economic Work Conference.
Iron ore inventory at major Chinese ports stood at 136.15 mnt on 15 December, inching down by 0.2 mn t as against 136.35 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium stable w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $19.1/t, stable against last week.
b) Spot lump premium edge up w-o-w: Spot lump premium stood at $0.1350/dmtu, rising as against $0.1300/dmtu last week.
“If lump premiums continue to rise and coke prices increase, pellets may see some demand again,” a China-based steel mill source said.
2. Coking coal prices rise w-o-w: Coking coal prices rose by $258/t FOB against $250/t FOB last week. Prices increased amid marginal improvement in restocking demand from India.
3. China’s billet prices rise w-o-w: Steel billet prices in China’s Tangshan rose by RMB 90/t ($13/t) w-o-w. Prices stood at RMB 3,810/t ($546/t), including 13% VAT, on 16 December. The decline in inventories and a sharp hike in rebar futures as well as finished steel prices supported billet prices. China’s SHFE rebar futures contract for May 2023 delivery closed at RMB 3,810/t ($546/t) on 16 December, a sharp rise of RMB 104/t ($15/t) w-o-w.
4. HRC export offers rise w-o-w: China’s HRC export offers increased by $10/t w-o-w to $590/t FOB as against $580/t FOB last week. Improved demand from overseas buyers and a sharp increase in SHFE HRC futures prompted major Chinese mills to raise their offers.
Domestic HRC prices increased by RMB 90/t ($13/t) w-o-w to RMB 4,090/t ($586/t) compared with RMB 4,000/t ($574/t) last week. Market sentiments improved with the goverment making Covid restrictions more liberal along with the introduction of stimulus measures for the real estate industry.
HRC futures on the Shanghai Futures Exchange (SHFE) rose by RMB 119/t ($17/t) w-o-w to RMB 4,125/t ($591/t) as on 16 December.
The world’s top steelmaker, Baosteel, raised its monthly HRC prices by RMB 200/t ($28/t) m-o-m for January 2023 sales.
5. Domestic rebar prices up w-o-w: China’s domestic rebar prices surged by RMB 210/t ($30/t) w-o-w to RMB 3,980/t ($571/t) from RMB 3,770/t ($541/t) last week. Prices increased w-o-w due to rising demand following the announcement of government plan to invest in infrastructure to support steel demand.
6. Shagang Steel raises rebar prices by $14/t: China’s Shagang Steel raised rebar prices by RMB 100/t ($14/t), while wire rods and coiled rebars prices remained flat for mid-December sales. Effective prices-
- Rebars (16-25 mm): RMB 4,050/t ($581/t)
- Wire rods (6-10 mm): RMB 4,360/t ($625/t)
- Coiled rebars (8-10 mm): RMB 4,450/t ($638/t).
- All prices are ex-mill, including VAT.
7. Shagang Steel lifts scrap buy prices: Shagang Steel lifted scrap buy prices for the first time this week by RMB 80/t ($11/t) for all grades of scrap. Post revision, HMS (6-10 mm) prices stood at RMB 3,090/t ($443/t) delivered to headquarters, including 13% VAT, effective from 13 December.
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