This week China’s steel prices witnessed an uptrend as market sentiments were boosted by the monetary support given by the nation’s central bank coupled with the National Development and Reform Commission’s (NDRC) positive take on economic growth. However, coking coal prices fell amid supply-demand gap.
Product-wise sentiments
1. China spot iron ore prices fall towards weekend: Chinese spot iron ore fines Fe 62% prices opened at $119.6/t CNF China for the week and assessed at $116/t, CNF China towards the weekend. Seaborne iron ore prices rose at the start of the week as the market gained confidence following the relaxation of quarantine measures. Later, iron ore prices fell as low steel demand kept buyers on the sidelines.
Market discussions about production cuts continued, with sources expecting production cut targets to emerge soon.
Iron ore inventory at major Chinese ports stood at 125.5 mnt this week, an increase of 1.1 mnt as against 124.4 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium down w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $29.6/t, down compared to $34.55/t last week.
b) Spot lump premium inch up w-o-w: Spot lump premium stood at $0.1000/dmtu, up as against $0.0980/dmtu last week.
2. Coking coal prices fall w-o-w: Prices in the Australian coking coal market continued to fall this week, owing to a weak steel market and supply-demand gap. Premium HCC prices fell by $48/t w-o-w. The price on 2 July stood at $302/t FOB Australia as against $350/t FOB last week.
3. China’s billet prices rise towards weekend: Steel billet prices in China’s Tangshan witnessed a significant rise of RMB 100/t ($15/t) w-o-w following a recovery in rebar futures. Prices stood at RMB 4,000/t ($597/t), inclusive of 13% VAT, on 1 July. According to data maintained with SteelMint, China’s SHFE rebar futures contract for October 2022 delivery closed at RMB 4,265/t ($636/t) on 1 July, witnessing an increase of RMB 76/t ($11/t) w-o-w.
4. HRC export offers drop $20/t, gain momentum towards weekend: China’s HRC (SS400) export offers dropped by $20/t to $675/t FOB compared with $695/t FOB a week ago. However, later in the week, offers were heard to have increased but deals are yet to be concluded at increased offers.
In the domestic market, HRC prices jumped RMB 30-40/t ($4-6/t) to RMB 4,340-4,350/t ($647-648/t) in eastern China as against RMB 4,300-4,320/t ($641-644/t) last week on the back of increased efforts by China’s central bank to introduce monetary support measures as well as gains in the futures market. Also, with easing COVID-19 related restrictions, market sentiments have improved.
According to the data maintained with SteelMint, HRC futures contracts for October delivery on the Shanghai Futures Exchange (SHFE) rose by RMB 60/t ($9/t) w-o-w to RMB 4,346/t ($648/t) on 1 July.
5. Domestic rebar prices up w-o-w: China’s domestic rebar prices went up by RMB 70-100/t ($10-15/t) to RMB 4,200-4,220/t ($626-629/t) in northern China in comparison with RMB 4,100-4,150/t ($611-619/t) the previous week. NDRC’s positive views on the country’s economic growth coupled with strong demand lifted market sentiments resulting in the rise in prices.
6. Shagang Steel reduces long steel prices: China’s Shagang Steel has reduced long steel prices for early-July sales. Effective prices:
- Rebar (16-25 mm): RMB 4,800/t ($716/t), down RMB 250/t ($37/t)
- Wire rods (6-10 mm): RMB 4,810/t ($718/t), down RMB 300/t ($45/t)
- Coiled rebar (8-10 mm): RMB 4,900/t ($731/t), down RMB 300/t ($45/t)
All prices are on ex-mill basis, including VAT.
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