Chinese steel prices across various categories witnessed a downward trend this week following a sharp fall in Shanghai Futures Exchange (SHFE) HRC and rebar futures.
Product-wise sentiments:
1. China spot iron ore prices down w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $101.75/t CNF China for the week and assessed at $95/t, CNF China towards the weekend. Seaborne iron ore prices plunged as strict pandemic restrictions in China’s Shenzhen and Chengdu cities dampened demand sentiment.
Seaborne buying sentiment remained steady despite bearish news from China. With talk of stronger restocking before China’s Golden Week holidays, interest in loading cargoes from early to mid-September has increased.
Iron ore inventory at major Chinese ports stood at 143 mn t this week increased by 2.6 mnt as against 140.4 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium down on week: Spot pellet premium for Fe 65% grade pellets was assessed at $24/t, moved down as against $21.05/t last week.
Pellet premiums fell further reflecting preferences to use more lump and sintered ore at a lower output.
b) Spot lump premium stable w-o-w: Spot lump premium stood at $0.0960/dmtu, stable since last week.
2. Coking coal prices stable w-o-w: Coking coal prices remained largely stable w-o-w at $274/t FOB Australia. The buying interest remained slow due to inflationary pressure and muted global downstream demand.
3. China’s billet prices slump towards weekend: Steel billet prices in China’s Tangshan fell by RMB 110/t ($16/t) w-o-w following a sharp decline in rebar futures. Prices stood at RMB 3,660/t ($530/t), including 13% VAT, on 2 September, 2022. China’s SHFE rebar futures contract for January 2023 delivery closed at RMB 3,637/t ($527/t) on 2 September, a sharp decrease of RMB 460/t ($67/t) w-o-w, according to data maintained with SteelMint.
4. HRC export offers decline by $15/t w-o-w: China’s HRC (SS400) export offers declined by $15/t w-o-w to $590/t FOB China as compared with $605/t a week ago.
In the domestic market, HRC prices dropped by RMB 100/t ($15/t) w-o-w to RMB 3,920/t ($568/t) in northern China against RMB 4,020/t ($583/t) in the previous week. This week spot prices were majorly impacted by sharp decline in SHFE futures.
SHFE HRC futures contract for January delivery fell sharply by RMB 371/t ($54/t) w-o-w to RMB 3,690/t ($535/t) as on 2 September, according to data maintained with SteelMint.
5. Domestic rebar prices down w-o-w: China’s domestic rebar prices fell by RMB 120/t ($17/t) w-o-w to RMB 4,040/t ($586/t) in western China against RMB 4,160/t ($603/t) last week. Prices fell amid increase in supplies and poor demand from real estate sector.
6. Shagang Steel lowers rebar prices by $15/t: China’s Shagang Steel has lowered rebar prices by RMB 100/t ($15/t), while wire rod and coiled rebar prices remained unchanged for early-September sales. Effective prices-
- Rebar (16-25 mm): RMB 4,400/t ($638/t)
- Wire rods (6-10 mm): RMB 4,510/t ($654/t)
- Coiled rebar (8-10 mm): RMB 4,600/t ($667/t)
All prices are on ex-mill basis, including VAT.
7. Shagang Steel trims scrap buy price: China’s Shagang Steel has cut scrap purchase prices twice this week by a total of RMB 130/t ($19). Post revision, HMS (6-10 mm) prices are at RMB 3140/t ($455/t) delivered to headquarters, including 13% VAT.
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