- Steel prices up w-o-w following SHFE gains
- Coking coal prices drop on weak demand
The Chinese steel market saw an uptick in prices this week, largely mirroring the rise in Shanghai Futures Exchange (SHFE) prices. Domestic steel product prices, including billet, hot-rolled coil (HRC) and rebar, saw w-o-w increases, while iron ore and coking coal prices dropped.
China’s crude steel production stood at 86.55 million tonnes (mnt) in May, down by 6.9% y-o-y, according to data released by the National Bureau of Statistics (NBS).
1. Iron ore spot prices fall by $1/t w-o-w: The benchmark iron ore fines spot price fell $1/t w-o-w to $94/t CFR China on 20 June as oversupply concerns resurfaced amid tepid buying interest. The physical iron ore market has weakened recently due to lower demand and the rainy season in China. As per reports, weak steel margins and declining port-stock prices signalled poor fundamentals, prompting traders to offload cargoes even at a loss.
Iron ore inventory at Chinese ports increased by 1.2 mnt (million tonnes) w-o-w to 134.6 mnt on 19 June, as per data published by SteelHome.
a) Spot pellet premium rises w-o-w: Spot pellet premium for Fe 65% grade pellet sharply increased up by $1.05/t w-o-w to $14.10/t CFR China on 18 June
b) Spot lump premium decreases w-o-w: Spot lump premium decreased by 0.0075/t to $0.1525/dmtu on 20 June.
2. Coking coal prices decline w-o-w: Australian PHCC prices dropped $6/t to $175/t FOB due to weak downstream demand and uncertain market sentiment. In China, subdued steel production during the summer off-season, high coke inventories, and anticipated coke price cuts pressured both the coke and coal markets, keeping buying interest low despite recent coal price stability.
3. Billet prices rise by RMB 30/t ($4/t) w-o-w: Steel billet prices in Tangshan, China, rose by RMB 30/t ($4/t) w-o-w to RMB 2,930/t ($408/t), including 13% VAT, on 20 June. Positive finished steel prices, rebar futures and recovery in domestic raw material prices supported billet tags. Meanwhile, SHFE rebar futures (October 2025 delivery) inched up w-o-w by RMB 23/t ($3/t) to RMB 2,992/t ($416/t) on 20 June.
4. Domestic HRC prices rise w-o-w: China’s HRC offers rose by RMB 10/t ($1/t) w-o-w to RMB 3,070/t ($428/t) against RMB 3,060/t ($426/t) in the preceding week following the rise in SHFE futures. SHFE HRC futures rose by RMB 46/t ($6/t) w-o-w to RMB 3,117/t ($434/t) on 20 June as compared to RMB 3,071/t ($428/t) on 13 June. However, supply-demand fundamentals continued to stay weak amid seasonal slowdown.
Meanwhile, Chinese HRC export offers remained stable w-o-w at $445/t amid sluggish demand.
5. Domestic rebar prices increased w-o-w: China’s rebar offers increased by RMB 10/t ($1/t) w-o-w to RMB 3,180/t ($443/t) against RMB 3,170/t ($442/t) a week ago. However, adverse weather conditions caused a sustained decline in end-user demand for rebar.
SHFE rebar futures (October 2025 contract) stood at RMB 2,994/t ($417/t) on 20 June, up by RMB 32/t ($4/t) as compared to RMB 2,962 /t ($413/t) on 13 June.
Outlook
In the short term, China’s supply-demand balance may continue to show some softness. Amid ongoing global uncertainties and limited signs of a new economic driver, steel prices are expected to remain volatile with a mild downward trend expected next week. Additionally, overseas demand remains quiet, and continued weakness in the domestic market is forcing buyers to stay cautious.
Leave a Reply