- CISA mills inventory drops 6% against mid-May levels
- Weak domestic demand, cautious buying to persist
China’s steel market remained firm this week. Notably, domestic prices of hot-rolled coils (HRC) remained firm while rebar inched up w-o-w, with billets also witnessing a weekly rise. However, in the raw materials segment, spot iron ore and coking coal prices dropped over the week.
The China Iron and Steel Association (CISA) has announced that the total steel inventory at key Chinese enterprises was at around 15.3 million tonnes (mnt) in late-May 2025. Inventory levels dropped by 1.05 mnt or 6.4% from 16.35 mnt in mid-May.
1. Iron ore spot prices dip w-o-w: The benchmark price of iron ore fines (Fe 62%) dropped by $1/t w-o-w to $96/t CFR China on 6 June. This drop was linked to a market pause during the Dragon Boat Festival in China, leading mills to adjust their input mix to safeguard margins. Mid-grade fines remained in demand as mills benefited from solid margins.Iron ore inventories at China’s major ports decreased by 1 mnt to 132 mnt on 5 June compared to last week, according to SteelHome data.
a) Spot pellet premium inches up w-o-w: Spot pellet premium for Fe 65% grade pellets rose w-o-w by $1/t to $12.80/t CFR China on 5 June.
b) Spot lump premium rises: Spot lump premium inched up by $0.01 w-o-w to $0.1645/dmtu on 6 June.
2. Coking coal prices dip w-o-w: Australia’s PHCC prices dropped $10/t to $185/t FOB on weak demand and ample supply. With the third round of met coke price cuts looming in China, the market has weakened further on lower bids.
3.Billet prices uptrend w-o-w: Chinese billet prices saw a slight uptick, rising by RMB 20/t ($3/t) w-o-w to RMB 2,910/t ($405/t), including 13% VAT, on 6 June, compared to 30 May, despite prevailing market weakness. The modest price increase was supported by improved sentiments following the recent China-US talks and a slight rebound in raw material prices such as iron ore and coking coal. Moreover, SHFE rebar futures strengthened, recording a marginal gain of RMB 14/t ($2/t) w-o-w, closing at RMB 2,975/t ($414/t).
4. Domestic HRC prices stayed firm w-o-w: Chinese HRC offers remained stable w-o-w at RMB 3,100/t ($431/t). SHFE HRC futures edged up by RMB 13/t ($2/t) to RMB 3,097/t ($431/t) on 6 June against RMB 3,084/t ($429/t) on 30 May. This stability was due to persisting bearish sentiments in China’s domestic steel market that led to cautious buying behaviour across regions. Moreover, China’s HRC export offers dropped by $10/t w-o-w to $445/t against $455/t a week ago.
5. Domestic rebar prices rise w-o-w: China’s rebar offers marginally rose by RMB 10/t ($1/t) w-o-w to RMB 3,170/t ($441/t) from RMB 3,160/t ($440/t) last week, mirroring the rise in SHFE rebar futures. SHFE rebar futures (October 2025 contract) stood at RMB 2,982 /t ($415/t) on 6 June, up by RMB 19 /t ($3/t) from 2,963/t ($412/t) as of 30 May. This increase in prices is driven by the uptrend in the steel raw material market, which has pushed up rebar tags.China’s Shagang Steel reduced rebar prices by $7/t for early-June sales. Prices of coiled rebars and wire rods remained stable. Post-revision, prices of rebars, coiled rebars and wire rods are as follows:
- Rebars (16-25 mm): RMB 3,250/t ($452/t)
- Coiled rebars (8-10 mm): RMB 3,410/t ($474/t)
- Wire rods (6-10 mm): RMB 3,320/t ($462/t)
Outlook
In the near term, the Chinese HRC market is expected to remain under pressure due to weak domestic demand, cautious buying, and limited export interest. While prices have remained relatively stable, bearish sentiment persists.
Leave a Reply