Chinese steel prices across all product categories saw an upward trend with the ease in Covid restriction and gains in HRC and rebar futures on the Shanghai Futures Exchange (SHFE).
November export-import data
i) China’s steel exports rose by 8% m-o-m to 5.59 mnt in November as against 5.18 mnt in October.
ii) Steel Imports stood at 752,000 t in November, down by 3% m-o-m as compared to 772,000 t in October.
iii) Iron ore imports were recorded at 98.85 mnt in November, up 4% m-o-m against 94.48 mnt in October.
The average daily crude steel output of CISA-affiliated mills stood at 2.02 mnt in late-November, up 1% from mid-November 2022.
- Steel inventory at CISA mills stood at 15.30 mnt in late-November, down 1.99 mnt or 11.54% from 17.30 mnt in mid-November.
- Compared with the end-October 2022, inventory declined by 1.16 mnt, or 7.10%.
- Inventory rose by 2.8 mnt or 22.59% compared to the year-ago period.
Product-wise sentiments-
1. China spot iron ore prices increase w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $109.6/t CNF China for the week and assessed at $112.4/t, CNF China towards the weekend. The spot prices of iron ore in China improved on an expected drop in Brazilian iron ore supplies and anticipation of stimulating property market measures in the annual Central Economic Work Conference in China next week.
According to sources, the relaxation of Covid-19 control measures in China brought the logistics and transportation back to normal, which is good for the sales and delivery of domestic concentrates.
Iron ore inventory at major Chinese ports stood at 136.35 mnt on 8 December 2022, inching down by 1.15 mnt as against 137.5 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 was assessed at $19.1/t, moving down as against $21.85/t last week.
Asian pellet premiums decline on bearish fundamentals in the seaborne market, even though producers tried to offer following the removal of export duty by India last month.
b) Spot lump premium down w-o-w: Spot lump premium stood at $0.1300/dmtu, falling as against $0.1620/dmtu last week.
2. Coking coal unchanged w-o-w: Coking coal prices remained range-bound at $250/t FOB against $248/t FOB last week. Prices remained steady with not much improvement in global steel demand.
3. China’s billets prices marginally up w-o-w: Steel billets prices in China’s Tangshan rose by RMB 170/t ($24/t) w-o-w. Prices stood at RMB 3,720/t ($535/t), including 13% VAT, on 9 December 2022. The stability in finished steel prices and significant rise in futures supported domestic billets prices, SteelMint notes. According to data maintained with SteelMint, China’s SHFE rebar futures contract for January 2023 delivery closed at RMB 3,770/t ($542/t) on 9 December, up RMB 30/t ($4/t) w-o-w.
4. HRC export offers rise w-o-w: China’s HRC export offers registered an increase of $35/t w-o-w to $580/t FOB China against $545/t FOB last week. The appreciation of the Chinese currency against the US dollar and an increase in SHFE HRC futures contributed towards the increase in export offers.
Domestic HRC prices increased by RMB 160/t ($23/t) w-o-w to RMB 4,000/t ($575/t) compared with RMB 3,840/t ($551/t) last week. The easing of Covid restrictions through a new 10-point plan by the China’s National Health Commission and an increase in SHFE HRC futures improved market sentiment this week.
HRC futures on the Shanghai Futures Exchange (SHFE) rose by RMB 101/t ($14/t) w-o-w to RMB 4,014/t ($577/t) as on 9 December.
5. Domestic rebar prices up w-o-w: China’s domestic rebar prices rose by RMB 130/t ($18/t) w-o-w to RMB 3,810/t ($535/t) from RMB 3,680/t ($517/t) last week. Prices increased w-o-w following relaxation in public transport in major cities which helped in growing business activity, including the construction sector. Furthermore, market participants anticipate that demand to improve in the near future.
6. Shagang Steel raises scrap purchase prices: Shagang Steel raised scrap prices twice this week by RMB 50/t ($7/t) each for purchase of all grades. Post revision, HMS (6-10 mm) prices stood at RMB 3,010/t ($433/t) delivered to headquarters, including 13% VAT, effective from 9 December 2022.
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