Chinese steel prices witnessed an uptrend this week as the market sentiments improved w-o-w. However, domestic rebar prices remained range-bound against last week. Moreover, SHFE HRC and rebar futures for October contract registered a rise on weekly basis.
Monthly export-import data- July
i) Steel exports stood at 6.67 mnt in July, down 12% m-o-m against 7.56 mnt in June.
ii) Steel imports remained largely stable m-o-m at 0.79 mnt in the month.
iii) Iron ore imports were recorded at 91.24 mnt, up 3% m-o-m compared with 88.96 mnt in June.
Product wise sentiments-
1. China spot iron ore prices stable w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $108.80/t CNF China for the week and assessed at $108.85/t, CNF China towards the weekend. The seaborne iron ore prices inched on the back of improved sentiments following the restart of production at steel mills. Later on iron ore prices continued to trend lower amid poorer seaborne buying interest, market sources said.
Iron ore inventory at major Chinese ports stood at 138.6 mnt this week, increasing by 2 mnt as against 136.6 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium stable w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $26.4/t, stable against $26.45/t last week.
b) Spot lump premium inch up w-o-w: Spot lump premium stood at $0.1000/dmtu, up as against $0.0960/dmtu last week.
Market views for seaborne lump premium remained mixed. Some sources saw the possibility of premiums rising with positive import margins, others were hesitant due to concerns about the sustainability of steel margins.
2. Coking coal prices rise w-o-w: Coking coal prices rose by $36/t w-o-w to $239/t FOB against $203/t FOB a week ago. The rise was majorly because of increased demand especially from India.
3. China’s billet prices rise towards weekend: Steel billet prices in China’s Tangshan witnessed a rise of RMB 60/t ($9/t) w-o-w to RMB 3,770/t ($559/t), including 13% VAT, on 12 August, 2022. According to data maintained with SteelMint, China’s SHFE rebar futures contract for October 2022 delivery closed at RMB 4,150/t ($615/t) on 12 August, witnessing an increase of RMB 114/t ($17/t) w-o-w.
4. HRC export offers up by $7/t w-o-w: China’s HRC (SS400) export offers edged up by $7/t w-o-w to $612/t FOB China compared with $605/t a week ago. Improvement in the domestic market and gains in HRC futures this week prompted mills to raise their export offers.
In the domestic market, HRC prices rose by RMB 30/t ($4/t) w-o-w to RMB 4,020/t ($596/t) in the northern China against RMB 3,990/t ($592/t) in the previous week. Also, stocks dropped 1% w-o-w to 2.66 mnt as on 12 August compared with 2.69 mnt a week ago, as per Lange Steel data.
According to data maintained with SteelMint, SHFE HRC futures contract for October delivery rose by RMB 67/t ($10/t) w-o-w to RMB 4,057/t ($602/t) as on 12 August’22.
China’s Baosteel slashed its monthly HRC prices by RMB 100/t ($15/t) for September 2022 sales due to falling global steel prices and weak domestic demand.
5. Domestic rebar prices edge down w-o-w: China’s domestic rebar prices edged down by RMB 10/t ($1/t) w-o-w to RMB 4,200/t ($623/t) in western China against RMB 4,210/t ($624/t) last week.
In addition, China’s rebar inventory declined sharply by 6% w-o-w to 4.90 mnt as on 12 August against 5.22 mnt a week ago, as per Lange Steel data.
6. Shagang Steel rolls over long steel prices: China’s Shagang Steel rolled over long steel products prices for mid-August sales. Effective prices-
- Rebar (16-25 mm): RMB 4,500/t ($667/t)
- Wire rods (6-10 mm): RMB 4,510/t ($669/t)
- Coiled rebar (8-10 mm): RMB 4,600/t ($682/t)
All prices are on ex-mill basis, including VAT
The steelmaker also lifted scrap prices by RMB 200/t ($30/t) for all grades from 10 August. Post revision, prices of HMS (6-10mm) stood at RMB 3,070/t ($455/t) delivered to headquarters, including 13% VAT. The company raised scrap purchase bids twice this week by a total of RMB 300/t ($45).
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