- HRC, billet prices remain unchanged w-o-w
- Inventories at key mills rise 3% in early January
China’s steel prices showed a mix trend w-o-w ahead of the Lunar New Year ( 28 January to 4 February) holidays. Notably, domestic prices for hot-rolled coils (HRCs) and billets remained unchanged w-o-w, while rebar saw a weekly increase. In the raw materials segment, spot iron ore prices edged up, but coking coal’s declined over the week.
The China Iron and Steel Association (CISA) said, the total steel inventory at key Chinese enterprises touched 12.93 million tonnes (mnt) in mid-January 2025. Inventory levels increased by 340,000 tonnes (t) or 2.7% compared to 12.59 mnt in early-January 2025.
1. Iron ore spot prices up $1/t w-o-w: Iron ore spot prices inched up by $1/t w-o-w to $105/t CFR China as of 24 January 2025, driven by recent macroeconomic developments. Notably, the announcement that the US would delay imposing additional tariffs on Chinese imports bolstered confidence.
a) Spot pellet premium remains stable w-o-w: Spot pellet premium for Fe65% grade pellets remained firm w-o-w at $18.35/t CFR China on 22 January.
b) Spot lump premium rises w-o-w: Spot lump premium increased by $0.0145/t to $0.1575/dmtu on 24 January.
2. Coking coal prices inch down w-o-w: Australian coking coal prices fell $3/t w-o-w. PHCC was assessed at $186/t FOB Australia. Improved cargo availability, weak demand, thin liquidity and the seventh round of met coke price cuts in China kept coking coal prices under pressure.
3. Chinese billet prices remain stable w-o-w: Billet prices in China’s Tangshan remained unchanged w-o-w at RMB 3,080/t ($425/t), including 13% VAT, on 24 January 2025. Volatility in raw material prices, finished steel prices, and rebar futures, combined with subdued trading activity, put pressure on billet prices.
4. Domestic HRC prices rise: Chinese HRC offers held steady w-o-w at RMB 3,390/t ($468/t), as market activity remained sluggish ahead of the holidays. Market participants are adopting a wait-and-see approach, anticipating clearer market direction after the holidays. SHFE HRC futures (May 2025 contract) inched down by RMB 7/t ($1/t) to RMB 3,455/t ($477/t) from RMB 3,462/t ($478/t) a week ago. However, China’s export offers increased by $20/t w-o-w to $475/t against $455/t last week.
5. Domestic rebar prices edge up w-o-w: China’s rebar offers edged up by RMB 30/t ($4/t) w-o-w to RMB 3,330/t ($460/t) compared to RMB 3,300/t ($456/t) a week ago. Prices rose as buyers engaged in restocking before the start of the Chinese Lunar Year. SHFE rebar futures (May 2025 contract) inched up by RMB 7/t ($1/t) w-o-w to RMB 3,353/t ($463/t) from RMB 3,346/t ($462/t) last week.
Moreover, Shagang Steel has kept prices of its long steel products – rebars, coiled rebars, and wire rods – unchanged for late-January sales. Effective prices now stand at:
- Rebar (16-25 mm): RMB 3,500/t ($481/t)
- Coiled rebar (8-10 mm): RMB 3,510/t ($482/t)
- Wire rod (6-10 mm): RMB 3,420/t ($470/t)
Outlook
As China prepares to celebrate the Lunar New Year, the steel market is expected to remain subdued, with participants adopting a wait-and-see approach. However, the recent uptick in iron ore prices and restocking activities ahead of the holidays may provide some support to steel prices in the short term. A clearer direction is expected to emerge after the holidays, when market participants return and trading activity resumes.
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