Steel prices witnessed mixed trends this week due to slow demand admist resurgence of COVID-19 cases in some parts of China along with fresh production curbs announced by the State Council. However, export offers for hot-rolled coils (HRC) jumped $5/t w-o-w on increased demand in the overseas markets.
Monthly export-import data:
i) Steel exports surged 56% to 7.76 million tonnes (mnt) in May 2022 compared with 4.98 mnt in April.
ii) Steel imports stood at 810,000 t in May, down 16% as against 960,000 t the previous month.
iii) Iron ore imports were recorded at 92.52 mnt in May, up 8% m-o-m compared with 86.06 mnt in April.
Product-wise sentiments:
1. Spot iron ore prices decrease on week: Chinese spot iron ore fines Fe 62% prices opened at $147.25/t CNF China this week and were assessed at $141.55/t CNF China towards the weekend. Seaborne iron ore prices declined as import losses continued to keep market participants wary.
Meanwhile, following the increase in the iron ore export tax in India, market participants said they expected demand for Indian pellets to increase given the limited supply making its way into China.
Iron ore inventory at major Chinese ports stood at 128.30 mnt this week, down 3.70 mnt as against 132 mnt last week, as per data maintained by SteelHome.
a) Spot pellet premium down w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $36.30/t, down $41.80/t from last week.
b) Spot lump premium decreases w-o-w: The spot lump premium stood at $0.2130/dmtu, down from $0.2665/dmtu last week. Lump premiums continued to fall and several lump cargoes were heard offered in the secondary market with no bidding interest.
2. Coking coal prices plunge $51/t w-o-w: Australian coking coal prices this week fell $51/y w-o-w amid low buying interest and improved supplies. The price on 10 June was assessed at $368/t FOB Australia as against $419/t FOB a week ago.
3. Domestic billet prices edge up towards weekend: Steel billet prices in China’s Tangshan witnessed a rise of RMB 20/t ($3/t) w-o-w. Prices stood at RMB 4,520/t ($674/t), inclusive of 13% VAT, on 10 June. According to SteelMint data, the SHFE rebar futures contract for October 2022 delivery closed at RMB 4,793/t ($714/t) on 10 June, witnessing a marginal increase of RMB 5/t ($1/t).
4. HRC export offers up $5/t w-o-w: China’s HRC export offers edged up by $5/t to $785/t FOB China from $780/t FOB a week ago.
In the domestic market, HRC prices remained flat at RMB 4,860-4,880/t ($724-727/t) w-o-w on the back of new announcements of production curbs by the State Council. Moreover, SHFE HRC futures kept tumbling during the week, which impacted spot prices as well.
For instance, HRC futures contract for October delivery on the Shanghai Futures Exchange (SHFE) remained stable w-o-w at RMB 4,880/t ($727/t) on 10 June.
5. Domestic rebar prices fall up to RMB 70/t w-o-w: Rebar producers lowered their prices up to RMB 50-70/t ($7-10/t) to RMB 4,650-4,700/t ($693-696/t) northern China as against RMB 4,720-4,750/t ($704-708/t) northern China last week due to slower-than-expected demand after the Dragon Boat festival. Moreover, sellers were trying to liquidate their inventories admist resurgence in COVID-19 cases. China’s rebar inventory stood at 7.17 mnt on 3 June, an increase of 3% to 7.41 mnt as on 10 June.
6. Shagang Steel rolls over long steel prices: China’s Shagang Steel rolled over long steel products prices for mid-June sales.
Effective prices:
- Rebar (16-25 mm): RMB 5,350/t ($797/t)
- Wire rods (6-10 mm): RMB 5,310/t ($791/t)
- Coiled rebar (8-10 mm): RMB 5,400/t ($805/t)
All prices are on ex-mill basis, including VAT.
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