Chinese steel prices remained range-bound post-the Christmas and New Year holidays. The latest supportive property market policies in the country provided price support to the iron ore market which, in turn, have propped up steel prices.
The average daily crude steel output of CISA-affiliated mills stood at 1.91 million tonnes (mnt) in late-December, down 2.4% from mid-December.
- Steel inventory at CISA mills stood at 13.05 mnt in late-December, down 2.93 mnt or 18.35% from 15.99 mnt in mid-December.
- Compared with late-November, inventory declined by 2.24 mnt, or 14.68%.
- Inventory rose by 1.75 mnt or 15.58% compared to the year-ago period.
Product-wise sentiments-
1. China’s iron ore spot prices increase w-o-w: Chinese iron ore Fe 62% fines prices opened at $117.65/t CNF for the week and were assessed at $119.8/t CNF towards the weekend. Seaborne iron ore prices rose as optimism from the latest supportive property market policies supported iron ore prices.
Though the property market news is supportive and good for the market, it still depends on whether or not downstream steel demand actually picks up.
Iron ore inventory at major Chinese ports stood at 134.1 mnt on 5 January, inching up by 0.45 mnt as against 133.65 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premiums edge down w-o-w: Spot premiums for Fe 65% grade pellets were assessed at $16/t, moving down w-o-w as against $16.65/t last week.
b) Spot lump premiums up w-o-w: Spot lump premiums stood at $0.1100/dmtu, up as against $0.0875/dmtu last week.
Seaborne lump premiums rose on the back of improved buying interest at low premium levels, according to sources.
2. Coking coal prices rise w-o-w: Australian coking coal prices rose by $10/t w-o-w to $314/t FOB against $295/t FOB last week. This came due to positive demand sentiments as China has allowed its four firms to resume coal imports from Australia.
3. China’s domestic billet prices stable w-o-w: Steel billet prices in China’s Tangshan remained stable w-o-w. Prices stood at RMB 3,780/t ($553/t), including 13% VAT, on 6 January. According to data maintained with SteelMint, China’s SHFE rebar futures contract for May 2023 delivery closed at RMB 4,107/t ($600/t) on 6 January, largely stable, w-o-w.
4. HRC export offers inch up w-o-w: China’s HRC export offers rose by $5/t w-o-w to $610/t FOB as against $605/t FOB last week. The export market remained stable this week post holidays.
Domestic HRC prices edged ups by RMB 20/t ($3/t) w-o-w to RMB 4,080/t ($597/t) compared with RMB 4,060/t ($593/t).
HRC futures on the Shanghai Futures Exchange (SHFE) rose by RMB 22/t ($3/t) w-o-w to RMB 4,158/t ($608/t) as on 6 January.
The world’s top steelmaker, Baosteel, raised its monthly HRC prices by RMB 100/t ($15/t) m-o-m for February sales.
5. Domestic rebar prices increase w-o-w: China’s domestic rebar prices increased by RMB 60/t ($14/t) w-o-w to RMB 4,080/t ($583/t) from RMB 4,020/t ($/t) last week.
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