H1 CY17 was characterized by sharp price hike in steel commodities in China. China’s crude steel output moved up by 4% Y-o-Y however steel exports declined sharply in the same period on yearly premises.
Price hike in domestic market pushed export offers – Rising coking coal prices and improved buying in domestic market resulted in hike in steel prices both in domestic as well as in export market in China.
Coking coal prices climbed 86% Y-o-Y in H1 CY17. Domestic rebar prices in China hiked by 60% Y-o-Y while domestic flat steel prices increased up to 43% Y-o-Y in H1 CY17.
Domestic billet prices in China witnessed increase of 60% and billet export offers improved by 41% Y-o-Y in H1 CY17.
Rise in iron ore futures and steel prices pushed iron ore prices too. Iron ore fines index moved up by 41% Y-o-Y in H1 CY17.
Manganese and Chrome ore prices also increased in H1 CY17 against same time period last year.
Scrap industry remained abuzz with news of Ferrous scrap exports from China.
China: Steel Prices in H1 CY17 vs H1 CY16
|
Commodity |
Delivery | Size/Grade | Unit Prices | H1 | H1 CY16 | Y-o-Y (%) | Remark |
|
CY17 |
|||||||
| Coking Coal | FoB Australia | Premium HCC | USD/MT | 172.5 | 92.6 | 86.3% | – |
| Iron ore | CNF China | Fines, 62, | USD/MT | 73.11 | 51.83 | 41% | – |
| Australia | |||||||
| Iron ore | CNF China | Fines, Fe 61.5%, | USD/MT | 70.34 | 50.83 | 38% | – |
| Australia | |||||||
| Iron ore | CNF China | Fines, 65, Brazil | USD/MT | 74.97 | 53.15 | 41% | – |
| Iron ore | CNF China | Fines, 63.5, Brazil | USD/MT | 70.46 | 50.50 | 40% | – |
| Iron ore | CNF China | Lumps, 64/63, | USD/MT | 80.69 | 61.78 | 31% | – |
| South Africa | |||||||
| Manganese Ore | CNF China | Lump, Mn:44% | USD/DMTU | 5.52 | 3.09 | 78.6% | – |
| Chrome Ore | CNF China | Conc 40-42%, S. Africa, | USD/MT | 300.54 | 106.33 | 182.6% | – |
| Billet | Ex-Tangshan | 150*150mm, Q235 | RMB/MT | 3,023 | 1,888 | 60.1% | Prices include VAT |
| Billet | FoB China | 150*150mm, Q235 | USD/MT | 417 | 296 | 40.9% | – |
| Rebar | Ex-Shanghai | 16-25mm, HRB 400 | RMB/MT | 3460 | 2,162 | 60.0% | Prices include VAT |
| Rebar | FoB China | Commercial | USD/MT | 444 | 315 | 41.0% | – |
| Wire rod | Ex-Shanghai | Ф6.5-10, HRB 300 | RMB/MT | 3,395 | 2,317 | 46.5% | Prices include VAT |
| Wire rod | FoB China | 6.5mm | USD/MT | 447 | 321 | 39.3% | – |
| HRC | Eastern China (ex-warehouse) | 2.75mm, Q235/ | RMB/MT | 3,486 | 2,443 | 42.7% | Prices include VAT |
| SS400 | |||||||
| HRC | FoB China | 2.5mm SS400 | USD/MT | 472 | 356 | 32.6% | – |
| CRC | Eastern China (ex-warehouse) | 1.0mm ST12/SPCC | RMB/MT | 4,123 | 3,082 | 33.8% | Prices include VAT |
| CRC | FoB China | 1.0mm SPCC | USD/MT | 525 | 401 | 30.9% | – |
| Plates | Eastern China (ex-warehouse) | 5.5mm, Q235/S400 | RMB/MT | 3,443 | 2,418 | 42.4% | Prices include VAT |
| Plates | FoB China | 5-10mm, SS400 | USD/MT | 461 | 369 | 24.9% | – |
Source: SteelMint Research
China’s monthly crude steel production hit highest ever in Jun – Crude steel production in China increased to 419.75 MnT in H1 CY17. In Jun’17, China’s crude steel output hit all time high at 73.23 MnT.
China’s apatite for imported iron ore increased further – Iron ore imports to China were recorded at 539.23 MnT in H1 CY17 against 493.6 MnT in the same time period last year, up by 9% Y-o-Y.
Imports of other key steel making raw materials like coking coal, pellets and chrome ore also witnessed increased in H1 CY17 compared to the same time period last year.
Outlook for H2 CY17 – With many steel makers shifting to rebar production, rebar prices in China are likely to remain strong amid better margins expected. The construction of electric furnaces in China have increased drastically after some of manufacturing units (medium sized furnace and the induction furnaces) were stopped by the government, shifted to electric furnace facility. This will further raise demand for billets following which billet prices are likely to move up further.
China: Imports & Exports of Steel in H1 CY17
|
Particulars |
Country | H1 CY17 | H1 CY16 |
Y-o-Y (%) |
|
Production |
||||
| Crude Steel | China | 419.8 | 401.1 | 4.65 |
| Iron Ore Production | China | 633.4 | 594.0 | 6.63 |
| Met Coke Production | China | 218.9* | 215.2 | 1.74 |
|
Imports |
||||
| Coking Coal | China | 36.2* | 27.0 | 34.07 |
| Iron Ore | China | 539.2 | 493.9 | 9.18 |
| Pellet | China | 10.0* | 7.3 | 36.39 |
| Steel | China | 6.8 | 6.5 | 4.6 |
| Chrome Ore | China | 7.8* | 5.7 | 36.93 |
|
Exports |
||||
| Met Coke | China | 4.1* | 4.4 | -6.8 |
| Steel | China | 41.0 | 57.1 | -28.20 |
*Expected
Fig in MnT
Source: SteelMint Stats
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