Chinese Steel Market Highlights- Week 10, 2018

This week Chinese steel market began with optimistic sentiments post festive holidays. However with the announcement by Donald Trump on Section 232 anti circumvention case to impose tariffs of 25% on USA imports has resulted to fall in Chinese domestic and global steel prices.Also weakening futures market led to decline in domestic prices in China.

Meanwhile as per recent data released by Chinese customs,Chinese finished steel export volumes witnessed growth on monthly basis to 4.85 MnT in Feb’18, increase of 4% as compared to 4.65 MnT in Jan’18.However on yearly basis nation’s finished steel export volumes plunged by 16% against 5.75 MnT in Feb’17.

Spot iron ore prices in China touch 3 months low : China spot iron prices fell by USD 3/MT on 9th Mar’18 to USD 70/MT, CFR China against the previous closing of USD 73/MT, CFR China. In last three trading days, prices have declined by USD 5/MT. Decline in steel and ferrous futures, increased iron ore stockpiles at Chinese major ports resulted in fall in spot iron ore fines prices.

Spot iron lump premium stood at 0.19/MT, CFR China. Spot pellet premium increased sharply to USD 42.5/DMT, CFR China.

Iron ore stocks at major Chinese ports stood at 158.6 MnT by the end of this week against 159.13 MnT a week ago.

Coking coal prices remain stable – Australian coking coal offers remain stable this week since the major importing nations India and China have halted their bookings on temporary basis over higher prices.

Currently,Premium HCC prices was assessed at around USD 232.75/MT FoB Australia,which remain unchanged as compared to preceding week.

However, demand for Coking Coal in China is expected to return after 15 Mar’18, when the curb on steel production during the winter season mandated by the Chinese government will come to an end.However, sellers in Australia have refrained from lowering their prices of the coal in global market.

Chinese billet domestic offers fall significantly – Spot billet (150*150mm) prices in Tangshan stood at RMB 3,670/MT (including 17% VAT) towards the week close against RMB 3,800/MT at the beginning of this week.

However Chinese billet export offers are assessed at USD 555/MT FoB China.

Chinese HRC export offers moved down towards weekend amid falling domestic prices– In the beginning of the week,Chinese HRC export offers showed uptrend in domestic as well as global market.However by the end of the week HRC export offers reported fall by USD 12/MT amid falling futures and weaker domestic prices.

Currently Chinese HRC export offers are assessed in the range of USD 608/MT,FoB China.In the beginning of the week the same stood at USD 620/MT,FoB basis.Payment are made on letter of credit basis for 1,000-10,000 MT.

Meanwhile prices in the domestic market are gauged at RMB 3,930-3,960/MT move down by RMB 70/MT in Eastern China and RMB 3,890-3,910/MT in Northern China.

Chinese Re-bar export market move down over weakening domestic market- Chinese re-bar export offers reported fall by USD 12/MT by the end of this week.

Currently, nation’s re-bar export offers are at USD 585-600/MT on FoB basis.Buyers are expecting the prices to be around USD 560-565/MT FoB China.

Market participants mentioned that Chinese mills will start exporting material in near term to compensate domestic losses.

Chinese Iron and Steel Prices Week 10-

Source-SteelMint Research