Chinese Steel Market Highlights – Week 11, 2019

This week Chinese steel prices fluctuated amid mixed sentiments in domestic market. However export offers continued to show uptrend over active buying. Chinese HRC and rebar export offers moved up this week. Coking coal offers remain range bound.

As per the recent data released by National Bureau of Statistics, China’s crude steel production for Jan-Feb’19 moved up by 8% to 149.58 MnT as compared to 138.8 MnT in Jan-Feb’18.Chinese steelmakers ramped up production amid easier environmental restrictions which pushed up production volumes.

China’s major steelmaker Baosteel announced hike in flat steel prices for April deliveries. The company has raised flat steel prices by RMB 300-350/MT (USD 45-52/MT).

As per the latest update received Hebei’s largest steel producing city- Tangshan has lifted the previously imposed enforced level 1 smog alerts amid poor weather conditions due to which steel mills had to cut their output from 40% to 70% depending upon the four categories they fall into.These emergency production cuts that were in force for about 26 days have been lifted by the Tangshan government.

Chinese spot iron ore prices drop towards the weekend- Chinese spot iron ore prices opened up this week at USD 83/MT, CFR China and increased to USD 86.2/MT towards the weekend.

Iron ore prices surged amid expectation of increased steel production.The prices showed uptrend amid raw material shortage globally owing to another operation halt by Vale this week at its TIG Guiaba Island Terminal (TIG) and Timbopeba iron ore mine.

Spot lump premium witnessed rise to USD 0.3660/DMTU for the week as against USD 0.3600 /DMTU a week ago. The lump premium is supported due to strong sintering controls in March especially in steel hub of China, Tangshan.

Spot pellet premium up by USD 1.30/MT this week- Spot pellet premium for Fe 65% grade pellets assessed at USD 36.75 /DMT, CFR China this week, up against USD 35.45/DMT against last week. However, Chinese pellet port stock inventory increased to 5.1 MnT this week compared to 4.9 MnT towards last weekend.

Coking coal offers remain range bound- Seaborne premium-grade coking coal prices remain range bound this week amid weak demand from buyers in China.Meanwhile stricter port restrictions for Australian cargoes impact buying from China.

Reportedly, customs authorities in Fangcheng, Guangxi China informed end-users and traders that cargo discharge would be limited during workdays, and more tests would be conducted for every 500 million tonnes of coal unloaded.As per custom clearance this process is expected to take about three months.

Meanwhile Indian steel mills are also showing low buying interest as they are currently holding enough inventories are in no urgent need of restocking.

Thus, Premium HCC coking coal prices are heard around USD 213.25/MT FoB Australia. However last week the offers was around USD 212/MT FoB Australia.

Chinese domestic billet prices increase- Domestic spot billet prices in China’s Tangshan closed this week at RMB 3,490/MT (ex-works, including VAT) up by around RMB 300/MT W-o-W.

Chinese HRC export offers rose further this week- Nation’s HRC export offers continue to move in upward direction.Also improved buying both in domestic and export market also keep prices supported in Chinese market.

Currently nation’s HRC export offers moved up by USD 10-15/MT and is assessed around USD 540-550/MT FoB basis.However in the beginning of the week HRC export offers stood around USD 535-540/MT FoB China.

Domestic prices in eastern China (Shanghai) moved up by RMB 10/MT on weekly basis and stood at RMB 3,830-3,850/MT.By the end of last week prices was around RMB 3,820-3,840/MT inclusive of VAT taxes.

Meanwhile prices at Northern China are also up by RMB 10/MT and stood at RMB 3,760-3,780/MT W-o-W basis in Northern China (Tangshan).Meanwhile the prices by the end of last week was around RMB 3,750-3,770/MT inclusive of VAT taxes.

Chinese re-bar export offers inch up this week- Nation’s re-bar export offers inch up by the end of this week over recovery in domestic market.

Currently,nation’s rebar export offers are at USD 525-530/MT FoB China.Last week the offers was in the range of USD 520-530/MT FoB basis.

Meanwhile domestic rebar prices moved up by RMB 30-40/MT W-o-W basis and is assessed at RMB 3,810-3,850/MT in (Eastern China).Last week the prices stood at RMB 3,780-3,810/MT inclusive of VAT taxes.

However increased investments in infrastructure and construction sector will results to improved buying of rebar in domestic and export market.

Chinese steel market Highlights Week 11,2019

Source- SteelMint Research