Chinese Steel Market Highlights – Week 29, 2018

This week Chinese steel market continued to remain bearish amid devaluation of Chinese currency – Yuan against USD. Towards end of the week Yuan Vs USD stood at 6.76 against 6.69 in beginning of the week. However recent summer production cuts has lead to uncertainty in domestic market.

Flat steel and rebar export offers remain range-bound this week over inactive buying.Billet export offers moved up marginally.Coking coal prices fell over passive buying.However iron ore prices edged up throughout the week.

According to National Bureau of Statistics (NBS) China’s crude steel output registered growth of 7% to 450.06 MnT in H1CY18 against 419.02 MnT in H1CY17.On monthly premises nation’s crude steel output fall marginally by 1% to 80.2 MnT in June’18 against 81.12 MnT in May’18. Nation’s crude steel output is constantly recording high since past three consecutive months from Apr to June

Chinese spot iron ore prices uptick – Chinese spot iron ore prices opened up this week at USD 63/MT, CFR China and increased to USD 64.7/MT, CFR China towards week end. Amid increase in steel gains,spot iron ore prices also moved up.

Iron ore inventory at Chinese major ports stood at 155.78 MnT, down by 0.4 MnT W-o-W.

According to National Bureau of Statistics, China’s – world’s largest iron ore consumer and importer,- Crude iron ore production is down in H1CY’18 by 38% to 390.57MnT against 633.37MnT in the same period last year 2017. Production has come down after China revoked many mine licenses owing to irregularties.

Coking coal offers decline amid scant buying- The seaborne coking coal market remained mostly quiet this week on scant buying as Chinese steelmakers were heard to be harboring expectations for prices to bottom out in a falling met coke market coupled with a depreciating Yuan.

Thus currently,Premium HCC prices were assessed at around USD 180.75/MT FoB Australia compared to USD 189/MT FoB basis last week.

Domestic billet prices in China moved up – Domestic billet prices in China moved up yesterday. Spot price of 150*150mm, Q235 billet in Tangshan stood at RMB 3,800/MT (including VAT) against previous day close of RMB 3,770/MT (including VAT). Chinese billet export price assessment moved up marginally to USD 515-525/MT, FoB.

Chinese HRC export offers remain steady- Chinese HRC export offers remain range-bound amid weak demand from South East Asian buyers.Meanwhile demand in domestic market continued to remain on lower side thus keeping export offers firm.

Also depreciation of Chinese currency yuan against USD has resulted to bearish sentiments in domestic market after imposition of USA tariffs on Chinese steel products.

Currently Chinese HRC export offers heard around USD 575-580/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

Prices of HRC in the domestic market are gauged at RMB 4,240-4,260/MT (ex-works) in Eastern China and 4,180-4,190 /MT (Northern China).

However domestic prices in northern region rose amid production cuts in cities of Tangshan and Wuhan in Hebei province.

Chinese Re-bar export offers remain largely stable – Nation’s re-bar export offers remained largely stable as overseas buyers are expecting further fall in prices amid depreciation of Chinese currency Yuan.

Currently,Chinese re-bar export offers are at USD 552-553/MT FoB China. However last week the offers are assessed at similar range.

Meanwhile prices in the domestic market stood at RMB 4,040-4,080/MT in (Eastern China) and RMB 4,000-4,040/MT in (Northern China).

Last month few small rebar manufacturers in Jiangsu province remained shut down for environmental reasons.However they are planning to resume the production by the end of July which will show its impact on re-bar prices in China.

Chinese Iron and Steel Prices Week 29,2018

Source- SteelMint Research