Chinese Steel Market Highlights- Week 43, 2019

This week Chinese steel makers kept domestic steel prices largely stable over competitive offers in the overseas market. This week iron ore prices moved up towards the weekend. Coking coal offers remained largely stable. Nation’s HRC export offers witnessed a decline despite an uptick in domestic prices. However, rebar export offers remain range-bound.

Chinese Spot iron ore prices witness uptrend on a weekly basis- Chinese spot iron ore prices opened up this week at USD 85.05/MT, CFR China and picked up to USD 87.65/MT, CFR China towards the weekend.

Prices have increased amid a reduction in sales guidance announced by miner Vale for the year 2019. The miner has revised the guidance to lower and midpoint of the range 307-332 MnT as against being towards the midpoint of the range.

As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports increased to 134.1 MnT as against 131.1 MnT assessed towards the end of last week.

The iron ore inventory reached almost 6 months high as the level was last witnessed towards the end of Apr’19 at 136 MnT.

The approaching winter curbs in China have resulted in an increased preference for pellets. Besides, the lump prices have witnessed continuous rise leading to diminishing use of lumps in blast furnace and have reduced cost efficiency rendering shift towards pellets.

Coking coal offers remain stable on weekly basis- Seaborne hard coking coal prices have remained static this week with Chinese traders attained wait and watch mode in anticipation of lower offers and depressed demand in the global market.

The persisting slow down in automobile, manufacturing and construction sectors continues to hinder demand for coking coal in India.

The latest offers for the Premium HCC grade are assessed at around USD 152.25/MT unchanged over the previous week offers.

China domestic billet prices up by RMB 10/MT W-o-W- Chinese billet prices in the Tangshan region rose by RMB 10/MT to RMB 3,360/MT during the week over RMB 3,350/MT on Friday of the previous week. Thus, slight improvement in domestic market sentiments resulted in an uptick in billet prices.

Competitive offers weighed on Chinese HRC export offers- Competitive offers from India and Russia to Vietnam led to lower export offers from China.

Thus, Chinese HRC export offers have fallen to USD 425-430/MT FoB China declined by USD 15/MT in comparison with USD 440-445/MT FoB basis in the previous week.

Domestic HRC prices edged up by RMB 10/MT to RMB 3,500-3,520/MT as compared to RMB 3,490-3,510/MT in Eastern China (Shanghai) in the previous week as traders shifted their focus from export markets to the domestic market.

Chinese Rebar export offers remain unchanged W-o-W basis- Chinese rebar export offers remained stable this week. However, the gap between bids and offers making it hard for Chinese traders to export in overseas markets. Thus, current offers for Rebar continue to hover at USD 450-460/MT FoB China.

Meanwhile, the domestic rebar prices stood at RMB 3,580-3,610/MT (Eastern China) stable against last week.

Chinese Steel Market Highlights- Week 43, 2019

Source: SteelMint Research