Chinese Steel Market Highlights-Week 50

This week China’s steel market was characterized as higher domestic prices supported by strong futures and optimistic demand.However towards end of the week domestic prices started falling amid bearish sentiments in domestic and global market. Flat steel export offers moved up over surge in domestic flat steel prices.Coking coal price also increased further over limited availability of cargoes ahead of winter holidays in Australia.Although re bar export offer witness decline.

China finished steel exports dropped significantly by 34% on yearly basis to 5.35 MnT in Nov’17 against 8.12 MnT in Nov’16.However monthly basis, the same increased by 7.4% in Nov’17 in contrast to 4.98 MnT in Oct’17.

Seaborne iron ore prices declined amid fall in futures– Seaborne iron ore prices in China declined amid fall in iron and steel futures. Benchmark index moved down further and closed at around USD 69/MT, CFR China on weekend which was at USD 72/MT, CFR on 4 Dec’17.

Spot lump premium fell amid softening demand in seaborne lump market and increased stock of lump at Chinese major ports.

Lump premium declined and stood at USD 0.0905/MT. Pellet premium declined to by USD 1/MT to USD 48.5/DMT, CFR China as Chinese steel mills kept preferred to go for pellets made out of concentrate rather than importing pellets at a high price

Iron ore inventory at Chinese major ports have further increased this week by 0.9 MnT to 142.57 MnT.Domestic iron ore prices in China increased marginally on weekly premises.

Coking coal prices continues to move upwards amid tight supply- Coking coal prices again moved up further amid tight supply of cargoes and strong import demand from India.There is no incremental production ahead of the winter holidays in Australia which will began on 20Dec’17.Meanwhile India has imported bulk stocks to use it in holiday period as their will be no supply of coking coal from Australia.

Currently Premium HCC prices was assessed at around USD 219.75/MT FoB Australia, moved up by USD 13.25/MT compared to previous week.

Chinese billet export offers inched up – Chinese billet export offers are assessed around USD 555/MT,FoB China against the previous offers which was around USD 540-545/MT,FoB basis. However prices in the domestic market showed decline and stood at RMB 3,930/MT (ex-works, including VAT) in northern China since the prices in the beginning of the week was assessed at RMB 3,970/MT (ex-works, including VAT).

Chinese HRC export offers moved up by USD 10/MT-Strengthening steel prices in domestic market have pushed global HRC export offers on higher side.

Currently HRC commercial grade ASTM A36 export offers are prevailing in the range of USD 570/MT,FoB China.Last offers were heard in the range of USD 560/MT on FoB basis.

Prices of HRC in domestic market are hovering in the range of RMB 4,220-4,250/MT (Eastern China) including VAT & other taxes.

Major mills in China are offering in the range of USD 580/MT FoB basis mills are reluctant to negotiate the offers with overseas buyers.

Chinese Rebar export offers decline-Chinese Re-bar export offers reported decline this week by USD 10/W-o-W basis owing to bearish sentiments prevailing in re-bar export market.In the mid of the week nation’s rebar export offers are at USD 550/MT on FoB basis however by the end of the week the offers were at USD 540/MT FoB China.

Major Chinese mills are offering on the higher side which is around USD 595-600/MT FoB basis.

Steel Raw Material & Finished Steel Prices in China

Source-SteelMint Research