Chinese Steel Market Highlights – Week 5, 2019

This week Chinese steel prices remained largely stable ahead of week long Lunar New Year holiday in first week of Feb’19.Market sentiments remained bearish and trade activities have came to standstill as steelmakers are in holiday mood.

Chinese HRC export offers inch up towards the weekend and rebar export offers remain stable ahead of festive holidays.However raw material like coking coal offers witnessed surge over positive buying from China. Meanwhile iron ore prices surge significantly amid restocking demand before Chinese New Year holidays.

Chinese spot iron ore prices surge after Vale dam collapse – Chinese spot iron ore prices opened up this week at USD 78.7/MT, CFR China and increased to USD 85.40/MT towards the weekend. The prices have picked up amidst Vale’s dam disaster rendering material scarcity in global market.

The miner has announced plans to halt 40 million tonnes of iron ore production including 10-11 million tonnes of pellet production, so that it can decommission dams similar to the one that burst last week.

Spot lump premium witnessed fall this week – Spot lump premium witnessed fall W–o-W at USD 0.3350 /DMTU as against USD 0.3430/DMTU a week ago. However, premiums are likely to move up amidst expectation of further sintering cuts in Tangshan. Also, reduced pellet supply from largest miner Vale may further impact lump prices.

Spot pellet premium for Fe 65% grade pellets assessed at USD 36.5/DMT, CFR China.

Coking coal price edges up amid restocking demand from end users in China- Seaborne premium-grade coking coal price witness marginal increase amid increase in trade activity for their restocking purposes ahead of the Lunar New Year holidays.

Meanwhile domestic supply also remained tight since mining activities have slowed down during the winter season.

Thus,premium HCC coking coal prices are heard around USD 201/MT FoB Australia. However last week coking coal prices was at USD 197/MT FoB basis.

Chinese domestic billet prices fall marginally- Domestic billet prices in China’s Tangshan for 150*150mm closed this week at RMB 3,430/MT (ex-works, including VAT). Mills being on a holiday mood prevented from quoting fresh offers.

Chinese HRC export offers inch up towards the weekend- Chinese HRC exports offers have remained unchanged in the beginning of the week.

However by the end of the week nation’s HRC export offers inched up ahead of Lunar New year holidays scheduled from 4-10th Feb’19.Limited trades reported as most of the industry participants are in the holiday mood.

Currently nation’s HRC export offers are assessed at around USD 490-495/MT FoB basis.Last week the offers was in range of USD 480-485/MT FoB basis.

Meanwhile prices in eastern China (Shanghai) also increased by RMB 60/MT on weekly basis and are hovering at RMB 3700/MT,Ex-factory including 17% taxes.

Chinese re-bar export offers remain stable ahead of festive holiday in China – Nation’s re-bar export offers remains stable this week ahead of week long Lunar New Year holiday starting from Monday on-wards.

Currently,nation’s rebar export offers are at USD 480-490/MT FoB China.Last week rebar export offers stood at similar levels.

Trading activity remained subdued and buyers are cautious regarding export offers post festive holidays.

Domestic rebar prices is assessed at RMB 3,670-3,700/MT in (Eastern China).However in the beginning of the week prices stood at similar levels.

Chinese steel market Highlights – Week 5, 2019

Source-SteelMint Research