Chinese steel market exhibited mixed sentiments this week. Export offers reported a sharp increase on a weekly basis due to continued uncertainty on the export rebate cut. However, domestic billet and rebar prices witnessed a sharp decline while domestic HRC prices remained largely stable.
China’s key steel statistics for Mar ’21 is as follows:
- Crude steel output rises by 19% y-o-y
- Finished steel exports go up by 16% y-o-y
- Finished steel imports ascends by 16% y-o-y
- Iron ore imports move up by 19% y-o-y
Product-wise market sentiments are mentioned below-
1. China spot iron ore prices went up during the week- Chinese spot iron ore prices opened at $173/t, CFR China increased to INR 177.85/t, CFR China towards the weekend. The iron ore prices rallied as better market expectations for high-grade fines boosted the sentiment. The dropping coke prices in China helped to lower overall raw material costs and open up the budget for higher-quality iron ore.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports was recorded at 135.85 mn t as against at 134.3 mn t assessed a week ago.
- Spot pellet premium down w-o-w- Spot pellet premium for Fe 65% grade pellets was assessed at $60.3/t as against $ 61.45/t last week. A shortfall of pellets is leading DR pellet plants to seek blast furnace grade and poorer quality substitutes to run operations at stable rates.As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports was recorded at 5.2mn t as against at 5 mn t assessed a week ago.
- Spot Lump premium goes up w-o-w- Spot Lump premium witnessed at $0.6015/dmtu as against $0.5735/dmtu assessed last week.
2. Coking coal prices remain stable w-o-w- Seaborne coking coal prices continued to remain stable on limited buying interest.
Presently, the demand for both premium low-volatility (PLV) and premium mid-volatility (PMV) hard coking coal from Asia, except China, is limited but end-users may show more interest once prices are attractive.
The latest offers for the Premium HCC grade remained stable at around $110.00/t FoB Australia and was unchanged against last week.
3. Chinese domestic billet prices saw a w-o-w drop of RMB 80 ($12)- This week, the Chinese domestic billet prices settled with a drop of RMB 80 ($12) w-o-w basis. The billet transactions were moderate, and finished steel prices softened. Yesterday, the domestic billet price was reported at RMB 4,960/t ($761/t), ex Tangshan, including 13% VAT.
4. HRC export offers up w-o-w- Major mills are offering HRC for exports in the range of $880-900/t FoB China, while a few tier-I mills are offering higher at $930/t FoB basis. Last week, the offer stood in the range of $820-840/t FoB basis.
The domestic market prices for HRC remained range-bound for the second consecutive week, though the price level remains close to the highest in 12 years. The current week’s price stands at around RMB 5,480-5,510/t (Eastern China) as against RMB 5,460-5,490/t (Eastern China) in the previous week, widening by RMB 20/t w-o-w.
The market participants expect prices to stay elevated in the near term over rising raw material costs.
5. Domestic rebar offers dropped down w-o-w- In the domestic market, rebar makers were offering at RMB 5,070-5,100/t (Northern China), declining by RMB 70-80/t w-o-w basis over a drop in feed material i.e billet price and tumbling rebar futures. Last week the offer stood in the range of RMB 5,140-5,180/t (Northern China). Also, in some parts of China rains have dampened construction and transportation activities.
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