Chinese steel prices exhibited mixed sentiments during the week due to the volatility in the futures. HRC and rebar export offers rose during the week on higher domestic prices. Iron ore prices, after hitting over six-years high early this week however the same fell towards the weekend. Limited import quotas continued to weigh on coking coal prices. Shagang Steel kept finish long steel prices unchanged for end-Aug but raised scrap purchase price up to RMB 20 on supply tightness.
Chinese spot iron ore prices retreat after hitting over six-years high
Chinese spot iron ore prices opened at $121.9/t CNF China this week and increased to $128.8/t CNF basis towards mid of the week. The prices have hit multi-year high as the price level was last witnessed in Jan’2014. The rise in prices is due to the supply tightness of Australian medium grade fines and robust steel demand outlook considering investments announced in the infrastructure sector. The recovery in crude steel production gave further impetus to iron ore prices for the week.
However, later this week prices dropped slightly to $126.65/t, CFR China yesterday (21st Aug). The prices fell slightly on increased shipment from Brazil and fall in the futures market.
Also, as per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports increased to 117.15 mn t this week as against 116.85 mn t assessed a week ago.
Spot pellet premium up w-o-w
Spot pellet premium for Fe 65% grade pellets assessed at $ 4.50/t up by $1.3/t w-o-w. Low alumina pellets witnessed support due to increased efficiency and cost-effectiveness.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports increased to 10.9 mn t as against 10.6 mn t assessed a week ago.
Spot Lump premium declines on high inventory
The spot lump premium stood at $ 0.0400/dmtu this week as compared to $ 0.0480/dmtu assessed last week. The lump prices have witnessed a fall due to less stringent environmental regulations.
Coking coal prices weighed down by scarce import quotas
Seaborne coking coal (HCC) prices have tumbled down further this week, due to the persistent bearish sentiment prevailing in Asia Pacific markets.
Chinese market participants’ buying interest has been dampened by the scarcity of import quotas, despite the presence of active demand for coking coal. However, three fresh bookings of Australian premium mid-vol cargoes, scheduled for Sept deliveries to China, were reportedly concluded earlier this week on Tuesday.
Indian market participants anticipate seaborne coking coal demand to eventually pick up on restocking needs, as most steel mills have now resumed normalized operations.
The latest offers for the Premium HCC grade are assessed at around $106.75/t FoB Australia as against $108/t FoB basis a week ago.
Domestic billet prices declined on the week
This week, Chinese domestic billet prices closed with a drop of RMB 20, against last week’s closing. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,400/t ($492/t) in Tangshan, inclusive of 13 %
HRC export offers increased on strengthening domestic prices
Nation’s HRC export offers moved up marginally on the back of decent domestic demand and limited allocation for exports.
The current week assessed export offers continue to hover at $505-515/t FoB China. The importers, however, were bidding at $ 500-505/t FoB China basis, while the mills have started offering October delivery cargoes.
Domestic prices on the other hand gained RMB 20/t w-o-w and stood at RMB 4,060-4,070/t (Eastern China) against RMB 4,040-4,060/t (Eastern China) a week ago.
The prices got as high as RMB 4,080-4,090/t (Eastern China) during the week. However, correction in the prices was witnessed towards the end of the week.
Rebar export offers rise further on higher domestic gains
Steel mills pushed up rebar export offers by $5/t this week with the domestic margins staying higher than in the export market.
The current week offers stand at $480-485/t FoB China against $475-485/t FoB basis in the previous week. However, the importers looking for cheaper cargoes were bidding as low as $430/t FoB China basis.
Domestic market prices have remained unchanged at RMB 3,610-3,640/t (Eastern China) as against the prices a week ago.
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