This week the country’s domestic steel prices showed an uptrend on the back of gains in the futures along with a boost in downstream industrial demand. In addition to this, HRC export offers went up amid higher domestic margins, while improved domestic market demand pushed rebar export offers. Spot iron ore and coking coal prices remain range-bound.
Other major highlights-
- Shagang group announced a hike in its scrap purchase price twice this week, pushing prices up by RMB 150/t ($23) for all grades. Current price for HMS (6-10 mm) stands at RMB 2,890/t ($437), inclusive of 13% VAT, delivered to headquarters works at Zhangjiagang North of Shanghai in China.
- Nation’s finished steel exports were clocked at 4.04 mn t in Oct ‘20, up by 5% as against 3.83 mn t in Sep ’20.
- Finished steel imports declined by 33% on the month in Oct ’20 to 1.93 mn t from 2.89 mn t in Sep ’20.
- Iron ore imports stood at 106.74 mn t in Oct ’20, down slightly by 2% as against 108.55 mn t a month ago.
China spot iron ore prices remain range-bound-
Chinese spot iron ore fines (Fe 62%) prices opened at $119.05/ t this week and dropped to $118.10/t towards the weekend. The slack winter demand for steel in the coming months continued to cast a shadow over iron ore buying interest. Steel inventory remains higher than previous years’ levels causing the decline in end-users procurement. With lower transactions taking place, trading houses refrained from building their inventories due to the poor reselling opportunities.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports increased to 130.8 mn t this week as against 128.95 mn t assessed a week ago.
Spot pellet premium up w-o-w-
Spot pellet premium for Fe 65% grade pellets is assessed at $28.5/t up against last week prices at $27.80 /t. As per sources, the current pellet premiums were supported despite thinning steel margins on account of the savings in coke usage. Pellet being the direct feed counterpart of lump has seen sustained demand with its usage seen as coke-efficient through a lowering of slag rate. As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports dropped to 9.9 mn t this week as against 10.25 mn t assessed a week ago.
Spot Lump premium down w-o-w-
Lump premium stands at $ 0.0680/dmtu as against $ 0.0700/dmtu last week. With the rise in Coke prices, Chinese demand for lump continues to suppress. However, falling pellet inventories at ports may support lump demand.
Coking coal prices remain largely unchanged on the week-
Seaborne coking coal prices remained mostly steady this week after their steep decline due to China’s informal ban on Australian coal imports.
Oversupply concerns loom amid continued selling pressure on Australian coals as China-based importers became obliged to source coking coal from non-Australian origins.
Indian spot demand stayed weak with buyers remaining on the sidelines hoping that offers could fall further in light of the current market weakness.
Latest offers for the Premium HCC grade are assessed at around $108.00/t FoB Australia, which was around $109.00/t FoB Australia in the preceding week.
Chinese domestic billet price up by RMB 60 ($9) w-o-w-
This week, the billet prices in the Tangshan market (northeast China) settled with a steep rise of RMB 60, against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,500/t ($529/t) in Tangshan, inclusive of 13 % VAT.
HRC exports offer rise on better margins in the domestic market-
Steel mills continued to raise their export offers this week on higher domestic prices. However, a few other exporting nations kept offering HRC at competitive prices in the overseas market. The current week assessed offer stands at $520-535/t FoB China in contrast with $515-530/t FoB basis a week ago.
Domestic HRC prices stood at RMB 4,040-4,060/t (Eastern China), up by RMB 100/t as against RMB 3,940-3,960/t (Eastern China). The downstream buyers increased their procurements amid anticipation of a further increase in prices as the futures market gains continued to rise.
Rebar export offers up by $5/t on improved domestic demand-
The mills further raised their offers by $5/t this week to $490-495/t FoB China against $485-490/t FoB basis a week back.
Improved domestic demand with the resumption of previously stalled construction projects amid better weather conditions led to an increase in domestic margins, which resulted in a marginal increase in the export offers as well.
Domestic market prices gained about RMB 140/t on the week to stand at RMB 3,890-3,920/t (Eastern China), which was RMB 3,750-3,780/t (Eastern China) in the preceding week.
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