This week nation’s steel prices gained upward momentum on the back of robust futures and improved demand on restocking in the domestic market. HRC and Rebar export offers rose steeply this week on higher domestic prices. Also, iron ore prices rebounded on the restocking rush. However, coking coal prices remain under pressure.
China’s crude steel output fell marginally in Oct’20 to 92.2 mn t, slipping 0.4% from 92.56 mn t last month on the back of environmental restrictions.
Chinese spot iron ore prices increased around $6/t-
Chinese spot iron ore fines (Fe 62%) prices opened at $124/ t this week and increased to $129.5/t towards the weekend. According to the sources, demand for medium-grade ore has increased this week and buyers are restocking iron ore amid better margin in steel.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports also decreased to 131.6 mn t this week as against 132.15 mn t assessed a week ago.
Spot pellet premium up marginally on the week-
Spot pellet premium for Fe 65% grade pellets assessed at $26.15/t up slightly against last week.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports dropped by 0.6 mn t to 8.5 mn t this week as against 9.1 mn t assessed a week ago.
Substitution of lump for pellets sends spot lump premium upwards-
Spot Lump premium witnessed at $ 0.070/t dmtu as against $ 0.06800/dmtu at the beginning of this week. Buyers are using lumps on cost efficiency purposes rather to import pellets.
Coking coal price declines on oversupply concern for the second consecutive week-
Seaborne coking coal prices continued declining this week amid oversupply concerns arising from subdued buying interest in Asian markets excluding China.
However, strong demand for non-Australian coals exists in the Chinese market following the country’s informal import ban. China delivered prices have risen to an eight month-high on fresh bookings concluded in the premium low-volatile segment and limited availability of non-Australian cargoes.
As Chinese end-users have become obliged to import coking coal from countries such as Canada and the US, Australian premium hard coking coal prices came under selling pressure.
Spot demand in Southeast Asian markets remained weak, with ex-Chinese buyers including Indians staying on the sidelines in hopes that offers could fall further.
Latest offers for the Premium HCC grade are assessed at around $97.25/t FoB Australia, which was $104.38/t FoB basis a week back.
Chinese domestic billet price up by RMB 40 ($6) w-o-w-
This week, the billet prices in the Tangshan market (northeast China) settled with a rise of RMB 40, against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,620/t ($551/t) in Tangshan, inclusive of 13 % VAT. The billet transactions were moderate, and finished steel prices are in synergy with billets.
HRC export offers surge amid improved demand in the overseas and domestic market-
The mills steeply increased their offers to $555-560/t FoB China, up by $20/t in contrast with $535-540/t FoB basis a week ago. Improved demand in t importing nations mainly Vietnam and Pakistan along with the falling inventories with the Chinese mills on improved domestic trades resulted in higher export offers.
Domestic HRC prices witnessed a steep increase of around RMB 90-100/t and stood at RMB 4,140-4,160/t (eastern China). Strong futures led to a steep hike in domestic prices.
The increased demand from downstream consumers operating close to the full capacity kept HRC prices supported.
Rebar export offer increases following a hike in domestic prices-
Rebar export offers in the current week was assessed at $535-540/t FoB China, rising by $ 20/t over $ 515-520/t FoB basis in the previous week.
Domestic rebar prices rose sharply by RMB 130/t to and settled at RMB 4,190-4,220/t (Eastern China) amid an increased restocking demand bolstered by higher procurement rates by end-users.
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