This week the Chinese steel market sentiments continued to remain strong on the back of gains in the future market, however, the rebar demand was disrupted amid bad weather conditions. Industry awaits roll out of regulations on imported scrap standards in China which expected to be done in Jan ’21. At a closed-door conference held in Beijing on 29 Nov ’20, Chinese government bodies including the Ministry of Ecology and Environment finally approved new classification standards for the country’s steel scrap sector.
HRC export offers witnessed a surge of $25/t for the second consecutive week. Rebar export offers stood unfazed even though the domestic prices dipped amid adverse weather conditions. Iron ore prices also shot-up on the anticipated increase in restocking demand. Coking coal prices remained rangebound
Chinese spot iron ore price hit 7-years high- Chinese spot iron ore fines (Fe 62%) prices opened at $132.30/ t this week and increased to $145.30/t towards the weekend. The prices increased on the expectation of firm steel production and iron ore restocking demand in the winter. World’s largest iron ore miner – Vale in its recent press release notified that the company has reduced its iron ore production guidance to 300- 305 mn t as against previously set guidance at 310-330 mn t.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports decreased to 128.7 mnt this week as against 130.3 mn t assessed a week ago.
Spot pellet premium up w-o-w- Spot pellet premium for Fe 65% grade pellets assessed at $31.75/t up against last week prices at $ 28.55/t.Higher global steel and seaborne ferrous scrap prices are supporting iron ore pellet despite industry forecasts of weaker European and Middle Eastern steel demand in 2021.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports dropped to 7.6 mnt this week as against 8.15 mn t assessed a week ago.
Spot Lump premium up amid cost-efficiency- Spot lump premium was witnessed at $ 0.1125 as against $ 0.0700 last week. Iron ore lump demand has improved as it is more cost-effective now compared with pellet, pushing up lump prices since mid-November. Despite the high coke costs, the lump is seen as a cost-reduction direct feed option compared to pellet presently.
Coking coal prices remain range-bound, deals reported- Seaborne coking coal prices have held firm this week, extending the gains made over the past fortnight with more bookings concluded at higher levels on FOB basis.
A total of four transactions were reported to have lately taken place in the spot market.
- 80,000 t cargo of premium low-volatile hard coking coal for January 1-10 laycan, traded at $102/t FoB Australia.
- 80,000 t cargo of premium low-volatile hard coking coal, for January 10-19 laycan, traded at $103.50/t FoB Australia.
- 80,000 t and 75,000 t of premium hard coking coals, with January 15-24 laycan, priced at $103/t FoB Australia.
China delivered prices remained supported amid higher price expectations, on the back of strong demand from Chinese mills and supply tightness of non-Australian coals.
Indian market sentiment was relatively steady but price expectations for seaborne coking coal were lifted amid the strength seen in domestic coking coal prices of all grades.
Latest offers for the Premium HCC grade continued to hover at $101/t FoB Australia.
Chinese domestic billet price down by RMB 10 ($1.5) w-o-w- This week, the billet prices in the Tangshan market (northeast China) settled with a drop of RMB 10 ($1.5), against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,580/t ($548/t) in Tangshan, inclusive of 13 % VAT. The billet transactions were moderate, while finished steel prices have started softening by the end of this week.
HRC export offers continue uptrend on higher domestic realizations- The mills further increased their HRC export offers to $595-600/t FoB China, surging by $25/t w-o-w for the second consecutive week. Last week offers stood around $570-575/t FoB basis. Higher realizations and steady demand in the domestic market along with firm overseas demand have kept the export offers higher.
Domestic prices also ascended by RMB 70-80/t w-o-w basis to RMB 4,280-4,290/t (Eastern China) against RMB 4200-4220/t on the back of higher restocking demand amid rallying futures.
Rebar export offers remain stable with the arrival of winter- The mills continued to offer Rebar at $535-540/t FoB China, unchanged over the preceding week. The importers are bidding no higher than $515/t anticipating decline in export offers.
However, domestic rebar prices dipped by RMB 120/t w-o-w to RMB 3,970-4,000/t (Eastern China) against RMB 4,090- 4,120/t (Eastern China) with a decline in downstream demand amid falling temperature and deteriorating weather conditions.
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