Weekly: Chinese Steel Market Highlights

The Chinese steel market witness improvement as the week commenced with the gradual control over Coronavirus disease.However towards weekend market sentiments exhibited sluggish on scarce domestic demand and lower HRC export offers on increased supply.Fluctuation in the future markets along with the slow resumption of the downstream industries and logistics sector resulted tight cash flows and weakening sentiments in nation’s domestic market.

 HRC export offers fell on a weekly basis. Rebar export offers also witness marginal decline. Iron ore prices fell with the weakening buying interest. However, spot pellet premiums gained while spot lump premiums remained consistent.Domestic billet prices gained the momentum and coking coal prices moved up this week.

Spot iron ore price drops as buying interest remains weak-
— Chinese spot iron ore prices opened up this week at USD 91.20/MT, CFR China and decreased to USD 83.9/MT, CFR China towards weekend amid falling interest for March loading cargoes.

— As per Mysteel data, Iron ore inventory at major Chinese ports dipped to 121.7 MnT for the week, down 2.2 MnT W-o-W.

Spot pellet premium picked up W-o-W-
— Spot pellet premium for Fe 65% grade pellets assessed at USD 32/MT, up against  USD 28.75/MT, CFR China last week. Pellet premium has picked up despite low margins.

Spot lump premium remains stable W-o-W-
— Spot Lump premium for the weekend witnessed at USD 0.2750/dmtu, stable on a weekly basis.

— As per sources, lump demand may loosen amid end of heating season towards mid-March and also due to reducing environmental concerns.

 Coking coal prices increases on weekly basis-
— Seaborne coking coal prices in the Asian market moved higher this week, after the conclusion of  tender for an Australian premium low-volatile.

— The latest offers for the Premium HCC grade are assessed at around USD 162.75/MT FoB Australia compared with USD 159.50/MT FoB basis a week ago.

— Trade sources in China anticipate the price of premium hard coking coal to continue rising in the short term.

Domestic billet prices rise on a weekly premise-
–This week, the country’s domestic billet market was settled at RMB 3,060/MT, ex Tangshan, including VAT, up RMB 50/MT against last week. The country’s market sentiments are improving but with buoyancy.

 Chinese HRC export offers remain volatile this week-
— The Chinese HRC export offers have remained volatile and fell towards the weekend on bearish sentiments prevailing in the domestic market

 — The HRC export offers stood at USD 465-470/MT FoB China towards the end of the current week compared with USD 475-485/MT FoB basis at the beginning of the week.

— Meanwhile, prices in the domestic market fell by RMB 20/MT to RMB 3,480-3,500/MT (Eastern China) as compared to RMB 3,500-3,520/MT (Eastern China) a week ago.Thus increase in supply and slow demand in the domestic market resulted in falling HRC prices this week.

Rebar export offers remain range-bound-
–The current week Rebar export offers stood at USD 440-445/MT FoB China and remain largely stable since last few days.However Chinese rebar export offers still remains competitive as compared to other exporting nations.

 –Meanwhile, the domestic market price weakened by RMB 50/MT and stood at RMB 3,370-3,400/MT (Eastern China) as compared to RMB 3,420-3,450/MT (Eastern China) in the preceding week.Also it is anticipated that prices will fall further until construction activity resumes completely.

Source: SteelMint Research