- Iron ore prices declined with curbs on steel output.
- HRC export offers slid down.
- Coking coal prices remain range-bound on limited buying interest.
Chinese steel market prices declined this week on the back of limited trades due to the New Year holidays. Along with this, adverse weather conditions restricted the logistics and activities of major downstream industries.
China spot iron ore price dropped during the week- Chinese spot iron ore prices opened at $164.25/ t this week, dropped to $158.9 towards mid-week. The prices dropped due to weaker Chinese steel prices, as concerns on slower demand grew. The Industry and Information Technology Ministry announced on Dec 29 that the Chinese steel industry should reduce crude steel output from 2021, as the country aims to reduce greenhouse gas emissions. This announcement had a dampening effect on prices.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports was recorded at 126.75 mn t this week as against 126.95 mn t assessed a week ago.
Spot pellet premium keeps rising on supply constraints- Spot pellet premium for Fe 65% grade pellets assessed at $ 44.1/t, against last week prices at $ 41.9 /t. The prices for iron ore pellets continued to surge on limited supply and the overall strength of prices for iron ore fines. The liquidity of pellet cargoes has been restricted by the high price. Steel mills bids are much lower than the offers as the steel margins are narrowing.
As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports dropped to 6.7 mn t this week as against 7.1 mn t assessed a week ago.
Spot lump premium moves up w-o-w- Spot Lump premium was at $ 0.1775/dmtu as against $ 0.1300/dmtu last week. The utilization of lump increased as a substitute for pellet over tight supplies of the latter, leading to an increase in prices.
Coking coal prices remain range-bound w-o-w- Seaborne coking coal remained range-bound this week amid moderate year-end demand.
The seaborne spot market continued to witness transactions for non-Australian coking coals at higher price levels to Chinese end-users. However, trading activities in the ex-China FoB market have considerably slowed down following the conclusion of a series of transactions in the past couple of weeks.
Indian buying interest for seaborne coking coal is presently limited despite ample material availability at competitive price levels.
The latest offers for the Premium HCC grade are assessed at around $102.50/t FoB Australia, which was $102.00/t FoB basis a week back.
Chinese domestic billet price down by RMB 140 ($21.4) w-o-w- This week, the billet prices in the Tangshan market (northeast China) settled with a drop of RMB 140 ($21.4), against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,740/t ($572/t) in Tangshan, inclusive of 13 % VAT.
HRC export offer continues to fall on limited buying interest- HRC export offers fell by around $10-20/t to $670-680/t FoB China against the previous week’s $690-700/t FoB basis. Withdrawal of offers from market participants due to New Year holidays and a lack of clarity on price direction over volatile futures weighed on the buying interest this week.
In the domestic market, HRC price dipped by RMB 140-170/t w-o-w to RMB 4,530-4,570/t (Eastern China) as against RMB 4,670-4,740/t (Eastern china) a week ago. Downstream buyers slowed their procurement rates anticipating a further decline in prices on falling futures.
Rebar export offer remains range-bound- Rebar manufacturers rolled out offers at $632-638/t FoB China this week. The offers were confined within the previous week’s price range of $620-640/t FoB basis.
Prices in the domestic market dropped by RMB 100-120/t w-o-w basis to RMB 3,950-4,000/t (Northern China) on thinning trades with the holiday mood setting in. Prices stood around RMB 4,070-4,100/t (Northern China) in the previous week. Also, adverse weather conditions weighed upon logistics and construction activities and weakened the demand throughout the week.
Leave a Reply