Prices remained under pressure in the Chinese steel market with the weakening of sentiments amidst decline in the futures market. The initiation of a probe on coal prices by China’s National Development and Reform Commission (NDRC) also weighed on market sentiments. Moreover, the Russia-Ukraine wr weighed on overseas trades towards the end of the week.
China spot iron ore prices decrease: Chinese spot iron ore fines Fe 62% prices opened at $139/t CNF China for the week and is assessed at $133.45/t CNF China towards the weekend. Seaborne iron ore prices dropped further as buyers remained absent from the market.
With Chinese steel margins deteriorated due to slower-than-expected downstream steel demand recovery, sources saw prices of low-grade fines stabilising at the ports. Iron ore inventory at major Chinese ports stood at 160.95 mnt this week, up 4.6 mnt as against 156.35 mnt a week ago, as per data maintained by SteelHome.
a) Spot pellet premium down w-o-w: Spot pellet premium for Fe 65% grade pellets was assessed at $54.2/t, down as against $57.15/t last week.
b) Spot lump premium stable w-o-w: Spot lump premium remains unchanged at $0.3525/dmtu from last week. Lump premiums remained stable with firm portside spread between Pilbara Blend Lump and fines. Although domestic coke prices started to edge up again, the potentially more stringent sintering curbs in March during the Winter Paralympics and the Two Sessions could support lump demand.
Coking coal prices surge amid trade tensions: Australian premium low-volatile hard coking coal prices surged $18/t this week with the outbreak of the Russia-Ukraine war and subsequent sanctions by western countries on Russia that led to increased demand for Australian coal.
Latest prices for the premium HCC grade are assessed at around $458/t FOB Australia as against $440/t FOB a week ago.
Domestic billet prices fall towards the weekend: Steel billets prices in China’s Tangshan witnessed a sharp fall of RMB 100/t ($16/t), w-o-w. Domestic billets prices stood at RMB 4,530/t ($717/t), inclusive of 13% VAT, on 25 Feb. According to data maintained with SteelMint, the Chinese SHFE rebar futures contract for May delivery closed at RMB 4,617/t ($731/t) on 25 Feb, a sharp w-o-w fall of RMB 162/t ($26/t).
HRC export offers remain flat w-o-w: The Chinese HRC export offers have remained at last week’s levels of $820-840/t on FOB basis. The demand for Chinese HRC subsided after the restocking demand from the major importing nations cooled.
On the domestic front, prices have declined by RMB 110-120/t on the week to RMB 4,850-4,860/t Eastern China, weighed down by the downtrend in the futures market.
Demand-supply mismatch weighs on domestic rebar prices: Ramp up in production by mills after the Winter Olympics led to increased supplies whereas adverse weather conditions and fall in futures weighed on trade volumes. Thus, sellers had to reduce offers to entice buyers, which led to a decline in prices this week. Current week’s price levels were assessed at around RMB 4,700-4,740/t Northern China, down RMB 50/t w-o-w.
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