Chinese steel prices moved up w-o-w on the bullish outlook that demand shall recover from the seasonal lull given that the Chinese authorities have pledged to facilitate stable economic growth in the coming weeks. However, trade activities in the finished steel segments turned subdued with participants leaving the market early for the Chinese Lunar New Year festivities.
Product-wise sentiments
1. China spot iron ore prices increase w-o-w: Chinese spot iron ore fines Fe 62% prices opened at $133.7/t CNF China for the week and assessed at $147.9/t, CNF China towards the weekend. Seaborne iron ore prices rose on a positive demand outlook ahead of the Lunar New Year holidays and Winter Olympics. Market participants saw liquidity in the seaborne market with traders being more active.
Some participants expected demand of medium-grade fines to improve as buying interests in both the seaborne and portside markets were firm, providing support to prices.
a) Spot pellet premium inches down: Spot pellet premium for Fe 65% grade was assessed at $57.3/t, inching down as against $58.65/t last week.
b) Spot lump premium down w-o-w: Spot lump premium was seen at $0.3100/dmtu, against $0.2475/dmtu last week. Several sources expected lump premium to continue an upward trajectory as demand for lump at ports was healthy, with many holding a bullish sentiment on direct-charge usage post-the holidays.
2. Coking coal prices up w-o-w: Seaborne coking coal FOB prices rose by $19/t w-o-w basis. However, prices remained largely stable throughout the week amidst stability in US coking coal prices ahead of the Chinese Spring festival holidays.
The latest price for the premium HCC grade is assessed at around $445.5/t FOB against $427/t FOB a week before.
3. China’s billets prices rise towards the weekend: Steel billets prices in China’s Tangshan witnessed a significant increase of RMB 60/t ($9/t) w-o-w. Domestic billets prices stood at RMB 4,500/t ($707/t), inclusive of 13% VAT, on 28 Jan’22. According to data maintained with SteelMint, the Chinese SHFE rebar futures contract for May’22 delivery closed at RMB 4,829/t ($759/t) on 28 Jan’22, a significant w-o-w rise of RMB 118/t ($18/t). Also, the same witnessed a sharp rise of RMB 156/t ($24/t), d-o-d.
4. HRC export offers up $10/t w-o-w: Chinese mills raised their HRC export offers by $10/t in anticipation that seasonal demand will recover along with supply tightness ahead of the Winter Olympics. Current week’s offer stands at $770-780/t FOB China compared to $760-770/t FOB a week ago.
In the domestic market, mills were quoting HRCs at RMB 4,920-4,950/t ($773-778/t) eastern China this week, down RMB 10-20/t ($2-3/t) in comparison with RMB 4,940-4,960/t ($777-780/t) eastern China in the previous week. Early exits by market participants amidst the CNY holidays resulted in mute trades which in turn pulled down prices.
5. Domestic rebar prices up RMB 100/t ($16/t) w-o-w: A sharp increase in long steel futures coupled with higher inventories pushed domestic rebar prices upwards. Currently mills are offering rebar at RMB 4,800-4,840/t ($755-761) northern China, up RMB 100/t ($16/t) as against RMB 4,700-4,740/t ($739-745/t) northern China a week ago.
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