China Steel Market Highlights- Week 1, 2020

The Chinese steel market was largely stable this week with freshly announced production curbs in the Tangshan region, providing stability to HRC prices. Meanwhile, domestic billet prices also remain unchanged. However, domestic rebar prices moved up on a weekly premise.

Augmented by the increasing global offers, the Chinese HRC export offers rise further, this week. Rebar export offers declined amid inactive buying from overseas buyers. Resumption of restocking activities lifted Spot Iron Ore offers this week. Along with this, active buying boost Coking coal offers on the higher side.

Spot iron ore picked up during the week- Chinese spot iron ore prices opened up this week at USD 90.50/MT CFR China and increased to USD 93.9/MT CFR China towards the weekend, amid higher steel prices, also mills started restocking from ports.

As per Mysteel data, Iron ore inventory at major Chinese ports dropped to 125 MnT this week, down 1.8 MnT against the previous week. The stocks at Chinese mills across all regions dropped amid high discharge rates to stock ahead of holidays starting from Jan 24.

Spot pellet premium down slightly W-o-W- Spot pellet premium for Fe 65% grade pellets dropped to USD 24.95/MT CFR China as against USD 25.45/MT CFR China.

The demand for imported pellets remained on the higher side amid winter production curbs. Since December 19, steel mills in East China's Shandong province, and North China's Shanxi province have been forced to obey strict production curbs because of heavy air pollution.

Spot lump premium down amid preference for fines- Spot Lump premium for the week has witnessed a slight drop to USD 0.2350/dmtu as compared to USD 0.2400/dmtu a week before. Few end users were heard replacing lumps by fines.

Coking coal offer moved up amid active bookings- Seaborne coking coal offer witnessed an increase this week amid active bookings reported through tenders.

Also, the anticipation of a gradual easing of Chinese port restrictions pushed coking coal offers in the upward direction.

The latest offers for the Premium HCC grade assessed at around USD 141.00/MT FoB Australia, which was USD 136.00/MT FoB basis a week ago.

China domestic billet prices stable W-o-W- Chinese domestic billet market was settled at RMB 3,300/MT, identical to last week. The market sentiments in the country were reported weak.

Chinese HRC export offers move up- The Chinese HRC export offers increased by USD 5/MT on a weekly premise after the announcement of steelmaking restrictions to improve air quality.

On Thursday, the Tangshan government announced a new round of production curb, restricting operations by 20-50% without any proposed end date.

Thus, the current HRC export offer stands at USD 490-495/MT FoB China as compared with USD 485-490/MT FoB basis a week ago.

Meanwhile, the domestic HRC prices were consistent at RMB 3,900-3,910/MT (Eastern China) against the previous week.

China Rebar export offers inch down over decreasing temperature- This week Chinese rebar export offer inched down by USD 3/MT owing to falling temperatures and lower trade inquiries from overseas buyers.

Thus, currently, the rebar export offer stands at USD 462-470/MT FoB China, which was USD 465-473/MT FoB basis in the previous week.

Meanwhile, domestic rebar prices moved up by RMB 50/MT to RMB 3,690-3,720/MT (Eastern China) as compared with RMB 3,640-3,670/MT in the preceding week.

Source: SteelMint Research