Chinese Steel Market Highlights- Week 24, 2019

This week Chinese steel market witnessed decline in domestic steel prices over volatile futures. However nation's export offers continued to remain subdued owing to softening demand in global market.

Nation's HRC and rebar export offers continued to remain on downside. Coking coal offers inch down further over weak buying from buyers in China.

As per the recent data released by NBS (National Bureau of Statistics), Chinese crude steel output hit record new high in May'19. Nation's crude steel output stood at 89.09 MnT increased by 5% in May'19 which was 85.03 MnT in Apr'19.

Meanwhile China's major steelmaker Baosteel revised its steel prices for July deliveries. The company has reduced its HRC prices by RMB 100/MT (USD 14/MT) in its Baoshan, Meishan and Dongshan base for July deliveries.

Chinese spot iron ore prices moved up- Chinese spot iron ore prices opened up this week at USD 100.40/MT and picked up to USD 109.4/MT, CFR. The increase in prices is owing to increased demand and tight supply.

As per SteelHome consultancy, iron ore inventory at major Chinese port fell to 124.9 MnT towards May'19 end, level last seen in Feb'17 as against 133.6 MnT towards beginning of May'19.

The inventory fell to 121.6 MnT last weekend, depicting steady fall against this year's peak levels of about 150 MnT observed in early Apr'19. Amid low stock in China, mills continue buying expensive material to continue full-load operation.

Spot lump premium witnessed at USD 0.3300/DMTU, CFR China, almost stable on weekly basis. However, the prices are expected to rise for the month amid tight supply.

Spot pellet premium dropped down- Spot pellet premium for Fe 65% grade pellets assessed at USD 24.35/DMT, CFR China this week as against USD 28.15/DMT, CFR China a week ago. Preference for pellet is more compared to lump due to high coke prices.

Coking coal offers decline further over softening demand- Seaborne premium low-volatile hard coking coal prices witness further decline amid weakening global demand. Meanwhile ample supply amid thin trades kept coking coal prices on lower side.

Meanwhile demand for coking coal among Indian importers remained moderate ahead of monsoon season.

Latest offers for the Premium HCC grade are assessed at around USD 195.50/MT FOB Australia, which was USD 202.50/MT FOB Australia previous week.

China domestic billet prices fall- This week Chinese domestic billet prices settled at RMB 3,500/MT, down RMB 20 against last week. This week, billet trade sentiments in China continued to remain weak.

Chinese HRC export offers witness continual decline- Chinese HRC export offers continued to remain on downside following decline in domestic prices.

Currently nation's HRC export offer declined by USD 5-10/MT and was assessed at around USD 485-490/MT FoB basis. In the beginning of the week the offers stood at USD 495-505/MT FoB basis.

Meanwhile domestic HRC prices in China stood at RMB 3,820- 3,830/MT in eastern China (Shanghai) fell by RMB 20 which was RMB 3,840-3,850/MT in eastern China (Shanghai.

Chinese rebar export offers inch down further- Nation's rebar export offers inch down further owing to weakening sentiments in domestic market.

Currently nation's rebar export offers are at USD 507-510/MT FoB China. Last week the offers were at USD 510-515/MT FoB basis.

Meanwhile domestic rebar prices stood at RMB 3,880-3,920/MT (Eastern China) fell by RMB 10 which was RMB 3,890-3,930/MT (eastern China).

Chinese Steel Market Highlights - Week 24, 2019

Source: SteelMint Research