Chinese Steel Market Highlights -Week 46, 2018

This week Chinese steel prices witnessed significant drop amid volatility in futures along with bearish market sentiments prevailing in domestic market.Thus pessimistic outlook in domestic market leads to lower export offers from China.

Flat steel and rebar export offers move down sharply on weekly basis.Coking coal prices remained largely stable. Billet export offers also recorded significant fall over falling domestic prices. However iron ore prices moved down throughout weekend.

China's crude steel output increased to hit record high in Oct'18 before winter production cuts come into action.China's crude steel output was recorded at 82.55 MnT in Oct'18 increased 2% against Sept'18.

China's major steelmaker - Baosteel has slashed flat steel prices by upto RMB 200/MT for Dec deliveries after keeping unchanged in previous month.

China's demand for low grade iron ore increases - Chinese spot iron ore prices opened up this week at USD 76.75/MT, CFR China and reduced to USD 74.15/MT, CFR China towards the week end. The prices have reduced amid narrowing steel margins promoting usage of lower grade fines in blast furnace.

Iron ore inventory at Chinese major ports reduced to 140.6 MnT against 140.65 MnT a week before.

Spot pellet premium dropped sharply by USD 8.05/DMT-Spot pellet premium for Fe 65% grade pellets assessed at USD 55.80/DMT, CFR China this week, down by USD 8.05/DMT W-o-W against USD 63.85/DMT a week before. Imported pellet buying interest of Chinese mills was learned to remain weak amid increased supply of Chinese domestic pellets.

Spot lump premium has witnessed drop this week to USD 0.3450/DMTU amid shrinking steel margins making lumps comparatively expensive.

Coking coal prices remain firm-This week seaborne coking coal prices remain stable owing to slowdown in trading activity from China.Weakening steel prices in resulted to weak demand from steelmakers in China.Meanwhile Chinese steelmakers are waiting for updates on 2019 import quotas before taking any new positions currently for buying seaborne coking coal.

Currently,Premium HCC is around USD 223/MT, FoB Australia.However previous week the same offers was around USD 221/MT ,FoB basis.

Chinese HRC export offers decline sharply - Chinese HRC export offers is persistently showing downward momentum over sparse trading in domestic and export market.Demand supply mismatch is leading to sharp decline in Chinese steel prices.Meanwhile overseas buyers are also bidding on lower side.

This week HRC export offers from China decline by 10-15/MT W-o-W basis.Currently HRC export offers from China is assessed around USD 500-505/MT FoB basis.However in the beginning of the week HRC export offers were around USD 515-520/MT FoB basis.

Presently domestic HRC is assessed at RMB 3,800-3,830/MT (ex-works) in Eastern China, down by RMB 100/MT against previous week.

Chinese Re-bar export offers move down amid seasonally weak period- Nation's re-bar export offers reported decline this week owing to pessimistic outlook of steel prices in domestic market.Meanwhile rebar traders expect weak demand with the onset of the year's seasonally weak period.

Currently, nation's re-bar export offers are at USD 560-565/MT FoB China.Last week rebar export offers was assessed at USD 575/MT FoB basis.

Domestic rebar prices fell by RMB 150-160/MT on weekly basis and is assessed at RMB 4,320-4,370/MT in (Eastern China).

Chinese Iron and Steel Prices Week 46,2018

Source- SteelMint Research