Chinese Steel Market Highlights - Week 48, 2018

Chinese steel prices continues to show downtrend in domestic as well as export market owing to weakening demand and volatile futures in China. Buyers are postponing their purchases as they are expecting further decline in prices from China.

This week flat steel and rebar export offers fell further over thin trades.Billet export offers also decline sharply following downtrend in domestic prices. Meanwhile iron ore prices also edge up towards the weekend.

Chinese spot iron ore prices hit 4 months low- Chinese spot iron ore prices opened up this week at USD 64.70/MT, CFR China, lowest in last 4 months and increased to USD 65.65/MT, CFR China towards the week end.The prices picked up amid expectation of better steel market and declining port inventory.Iron ore inventory at Chinese major ports reduced to 137.85 MnT against 140.95 MnT a week before.

The Chinese Hebei province has issued second level production cut from 22nd Nov amid visible threat to environment, which in turn enhance the demand of high grade ore. However less expensive medium grade and lower grade fines are in high demand due to continued need to lower production cost.This is resulting in reduced price gap between low grade and high grade ore.

Spot lump premium has witnessed slight increase during the week by USD 0.0019/DMTU to USD 0.3319/DMTU.

Spot pellet premium dropped sharply by US 5.25/DMT- Spot pellet premium for Fe 65% grade pellets assessed at USD 48.15/DMT, CFR China this week, down by USD 5.25/DMT W-o-W against USD 53.40/DMT /DMT in previous week. Imported pellet buying interest of Chinese mills continues to be on lower side and pellets are being replaced with lower grade iron ore amid narrow steel margins.

Coking coal prices witness increase on weekly basis- Seaborne premium-grade coking coal prices from Australia increased amid strong demand and supply concerns emerging from major rail line closure in Queensland's Blackwater network operated by Aurizon.

However prices in Chinese market remained dull amid tedious buying interest owing to temporary halt on coal imports from November to December.

Thus,premium HCC coking coal prices are heard around USD 224/MT FoB Australia.However in previous week the same was heard around USD 221/MT FoB basis.

Chinese billet prices stabilise towards weekend - Chinese billet prices notice stability after a sharp fall. Domestic prices increased by RMB 60 (USD 9) in last two days. Chinese domestic billet prices observed some rebound on Thursday amid improved export enquiries, SteelMint learned from market sources. Major billet producers cumulatively increased billet prices by RMB 50 (USD 7) to RMB 3100 ( USD 445), ex-Tangshan, China, including 17% VAT.

Chinese HRC export offers approach nearly 1.5 years low - Chinese HRC export offers is constantly dropping amid weakening sentiments in domestic market along with soft demand in downstream products.In Jul'17,Chinese HRC export offers stood around USD 470-480/MT Fob China.However nation's HRC export offers is showing similar levels in Nov'18.

However on weekly basis nation's HRC export offers move down by USD 15/MT.Currently HRC export offers from China is assessed around USD 485-490/MT FoB basis.However last week offers was assessed around USD 500-505/MT FoB basis.

Meanwhile prices of HRC in the domestic market fell by RMB 160/MT on W-o-W basis.Presently domestic HRC is assessed at RMB 3,570-3,590/MT (ex-works) in Eastern China.

Chinese Re-bar export offers plunge on weekly basis - Nation's re-bar export offers witness fall on weekly basis following slump in domestic prices

Nation's rebar export offers slump by USD 20/MT W-o-W basis.Currently, nation's re-bar export offers are at USD 495-500/MT FoB China.Last week rebar export offers was assessed at USD 515/MT FoB basis.

Domestic rebar prices fell by RMB 120/MT on weekly basis and is assessed at RMB 3,800-3,830/MT in (Eastern China) as compared to RMB 3,920-3,950/MT (Eastern China).

Chinese Iron and Steel Prices Week 48,2018

Source- SteelMint Research