Chinese Steel Market Highlights - Week 7,2019

This week Chinese steel prices reported surge in domestic market in beginning of week however it started falling amid fluctuation in futures and limited trades towards the weekend.

However export offers showed uptrend post week long New Year holidays.Nation's HRC and rebar export offers increases from the beginning of week.Meanwhile coking coal offers also reported uptrend. Iron ore prices upsurge in the wake of accident in one of Vale's iron ore mines in Brazil.However iron ore prices inch down towards the weekend.

According to Chinese customs data released recently nation's finished steel exports reported an increase of 11% to 6.188 MnT in Jan'19 in contrast to 5.556 MnT in Dec'18.Nation's export volumes hit nearly seven months high as the same levels were last seen in the month of June'18 at 6.9 MnT.

Meanwhile China recorded iron ore imports at 91.26 MnT in Jan'19 increased by 5% as against 86.65 MnT in Dec'18.The rise in imports is attributed to restocking by mills ahead of lunar New Year holidays in Feb'19.

Chinese spot iron ore prices drop towards the weekend - Chinese spot iron ore prices opened up this week at USD 90.2/MT, CFR China and dropped to USD 87.80/MT towards the weekend. The prices have dropped amid Chinese preference for port stock over seaborne iron ore. Also the steel mills tend to stock material in January as week long New Year holidays was approaching in Feb to ensure sufficient raw material availability post holidays.

Spot lump premium almost stable for the week at USD 0.3300 /DMTU. The lump demand and prices are expected to increase with rising pellet prices and expectation of higher sintering cuts.

Spot pellet premium increased USD 5/MT this week-:Spot pellet premium for Fe 65% grade pellets assessed at USD 44.25/DMT, CFR China this week, up against USD 39.25/DMT a week before.

The premiums have picked up amid rising spot demand from non-Chinese markets post Vale mishap.Also,Vale had suspended several iron ore and pellet contracts with buyers after the dam collapse resulting in rising demand from overseas markets.

Coking coal prices increases this week -Seaborne premium-grade coking coal prices reported increase this week as the Chinese buyers returned after week long holidays.

Coking coal offer edges up but buying remain subdued as market participants were still assessing the restrictions imposed on Australian coking coal arriving in China.

However, sellers are heard expected a tightening supply in the seaborne market in near term as mining activities slowed down during the heavy rains.

Thus,premium HCC coking coal prices are heard around USD 208.50/MT FoB Australia.

Chinese domestic billet prices fall marginally- Domestic billet prices in China's Tangshan for 150*150mm closed this week at RMB 3,460/MT (ex-works, including VAT).Nation's billet prices started weakening amid fluctuating futures and weakening market sentiments in domestic market.

Chinese HRC export offers rises towards the weekend- Chinese HRC export offers moved up by USD 10-20/MT post Lunar New year holidays.Meanwhile Chinese mills are increasing HRC prices in export market amid hike in iron ore prices due to accident in one of Vale's iron ore mines in Brazil.

Currently nation's HRC export offers are assessed at around USD 510-520/MT FoB basis.Before the holidays the offers was in range of USD 495-497/MT FoB basis.

Meanwhile prices in the domestic market decline towards the weekend.Domestic prices in eastern China (Shanghai) is hovering at RMB 3,730-3,740/MT and RMB 3,740-3,750/MT in Northern China (Tangshan).Prices mentioned are ex-factory including 17% taxes.

Chinese re-bar export offers surge post Lunar holidays- Nation's re-bar export offers reported surge post lunar New year holidays by USD 15-20/MT.

Currently,nation's rebar export offers are at USD 510-520/MT FoB China.

However buying remains weak amid weakening prices in domestic market.

Domestic rebar prices is assessed at RMB 3,750-3,780/MT in (Eastern China) and RMB 3,800-3,830/MT (Northern China).

Chinese steel market Highlights - Week 7, 2019

Source- SteelMint Research