Chinese Steel Market Highlights -Week 8, 2018

This week Chinese steel market remained dull and inactive in the beginning of the week since the Chinese steelmakers were officially on holidays from 15th Feb to 21st Feb '18 on Lunar New Year.However post holidays nation witnessed rise in prices amid gains in domestic market.

Also,with Tangshan's municipal govt announcing extension of steel output curbs for eight more months till November to lower the production rates from mid of March resulted in surge in ferrous futures.

China's Ministry had announced plan to cap steel production rates at 50% of capacity during 15th Nov-15th Mar in heavily polluted cities like Tangshan amid winter heating season. But the city will now enforce a 10-15% cut in blast furnace capacity for eight more months, until mid-November.

Seaborne iron ore prices move up, lump demand improves - After market reopened, seaborne iron ore prices witnessed minute fall amid less trade activities but on Friday index moved up. Lump demand increased resulting in increased lump premium. Spot lump premium increased to USD 0.19/DMT CFR China.

However pellet premium remained unchanged at USD 38.5/MT, CFR.Iron ore fines (Fe 62%) stood at around USD 78.4/MT,CFR after holidays but on Friday it increased to USD 79.2/MT, CFR.

Coking coal prices continue to show uptrend over positive demand - Australian coking coal importers are consistently raising the coking coal offers in anticipation of positive demand from China.Since Chinese mills are planning to resume full fledged production activities post Lunar New Year holidays.

Currently,Premium HCC prices was assessed at around USD 232.25/MT FoB Australia,which was USD 227/MT in preceding week.

Chinese domestic billet prices moved up-Domestic billet prices in China also witnessed upwards movement this week. Towards mid of the week prices of 150*150mm billet in Tangshan was around RMB 3,740/MT (incl 17% VAT). By the week close it increased to RMB 3,800/MT (incl 17% VAT).

Chinese HRC export offers edge up -Chinese HRC export offers remained unaltered in the beginning of this week owing to Lunar New Year Holidays. However by the end of the week Chinese steelmakers returned back and have started quoting fresh prices in domestic and global market.

Chinese HRC prices in domestic marker are heard to be in range of RMB 4,090-4,110 (Eastern China) and RMB 3,980-4,000/MT (Northern China).

However Chinese HRC export offers for commercial grade ASTM A36 are prevailing in the range of USD 590-600/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

Chinese Re-bar export offers remained stable- Chinese re-bar export offers remained stable this week amid festive holidays.Traders in China are expecting that trading activity in the market shall pick up by next week.

Currently, nation's re-bar export offers are at USD 553/MT on FoB basis.Last week also the export offers stood at similar range.

However gains in domestic market did not show its affect in the export prices.

Chinese re-bar prices in domestic marker are heard to be in range of RMB 3,990-3,950 (Eastern China) and RMB 4,000-4,040/MT (Northern China).

Steel Raw Material & Finished Steel Prices in China

Source-SteelMint Research