Weekly: Chinese steel market highlights
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This week Chinese steel prices reported increase in the domestic market over strong futures. This in turn resulted in upside in export offers in overseas markets.
HRC export offers increased on stronger domestic prices. Rebar export offers remained range bound.Billet prices increased on strong futures. Coking coal prices witnessed decline due to limited buying from Chinese buyers.
China spot iron ore prices picked up during the week-
--Chinese spot iron ore prices witnessed at USD 100.5/MT towards the beginning of the week and dropped to USD 99.2/MT during the week. However, later it rebounded to USD 100.95/MT, CFR China towards the weekend.
--The prices have picked up amid strong Chinese appetite for raw material and Brazilian supply concerns. The concerns over coronavirus have been impacting the Brazilian supplies of iron ore cargoes amid rising COVID-19 cases at the iron ore mine in Itabira Brazil, owned by Vale, which may lead to operation suspension at the mine.
--Also, the port inventories of Brazilian and Australian fines has witnessed a continuous drop.
--Brazilian miner Vale has obtained a preliminary license to expand its Serra Lesta iron ore mine in northern Para state, with final approval expected within three months. The project involves expanding production capacity from 6 MnT per year to 10 MnT per year.
As per data compiled by SteelHome consultancy, iron ore inventory at major Chinese ports dropped to 108.5 MnT, drop of 1 MnT as against 109.5 MnT assessed a week ago.
Spot pellet premium down W-o-W:
--Spot pellet premium for Fe 65% grade pellets assessed at USD 16.85/MT as against USD 21.90/MT last week. The pellet premium dropped amid falling demand due to rising iron ore preference. Also higher pellet inventories at major Chinese ports can be attributed for decline in prices
--As per data compiled by SteelHome consultancy, pellet inventory at major Chinese ports increased to 6.6 MnT, as against 5.7 MnT assessed a week ago.
Spot lump premium stay unchanged W-o-W-
--Spot lump premium witnessed at USD 0.1520/dmtu, stable on weekly basis. However, the cost efficiency of lump is still not improved enough to entice higher demand.
Coking coal prices softened over low trades-
--Seaborne coking coal prices have soften on weekly basis amid thin trading since buyers have adopted wait and watch mode
--The Chinese market observed limited trades in anticipation of further tightening of port-related policies.
--Indian buyers are still consuming their long-term contract cargoes and demand is unlikely to revive before September this year.
--Latest offers for the Premium HCC grade are assessed at around USD 109.75/MT FoB Australia, which was USD 116/MT FoB basis a week ago.
Domestic billet prices gain on the week- The domestic billet prices in China are at RMB 3,330/MT ex Tangshan (including VAT), up RMB 50, against last week.
HRC export offers increased following gains in domestic market
--The nation's export offer remains stable at USD 435-440/MT FoB China against USD 430-435/MT FoB basis following uptrend in domestic market.
--Domestic HRC prices increased by RMB 30/MT on the week to 3,600-3,630/MT (Eastern China) as against RMB 3,580-3,600/MT (Eastern China).
--Meanwhile mills are also offering on the higher side since the beginning of the week on improved market sentiments.
Rebar export offers moved up marginally
--The rebar export offers moved up slightly by USD 3-5/MT against the previous week.The current week's offer stands at USD 450-458/MT FoB China as against USD 445-455/MT FoB basis.
--In similar lines, the domestic rebar price increased by RMB 70/MT to RMB 3,600-3,630/MT (Eastern China) in contrast with RMB 3,530-3,560/MT (Eastern China) a week ago.
--The Chinese finance ministry issued RMB 3.2 trillion of the local bond which boosted the market sentiments.
Particulars | Currency | Current Price Per MT | 1 W |
Spot Iron Ore Fines Fe 62%, CNF China | USD/MT | 101 | 101 |
Met Coke ,64% , FoB China | USD/MT | 267 | 272 |
Premium HCC, FoB Australia | USD/MT | 109.75 | 113 |
Premium HCC, CNF China | USD/MT | 118 | 124 |
Domestic billet prices | RMB/MT | 3,330 | 3,280 |
Domestic Rebar Prices (ex-warehouse Eastern China) | RMB/MT | 3,600-3,630 | 3,530-3,560 |
Rebar, FoB China | USD/MT | 454 | 450 |
Wire Rod, FoB China | USD/MT | 447 | 447 |
Domestic HRC Prices (ex-warehouse Eastern China) | RMB/MT | 3,600-3,630 | 3,580-3,600 |
HRC, FoB China | USD/MT | 435-440 | 430-435 |
CRC, FoB China | USD/MT | 493 | 470 |
Plate, FoB China | USD/MT | 465 | 458 |
Source - SteelMint Research