Weekly: Chinese Steel Market Highlights
...
This week Chinese steel market exhibited mixed response as the domestic steel prices witnessed a marginal increase amid volatile futures. However, Chinese steel export offers slumped further amid lockdown announced across global nations to restrain the spread of Coronavirus.
-- Chinese HRC export offers fell further and rebar export offers remained largely stable. Coking coal prices moved down further on low buying.
-- China's major steel producer, Baosteel announced a reduction in its steel prices for May deliveries. The company has cut its HRC prices by RMB 100/MT, Hot-dipped Galvanized prices by RMB 150/MT and slashed the Color-coated steel prices by RMB 200/MT.
Spot iron ore prices stable W-o-W, port stocks up-
-- Chinese spot iron ore prices opened up this week at USD 82.55/MT, CFR China and increased to USD 83.55/MT, CFR China towards weekend amid a rebound in construction demand. Against last week's close, prices remained flat, however, steel margins did not witness improvement.
-- As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports increased to 119.05 MnT as against at 118.65 MnT assessed a week ago.
Spot pellet premium down W-o-W-
-- Spot pellet premium for Fe 65% grade pellets assessed at USD 28.15/MT, CFR China as against USD 31/MT, CFR last week. The domestic pellet is being considered a possibly less expensive direct feed by end-users. Also, amid uncertainty at Indian ports, Chinese buyer is not procuring further pellet cargoes from India.
Less stringent regulations pushed spot lump premiums down-
-- Spot Lump premium for the week witnessed at 0.2170/dmtu as compared to 0.2750/dmtu last weekend. The fall in lumps witnessed increasing pressure following a resumption of domestic concentrate production and less stringent regulations.
Coking coal prices weighed down by low buying interest-
-- Seaborne coking coal prices have continued to slump further on mute buying interest since lockdown announced in various global nations induced production cuts amid coronavirus pandemic.
-- Also, Australian coal mines are still planning to remain largely operational, despite idle blast furnaces across the globe as part of measures to tackle the ongoing spread of the deadly coronavirus pandemic. Thus, the seaborne metallurgical coal market remained bearish amid concerns of oversupply caused by weak demand.
-- In India demand for seaborne coking coal remain subdued, as the country's government has enforced a total lockdown for 21 days starting from March 24 as a preventative measure against the corona virus.
-- The latest offers for the Premium HCC grade are assessed at around USD 134.00/MT FOB Australia, which was USD 138/MT FoB basis a week ago.
China continues to import billet at cheaper prices-
-- China continues to import billet. The import offers in China are at USD 350-360/MT CFR China, down by USD 10-15/MT against last week.
-- Meanwhile, the domestic billet price is assessed at RMB 3,010/MT ex-Tangshan (including VAT), up by RMB 10/MT against the previous week.
Chinese HRC export offers fall, imports resume-
-- The Chinese HRC export offer declined further by USD 5/MT as the other steel producing nations like India and Russia are offering HRC export aggressively to Vietnam buyers.
-- Thus the current assessed export offer stands at USD 405-410/MT FoB China as compared with USD 410-415/MT FoB basis in the preceding week. Also, thin trades in the overseas market weighed on the nation's HRC export offers.
--Also Chinese steelmakers have increased the appetite for imports and booked around 100,000 MT of HRC with South Korea. Thus, low priced imports attracted Chinese buyers and they continue to import slab, billets, and HRC for June shipments.
-- However, the domestic HRC prices jumped by RMB 70-80/MT to RMB 3,270-3,280/MT (Eastern China) in comparison with RMB 3,190-3,210/MT (Eastern China) a week ago.
Rebar export offers remain stable despite gains in the domestic market-
-- The rebar export offer remained largely consistent over the week with the Chinese traders shifting focus and catering to the decent demand and reaping good profits in the domestic market.
-- Thus, the Rebar export offer was witnessed at USD 435-440/MT, which was USD 435-445/MT in the previous week.
-- Meanwhile, the domestic rebar price stands at RMB 3,400-3,430/MT (Eastern China), marginally up by RMB 10/MT as against RMB 3,390-3,420/MT (Eastern China) a week ago.
Particulars | Currency | Current Price Per MT | 1 W | 1 M | |
Spot Iron Ore Fines Fe 62%, CNF China | USD/MT | 84 | 84 | 91 | |
Met Coke, 64%, FoB China | USD/MT | 271 | 282 | 288 | |
Premium HCC, FoB Australia | USD/MT | 134 | 138 | 161.75 | |
Premium HCC, CNF China | USD/MT | 141.25 | 156.5 | 169.25 | |
Domestic billet prices | RMB/MT | 3,010 | 3,000 | - | |
Domestic Rebar Prices (ex-warehouse Eastern China) | RMB/MT | 3,400-3,430 | 3,390-3,420 | - | |
Rebar, FoB China | USD/MT | 440 | 442.5 | 444.5 | |
Wire Rod, FoB China | USD/MT | 452 | 452 | 457 | |
Domestic HRC Prices (ex-warehouse Eastern China) | USD/MT | 3,270-3,280 | 3,190-3,210 | - | |
HRC, FoB China | USD/MT | 408 | 415 | 410 | |
CRC, FoB China | USD/MT | 465 | 474 | 510 | |
Plate, FoB China | USD/MT | 450 | 455 | 468 |
Source: SteelMint Research