Chinese Steel Market Highlights - Week 17, 2019

Meanwhile HRC export offers declined over softening domestic prices. Rebar export offers inched up as Chinese mills were trying to secure more export orders. Coking coal offers declined over weaker trades from Australia. Iron ore offers remain range bound on weekly basis.

Chinese spot iron ore prices - Chinese spot iron ore prices opened up this week at USD 93.6/MT, CFR China and dropped to USD 92.8/MT towards the weekend amidst easing supply concerns from major miners. Vale, Brazil announced resumption at its Brucutu mines (capacity of 30 MnT pa) on 17th Mar.

Iron ore inventory at major Chinese port dropped to 136 MnT this week as against 140 MnT towards last weekend.

Spot lump premium witnessed drop on W-o-W- Spot lump premium witnessed slight drop on weekly basis to USD 0.3100/DMTU as against USD 0.3150/DMTU, CFR China towards last week. Lump inventory at major Chinese ports has dropped on weekly basis to 15.90 MnT assessed on 26th Apr as against 16.2 MnT on 19th Apr.

Spot pellet premium marginal decline on W-o-W basis-: Spot pellet premium for Fe 65% grade pellets dropped to USD 29.10/DMT, CFR China this week, against 29.25/DMT a week before. Chinese mills are yet to change the blend ratio hence, even after fall in pellet premium, it has failed to replace lumps. As a result, pellet inventory at major ports have picked up to 5.2 MnT this weekend against 4.9 MnT a week before.

Coking coal offer edges down on weekly basis-  Seaborne premium hard metallurgical coal prices have inch down this week amid slowdown in trading activity.However coking prices to China gained momentum as end-users were restocking in China

Latest offers for the Premium HCC grade are assessed at around USD 204.25/MT FOB Australia.Previous week the offers was hovering at USD 206/MT FoB basis.

Chinese HRC export offer inch down - Chinese HRC export offers reported marginal decline later this week amid weakening sentiments in domestic market.

Currently nation’s HRC export offer is assessed at around USD 525-530/MT FoB basis. In the beginning of the week, nation’s HRC export offers stood at USD 535-545/MT FoB basis.

Meanwhile prices in domestic market rebound amid limited trading.Domestic HRC prices in eastern China (Shanghai) stood at RMB 3,990-4,000/MT inclusive of VAT taxes.

In the beginning of the week domestic HRC price stood at RMB 4,010-4,020/MT (eastern China) and fall back to RMB 3,990-4,000/MT (Eastern China).

Thus mills in China are increasing their output which results to higher inventory levels.However trading activities remain dull which has kept prices stable in domestic market.

Chinese rebar export offers inch up - This week nation’s rebar export offers inched up on weekly basis despite stability in domestic prices.

Nation’s rebar export offers are at USD 535-550/MT FoB China.Last week also the offers were at USD 535-540/MT FoB basis.

However domestic rebar prices remained stable on weekly basis and are assessed at RMB 4,050-4,100/MT in (Eastern China) inclusive of VAT taxes.

Thus domestic rebar prices likely to remain weak amid higher inventory levels and weak demand in domestic market.Thus Chinese steel mills will try to secure export orders by reducing the prices.