Chinese Steel Market Highlights- Week 35, 2019

Thus pessimistic market sentiments and slow demand resulted to downturn in nation’s domestic steel prices. On weekly basis steel prices witness downfall of around RMB 100-110/MT.

Along with this, nation’s HRC and rebar export offers registered decline. Meanwhile billet export offers drop sharply over plunge in domestic prices. Coking coal prices also slipped further and iron ore prices rebound this week over volatility in spot iron ore prices.

Volatility persists in spot iron ore prices- Chinese spot iron ore prices opened up this week at USD 86/MT, and fell to USD 81.45/MT, CFR China during the week, however picked up to USD 85.85/MT towards weekend.

As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports increased to 125.25 MnT as compared to 124.65 MnT a week ago.

Spot pellet premium down sharply amid easing supply- Spot pellet premium for Fe 65% grade pellets assessed at USD 24.3/MT CFR China as against USD 30.6/MT CFR China a week before. Pellet premium has witnessed a drop amid thin demand and easing supply in Chinese market.

Pellet inventory at major Chinese ports witnessed rise to 5 MnT, up on weekly basis compared to 4.9 MnT last week.

Spot lump move down on weekly basis- Spot lump premium this week witnessed further fall to USD 0.1200/DMTU as compared to USD 0.1250/DMTU assessed last week.

The continuous fall in lump premium has made the steel mills to review cost comparison between pellet and lumps. Besides this, few mills are heading towards increased usage of lumps in blast furnace replacing pellets.

Coking coal offers slide down further- Seaborne low-volatile hard coking coal prices witness marginal decline this week. Meanwhile absence of clarity on price trend kept coking coal offers on lower side.

Also Chinese spot prices in coking coal market showed downturn over limited trades.

Meanwhile Indian steelmakers are planning to resume restocking activities with the end monsoon season later in the month as they expect further downside in prices.

Currently offers for the Premium HCC grade are assessed around USD 150.75/MT FoB which was USD 153.00/MT FoB Australia in preceding week.

China domestic billet prices fell by RMB 110/MT- This week Chinese domestic billet prices in Tangshan settled at RMB 3,300/MT, down RMB 110 against RMB 3,410/MT in preceding week. This week, billet trade sentiments in China were reported weak.

Chinese HRC export offers slump further over decline in domestic prices- This week Chinese HRC export offers witness downtrend amid weak buying activities from overseas buyers. Also stretching US-China trade feud and widening gap between bids and offers kept HRC export offers on lower side.

Currently nation’s HRC export offers stood at USD 470-475/MT as against 480-485/MT FoB in previous week.

On weekly basis domestic HRC prices in China stood at RMB 3,620-3,630/MT in Eastern China (Shanghai) were slashed by RMB 80-90/MT as against 3,700-3,720/MT in previous week.

Trading activities remain sparse as buyers resist making new purchases in anticipation of further downside in domestic and export prices.

Weakening domestic prices weigh on Chinese rebar export offers- This week nation’s rebar export offers further fell by around USD 2-7/MT on weekly basis following decline in domestic prices.

Meanwhile possibility of lenient production cuts in Tangshan region may reduce nation’s rebar export offers in upcoming months. Also Chinese steelmakers will commence to offer rebar cargoes for Nov shipments. However Nov is considered as beginning of winter season in China, thus slowdown in trade activities may keep rebar export offers on lower side.

Also on occasion of National Day scheduled on 1 Oct’19 construction activities shall be suspended in order to improve air quality. This again will affect rebar prices in domestic and export market.

On an average basis currently nation’s rebar export offers stood at USD 468-473/MT FoB China which was around USD 470-480/MT FoB basis last week.

Meanwhile domestic rebar prices stood at RMB 3,540-3,590/MT (Eastern China) witnessed significant decline by RMB 100-120/MT against RMB 3,660-3,690/MT (Eastern China) a week ago.