Chinese Steel Market Highlights- Week 36, 2019

Nation’s HRC and rebar export offers drop further over thin trades. Coking coal offers continue to remain firm. Billet export offers showed a downturn despite the upside in domestic prices. Meanwhile, iron ore prices fell towards the weekend.

Chinese spot iron ore prices fell towards the weekend- Chinese spot iron ore prices opened up this week at USD 91.15/MT and fell to USD 88.1/MT CFR China towards weekend. As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports increased to 126.7 MnT as compared to 125.25 MnT a week ago.

Spot pellet premium down sharply W-o-W- Spot pellet premium for Fe 65% grade pellets assessed at USD 20.40/MT, CFR China as against USD 24.3/MT, CFR China a week before. Pellet premium has witnessed a drop amid thin demand and easing supply from overseas markets. Pellet inventory at major Chinese ports witnessed rise to 5.25 MnT, up on a weekly basis compared to 5 MnT last week.

Spot lump premium witnesses fall on a weekly basis- Spot lump premium this week witnessed fall to USD 0.0950/DMTU as against USD 0.1200/DMTU assessed last week. The oversupply of lumps at Chinese port has pulled down the prices. Besides, the continuous fall in lump premium has led the steel mills to review cost comparison between pellets and lumps. Besides, few mills are heading towards increased usage of lumps in blast furnace replacing pellets.

Coking coal offers remain largely stable- Seaborne low-volatile hard coking coal prices remain largely stable as buying interest continues to remain positive in China. However, no major deals reported yet as Chinese based steelmakers will observe the market trend before making any fresh bookings from Australia.

Meanwhile, resumption of restocking activities in India kept coking coal offers firm this week.

The latest offers for the Premium HCC grade are assessed at around USD 152.00/MT FoB Australia which was around USD 150.75/MT FoB basis a week ago.

China domestic billet prices surge on W-o-W basis- This week Chinese domestic billet prices in Tangshan settled at RMB 3,360/MT, up RMB 60 against RMB 3300/MT hovering last week. This week, billet trade sentiments in China were reported strong in the region. Meanwhile the nation’s export offers continue to remain on the downside.

Chinese HRC export offers continue to slide further- This week Chinese HRC export offer move down further by USD 5-10/MT on the back volatile futures and thin trades happening in the export market. Thus, in anticipation of further fall in prices, overseas buyers are bidding on the lower side.

Currently, the nation’s HRC export offers stood at USD 465-475/MT as against 470-475/MT FoB in the previous week.

However, on a weekly basis, domestic HRC prices witness increases over strong futures. Thus domestic HRC prices stood at RMB 3,650-3,670/MT in Eastern China (Shanghai) surged by RMB 30-40/MT as against 3,620-3,630/MT in the previous week.

Chinese Rebar export offers fell further on a weekly basis- Dampening global market sentiments and limited trades in the overseas market kept the nation’s Rebar export offers on the lower side.

This week Rebar export offers moved down by USD 3-8/MT on a weekly basis. Currently, the nation’s rebar export offers stood at USD 460-470/MT FoB China which was around USD 468-473/MT FoB basis last week.

Meanwhile, domestic rebar prices witness uptrend over increased futures. Thus domestic rebar prices stood at RMB 3,620-3,650/MT (Eastern China) spiked up by RMB 60-80/MT against RMB 3,540-3,590/MT (Eastern China) a week ago.

However, heavy rains caused by Typhoon Lingling weakened market sentiments further; which may impact rebar prices in China in upcoming days.