Chinese Steel Market Highlights - Week 33, 2018

This week Chinese steel prices witnessed gains in the domestic market amid announcement of Tangshan winter production which is starting ahead of its schedule. Spot pellet premium shot up amid restrictions over emissions. Meanwhile flat steel export offers inch down this week. Rebar export offers remain unchanged.Billet export offers moved up marginally.

According to National Bureau of Statistics (NBS) China’s crude steel output moved up marginally in Jul’18 to 81.24 MnT against 80.2 MnT in Jun’18. Meanwhile on yearly basis country’s crude steel output observed growth of 10% in Jul’18 which was 74.02 MnT in corresponding month of previous year.

Chinese spot pellet premium shot up - Spot pellet premium for Fe 65% grade pellets assessed at USD 76.85/DMT, CFR China, up by USD 7.65/DMT W-o-W against 69.20/DMT a week before.The enormous surge in the pellet premium is attributed to limited supply in spot market, emission restrictions imposed in China ,along with aggressive restocking by traders.

Chinese spot iron ore prices opened up this week at USD 68.75/MT, CFR China and decreased to USD 67.5/MT, CFR China towards the week end. Spot lump premium increased by USD 0.0160/MT this week to USD 0.2485/MT, CFR, due to better demand from Chinese buyers and surge in pellet prices. Also, Lump inventory at Chinese major ports has reduced to 21.90 MnT this week, as against 22.20 MnT a week before.

China has produced 64.76 MnT crude iron ore in July`18, according to National Bureau of Statistics,.The production has declined by 44% compared to 114.66 MnT in July`17. However,on monthly basis the production stood almost stable compared to June`18 production at 65.5 MnT.

China has produced 455.33 MnT of iron ore for the duration Jan-July`18 down by 39% on yearly basis against 748.03 MnT for same duration last year (Jan-July`17).

Coking coal offers remain stable this week- Seaborne coking coal offers remain largely stable this week.However recent production cuts announcement in china results to dull buying interest from steelmakers in China. Moreover, concerns over the escalating China-US trade tension has slowed down seaborne trading activity in the country.

Currently Premium HCC prices moved up W-o-W and are assessed around USD 183.75/MT FoB Australia compared to USD 182/MT FoB basis a week ago.

Chinese billet prices move up - Domestic billet prices in China have continued to strengthen over increase in raw material prices. Current spot price assessment is at around RMB 4,170/MT (including VAT) for 150*150mm billet Q235. Chinese billet export price assessment also moved up by USD 5/MT W-o-W.

Chinese HRC export offers inched down over subdued demand-Chinese HRC export offers inch down by USD 5-10/MT despite upward momentum in domestic prices.

Currently Chinese HRC export offers heard around USD 570-575/MT, FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

Domestic prices witness upward momentum as the Tangshan region will commence winter production cuts ahead of schedule this year.Thus prices of HRC in the domestic market are gauged at RMB 4,300-4,310/MT (ex-works) in Eastern China and 4,240-4,250 /MT (Northern China).

Meanwhile Chinese steel mill are currently focusing in domestic market rather than exports unless overseas buyers are ready to pay higher prices.

Chinese Re-bar export offers remain range bound -This week Chinese rebar export offers continue to remain range bound despite gains in domestic market.

However owing to dull trading and tedious buying activity among overseas buyers, export offers remain on lower side.

Currently,Chinese re-bar export offers are at USD 555-560/MT FoB China.Bids remained on lower side which is around USD 535-545/MT FoB China.

Meanwhile prices in the domestic market witness gains amid early start of winter production cuts in Tangshan region.Domestic rebar prices stood at RMB 4,350-4,400/MT in (Eastern China) and RMB 4,230-4,260/MT in (Northern China).

Chinese Iron and Steel Prices Week 33,2018

Source-SteelMint Research