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Chinese domestic prices for hot-rolled coil (HRC) have declined significantly since the Chinese New Year holiday ended on February 2. Steelmakers have opted to conduct maintenance amid bleak demand but this has failed to prop up prices as market expectations remain for flat steel demand to stay negative in the long term, Mysteel Global has learned from the market.
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Mysteel’s national average HRB400 20mm dia rebar benchmark price hovered at Yuan 3,650/tonne ($516.3/t) including the 13% VAT as of Thursday, nudging up Yuan 1/t on day. The benchmark has remained rangebound since mid-March, Mysteel Global noted.
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Ordinary steel inventories held by Chinese traders declined further over the period of March 20-26, thanks to continuing firm downstream demand, new data indicated. However, traders still showed some hesitation about stepping up prices for now, Mysteel Global has learned from the market.
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China’s national average benchmark price reversed up Yuan 8/tonne ($1.1/t) on day to Yuan 3,949/t, including the 13% VAT as of March 25, according to Mysteel’s database. Sales stabilised with better trading on the same day.
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China’s national average benchmark price for HRB 400 20mm dia rebar retreated for the second day to Yuan 3,641/tonne ($520/t), including 13% VAT, as of March 24. Rebar price inched down by Yuan 6/t on day, according to Mysteel’s daily price tracker. Downstream demand has yet to fully resume.
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China’s rebar output from 137 sampled steelmakers across the country jumped up a notable 9.8% or 242,300 tonnes on week to 2.7 million tonnes during March 12-18, much faster than the 1.4% on-week growth in the prior survey week, according to Mysteel’s latest weekly production study.
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Mysteel’s national average price for HRB400 20mm rebar benchmark reversed down by Yuan 25/tonne ($3.5/t) from last Friday to reach Yuan 3,647/t including the 13% VAT as of March 23. Trading has slowed down and market sentiment has turned more cautious, Mysteel Global noted.
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Chinese export steel prices softened further after Beijing announced increases to export tax rebates on some steel items from March 20, but export transactions did not improve much despite the price drops, export sources tell Mysteel Global. Global steel prices fell faster and the few buyers with interest turned to cheaper products, they explained.
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China’s domestic spot steel prices kept increasing over March 16-20, as the demand from the downstream industries had been steadily improving, while steel futures prices retreated on the market uncertainties amid a mix of positive and negative news, Mysteel Global noted.
Rebar: China’s national average HRB400 20mm dia rebar benchmark price
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The Tangshan Q235 150mm square billet price, a barometer of the Chinese steel market vitality, reversed down Yuan 40/tonne ($5.6/t) from last Friday to Yuan 3,120/t EXW and including the 13% VAT as of March 22 amid remaining uncertainties in the domestic steel market despite the spiral-up in the spot trading.
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Below is the brief near-term outlook of the five key steel products Mysteel shares on weekly basis basing on a series of related surveys and communication with market participants.
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The most-traded rebar contract on the Shanghai Futures Exchange for May delivery closed the daytime trading session on Friday at Yuan 3,483/tonne ($498/t), down Yuan 86/t on week though up Yuan 22/t from the prior day’s settlement price, an indication that sentiment in the domestic futures market had become a bit more wary.
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Total stocks of the five major finished steel products held by the 184 steel mills across China which Mysteel monitors slipped for a third week over March 19-25 to 10.87 million tonnes, down 6.8% from one week before. The dip occurred despite the fact that steel production had recovered steadily during that period, indicating that steel consumption in the domestic market has improved further, Mysteel Global notes.
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Total stocks of the five major finished steel products held by the 184 steel mills across China which Mysteel monitors emptied at a faster pace over the March 12-18 week, thanks to the further recovery in demand, with the tonnage slipping to 11.67 million tonnes as of March 18, Mysteel’s latest weekly survey showed. The rate of decline of 9.6% on week was much sharper than the 4.5% dip recorded over the prior week, Mysteel Global notes.
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China’s national average benchmark price for HRB400 20mm dia rebar reversed down Yuan 13/tonne ($1.8/t) on day to Yuan 3,664/t, including the 13% VAT, as of March 19, mainly impacted by the bearish rebar futures market, according to Mysteel’s daily price tracker.
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Total inventories of the five major steel items held by Chinese traders finally entered de-stocking territory after steadily increasing for nearly three months, Mysteel Global has learned. And it was improving demand, not production cuts, that did it.
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China’s shipbuilders saw their new vessel orders increase by 41.4% on year over January-February, according to the latest release by China Association of the National Shipbuilding Industry (CANSI) published on March 18. The leap in orders during this year’s first two months was mainly due to the low base for the same period last year, however.
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China’s national average benchmark price inched up Yuan 7/tonne ($1/t) on day to Yuan 3,677/t including 13% VAT as of March 18, according to Mysteel’s daily price report, mainly thanks to the sudden surge in long steel transactions in the spots market.
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Steel industry insiders in China responsible for domestic steel business responded rather coolly to Tuesday night’s announcement from the country’s Ministry of Finance that tax rebates for exports including steel products are to be increased, Mysteel Global has found. Some expressed reservations about whether larger rebates would contribute anything to boosting the domestic steel market.
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China’s average price for HRB400 20mm dia rebar remained stable at Yuan 3,670/tonne ($524/t) including the 13% VAT as of March 17, according to Mysteel’s data. Long steel sales retreated on the same day as downstream users slowed down their pace of procurement after noting the sharp rise in price on Monday.
