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China’s export offering prices of finished steel including the hot-rolled coil (HRC) and rebar rebounded by $15-25/tonne in the first couple of days after China has been back to work from the Chinese New Year (CNY) holiday over February 11-17, having borrowed support from the higher global steel prices and the rising raw material costs, according to Mysteel’s latest assessment.
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Below are
summaries of the key ferrous data release schedule during the Chinese New Year
holiday over Feb 11-17.
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Global steel export prices continued trending in different directions last week, with prices in Europe and US strengthening further, while those in Asia stayed weak, with trading activity quietening ahead of Chinese New Year (CNY) celebrations in many countries, according to Mysteel’s latest weekly survey.
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The Q235 150mm square billet price in Tangshan city, the weathervane of China’s steel market dynamics, has been locked at Yuan 3,850/tonne ($595/t) EXW and including the 13% VAT over February 2-17, and as of February 5, the price was down Yuan 10/t on week but up Yuan 550/t from the CNY period of 2020, according to Mysteel’s data.
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China’s steel exports have been slowing down recently, with both the inquires and new bookings from the overseas buyers shrinking, as global steel prices with longs in particular, have plunged while the Chinese steel mills have refused to give in on prices too much due to the persistently high production costs, market sources shared on Wednesday.
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Mysteel’s latest survey shows that billet stocks at 14 trading houses in Tangshan, the country’s top steel producing and billet supply base in North China’s Hebei province, reversed down during the January 22-29 week, the first reduction in the past two months. As of January 28, total stocks held by the traders had eased by 46,800 tonnes or 5.5% from the ten-month high reached on January 21, as the pickup in profits led Tangshan steel re-rollers to resume active replenishment, according to Mysteel’s latest survey.
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Since last week, Chinese steel export prices have been on a fast downward track, with mills slashing prices and seeking export opportunities amid shrinking domestic demand. Though the offer price dive has continued this week, the volumes of Chinese steel being traded have declined and buyers abroad are stepping back from the market to watch, export sources said.
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Baoshan Iron & Steel Co (Baoshan Steel), the listed arm of China’s top steel producer - China Baowu Steel Group - announced to roll over its list prices of the carbon steel hot-rolled coil (HRC) for domestic sales in March, according to its pricing policy on January 25, as demand has shown signs of weakening ahead of the Chinese New Year (CNY) holiday but production cost has persisted high.
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Mysteel’s latest survey of ten integrated steel mills in Tangshan, North China’s Hebei province, showed that their average gross profits from selling billets had plunged by another Yuan 59/tonne ($9.1/t) on week to just Yuan 14/t as of January 22. The mills’ raw materials costs continued to climb but the producers hesitated to pass these along to customers in higher billet prices.
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Since the start of 2021, China’s rebar export price has caught up with speed in strengthening, up $15/tonne on week or $30/t higher than the end of December, and the export volume has surged too, while the hot-rolled coil (HRC) prices has shown signs of waning after the earlier spree in December, Mysteel’s latest weekly report.
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Billet suppliers in Tangshan, China’s top steel producer based in North China’s Hebei province, have been trying to support billet prices given the low margins they are earning, according to Mysteel’s latest weekly report. Some are even suffering from losses amid shortages of raw materials.
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The auto production among China’s 15 major automakers declined 27.4% on year to 523,000 units over January 1-10, according to the latest data from China Association of Automobile Manufacturers (CAAM) on January 14, which was mainly due to the growing shortage of auto semiconductors and the manufacturers’ relaxation on output at the start of the year, according to market sources.
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The price of Q235 150mm square billet in Tangshan, China’s top steel producing and billet supply hub, had trouble finding ground last week with the price rising by Yuan 10/tonne ($1.5/t) on Tuesday, falling by Yuan 20/t on Wednesday, boomeranging back by another Yuan 10/t on Thursday, before ending the week another Yuan 10/t higher at Yuan 3,800/t EXW and including the 13% VAT as of January 8.
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A rise in the number of confirmed cases of the coronavirus recorded in North China’s Hebei province over the past few days is making steel producers, traders and raw materials suppliers in the province anxious, especially when the local authorities have quickly imposed restrictions on trucking in parts of the province – disrupting the transportation of both steel and raw materials – but the tangible impact on mill operations has been limited so far, market sources confirmed on Thursday.
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After over two years of steel scrap imports restrictions, the Chinese government, as widely expected, has reopened the door to overseas steel scrap starting January 1 together with the new adoption of the “recycled iron-steel raw materials” standards, according to an announcement from the country’s Ministry of Ecology and Environment (MEE) on the last working day of 2020.
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Chinese export prices for both long and flat steel items surged at an even faster rate last week compared with previous weeks, reflecting the fact that domestic steel prices had hit multi-year highs earlier in the week. But Mysteel’s latest weekly survey shows that bid prices lodged by global buyers have been slow to catch up.
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The stocks of processed and unprocessed steel scrap held by China’s 291 licensed steel scrapyards had reversed up by 3.5% on month as of December 25, according to Mysteel’s latest survey. Chiefly responsible for the recovery were an increase in processing activity and the scrapyards’ determination to hold off selling in response to strengthening scrap prices.
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Sudden drops in temperature have hit most regions of China but the cold’s impact on steel demand has varied by region, market sources say of the chill. Raw materials transportation has been disrupted too though the effect so far has been limited, they said.
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The price of Q235 150mm square billet in Tangshan city, North China’s Hebei province, the bellwether of China’s steel market movement, had declined steadily by the end of last week after hitting a 27-month high of Yuan 4,020/tonne ($615.6/t) EXW and including the 13% VAT last Tuesday. The price eventually settled at Yuan 3,840/t on December 25, still up Yuan 110/t on week, according to Mysteel’s assessment.
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China’s Metallurgical Information and Standardization Institute (CMISI) that has participated in the formulation of the country’s new steel scrap standards, shared some explanation notes on some terms in the documentation on December 21, though the full and final copy of the guidelines is nowhere to be found yet.
