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Over July 6-10, China’s rebar and HRC prices recovered on the declines in steel production, the slowdown in steel stocks build-up, as well as the growing market optimism in the next few months that had boosted spot sales.
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China’s steel export prices remained stable over June 29-July 3 after increasing $5-10/tonne during the prior week, according to Mysteel’s latest weekly report, which pointed out that demand from Asia showed signs of recovery with the faster resumption of industry in India after New Delhi’s COVID-19 shutdown and the restart of construction activities in Singapore.
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Capacity utilization of blast furnaces in Tangshan, China’s top steel producing city in North China’s Hebei province, stayed high in early July, even though the city government had earlier ordered most producers to halt or curb their operations from July 1 as an anti-pollution measure, according to Mysteel’s latest weekly investigation.
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Over June 29-July 3, China’s rebar and HRC prices softened on rises in production and inventories while less demand from East, South and Southwest China with the frequent and heavy rainfalls.
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Inventories of major finished steel products held by Chinese traders increased for a second successive week over June 25-July 2, as actual demand was undermined by the continuing frequent rainfalls in South and East China while domestic steelmakers kept production churning, Mysteel’s latest survey showed.
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Stable trading conditions at home encouraged China’s suppliers of hot-rolled coil to raise their export prices by around $10/tonne over June 20-28, yet despite this hike the price gap with the Chinese shippers’ global competitors narrowed as international prices climbed even faster, according to Mysteel’s latest weekly report. Shippers of foreign coils exporting to China stumbled with their pricing as well last week, Mysteel Global notes.
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The price of billet in Tangshan, China’s largest steel production base in North China’s Hebei province, is under pressure from all directions, the chief causes being the persistent supply gap (but low profit margins producers can win), slow trading and the swollen stocks of finished steel stocks gathering dust in the yards of re-rollers.
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Over June 22-24, China’s rebar prices inched down on the slowing demand amid rainy season and rising production whilst firm billet prices, and the hot-rolled coil prices held largely steady, though the country’s overall steel sales were partially interrupted by the Dragon Boat Festival over June 25-26, and traders’ finished steel stocks reversed up after 14-week declines, according to Mysteel’s series of surveys.
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Blast furnace capacity utilization rate among China’s 247 steel mills grew up for the fifteenth consecutive week over June 19-24 by another 0.76 percentage points to 93.42%, according to Mysteel’s weekly survey, as most of the Chinese steel mills had not shown any inclination to cut down on their output in the rainy season yet.
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Major finished steel stocks at the Chinese traders ended its 14 weeks of continuing declines since late March over June 19-24, though the recovery was merely 61,400 tonnes or merely 0.3% on week, mainly as the domestic steel demand had shown signs of slowing with the heavy rainfalls having hit South and East china, while steel mills had yet trimmed the output promptly, according to Mysteel’s latest survey.
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Steel re-rollers in Tangshan, the largest steel production base in North China’s Hebei province, resumed operations since the start of last weekend following a short-term production ban enforced to control pollution, according to Mysteel’s latest weekly survey. Nevertheless, as most are operating at breakeven point, their pace of production was generally lethargic.
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Over June 13-19, China’s steel exporters had raised their offering prices of the B500B 18-25mm rebar by another $5/tonne on week to $441/t FOB Shanghai port on average, in contrast to the recent softening in China’ domestic steel prices together with the weakening in demand in the rainy season.
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Finished steel inventories held by Chinese traders that have been declining since late March slipped further over June 12-18, declining by another 327,100 tonnes or 1.5% on week. However, the pace at which stock levels fell slowed down last week from the 653,600 tonnes or 2.9% on-week decline seen in the prior period, Mysteel Global noted. Industry watchers cited slower destocking due to softening demand in East China amid the wet season rains.
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Chinese steel mills had decided to raise their export offering prices marginally on noting signs of fast recovery in steel demand in Asia recently, though they were aware of the challenges in exporting because of higher prices against the other competitors, Mysteel Global understands from the market.
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The price of Q235 150mm square billet in Tangshan, the bellwether of Chinese steel market sentiment, was stable on week at Yuan 3,320/tonne ($469.6/t) as of June 12, as both supply and demand for the semi had eased during last week, according to Mysteel’s latest weekly report.
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China’s hot-rolled coil prices remained largely steady amid disciplined production pace, but rebar prices softened moderately over June 8-12, as demand especially in South China had been severely affected by the heavy rainfalls while production continued trending up, though the high steelmaking raw material prices had been lending support to the domestic steel prices for now.
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The steel inventories held by Chinese traders continued to decline over June 5-11, losing 2.9% on week, new Mysteel data shows. However, the pace of destocking had slowed further from the 3.9% on-week decline in the prior week, mainly due to the frequent and intense rainfalls in South China which impacted steel user demand, Mysteel Global noted.
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Export prices of China-origin steel products, as well as those from other regions, both increased rapidly last week over May 30-June 5, mainly due to the jump in raw materials prices, according to Mysteel’s latest weekly report. China’s steel imports and exports were quiet over the period, with large price gaps evident between buyers and sellers.
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Demand for billet from steel re-rollers in Tangshan, China’s top steel producing city in North China’s Hebei province, shrank over June 1-5, according to Mysteel’s latest weekly survey. The sustained high prices of the semis had crimped the re-rollers’ profitability, with some facing the reality of losing money, one survey respondent said.
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The total volume of iron ore dispatched to global destinations from the 19 ports and 16 mining companies in Australia and Brazil rebounded 20.8% or 5 million tonnes on week to 29.3 million tonnes over June 1-7, with both origins posting increases on week.
