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We are almost two months into 2021, and the global iron ore prices have so far appeared rather resilient especially with the serious surges after the Chinese New Year holiday over February 11-17, and with the anticipation of global economic recovery and the recent booms in the steel prices in many countries including China, the worldwide ferrous community is wondering whether the history of 2020 will repeat this year.
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Daily crude steel output among China’s 318 steel mills under Mysteel’s regular survey reversed up by 3.3% from the prior ten days to average 2.86 million tonnes/day over February 21-28, ending the continuous decrease since the start of January, according to Mysteel’s latest release on March 1. Domestic steel mills had resumed production after completing maintenance on steelmaking facilities, survey respondents explained.
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Production at steel mills, fabrication companies, mines and logistics enterprises in North China are preparing for some disruption to their business over the coming two weeks as Beijing plays host to thousands of visiting party members and officials for the year’s two most crucial political events convening this week.
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Japan’s eight major automakers posted a 4.5% on-year drop in January output at both the domestic and overseas plants to about 2.11 million units, according to the data released by automakers until February 26, and the decline was not about auto demand but the worldwide shortage of semi-conductors, according to market sources.
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The Purchasing Managers’ Index (PMI) for China’s steel industry for February scored 48.6, or having reversed up by 4.3 basis points on month, indicating “the obvious revival in both the domestic demand and supply despite the Chinese New Year (CNY) holiday over February 11-17”, according to the latest release from CFLP Steel Logistics Professional Committee (CSLPC) on February 28, the authorized index compiler.
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China’s Purchasing Managers’ Index (PMI) for the manufacturing industry slid for the third month in February, easing by 0.7 basis point on month to 50.6, with the country’s National Bureau of Statistics (NBS) attributing the on-month decline mainly to the Chinese New Year (CNY) holiday over February 11-17. Despite the dip, the national PMI has nonetheless remained in the expansion zone for the twelfth month, according to Bureau’s latest release on February 28.
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Japan’s Purchasing Managers’ Index (PMI) for its manufacturing industry for February gained 1.6 basis points on month to reach 51.4, returning to expansion for the first time since December and indicating that Japanese manufacturers are gradually emerging from the impact of the COVID-19 pandemic. According to index compiler au Jibun Bank Corporation on March 1, the February result showed the strongest improvement since December 2018. A reading over the threshold of 50 connotes expansion, Mysteel Global notes.
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Shagang Group (Shagang), China’s largest privately-owned steel producer and a leading rebar supplier in East China’s Jiangsu province, is raising list prices of rebar by Yuan 150/tonne ($23.2/t) for sales over March 1-10, the company announced March 1, after keeping its prices unchanged since January 11.
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Carbon steel prices in China’s domestic spot and futures markets moved up further over February 22-26, propelled by sustained optimism about business fundamentals. However, the momentum had slowed by week’s end as actual demand had not fully recovered, Mysteel Global noted.
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China’s national price of the HRB400 20mm dia rebar continued to firm on February 26, having inched up by another Yuan 6/tonne ($0.9/t) on day to reach Yuan 4,688/t including the 13% VAT and refreshing a two-year high, according to Mysteel’s monitoring.
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Prices of rebar in China’s spot and futures markets rose further this week, fuelled by optimism both for a steel demand recovery and a macro-economic rebound, according to market pundits. But for now, the fundamentals are not reflecting that anticipation of better business ahead, Mysteel Global noted.
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Steel exported worldwide from Vietnam in January soared by 98.8% on year to total 967,913 tonnes, thanks largely to aggressive purchasing by China, currently the largest buyer of Vietnamese steel.
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Some domestic yellow goods dealers in East and Central China have begun raising sales prices of their heavy equipment beginning late February, trying to offset higher manufacturing costs caused by climbing input prices including those of steel, Mysteel Global has learned.
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Japan’s carbon steel exports declined again in January, falling by 13% on year and by 0.9% on month to 1.65 million tonnes, according to the latest data released by the Japan Iron & Steel Federation on February 26. Though this marked the ninth consecutive monthly tumble, a JISF official was optimistic that this month’s result would show some improvement as steelmakers had more capacity available.
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Crude steel production among 64 countries worldwide under the monthly survey by World Steel Association (WSA) totaled 162.9 million tonnes in January, up 4.8% on year or 2 million tonnes or 1.2% more on month, according to the latest statistics released by the association on February 25, showcasing that global steel demand has been picking up steadily on support of recovering downstream sectors such as automobiles.
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As of February 26, China’s ferromolybdenum prices have grown to Yuan 113,000-114,000/tonne ($17,469-17,623) with some small-sized steel mills paying even higher at Yuan 116,000/t, after China has returned to work since February 18 after the Chinese New Year (CNY) holiday, mainly in tandem with the gains in the global market.
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On February 25, China’s spot sales of construction steel including rebar, wire rod and bar-in-coil jumped 53.5% on day, and the domestic rebar price appeared rather firm, or having recovered Yuan 9/tonne ($1.4/t) on day, Mysteel’s surveys showed.
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After several months of inactivity, China’s imports of billets picked up after the Chinese New Year (CNY) holiday over February 11-17, thanks to the widening price disparity between domestic semis and imports, and amid expectations of stronger demand, Mysteel Global noted.
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Steel stocks held by traders across China increased over the first week after the Chinese New Year holiday, rising by 16.4% on week as mills passed along some stocks to traders, Mysteel Global noted.
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Growth in China’s industrial machinery sector in 2021 is expected to ease slightly to around 5.5%, as against the 6% on-year rise seen in 2020, but the outlook for the sector remains positive, according to a February 24 release from China’s Machinery Industry Federation (CMIF).
