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Like in many markets globally at the moment, steel demand in China has not been as strong as generally expected, with the result that prices are weakening. Over September 28-October 12, Mysteel’s SS400 4.75mm hot-rolled coil was traded at $463/t FOB Bayuquan port in Northeast China’s Liaoning province, down $5/t from September 21-27, as Mysteel Global reported.
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Over the coming few days, the local government of Tangshan city, China’s top steel producing base in Hebei province, intends to strengthen emergency measures already in place to reduce pollution over the city, Mysteel Global has learned, as a response to warnings from both the central and local meteorological administrations about air quality deteriorating.
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Chinese shipbuilders received 19.5 million dead weight tonnes (dwt) of new vessel orders during this year’s January-September period, down 27.4% on year, according to the latest statistics from China Association of the National Shipbuilding Industry (CANSI) published on October 16. However, the margin of decline was much smaller than the on-year decrease seen over the first eight months of nearly 38%, Mysteel Global noted.
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Shenzhen-listed Angang Steel Co, one of China’s top 10 steelmakers, is warning shareholders to expect a huge 75% fall in net profits for this year’s January-September period to Yuan 1.7 billion ($239 million), according to the company’s preliminary financial report released on October 14. Angang blamed thinner margins and higher costs for the dramatic fall, noting that profits for the July-September quarter alone plummeted by nearly 88% on year to Yuan 297 million.
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Chinese steel market participants are divided on whether steel mills in the “2+26” cities in North China will definitely face tougher restrictions from their local authorities in the upcoming winter over November-March 2020 just because Beijing has set a higher bar for air pollution reduction, targeting to reduce the average PM2.5 density by 4% on year for the 2019 winter from last year’s 3% reduction.
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Mysteel’s national average HRB400 20mm dia rebar benchmark fell for the second day on October 16, down another Yuan 17/tonne ($2.4/t) on day to Yuan 3,869/t including the 13% VAT, and the trading activity was slack on Wednesday with buyers hesitating to book tonnage amid a bearish outlook.
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Hoa Phat Group, the largest steel manufacturer in Vietnam, has hot commissioned the second of four converters that will form the core of the company’s new 4 million tonnes/year steel works under construction at Dung Quat in Quang Ngai province in South-central Vietnam.
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Mysteel’s national average price for HRB400 20mm dia rebar reversed down on October 15 by Yuan 18/tonne ($2.5/t) on day to Yuan 3,886/t including the 13% VAT, and the spot steel trading eased further amid the persistent market uncertainties.
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The most-traded rebar contract on the Shanghai Futures Exchange for January delivery declined for a second straight day on October 15, falling by Yuan 57/tonne ($8/t) from Monday’s settlement price to reach Yuan 3,346/t at the close of the daytime trading session. On Monday, the rebar futures price had lost Yuan 45/t.
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China’s sales of excavators and other heavy machinery over January-September increased by 14.9% on year to 179,195 units, according to the latest data released by the China Construction Machinery Association (CCMA), with September sales alone being higher by 17.8% on year at 15,799 units. CCMA’s survey canvasses 25 major excavator producers nationwide, Mysteel Global notes.
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The World Steel Association (WSA) raised its projection for the global steel demand growth for 2019 to 3.9% on year to about 1.8 billion tonnes from the original 1.3% year-on-year forecast in April, which is also higher than the 2.1% yearly growth for 2018, according to WSA’s release on short-range outlook.
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China’s auto sales over the first nine months of 2019 decreased 10.3% on year to 18.4 million units, and auto production declined 11.4% on year to 18.1 million units, according to the latest statistics from the China Association of Automobile Manufacturers (CAAM) on October 14.
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China Baowu Steel Group Co (Baowu), the country’s top steel producer or the world’s second largest mill, has always worshipped its clear-headedness and caution in its overseas development strategy all along, and this remains the rule when it studies overseas steel investment opportunities now, as “risks in overseas investment are pretty high”, a senior official from the conglomerate explained.
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China’s national average price for HRB400 20mm dia rebar maintained largely stable at Yuan 3,904/tonne ($550/t) including the 13% VAT as of October 14, up merely Yuan 4/t from October 12, a make-up working day after the National Day holiday, and the daily construction steel trading hovered at its threshold of around 200,000 tonnes/day on Monday.
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China’s import and export value reached Yuan 22.91 trillion ($3.2 trillion) over January-September, up 2.8% on year, according to data released by China’s General Administration of Customs (GACC) on October 14.
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China exported some 50.3 million tonnes of steel over the first nine months of 2019, down 5% on year, according to the latest data released by China’s General Administration of Customs (GACC) on October 14. The decline was more substantial than the 4.4% fall on year seen over the first eight months, Mysteel Global noted.
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The immediate action of Jiangsu province in East China to strictly forbid truck overloading on the road after a recent catastrophic bridge collapse on October 10 due to an overloaded truck has greatly affected transportation of ferrous products mainly finished steel and scrap, market sources confirmed on October 12.
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China's steel exports declined 5% on year to just below 50.3 million tonnes for January-September. A detailed report will be posted soon.
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China’s daily crude steel output over October 1-10 hit its eight-month low of 2.23 million t/d, Mysteel’s latest survey among 247 blast-furnace and 101 electric-arc-furnace steel producers across the country showed, which was mainly because of the restrictions at many key steelmaking bases in China around the period.
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Steel inventories at both traders and steel mills reversed down over October 9-10 after increasing markedly during China’s National Day holiday over October 1-7, according to Mysteel’s latest survey published on October 11. The stock levels thinned mainly because traders and end-users returned to the market after the holidays with renewed vigour for buying, but market sources remain concerned about stock digestion in the future.
