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Chinese steel plants have little inclination to accumulate stocks of coke to sustain their operations during the coming Chinese New Year holidays over February 4-10, sources confirmed on January 17. The mills are still content to procure just according to demand for their normal operations, Mysteel was told.
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Production
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Source: Rio Tinto, released on January 18
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Mysteel’s 62% portside iron ore fines index declined on January 17 but only by Yuan 2/wmt ($0.3/wmt) on day to reach Yuan 564/wmt FOT Qingdao and including 16% VAT. The 62% seaborne iron ore fines index remained unchanged at $75.1/dmt CFR Qingdao the same day.
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Some Chinese traders have finally shown inclination to stock up some steel for a possible revival in the domestic market after the Chinese New Year holiday around late February or early March with the holiday being only two weeks away, though the enthusiasm is still mixed with caution, market sources noted on January 17.
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The Tangshan government in North China’s Hebei province has ordered steelmakers under its jurisdiction to submit to a new round of emergency restrictions over January 17-19, just two days after the makers emerged from an earlier marathon of restraint, Mysteel has learned.
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Ferrosilicon production among China’s 125 major smelters in 2018 was the highest since 2014 and reached 5.38 million tonnes, making for a year-on-year rise of 952,300 tonnes or 21.5%, according to Mysteel’s latest monthly survey released on January 16. The 125 plants covered by the survey represent almost all of China’s FeSi capacity.
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Production
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Source: South32, released on January 17
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China Baowu Steel Group Co (Baowu), China’s top and the world’s second largest steel producer after ArcelorMittal, has been embracing intelligence in manufacturing in the full swing, substituting 2,500 human employees with 479 robots by the end of 2018 for higher efficiency and lower costs, according to a company post on January 16.
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Mongolia’s coal exports for 2018 grew further, up another 8.6% on year to a new high of 36.3 million tonnes, according to the latest statistics released by the country’s National Statistics Office on January 15.
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Mysteel’s national HRB 400 20mm dia rebar benchmark slipped for the sixth consecutive working days on Wednesday, down another Yuan 5/tonne ($0.7/t) on day to Yuan 3,911/t including the 16% VAT as of January 16 as the continuing declines in spot sales took a toll.
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China’s domestic ferrosilicon prices have finally bottomed and have started to show signs of recovering, with the price of 75% grade FeSi reversing up Yuan 38/tonne ($5.6/t) week on week to Yuan 5,826/t as of January 16, according to Mysteel’s database.
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Demand for Robe Valley Fines at Chinese ports has increased this week, after Rio Tinto declared force majeure on impacted customers following the fire at its Cape Lambert port facility in Australia’s Pilbara early this week, Mysteel has learned.
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Prices of medium- and high- grade imported iron ore in China’s physical market weakened on January 16 while the price of low-grade ore strengthened. As a result, Mysteel’s 62% portside iron ore fines index stayed unchanged on day at Yuan 566/wmt ($83.8/wmt) FOT Qingdao and including 16% VAT while the 62% seaborne iron ore fines index edged up $0.8/dmt on day to $75.1/dmt CFR Qingdao the same day.
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Fifteen integrated steelmakers in East China’s Shandong province are having to pay an extra Yuan 0.1/kWh ($0.015/kWh) including 16% VAT for the electricity they buy from China’s State Grid to power their operations starting January 1, as ordered by the Shandong Development and Reform Commission. But mills contacted by Mysteel were largely indifferent to the rise.
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The boost in Chinese steelmaker demand for lower-grade iron ore has served to strongly prop up prices of this grade over the past several weeks, a trend which has finally helped the Australian producer of major medium- to low-grade iron ore, Fortescue Metals (FMG), to further shrink contract discounts on its major products for February delivery and enjoy better profits, market sources remarked on Tuesday.
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All coal mines in Linfen in North China’s Shanxi province have been ordered by the city government to idle operations before January 20 – two weeks ahead of the official start of this year’s Chinese New Year holiday over February 4-10 – to minimize the risk of mining accidents during the break, a local miner confirmed.
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This year’s Chinese New Year holidays are still more than three weeks away and yet many electric arc furnace-based steel producers in East, Central and Southwest China have already halted production to avoid further margin losses, Mysteel has learned from market sources. Other mills are planning to close earlier than last year too, perhaps in the next few days.
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The debt to assets ratio of Chinese steel companies shrank again last year to 65.7% as at the end of November 2018, thanks to the improved performance of the country’s steel industry overall, according to a report of the China Iron & Steel Association (CISA) presented at its annual meeting in Beijing on January 14.
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Chinese prices of imported iron ore softened on January 15, with Mysteel’s 62% Australian iron ore fines price index for seaborne cargoes lower by $0.55/dmt on day to $74.3/dmt CFR Qingdao, while the price for ore of the same grade and origin at the ports continued to stay at Yuan 566/wmt ($83.6/wmt) FOT Qingdao and including 16% VAT.
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The prices of steel scrap across major Chinese markets had risen by as much as Yuan 130/t ($22.2/t) on week as at January 11, Mysteel has learned. Chinese steelmakers lifted scrap procurement prices to attract scrap suppliers last week, but trading volume saw limited growth, according to market sources.
