Wednesday, January 16, 2019

China AM: Steel futures maintain strength, raw materials pick up

China’s ferrous futures experienced a slight uptick on Thursday January 17 across the board, with steel contracts maintaining their strength from a day earlier.

Futures closing prices – morning session 
Shanghai Futures Exchange 
May rebar: 3,557 yuan ($526) per tonne, up 5 yuan per tonne
May hot rolled coil: 3,464 yuan per tonne, up 16 yuan per tonne 

Dalian Commodity Exchange 
May iron ore: 513 yuan per tonne, up 1 yuan per tonne 
May coking coal: 1,232 yuan per tonne, up 7.50 yuan per tonne
May coke: 2,036 yuan per tonne, up 4.50 yuan per tonne 

Raw materials 
The following were obtained from market sources:

Global Ore, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the March average of a 62% Fe index at a premium of $2 per tonne, laycan March 1-20.

Global Ore, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the March average of a 62% Fe index at a premium of $2.30 per tonne, March arrival.

The Fastmarkets MB 62% Fe Iron Ore Index was at $74.31 per tonne cfr China on Wednesday, up $0.53 per tonne from Tuesday.

The MB fob Australia Premium Hard Coking Coal Index fell $0.87 per tonne on the same day to $190.27 per tonne.

Key market news 
China’s auto sales fell last year for the first time since the 1990s, dampening expectations for steel demand in 2019 although some in the market think that there are still opportunities for steelmakers to remain profitable. Sales totaled 28.1 million units last year, down 2.8% from those sold in 2017, according to statistics from the China Association of Automobile Manufacturers (CAAM).

China’s domestic stainless steel prices remained unchanged for a third week amid soft demand and low supply ahead of the Chinese New Year. Fastmarkets MB’s price assessment for benchmark 304 stainless cold-rolled coil in the major market of Wuxi was 14,200-14,800 yuan per tonne including value-added tax for the week ended Wednesday, unchanged from a week earlier.

Import prices for stainless steel in East Asia moved up over the past week amid improved demand and costlier nickel, while talk also emerged in the market about a major Indonesian mill’s plans to reduce its stainless steel supply to Taiwan. 

Fastmarkets MB's import price assessment for 304 stainless 2mm trimmed cold-rolled coil in East Asia was $1,880-1,970 per tonne cif for the week ended Wednesday, widening upward by $10 per tonne from a week earlier. The import price assessment for 304 stainless trimmed hot-rolled coil in the same region was $1,760-1,830 per tonne cif for the same period, narrowing upward by $10 per tonne week on week.

The MB fob China Rebar Index was at $487.50 per tonne on Wednesday, down $0.50 per tonne from Tuesday.

The MB fob China HRC Index fell $0.21 per tonne on the same day to $480.42 per tonne.