China:
Product prices in the China's steel market remained mixed this week.
In iron ore; An improvement was seen following the recovery in demand in the country. DCIOcv1, the most traded iron ore on the Dalian Commodity Exchange (DCE) in May, rose 1.24% in daytime trading, reaching 897.5 yuan ($124.70) per metric ton. Additionally, coking coal DJMcv1 and coke DCJcv1 rose 2.11%.
Rebar SRBcv1 on the Shanghai Futures Exchange increased by 1.62%, hot rolled coil SHHCcv1 increased by 1.42%, wire rod SWRcv1 increased by 0.82% and stainless steel SHSScv1 increased by 1.11%.
In hot rolled coil; While production increases, uncertainties continue in the industry due to low demand.
35 hot rolled coil (HRC) mills in China produced approximately 3.56 million tons of HRC during the week. This production amount increased by approximately 600 thousand tons compared to the same period in 2023. Although hot rolled coil supply in China is still high, local market demand remains weak. Steel mills contribute to increasing social stock levels by redistributing their stocks to the masses.
With more new hot rolled production lines expected to come into operation this year, market experts express concerns about achieving a stronger market performance.
India:
The increase in steel demand in India has led to an increase in domestic iron ore consumption. According to sources, small steel producers have recently petitioned the Indian Steel Ministry to impose export restrictive measures to ensure adequate supply of iron ore at affordable prices domestically.
Despite concerns from small steel producers, the Federation of Indian Mineral Industries (FIMI) has urged the government not to restrict iron ore exports. FIMI argued that India mainly exports low-grade iron ore, which is not widely used domestically, and therefore shipment of this grade abroad should not be restricted.
According to information shared by market experts, India's iron ore production is expected to increase to 330 million tons in the fiscal year that will start in April 2024.
Vietnam:
In hot rolled coil; prices decreased. Major steel producers such as Formosa Ha Tinh and Hoa Phat have reduced their HRC prices for April shipments, adding to the pressure on the market along with weak demand in global markets and a drop in import offers from China.
Vietnam's leading steel producer Formosa Ha Tinh has reduced its hot rolled coil prices by $45 per ton for April shipments to the range of $613-620/ton CIF Ho Chi Minh City. This follows the decline in import offers from China and the decline of SAE1006 grade HRC in the global market to $600/t CFR in February.
Local rival Hoa Phat also reduced its HRC prices for April-May, increasing the pressure on the market. On the other hand, there was a decline in hot rolled coil futures (May 2023 contracts) in China after the end of the Chinese New Year holiday, following the decline in local hot coil prices.
In rebar; Low prices are boosting the construction industry in Asia. Rebar from Vietnam is in great demand in Asia. Recent low-priced export deals indicate a revival of the market in regions such as Singapore and Hong Kong.
65,000 tons of coils from Vietnam's leading mills were sold to Hong Kong and Singapore at $560/ton cfr. This cargo was split with 25,000 tons going to Hong Kong and 40,000 tons going to Singapore. It was stated that the deal was made through Chinese traders and the freight to Singapore was $17/ton higher than to Hong Kong.
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