Chinese steel prices gained strength from the rally in the futures market, with authorities taking anti-fog measures since the beginning of the week. In addition, the rise in flat steel prices announced by China's leading steelmaker Baosteel for February'22 kept the market sentiments alive.
Chinese spot iron ore fines Fe62% prices opened at $119.50/t CNF China for the week and were valued at $127.30/t CNF China towards the end of the week. Seagoing iron ore prices were higher due to fresh transactions and observed price points, as well as firm buying interest and limited spot availability.
According to sources, the premium for medium fines overall improved as purchasing interest was flexible, with the loss of imports from port side moderate fines reduced.
In December, finished steel product production levels and finished steel stock levels were quite low. Therefore, even if the macro outlook for steel production declines in 2022, it is likely that steel demand and steelmaker margins will see improvements at the beginning of the year and push iron ore prices higher. According to the data provided by SteelHome, the inventory of iron ore at major Chinese ports stood at 156 million tons this week, down 0.2 million tons from last week's 156.2 million tons.
Marine coking coal FOB prices rose $2/ton due to tight supply. Weather concerns continue to weigh on market sentiment in Australia and offers are limited in the spot market.
Requests were heard for premium hard coking coal (HCC) from India, but no deal was reported. The latest price for premium HCC grade is around $359/t (t) FOB Australia, up $2/ton from $357/t FOB a week ago.
Leading China's electric arc furnace (EAF) steelmaker Jiangsu Shagang Group increased its scrap purchasing prices by RMB 100/tonne ($16/t) on January 7'22. Specifically, this is the first hike on January 22. Current prices of HMS (6-10 mm) stand at RMB 3,690/ton ($579/t) including 13% VAT delivered to headquarters. However, the company's scrap purchase offers reached the highest level in two months. Similar levels were last seen at the end of October 21st.
Billet prices rise towards the end of the week in China
In Tangshan, China, steel billet prices rose RMB 80/ton ($12/t). On January 7'22, local billet prices stood at RMB 4,350/ton ($682/t) including 13% VAT. China's rebar futures contract for May'22 delivery closed at RMB 4,526/ton ($710/t) on 8 January'22, rising sharply by RMB 211/ton ($33/t) weekly.
HRC export offers remain unchanged
Chinese mills did not change their HRC export offers at $760-770/ton FOB China each week due to limited activity after the Christmas and New Year holidays. Also, export offers from China are less attractive than other exporting countries, so buying interest for Chinese origin cargoes remained low.
For example, it was heard that China's HRC exports to Vietnam were around $795/ton, while exports from India were at $750/ton on CFR basis as of January 4'22.
In the domestic market, HRC prices increased RMB 30-60/ton ($5-10/t) to RMB 4,900-4,930/ton ($768-773/t) and RMB 4,840-4,900/ton (759 lb) in eastern China. -768$/ton) This comes after sharp gains in HRC futures as coal prices rose after Indonesia's unexpected move to ban coal exports on January 22 amid the domestic energy supply crisis.
Another factor was the implementation of 'level two' serious anti-smoke measures in Tangshan and Hebei provinces this week to combat heavy air pollution.
Local rebar prices remained stable at RMB 4,500-4,550/tonne ($706-713/t) (North China) due to limited activity due to adverse weather conditions in some regions.
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