China's market is experiencing a period of subdued activity, marked by a decline in demand and reduced purchasing transactions. Current inventory levels for finished products, including Hot Rolled Coils (HRC), are minimal domestically. Forecasts suggest that HRC prices are unlikely to see an increase post the Chinese New Year holiday. This week, primary offers from China's leading mills are approximately $615 per tonne for the 3mm base grade (S235JR/SS400) and $630-635 per tonne for the 2mm SAE1006 grade, scheduled for March/April shipment. Some factories have initiated offers for products ready to be loaded by April.
On the other hand, domestic spot rebar prices in China exhibited a slight recovery last week, driven by improved market sentiment attributed to rising raw material prices and the announcement of macroeconomic policies by the central government to support the steel market. China's national price for HRB400E 20mm diameter rebar increased by Yuan 24/t to Yuan 4,046/tonne ($564/t) including 13% VAT as of January 25.
China's iron ore futures fell to the lowest level in the last week due to negativities in factories and crises in the real estate sector. DCIOcv1, the most traded May iron ore contract on the Dalian Commodity Exchange (DCE), fell 3.08% to 960.5 yuan ($133.74) per metric ton. Additionally, coking coal DJMcv1 fell 4.19% and coke DCJcv1 fell 3.58%. According to the comments of market analysts, the decrease in ore prices occurred due to the end of pre-holiday raw material stocking among producers and the increase in both shipments and port stocks.
The liquidation order issued by a Hong Kong court to real estate giant China Evergrande Group 3333.HK on Monday has put new pressure on the struggling real estate sector in China. According to analysts, this decision played an important role in the decrease in demand and the downward movement of prices.
In addition, it is thought that the crises in the real estate sector may delay the recovery that the China's market aims for this year.
In Malaysia, the rebar market remains steady. A Malaysian mill's offer for theoretical-weight rebar remains steady at approximately $570-575/tonne when trucked to Singapore, equivalent to $565-570/t cfr Singapore for orders of at least 10,000 tonnes. Despite a sluggish market, prices hover around $570, with the approaching Lunar New Year contributing to the subdued market activity. The quiet market, however, is countered by rising prices influenced by the Chinese government's decision to lower bank reserve requirements. BS4449 500B 10-40mm diameter rebar at $560-565/t cfr Singapore theoretical weight, unchanged from the previous week. The same Malaysian mill is offering actual-weight rebar at $575-580/t cfr Hong Kong, up from $570/t cfr in the preceding week.
Hot and cold rolled coil producers in India are turning their attention to overseas markets as local prices remain stable. Manufacturers who want to increase profitability with European buyers benefit from factors such as increased freight rates, increases in raw material costs and supply restrictions in the EU. It enables Indian factories to get more competitive prices. Current cost of Indian HMS (80:20) scrap stands at Rs 34,500-34,700/t ($415-417) ex-yard
In addition, looking at India's steel imports, in the April-December period of the 2023-2024 fiscal year, the country's finished product imports increased by 26% on an annual basis and reached 5 million mt. This level was recorded as the highest level in the last five years. In the same period, India's domestic steel consumption increased by 14% on an annual basis and reached 100 million mt.
On the contrary, finished product exports fell to the lowest level in the last six years, falling to 4 million mt on an annual basis.
Scrap trade in Taiwan remains stable, but there is a gradual decline in prices as end users resist purchasing rebar. HMS 1&2 80:20 container scrap was at $377-379/ton CFR Taiwan, down $3/ton compared to the previous week.
US origin HMS 1&2 80:20 scrap dropped by $10/ton to $378-380/ton CFR compared to last week's offers, while domestic offers are at $375/ton CFR.
Additionally, Feng Hsin Steel Co., one of Taiwan's leading electric furnace manufacturers. Ltd. kept this week's scrap purchasing price at NT$11,200/ton, while rebar and section prices remained at NT$20,000/ton and NT$26,300/ton, respectively. The stability in rebar prices was in line with market expectations, following sluggish trading in the previous week due to low market prices and the pre-holiday atmosphere.
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