HIGHLIGHTS: Futures prices affect scrap, coking coal drops, trade policies…

Latin America editor Ana Paula Camargo reviews the main global steel market news covered by Metal Bulletin over the past week.

Futures prices continued to directly affect the ferrous market in China.

Metal Bulletin’s 62% Fe Iron Ore Index ended the week at $81.66 per tonne cfr Qingdao on Friday December 9, after reaching $82.25 per tonne on Wednesday December 7 – the highest value since October 15 2014 – amid a sharp rise in the futures prices. 

China’s ferrous futures rose across the board during early trading on Wednesday amid speculation that tightening supply will continue to support steel prices.

Spot hot rolled coil (HRC) prices in China held steady on Friday amid a volatile paper market, though they still ended the week higher despite tumbling a day earlier.

China’s spot rebar prices were mixed on Friday, with those in the eastern region rising while the northern market was flat amid uncertainties fuelled by rumours of a supply cut in Tangshan.

Meanwhile, in the global scrap market, Turkish players are awaiting for January bookings, US coasts are taking split paths, Taiwanese prices were up amid tight supply and Indian prices were down this week.

And finally, the pessimism in the seaborne coking coal market persisted as the week drew to a close, with offers on Global Coal falling further on Friday.

Metal Bulletin’s fob Australia premium coking coal index plunged $21.64 per tonne on Friday to $270.72 per tonne, while the cfr China index tumbled $20.46 per tonne to $280.85 per tonne.

The fob Australia hard coking coal index fell $9.52 per tonne to $265.45 per tonne while the cfr China equivalent shed $7.37 per tonne to $274.92 per tonne.

Despite the recent downtrend, higher coking coal costs continued to have an impact on steel prices.

Mills in Brazil and Argentina have raised flat steel prices for December due to the use of high-priced coal in their production processes, with companies in both countries eyeing a new adjustment for January 2017.

In Russia, domestic prices for flat steel products also increased this week, supported by growing export prices.

The US market saw Nucor raise its merchant bar price by $30 per tonne and local steel plate producers increase prices by $40 per tonne.

This week, Metal Bulletin proposed the discontinuation of some prices assessments for Iranian domestic and import steel prices and for Peruvian domestic rebar, following a review of its pricing portfolio.

Trade cases
In terms of trade policies, India extended the minimum import price (MIP) on 19 coated steel products until February 4, while removing 47 other goods from the restriction.

Mexico opened an anti-dumping probe into imports of welded tubes from China.

Meanwhile, on Friday, the European Commission (EC) started an anti-dumping investigation into imports of hot dipped galvanized coil (HDG) China, following a request from the European steel association, Eurofer.

On Wednesday, ArcelorMittal has called for further trade cases to be initiated against imports from China to protect European mills over the time it takes for the Asian country to reduced its excess if steelmaking capacity.

Around the world
As part of the state drive to cut excess steel capacity in China, the government has ordered Shandong Jinhaihui Technology to dismantle its stainless steel capacity in the city of Linyi, Shandong province.

Still in China, iron ore imports were up by 12% in November, just as prices hit a two-year high, totalling 91.98 million tonnes, according to preliminary Chinese customs data.

In Brazil, Vale has been granted an operating licence for its S11D iron ore project, allowing it to produce 90 million tpy in the country’s Carajás region. The first commercial ore is expected to be produced in January 2017.

In the USA, Nucor has acquired Southland Tube for $130 million, further solidifying the mini-mill operator as a major provider of structural tubing.

Metal Bulletin Research analysed the scenario for HRC prices in the US market, which are starting to rebound.

And finally, two special reports from Metal Bulletin Magazine’s December 2016-January 2017 issue look at the country’s ambitious plans for the steel industry and the growing potential and future challenges facing steelmakers in Iran.