STEEL WEEK IN BRIEF: Bearish steel markets, US wire rod case, worrying news from China

Metal Bulletin reviews some of the key news and price moves from the past week in the global steel market.

China’s crude steel output rose to an all-time high in March.

Rising output, together with stagnant downstream demand, are collectively weighing on steel prices and casting a shadow over Chinese mill earnings for this year.

More and more steelmakers in north China are putting their production lines on maintenance as the pressure of securing orders intensifies in an oversupplied market.

Meanwhile, China’s largest private steelmaker Shagang’s first quarter net profits surged by more than 25 times year-on-year.

Scrap and raw materials
The iron ore market has been one of few bright spots in the international steel and steelmaking raw materials markets, with prices on the rise since April 18.

Metal Bulletin’s 62% Fe Iron Ore Index gained $5.02 per tonne during the April 18-21 period and closed at $68.22 per tonne cfr Qingdao on Friday.

For seaborne coking coal, fewer buyers were willing to accept prices of $300 per tonne fob Australia or higher, as supply concerns gradually eased.

Metal Bulletin held a free webinar ‘Metal Bulletin’s Seaborne Coking Coal Indices: What’s in it for me?’ on April 21.

The Turkish import scrap market crashed on April 19, after being quiet since the first week of the April as market participants waited until after the country’s constitutional referendum on April 16 before proceeding with deep-sea purchases for June.

And falling steel prices in China saw global scrap prices take a downward turn.

Steel prices
Chinese export prices dropped for all major steel products over the past week, including hot rolled coil (HRC), plate, cold rolled coil (CRC) and hot dipped galvanized (HDG), as well as rebar and wire rod.

The scale of the decline varied from $20 per tonne for finished long steel products and an average of $25 per tonne for uncoated flat steel to $50 per tonne for HDG.

Billet import prices in Southeast Asia are expected to drop below $400 per tonne cfr soon, as Chinese traders keep lowering their offer prices to induce firm bids.

Due to the drop in Chinese prices, market sentiment has been mostly gloomy for both European and CIS flat steel products.

In the USA, flat-rolled stocks hit a seven-year low as buyers held back from purchasing.

Meanwhile, prices for rebar and wire rod in the Turkish export and domestic markets dropped amid cheaper scrap.

Trade policy
The USA initialed a trade case on April 18 against wire rod imports from ten countries – Belarus, Italy, South Korea, Russia, South Africa, Spain, Turkey, Ukraine, the UAE and the UK.

US president Donald Trump signed a memorandum on April 20 launching a Section 232 investigation into whether steel imports pose a threat to his country’s national security.

We published our fifth report in Metal Bulletin’s series on how global trade flows have changed since the rise of protectionism in the steel market.

The report looks at Asia, where a trade case targeting billet shipments into Vietnam has been proved to be among the most successful of the many trade defence measures applied to steel imports in Southeast Asia in recent years.

Around the world
US president Donald Trump signed an order on April 18, requiring that federally funded infrastructure projects use steel produced in the USA.

Similarly, the Indian Ministry of Steel is to put forward a proposal that would “make it mandatory to use Indian-made steel in key projects”, steel minister Shri Chaudhary Birender Singh said on April 19.

Indian steelmaker Tata Steel is reported to be planning to offer a one-off payment of £520 million ($666 million) to members of the British Steel Pension Scheme to clear its pension liabilities.

Ukraine’s largest steelmaker Metinvest has turned to third-party billet supplies to feed its Bulgarian rolling mill, Promet Steel, as the company’s billet plant in Ukraine remains under illegal seizure.

Meanwhile, we asked if there was a chance that the London Metal Exchange’s steel billet contract could be revived, having been suspended on April 10.

And we published a summary report from the 8th China Steel Development Summit in Beijing.

Finally, late on Friday, Liberty House took its first significant steps in the US steel market with an agreement to buy ArcelorMittal’s wire rod mill in Georgetown, South Carolina.

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