STEEL WEEK IN BRIEF: Iron ore, coking coal prices down; trade case monitor, volatility in China…

Metal Bulletin reviews the major stories affecting the steel market over the past week.

Iron ore prices dived further at the end of the week with those at Chinese ports already below the seaborne market equivalent of $60 per tonne cfr, as China’s futures and steel markets continued to tumble.

Metal Bulletin’s 62% Fe Iron Ore Index slumped by $3.47 per tonne on Friday May 5, to $61.73 per tonne cfr Qingdao.

Fortescue Metals Group (FMG) has increased its price adjustment for its Fortescue Blend fines (FB) to an all-time high of 25%.

Meanwhile, the pessimism in the seaborne hard coking coal spot market continues to weigh on prices, and even lower offers appeared to be unable to pique any interest as the working week came to an end.

Metal Bulletin’s fob Australia premium hard coking coal index fell $3.45 per tonne to $202.66 per tonne while the cfr China premium hard coking coal index dropped $7.55 per tonne to $181.66 per tonne.

In the scrap market, Turkish steel producers resumed their deep-sea purchases in the working week from Monday May 1 to Friday May 5, pushing prices up slightly, while Indian and Taiwanese prices remained comparatively stable.

China’s spot rebar prices fell further on Friday as sellers attempted to offload their materials on fears of the market weakening further, while China’s hot rolled coil (HRC) prices continued to soften with the futures market remaining subdued after Thursday’s plunge. [LINK 2]

CIS-region export billet market participants held diverging views about the direction prices will move on Friday, as some higher-priced deals were heard, but expectations were also voiced of a price fall after a softening in Chinese domestic prices.

Steel billet importers in Southeast Asia, meanwhile, have been largely on the sidelines of the market over the past week amid price volatility from China and generally weak long steel orders in their home markets.

In Turkey, flat steel prices have started to fall this week, with demand flagging, and with market participants expecting May to be just as slow, as the Islamic holy month of Ramadan starts at the end of the month.

Prices for CIS-origin export HRC have fallen by $35-40 per tonne over the past month, while those for cold rolled coil (CRC) have declined by $60-65 per tonne. The changes followed the downward dynamics in Chinese flat steel export prices.

Domestic prices for HRC fell in Northern and Central Europe over the past week, while in Southern Europe they remained unchanged.

In the long steel sector, Turkish long steel producer Kardemir opened its domestic long steel sales with higher prices on Thursday.

Prices for steel beams in Europe dropped for the second week in a row, under pressure from poor demand and weak global steel markets.

Trade policy
Metal Bulletin published its monthly update of global steel trade cases for April this week.

Canada opened a routine review of duties imposed on Chinese, Turkish and South Korean rebar in January 2015.

Gulf Co-operation Council (GCC) countries started an anti-dumping investigation into imports of iron and steel pipes from China this week.

Mexico has extended an existing anti-dumping duty on imports of rolled steel plate from Russia.

And the Chilean government has imposed definitive anti-dumping duties against imports of wire rod from China.

Around the world
Earnings from the global operations of Brazil-based Gerdau fell by 8.30% year-on-year in the first quarter of 2017.

German steelmaker Salzgitter made a preliminary announcement of a significant year-on-year jump in its earnings for January-March 2017 – its best quarter in 10 years.

Analysts expect global steelmaker ArcelorMittal’s earnings to jump by 118.23% year-on-year in January-March 2017.

International metals group Liberty House will increase production and ramp up investment in its newly purchased speciality steels business in northern England.

Russian steelmaker Severstal has sold its steel wire rope production unit in Italy.

Sentiment in the global long steel market is being subdued by higher export volumes at lower prices from China, the International Rebar Producers & Exporters Assn (Irepas) said this week.

The Indian government has approved two new policies intended to increase steel output threefold over the next 13 years, and to support domestic consumption of local production.

Brazilian iron ore export volumes fell by 20.54% year-on-year in April, to 24.05 million tonnes, according to figures released by the country’s foreign trade ministry, MDIC.

And continued uncertainty over the legal and fiscal regulations governing Myanmar’s metal ore mining industry seems to be deterring substantial foreign investment from medium-and-large western mining companies.

Finally, the latest issue of China Steel Market Insight, highlights how, despite the economy performing well at the start of the year, a massive oversupply in the iron and steel markets has led to a collapse in prices, raising the prospect of further consolidation in the steel industry.