STEEL WEEK IN BRIEF: Raw materials prices fall, China prices down on bearish sentiment, trade policy...
Metal Bulletin reviews some of the key news and price moves from the past week in the global steel market.
Prices of steelmaking raw materials fell in the working week between Monday March 20 and Friday March 24.
Metal Bulletin’s 62% Fe Iron Ore Index slipped to $85.06 per tonne cfr China on Friday, from $91.49 per tonne cfr on Monday and $92.34 per tonne cfr a week earlier, with trading activity continuing to stagnate in the physical market amid a bearish outlook for next month.
The seaborne coking coal spot market quietened down ahead of the weekend as participants remained on the sidelines to process the most recent price movements.
Metal Bulletin’s indices were unchanged for the day on Friday, at $163.89 per tonne cfr China and $145.45 per tonne fob Australia for premium hard coking coal, but respectively down from $165.10 per tonne cfr China and $155.22 per tonne fob Australia on Monday.
A tropical cyclone that is gathering momentum could hit the northern ports in Queensland, Australia, this weekend, potentially affecting the supply of seaborne cargoes, according to various sources.
With the short-term outlook for spot coking coal prices not looking particularly rosy, market participants are hoping to get some guidance from second-quarter contract prices for seaborne cargoes, which remain under negotiation.
Meanwhile, Turkish, Indian and Taiwanese scrap import prices continued to soften this week as Turkey booked Canada-origin cargoes at sharply lower prices, while demand in China for long steel and billet was also weakening.
Turkish scrap import prices fell $35-38 per tonne over the past week as a Canadian supplier agreed to sell two cargoes at lower prices.
Also, prices for grade-5C scrap in the UK fell by £5 ($6) per tonne this week as conditions in the export market deteriorated sharply.
Moreover, export prices for CIS-origin high-manganese pig iron have fallen over the past week, as Turkish buyers preferred scrap that has fallen in price while Italian consumers had sufficient stocks of pig iron.
Steel prices in China have dropped this week, amid a general bearishness in the market.
Rebar prices are down 50-60 yuan ($7-9) per tonne in east China, and 70-80 yuan ($10-12) per tonne lower in north China, while prices for hot rolled coil (HRC) are down 160-170 yuan ($23-25) per tonne in east China, and 180-190 yuan ($26-28) per tonne lower in north China.
China’s export prices for wire rod have fallen amid offer-bid deadlock, while those for rebar narrowed upwards.
Chinese export prices for cold rolled coil (CRC) and hot dipped galvanized coil (HDG) have also fallen in the past week amid subdued buying interest.
Meanwhile, the Southeast Asian billet import market has continued to face slow trading activity, with most buyers rejecting the high offer prices currently available, with CIS billet export prices coming under pressure from lower scrap prices in Turkey.
Import prices for re-rolling-grade HRC in Vietnam softened for a second consecutive week, as traders started short-selling amid growing weakness in China’s market.
In Southern Europe, meanwhile, the rebar export market has seen limited price rises over the past week amid a lack of activity.
And finally, Latin America’s slab export prices were marginally up this week, amid reduced availability of the material from Brazilian steel producers.
The European Commission (EC) is unlikely to impose the preliminary anti-dumping duties on HRC imported from five countries - Brazil, Iran, Russia, Ukraine and Serbia. Market sources believe the EC has decided not to announce any provisional duties, although it might still impose definitive duties within the next six months.
But investment bank Jefferies said the preliminary duties on HRC could be “a turning point in EU trade policy and a boon for local steelmakers hoping to regain market share.”
Also, sources said that EC is likely to start an anti-dumping investigation into rebar imports from Russia.
In Australia, the Anti-Dumping Commission has revived its investigation into imports of hollow structural sections from India and the UAE that had been terminated last year. It has also been granted more time to submit a key report relating to a review of anti-dumping duties on zinc-coated and aluminium-zinc-coated flat steel products exported by South Korean steelmaker Dongbu Steel.
Around the world
Metal Bulletin reported that the daily alloy surcharge model offered by European stainless steel mills is growing in popularity, but stainless steel distributors in Europe remain wary of switching from the widely used monthly surcharge model.
At the Eurometal Central Europe regional meeting, the head of operational marketing at ArcelorMittal Flat Carbon Europe said the Eastern European flat steel market is “on the road to convergence” to Western Europe’s level.
ArcelotMittal Germany’s ceo said that ArcelorMittal’s bid to purchase Italian steelmaker Ilva was part of the company’s vision for global consolidation in the steel industry.
Indeed, if the latest bid by ArcelorMittal and Marcegaglia is successful, it would support coil prices in Europe, according to investment bank Jefferies.
Still in Europe, Italian steelmaker Acciaierie e Ferriere di Piombino (Aferpi) has stopped production at its rail product rolling mill in Piombino, Tuscany, on Italy’s north-west coast.
In Brazil, the board of directors of Brazilian steelmaker Usiminas voted to remove ceo Rômel Erwin de Souza from his position, but Nippon Steel & Sumitomo Metal Corp (NSSMC) – one of Usiminas’s major shareholder – said it will take “all necessary legal measures” to annul this decision.
Vietnam’s My Viet Industries has ordered a reversing 400,000-tpy cold rolling mill and a push-pull pickling line from the SMS Group’s Indian subsidiary Esmech Equipment.
East China’s Shandong Iron & Steel Rizhao Corp, a subsidiary of the Shandong Iron & Steel Group, has contracted the SMS Group to supply it with a plate mill to increase its production capacity of heavy plate.
Fortescue Metals Group (FMG) has further increased the price adjustments for its iron ore products, with seaborne sales remaining challenging despite better reception at Chinese ports.
In term of statistics, China’s imports of steelmaking raw materials continued post significant increases in February, especially scrap.
Meanwhile, global crude steel production rose by 4.09% year-on-year to 126.58 million tonnes in February 2017, according to the World Steel Assn (Worldsteel).
Global output of direct reduced iron (DRI) increased by 9.38% over the same period, to 4.23 million tonnes.