STEEL WEEK IN BRIEF: Seaborne coking coal shrugs off La Niña warning, Vietnam exports first-ever HRC, Klöckner expects EU product prices to stay high in Q417…

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

Seaborne coking coal prices held up despite warnings from the Australian Bureau of Meteorology of potential extreme weather in the country’s eastern states in the coming months due to the La Niña phenomenon.

Metal Bulletin’s premium hard coking coal was $189.46 per tonne cfr China on Friday October 27, largely unchanged from $189.90 per tonne a week earlier.

A few seaborne coking coal buyer sources indicated their preference for index-linked deals on expectations of lower prices in the coming weeks.

Production restrictions on the steel sector in north China continued to cast a shadow over iron ore prices and trading activity.

Metal Bulletin’s 62% Fe Iron Ore Index was $60.08 per tonne Friday, down from $62.46 per tonne the previous Friday.

China’s biggest ferrous scrap consumer, Shagang, raised its purchase price for the steelmaking raw material to a near three-year high of 1,880 yuan ($283.75) per tonne, as mills began winter restocking.

Turkish domestic ship scrap prices inched up on stronger demand, while domestic auto bundle scrap prices remained stable.

And CIS pig iron export market trade improved after suppliers reduced prices.

Vietnam exported its first-ever shipment of hot rolled coil (HRC) in a move participants said could have a significant impact on the Southeast Asian steel market, sources told Metal Bulletin this week.

China’s domestic physical HRC market lost ground, weighed down by weakness in the futures market.

Meanwhile, the Russian domestic market for hot rolled and cold rolled sheet steel was calm, as traders rejected higher offers as the country’s construction season draws to a close and demand decreases.

European domestic HRC prices were also largely unchanged as plentiful supplies limited buying activity.

Metal Bulletin’s weekly price assessment for domestic HRC in Northern Europe remained at €530-540 ($623-635) per tonne ex-works on October 25.

In the USA, buyers walked away from offers for imported HRC despite prices being the same or lower than domestic prices.

In the long steel market, East China steel major Shagang rolled over the list prices for late October delivery. 

Turkish domestic rebar and wire rod prices remained stable despite the market struggling with the weak lira.

Northern Europe rebar prices were also steady, amid stable end-user demand and reduced availability.

But CIS export rebar prices continued to fall on weak demand. Metal Bulletin’s weekly price assessment for CIS rebar exports was $500-515 per tonne fob Black Sea on October 23, down by $15-20 per tonne.

Billet and rebar imports into the Gulf Co-operation Council nations were limited, as market participants expected prices to fall. Iran was offering billet at $495-500 per tonne cfr to the UAE, but no significant deals were heard.

And Turkish billet prices remained stable over the week but were expected to increase in line with imported scrap values.

Trade policy
The US Commerce Department set preliminary anti-dumping duties on carbon and alloy steel wire rod imports from Italy, South Korea, South Africa, Spain, Turkey, Ukraine and the UK.

A new regulation affecting finished goods imported into Algeria is likely to reduce demand for rebar imports, sources told Metal Bulletin.

The regulation, introduced by the Algerian Central Bank on October 22, requires importers of finished goods for resale, to provide a financial guarantee worth 120% of the value of the imported products. This must be done at least 30 days prior to the shipment of the goods.

Meanwhile, Pakistan’s National Tariff Commission imposed a 19.15% anti-dumping duty on rebar imports from China for a five-year period from October 23.

Around the world
Quarterly reports were published by a swathe of companies, including from Sweden’s SSAB, Finland’s Outokumpu, Germany’s Klöckner and Brazil’s Vale.

Klöckner expects European steel prices to stay high and US prices to stabilise in the fourth quarter, while SSAB expects its own prices to be lower in October-December, compared with the third quarter.

Outokumpu said high graphite electrode prices will lead to a “clear cost increase” for European stainless steel mills in 2018, but expects underlying stainless demand to remain “healthy” in both Europe and the USA in the fourth quarter of 2017.

Vale expects the average iron ore price in the global market in 2018 to stay above $65 per tonne on balanced supply and demand.

The company’s realised iron ore price rose by $15.90 per tonne in the third quarter, to $67.20 per tonne due to an $8 per tonne increase in the iron ore market index and a $4.10 per tonne rise in premiums.

Global crude steel output rose by 5.56% year-on-year to 141.43 million tonnes in September as China raised its production volumes, the World Steel Assn (Worldsteel) said.

Steel demand in the EU is expected to continue its recovery in 2017-18, but growing volumes of imports will remain a critical issue for the sector, according to European steel association Eurofer.

Meanwhile, the European competition regulators have rescheduled their announcement of a decision on the sale of Italian flat steel producer Ilva to November 13 this year.

And Japan’s Kobe Steel is maintaining normal production operations at all of its steel plants in the face of inspections ordered by Japan’s Ministry of Economy, Trade & Industry following recent discoveries that data had been fabricated in some of its steel shipments.