Steel aiding iron ore in China

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28 November 2016

Recent announcement of hike in steel prices by Chinese steel mills is aiding the increase in iron ore prices.

China’s Benxi Iron & Steel Group announced to raise its prices on certain products for December which included RMB 350-500 per ton for HRC, CRC and galvanized steel products. It was followed by Hebei Steel that announced to hike its hot rolled coil prices by RMB600/ton, heavy plate prices by RMB650/ton and the prices of cold rolled coil by RMB650/ton. Chinese mills are satisfied with the price rise as their customers are picking up cargoes at hiked levels though future fate may change depending on the upcoming market situation. Analysts within China are bullish on further price rise in raw material and steel.

Chinese billet went up to $386-388 per ton, rising by $1.5 per ton; rebar followed by a rise of $4.5-5 per ton between 21-25^th November to $405.5 per ton and HRC mildly up by $2 per ton at $459.5 per ton. All prices in FOB China.

A hint of uncertainty is also in the traders mind, who unsure of the market movement are unwilling to pick up raw material cargoes at prevailing high levels. Spot iron ore deals discussing at $80-80.50 per ton levels and coking coal at $306.25 per ton, FOB Australia (Low Vol) are contemplated high in the market conditions.

Iron ore is getting its support from steel price rise and because of constant evacuation from ports. Coking coal is steady for last week to ten days as China lifted mining restrictions.

News from the middle-east scrap traders at the same time is following the lines of China because scrap prices have increased by $1 per ton in the weeks’ period to $272 per ton CFR Turkey.

Thermal coal [RB1 6000 NAR] originating from South Africa has gone up as winter stocking is going on in many countries including China & India. China’s domestic miners are seeking higher prices for their coal and iron ore which is showing some support to imported thermal coal. After 2 weeks of decline, price of thermal coal went up by $1.4 to $ 85.4 per ton on last day of week trading.