Monthly Archives: March 2018

Chinese Steel Market Highlights – Week 13, 2018

This week Chinese steel market started showing bullish sentiments owing to gains in domestic market. Increase in futures and gains in domestic market leads to uptick in steel prices.Flat Steel and Rebar export offers witness uptrend this week.However Coking coal offers moved down amid excess supply along with subdued demand from China.

China’s key steel producing region Hebei has recently released its new capacity cut plans for three years starting from 2018 to 2020. The province plans to cut steel capacity of 10 MnT in 2018, another 10 MnT in 2019, and 20 MnT in 2020 in order to keep the region’s steel capacity within the limit of 200 MnT by the end of 2020. It has also vowed to remove all the zombie enterprises by the end of 2018.

Wu’an, a part of Handan city in northern China’s Hebei province, ordered local steel mills Tuesday to cut their blast furnace utilization rate by 40-50% during the non-heating season.

Chinese spot iron ore prices remain range bound – China spot iron fines prices remained stable throughout the week. Trade activities remained thin. Iron ore fines (Fe 62%) index stood at USD 63.1/MT, CFR China by the week close.

Spot pellet premium edged up to USD 44.5/MT, CFR China. Spot lump premium was assessed at USD 0.19/DMT, CFR China.

Iron ore inventories at Chinese major ports increased by 0.8% W-o-W to 161.68 MnT.

Coking coal offers fell amid excess supply over slumped demand-Australian coking coal offers registered decline owing to sluggish demand, increased supply and weak buying from major importing nations.

On the other side Australian coking coal producers have accumulated the unsold inventories over lesser demand for coal from China since their steel plants are running on lower rates.

Meanwhile higher production of coking coal from China in turn decline in coking coal offers from Australia.

Currently,Premium HCC prices was assessed at around USD 196.50/MT FoB Australia. Last week the offers were heard at USD 207.5/MT FoB basis.

Chinese billet domestic offers increased towards the weekend – Domestic spot billet (150*150mm, Q235) prices in Tangshan, China assessed at RMB 3,510/MT by the week close against RMB 3,370/MT in the beginning of this week. Prices mentioned are including 17% VAT.

However Chinese billet export offers declined sharply after plunge in steel futures last week. Few trades of Chinese billets were reported with South East Asian nations at USD 530-535/MT, CNF (equivalent to USD 510/MT, FoB China).

Chinese HRC export offers rose marginally – Despite having a weak opening this weak, Chinese HRC export offers rose marginally over gains in domestic market. Increase in futures along with bullish sentiments in domestic market results to increases in HRC exports offers from China.

Currently Chinese HRC price assessment is in the range of USD 580-595/MT,FoB China.Payment are made on letter of credit basis for 1,000-10,000 MT.

Meanwhile prices in the domestic market are gauged at RMB 3,820- 3,840/MT D-o-D basis in Eastern China (up by RMB 40/MT) D-o-D basis and RMB 3,790 – 3,810/MT (up by RMB 50/MT) in Northern China.

Chinese Re-bar export offers move up over rising futures-Nation’s re-bar export offers witness upward momentum amid gains in futures market.

Currently,nation’s re-bar export offers are at USD 555-560/MT on China.However market participants are expecting the prices to be on lower side which is around USD 530-540/MT FoB basis.

Meanwhile prices in the domestic market are heard at RMB 3,550-3,600/MT,D-o-D basis up by RMB 60-90/MT (Eastern China) and RMB 3,710-3,740/MT up by RMB 30-40/MT(Northern China).

Chinese Iron and Steel Prices Week 13

 Particulars Currency Current  
Prices per MT
1 W 1 M
Spot Iron Ore Fines Fe 62%,
CNF China
USD 65 65 79
Met Coke, 64%, FoB China USD 352 360 360
Premium HCC,CNF China USD 203.5 219.5 233.5
Chinese Domestic
Billet, ex-works
(150*150mm, including 17% VAT)
RMB 3,510 3,440 3,750
Billet 150*150 mm,
FoB China
USD 510 535 550
Rebar, FoB China USD 541 559 580
Wire Rod.FoB China USD 575 585 582
Eastern China
Domestic HRC Prices
ex-Works
RMB 3,820-3,840 3,760-3,800 4,115
HRC, FoB China USD 580 595 600
CRC,FoB China USD 607 633 625
Plate,FoB China USD 595 600 595

Source-SteelMint Research

 

Indian Steel Market Weekly Snapshot

Indian Steel prices remained volatile in the Week-13 (26-31 Mar) due to subdued trade activities amid financial year ending.

In this week, Semi finished trades little bit improved as prices of billet rose by around INR 500-1,000/MT (USD 8-15), while Sponge iron prices fell slightly by INR 200-400/MT (USD 3-6) on improved supply. Further, the long steel – Rebar prices inched up by INR 300-600/MT (USD 4-9) in across major Indian markets.

In context to Flat Steel, the purchase inquiries remained poor as per market participants and the prices reported fall of INR 500-1,000/MT (8-15) in traders market.

Iron ore and Pellets: In this week India’s largest merchant iron ore producer – Rungta Mines has reduced Iron ore price by INR 200/MT in lumps and INR 100/MT in fines. Earlier on 27th Mar’18 Essel Mining also reduced iron ore prices by INR 225/MT in both lumps and fines.

Domestic pellet prices in India continue to remain under pressure witnessing sharp fall of INR 150-500/MT W-o-W across all major markets in India. West India (Rajasthan) based pellet maker – Jindal SAW has slashed pellet prices by INR 500/MT. Central India based pellet makers reduced pellets prices by INR 300/MT. Durgapur (eastern India) pellet have declined offers by INR 300/MT W-o-W.

In Southern India (Ex – Bellary) based pellet manufacturers have also decreased its offers by 200/MT W-o-W. Trade sources reported that the market has turned dipper owing to year-end pressure (31st Mar’18) and declining sponge prices in the market. Indian pellet offers have also come because of decreasing pellet export prices.

Scrap: In the week duration, Indian domestic scrap market remained volatile and registered prices volatility by INR 200-700/MT.

Imported scrap offers to India remained majorly stagnant this week and are reported at USD 395/MT for Shredded grade UK origin. Although, no significant buying interest have seen from importers end over the financial year ending. Buyers are likely to resume bookings in next couple of weeks. Offers for Shredded scrap also stable in this week for US origins and now assessed at USD 395-400/MT, CFR Nhava Sheva.

The price assessment for HMS 1&2 (80:20) in containers for Dubai origin stood at USD 385/MT, CFR Nhava Sheva.

Salem Steel Plant (SSP), a unit of Steel Authority of India Limited (SAIL), concludes a global tender for purchase of around 20,000 MT Scrap. And as per the sources, tender was concluded at USD 449/MT for Shredded.

Coking Coal: The falling trend in the Coking Coal prices continues, with over-supply fueling the decline. Coking Coal sellers in Australia, the prime export market, have been continuously lowering their spot prices due to the lackluster demand and over-supply ruling the market. Accumulation of unsold steel inventories of the Chinese steel makers on account of weak steel market has eroded demand for the coal as the steel plants ran at lower rates. At the same time, domestic Coking Coal production went higher in China, contributing towards the coal price fall. Current spot offers for the Premium HCC were learnt to have come down to around USD 196.50/MT FoB Australia.

Semi Finished: On Weekly analysis, Billet prices have increased in PAN India by INR 400-1,200/MT (USD 6-19) & the sponge iron prices slightly declined by INR 200-400/MT amid average inquiries and healthy supply. In these period major rise of INR 1,200/MT in billet have seen in Jalna, Western India.

Indian Sponge iron export price assessment for lumps of grade FeM 78-80, recorded at USD 360-365/MT CPT Benapole (dry land port of Bangladesh & India) and USD 380/MT CFR Chittagong, Bangladesh.

Vizag Steel has invited a tender for export of 8,256 MT billet and 5,504 MT Wire rod coils to Nepal. The due date for bid submission is 3rd Apr’18.

The latest export offers to Nepal for Induction route billets by medium mills in Durgapur reported at USD 505/MT, against last week at USD 505-510/MT (ex-mill) Durgapur & size – 100*100mm.

SteelMint’s Pig iron export price assessment stood at USD 385-395/MT FoB India, USD 385-390/MT FoB Brazil and USD 385-395/MT FoB Black sea.

Pig iron offers in Central & Eastern India declined further by INR 300-500/MT (USD 4-8) W-o-W, due to slump in steel prices and improved supply for the material. The latest offers for Steel grade are evaluated at INR 27,800-28,200/MT ex-Durgapur, INR 29,100-29,300/MT ex-Raipur, INR 28,000-28,500/MT ex-Odisha & INR 28,000-28,300/MT ex-Vizag/Hyderabad.

Finish-Long Steel: As per week assessment, Finish Long steel demand gradually picked and Rebar price range have increased by INR 300-600/MT which is being captured with appropriate bookings by trade participants.

Rathi Steels based in North Region, considered one of the price trend setter has increased the rebar price by INR 1,100/MT on weekly basis and current range of 12 mm rebar around INR 40,600/MT, Ex-Delhi.

Whereas the large manufacturers offers for 12mm rebars are evaluated at INR 44,500-45,000/MT ex-Mumbai and as per sources report Inventory level in stock yards is still concerned as procurement is not fulfilled appropriately.

Structure & Wire Rod market remained on positive note and registered price hike of INR 100-500/MT.

In this week, Jalna based rebar manufacturers have increased gauge parity by INR 300/MT in all sizes w.e.f 26.03.18.

Flat Steel Market : Indian flat steel prices have witnessed further decline in traders market by INR 500-1,000/MT W-o-W as the sluggish demand coupled with end of financial year resulted in bearish sentiments in domestic flat steel market.

Market sources shared that, “Buying activity remain very limited in domestic market owing to end of financial year and buyers have lowered purchases”.

Currently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed at INR 43,500-44,000/MT (ex-Mumbai),INR 44,000-44,500/MT(ex-Delhi), INR 44,500-45,000/MT (ex-Chennai). The prices mentioned above are basic prices excluding GST @ 18%.

Trade reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 48,500-49,000/MT (ex-Mumbai) INR 49,500-50,000/MT (ex-Delhi) and INR 49,000/MT (ex-Chennai). The prices mentioned above are basic prices excluding GST@18%.

Issues related to material availability seems to have restored as SAIL’s Bokaro plant which faced fire breakout in its hot strip mill and was under maintenance is heard to have resumed operations.

On the other hand major Indian manufacturers are planning to raise flat steel prices about INR 500-1,000/MT in the month of Apr’18. However market participants remain perplexed regarding hike in flat steel prices as it seems difficult to absorbed in the domestic market.

Indian Raw material and Finished Steel reference Prices as on 31 Mar 2018 (Week 13)

Products Regions Taxes Prices in INR/MT W-o-W
Pellet Fe 63%, 6-20 mm Ex-Barbil,Loaded to wagon GST at 5% Extra 5,300 – 150
Iron ore Fe 62%, 10-30 mm Joda loaded to wagon Incld Royalty, DMF & NMET, GST at 5%Extra 5,250 – 200
Coking Coal, Premium HCC CNF India Prices in USD 213 – 16
Scrap HMS (80:20) Ex-Mumbai GST at 18% Extra 25,400 + 700
C-DRI 80 FeM Ex-Raipur GST at 18% Extra 21,300 0
P-DRI 80 FeM Ex-Raipur GST at 18% Extra 19,600 – 100
Pig iron Steel grade Ex-Raipur GST at 18% Extra 29,300 – 700
Billet 125*125 MM Ex-Mumbai GST at 18% Extra 34,900 + 600
Rebar (12mm) Ex-Mumbai (Medium Scale) GST at 18% Extra 38,300 + 400
Wire Rod (5.5 mm) Ex-Raipur GST at 18% Extra 38,200 + 100
Structure ( 40 Angle) Ex-Mumbai GST at 18% Extra 38,800 + 500
HRC (2.5-8 mm) Ex-Mumbai GST at 18% Extra 44,000 – 1,000
CRC (0.90mm) Ex-Mumbai GST at 18% Extra 49,000 – 500
HR Plate(5-10mm) Ex-Mumbai GST at 18% Extra 43,500 – 1,000

Prices are Ex-works, Exclusive of GST at 18%

Indian Export Reference Prices as on 31st Mar’18

Commodity Size and Grade Prices 1W 1M
Pellet Fe 64% 97 103 107
Billet 150*150 mm 510 540 540
Pig Iron Steel Grade 390 390 365
HRC 2.5-8mm, IS 2062 645 647 635

Prices in USD/MT
Source: SteelMint Research

 
Japan Coal Imports

Japan: Coal Imports Down 10% M-o-M in Feb’18

Japan has witnessed a decline in coal imports for the second month in a row, as the country’s coal import had fell from 17.14 MnT in Jan’18 to 15.4 MnT coal in Feb’18. However, imports in Feb’18 were slightly higher on the year compared with 15.27 MnT in Feb’17.

Japanese coal imports have weakened since the beginning of CY18. As per the data provided by Japanese customs, coal import by the country stood 32.54 MnT during Jan’18-Feb’18, which was 2% lower on the year compared with imports of 33.35 MnT in Jan’17-Feb’17.

Grade-wise Coal Imports:
Imports of Non-Coking coal had fell 11% M-o-M to 10.24 MnT in Feb’18, compared with 11.46 MnT in Jan’18.

Coking coal imports had increased 7% M-o-M to 3.55 MnT in Feb’18. Imports of Anthracite coal had also increased during the month. While, imports of Met coke and Pet coke had fallen in Feb’18.

Grade Feb’18 Jan’18 M-o-M
Non Coking Coal 10.24 11.46 -11%
Coking Coal 3.55 3.33 7%
Anthracite 0.41 0.25 64%
Pet Coke 0.27 0.59 -54%
Met Coke 0.07 0.17 -59%
Others 0.86 1.32 -35%
Grand Total 15.4 17.14 -10%

Source: Japanese Customs
Quantity in MnT

Major Coal Exporters:
Australia remained the largest coal supplier to Japan in Feb’18, and was the only country among the major exporters, to have recorded growth in exports on the monthly basis.

Australian coal exports had increased 2% M-o-M to 10.22 MnT in Feb’18, which was also 4% higher on the year compared with 9.78 MnT in Feb’17.

Indonesian coal exports decreased 35% M-o-M to 2 MnT in Feb’18, which was also 24% lower on the year compared with 2.62 MnT in Feb’17.

US replaced Russia to become the third-largest coal exporter in Feb’18. US coal exports totaled 1 MnT during the month, down 24% M-o-M from 1.32 MnT in Jan’18. Russian coal export to Japan was 0.93 MnT in Feb’18.

Japan Coal Imports Country-wise

Source: Japanese Customs | Quantity in MnT

 

CIL’s New Game Plan to Bring in Cheers to Customers, Tears to Workers

There seems good news brewing up for the coal consumers of the state-run Coal India Limited (CIL), and at the same time bad news also is in store for the workers of the world’s largest coal miner.

With the impeding entry of private players into the Indian coal mining space, CIL is gearing up to withstand the tough competition to proliferate after the actuation of the commercial coal mining in the country.

CIL is banking on the price game as its foremost strategy to tackle with the speculated competitive atmosphere with private players operating with advanced technology know-how and other tactics. Towards this initial move, CIL has decided to leverage on technology to increase production and keep the coal prices lower than the private peers. Moreover, the coal prices to be offered by the private players will be considered as the benchmarks for each coal category, as decided by CIL.

In parallel to the decision to lower its coal prices the coal major also has decided to implement cost cutting measures lower its cash out-go. To implement this step, CIL has decided to lower its 280,000 strong workforce by eliminating around 12,000 workers every year to trim labor costs, which account for about 55% of the total cost of production. And instead, investments will be made on automation and mechanization to achieve higher efficiency in coal production that will help in keeping the coal prices low.

While preparing a blue print of its game plan to deal with the fierce competition with the advanced private players, CIL also has finalized shutting down 40 odd unviable underground coal mines, which account for less than 10% of its coal production and substantial number of workers are deployed, to save costs.

 

Global Ferrous Scrap Market Overview – Week 13, 2018

This week observed softening in global scrap prices. Domestic and export prices of Japanese scrap declined sharply. Chinese steel mill – Shagang Steel reduced domestic scrap purchase prices twice this week. On the other hand, imported scrap prices in Turkey remained stable throughout the week and the week witnessed one deep sea cargo booking. Scrap importers in countries like India, Pakistan and Bangladesh also remained silent eyeing for drop in offers.

Japanese steel mill slashes bid for scrap – Tokyo Steel has reduced its domestic scrap purchase prices by Yen 1000/MT (USD 9). Now H2 scrap fetches JPY 37,000/MT (USD 349) at largest work in central Japan-Tahara. While the same grade fetches JPY 36,500/MT (USD 344) at Utsunomiya works in north Japan. While for its Okayama plant, Kyushu factory Takamatsu Steel Center Company bids are at JPY 34,000/MT at JPY 34,500/MT and JPY 33,500/MT respectively.

Scrap prices in Japan have softened amid decline in scrap prices in Kanto and Gulf regions. Bids in Gulf region are still lower by Yen 500/MT lower than other regions. Also higher scrap inventories with EAF steel manufacturers than demand has also put scrap bids under pressure.

Hyundai Steel bids Yen 1000 lower for high grade Japanese scrap – Bids put by Hyundai Steel for both Shredded and HS are assessed at JPY 39,000/MT (USD 367) respectively. Its latest bids presented for high-grade scrap like Shindachi Daichibara (SB) and Shindachi Press at JPY 42,000/MT (USD 395) and at JPY 43,000/MT (USD 405) on FOB Japan basis respectively. However Hyundai Steel skipped placing bids for H2 grade and H1/2 this time as they see sufficient supply for the material along with sufficient scrap inventories available with them.

China’s Shagang Steel reduced domestic scrap purchase prices twice – One of the largest ferrous scrap consumers in China, Shagang Jiangsu Steel group slashed its scrap purchase prices twice this week on 26th and 27th Mar’18 by USD 24/MT and USD 8/MT respectively. Shagang is now paying RMB 2,200/MT (USD 350) inclusive of 17% VAT for HMS not lesser than 6 mm in thickness delivered to its headquarter works in Zhangjiagang Province in China.

Turkey imported scrap prices stable, one deep sea cargo booking reported – On weekly basis, US origin HMS (80:20) prices are assessed at USD 368-369/MT, CFR Turkey. As per reports, a European cargo was booked recently by Turkish steel mills. The cargo comprised of 5,000 MT HMS (75:25), 20,000 MT Shredded scrap and 5,000 MT Bonus scrap. The average price of the deal was assessed around USD 375/MT, CFR for April shipment.

Imported scrap trade activities in India, Bangladesh and Pakistan remain dull – Imported scrap prices in India remained stable this week with buyers keeping away from imported material. Buyers are likely to resume bookings in next couple of weeks. Shredded scrap price assessment stands at USD 395-400/MT, CFR India.

Bangladesh based importers also remained silent and buyers kept looking for lower offers. Offers for Shredded scrap in containers from USA are heard around USD 405/MT, CFR Chittagong and HMS1 is being quoted around USD 390/MT, CFR levels. As per sources, last week a bulk scrap cargo containing Shredded scrap of 35,000 MT US origin was booked at around USD 430/MT, CFR.

Pakistan imported scrap market also remained silent and kept seeking lower offers. Price assessment for Shredded scrap 211 is around USD 388-395/MT, CFR Port Qasim depending on the origin.

Global ferrous scrap prices – Week 13,2018

Particulars Current Prices in USD/MT W-o-W 
HMS (80:20) from US, CNF Turkey 368-369 -6
Shredded from USA , CFR India 400 =
Shredded from USA, CFR Pakistan 388-395 -5
HMS 1 from Dubai ,CFR Bangladesh 390 -10
Shredded ,CFR Bangladesh 405 -10
HMS (80:20) from US, CNF Taiwan 343 -15
HMS (80:20), FoB Europe 343 -4

Source: SteelMint Research

 

Chinese Ferrous Scrap Imports Surge 88% in Feb’18

China has witnessed significant increase in scrap imports in Feb’18 amid fall in global scrap prices during mid of January month. United States scrap exports to China sky rocketed in Feb’18.

China – world’s largest steel producer has witnessed significant increase in its ferrous scrap imports in Feb’18. China’s scrap imports surged by 88% M-o-M in Feb’18. According to recently released customs data, the country imported 187,671 MT ferrous scrap in Feb’18 compared to 99,632 MT ferrous scrap imports in Jan’17.

On yearly premises, ferrous scrap imports witnessed fall of 30% Y-o-Y in Feb’18 as against 270,887 MT scrap imports in Feb’17.

On the other hand, global scrap prices started falling in mid of Jan’18 this could have resulted in increased scrap imports in Feb’18. During mid of Jan’18, global scrap prices observed decline which continued till mid of Feb’18.

Japan remained largest scrap supplier to China in Feb’18 –

Japan stood as the largest exporter of ferrous scrap to China in Feb’18. Japan exported 113,358 MT comprising 60% share in total Chinese ferrous scrap imports in Feb’18. Japan scrap exports witnessed 30% M-o-M increase in Feb’18 as against 87,090 MT ferrous scrap in Jan’18. While United States witnessed sharp increase in its scrap exports to China in Feb’18 which recorded at 65,622 MT as against just 1,025 MT exports in Jan’18. Followed by other exporting countries like North Korea ( 3,347 MT, +21% M-o-M) and China (1,200 MT, -73% M-o-M).

China’s ferrous scrap imports down 42% Y-o-Y during Jan-Feb’18-
During Jan-Feb’18, China’s ferrous scrap imports summed up at 0.28 MnT which have fallen by 42% Y-o-Y as against 0.48 MnT during the same period in the last year. Japan exported 0.20 MnT occupying highest 70% of total scrap imports in China, followed by United States (23%), North Korea (2%), and China (2%) respectively.

China’s EAF steel production is expected to rise at faster pace in CY18 which presently contributes around 6.5% of total crude steel production in China.

Country-wise China ferrous scrap imports –

Country

Feb’18 Jan’18 M-o-M % Change Feb’17 Y-o-Y % Change Jan-Feb’18

2017

Japan 113,358 87,090 30.16% 158,725 -28.58% 200,448    1,828,860
United States      65,622         1,025 6304.19%          94,490 -30.55% 66,646       222,853
North Korea         3,347         2,772 20.74%                   – 6,119                   –
China         1,200         4,459 -73.10%                   – 5,659          33,662
Taiwan            724            397 82.43%                380 90.59% 1,120            9,848
Germany            682            571 19.45%                432 57.89% 1,253            5,508
Others         2,739         3,318 -17.45%          16,860 -83.76% 6,057       223,604
Total    187,671       99,632  88.36%       270,887  -30.72% 287,303    2,324,335 

Quantity in MT,
Source: SteelMint Stats & Customs Data

 

Japan – Flat Steel Exports Decline by 9% M-o-M in Feb’18

According to latest customs data released, Japan flat steel exports which includes 7208 (HR coils /Plates), 7209 (CR coils), 7225 (Electrical sheets),7210/7212(GP/GC) registered decline of 9% M-o-M in Feb’18.

Country has exported 1.96 MnT of flat steel in Feb’18 which was 2.15 MnT in previous month.Also on yearly basis nation’s flat steel exports reported decline of 10% in Feb’18 against 2.18 MnT in Feb’17.

Japan’s Ministry of Economy, Trade and Industry (METI) had forecasted for fourth quarter of fiscal year 2017-18 (Jan-Mar’18) that country’s exports are estimated to decline by 2.8% in Q4 FY18 over the period as the steelmakers prioritize domestic market over exports due to tightening of domestic supply, the ministry said.

During first two months (Jan-Feb ) of CY18 nation’s flat steel exports summed up to 4.11 MnT fell by 5% in comparison with 4.33 MnT in corresponding time frame of previous year.

Japan: Commodity Wise Flat Steel Exports in Feb’18

Sub Commodity Feb’18 Jan’18 M-o-M
(Change in %)
Feb’17 Y-o-Y
(Change in %)
HRC/Plate 1.08 1.21 -10.74 1.22 -11.47
Electrical Steel 0.44 0.51 -13.72 0.49 -10.20
Galvanised Steel 0.24 0.23 4.34 0.26 -7.69
CRC 0.18 0.19 -5.26 0.21 -14.28
Others 0.01 0.01 0 0.01 0
Grand Total 1.96 2.15 -9% 2.18 -10%

Strong demand in domestic market lead to subsequent fall in export volumes- Japan Iron and Steel Federation commented that nation’s steel demand in domestic market remains strong.Steel prices have risen on increased production by automakers, while construction is in full swing for Tokyo’s 2020 Olympics and a series of redevelopment projects in the Tokyo metropolitan area.

Country-wise Japan flat steel exports in Feb’18- China was the major flat steel importer of Japan and has imported 0.34 MnT in Feb’18 inched down by 5% against 0.36 MnT in Jan’18.

Second largest flat steel importing nation from Japan was Thailand which stood at 0.34 MnT in Feb,18,down by 5% on monthly basis against 0.36 MnT in Jan’18.

Other major counties include South Korea at 0.21 MnT in Feb’18 fell by 25% against 0.28 MnT a month ago.

Fourth largest importer of flat steel is Vietnam at 0.12 MnT ,moved down significantly by 37%in Feb’18 as compared to 0.19 MnT in Jan’18.

Also Indian mills have imported 0.05 MnT of flat steel followed by Pakistan at 0.07 MnT, Bangladesh at 0.06 MnT and Malaysia at 0.07 MnT from Japan in Feb’18.

 

Are Chinese Steel Mills Eyeing Indian Market to Import Graphite Electrode ?

Amid increasing consciousness towards environment, China’s clampdown of thousands of induction furnaces producing low-quality steel last year as a part of supply side structural reforms has compelled the country’s steel manufacturers to shift their focus to EAFs (Electric Arc Furnace) for steel production.

Graphite electrodes (GE) are used as key raw material to melt scrap in EAFs to produce new steel. Now, as China has tightened the screws on polluting industrial plants, about 30% of its graphite electrode production capacity had been shut and some provinces had restricted output. This has resulted in demand-supply mismatch of GE leading to significant increase in its prices.

As per the market reports, graphite electrode spot prices in China have increased nine-fold in 2017. This surge in prices can also be attributed to shortage of needle coke, a key raw material used for manufacturing of GE.

Currently spot prices of Graphite Electrodes in China’s domestic market are being heard in the range of USD 25,000-30,000/MT for UHP grade. These prices will further include VAT of 17%.

Now sources have informed SteelMint that the Chinese steel manufacturers are seeking out Indian market to procure graphite electrodes as there is parity between China’s domestic prices and export offers from India.

Indian players are currently offering Graphite Electrode (UHP grade) at spot prices in the range of USD 20,000-25,000/MT. Also, although Chinese government has imposed import duty of 8% and a VAT of 17% on imported Graphite Electrode, procuring the same from the Indian market will still be feasible to the Chinese buyers. However, in the Indian market also the supply of Graphite Electrode is quite tight and the suppliers have very limited quantity to offer. Thus, it remains to be seen how much Chinese requirement of Graphite Electrode will be met from India.

With the surge in Graphite Electrode prices, steelmakers that typically bought Graphite Electrode on yearly contracts have to go for short-term quarterly contracts or buy in the spot market as suppliers are not willing to bind by long-term contracts in the volatile price environment amid uncertainties of Needle Coke prices and availability.

China’s Graphite Electrode Imports

In 2017, China imported about 2,597 MT of graphite electrode, out of which about 51% imports (1,317 MT) were made from Japan followed by 806 MT from Malaysia and 139 MT from India.

Over past two months of Jan and Feb’18, China has imported about 355 MT of Graphite Electrode, with 186 MT coming from Philippines and 96 MT from Japan.

 
South African Coal Price

South African Coal Prices Stable After Drastic Fall

South African coal prices have maintained stability during the week, after witnessing a drastic fall from the previous month’s offers.

An Indian trader was skeptical of the increase in coal offers, citing that the prices had to be corrected given that offers had already risen to significant high on global cues. In addition, lack of buying among Indian buyers due to improved domestic supply and the free fall in Indonesian coal market, had too lowered the offers for South African coal.

South African coal index API-4 had touched USD 98.3 in Feb’18, since then the index has been falling continuously and was assessed at USD 88.10 for Apr’18 shipments.

Market participants had informed that the tightness in coal supply had prompted miners to reduce discounts on coal. Current offers for 5500 NAR coal was heard at a discount of USD 6/MT for Apr’18 shipments, while 4800 NAR coal was available at a discount of USD 11-12/MT.

However, following the expected ease in supply in the coming months, discounts for forward buying for May’18 shipment were assessed at a USD 7/MT for 5500 NAR coal and USD 13/MT for 4800 NAR coal.

5500 NAR coal was offered at USD 74-75/MT, FOB Richards Bay for Apr’18 shipments. 4800 NAR coal was offered at USD 60-61/MT, FoB Richards Bay.

For Indian buyers, offer for 5500 NAR coal was assessed at USD 88-89/MT, CFR basis for panamax vessel. 4800 NAR coal was priced at USD 74/MT, CFR India.

 

Japan: Ferro Alloy Imports Rises Up in Feb’18

According to the Japanese customs, the country witnessed a substantial rise of 69% M-o-M in its Ferro Alloy imports.

Japan imported 0.27 MnT in Feb’18 against 0.16 MnT in Jan’18. Moreover, on yearly basis, Japanese imports increased by 35% as it imported 0.2 MnT in Feb’17.

In Feb’18 Japanese imports majorly consist of Manganese Ore at 0.16 MnT, witnessing a mammoth increase of more than 400% M-o-M against 0.03 MnT in Jan’18. Ferro Chrome imports by Japan in Feb’18 is 0.07 MnT registering a decrease of 13% against 0.08 MnT in Jan’18 while Ferro Silicon imports by the country were stable at 0.04 MnT.

Sub-Commodity Jan’18 Feb’18 Change
Manganese Ore 0.03 0.16 433%
Ferro Chrome 0.08 0.07 -13%
Ferro Silicon 0.04 0.04 0%

South Africa remains the largest Ferro Alloy exporter to Japan at 0.16 MnT in Feb’18 recording a massive increase of 129% M-o-M. Gabon was the second largest exporter to Japan at 0.04 MnT followed by Kazakhstan at 0.02 MnT among the others.