Monthly Archives: March 2020

China Continues Importing Billets

China has been actively importing semi-finished steel (billet and pig iron) following an increase in construction activities post-COVID-19. So far this week, the country was reported to book billets from CIS and Vietnam. The import deal details as received to SteelMint from its sources are as below-

— 40,000 MT billet deal was heard to have got concluded from CIS at around USD 365/MT, CFR China.

— Also prior to this, 30,000 MT billet deal was reported from Vietnam at USD 381/MT, CFR China.

It is worth noting that, there is no import duty for Vietnamese material in China, and that’s why the country booked Vietnam origin billets at a higher price, SteelMint learned from market sources.

Meanwhile, billet export offers from Iran also witnessed a sharp drop this week and are noted to be between USD 320-330/MT, FoB Iran. However, bids are at USD 315/MT, FoB Iran. According to SteelMint analysis, China could soon start sourcing billets from Iran as well.

 

Pakistan: Imported Scrap Offers Fall, Trades Stall as Mills Face Shutdown

In continuation to the strict nation-wide lock down announced last week, the steel mills are likely to remain closed until at least 6th April. Due to the ongoing lockdown, no finished steel sales were recorded. However, few bookings for imported scrap were witnessed as mills look to capitalize on the huge fall in prices, as the prevailing offers hover around 4-year low levels.

SteelMints’s assessment for Shredded scrap from UK/Europe stand at USD 235/MT CFR Qasim, further down by USD 5/MT against last week’s closing. Last trades concluded for Shredded in recent days were reported at USD 238/MT CFR, while present offers stand at USD 235/MT. In spite of all steel mills being closed, few bookings in containers were reported.

Some buyers bid at USD 230/MT CFR level while aiming to secure some material at these price levels which are at the lowest levels since Sep ’2016 and may not be achieved for a long time in future.

Absence of any transaction in domestic steel market led to no clarity on steel prices, while fresh finished steel prices will only be clear after the mills resume operations.

 

Indian Refractory Makers Body Urges Ministry to Allow Refractories to be Brought Under ESMA

The refractory fraternity wants refractory and refractory raw materials supply chain to be brought under the Essential Services Maintenance Act (ESMA), 1981 and be allowed to function uninterruptedly because these are essential inputs to keep running thermally-intensive industries like iron and steel, thermal power and petrochemical plants, cement, non-ferrous metals and glass.

The Indian Refractory Makers Association (IRMA), the apex body of refractory makers, has already represented to the Ministry of Steel, Government of India, as also to other important ministries and various industry bodies that the refractory and refractory raw materials industry should be brought under the ambit of ESMA, 1981 and is awaiting a favourable response from the concerned authorities.

Refractories are ceramic materials which provide resistance to thermal, mechanical and chemical attacks. IRMA has appealed to the government that the refractory industry’s customers in steel, thermal power, petrochemical, non-ferrous metals, glass, waste management and pulp & paper are directly responsible for supplying the primary materials used in the production of most essential items such as rapid steel-intensive constructions, hospital beds, ambulances, respirators, face masks, medicines and other medical devices as well as everyday needs like electricity and petrochemicals. “Their production processes cannot continue without refractories, even in the short term,” IRMA has stressed in a release.

Parmod Sagar, Chairman, IRMA, said, “In the context of nCOVID19, we, the refractory makers in India, are facing a unique challenge of maintaining supply lines and services to our customers, which they would like to run following all safety and health guidelines. They are fully geared up to accept the challenges and serve the country in its hour of need.”

“We must continuously produce and service refractories because they are critical components in almost all products’ supply chains. At the same time, our top priority is, and always has been, the safety and well-being of our industry employees and the communities in which they operate. Needless to mention, we are already complying with all pre-requisites that the government has put in place to ensure safety of people and prevention of further spread of the nCOVID19 infection,” Sagar further added.

 By Madhumita Mookerji

 

Weekly: Global HRC & CRC Market Overview

Chinese HRC export offers fall due to bearish sentiments –

— Chinese HRC export offers witnessed a slight fall by USD 5/MT owing to the pessimistic sentiments in the domestic market. Also, competitive HRC export offers from India amid lockdown situations resulted in the downside in the nation’s HRC prices.

–Also due to COVID-19 many countries have announced lockdown which resulted in weak trading in the overseas market.

— The current export offers are assessed at USD 420-425/MT FoB China, which was USD 425-430/MT FoB basis a week ago.

— Meanwhile, domestic prices decline by RMB 10-20/MT D-o-D basis and hovering at USD 3,280-3,290/MT (Eastern China) and RMB 10/MT down D-o-D basis and stood at USD 3,250/MT in Northern China.

Indian mills exploring export options as domestic demand remains muted-

— Indian HRC export offers to Vietnam stands at USD 400-405/MT CFR Vietnam, which is equivalent to around USD 385-390/MT FoB India. With domestic trades coming to a halt post lockdown, Indian mills have started exploring export options actively.

— Last week a western-based Indian mill booked 40,000 MT of HRC with Vietnam at USD 405/MT CFR basis for may June shipments.

— Meanwhile, the current offers for UAE stands at USD 410/MT CFR basis which is equivalent to around USD 380-390/MT FoB India.

Vietnam Government announces 15 days lockdown period-

— The nation’s government has announced a 15 days lockdown, commencing from 1st Apr’20 until 15 Apr’20 to halt the spread of virus COVID-19.

Current imported HRC offers to Vietnam-

— HRC (SAE 1006, 2mm), China- Benxi Steel is offering at USD 410-415/MT CFR basis. The previous offer was at USD 420/MT CFR basis.

— HRC (SAE 1006, 2mm), China- Chunghung Steel is offering at USD 415/MT CFR basis. The previous offer- USD 420/MT CFR basis.

— HRC (SAE 1006, 2mm), Russia- MMK is offering USD 380-395/MT CFR basis.

–HRC (SAE 1006, small coils) Ukraine – Metinvest offering HRC at USD 425-430/MT CFR basis.

— Formosa Ha Tinh is offering HRC (SAE 1006, skin pass) at around USD 480/MT CFR for May shipments. Sources also shared that, the company may cut production in the near term, although it’s still under discussion.

CIS origin HRC export offer fall over sluggish demand-

— The CIS origin HRC export offers plunged by USD 20/MT owing to the dampened demand across the globe amid the growing concerns of COVID-19 which is hindering overseas trades.

— Current offers are assessed at USD 415-425/MT FoB Black Sea, which was USD 435-445/MT FoB basis in the previous week.

Particulars Currency Prices
HRC, FoB China USD/MT 420-425
CRC, FoB China USD/MT 480-490
HRC, FoB Black Sea USD/MT 415-425
CRC, FoB Black Sea USD/MT 495-515
HRC, CFR Vietnam from China USD/MT 410-415
HRC, CFR Vietnam from India USD/MT 405
HRC, CFR UAE from India USD/MT 410

Source: SteelMint Research

 

India’s Vizag Steel Concludes 30,000 MT Ocean Billet Export Tender

Rashtriya Ispat Nigam Limited (RINL), the state-owned steel maker under the Ministry of Steel, had invited a bloom export tender for 30,000 MT quantity. The size and grade mentioned in the tender were 150*150mm and 4SP respectively. According to close sources report to SteelMint, the company has concluded the tender at USD 355-360/MT, FoB basis. And the shipment is scheduled for 15 Apr’20. If sources are to be believed, the shipment is destined for China.

Vizag Steel had also floated spot sales export tender for 30,000 MT billet (4 SP, 150*150mm) which was due yesterday.

Unlike other nations, China is the only economy, which is recovering from the pandemic. China has been aggressively booking billets, pig iron, and slab following resumption in construction activities. This is made all the major billet exporting nations combative for supplying the billets to China, as due to the pandemic, other billet consumers are largely lockdown. With the resumption of construction activities, trades have gained momentum in the country.

CIS billet export price assessment is at USD 340/MT, FoB Black Sea. While that for Iran is at USD 320-330/MT, FoB Iran.

 
Japan Coal Import

Japan Coal Imports Down 14% M-o-M in Feb’20

Coal imports taken by Japan dropped 14% on the month as the country accelerated its steel output cuts, in line with weaker demand from the manufacturing sector.

Data provided by Japanese customs indicate that coal volumes which totaled 14.82 MnT in Feb’20 had fell below the 15 MnT mark for the first time since Jun’19. Besides, the steep M-o-M decline witnessed from 17.2 MnT in Jan’20, imports had also noted modest fall Y-o-Y from 14.89 MnT in Feb’19.

The major contributor in the decline was attributed to the subdued intake of coking coal, which had decreased 36% on the month to 2.67 MnT in Feb’20.

Another essential ingredient for steel industry-Met Coke’s imports plunged by 67% from a month earlier to 0.01 MnT in Feb’20 as Japanese steel mills relied more on domestically produced coke.

In addition, there was a tepid demand seen for non-coking coal as well, which came down 4% M-o-M to 10.63 MnT in Feb’20.

Grade Feb’20 Jan’20 % Change
Non Coking Coal 10.63 11.07 -4%
Coking Coal 2.67 4.16 -36%
Pet Coke 0.36 0.62 -42%
Anthracite 0.32 0.51 -37%
Met Coke 0.01 0.03 -67%
Others 0.82 0.82 0%
Grand Total 14.82 17.2 -14%

Source: Japanese customs
Quantity in MnT

Major Coal Exporters:

Australia remained the major coal supplier in Feb’20. However, tepid demand for coking coal coupled with higher spot prices made Japanese customers less interested in procuring cargoes from the country.

Australian coal exports were down 19% M-o-M to 8.41 MnT in Feb’20, which was also marked 6% lower on the year from 8.95 MnT in Feb’19.

Coal shipments from Indonesia increased to 3.2 MnT in Feb’20, up by 20% from the previous month. While volume supplied by Russia were at 1.26 MnT, down by 14% on the month.

Japan Country-wise Coal Import

 

China: Prices of Chrome Ore Gets Support over Anticipation of Supply Shortage

As the global market still reels from the spread of covid19, China‘s Chrome market showed signs of resilience and rebound out of the anticipation of disruption in Chrome ore supply following the lockdown for three consecutive weeks in the major producing countries such as South Africa and Zimbabwe.

Market participants are more willing to back up spot cargo price, due to the long down-trending market and the anticipation of supply disruption soon.

Previously, the sales pressure on stainless steel has been passed to alloy and in turn to chrome ore after the spring festival. But following the contingency measures taken by supplying countries, both chrome ore and alloy price grew strong with today’s South African concentrates gaining RMB1/dmtu and retail price of HC Ferro Chrome up RMB 100-150 (USD 14-21) /50 basis per MT and LC Ferro Chrome/ultra-low Ferro Chrome up RMB 200 (USD 28) /60 basis per MT.

Offers on the market:
1. Chrome ore: South African 40-42% chrome ore concentrates at RMB 28-30 (USD 4-4.23)/dmtu, up by RMB2/dmtu; South African 42-44% concentrates at RMB 30-31/dmtu (USD 4.23-4.37/dmtu), up RMB1/dmtu; Turkey concentrates at RMB 38-38.5/dmtu (up RMB1/dmtu on Mar26).
2. HC Ferro Chrome: Inner Mongolia area at RMB 5650-5,750; Southwest at RMB 5,950-6,100; East China at RMB 6,100-6,200 (USD 859-873) (50 basis,ex-factory). Meanwhile, some factories halted offers on the expectation of further upswing.

Citic pacific confirmed its HC Ferro Chrome tender price for April at RMB6,250-6,380/50 basis per MT (acceptance, delivered, tax inclusive), up by RMB 100-180/50 basis per MT M-o-M with purchase amount 3,760 MT; LC Ferro Chrome at RMB 10,700-10,800/60 basis per MT (acceptance, delivered, tax inclusive), flat with last month level with purchase quantity 2,660 MT.

Till now, stainless steel mills understood moves to hike alloy price but are still conservative to accept high offers considering its own sales dilemma.

Transactions concluded today on chrome ore at Tianjin port:
South African Chrome ore ROM 37% at RMB30/dmtu for 1000MT
South African Chrome ore ROM40% at RMB32/dmtu for 1500MT
South African Chrome ore concentrates 44% at RMB31/dmtu for 1000MT

 

Nepal Extends Lockdown for One More Week, Industries to Remain Close

Nepal government has extended its national lockdown by another a week till midnight of 7 Apr’20, SteelMint confirmed from the local industries based in Biratnagar, Nepal.

As per them, the Cabinet made the decision on the recommendation of the Coronavirus Control High-level Task Force headed by Defence Minister on the WHO criteria of a safe 14 day incubation period for the virus.

Earlier, the government had announced lockdown till 31st Mar’20.

Further if sources are to be believed, the lockdown may extend further as India is also facing lockdown till 14th Apr’20 to prevent spread of COVID-19.

There are about 35-40 medium & small sized plants in Nepal that produce rebars, structures, flat steel products and pipes. Nepal’s annual finished steel production is about 1.5-2.0 MnT.

Sources reported, owing to suspended local transportation and lockdown borders, supply of steel products have been halted to Nepal from India. This may result in drop Nepal’s steel imports in coming months.

Recently released custom data being shown that, Nepal’s billet imports from India dropped to 3 months low with 97,866 MT in Mar’20, also it drop slightly by 4.7% M-o-M.

 

China’s Met Coke Exports Plummet as COVID-19 Hampers Steel Production

China’s coal exports have reduced by 59.6% on a year-on-year basis to 1.27 million metric tons (MnT) in the two-month period of this year (Jan-Feb’20), as compared to 3.15 MnT in the corresponding period of the previous year (Jan-Feb’19), as per the latest customs data obtained by CoalMint Research.

Furthermore on a cumulative basis, China’s coal exports have totaled 12.08 MnT in the eleven month period of the current fiscal year (Apr’19-Feb’20), down 29.86% against the aggregate exports of 17.22 MnT recorded during the same period of FY 2019 (Apr’18-Feb’19).

Non-coking coal exports from China have decreased by 84.6% Y-o-Y to 0.07 MnT in Jan-Feb’20 against 0.46 MnT in Jan-Feb’19.

Coking coal exports from China have decreased by 58.4% Y-o-Y to 0.13 MnT in Jan-Feb’20 against 0.31 MnT in Jan-Feb’19.

Most notably, metallurgical coke coal exports from China have decreased by a whopping 74.2% Y-o-Y to 0.36 MnT in Jan-Feb’20 against 1.40 MnT in Jan-Feb’19.

 

Given the rapid spread of COVID-19 since end-January 2020, there has been an inevitable decline in demand for steelmaking raw materials, including met coke, owing to widespread steel mill closures across major Asia-Pacific nations along with the wider European market.

In Europe, several other blast furnaces are operating at low levels of productivity, and are thus consuming less met coke. Further, European steel demand has plunged as much of the continent’s automotive sector has ceased production in recent days following the corona virus outbreak. The automotive industry accounts for 12% of all steel demand.

Major Coal Importers from China in Jan-Feb’20:

A country wise breakup of Chinese export data reveals that the major proportion of China’s outbound coal shipments are traditionally exported to Japan, South Korea, Malaysia and India.

Japanese coal imports from China decreased by 51.67% Y-o-Y to 0.17 MnT in Jan-Feb’20 against 0.36 MnT in Jan-Feb’19.

South Korean coal imports from China decreased by 58.28% Y-o-Y to 0.29 MnT in Jan-Feb’20 against 0.70 MnT in Jan-Feb’19.

Malaysian coal imports from China decreased by 55.26% Y-o-Y to 0.14 MnT in Jan-Feb’20 against 0.32 MnT in Jan-Feb’19.

Indian coal imports from China decreased by 79.18% Y-o-Y to 0.10 MnT in Jan-Feb’20 against 0.48 MnT in Jan-Feb’19.

 

The following table provides a more detailed breakup of the coal exporting countries to China.

China Export Jan-Feb’20
Commodity/Sub Commodity/Importing Country 2020 (Jan-Feb) 2019 (Jan-Feb) % Change Y-o-Y
Coal           1,273,681           3,151,748 -59.6
Pet Coke               416,904               488,283 -14.6
United Arab Emirates                 73,732                 82,227 -10.3
Australia                 70,176                 33,915 106.9
South Korea                 49,209                 86,149 -42.9
India                 46,693               135,689 -65.6
Others               177,095               150,303 17.8
Met Coke               361,920           1,404,334 -74.2
Malaysia               108,969               208,494 -47.7
India                 52,222               339,369 -84.6
Indonesia                 39,396               128,189 -69.3
Japan                 35,808                 53,741 -33.4
Others               125,526               674,541 -81.4
Anthracite               249,236               480,438 -48.1
South Korea               126,358               227,852 -44.5
Indonesia                 49,555                 29,907 65.7
Taiwan                 39,323                           – 100.0
Japan                 33,339               187,376 -82.2
Others                       661                 35,303 -98.1
Coking Coal               129,998               312,492 -58.4
South Korea                 82,998               207,992 -60.1
Malaysia                 25,000               104,500 -76.1
Japan                 22,000                           – 100.0
Non Coking Coal                 70,766               459,298 -84.6
Japan                 37,979               115,010 -67.0
South Korea                 32,754               173,270 -81.1
Myanmar                          33                 29,809 -99.9
Taipei                           –               102,244 -100.0
Indonesia                           –                 38,965 -100.0
Others                 44,857                    6,904 549.7
Japan                 44,856                    3,868 1059.5
Germany                            1                           – 100.0
South Korea                           –                    3,011 -100.0
Indonesia                           –                          25 -100.0

Source: CoalMint Research | Quantity in MT

 

Bangladesh: Latest Bulk Scrap Booking Pulls Down Prices Further by USD 25/MT

As the global scrap prices are continuously dropping since mid Mar’20 due on low demand amid production cuts due to COVID-19 escalation, Bangladesh has booked another bulk cargo at sharply reduced price earlier today, marking the 16th bulk vessel booking for Bangladesh in last one month.

In the latest booking concluded just today, a major EAF Steelmaker from Chittagong booked a Bulk cargo from a USA West Coast based supplier, at USD 250/MT CFR Chittagong for 32,000 MT of cargo entirely comprising of Shredded scrap. The shipment for the cargo is expected for May ’20.

This booking comes at a price lower by USD 25/MT against last booking, which was concluded at USD 275/MT CFR for Shredded over a week ago. Although in comparison to the bookings in opening of March at around USD 295/MT for Shredded, the price has come down by USD 45/MT CFR over this month, as global prices now hover around lowest in 3-&-a-half to 4 years low.

Notably, this is the fifth bulk vessel booking by the said steelmaker in March’20 from the USA, while in total, Bangladesh steelmakers have now booked eight bulk vessels from USA, two bulk vessels from Australia and six smaller vessels from Japan, comprising of 360,000 MT of bulk scrap in March alone, easily the highest ever bulk scrap’s booking in one month period by Bangladeshi steelmakers as yet.

Amid reports about strict inspection of arriving vessels at Chittagong port as well as reduced workforce at suppliers’ end due to the lockdown, it is to be seen if the April arrival cargoes will berth on time without any delays.