*** Domestic
Eastern China (Shanghai): ۴,۸۲۰-۴,۸۴۰ yuan ($744-747) per tonne, down 60 yuan per tonne
Several Shanghai-based traders said sellers in the city’s spot market made price cuts on seeing the futures market weaken.
The move encouraged some downstream buyers to return to the market to restock. Market participants put this down to a generally positive outlook for steel product prices.
Local media had reported earlier in the day that China’s Ministry of Industry & Information Technology was working on a plan to limit steel refining capacity in the country to reduce carbon emissions. This dampened sentiment upstream in the ferrous market, because such a move would reduce demand for steelmaking raw materials.
Coking coal and coke futures led the slump in the ferrous market, sources said.
But market participants expect steel prices to strengthen in the long term if capacity is reduced, sources said.
*** Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۷۰۰٫۳۰ per tonne, up $1.77 per tonne
A source at a mill in eastern China told Fastmarkets that it was planning to raise its export offers across all of its steel products by $10-15 per tonne this week despite a weakening of the domestic market.
He said the mill was bullish about steel prices in the longer term. Furthermore, it is in no hurry to sell its products, which allows it to keep prices high over the next few days, he said.
Most major mills did not update their export offers for HRC on Monday, but traders said it was almost impossible to secure cargoes from Chinese steelmakers at under $700 per tonne fob.
Alongside the optimism about price trends for HRC, market participants said the uncertainty over China’s export tax rebate also encouraged exporters to keep their offers high because they would incur losses if a cut was announced.
Freight rates are also on the rise, which eat into the margins of sellers, sources said.
*** Market chatter
“I didn’t receive any orders from overseas buyers on Monday, but I can’t offer cheaper goods to boost trading activity. I don’t foresee any possibility of mills lowering export prices anytime soon,” a Shanghai-based trader said.
*** Shanghai Futures Exchange
The most-traded May HRC futures contract closed at 4,841 yuan per tonne on Monday, down by 46 yuan per tonne from last Friday.
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