Domestic prices for hot-rolled coil in China cruised higher on Friday July 23 after the country’s third-largest steelmaking province announced a ceiling for its crude steel output for 2021.
Domestic
Eastern China (Shanghai): ۵,۸۶۰-۵,۹۱۰ yuan ($905-913) per tonne, up by 10-60 yuan per tonne
Northern China (Tangshan) weekly assessment: ۵,۷۲۰-۵,۷۳۰ yuan ($884-885) per tonne, up by 10 yuan per tonne
The eastern Chinese province of Shandong has set a target ceiling of 76.5 million tonnes for its crude steel output this year, according to local media reports.
Data from the National Bureau of Statistics shows that the province produced 45.26 million tonnes of crude steel in the first half of this year, making it the third-largest steelmaking province in China. Its output in the first half is 17.02% higher than the same period of last year.
The announcement by Shandong province comes amid widespread expectations of production cuts in the second half of this year to keep the country’s crude steel output from exceeding that of last year.
The most-traded HRC contract on the Shanghai Futures Exchange ended the day slightly higher than Thursday’s close after fluctuating in a small range during the trading session.
But recent comments from the central Chinese and concerns over demand amid adverse weather limited the upside for steel prices, according to industry analysts.
The National Development & Reform Commission said earlier this week that it would continue with its efforts of maintaining the stability of commodity markets following a meeting last week where it instructed local authorities to strengthen price monitoring and implement controls aimed at countering wide price swings.
HRC prices in eastern China ended the week little changed from last Friday’s 5,860-5,900 yuan per tonne.
Export
Fastmarkets’ steel hot-rolled coil index export, fob main port China: $۹۱۸٫۶۸ per tonne, up by $0.84 per tonne
Export prices were largely unchanged on Friday, with trading companies yet to return to the market amid sustained concerns over whether the Chinese government would implement an export tax for steel.
Market sources’ indications of achievable prices for SS400 HRC remained wide amid low bids from Southeast Asia and high domestic prices.
Sources said that buyers in South America and Africa might be willing to pay $930 per tonne fob for cargoes while Vietnamese buyers were bidding at $897-875 per tonne fob China.
Market chatter
“I’m not issuing offers for now because I can barely make any money under current market circumstances. I will wait and see if the [Chinese] government imposes duties on HRC exports and remove the tax rebate for exports of cold-rolled coil and hot-dipped galvanized coil on August 1,” a Hangzhou-based trader said.
Shanghai Futures Exchange
The most-traded October HRC contract closed at 5,968 yuan per tonne on Friday, up by 21 yuan from Thursday’s close.
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