STEEL WEEK IN BRIEF: Iron ore prices plunge, Chinese steel export prices fall, EU HRC trade case...

Metal Bulletin reviews some of the key news and price moves from the past week in the global steel market.

Seaborne iron ore prices nudged up slightly, but stayed below $70 per tonne on Thursday April 13, with the steel futures market range-bound.

Metal Bulletin’s 62% Fe Iron Ore Index was $68.68 per tonne cfr Qingdao on April 13, with mainstream 62% Fe Australian fines being offered with no premium or even at discount against April average indices as weakness persisted in the seaborne iron ore market.

On April 12, seaborne iron ore offers were cut below the $70-per-tonne-cfr mark, as sellers began to panic with “nobody buying”.

Meanwhile, in the coking coal market, Chinese end users are reluctant to accept higher offer prices for seaborne cargoes, while for buyers in other parts of Asia concerns about longevity of supply tightness are paramount.

Coking coal prices in China have shot up in April, due to domestic market improvements and a recent surge in seaborne coking coal prices.

Meanwhile, the timeframe in which the coal rail system in Queensland, Australia, will return to normal operations following the outage due to cyclone Debbie will be crucial to determining the tonnages lost to the outage.

The Newlands coal rail system reopened on April 13, ahead of the previous estimate of April 14, rail freight operator Aurizon confirmed.

Metal Bulletin’s cfr China premium hard coking coal index was at $230.97 per tonne on Thursday. On fob Australia basis, the index was stable at $299.84 per tonne.

The Turkish scrap import market remained quiet on April 13 as market participants waited for the results of this coming weekend’s constitutional referendum, while monthly UK ferrous scrap prices for April dropped by £5-15 ($6-19) per tonne depending on grade.

Steel
China’s export prices for hot rolled coil (HRC) continued to move down over the past week amid rising inventory pressure in the domestic market.

Export prices for Chinese cold rolled coil (CRC) and hot dipped galvanized coil (HDG) have also fell further, after price drops in the local market.

Following the dynamics in Chinese flat steel exports, export prices for CIS-origin HRC and CRC have dropped by between $20 and $35 per tonne.

Prices in the Black sea slab export market remained largely unchanged over the past week despite declines in the CIS flat steel export sector, as reduced availability of the semi-finished material from both Russia and Ukraine, helped to support the CIS slab export prices.

In Turkey, long steel producer Kardemir increased its rebar and round bar prices, and reduced sections and angles prices.

Also, Metal Bulletin reported in its global stainless wrap that relatively high prices for stainless steel products across the globe in the first quarter of 2017 are unlikely to be sustained in the second quarter, as high stock levels and modest demand create problems for producers in the Asian, European and North American markets.

European steelmakers are targeting higher prices for finished long steel products.

Trade policy

The European Commission (EC) has decided to not impose preliminary duties on imports of HRC from Brazil, Iran, Russia, Serbia and Ukraine.

Russian steelmaker Severstal has hailed the EC decision to not apply preliminary anti-dumping duties, saying that it can now ship to Europe and have higher margins from the sales to the region compared to other destinations, and thus increase the profitability of its export sales.

In addition, the EC decided not to amend its definitive anti-dumping duty of 6.80% on imports of stainless steel cold rolled (CR) flat products originating from Taiwan, following an absorption reinvestigation.

Meanwhile, German steelmaker Salzgitter has branded the USA's anti-dumping duties on heavy steel plate as “incomprehensible”.

And the US Commerce Department hasraised most anti-dumping duties on imports of oil country tubular goods (OCTG) from South Korea.

Metal Bulletin analysis, has found that HRC trade cases in Europe and the USA have diverted shipments and dislocated supplies, but they have also brought unexpected opportunities.

And Malaysia announced definitive safeguarding duties on imports of steel rebar, wire rod and deformed rebar (debar).

Around the world

Fortescue Metals Group (FMG) posted a 6% drop in its iron ore sales and a 4% rise in cash production costs in January-March due to the impact of heavy rainfall.

Russian miner Mechel will supply China’s Baosteel Resources with 960,000 tonnes of premium hard coking coal mined in Southern Yakutia from this month.

Germany’s ThyssenKrupp and Tata Steel Europe are “rumoured to be in the final stages of a planned merger of steelmaking operations”, according to investment bank Jefferies.

ThyssenKrupp said it will idle some of its heavy plate production capacity as part of a major cost-savings plan within its European operations.

The London Metal Exchange has suspended its physically-settled steel billet contract with immediate effect, but will retain its cash-settled ferrous contracts.

Nucor has stopped production at its direct-reduced iron (DRI) plant in Louisiana, USA, for the second time this year. The steelmaker said a roughly one-week outage is necessary to fix a broken feed belt.

Former Nucor ceo Daniel DiMicco has been named chairman of the Coalition for a Prosperous America (CPA).

Metal Bulletin’s offices in London, Singapore and São Paulo are all closed on Friday April 14 due to local holidays.

Daily PDFs will be downloadable until Friday April 14. After that, because of the UK’s Easter holidays, the next daily PDFs will be downloadable on Wednesday April 19.

Ana Paula Camargo

acamargo@metalbulletin.com

Published

Ana Paula Camargo

April 14, 2017

18:50 GMT

São Paulo