STEEL WEEK IN BRIEF: Coking coal index-based system, stainless steel conference, trade policy...

Metal Bulletin reviews the major stories affecting the steel market over the past week.

Seaborne coking coal prices ended the week lower amid aggressive offers from traders over the past five days.

Metal Bulletin's fob Australia premium hard coking coal index fell $3.58 per tonne to $139.33 per tonne.

The cfr China hard coking coal index shed $5.43 per tonne to $135.01 per tonne while the fob Australia index lost $5.34 per tonne to reach $129.85 per tonne.

Early in the week, Nippon Steel & Sumitomo Metal Corp (NSSMC) said it was moving to an index-based system to price quarterly contract cargoes of premium coking coal.

The new system will involve using a three-month average of a basket of indices to price each quarter’s shipments.

But NSSMC will retain one-to-one price negotiations with producers for quarterly contract cargoes of pulverized coal injection (PCI) materials and semi-soft coking coal.

And Teck Resources has revised its second-quarter metallurgical coal sales guidance to 6.80-7.00 million tonnes after confirming a contract price of “approximately $190 per tonne” for the period.

Meanwhile, iron ore prices continued to edge up on Friday with the seaborne market seeing some improvement in demand, with Metal Bulletin’s 62% Fe Iron Ore Index reaching $55.75 per tonne cfr Qingdao, up by $0.52 per tonne on a daily basis.

In the scrap market, Turkish steel mills accelerated their deep-sea purchases with strong domestic demand and expectation for a better export market after the Ramadan period, while the Taiwanese scrap market and the US market were also enjoying increasing trade activity.

The Shanghai Futures Exchange is considering launching a ferrous scrap contract in the near future, its product director Chen Ye said.

The decision stems from the Chinese government’s encouragement of the use of scrap to reduce emissions and conserve energy as part of its commitment to the Paris Agreement to address climate change

Steel
Eastern China’s steel major Shagang lowered the list prices of its long steel products for mid-June amid a weakening spot market.

And nearby, Baosteel has lowered the list prices for its cold rolled coil (CRC) and hot dipped galvanized coil (HDG) for next month, but is keeping those for hot rolled coil (HRC) and plate unchanged, while Central China’s Wuhan Iron & Steel is keeping the list prices for its HRC, CRC, HDG and plate unchanged for July.

Export prices for CIS flat steel moved up slightly over the past week, with some higher offers announced by Russian steelmakers – although no deals have been done as yet.

Prices in the CIS export billet market were stable over the past week, supported by firm buying activity in North Africa despite Ramadan.

The import market for steel billet in Southeast Asia continued to be under pressure from low booking activity over the past week and competitive offers from Iran.

Import prices for slab in Asia have slipped below $400 per tonne cfr with market sentiment remaining bearish among buyers due to a seasonal slowdown in the region.

Turkish long steel producer Kardemir opened its domestic long steel and semi-finished sales book at lower prices.

In Europe, prices for domestic heavy steel plate have been under pressure from declining slab prices and competitive imports over the past seven days.

Northern European domestic rebar prices fell over the past week as producers ‘lose nerve’.

And falling ferro-chrome prices and nickel falling below $9,000 per tonne are expected to “meaningfully weigh on [EU] stainless transaction prices in the coming months as alloys surcharges reset”.

In the USA, Nucor increased its steel plate prices by at least $30 per ton, with immediate effect. Along with Kesytone, it has also raised wire rod prices between $20 and $25 per ton.

Trade policy

The European Commission (EC) has set definitive anti-dumping duties of 10.60% on rebar imported from Belarus for five years.

Europe's anti-dumping duty on imports of certain organic coated flat steel products from China will expire on March 15, 2018, unless a review is initiated, according to the EC.

India has called for World Trade Organization (WTO) action after the USA failed to meet an April 2016 deadline to drop countervailing duties on hot-rolled carbon steel flat products from India.

India also reduced its basic import duty on some flat steel products used to manufacture cold-rolled grain oriented electrical steel, the country’s Ministry of Finance said.

Mexico has renewed a voluntary agreement with South Korean steelmaking companies Posco and Hyundai Hysco to limit imports of CRC.

And in the USA, certain duties on Mexican and Turkish rebar were revised down to almost zero last week in administrative reviews by the US Commerce Department.

Around the world
During the 12th Asian Stainless Steel conference in Hong Kong, China’s Tsingshan Group said that its Indonesian stainless steel plant will be put into operation in the second half of this year.

Baosteel also said at the event that it is planning to convert 1 million tpy of its carbon steel capacity to stainless steel at its Meishan plant in Nanjing city, Jiangsu province.

In addition, stainless steel prices in China may rebound in the fourth quarter of this year, according to representatives of several producers who attended the conference.

Finnish stainless steelmaker Outokumpu has increased peeled stainless steel bar production output to around 15,000 tpy at its Degerfors mill in Sweden.

Indian steelmaker JSW Steel plans to increase the annual production capacity of the largest blast furnace at its Vijayanagar site in Karnataka, south-west India, by more than 60%.

A consortium including South Korean steelmaker Posco has been named as the preferred bidder for Arrium, according to the Australian steelmaker's administrator KordaMentha.

Liberty House, which missed out on that deal, will raise bar production to 137,000 tpy by the end of this year at its newly purchased speciality steels business in Rotherham, northern England.

UK long products steelmaker British Steel has registered an “official interest” in acquiring troubled Italian steelmaker Acciaierie e Ferriere di Piombino (Aferpi), according to Italian media reports.

Metal Bulletin also published a special report on British Steel.

Brazilian steel and iron ore producer Usiminas plans to restart operations at two iron ore processing facilities at its mining subsidiary, Mineração Usiminas, by September.

And finally, Cliffs Natural Resources has picked Toledo, Ohio, as the site for a $700-million hot-briquetted iron (HBI) production plant – only the third such facility in the USA.

Ana Paula Camargo

acamargo@metalbulletin.com

Published

Ana Paula Camargo

June 16, 2017

22:00 GMT

São Paulo