Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Baoshan Iron & Steel Co (Baoshan Steel), under the flagship of Chinese steel producer Baowu Steel Group (Baosteel), has decided to raise prices of its finished flat steel of hot-rolled coil (HRC) by CNY300/mt ($46/mt) for April deliveries. Post-Chinese new year holidays in Feb, demand has gradually increased from the auto sector. Most producers are optimistic about demand’s sustainability in the near term.  


Globally, the demand for HRC has remained strong from the end-users and OEMs after the Lunar New Year holidays. Most mills cut production and went for maintenance to match the supply-demand gap and liquidate excessive inventories. The recent rise in the prices in the US domestic market, Turkey and CIS regions have kept the outlook positive with improving profit margins. 


For April deliveries, Baosteel lifted prices for CRC (cold-rolled coil) and sections by CNY100/mt and CNY200/mt. Prices for pickled and oiled coils were also raised by CNY100-150/mt, depending on specification. Prices of hot-dipped galvanized steel, electrolytic galvanized steel, color-coated coil, and galvalume remain unchanged for April shipment, according to the company’s retail listed prices.


For March deliveries, the steelmaker had rolled over domestic ex-work prices for HRC and CRC products from February shipments. Prior to that, the company had raised HRC prices by a total of CNY850/mt ($131/mt) in three months from December 2019.


Despite this, there is a gap between Chinese HRC prices and those from the US and Europe, indicating room for prices to rise further.  


In China’s domestic market, HRC Q235 traded at CNY4,940-4,950/mt ex-works eastern China, up CNY420-430/mt from the prior month. HRC export offers were heard at $705-710/mt fob China, up $60-70/mt from mid-February.  The export market is slow with most buyers exercising caution and mills holding their base offers flat.


On Thursday, Q235 150mm square billets prices in China traded at CNY4320/mt ex-works Tangshan including the 13pc VAT, up by CNY20/mt from the prior day. Spot prices for imported benchmark Fe 62pc content iron ore marginally increased to $164.3/mt cfr Qingdao amid a recovery in steel futures on Wednesday. An upward trend is expected to continue with iron ore futures rose over 5-6pc on Thursday.


Baosteel’s HRC prices set a benchmark for Asian HRC producers like Posco and Hyundai in South Korea, Formosa in Vietnam, and JSW and Tata Steel in India.

($1= CNY6.49)

Leave a Reply

Your email address will not be published.