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

On Friday, Chinese finished steel prices dropped with domestic billet losing CNY100/mt to CNY4,310/mt ex-Tangshan in a day. On Thursday, prices surged on output restrictions in Tangshan. Traders feel that metal prices in China momentarily gained, only to start their downtrend to encourage buying in Southeast Asia and China.


Chinese billet importers stopped accepting firm bids since late Thursday. Russian billet producers, including Amur steel, offered billets at $610-625/mt cfr Philippines and Thailand but failed to get prices over $600/mt cfr Philippines or China. 

Trades had also slowed due to delays at transshipment ports, less availability of containers, and elevated freight rates. On Malaysia and Thailand routes, freight rates have almost doubled from a month ago. 

Although local governments have announced production cuts, steel product inventories remain high. Steel prices thus remained under pressure. In the Shanghai futures market, non-ferrous metals, stainless steel, nickel, and copper, also registered drops. 

China’s parliamentary twin session began on Thursday. Every year, steel prices gain during the session amid positive sentiment in anticipation of infrastructure projects.

Indian mills cautious

Around 20,000-22,000mt billets were sold by an induction furnace maker at $578-583/mt fob India. Major primary billet producers reportedly sold around 140,000mt at $545-550/mt fob India, according to Davis sources. Large steelmakers in India remain unfazed by the softness in the China market and kept offers unchanged for semi-finished steel and longs, but offered discounts to incentivize sales.


But prices for HRC could drop by around Rs1,500-2,000/mt for April shipments. Most traders were reluctant to restock at higher prices since most consumers have sufficient inventories. 


Domestic rebar prices fell due to a reduction in iron ore prices and increased production by secondary steel producers. The rise in production was supported by the budget announcement and reduction in duty steel scrap.


($1=Rs72.76, CNY6.47) 



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