Chinese rebar prices have risen on strengthening demand in the country and positive sentiment after the economic and steel PMI rose in July. The government announced stricter production control regulations in the Tangshan region also giving a boost to the prices towards the end of August.
Shorter supply of wire rod and strip pushed steel prices higher in September with rebar being offered at CNY3,680-3,700/mt ($536-540/mt), up by CNY30/mt. Rebar demand could rise over the next two months following the waning monsoon and milder weather.
Moreover, newly launched construction projects could generate another 1-1.5mn mt of steel in September, an industry source said, adding that despite some inventory and sales pressure, Chinese steel mills are bullish about futures remaining firm. On Tuesday, the US Dollar depreciated to $6.82 against the CNY from $7.2 three months earlier—a 27-month low.
Steelmakers raise prices
Baosteel increased prices by CNY300/mt in September, anticipating the Chinese crude production in 2020 to hit the 1bn mt mark.
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In the finished flat market, eastern China’s Shagang steel hiked prices by CNY40/mt for early September sales taking its HRC prices to CNY4,300/mt. Its CRC prices rose by CNY40/mt from the prior week. The price gap between HRC and CRC has now expanded to CNY620/mt.
HRC export offers rose above $540/mt fob China with the increase in demand from buyers in Vietnam and the Middle East also pushing Indian steelmakers to supply HRC at prices above $540/mt fob China. HRC prices were at $520/mt fob Southeast Asia. Exports volumes, however, remained limited from China.
Billet import inquiries resume
A few Chinese importers resumed billet import inquiries, but Southeast Asian and CIS billet exporters were slow to respond amid weak domestic fundamentals. On the other hand, Chinese billet prices in the domestic market rose by CNY50/mt to CNY3460/mt ex Tangshan on Monday and were offered at CNY3,460/mt ex Tangshan on Tuesday.
The iron ore import index rose by $1.1/mt to $124.35/mt cfr China for Australian origin Fe 62pc content grade on Tuesday. High raw material prices for iron ore, domestic steel scrap, and coke could result in a rise in finished steel prices amid continuing demand in the country, continuing the uptrend in Chinese steel prices being witnessed over the last four months.