Chinese steel industry is optimistic of its economy recovering in the second half 2020 with overall PMI index at 51.1 and steel PMI settling at 49.1. The logistic index moved up by 3.57pc from the prior month indicating overall positive sentiments in the country. China PMI expanded rapidly in July and was at a 10-year high.

 

Chinese iron ore futures hit eight-week high – Strong outlook for demand pushed Chinese raw material prices this week. Iron ore futures hit an eight-month high while coking coal futures hit 12-month high. Iron ore import prices for 62pc Fe scrap hit $115/mt cfr China on strong domestic demand. The Dalian iron ore jumped more than 4pc at CNY873/mt ($125.11/mt) since June 8. Spot Iron ore prices are thus hovering around 1 year high. Supply from Brazilian miner Vale is also expected to be impacted on COVID-19 related worries. 

 

Domestic billet prices stable – The domestic billet prices settled at CNY3,390/mt ex works Tangshan while steel export prices remained flat on Friday.  

 

Increased daily output – The average daily molten iron output of steel mills reached a new high, reaching 2.5mn mt mainly due to the resumption of production recently at blast furnaces in most areas.

 

Finished steel prices rise – Chinese rebar and hot-rolled plate prices rose by CNY20-30/mt on Monday. According to a local market intelligence company’s survey, around 2.2mn mt of steel trades being concluded every day while steel inventory in Hangzhou province has gone below 1.05mn mt. The futures for the construction steel rebar on the Shanghai Futures Exchange rose 2.1pc, hot-rolled coil jumped 2.4pc and stainless steel advanced 0.7pc.  

HRC export offers from Vietnam and India rose to $495-510/mt cfr China, up from $480-490/mt cfr China a week ago. Indian billet is being offered at $420-425/mt cfr China, up $10/mt from the prior week, said a trader.    

 

($1 = CNY6.99)

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