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

Chinese steelmaker Shagang Steel has announced a price hike for early June shipments amid strong domestic steel demand. Finished steel demand in the country registered a sharp increase in the spot market with construction activity resuming post-COVID-19 outbreak. Gradual improvement in demand has encouraged mills to ramp up the output.  


Chinese finished long steel inventories have started decreasing and stocks of rebar and wire rod dropped by 40pc since mid-March, according to local survey agency. Over the last week, rebar and wire rod stocks in 40 big cities dropped by 4.7pc and 6.2pc to 9mn mt and 3.2mn mt, respectively.


Shagang is in eastern China’s Jiangsu province. For early June shipments scheduled over the period June 1-10, the company has raised finished steel prices by CNY50/mt ($7/mt). Revised offers for rebar (HRB400, 16-25 mm) would be CNY3,800/mt ($534/mt) ex-works and those for wire rod (HPB300, 6.5 mm) at CNY3,860/mt ($541/mt) ex-works. These prices include 13pc VAT.


Iron iron ore import prices in China were at $101-102/mt cfr China levels on higher spot market demand, said a trader. Brazilian miner Vale’s iron ore shipments to China are expected to rise in 2020 from 2019 due to falling demand in countries which are affected by COVID-19, according to the China Iron and Steel Association.


Chinese rebar futures hit 9 months high 

On June 3, rebar steel futures in China jumped to a 9-year high on stronger spot steel demand and falling domestic inventory of the construction material.

The Shanghai Futures Exchange’s (ShFE) most-traded October rebar contract rose by 1.5pc to CNY3,663/mt ($515.97/mt), its strongest since February 2011.

Chinese industry participants believe stronger spot demand in China could remain firm for the next 2-3 weeks.

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