According to China Metals Weekly, as of April 5th month on month (m/m) long product prices were down across the board ranging from 4.1% for 50# angle to 7.9% for 25# beam. For reference 3mm hot rolled coil prices fell 11.0% m/m. On a year on year comparison China steel prices were up an average of 29.4%. Rebar, angle and channel all moved-up within + or – one point of +35%. Beams and rebar increased by 29.4% and 27.7% y/y/, while hot rolled coil increased the least at +16.6% y/y.
Figure 1 illustrates the pricing history of Chinese long pricing together with hot rolled coil pricing for comparison. China Metals weekly references three prices for beams that vary by region and size. The standard reference beam is 25# and the current price in US dollars (USD), was $479 per ton on April 5th. The Beijing Laiwu mill 100×100 beam was USD 549 per ton and the Beijing Maanshan mill 400×400 beam was priced at USD 530 per ton on April 5th. Since the recent low point January 20, 2016, these prices have moved-up between 70% and 81%
Referencing China Metals Weekly, the Chinese overall economy appears to be gaining strength. The China Federation Purchasing Managers’ Index of manufacturing industry was 51.8% in March, 0.2 percentage points higher than that in February. In addition, the new order index was 53.3% in March, 0.3 percentage points higher than that in February.
Chinese carbon billet prices fell 9 to 12 USD per ton week to over week to settle at a range of between USD 403 and USD 428 per ton depending on mill and location. China Metals Weekly portends that prices are likely to fall further in the near term despite it also mentioning that ferroalloys and coking coal prices both moved higher. Iron ore prices came under pressure as a result of inventory levels that were deemed to be too high. Total inventory of imported iron ore at all 41 ports was reported to be 134.46 million tonnes (Mt), up 0.93 Mt week on week. This inventory build may be impacted as a result of Cyclone Debbie which has wreaked havoc on BHP Billiton Ltd., (a major Australian coal supplier), ability to get its product by rail to ocean freighters.
At Gerdau we keep a keen-eye on Chinese steel production and pricing. China produces close to 50% of the world’s steel and as a result has a massive influence on global steel trade patterns. Imported steel volume and pricing has an influence on domestic steel so we routinely monitor it.