Prices fell for three of the five long product groups according to the May 10th China Metals Weekly (CMW) newsletter. Wire rod priced edged down 2.5% week on week (w/w) and was off 6.7% month on month (m/m).
The current domestic price in China was US$440.09 per short ton for 6.5mm rod. Rebar (20mm), pricing fell 2.5% w/w and 5.6% m/m and currently sells for US$442.71 per ton. Angle was down 0.4% w/w and by 6.9% m/m. Angles current China based pricing was $463.42 per ton. Channel and beams bucked the trend and moved up a touch, 0.1% w/w. Both were down on a m/m basis however, channel down 4.9% and beams off 5.2%. Current pricing for 16# channel was $459.79 per ton and $454.54 per ton for 25# beams. For reference hot rolled coil price was US$411.18 per ton, down a fraction w/w, but down significantly, 10.6% m/m.
Figure 1 illustrates the pricing history of Chinese long pricing together with hot rolled coil pricing for comparison. On a year on year comparison total China steel prices were up substantially, ranging from +10.3% for HR coil to 43.7% for reinforcing steel.
Referencing China Metals Weekly, according to Chinese customs officials, China exported 6.49 Mt (million metric tons), of steel products in April. This was 1.07 Mt less than in March and was down 28.5% year on year (y/y). Year to date (YTD), China exported 27.21 Mt also down 28.5% y/y. China imported 1.08 Mt in April, down 1.8% y/y and brought-in 4.56 Mt through April, up 7.8% YTD y/y. Iron ore imports were 82.23Mt in April, 13.33Mt less than that in March and down by 2.0% y/y, The total amount of imports through April was 353.09Mt, up by 8.6% YTD y/y. Exports of coke was 740,000t in April, up by 7.2% y/y, and totaled 2.75Mt in January-April, down by 19.8% y/y.
CMW reported than billet prices rose week on week and despite an 8,500 tonne inventory build, it expects prices to continue to tick higher in the short term. Scrap and iron ore prices traded in a narrow range over the past couple of weeks. CMW sees softening prices on the horizon for both feedstocks, which seems to contradict the expected future rise in billet prices. However reading on further through the report, the declining feedstock prices are a function of lower flat rolled demand which is depressing prices as inventories build.
At Gerdau we keep a keen-eye on Chinese steel production and pricing. China produces close 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.