According to the June 8th China Metals Weekly (CMW) newsletter, prices moved-up for three of the five long product groups for the week ending June 7th. Angles edged up 0.6% to $488 per ton, channels and beams each increased by 0.3% week on week (w/w), to $467 and $464 respectively. Wire rod priced fell 2.8% to $458 and rebar was off 3.2% w/w to $477. For reference, hot rolled coil (HRC) was up 0.9% w/w to $418 per ton.
On a month on month, (m/m) and year on year, (y/y) comparison, prices were up across the board. Rebar was up 5.6% m/m and by 67.2% y/y. Wire rod was up 1.4% m/m and by 53.3% y/y. Angle was up 2.9% m/m and by 34.5% y/y. Channel was up 1.7% m/m and by 35.8% y/y. Beam was up 2.3% m/m and by 36.1% y/y and HRC managed a 1.4% m/m increase and was up 14.1% y/y, (Figure 1).
Referencing CMW, according to Chinese customs officials, China exported 6.98 Mt (million metric tons), of steel products in May. This was 0.49 Mt less than in April and was down 25.9% year on year (y/y). Year to date (YTD), China exported 34.19Mt down 25.7% y/y. China imported 1.11Mt in May, up 1.8% y/y and brought-in 5.67Mt through May, up 6.5% YTD y/y. Iron ore imports were 91.92Mt in May, 9,69Mt more than that in April and up by 6.0% y/y, The total amount of imports through May was 444.57Mt, up by 7.9% YTD y/y. Exports of coke was 650,000t in May, up by 14.0% y/y, and totaled 3.40Mt in January-May, down by 15.0% y/y.
CMW reports per the China Iron and Steel Association, (CISA) that the daily output of crude steel was 1.8Mt per day (member companies reporting), over the first 20 days of May so the daily output in the whole country was estimated at 2.33Mt, down by 96,800t m/m. Chinese steel production is forecasted to decrease in the near future from the combined effect of the rainy season and through amplified environmental protection measures. Iron inventory at ports measured 140.27Mt at the end of May, up by 5.21% m/m and 37.71% y/y, hitting a new record. With supply exceeding demand, iron ore prices are expected to decline in the near future.
CISA statistics show that 107 medium and large steel enterprises achieved RMB1.1533 trillion in sales revenue (approximately $154 billion US dollars), in the first quarter, up by 38.46% y/y. Profit was reported at RMB32.906 billion (approximately $20.56 billion US dollars), or 13.4% on sales. This compares to an RMB1.063 billion loss (approximately $141.9 million US dollars), for the same period last year. Twenty-one out of the 107 firms reported losses over the first quarter.
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.