China Metals Weekly (CMW), October 12th newsletter reported that for long products prices rose across the board on a week over week basis from 0.7% for 6.5mm wire rod to 1.4% for 25# beams. On a month over month (m/m), basis long products decreased on all products ranging from -1.4% for 50×5 angles to -6.2% for 20mm rebar. Current pricing in China: Angles $605 per ton, Channels $591 and Beams $573. Wire rod was priced at $569 per ton and Rebar $536 per ton.
Hot rolled coil, (HRC) prices rebounded a bit over the past week, up 1.0% m/m to $397 per ton. Hot rolled coil prices are still down by $30 per ton from its recent high in mid-August.
Examining prices compared to one year ago shows that long products were sustainably higher in every sub-category ranging from +53% to +74%. Beam prices advanced $197 per ton y/y, as Angles and Channels moved-up $238 and $225 respectfully. Rebar prices increased by $220 per ton y/y and Wire rod was up by the largest margin, +$242 per ton y/y. The price of HRC was essentially unchanged at $397 per ton, down 0.1% lower year on year, (y/y).
Figure 1 shows the price history per net ton for longs and HRC from 2014 to present. Long product pricing is trending higher while HRC is trending lower.
According to CMW, Ma’anshan Steel has started construction of a heavy section beam in Anhui China. The line is scheduled to start operation in June, 2019. Its designed capacity is 800,000 tonnes per year and its maximum product specification will be 1,108 X 476 X 115 mm, (43.6 X 18.7 x 4.5 inches).
The China Iron and Steel Association, (CISA) reports that 95 large and medium steel companies combined to achieve RMB91.86 billion, ($12.64B) of sales revenue in the January to August period. This figure was 374% higher y/y. Profit on sales was reported at RMB21.48B, ($2.96B). A further 10 enterprises reported a combined loss of RMB675.41 million, ($93M) down by 75.7% y/y.
The Chinese Purchasing Managers’ Index, (PMI) of manufacturing industries was 52.4% in September, up 0.7 percentage point m/m. The new order index was 54.8% in September, 1.7 percentage points higher than in August. The PMI for the steel industry fell 3.5 percentage points m/m to 53.7% as the production index was off 1.9% m/m. New orders dropped 6.0 percentage points to a still robust 60.6%. In addition, the new orders for export index fell by 4.5% to 40.5%. The stock index of steel products rose 4.2 percentage points to 46.3%, while the procurement price index of raw materials fell to 60.2%, 8.8 percentage points lower than in August
Billet prices fell further in many parts of China as inventory was up and re-rolling mills stopped production. Billet prices fell by $14 to $23 per tonne to between $458 and $501 per tonne. Coke prices were stable in the range of $311 to $320 per tonne. Pig iron prices were also fairly stable. Prices for steelmaking pig iron ranged from $372 to $393 per ton. Meanwhile, casting pig iron sold for $461 per ton. Iron ore prices were depressed in most regions. Prices fell $1 to $6 per ton to range from $67 to $85 per tonne for 66% dry concentrated iron. Scrap prices were mixed depending on the region in question. Prices fell $6 in some areas to up $1 per tonne in others. Prices for heavy melt scrap ranged from $204 to $218 in Zhejiang to $241 to 268 per tonne in Hebei.
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.