Long product prices moved higher for all product groups for the week ending May 24th according to China Metals Weekly (CMW). Rebar led the advance, as pricing moved up 6.9% week on week (w/w), to $493 per ton. Wire rod prices increased by 4.9% to $477 per ton. Angles were up $9 to $478 per ton, beams increased 5.5% to $465 per ton and channel rose $2 to $469 per ton. Hot rolled coil (HRC) prices were flat w/w at $412 per ton.

On a month on month (m/m) long product prices were up across the board ranging from 5.5% for 25# beams to +16.7% for 20mm rebar. Wire rod rose 12.6%, angles were up 6.9% and channels by 5.8% w/w. Hot rolled coil, prices fell by 0.2% m/m. Chinese HRC prices have fallen for 12 consecutive weeks on a m/m comparison.

On a year on year comparison total China long steel prices were up 43.7% overall. Rebar (20mm) advanced the most, +82.3%, followed by wire rod (6.5mm), up 65.5%. Beams, angle and channel prices moved-up from ranging from 34.9% to 38.8%. Hot rolled coil prices were up 17.3% y/y.

cmw2-fig1Figure 1 illustrates the pricing history of Chinese long pricing together with HRC pricing for comparison. Long product prices shot-up at the beginning of 2017 only to fall back down bottoming-out in the week of April 19th.  Long product prices have been moving higher since then. Hot rolled coil did not follow longs up, rather has been flat for six weeks in row.

Figure 2cmw2-fig2 charts the prices of Chinese beams by mill. The Shanghi mill reference price was $465 per ton groups for the week ending May 24th up 5.5% m/m and by 33.3% y/y. The Beijing Laiwu mill beam reference price was $550, up 11.6% m/m and by 26.2% y/y. The Beijing Maanshan mill reference price was $532 per ton, up 12.4% m/m and by 32.3% y/y.

Referencing China Metals Weekly, the output of crude steel was 72.78 Mt in April, up 4.9% y/y. The daily output of crude steel was 2.426Mt, reaching the highest level in history. The export and import of steel products was 6.49Mt and 1.08Mt in April per China customs statistics. Therefore the net export of steel products was 5.60Mt, down by 13.6% y/y. CMW reports that; total exports of merchant bar, rebar and wire rod were 3.719Mt, 68,172t and 1.847Mt respectively during the first quarter, down by 56.7%, up by 25.4% and down by 34.1% y/y. GMW reports that export volumes are being negatively impacted by the shut-down of substandard production capacity in addition to closures by the environmental protection supervision. This is resulting in lower inventory and hence higher prices.