Local long steel and billet prices in China have posted minor declines on February 24, the first working day after the Chinese New Year holiday, amid softer futures prices and no immediate improvement in demand. However, the overall market mood is not very pessimistic, and most market sources do not predict significant falls in prices, especially for customers abroad.
On February 24, average local rebar prices are down RMB 7/mt ($1/mt) to RMB 3,223/mt ($464/mt) ex-warehouse, while billet prices have edged down by RMB 5/mt ($0.7/mt) to RMB 2,945/mt ($424/mt) ex-warehouse, compared to the previous trading day February 13. “The Chinese steel market is still weak due to weak demand in winter and the market opened with a minor falling,” a Chinese trader noted, adding that some better demand is expected in March and, with cost support, prices in China may be supported at the current levels or even improve slightly in the coming week when demand fully recovers after the holiday.
Rebar futures at Shanghai Futures Exchange have eased by 0.88 percent, while at the same day iron ore prices at Dalian Commodity Exchange have lost 1.79 percent, while coking coal and coke prices have softened by 1.52 and 2.18 percent, respectively. The raw material futures and spot prices (in case of iron ore, today’s spot price for fines with 62 percent Fe decreased by $0.5/mt to $98.7/mt CFR) have weakened mainly due to poor demand amid some limitations of steel production during the long holiday. But supply of the raw materials is also expected to be reduced in the near future, which may prevent prices from recording big declines from early March.
Most major Chinese steel export prices have remained unchanged, with rebar priced at $460-470/mt FOB and billet at $440-445/mt FOB. Market sources believe that, with the stronger yuan, most exporters will not provide discounts in the export market even with the current slowness of domestic demand. While the PBOC’s mid-point exchange rate stands at $1 = RMB 6.9414 today, February 24, the market exchange rate has hit $1 = RMB 6.88 - the strongest level since April 2023.