The local Chinese steel market has re-opened on February 5 on a weak note after its week-long holiday amid some declines in futures prices and slow activity. There are still expectations of some increase in the market in spring, but for now the mood is from stable to negative in both the steel and major raw material markets.
The average local rebar price in China has settled at RMB 3,417/mt ex-warehouse on February 5, up marginally by RMB 4/mt from the last day before the holidays, while the local billet price is down RMB 12/mt to RMB 3,118/mt ex-warehouse. Slow demand has prevailed in the market with many market players unlikely to come back to the market before the Lantern Festival holiday (February 12). “The US tariff issue remains, but there is no action on interest rates. Steel futures have fallen… It seems that only small changes will happen amid production controls to be extended to the end of March,” a Chinese trader noted. Rebar futures at Shanghai Futures Exchange have lost 1.51 percent today, contrary to the usual increase which would be expected after a long holiday.
As regards billet exports, there has been a very limited number of offers. Some suppliers have voiced offers for billet at $445-448/mt FOB, almost stable compared to before the holiday and lower futures prices signal that the workable level is still at $435-440/mt FOB at the highest. The leading Indonesian mill has announced its price idea at $445/mt FOB, just slightly changed from $443/mt FOB in late January.
In the import iron ore market, prices have softened on the first day after the holiday. Iron ore fines with 62 percent of Fe content stand at $104.25/mt CFR, down by $0.7/mt since January 27, while ex-Brazil Fe 65 percent fines are at $118.45/mt CFR, losing $0.65/mt over the same period. Only three deals for 40,000 mt of iron ore in total have been done at the Corex platform on February 5, including 10,000 mt of 56.34 percent FMG ultra fines at RMB 672/mt ($93.7/mt), for delivery to Jingtang port.
In the coking coal segment, though prices have been rather stable, at $188/mt FOB Australia, sentiments have lacked strength. Since China will impose 15 percent tariffs on coal and liquefied natural gas (LNG) from the US, there will be more supply of US coking coal to the global market (since in 2024 the US exported over 10 million mt of coking coal to China), impacting Australian demand elsewhere. Moreover, China will focus on Canadian high-grade coking coal and keep importing lower grades of hard coking coal and PCI from Mongolia and Russia.
Even the worsening of weather conditions in Australia has failed to support coking coal prices amid the insufficient demand in the market. Dalrymple Bay Coal Terminal is going to limit shipments this week due to heavy rains.