China Steel Index Rise Significantly Monday - Market Monitor - China (WEEK 25) - Dragon gets bullish
By Daniel at 21 June, 2009, 11:45 pm
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Chinese Steel Prices improved substantially during WEEK 25. The Chinese Long Product Price Index CLPPI improved by 97 points, whereas the Chinese Flat Products Index CFPPI improved by 118 points. The overall price index CHISPI increased 109 points.
Chinese domestic prices have surged by about 6% to 12% for all major categories at Shanghai, except plates, during last 30-35 days, increasing realization of steel mills in domestic sales.
Veterans impute this roller coaster to the following:
1. The fully implementation of economic rescue packs. Investment, import & export, consumption all post uptrend, with steel usage also advancing.
2. The continuously depleting market stocks
3. Overall upswings of key raw materials prices which lend strong support for steel prices.
Stockpiles of benchmark steel varieties kept plummeting indicating the rising in steel consumption in the key sectors viz., construction, automobile and consumer durables of which the construction steel products fell the most.
And though demand increased for long products like rebar and wire rod, the reviving production from medium and small scaled steel mills would certain to break the market balance. In addition, the steel association also warned impacts from the diving steel export and surging import. China’s steel industry still confronts severe challenges like the swift capacity utilization, advancing raw materials prices, the emerging global trade protectionism etc.
A. Long products- Demand picks up on depleting stock
The demand for long product picked up on depleting reserves for rebar and wire rod fell 5.59% and 14.81% respectively from a month ago.
It is reported that in the first five months of the current year, China invested CNY 1.0165 trillion in real estate development, marking a growth of 6.8%YoY. The growth rate in question was up 1.9 percentage points compared with that registered in the first two months of 2009 and was down by 25.1 percentage points compared with the same period last year.
The housing area under construction in China in the January to May period totalled 2.185 billion square meters up by 11.7%YoY meanwhile, in the same period construction work started on a total housing area of 357 million square meters representing a drop of 16.2%YoY.
In the January to May period, the real estate sales volume in China rose 25.5% from a year earlier to 246.44 million square meters.
HRC
The average price of 3.0mm HRC in major Chinese cities posted at CNY 3680 per tonne up by CNY 21 per tonne from that of last Thursday. There were four steel mills hiked their ex-work price this week, Shanghai based Baosteel hiked the price by CNY 400 per tonne.
SAT disclosed on June 8th to hike the export rebate for HRC, among other steel products, to 9%. The news has somehow boosted the market sentiment and support the price increase. Insiders said that the rebate increase would encourage the export and traders are somehow more active in the market. However, the underlying recover of export sill much depends on international demand and price advantage
Plates
Plate prices surged so much backed by demand but the low market inventories and limited deliveries from mills. In recent weeks as the domestic ship plate market has improved, most mills have begun focusing more on ship plate production than commercial plate.
News
Monday, 22 Jun 2009
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Monday Market Monitor - China (WEEK 25) - Dragon gets bullish
Monday, 22 Jun 2009
Chinese Steel Prices improved substantially during WEEK 25. The Chinese Long Product Price Index CLPPI improved by 97 points, whereas the Chinese Flat Products Index CFPPI improved by 118 points. The overall price index CHISPI increased 109 points.
Class 12-Jun 19-Jun Change %
CLPPI 5707 5804 97 1.7%
CFPPI 5720 5838 118 2.1%
CHISPI 5714 5823 109 1.9%
CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index
Long Products
Category 12-Jun 19-Jun Change %
PI-WRC 5020 5106 86 1.7%
PI-Rebar 6539 6648 110 1.7%
PI- Product Index
Flat Products
Category 12-Jun 19-Jun Change %
PI-PLTS 4898 5008 110 2.2%
PI-HR 5823 5926 103 1.8%
PI-CR 6041 6185 144 2.4%
PI-GP 5820 5996 177 3.0%
PI- Product Index
Chinese domestic prices have surged by about 6% to 12% for all major categories at Shanghai, except plates, during last 30-35 days, increasing realization of steel mills in domestic sales.
Location - Shanghai
Item Size In CNY In USD %
WRC 6.5mm 230 34 6.90%
Rebar 20mm 210 31 6.40%
Plates 20mm -30 -4 -0.90%
HRC 4.75mm 220 32 6.60%
CR 1.0mm 400 59 9.50%
HDG 1.0mm 470 69 11.60%
Change is per tonne
Change is as on June 12th 2009 as compared to May 4th 2009
Veterans impute this roller coaster to the following:
1. The fully implementation of economic rescue packs. Investment, import & export, consumption all post uptrend, with steel usage also advancing.
2. The continuously depleting market stocks
3. Overall upswings of key raw materials prices which lend strong support for steel prices.
Stockpiles of benchmark steel varieties kept plummeting indicating the rising in steel consumption in the key sectors viz., construction, automobile and consumer durables of which the construction steel products fell the most.
And though demand increased for long products like rebar and wire rod, the reviving production from medium and small scaled steel mills would certain to break the market balance. In addition, the steel association also warned impacts from the diving steel export and surging import. China’s steel industry still confronts severe challenges like the swift capacity utilization, advancing raw materials prices, the emerging global trade protectionism etc.
A. Long products- Demand picks up on depleting stock
The demand for long product picked up on depleting reserves for rebar and wire rod fell 5.59% and 14.81% respectively from a month ago.
It is reported that in the first five months of the current year, China invested CNY 1.0165 trillion in real estate development, marking a growth of 6.8%YoY. The growth rate in question was up 1.9 percentage points compared with that registered in the first two months of 2009 and was down by 25.1 percentage points compared with the same period last year.
The housing area under construction in China in the January to May period totalled 2.185 billion square meters up by 11.7%YoY meanwhile, in the same period construction work started on a total housing area of 357 million square meters representing a drop of 16.2%YoY.
In the January to May period, the real estate sales volume in China rose 25.5% from a year earlier to 246.44 million square meters.
Billets
150*150
Q235
Location CNY USD %
Jiangsu Province 50 7 1.5%
Shandong Province 100 15 3.1%
Hebei Province 110 16 3.3%
Shanxi Province 100 15 3.2%
Tianjin 100 15 3.1%
Fujian Province 80 12 2.4%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
WRC
6.5mm
Common
Location CNY USD %
Shanghai 100 15 2.7%
Hangzhou 80 12 2.1%
Nanjing 150 22 3.9%
Changsha 80 12 2.2%
Zhengzhou 70 10 2.0%
Chengdu 10 1 0.3%
Guiyang 130 19 3.5%
Kunming 40 6 1.1%
Urumchi 0 0 0.0%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
Rebar
20mm
HRB 400
Location CNY USD %
Shanghai 60 9 1.7%
Hangzhou 100 15 2.7%
Nanjing 100 15 2.7%
Jinan 100 15 2.8%
Hefei 50 7 1.4%
Fuzhou 110 16 3.0%
Nanchang 70 10 1.9%
Guangzhou 90 13 2.4%
Changsha 70 10 1.9%
Wuhan 80 12 2.2%
Zhengzhou 120 18 3.3%
Beijing 50 7 1.3%
Tianjin 20 3 0.5%
Shijiazhuang 30 4 0.8%
Taiyuan 130 19 3.4%
Shenyang 20 3 0.5%
Harbin 50 7 1.4%
Chongqing 50 7 1.4%
Chengdu 0 0 0.0%
Guiyang 70 10 1.8%
Kunming 0 0 0.0%
Xian 70 10 1.9%
Lanzhou 30 4 0.8%
Urumchi 0 0 0.0%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
B. Flat products - On the up hill
HRC
The average price of 3.0mm HRC in major Chinese cities posted at CNY 3680 per tonne up by CNY 21 per tonne from that of last Thursday. There were four steel mills hiked their ex-work price this week, Shanghai based Baosteel hiked the price by CNY 400 per tonne.
SAT disclosed on June 8th to hike the export rebate for HRC, among other steel products, to 9%. The news has somehow boosted the market sentiment and support the price increase. Insiders said that the rebate increase would encourage the export and traders are somehow more active in the market. However, the underlying recover of export sill much depends on international demand and price advantage
HRC
4.75mm
Common
Location CNY USD %
Shanghai 30 4 0.8%
Hangzhou 30 4 0.8%
Nanjing 20 3 0.6%
Jinan 100 15 2.7%
Hefei 70 10 1.9%
Fuzhou 0 0 0.0%
Nanchang 20 3 0.5%
Guangzhou 40 6 1.1%
Changsha 50 7 1.4%
Wuhan 30 4 0.8%
Zhengzhou 100 15 2.7%
Beijing 100 15 2.7%
Tianjin 120 18 3.3%
Shijiazhuang 100 15 2.7%
Taiyuan 50 7 1.3%
Shenyang 60 9 1.7%
Harbin 80 12 2.2%
Chongqing 20 3 0.5%
Chengdu 50 7 1.4%
Kunming 20 3 0.5%
Xian 50 7 1.4%
Lanzhou 130 19 3.5%
Urumchi 0 0 0.0%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
Plates
Plate prices surged so much backed by demand but the low market inventories and limited deliveries from mills. In recent weeks as the domestic ship plate market has improved, most mills have begun focusing more on ship plate production than commercial plate.
20mm
Common
Location CNY USD %
Shanghai 80 12 2.3%
Hangzhou 60 9 1.7%
Nanjing 50 7 1.4%
Jinan 100 15 2.8%
Hefei 50 7 1.4%
Fuzhou 80 12 2.2%
Nanchang 40 6 1.1%
Guangzhou 30 4 0.8%
Changsha 20 3 0.6%
Wuhan 100 15 2.8%
Zhengzhou 150 22 4.2%
Beijing 200 29 5.7%
Tianjin 200 29 5.7%
Taiyuan 40 6 1.2%
Shenyang 150 22 4.2%
Harbin 100 15 2.8%
Chongqing 50 7 1.4%
Chengdu 60 9 1.7%
Kunming 30 4 0.8%
Xian 0 0 0.0%
Lanzhou 50 7 1.4%
Urumchi 0 0 0.0%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
CR
1.0mm
Common
Location CNY USD %
Shanghai 80 12 1.7%
Hangzhou 60 9 1.3%
Nanjing 100 15 2.2%
Jinan 200 29 4.4%
Qingdao 250 37 5.5%
Hefei 100 15 2.2%
Fuzhou 100 15 2.1%
Nanchang 50 7 1.1%
Guangzhou 100 15 2.2%
Changsha 100 15 2.2%
Wuhan 50 7 1.1%
Zhengzhou 180 26 3.8%
Beijing 120 18 2.6%
Tianjin 150 22 3.3%
Shijiazhuang 150 22 3.1%
Taiyuan 50 7 1.1%
Shenyang 280 41 5.8%
Harbin 150 22 3.1%
Chongqing 20 3 0.4%
Chengdu 0 0 0.0%
Kunming 50 7 1.1%
Xian 50 7 1.1%
Lanzhou 150 22 3.4%
Urumchi 50 7 1.2%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
HDG
0.5mm
Common
Location CNY USD %
Shanghai 130 19 2.7%
Hangzhou 50 7 1.0%
Beijing 200 29 4.2%
Tianjin 100 15 2.1%
Boxing 180 26 3.8%
Guangzhou 100 15 2.0%
Zhengzhou 300 44 6.3%
Xian 50 7 1.0%
Shenyang 100 15 2.0%
Harbin 250 37 5.1%
Nanchang 100 15 2.0%
Fuzhou 250 37 4.9%
Chongqing 200 29 3.9%
Wuhan 150 22 3.1%
Change is on June 19th 2009 as compared to June 12th 2009
Change is per tonne
The sustainability of this bolstered market sentiments is suspect owing to the following:
Manufacturers are going full hog in production
2) The soaring prices in domestic market have catalysed imports.
The Chinese mills have lost cost competitiveness as the price of input materials like coke and iron ore is unusually high.
With domestic mills badly hit in almost all the countries, trade issues have taken front seat. As a result many countries are contemplating enforcing trade barriers on steel imports, or could do so on import surge. This has scuttled the outlet of Chinese materials.
Exports on the other hand refuse to pick up due to not only better realisation in the domestic market but also sagging demand internationally
C. Chinese Import and Export Scenario
As for import and export, the market saw pick up in activities post hike in export rebate. There were more inquiries this week.
Insiders have mixed opinion varying from slight decrease in prices due to the export rebate adjustment thereby enhancing their competitiveness to pessimism about hike in export in the short run due to lack of demand overseas and increasing protectionism in traditional markets.
Backed by a resurgent domestic market suppliers felt emboldened to maintain the price levels and follow a wait and watch policy as global market show simmering of recovery in Europe and Middle East.
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(Sourced fromwww.steelprices-china.com)
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