CRU: Strength in China as Market Activities Resume After Holiday

By CRU Analyst Anh Nghiem, from CRU’s Steelmaking Raw Materials Monitor

Optimism from the steel market led to good buying interest of iron ore from Chinese steel mills last week. There was also post-holidays restocking demand as iron ore inventory at Chinese steel mills fell by 13% w/w last week. However, there was an announcement on Monday that environmental restrictions in Tangshan would start earlier this year and buying interest weakened as a result.

Iron ore supply remains good from Australia and Brazil. Port Hedland shipments were reported at 9.6 Mt last week. Even though it was below the 10 Mt/w mark, it is considered a good level for the start of a quarter. Iron ore exports from Brazil jumped by 21% in September to a total of 37.9 Mt. CRU has assessed the weekly 62% Fe fines price at $124.0 /t, an increase by $4.5 /t w/w.

Coking Coal

Chinese import restrictions pushed coal prices lower. According to market sources, several state-owned mills in China have received verbal instructions from the government to not import Australian coal. On the back of this uncertainty, coking coal prices have been under downward pressure. Demand from India, however, remains firm. Buying interest for Premium Mid Vol HCC was heard at $127 /t, FOB Australia, while offers stood at above $130 /t, FOB Australia. Meanwhile, supply remains stable with Hay Point shipments reported at 2.4 Mt last week, a 0.2 Mt increase w/w. There was also no news on potential disruption caused by weather.

CRU assessed the weekly average price for Premium HCC, FOB Australia, at $133 /t, down $3.3 /t w/w, while Standard HCC, FOB Australia, was assessed at $112 /t, down $1 /t w/w.

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