Rebar price hike making Chinese construction firm nervous
Shanghai Securities News reported that rebar prices advance successively steel users begin to worry about the supply. The demand of rebar in spot market has been driven into an unparalleled level by the lately started large infrastructural constructions and the improving operations in real estate sector. And some small steel user worries about the short of rebar supply in Q3 midseason of constructions. Under this situation, some small steel users turn to futures market to ensure the purchasing. As learned the number of registered cargoes gradually increases and the rebar stocks of Shanghai Futures Exchange firstly outnumber 10,000 tonnes this week. Small users tend to deal with future delivery since the minimum tonnage in the delivery is only at 300 tonnes fit for small trades. Prices for the futures contracts in Shanghai Futures Exchange all went up recently that for dominant contracts continued to break down records this week. The survey shows that spot prices for main rebar are traded at CNY 4093 per tonne to CNY 4456 per tonne and the average prices for futures delivery are at CNY 4100 per tonne to CNY 4269 per tonne. To sum up rebar prices are expected to head up both in spot and futures markets. Mr Xiong Zheng GM of Shanghai subsidiary of Soochow Securities said "Rebar prices bubbles up mainly due to the hot downstream demand." Government huge investments have brought in lots of demand of rebar which fears small users that they will be hard to let in rebar in the incoming midseason. Many small traders support the thought of buying future contract, when mills always give priorities to large steel consumers. Mr Wei Bin director of steel department of Shenyin Wanguo Future said "It's feasible for them to absorb products from futures market." If small agents want successful futures delivery there must be cargos in the depot and the depot should not be far from the agents. At present, the total storage capacity of rebar referred to Shanghai Futures Exchange is at 3 million tonnes including 0.54 million tonnes in Shanghai, 1.47 million tonnes in Jiangsu, 0.39 million tonnes in Zhejiang, 0.6 million tonnes in Tianjin. However the registered cargos are a bit few at present. Expert said that it needs more mills and traders to take part in the businesses.
Chinese iron ore importers look beyond traditional suppliers
Combined imports of iron ore from China's main supplying countries . Australia, Brazil and India . dipped slightly in June, Steel Business Briefing learns. According to Chinese customs statistics, imports from these countries amounted to 44.2m tonnes, 79.9% of China's total imports of 55.32m t. In May, iron ore shipments from these countries were 82.7% of the total. During the first half of this year, China imported 121.62m t of Australian iron ore, up by 42.93% from the corresponding period of last year. Imports from Brazil rose by 20.43% to 60.83m t while Indian-origin ore rose by 10.12% to 62.49mt. The next three main iron ore suppliers to China in June were South Africa, Ukraine and Russia and imports from these countries grew by 48.4%, 16.9% and 12.7% respectively over May. During the first half of this year, China's iron ore imports from South Africa, Ukraine and Russia also recorded sharp increases (see table). Chinese buyers are eager to develop new iron ore supply channels, to reduce dependence on the traditional three major supplying countries and strengthen their bargaining power, a Shanghai-based iron ore trader tells SBB. His company is now looking for some iron ore supply from Iran for his customers. "Mills are more flexible now to try iron ore from various sources," he says. However, he also points out iron ore project investments in many countries are facing difficulties. This means China's dependence on the traditional ore supplying countries is unlikely to change in the short term.
China's imports of iron ore million t. (Source: China customs)
Jun 09 May 09 m-o-m Jan-Jun 09 H1 09/08
Australia 23.72 21.71 9.26% 121.62 42.93%
Brazil 12.21 13.6 -10.2% 60.83 20.43%
India 8.29 8.92 -7.06% 62.49 10.12%
South Africa 4.2 2.83 48.41% 16.61 98.74%
Ukraine 1.52 1.3 16.92% 5.61 98.01%
Russia 1.24 1.1 12.73% 5.37 76.77%
China domestic iron ore prices continue to rise
Chinese domestic iron ore prices have continued to increase from June levels, market sources tell Steel Business Briefing. The price of iron ore concentrates grading 66% Fe is prevailing at around RMB 640-650/wet metric tone ($94-95/wmt) in north-eastern China's Liaoning province, on an ex-works basis including 17% VAT. This represents a near 16% climb from mid-June's RMB 550-560/wmt. The price of 66% Fe iron ore concs in eastern China's Anhui province is around RMB 680-690/wmt on the same basis, up from June's RMB 660-670/wmt. Traders say that for some mills to turn to domestic ore now is quite understandable, as high grade imported ores are generally too expensive. Overall demand for ore among the mills is increasing given that China's monthly crude steel output has shown continuous rises since May. A Beijing-based analyst says although domestic ore prices are also rising, the rate of increase is not as sharp as for imported iron ores. The mills are unlikely to stock too much domestic ore under current market conditions because of the uncertainty of the imported iron ore price negotiations. "In the short term, unless imported ore prices collapse suddenly, domestic ore prices will probably continue to rise, supported by strong domestic steel prices," the analyst predicts. CISA statistics suggest China produced about 83.26m t of crude iron ore in June, up from 65.55m t in May. In the first half of this year, China produced about 379.9m t of crude ore, down by 4.8% year-on-year.
Doubt cast on talk of ore price settlement by 1 August
Disagreement has emerged among several Chinese steelmakers over comments attributed to Li Xiaowei president of central Chinese steelmaker Valin Iron & Steel Group and a CISA vice chairman . to the effect that the iron ore price negotiations may be settled by 1 August. Though Li apparently continued to insist that China would not accept the 33% price decrease decided between Rio Tinto and the Japanese mills in late May, his comments nevertheless received wide coverage in the Chinese media and caused a stir in the Chinese market. But steel sources contacted by Steel Business Briefing doubted the talks would be concluded within the ten days that Li indicated. A Baosteel official said he had heard nothing to indicate the negotiations will be completed soon. Indeed, he knew of no schedule set for the talks to reconvene. Nobody at Valin was available for comment. A northern Chinese mill official suggested that the talks had reached an impasse that was unlikely to be broken unless either the miners or mills presented some new proposals. "However, so far there is no evidence showing that either negotiating party is willing to concede ground," he says. The current rising spot iron ore market is also making the negotiations increasingly difficult for the Chinese side. "China should be in no hurry to achieve a price settlement when spot ore prices are reaching record highs. It's better to wait until the market is a bit cooler," a Beijing-based iron ore trader says.
Shanghai Securities News reported that rebar prices advance successively steel users begin to worry about the supply. The demand of rebar in spot market has been driven into an unparalleled level by the lately started large infrastructural constructions and the improving operations in real estate sector. And some small steel user worries about the short of rebar supply in Q3 midseason of constructions. Under this situation, some small steel users turn to futures market to ensure the purchasing. As learned the number of registered cargoes gradually increases and the rebar stocks of Shanghai Futures Exchange firstly outnumber 10,000 tonnes this week. Small users tend to deal with future delivery since the minimum tonnage in the delivery is only at 300 tonnes fit for small trades. Prices for the futures contracts in Shanghai Futures Exchange all went up recently that for dominant contracts continued to break down records this week. The survey shows that spot prices for main rebar are traded at CNY 4093 per tonne to CNY 4456 per tonne and the average prices for futures delivery are at CNY 4100 per tonne to CNY 4269 per tonne. To sum up rebar prices are expected to head up both in spot and futures markets. Mr Xiong Zheng GM of Shanghai subsidiary of Soochow Securities said "Rebar prices bubbles up mainly due to the hot downstream demand." Government huge investments have brought in lots of demand of rebar which fears small users that they will be hard to let in rebar in the incoming midseason. Many small traders support the thought of buying future contract, when mills always give priorities to large steel consumers. Mr Wei Bin director of steel department of Shenyin Wanguo Future said "It's feasible for them to absorb products from futures market." If small agents want successful futures delivery there must be cargos in the depot and the depot should not be far from the agents. At present, the total storage capacity of rebar referred to Shanghai Futures Exchange is at 3 million tonnes including 0.54 million tonnes in Shanghai, 1.47 million tonnes in Jiangsu, 0.39 million tonnes in Zhejiang, 0.6 million tonnes in Tianjin. However the registered cargos are a bit few at present. Expert said that it needs more mills and traders to take part in the businesses.
Chinese iron ore importers look beyond traditional suppliers
Combined imports of iron ore from China's main supplying countries . Australia, Brazil and India . dipped slightly in June, Steel Business Briefing learns. According to Chinese customs statistics, imports from these countries amounted to 44.2m tonnes, 79.9% of China's total imports of 55.32m t. In May, iron ore shipments from these countries were 82.7% of the total. During the first half of this year, China imported 121.62m t of Australian iron ore, up by 42.93% from the corresponding period of last year. Imports from Brazil rose by 20.43% to 60.83m t while Indian-origin ore rose by 10.12% to 62.49mt. The next three main iron ore suppliers to China in June were South Africa, Ukraine and Russia and imports from these countries grew by 48.4%, 16.9% and 12.7% respectively over May. During the first half of this year, China's iron ore imports from South Africa, Ukraine and Russia also recorded sharp increases (see table). Chinese buyers are eager to develop new iron ore supply channels, to reduce dependence on the traditional three major supplying countries and strengthen their bargaining power, a Shanghai-based iron ore trader tells SBB. His company is now looking for some iron ore supply from Iran for his customers. "Mills are more flexible now to try iron ore from various sources," he says. However, he also points out iron ore project investments in many countries are facing difficulties. This means China's dependence on the traditional ore supplying countries is unlikely to change in the short term.
China's imports of iron ore million t. (Source: China customs)
Jun 09 May 09 m-o-m Jan-Jun 09 H1 09/08
Australia 23.72 21.71 9.26% 121.62 42.93%
Brazil 12.21 13.6 -10.2% 60.83 20.43%
India 8.29 8.92 -7.06% 62.49 10.12%
South Africa 4.2 2.83 48.41% 16.61 98.74%
Ukraine 1.52 1.3 16.92% 5.61 98.01%
Russia 1.24 1.1 12.73% 5.37 76.77%
China domestic iron ore prices continue to rise
Chinese domestic iron ore prices have continued to increase from June levels, market sources tell Steel Business Briefing. The price of iron ore concentrates grading 66% Fe is prevailing at around RMB 640-650/wet metric tone ($94-95/wmt) in north-eastern China's Liaoning province, on an ex-works basis including 17% VAT. This represents a near 16% climb from mid-June's RMB 550-560/wmt. The price of 66% Fe iron ore concs in eastern China's Anhui province is around RMB 680-690/wmt on the same basis, up from June's RMB 660-670/wmt. Traders say that for some mills to turn to domestic ore now is quite understandable, as high grade imported ores are generally too expensive. Overall demand for ore among the mills is increasing given that China's monthly crude steel output has shown continuous rises since May. A Beijing-based analyst says although domestic ore prices are also rising, the rate of increase is not as sharp as for imported iron ores. The mills are unlikely to stock too much domestic ore under current market conditions because of the uncertainty of the imported iron ore price negotiations. "In the short term, unless imported ore prices collapse suddenly, domestic ore prices will probably continue to rise, supported by strong domestic steel prices," the analyst predicts. CISA statistics suggest China produced about 83.26m t of crude iron ore in June, up from 65.55m t in May. In the first half of this year, China produced about 379.9m t of crude ore, down by 4.8% year-on-year.
Doubt cast on talk of ore price settlement by 1 August
Disagreement has emerged among several Chinese steelmakers over comments attributed to Li Xiaowei president of central Chinese steelmaker Valin Iron & Steel Group and a CISA vice chairman . to the effect that the iron ore price negotiations may be settled by 1 August. Though Li apparently continued to insist that China would not accept the 33% price decrease decided between Rio Tinto and the Japanese mills in late May, his comments nevertheless received wide coverage in the Chinese media and caused a stir in the Chinese market. But steel sources contacted by Steel Business Briefing doubted the talks would be concluded within the ten days that Li indicated. A Baosteel official said he had heard nothing to indicate the negotiations will be completed soon. Indeed, he knew of no schedule set for the talks to reconvene. Nobody at Valin was available for comment. A northern Chinese mill official suggested that the talks had reached an impasse that was unlikely to be broken unless either the miners or mills presented some new proposals. "However, so far there is no evidence showing that either negotiating party is willing to concede ground," he says. The current rising spot iron ore market is also making the negotiations increasingly difficult for the Chinese side. "China should be in no hurry to achieve a price settlement when spot ore prices are reaching record highs. It's better to wait until the market is a bit cooler," a Beijing-based iron ore trader says.
Malaysian Ringgit Exchange Rate