By Reuters| 2017-01-17 09:29:13

MANILA (Reuters) – China’s steel exports fell in 2016 from a record in the previous year, dragged down by improved demand at home and Beijing’s resolve to tackle overcapacity, in a relief for steelmakers elsewhere that have been hit by cheap Chinese shipments. China’s exports could slip further this year, analysts and industry officials say, as Beijing strengthens its supply-side reforms and overseas markets fight against being flooded with Chinese products. China’s exports of steel products fell 3.9 percent from the previous month to 7.8 million metric tons in December, customs data showed on Friday. Full-year export volumes dropped to 108.46 million metric tons from a record 112.4 million metric tons in 2015, Reuters calculations showed. "It’s a relief for steel producers globally, especially in Asean,” said Roberto Cola, vice president of the Asean Iron and Steel Council. About a third of China’s steel exports go to member countries of Asean. Trade cases filed by countries from Asia to Europe against Chinese steel products as well as improved domestic demand may have helped limit China’s exports this year, said Mr. Cola. "But I think the big factor was the shutdown of many steel plants due to China’s anti-pollution measures which had curbed volume for export,” he said. China shut at least 45 million metric tons of steel production capacity last year, meeting its target, in a drive to address a glut through 2020. "The supply-side reform created some persistent production disruption so China didn’t produce as much as it would have in an unconstrained market,” said Andrew Driscoll, head of research at CLSA. China this week unleashed its boldest reform plan so far for its bloated steel sector, saying it will eliminate all production of low-quality steel products by the end of June, a move analysts say could dent exports further. Source: Reuters

By The Economic Times| 2017-01-16 10:22:28

NEW DELHI: India has imposed anti-dumping duties on colour-coated or pre-painted flat products of alloy or non-alloy steel imported into the country, a government notification said on last Friday. The government imposed the anti-dumping duty on products imported from China and European nations for a period not exceeding six months, the circular said. The effective duty rate would be the difference between the official rate of $849 per tonne and the landed value of the product, provided the landed value is lesser than $849 per tonne, it said. Source: The Economic Times

By Reuters| 2017-01-16 00:00:00

TOKYO, Jan 16 (Reuters) - Tokyo Steel Manufacturing Co Ltd <5423.T>, Japan's top electric-arc furnace steelmaker, will raise product prices for a third straight month, citing firmer international prices and domestic building projects getting under way for the 2020 Olympics. Tokyo Steel, which makes beams and bars used for in the construction industry, said on Monday product prices will climb by about 2-4 percent for February delivery, marking the first time in nearly six years that it has raised prices for three consecutive months. [nL4N1EE1K0] Managing director Kiyoshi Imamura said at a news conference there is room for the company's prices to move even higher later this year. Tokyo Steel's pricing strategy is closely watched by Asian rivals such as South Korea'sPosco <005490.KS> and Hyundai Steel Co <004020.KS>, as well as China'sBaoshan Iron & Steel Co (Baosteel) <600019.SS>. "The steel market has been under pressure due to massive China production and exports in the past two years," Imamura said, "but things look different now as China's demand has recovered while its exports have declined." Among Olympic construction projects under way in Tokyo, Imamura cited the building of the main stadium to host the games, with work on the Olympic village for athletes due to start this month. The latest move would translate to price rises of 1,000-3,000 yen ($8.80-26.30) a tonne, Imamura said. ($1 = 114.0500 yen) (Reporting by Yuka Obayashi; Editing by Kenneth Maxwell) Source: Reuters

By Ravi Ananthanarayanan| 2017-01-13 09:24:32

In December, steel consumption rose by 5.2% over a year ago and by 17.1% over November, according to data collated by the government’s Joint Plant Committee. Photo: Bloomberg If demonetisation has affected steel-consuming sectors such as automobile and construction/real estate, how come steel consumption is rising? In December, steel consumption rose by 5.2% over a year ago and by 17.1% over November, according to data collated by the government’s Joint Plant Committee (JPC). In November too, consumption was up by 3.8%, although it did decline sequentially. Specific factors appear to be behind this increase and the underlying demand for steel remains weak. Consumption data reported by JPC represents sales made by steel producers to buyers such as steel dealers—who then sell to actual consumers—and large companies such as in the automobile or projects sectors. In December, the purchasing teams of large consumers of steel got wind that steel companies will be increasing prices January onwards, said Puneet Paliwal, consultant at research and consultancy firm CRU Group. Higher input costs, especially of coking coal, had led to talk of price increases. Large consumers of steel bought additional quantities in December to build stocks for future use, which explains the sharp increase. In November, the increase although relatively slower, was seen due to dealers stocking up steel while they could use their stock of demonetised currency, according to Vivek Jain, associate director (large corporates) at India Ratings and Research Pvt. Ltd. They have stocked up on additional inventory, to be sold in future months. Firms have announced a hike in flat steel prices in January, as predicted, but maintaining higher prices will be tough. Steel mills have purchased raw materials at high prices, but the market may be unable to absorb higher steel prices, says Paliwal. Underlying demand conditions are weak, due to demonetisation. The export market, too, is not supporting higher realizations and it may get tougher when the Chinese New Year holidays see more exports from China as local activity ebbs. If both dealers and companies have stocked up on inventory and demand is not robust, things may get tougher. The coming months may, therefore, see reported consumption growth under some strain, till the surplus steel already in the market gets absorbed. A quick revival in demand in user sectors could do the trick as well, although that’s an idle hope at this point. Steel producers may, therefore, have to decide between exporting more or cut back on output. Analysts are predicting the latter. Meanwhile, the December quarter results of large steel companies may show a surge in sales based on JPC data. Tata Steel Ltd’s December quarter saleable steel output rose by 25.8% over a year ago while sales rose by 27.5%, partly due to volumes from its new plant. JSW Steel Ltd reported a 43% year-on-year increase in crude steel output. While the headline financials should look good, based on these numbers, investors should pay more attention to what managers say about real steel demand conditions in the domestic market. Source: LiveMint.com

By Annie Gilroy| 2017-01-13 00:00:00

Chinese steel prices Since China is the world’s largest steel producer and exporter, it’s important for investors to keep track of Chinese steel prices. The most dominant factors driving iron ore’s 2016 price rally included higher steel production and rising steel prices in China (FXI). Higher prices In December 2016, steel prices in China hit 3,557 Chinese yuan per ton, their highest level in 2.5 years. While steel prices in China rose almost 60% in 2016, they started falling in the last few days of 2016 due to falling futures. There have been reports that production restrictions in northern China may have been lifted. This kind of development could increase supply, putting pressure on prices. Concerns regarding a slowdown in demand growth in the market also pressured prices. What’s driving steel prices? To make the domestic steel sector more efficient, a significant amount of capacity was cut in 2016. The stimulus provided by the government also helped steel mills to restock their inventories, which acted as a major driver of rising prices. The shortage of another steelmaking raw material, coking coal, also led to higher prices. While inventory restocking provides temporary relief to steel prices, metals prices (DBC) depend on underlying real demand and supply. On the supply side, Chinese steel production rose 3.6% year-over-year. A demand-supply mismatch could hamper sustained recovery in Chinese steel prices. Impact on mining companies Chinese steel prices and seaborne iron ore prices move in tandem. Iron ore prices have been strong in 2016 despite a supply overhang. Many analysts believe that we could see some moderation in iron ore prices in 2017, and any fall in iron ore prices could also put pressure on Chinese steel prices. China’s cutbacks in domestic steel production could result in falling iron ore imports from seaborne suppliers such as Rio Tinto (RIO), BHP Billiton (BHP) (BBL), Vale (VALE), and Cliffs Natural Resources (CLF). Source: Market Realist  

By Manolo Serapio Jr| 2017-01-12 09:00:48

Beijing's sustained efforts to tackle excess steel production capacity has sent steel and iron ore futures in China upwards for a third day in a row to hit their strongest mark in three weeks. The drive since last year by the world's largest steel producer to reduce surplus capacity helped Chinese steel prices snap a six-year losing streak, and they began 2017 higher as well. Iron ore meanwhile has piggy-backed on steel's rally, although traders say plentiful stocks of the raw material at China's ports suggest lean demand. Apart from shutting outdated capacities, China will also eliminate by June 30 all production of substandard rebar steel, according to local Chinese media reports. "In other words, if local government officials don't abide by this measure, they will risk losing their jobs," Lau said in a note. The most-active rebar on the Shanghai Futures Exchange was up 2.2 percent at 3,164 yuan ($457) a tonne by the midday break, after touching a three-week peak of 3,202 yuan. Annual production of substandard rebar, or construction steel, in China was around 40-50 million tonnes. The closure of these producers implies that China's annual rebar output will be reduced by at least 20 percent, said Lau. China produced about 200 million tonnes of rebar in 2016. Iron ore on the Dalian Commodity Exchange was last up 2.8 percent at 596.50 yuan a tonne. It earlier touched 602.50 yuan, the highest since Dec. 16. Iron ore is "not driven by fundamentals," said a Shanghai-based trader, citing ample supply of the raw material at ports. Stocks of imported iron ore at major Chinese ports reached 116.7 million tonnes on January 6, according to SteelHome consultancy, the most since SteelHome began tracking it in 2004. Iron ore for delivery to China's Qingdao port climbed 2.2 percent to $79.43 a tonne on Tuesday, according to Metal Bulletin. Hebei, which accounts for about a quarter of China's total steel output, announced plans on Sunday to slash 31.86 million tonnes of steel and ironmaking capacity this year. That would be more than double the 14.62 million tonnes of steel capacity that Hebei cut last year. "While smog concerns still threaten to lower steel output, a drive to cut outdated steel capacity is also pressuring production lower," Commonwealth Bank of Australia analyst Vivek Dhar said in a note. Source:Reuters

By Stuart Burns| 2017-01-10 09:10:24

All good things come to an end and so, according to CRU, it is with Chinese steel producers, at least as far as export prices are concerned. A recent article by the firm suggests rising steel prices have hit demand from overseas clients. Rising trade barriers have had an impact but more significantly for sales into the Asian market, CRU reports Chinese exporters are also facing increasing competition from keenly priced exports from Indian, Russian and Korean competitors, eroding Chinese exporters’ market share. As the graph shows, export premiums were strong in the Fall but collapsed in late November and early December before recovering as the year ended, but recent price movements have shown a softening of export prices and a rise in domestic prices suggesting the market is responding to greater competition on exports and an inability, due to input costs, to compete as effectively on exports. Chinese mills have benefited from the fall of the yuan renminbi relative to the U.S. dollar but input costs have risen sharply as the principal input products —iron ore and coking coal are dollar-priced commodities — which have risen strongly in 2016 on the back of robust demand before dollar strength is factored in. As most of China’s steel output is domestically consumed and renminbi-denominated, it is likely to have an inflationary effect on China’s domestic steel prices, both directly by pushing up input costs, and indirectly as mills will hike list prices to defend margins in response to the increase in raw materials costs, CRU argues. This is certainly what we have seen throughout 2016 but just in the last few days’ MetalMiner’s Index has tracked domestic steel prices easing. Whether this is an early sign of a reversal in domestic steel prices or merely a temporary softening due to the holidays or lower winter seasonal demand remains to be seen but is certainly worthy of continued monitoring. Reporting some specific mills’ behavior, CRU states that some mills have voluntarily reduced export capacity allocations simply because domestic prices are offering better margins than exports. China receives considerable global condemnation for the role its steel exports play in suppressing global steel prices and the actions Beijing has taken to allow a controlled weakening of the renminbi, the allegation being that a weaker currency helps exporters. In fact, with the vast bulk of Chinese steel production being consumed domestically, margins have been negatively impacted by the weakening currency as input costs have risen but output prices have been constrained by a competitive domestic marketplace. If export volumes reduce further as a percentage of total production this trend will become more significant and encourage more mills to trim exports in preference to domestic sales. Source: MetalMiner 

By Winni Zhou/Alexandra Harney/Jane| 2017-01-09 09:24:15

Jan 8 China's biggest steelmaking province Hebei plans to slash 31.86 million tonnes of steel and ironmaking capacity for this year, the official Xinhua news agency quoted a provincial official as saying on Sunday. Hebei, a province in the north of the country near the capital Beijing, accounts for nearly a quarter of China's total steel output and has pledged to cut steel capacity by 31.17 million tonnes by 2017 and by 49.13 million tonnes by 2020. Xinhua reported Hebei provincial governor Zhang Qingwei as saying in a government work paper that Hebei is aiming to eliminate 15.62 million tonnes of steel capacity, 16.24 million tonnes of ironmaking capacity by the end of this year. Hebei had cut 14.62 million tonnes of steel capacity by the end of October, achieving 2016's target of 14.22 million tonnes ahead of schedule. Zhang also said four "zombie firms" in Heibei would be shut down this year. He did not specify which firms. "(The) process of reducing all ironmaking and steel production capacity in cities of Langfang, Baoding and Zhangjiakou will be accelerated this year," Zhang was quoted as saying. In addition, there are plans to cut 7.42 million tonnes of coal capacity, 1.1 million tonnes of cement capacity and an additional 5 million weight cases of flat glass in 2017. Tangshan, China's biggest steel producing city, which is in Hebei province, aims to close 8.6 million tonnes of steel capacity in 2017, the local government said on Thursday, part of its efforts to "upgrade" its highly-polluting heavy industrial economy. (Reporting by Winni Zhou and Alexandra Harney. Editing by Jane Merriman) Source: Reuters

By James Regan/Christian Schmolling| 2017-01-09 00:00:00

Australia on last Monday forecast a dramatic decline in the price of iron ore -- its most valuable export commodity -- over the next two years to well below current market prices. The Department of Industry, Innovation and Science forecasts iron ore to average $51.60 a ton this year and $46.70 in 2018, compared with current spot prices of around $80, double the price a year ago. The department predicted a price of $44.10 in 2016 The country's chief forecaster said the price rise is being caused by a temporary lift in Chinese steel production and run ups caused by speculative commodities trading in China that will not last. "The rally reflects a combination of fundamental drivers and speculative trading," the department said in its latest commodities outlook paper, "However, with the likely moderation of these factors over the outlook period, the iron ore price is still forecast to decline." The department also dropped its forecast for exports of iron ore by 2 percent to 832.2 million tons in fiscal 2016-17 from 851 million previously, though this is still a 5.9 percent rise year-on-year. Australia is the world's top supplier of iron ore. December iron ore shipments to China from Australia's Port Hedland terminal hit a record 37.4 million tons in December, boosted as users such as BHP Billiton and Fortescue Metals Group ramped up production. The price of metallurgical coal, one of the best-performing commodities last year, should rise by 59 percent on a contract basis this year to an average $182.20 a ton in 2017, according to the department. Contract prices for long-term supply for the March quarter 2017 were settled between Australian metallurgical coal producers and Japanese steel producers, at $285 a ton. This marked the highest negotiated quarterly contract price in five years. The contract price averaged $114 a ton in 2016. Australia also lifted its average 2017 thermal coal price forecast to $74 a ton from $63 previously, citing China’s supply side reform policies and lower output from Indonesia. Thermal coal averaged $62 a ton in 2016. The forecaster expects Australian crude oil and condensate output to remain steady at around 317,000 barrels per day in fiscal 2016-17. Liquefied natural gas production is forecast to increase to 104.5 billion cubic meters (Bcm) in 2016-17 from 81.2 million Bcm the previous year. (Reporting by James Regan; Editing by Christian Schmollinger) Source: Reuters

By EconomicCalendar| 2017-01-07 08:47:59

Chinese steel prices started the new year with a positive twist, although some Chinese folk would hardly call it positive, as gains were brought about by adverse weather conditions in the country’s Northern provinces. Investors are expecting a slight deficit of steel goods following the Chinese government’s moves to curb steel production in regions with a hampered ecological situation. Heavy smog has covered Northern China this weekend and will continue to make life harder for the locals until Thursday, according to weather reports. Traditionally, during such weather calamities China is curbing steel output, as well as halting cement production and construction works. The most active May rebar contract at the Shanghai Exchange gained 0.6% on the day to 2,927 yuan or about $420.87 per ton. Iron ore price at the Dalian Commodity Exchange rose 0.2% to 555,5 yuan per ton. While China is endorsing steel production cuts to ease the blows dealt to its ecology combined with decreased demand from the US following the introduction of higher tariffs on Chinese-origin steel, Vietnam is reaping the benefits, as lower Chinese imports must be substituted from elsewhere. According to the American Iron and Steel Institute (AISI), US steel import from Vietnam rose 419.6% in January-November 2016 over the 2015 figure to 903,000 tons. Vietnam outpaced China, Taiwan and Germany, and is now holding third place among top steel exporters to the US following South Korea and Turkey. However, overall imports of steel and steel products to the US fell by 16.5% and 17.3% year-over-year respectively. The trend is likely to continue in 2017, considering Donald Trump’s domestic economic expansion policy. US steel output is already forecast to expand 4.4% in 2017. Source: EconomicCalendar