China’s steel prices up 20% on output cuts, festive demand
Thanks to a spate of production cuts, prices of steel products, such the benchmark hot-rolled coils, in the key Chinese market have shot up to $515 a tonne over the past few days. This is an increase of nearly 20% from the 33-month low in mid-Nove...
By Amriteshwar Mathur, ET Bureau |
MUMBAI: Thanks to a spate of production cuts, prices of steel products, such the benchmark hot-rolled coils, in the key Chinese market have shot up to $515 a tonne over the past few days. This is an increase of nearly 20% from the 33-month low in mid-November.
According to data compiled from domestic brokerage reports and industry sources, this jump in Chinese prices is attributed to the cuts in production undertaken by the steel industry over the past two months, coupled with increased seasonal demand ahead of the spring festival.
China���s steel production in November was 35.18 million tonne, a decline of 12.4%, according to data gathered from the International Iron and Steel Institute, a Brussels-based global industry body. China is the world���s largest steel market. Meanwhile, domestic spot HRC prices are currently pegged at $550-600 a tonne, according to industry sources. Hot-rolled coils find applications in end-user sectors like energy pipelines, construction, consumer
durables and the auto industry.
Senior officials at domestic steel companies, like JSW Steel and Essar Steel, said that they were aware of the rise in steel prices in the neighbouring country over the last few weeks. They pointed out that domestic demand for HRC has shown signs of picking up in select segments and that they are evaluating whether the user segment can absorb higher prices going forward.
Revisions in domestic steel prices, if it all, would be made in the first week of January 2009, they added. In other key markets, like the US, spot HRC prices are currently ruling at $575-a-tonne levels. Global spot HRC prices reached a peak of $1,050-$1,100 a tonne at the end of July and the beginning August in the run up to the Olympics in China and fell following sluggish demand from key user industries.
According to data compiled from domestic brokerage reports and industry sources, this jump in Chinese prices is attributed to the cuts in production undertaken by the steel industry over the past two months, coupled with increased seasonal demand ahead of the spring festival.
China���s steel production in November was 35.18 million tonne, a decline of 12.4%, according to data gathered from the International Iron and Steel Institute, a Brussels-based global industry body. China is the world���s largest steel market. Meanwhile, domestic spot HRC prices are currently pegged at $550-600 a tonne, according to industry sources. Hot-rolled coils find applications in end-user sectors like energy pipelines, construction, consumer
durables and the auto industry.
Senior officials at domestic steel companies, like JSW Steel and Essar Steel, said that they were aware of the rise in steel prices in the neighbouring country over the last few weeks. They pointed out that domestic demand for HRC has shown signs of picking up in select segments and that they are evaluating whether the user segment can absorb higher prices going forward.
Revisions in domestic steel prices, if it all, would be made in the first week of January 2009, they added. In other key markets, like the US, spot HRC prices are currently ruling at $575-a-tonne levels. Global spot HRC prices reached a peak of $1,050-$1,100 a tonne at the end of July and the beginning August in the run up to the Olympics in China and fell following sluggish demand from key user industries.
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