Monthly Report on China Steel Market for Feb 2009

Summary:

Longs:
China construction steel market in February shifted quickly into downward slope after short period of hike due to shrinking demand, higher inventory and the drop in billet/slab and flats market. Current longs market is confronting with a major problem, that is, steel inventory in marketplace mounted significantly and even hit record high as demand recovers slowly and steel mills sustain normal production.
The adverse factors for steel market is high inventory and output, and dull real estate industry, but there are also favorable factors, such as traditional hot consumption season of March, steel demand may increase, and fluent cash flow. SteelHome website predicts that the downfall in China construction steel market may halt in March, but the overall market is still on the swing.
I Brief analysis on February construction steel market
II Outlook for March construction steel market
1 The output will keep high
2 Construction steel demand may magnify, but the prevailing gloomy property industry may dampen its consumption
3 Global longs price slumped, which made it harder for China steel to be shipped abroad
4 Loosened money policy and fluent cash supply
5 Construction steel inventory remain high in marketplace
6 Ex-works price was cut back after short period rise
7 Limited rooms for further drop of raw material price
Graphs and Tables: Q235 6.5mm wire rod price trend in February 2009
HRB335 20mm rebar price trend in February 2009
China wire rod/rebar market price change in February
Money Supply in China during 2007-2009
Construction Steel Inventory in Marketplace during 2007-2009
Ex-works Price by Major Steel Mills

Stainless Steel
300 and 200 series stainless steel price slipped continuously at China key markets in the second month of 2009, while 400 series price maintained stable with downtrend.
Despite that China stainless steel plate/strip supply increased significantly in February compared with prior month, downstream demand showed no hint of obvious improvement. Nickel futures price fluctuated unsteadily and stainless steel inventory substantially increased, which exerted much pressure on China stainless steel market. As some domestic manufacturers slash projected production, stainless coil/sheet supply will post monthly decrease in March, therefore, market demand is likely to recover gradually. China stainless steel price drop is predicted to slow down in March.
I China stainless plate/strip price continued dipping in February
II China stainless steel market status in March, 2009
1 Supply and demand
1) Major manufacturers post monthly decrease in total output of stainless plate/strip
2) China stainless plate/strip exports face great pressure
3) Stainless steel demand unlikely to recover visibly in the short term   
2 Analysis on stainless steel raw material
1) LME nickel futures price headed down unsteadily in February
2) High carbon ferrochrome price moved stable on the whole
3 Flexible Steel Price Policies in Steel Mills
4 Continuous hike in China stainless steel inventory
Graphs and Tables: Stainless Steel Price Index Since 2007
SS Plate/strip Price Alteration at Key Markets During February, 2009
SS Plate/strip (width≥ 600mm) Import and Export Status in January, 2009
CR Stainless Sheet Import and Export from 2007
HR SS Medium Wide Strip Import/Export since 2007
LME Three Month Nickel Price and Inventory Comparison since 2007
Stainless Steel Inventory in Wuxi Market since 2007

Iron Ore
Affected by massive steel price drop, China iron ore market in February fluctuated with downward trend. Most steel mills cut the purchasing price of iron ore by 30-50 yuan per ton. Northern steel mills that purchased iron ore at high cost from domestic market basically stopped procuring at home and resorted to imports. With regards to imported ore, spot ore at ports went down to some degree after slight increase in early and mid February. Due to decreasing demand from China, price of 63.5 percent of Indian ore fell to 630-650 yuan per ton.
First, China iron ore market moved down as a whole
Second, Analysis on Iron Ore Market in March
Newly arrival of iron ore at home market is likely to move up slightly in March
Iron ore price at ports fluctuated by small margin
Ocean Freight picked up
Iron ore inventory at ports kept slipping
China steel price slumped sharply in February
International iron ore negotiation entered into deadlock
Domestic enterprises enhanced efforts to acquire overseas mines
Graphs and Tables: China Iron Ore Price during Jan 2008-Feb 2009
China Iron Ore Price in Apr. 2008-Feb. 2009
Contrast Between China Iron Ore Output and Import in Jan 2008-Jan 2009
Price Contract between Domestic and Imported Ore during 2008-2009
International Ocean Freight during 2008-2009
China Iron Ore Imports and Inventory at Ports during 2008-2009
Steel Price Changes at domestic market (Taking Shanghai market as an example)

Scrap
In February, scrap price in Chinese markets headed up first and then fell into chilled season. After Spring Festival, domestic steelmakers started to replenish their scrap inventory, so scrap market price was uplifted by 200 Yuan per ton, and HMS dealing price in some regions even reached 3100 Yuan per ton. However, because operational rate of steel makers obviously overtops the revival of downstream demand, steel price dived sharply from mid February. In order to relieve production cost, steel mills became inactive in scrap purchasing, causing scrap price to retreat to the level of end 2008.
I Review on China scrap market trend of February 2009
1 Domestic scrap price rose first and then declined in Feb
2 Steelmakers’ scrap inventory & purchasing price adjustment in Feb
International scrap price softened mildly
Asia/Europe/USA
II Outlook on domestic scrap market in March 2009
1 Scrap supply in China not to be improved
2 Scrap imports keep uptrend
3 Domestic scrap demand in lackluster
4 Related products price to decline
Graphs and Tables: China Scrap Import Price in February 2009
China Iron-to-Steel Ratio VS Scrap Price in 2008-2009

Publish Date: Feb 2009
Price of soft copy (PDF): USD 500

 
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Disclaimer:
This report was made by Steelhome of China. SteelGuru doesn't guarantee or endorse the correctness or completeness of the contents. SteelGuru does not take any liability or complaints arising out of the same in any way, whatsoever.