Chinese steel demand, both in the spot market and futures market, lowered amid a drop in temperature in most regions. The ferrous futures market reported declined for a third successive day. Prices of spot iron ore with 62pc iron content were close to $160/mt cfr China on Wednesday, and are expected to reach $155/mt cfr China in the coming days on easing supply.
Prices for Q235 150mm square billets were unchanged at CNY3,730/mt ex-works Tangshan, including the 13pc VAT from a day prior.
Billet prices dropped by CNY120/mt ($18/mt) from the late last week. HRC export offers fell by over $10/mt on the back of the weak futures market. Rebar prices were at CNY4,500/mt ex-works, down CNY30/mt on Wednesday.
China has issued an orange alert for a cold wave, with temperatures in the central and eastern regions of the country expected to drop to sub-zero levels. The Chinese industry ministry has urged steelmakers to produce less crude steel in 2021 amid the government’s carbon neutrality scheme.
China will set up a new steel industry strategy with tighter control of steel output. The is a possibility of demand for iron ore declining as the country’s steelmakers focus on mergers. Iron ore prices in 2021 are less likely to rise, unlike in 2020.
According to their 14th five-year plan for 2021-2025, China will focus on building a stronger and more resilient economy by stabilizing and upgrading its manufacturing, enhancing the self-reliance in the value chain of various industrial sectors, growing the competitiveness of enterprises, and building new information technology infrastructure and environment, said Ministry of Industry and Information Technology (MIIT) on December 29.