Steel production closes in China despite regional production controls
Record steel margins for flat and long steel products
Higher restocking demand in the week on Chinese docks
The Platts 62% Fe iron ore fines index hit a record high at $ 193.85 / mt dry CFR in northern China, 85 cents above the previous record set in February 2011 of $ 193 / mt , following on from the strength of prices posted in the first quarter. 2021 with high steel production and rising margins in China, increasing the demand for iron ore.
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Global crude steel production totaled 486.9 million tonnes in the first three months of 2021, an increase of 13% from the same period in 2020, according to World Steel. Of that total, China produced 271 million crude steel in the first quarter, up 15.6% year-on-year.
Despite the strict implementation of regional production controls in northern China since March of this year, China’s steel production has continued to strengthen thanks to booming downstream demand.
âThe boom in crude steel production around the world in March turned people’s expectations into reality. First quarter production data proved that the demand for iron ore and steel is strong and steel mills will maximize the production rate where it is allowed now. End users who were reluctant to create positions in March picked up the pace of buying in April, âsaid a Beijing-based Chinese trader.
HRC, rebar margins at record highs
April to May has traditionally been a peak season for steel demand in China, given favorable weather conditions for construction activities. This coincided with a sharp rise in steel prices in the first quarter in Europe and the United States, with COVID-19 vaccination programs contributing to the economic recovery.
According to S&P Global Platts Analytics, Platts MVS China’s domestic steel mill HRC margin hit a record high of $ 177.88 / t on April 26, while rebar margin closed at a high of 138 , $ 75 / t in two years.
“The flat and long steel margins seek to maintain at around 1,000 yuan / t thanks to thriving export markets. Domestic downstream sectors also matched the price increases,” said one. source from a factory based in northern China. “This supports the level of acceptance by factories for the high costs of raw materials.”
Meanwhile, in southern China, an inland-based supply source recorded comparatively lower steel margins, but noted a general tendency among local factories to maximize pig iron production. raw materials and to procure better quality ores with a higher iron content.
The vastly improved liquidity on port transactions during the week also echoed opinions that the recent rise in iron ore prices was due to demand for restocking. The Platts 62% -Fe Iron Ore Inventory Index, or IOPEX East China, was valued at 1,333 Yuan / wmt FOT on April 27, or $ 193.89 / dmt on a parity basis. import.
Iron ore supply was less of a concern in the first quarter of 2021 compared to the same period in 2019 and 2020, with Brazilian miner Vale producing 68 million tonnes in the first quarter, up 14.2% from the previous quarter. first quarter 2020, according to its latest quarterly production report.
Meanwhile, in Australia, above-average wet weather hampered production levels in the first quarter of 2021. Among the major producers, BHP produced 59.8 million tonnes and Rio Tinto produced 76.4 million tonnes iron ore in the first quarter, stable and down 2% respectively compared to the same period last year. .
Correct the price in the first paragraph