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Summary:

Monthly Report on China Construction Steel Market for October 2010

China construction steel market went through correction in a narrow range in October 2010. On one hand, global commodity price surged up and steel mills face rising operating cost on high raw material price, which hence bolster up construction steel price. On the other hand, the nation launched strict control policy on real estate sector and the Central Bank hiked interest rate for the first time within 34 months, a move showing the government’s determination on inflation control. Construction steel price lacked momentum to rise as the number of transactions remained low.

I Review on October market

I.1 Construction steel production was on steady increase, exports rebounded over a month earlier and apparent consumption growth slowed down

I.1.1 Daily output of rebar and bars posted a monthly increase while that of wire rod fell down

I.1.2 Construction steel exports rebounded in September

I.1.3 Apparent consumption increased steadily

I.2 FAI and real estate investment growth declined stably

I.3 Construction steel inventory fluctuated slightly

I.4 China money supply remained abundant

II Outlook on November market

II.1 FAI and real estate investment continued falling and construction steel demand will weaken entering off-season

II.2 China’s efforts on emission cut will continue, which will hence restrict construction steel production growth

II.3 Central Bank is tightening monetary policy but fluent liquidity will continue

II.4 China raw material market rises on the whole and operating cost of steel mills further increase

II.5 Steel mills’ ex-works prices are close to market price

Table 1 Spot price of China wire rod/ rebar in October 2010

Table 2 October ex-works prices in China’s leading steel mills

Graph 1 Q235 6.5mm high speed wire rod price in October 2010

Graph 2 HRB335 20mm rebar price in October 2010

Graph 3 Monthly output and growth of construction steel in 2009-2010

Graph 4 Accumulative output and growth of construction steel in 2009-2010

Graph 5 Daily output of construction steel in 2009-2010

Graph 6 Construction steel import in 2009-2010

Graph 7 Construction steel export in 2009-2010

Graph 8 Semis import and export in 2009-2010

Graph 9 Accumulative apparent consumption of construction steel in 2009-2010

Graph 10 Monthly apparent consumption of construction steel in 2009-2010

Graph 11 China’s Urban Fixed Assets Investment in 2009-2010

Graph 12 Real estate investment in 2009-2010

Graph 13 China construction steel inventory in 2009-2010

Graph 14 China money supply growth in 2009-2010

Monthly Report on China Medium Plate Market for October 2010

Chinese medium plate price witnessed fluctuation in October, showing a slight decrease compared to last month. The output growth recovered. Output by major medium plate mills in East China declined under the influence of strengthened execution of conserving energy and reducing emissions, while output by mills in North China increased. Monthly exports in September increased significantly compared to last month, but still at a low level. Middle and large-sized mills received scanty orders from the outside of China. The demand from ship building and machinery sectors was released periodically. Slab price kept firm, restraining the proportion of capacity release for re-rollers in East China. Monthly production of the newly-established Jinan Steel and Pingxiang Steel is approaching the target. The proportion of capacity release at Echeng Steel and Laiwu Steel increased stably month on month. It is forecasted that Chinese medium plate price in November will climb up concussively.

I Chinese medium plate price remained fluctuating in October

I.1 Momentums causing price vibration in China medium plate market

II Analysis on China medium plate market in November

II.1 China daily medium plate production increased in September

II.2 Analysis on China medium plate import & export 

II.2.1 Medium plate exports increased slightly in September

II.2.2 China medium plate supply pressure increased slightly in September

II.3 Downstream sectors 

II.4 Korean Demand Increased, while later export prospect is far from being satisfactory

II.5 Price policies of medium plate manufacturers in October

Table 1 Medium plate price in major Chinese markets in October

Table 2 China medium plate production during January- September, 2010

Table 3 China medium plate and steckle mill production during Jan.– Sep. 2010

Table 4 Summary: Steel mills’ ex-works price adjustment in October 2010

Table 5 Shipbuilding plate ex-works price adjustment in October

Graph 1 SteelHome China Steel Average Price during Jan.4,2009-Oct.29, 2010

Graph 2 SteelHome China Steel Average Price during Jan.4,2009-Oct.29, 2010

Graph 3 China Accumulative plate production in 2009-2010

Graph 4 China plate production by month in 2009-2010

Graph 5 China plate imp & Expo in 2009-2010

Graph 6 Accumulative apparent consumption of China plate in 2009-2010

Monthly Report on China Iron Ore Market for October 2010

China iron ore market jumped up entirely in October, of which iron concentrates price in northern China stabilized in mid and late of October after a significant rise at early of this month, and that in southern China picked up consecutively from mid and late October.

Owing to centralized purchasing from Chinese purchsers at the end of September, import price of Indian fines (Fe content of 63.5 percent) climbed up to US$ 158-160 per tonne at the early of October (CIF), up US$ 10 per tonne compared with the end of September, and then, domestic purchasers entered into wait-and-see attitude.

Boosted by large-and-medium steel mills’ winter reserves, iron ore procurement expands to some extent in November, however, affected by power consumption restriction, it is estimated that iron concentrates procurement from small-and-medium steel makers may drop somewhat.

I China iron ore price picked up overall in October 2010

II Analysis on China iron ore market in November 2010

II.1 China available iron ore supply is likely to fall in November

II.2 Price of imported ore fluctuate upwardly

II.3 Ocean freight is likely to fluctuate upwardly in November 2010

II.4 Iron ore inventory at ports slid mildly

II. 5 China steel price swung slightly in October

II.6 Indian iron ore export to step down in the long run

II.7 Part of domestic steel makers expand purchasing for winter reserve

Table 1 China Iron Ore Price in Dec.2009-Oct.2010

Table 2 Steel Price Changes at Domestic Market

Graph 1 China iron ore in 2009-Oct.2010

Graph 2 China iron ore output & import in 2009-Sep.2010

Graph 3 Price contrast between domestic and import in 2009-Oct.2010

Graph 4 International Ocean freight in Jan.-Oct. 2010

Graph 5 China iron ore import & inventory in 2009-Sep.2010

Monthly Report on China Scrap Market for October 2010

China’s steel scrap market volatized slightly in October. Steelmakers, hit by overwhelming energy-saving policies, were inactive in buying raw materials, and scrap price was lacking in driver. The situation will change in November when part steel mills finish the maintenance and tax policy has been adjusted. We expect a rally in scrap demand.

Meanwhile, Chinese steel mills and scrap traders will continue buying overseas resources so as to offset the country's scrap shortage. SteelHome anticipate that China 's scrap market price will spiral up and scrap imports will keep high in November.

I Review on China scrap market in October 2010

I. 1 Chinese scrap price vibrated

I.2 Crude steel output declined; scrap trades performed plain

I.3 Steelworks' scrap inventories & purchase price

I.4 International scrap price ebbed

II Outlook on China scrap market in November 2010

II.1 Scrap resources in China to remain tight

II.2 Scrap imports to perch high

11.3 Chinese scrap demand to warm up

II.4 International scrap price to rally

II.5 The prices of related products to keep stable

Table 1 6 -10mm Scrap purchase price adjustment in October

Graph 1 China 6-10mm Scrap in 2009-2010

Graph 2 Scrap VS Rebar prices in East China in 2009-2010

Graph 3 Scrap use & inventory of Chinese steelmakers in 2009-2010

Graph 4 Japan domestic scrap average price in 2009-2010

Graph 5 China scrap import volume and price in 2009-2010

Graph 6 China scrap import price in 2009-2010

Graph 6: China iron/steel ratio curve in 2009-2010