Haihao Group brings you a summary of last week’s raw material market
As a supplier with years of experience in the pipeline system sector, Haihao Group has been closely monitoring changes in the raw material market and sharing insights with clients to deliver more competitive pipeline system products. This article provides you with an overview of the changes in the raw material market from last week, including iron ore, metallurgical coke prices, and changes in ferroalloy situations.
Decline in Imported Iron Ore Prices: Last week witnessed an overall decline in imported iron ore prices, with the international market experiencing a more significant drop than the local port spot prices. The domestic steel industry faced concentrated blast furnace maintenance, leading to a continued decrease in operating rates and a reduction in demand for iron ore. While some steel enterprises have been gradually replenishing stocks, companies with low inventory levels are making limited purchases. Currently, the offshore iron ore prices, when converted, have fallen below the spot prices at iron ore ports. Due to higher costs, businesses are temporarily reluctant to sell at lower prices, leading to a continuous increase in main port inventories. In the short term, with the lower blast furnace operating rates in steel mills and subdued market expectations, iron ore prices may continue to decline. However, a significant fall in iron ore prices is unlikely in the near term, given the continuing demand for replenishing stocks by some steel mills.
Overall Decrease in Domestic Metallurgical Coke Prices: Last week witnessed an overall decrease in domestic metallurgical coke prices. Prices in the East and North China regions dropped by 100 to 110 RMB/ton, while in the Northeast region, some coke enterprises experienced a reduction of 100 to 110 RMB/ton. Monthly priced coke enterprises in the Central-South region maintained stability, while the bi-weekly priced coke enterprises in the Southwest region saw a decrease of 200 RMB/ton. Last week, the total inventory of the coke industry chain increased by 217,000 tons, and 80 steel enterprises saw an increase of 0.8 days in coke available days. With a dual decrease in supply and demand for metallurgical coke, 199 steel enterprises witnessed a decline of 0.62 percentage points in blast furnace operating rates, and 200 independent coke enterprises experienced a 1.04 percentage point decrease in capacity utilization. Steel enterprises still intend to reduce prices, possibly proposing a third round of price cuts in the near term. Meanwhile, troubled by losses, coke enterprises are reluctant to reduce prices. Considering the relatively ample overall supply of metallurgical coke, there is still a possibility of a further decrease in prices. It is expected that domestic metallurgical coke prices will remain relatively stable with a slight downward trend in the near term.
Mixed Performance in the Ferroalloy Market: Last week, various types of ferroalloys showed mixed performances. Silicon iron prices declined by 50 to 100 RMB/ton. The prices of raw materials such as anthracite fines also decreased by 30 RMB/ton. Despite the continued decline in production costs for silicon iron, enterprises in major silicon iron-producing regions, such as Qinghai and Shaanxi, received notices that electricity prices may be raised by around 0.05 RMB per kilowatt-hour in January, leading to a cost increase of 400 RMB/ton. Some silicon iron enterprises plan to reduce production or shift to the production of special silicon iron by the end of the month. It is expected that the silicon iron market will remain relatively stable in the near term. Silicomanganese prices slightly decreased by 50 to 100 RMB/ton. Due to high costs, a manganese ore furnace in Guangxi has not yet started production. Large steel enterprises’ bidding prices fell below expectations, causing a subdued market sentiment. The silicomanganese market is expected to remain relatively stable and weak in the near term.
High carbon ferrochrome prices increased by 50 RMB/ton. The rise in chrome ore prices and the high production costs of high carbon ferrochrome have resulted in profitable operations only for enterprises in Inner Mongolia, while those in the southern regions are operating at a loss. Currently, orders for some high carbon ferrochrome production enterprises are scheduled beyond the Spring Festival, and there is a weak willingness to accept low-priced orders. It is anticipated that the high carbon ferrochrome market will remain relatively stable and show strength in the near term.
The raw material market continues to be volatile, with different commodities exhibiting various trends. Understanding these fluctuations is crucial for industry stakeholders to make informed decisions in this evolving market environment. Haihao Group will continue to share updates on changes in the raw material market, and if you require pipeline system products, please feel free to contact us.