Chinese spot steel prices were largely stable on December 27 as weak demand during the seasonal construction activities slowdown offset the impact of heavy smog on steelmaking in northern China.

 

Prices of square billet in Tangshan city stood largely unchanged at 3,680 yuan/t, ex-plant with VAT, according to market sources.

 

For finished steel, the rebar (20mm, HRB400) prices averaged 4,072 yuan/t in 31 major cities nationwide on December 27, up 3 yuan/t from a day prior.

 

HRC (4.75mm) prices averaged 4,108 yuan/t in 24 major cities on the same day, down 4 yuan/t from the previous day. CRC shed 1 yuan/t to 4,769 yuan/t. Plate (20mm) prices inched up 1 yuan/t to 4,116 yuan/t.

 

Trading activity remained subdued as downstream customers had limited purchasing needs except for immediate requirements. Both end users and traders adopted a cautious attitude towards procurement, especially when there is a lack of market dynamics. Some traders suspended buying and relied on existing stocks to maintain cash flows at the end of the year.

 

Top steelmaking Tangshan and other northern cities are expected to experience some of the worst air pollution this winter in December 28-30, forcing local governments to initiate emergency response. Steel mills in these areas may prolong maintenance to curb emissions, clouding the outlook for steel production and raw material prices in the near term.

 

Analysts said steel prices are likely to move in a narrow range over the near future amid balanced supply and demand dynamics. Seasonal weakness in construction also limited the upside potential.

 

Prices of coke, one of the key ingredients for steelmaking, were temporarily stable. Some coking plants have been running at low capacity due to worsened profitability. Impacted by declined profit margins and persistently melt iron production decline in the steel industry, coke producers were worried whether the fourth coke price hike could be materialized.

 

On December 27, Quasi Grade I coke traded at Rizhao port was assessed by Sxcoal at 2,430 yuan/t FOB with VAT.