On September 6th, the latest weekly analysis report from the renowned Nisshin Shinkansen spot trading platform revealed mixed trends in China’s steel raw material markets. This week, domestic prices for billet, scrap, and imported iron ore saw a slight decline, while coal and coke continued to show upward momentum. Domestic iron ore prices remained relatively stable, but the price of imported iron ore dipped slightly.
As of this Friday, the purchase price of 66% Fe fine powder at Hebei’s Tangshan Steel Plant stayed around 1,070 yuan/ton. Meanwhile, steel mills in the Tangshan area reported an increase in their purchases, reaching 6.15 million tons, while domestic mines reduced their buying volume by 100,000 tons to 400,000 tons. In Liaoning Province, the price of 66% Fe fine powder dropped by 10 yuan to 980 yuan/ton.
Turning to raw materials, domestic coke prices experienced a modest rise. The price of secondary metallurgical coke (A: 13.5%) in Shanxi reached approximately 1,140 yuan/ton, while primary metallurgical coke (A: 12.5%) was quoted at 1,260 yuan/ton. In Hebei and Liaoning, the price of primary metallurgical coke climbed to between 1,410 and 1,430 yuan/ton, up by 30 yuan per ton. Leading steel mills in Tangshan maintained a coke inventory of 550,000 tons.
The coal market also showed broad-based gains this week. Shanxi Coking Coal Group increased the price of main coking coal by 20 yuan, with prices in Tunlan reaching 1,080–1,130 yuan/ton (railway). Hebei Kaiyuan Group raised its main coking coal price by 5 yuan to 1,045 yuan/ton, while Henan Pingdingshan Coal Coking Group increased its price by 30 yuan to 1,120 yuan/ton. Similarly, Heilongjiang Longco Coal Group lifted its main coking coal price by 30 yuan to 1,300 yuan/ton.
Although steel prices have softened recently, the rising cost of coal and coke is beginning to weigh on producers. This week, the production costs for rebar increased across different steel mill sizes. For mills with over 10 million tons of annual capacity, the cost rose to about 3,661 yuan/ton, up 13 yuan/ton from last week. Medium-sized mills (5–10 million tons) saw their costs increase to 3,569 yuan/ton, up 14 yuan/ton, while smaller mills (under 5 million tons) reported costs of 3,485 yuan/ton, up 14 yuan/ton. The average market price for third-grade rebar was 3,627 yuan/ton, down 26 yuan/ton from the previous weekend, reflecting a gap between current prices and raw material costs. As a result, small and medium-sized steel mills are operating under low-profit conditions.
In terms of inventory, large and medium-sized steel mills have shown less enthusiasm for purchasing imported ores and scrap due to lower steel prices, leading to stable stock levels. However, some mills continue to raise prices to manage tight early-season inventories, keeping stock levels steady.
Starting from August 30th, China will impose a 3% MFN tax rate on lignite imports. Analysts estimate that lignite accounts for about 20% of China’s coal imports, with an average import price of around $52 per ton since 2013. This new tax is expected to add roughly 10 yuan/ton to the cost of coal, potentially limiting the growth of coal imports.
Iron ore shipments from Brazil and Australia increased by 4.94% and 9%, respectively, in August. According to Nisshin Shinkansen, major mining companies like Rio Tinto, BHP Billiton, and Vale have been conducting frequent tenders, most of which are scheduled for mid-September. This suggests that iron ore shipments into China could see a significant rise in October. Additionally, Rio Tinto recently completed its first shipment from newly expanded facilities in Western Australia, signaling an increase in supply and likely putting more pressure on the iron ore market in the coming months.
Despite the traditional “golden September, silver October†season, the steel market has seen growing concerns over overcapacity and liquidity issues after nearly one and a half months of recovery. Price increases have been weak, and the market is gradually entering a period of uncertainty. As a result, steel buyers are becoming more cautious, focusing on maintaining existing stock levels. Large-scale imports of iron ore, billets, and scrap may face minor adjustments. Meanwhile, coal and coke prices remain relatively low but are expected to rise steadily in the short term.
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