Long Products Flat Products News Stainless Steel Scrap Metal Ferro Alloys ASN Vol. 4 Issue 9 May 2021 Australian Steel News STEEL MARKET SUMMARY - May China Rebate Withdrawal To Raise Steel Prices As if steel pricing and supply line chaos wasn´t enough to drive steel buyers and consumers around the bend, China has upped the ante by removing its VAT rebate on 146 exported steel products – effective May 1st. The products from which the rebate of 13% has been removed include: HRC, hot-rolled sheet, plate, rebar, wire rod, colour-coated steel and cold-rolled sheet with 0.5-3.00mm and below 0.5mm thickness. China made no changes to rebates for duties on exported cold-rolled coil and hot-dip galvanised steel. The rebate cut, which was forecast by Australian Steel News, is widely expected to put upward pressure on world steel prices and to alter steel trade flows in the midst of a global boom. The volume of steel enjoying the now-cancelled rebates was more than 44 million metric tonnes in 2019, according to Kallanish Commodities. That´s more than two thirds of total steel exports In a separate announcement, the central government´s Finance Ministry also entirely removed the import duty on pig iron, crude steel and recycled steel (ferrous scrap). “The measures will reduce the cost of importing, expand the import of iron and steel resources and lend downward pressure to domestic crude steel output, guiding the steel industry towards the reduction of overall energy consumption, while promoting the transformation and high-quality development of the steel industry,” the Ministry said. When the rebate removal was announced last week, many commentators rushed to predict steel prices would automatically and immediately rise by 13%. However, that remains to be seen. At least one Beijing-based steel analyst told S&P Global Platts that he expects the rebate cancellation to have little impact on both China´s steel export prices and volume in the near term, saying: “Most of the Chinese mills, when signing export deals recently, had already factored in the possible cancellation.” The recent price hikes by Chinese exporters would seem to support the notion they were expecting the rebate to be removed. However, even with a full 13% increment, Chinese steel exports could remain competitive in a climate where global demand has been recovering and supply has been limited. Additionally, other market players are likely to take this opportunity to raise their own export prices. Turning to scrap prices, our Long Products graph shows the LME steel scrap price for May 3. The next day it jumped by US$45 to $474 as seen in our Scrap Metal Prices graph. The spanner in the works created by China´s export rebate decision came two weeks after the World Steel Association (WSA) released its Short Range Outlook for 2021 and 2022. The WSA forecasts global steel demand will grow by 5.8% in 2021 and by a further 2.7% in 2022 to 1,924.6 million metric tonnes. Specifically, the report says China´s steel demand is expected to grow by 3.0% in 2021 but that it will decelerate to 1.0% in 2022 as the effect of the 2020 stimulus subsides. In the advanced economies, a recovery in demand this year of 8.2% will be followed by 4.2% growth in 2022. However, steel demand in 2022 will still fall short of 2019 levels. The WSA also forecasts global construction will....(Click to continue reading) “Key Indicators, Pricing and News for the Australian Steel Industry”*
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Long Products Flat Products News Stainless Steel Scrap Metal Ferro Alloys
ASNVol. 4Issue 9May 2021
Australian Steel News
STEEL MARKET SUMMARY - May
China Rebate Withdrawal To Raise Steel Prices
As if steel pricing and supply line chaos wasn´t enough to drive steel buyers and
consumers around the bend, China has upped the ante by removing its VAT rebate
on 146 exported steel products – effective May 1st. The products from which the
rebate of 13% has been removed include: HRC, hot-rolled sheet, plate, rebar, wire
rod, colour-coated steel and cold-rolled sheet with 0.5-3.00mm and below 0.5mm
thickness. China made no changes to rebates for duties on exported cold-rolled coil
and hot-dip galvanised steel. The rebate cut, which was forecast by Australian Steel
News, is widely expected to put upward pressure on world steel prices and to alter
steel trade flows in the midst of a global boom. The volume of steel enjoying the
now-cancelled rebates was more than 44 million metric tonnes in 2019, according to
Kallanish Commodities. That´s more than two thirds of total steel exports
In a separate announcement, the central government´s Finance Ministry also
entirely removed the import duty on pig iron, crude steel and recycled steel (ferrous
scrap). “The measures will reduce the cost of importing, expand the import of iron
and steel resources and lend downward pressure to domestic crude steel output,
guiding the steel industry towards the reduction of overall energy consumption,
while promoting the transformation and high-quality development of the steel
industry,” the Ministry said.
When the rebate removal was announced last week, many commentators rushed to
predict steel prices would automatically and immediately rise by 13%. However, that
remains to be seen. At least one Beijing-based steel analyst told S&P Global Platts
that he expects the rebate cancellation to have little impact on both China´s steel
export prices and volume in the near term, saying: “Most of the Chinese mills, when
signing export deals recently, had already factored in the possible cancellation.” The
recent price hikes by Chinese exporters would seem to support the notion they were
expecting the rebate to be removed. However, even with a full 13% increment,
Chinese steel exports could remain competitive in a climate where global demand
has been recovering and supply has been limited. Additionally, other market players
are likely to take this opportunity to raise their own export prices. Turning to scrap
prices, our Long Products graph shows the LME steel scrap price for May 3. The
next day it jumped by US$45 to $474 as seen in our Scrap Metal Prices graph.
The spanner in the works created by China´s export rebate decision came two
weeks after the World Steel Association (WSA) released its Short Range Outlook for
2021 and 2022. The WSA forecasts global steel demand will grow by 5.8% in 2021
and by a further 2.7% in 2022 to 1,924.6 million metric tonnes. Specifically, the
report says China´s steel demand is expected to grow by 3.0% in 2021 but that it
will decelerate to 1.0% in 2022 as the effect of the 2020 stimulus subsides. In the
advanced economies, a recovery in demand this year of 8.2% will be followed by
4.2% growth in 2022. However, steel demand in 2022 will still fall short of 2019
levels. The WSA also forecasts global construction will....(Click to continue reading)
“Key Indicators, Pricing and News for the Australian Steel Industry”*
The Reserve Bank of Australia has kept interest rates on hold and has flagged the possibility of more stimulus ahead.RBA – Monetary Policy Decision
583600
770
869
608 591
702
764
554563
656643 639
532
632 632650 690
372
423
387
471 460429
300
400
500
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700
800
900
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 3rd
Long Products – Construction Steels
Wire Rod
Rebar China
Rebar Turkey
Rebar SE Asia
Scrap Turkey
Building Approvals Trend Up - May 5
Dwellings approved rose 17.4% in March, following at 20.1% rise in February. NSW saw a 26.9% rise and Victoria a 24.7% rise.ABS – Building Approvals, Australia
Australian Construction & Economic Data
New Loans At Record Level – May 4
New loan commitments for housing rose 5.5% in March, seasonally adjusted, to a new record high of $30.2 billion.ABS – Lending Indicators
Private Home Starts Rise – April 14
New private sector house starts rose by 26.6% to a 20-year high of 33,761 dwellings in the December quarter.ABS – Building Activity, Australia
Prices are displayed in USD per tonne. See Key to Prices for full product description.
* The Feedstock Index is the cost of iron ore, coking coal and scrap metal in one tonne of steel made via the BOF process. To see a full explanation of ASN´s Feedstock Index, click here.
Prices are displayed in USD per tonne. See Key to Prices for full product description.
ANTI-DUMPING NEWS
Measures already in place:
ADC - MeasuresUpdates to the public record:
ADC - UpdatesRecent anti-dumping actions:
ADC - Actions
Request a weekly update from theAustralian Government Anti-Dumping
Non-Ferrous Metals PricesPrices are displayed in USD per tonne, except Vanadium in USD/kg. See Key to Prices.
372
423
471
460474
380
475
397
460
442
466
321
447
368
427
401
420
290
340
390
440
490
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 4th
Steel Scrap Turkey East Asia Import CFR
Taiwan Containerized CFR
2667 2638
2874
3072
2830
2982
19662036
2194
2389
2156
2301
1800
2000
2200
2400
2600
2800
3000
3200
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 3rd
Stainless Steel Feedstock Index*- EAF (AUD)
Stainless Steel Feedstock Index*- EAF (USD)
* The Stainless Steel Feedstock Index is the cost of iron ore, chromium and nickel in one tonne of stainless steel created through the EAF process. For a full explanation of ASN´s unique Stainless Steel Feedstock Index, click here.
Prices are displayed in USD per tonne. See Key to Prices.
Stainless Steel Feedstock IndexPrices are in the currency indicated. See Key to Prices.
Top Steel-Producing Companies*(Figures quoted are millions of metric tonnes)
Rank Company HQ 2019
1. ArcelorMittal Luxembourg 97.312. China Baowu China 95.473. Nippon Steel Japan 51.684. HBIS Group China 46.565. POSCO South Korea 43.126. Shagang Group China 41.107. Ansteel Group China 39.208. Jianlong Group China 31.199. Tata Steel India 30.1510. Shougang Group China 29.34