Global steel and raw material prices showed varying trends this month (till 25 February), with a range of factors inducing volatile market sentiment.

Market pessimism continued, though there were some favourable developments. Key factors shaping the steel landscape included (1) the Lunar New Year holidays, which led to a trade lull in the Far East and Southeast Asia; (2) the imminent imposition of tariffs on US steel imports; (3) Cyclone Zelia, which impacted port deliveries in Western Australia; and (4) market anticipation regarding the Two Sessions meeting in China, which is expected to see the announcement of further stimulus measures.

Price overview

Hot-rolled coil (HRC) offers fluctuated across regions. Chinese offers edged up by 1% to settle at $473/tonne (t) FOB in February against $468/t in January. Conversely, Indian mills offers were stable m-o-m, while Japan's dipped by 4% to $468/t against $485/t previously.

Black Sea billets recorded a minor 2% drop m-o-m to $432/t compared to $439/t, while Turkish rebars rose by a negligible 0.4% to $563/t from $561/t.

Among the raw materials, iron ore fines (CFR China) and HMS 80:20 (CFR Turkiye) witnessed the highest upticks of 6% and 4% m-o-m, respectively. Iron ore fines stood at $107/t in February compared to $101/t in January, and HMS 80:20 increased to $356/t from $341/t over the same period.

Premium hard coking coal (HCC) from Australia, CFR India, fell by 2% m-o-m to $201/t in February from $205/t.

Factors impacting global steel, raw material prices in Feb'25

Chinese, Indian HRC export offers remain stable: Chinese HRC export offers ended up being largely stable m-o-m in February. Following the inactivity at the start of the month, due to the Lunar New Year holidays, Chinese exporters trimmed offers to the Middle East by $10/t over the month to around $495/t CFR UAE, while those to Vietnam remained range-bound m-o-m at around $485-$490/t CFR Ho Chi Minh City.

Prices were supported by the following factors: (1) increased restocking activity following the Lunar New Year; (2) a demand recovery, with increased procurement by fabricators and construction firms in particular; and (3) favourable market sentiment ahead of the Two Sessions gathering. However, the recovery in demand was somewhat slow paced, which weighed on prices.

Meanwhile, Indian HRC offers also held firm, as mills resumed actively offering material to the Middle East as Chinese exporters stepped away from the market. Some deals were closed during this short window, but afterward, India's offers to these regions remained stagnant, as Chinese material eventually emerged more competitive. Restocking ahead of Ramadan also kept prices firm.

On the other hand, India's offers to the EU dropped by $10-15/t w-o-w to $570-580/t CFR Antwerp, impacted by sluggish trade momentum. Mills export activity in the EU continued to be subdued.

Japan's HRC offers trended down amid aggressive competition, as suppliers reduced their tags to make them level with Chinese prices. Additionally, increased trade protectionism hurt export prospects. For instance, this month, it was announced that South Korea is considering an anti-dumping investigation into hot-rolled steel imports from Japan in addition to China.

Iron ore fines prices rise on supportive global factors: Iron ore fines price increased, supported by the following factors: first, as Chinese steelmakers wrapped up their Lunar New Year celebrations, they gradually resumed production operations, which lifted demand for iron ore; secondly, Zelia hit Western Australia in mid-February, which impacted supply due to disrupted port operations; thirdly, while the market was slightly concerned about Trump's blanket 25% tariffs on US steel imports, the approaching Two Sessions gathering led to an optimistic outlook, with participants expecting stimulus support to raise domestic consumption. Another positive macroeconomic development was Trump hinting at a possible trade deal with China.

Higher scrap tags keep Turkish rebars firm: Turkish rebar prices remained steady, despite sluggish demand, as production costs increased because of higher scrap tags, fuelled by an uptick in US export offers. Positive sentiment in the Chinese market also helped keep prices firm.

Depreciating currency keeps Black Sea billets supported: Russian billet prices were largely range-bound in the Black Sea export market. Major destinations such as Turkiye and Egypt witnessed poor sales, but a depreciating rouble forced suppliers to raise offers to make up for the lower realisations. However, with slackening finished longs sales in Turkiye, there was no incentive for rebar producers to enhance billet procurement.

Squeezed supply pushes up Turkish imported scrap: Turkish scrap prices increased, as import offers trended up amid tightening global supply. Offers from the US rose significantly, following supply disruptions from winter storms and higher collection costs. This pushed up Turkish prices even though mills were not quite happy to shell out the extra amount amid subdued offtake volumes. However, sellers maintained firm price targets.

Australian PHCC dips on bid-offer gaps: Australian PHCC import prices in India suffered a slight dip, with the key factor being bid-offer disparities hindering trades arising from stagnant steel market movements, which suppressed demand. Additionally, Chinese met coke prices witnessed another consecutive round of price cuts amid weak steel mill margins and high inventories, weighing on coking coal tags. However, supply disruptions from seasonal factors such as Cyclone Zelia supported prices.

Outlook

The outlook for the global steel and raw materials landscape in March looks hazy at the moment. China's market dynamics will be shaped by the announcements made at the Two Sessions, which are expected to help counter the impact of the US steel tariffs. The EU is expected to announce the results of its anti-dumping investigation into steel imports from India, and Indian mills are hopeful of a demand recovery subsequently. The outcome of the EU's review of steel safeguard measures is also eagerly awaited.

Meanwhile, Indian market participants are pinning their hopes on the eventual imposition of the safeguard duty on steel imports. Leading steelmakers have also reiterated the need for this buffer amid concerns over increased influx of cheaper material following the implementation of US tariffs.

Source:BigMint