Along with raw materials, Chinese
rebar and hot rolled coil futures fell slightly on Tuesday, the first trading
day of 2023. Macro expectations however were still playing a positive role in
the market, Kallanish notes.
On the Shanghai Futures Exchange, the
most-traded May 2023 rebar contract closed CNY 42/tonne
lower than 30 December, the previous trading day, at
CNY 4,063/t ($588/t), while the same contract for
HRC lost CNY 44/t to CNY 4,099/t.
The main contract of coking coal and coke
futures closed 2% and 1.6% lower respectively than 30 December, hitting steel
futures sentiment on Tuesday. In spot markets, coke prices also lost CNY 100/t
after four consecutive rises totalling about CNY 400-440/t in recent weeks.
The decrease in coke prices was forced through
by suffering steelmakers, although coking companies are themselves facing
negative profit margins. Steel production is trending lower before the Chinese
New Year so that steel mills want to secure earnings by lowering costs.
The latest purchasing
manufacturers’ index (PMI) data
is weak. The National Bureau of Statistics data
indicates that December manufacturing PMI hit a year-long low of 47. Meanwhile,
PMI in the steel sector ended a two-month decline on a month-on-month basis and
rebounded to 44.3 in December, according to the CFLP Steel Logistics
Professional Committee.