Mysteel Steel Daily Issue 2586 Thursday 6Th July 2017 Long Steel • Flat Steel • Special Steel • Semi Finished Steel • Latest News • Analysis • Data

Mysteel Steel Daily Issue 2586 Thursday 6th July 2017 Long Steel • Flat Steel • Special Steel • Semi Finished Steel • Latest News • Analysis • Data

Contents Mysteel Shanghai Rebar (HRB400 20mm) and HRC (Q235B 4.75mm)

Industry & Market News 2 4500 Chinese Long Steel Prices 4 Rebar HRC Chinese Flat Steel Prices 5 4000 Key Indicators & Analysis 6 3500 Maintenance & Restrictions 7 Capacity & Production 8 3000 Tangshan Billet Indicators 11 2500 Rebar Inventories 12 Wire Rod Inventories 13 2000 HRC Inventories 14 1500 CRC Inventories 15

Plate Inventories 16 1000 About Mysteel 17 500 Copyright Agreement 18

Chinese long products prices firm in response to tighter market fundamentals

Mysteel’s average rebar price for HRB400 20mm grade across 25 major cities inched RMB7/t higher day-on-day to RMB3,847/t, EXW (incl. tax), as mar- Editorial ket fundamentals remained tight and sentiment on the outlook for near-term steel demand was still relatively optimistic. That said, relatively higher-priced Vice President: Amy Ren steel products have resulted in lower transaction volumes while demand +86-21-2609-3646 has also softened due to heavy rains in the south and high temperatures in [email protected] the north of China. In fact, we note that the volume of transactions for construction steel products has fallen markedly to 167,341 tonnes yesterday, Head of Market Intelligence: compared with daily average volumes achieved last week (190,878 tonnes). Atilla Widnell +65-6653-8226 Mysteel calculates that rebar profit margins for some Chinese steel produc- [email protected] ers have climbed above RMB1,000/t, as demand remains surprisingly strong while nationwide inventories have fallen to historical lows. As a result, many Editors: domestic long products producers have been incentivized to raise capacity Olivia Zhang [email protected] utilization rates to benefit from such “juicy” profit margins. While openin- terest declined in the futures market on Tuesday, Mysteel understands that Rebecca Zhu investors holding most of the longs actually increased their positions. There- [email protected] fore, we believe there is more scope for more increases in rebar futures contracts; narrowing the disparity between futures and physical spot prices. Industry & Market News 2

China implements nationwide safety inspec- Mining Group, Liuqiaoyi Mine of Wanbei Coal & tions of metals and mining industry from Power Group and Jinshi Mining of Huaibei Xinguang July to October 2017. Chinese officials will carry Group; with the planned reduction in annual capaci- out a nationwide safety checks on the domestic met- ty estimated to be 4Mt, 1.2Mt, 1.4Mt and 0.45Mt this als and mining industries from July to October 2017, year respectively. At the same time, Anhui province to test whether production, equipment and manage- will accelerate the release of advanced capacity of ment meet legal and safety standards. Furthermore, collieries and those under construction which have small mines and steel producers with poor safety re- been examined and conform to the local govern- cords will be closed. For key industries which have ment’s rules, regulations and safety standards. recorded a high number of work place casualties, the Chinese government will disperse safety inspec- China cuts 42Mt of crude steel capacity in tion teams to carry out level-to-level management. 2017, but excessive supply persists. China re- At the same time, key personnel and safety officials duced crude steel capacity by around 42Mt through in the metals and mining industry will be required the first five months of 2017, as many provinces to pass examinations on knowledge of production tackled the production of substandard steel on safety and management. Mysteel understands the government orders. Moreover, this means that the policies will be implemented in phases with “central- country has now completed 84.8% of the annual ized renovation” in July, deep investigation in August capacity reduction target for 2017. In the process, and September, and field supervision in September Chinese officials have checked over 500 manufac- and October. turing enterprises that produce low-quality steel; with total capacity of 1.19 billion tonnes, according China closes around 120Mt of substandard to the China Iron and Steel Association. While there finished steel capacity by end of June 2017. have been great achievements in reducing capac- China banned around 600 enterprises from produc- ity in the coal and steel industries, a situation of ing substandard steel products by the end of June, structural oversupply is still prominent across many with a total capacity of 120Mt per annum, according provinces. Wang Xianzheng, the president of China to an announcement from the National Development National Coal Association, recently said that there and Reform Commission (NDRC). At present, all has been no fundamental change to excessive coal enterprises of substandard steel products were shut capacity in the country, with supply still very much down. Liu Zhenjiang, the China Iron and Steel In- exceeding demand. In addition, there are still some dustry Association (CISA) party secretary, said that problems to be resolved, such as illegal production just like the elimination of substandard steel prod- increases and employee resettlement. The Chinese ucts, the prevention of substandard steel products Academy of Social Sciences Institute of Industrial was also quite important. After banning the produc- Economics proposed that the country should take tion of substandard steel products, Mysteel under- full advantage of market, law and financial means to stands that steel mills with intermediate frequency/ solve the problem of excessive steel capacity and induction furnaces have almost been completely improve the exit mechanism of excessive capacity. shut down. This may lead the way for more electric Furthermore, the institute stated that preferential arc furnace steel production in the future given the tax policies should be provided to underdeveloped strengths in short tap-to-tap times, lower capital areas where enterprises have huge overcapacity. expenditure, lower emissions, and relatively energy The focus should be on setting and retraining the efficient. unemployed and improving social security.

Anhui province plans to shut down four coal mines and eliminate 7.05Mt capacity in 2017. In order to resolve excess capacity in the Chinese coal industry, provincial and local coal enterprises in Anhui province have announced plans to permanently close four mines in 2017; reducing annual capacity by 7.05Mt. The four enterprises/ mines included are Xinzhuangzi Mine of Huainan Mining Group, Daihe Coal Mine of Huaibei Coal

Global Economics: Central Banks are be- numbers come at a time when the Chinese govern- coming more hawkish. The Fed has been for ment is trying to keep a strong economic growth some time the only hawk amongst Central Bankers. while embarking into a series of measures aiming at Markets have anticipated another 25bp interest rate de-leveraging the economy. It therefore gives more hike in 2017 with the possibility of two more in- room for the PBOC to push ahead with reforms. creases in 2018. As the world economy is continuing However, we believe that as the 19th National Con- its synchronised upswing, the Fed hawkish rhetoric gress of the Communist Party of China nears, the has been joined by the European Central Bank, the monetary authorities will become more prudent, to Bank of Canada and after a surprising reversal, by ensure that there will be sufficient financial stability Bank of England, triggering the question whether we at that time. could see a synchronised tightening. Central Bank- ers are certainly making their rhetoric louder but we The Chinese Yuan has also posted its strongest believe that they will be very prudent in walking the quarterly gain in nine years, rising 1.8% vs the US walk with more tolerance for inflation -which has yet dollar over the past three months. All this points to materialize- and not put the economy at risk. towards a stronger than expected economy in the In the US, Fed officials have been discussing over second part of the year with at worst a mild slow- how the central bank should react to the US econ- down driven by moderating property prices. It is omy’s seemingly conflicting signals from unemploy- difficult to not mention the 20th anniversary of Hong ment and inflation. Kong handover to China, which took place on July 1st 1997. In its speech Chinese President Xi Jinping Joblessness dropped to 4.3% in May, a 16-year low. said that challenges to China’s rule would not be Ms Yellen and some of her colleagues have called tolerated and that the city’s leaders must find new for continued, if slow, tightening because they ex- ways to profit from Chinese economic clout, adding pect labour market gains will eventually trigger high- that they must build political consensus, devise new er wages and overall prices. Last week however, Ms economic drivers and address soaring home prices. Yellen nodded to concerns among some economists Hong Kong has Asia’s largest wealth disparity with that inflation expectations might be declining. ‘We housing prices having increased by nearly 400% don’t get a consistent story,’ she said. In a com- over the past thirteen years while the median wages prehensive speech hold in Sintra, Portugal, ECB’s trailed with a 75% rise. In terms of economic weight, President Draghi said that ‘deflationary forces’ have Hong Kong accounts now for only 3% of total been replaced by ‘reflationary forces’ summarizing China’s economy vs nearly 20% two decades ago, the optimism in the euro-area. Mr Draghi appeared reducing China’s tolerance for any political dissent. also convinced that the Phillips Curve will steepen During Mr Xi’s visit, the Hong Kong stock exchange at some stage but called for patience. He mentioned announced that foreign investors would, from Mon- that external shocks -mostly driven by commodities-, day July 3rd, gain access to China’s US$10tn debt wages upward resistance and a ‘labour market more market through a local bond connect. Mr Xi also contestable’ are causing delays in the transmission oversaw the signing of an agreement to develop from demand growth to inflation. Mr Draghi also said closer economic links between Hong Kong, Macau that patience was still necessary before removing and nine cities in the Guangdong province. the accommodative monetary policy. Nevertheless, Germany’s 10-year bond yield surged from 0.245% to 0.45% also helped by an increase in the German June inflation to 1.5% YoY from 1.4% YoY in May.

China economy: stronger than expected. Weekly Economic Highlights provided by: China’s manufacturing PMI increased in June to Erik Sardain and Gilberto Cardoso 51.7 vs 51.2 in May, beating a consensus forecast Managing Partners of 51, an indication that China manufacturing is Victorem Capital taking full advantage of a stronger global economic www.victoremcapital.net demand. Non-manufacturing PMI also increased The opinions, findings, and conclusions or to 54.9 in June vs 54.5 in May, indicating a buoy- recommendations expressed in this analysis are ant service and construction activity. These positive those of the authors and do not necessarily reflect the views of Mysteel or Shanghai Ganglian.

Benchmark Grade Terms Units Latest Prev. Day D/D % Prev. Week W/W % Prev. Month M/M %

Billet Tangshan Billet Q235 EXW RMB/t 3,320 3,340 -0.6% 3,300 0.6% 3,080 7.8% Jiangsu Billet Q235 EXW RMB/t 3,510 3,510 0.0% 3,400 3.2% 3,310 6.0% Shandong Billet Q235 EXW RMB/t 3,400 3,400 0.0% 3,300 3.0% 3,150 7.9% Tianjin Billet Q235 DDP RMB/t 3,400 3,400 0.0% 3,320 2.4% 3,130 8.6% Shanxi Billet Q235 DDP RMB/t 3,250 3,250 0.0% 3,150 3.2% 3,030 7.3% Rebar Shanghai Rebar HRB400 20mm Spot RMB/t 3,660 3,660 0.0% 3,560 2.8% 3,700 -1.1% Beijing Rebar HRB400 20mm Spot RMB/t 3,680 3,660 0.5% 3,590 2.5% 3,630 1.4% Guangzhou Rebar HRB400 20mm Spot RMB/t 3,950 3,950 0.0% 3,930 0.5% 4,020 -1.7% Tianjin Rebar HRB400 20mm Spot RMB/t 3,670 3,650 0.5% 3,600 1.9% 3,590 2.2% National average Rebar HRB400 20mm Spot RMB/t 3,847 3,840 0.2% 3,777 1.9% 3,832 0.4% Wire Rod Shanghai Wire Rod HPB300 8mm Spot RMB/t 3,750 3,750 0.0% 3,650 2.7% 3,760 -0.3% Beijing Wire Rod HPB300 8mm Spot RMB/t 4,090 4,030 1.5% 3,980 2.8% 3,980 2.8% Guangzhou Wire Rod HPB300 8mm Spot RMB/t 3,870 3,870 0.0% 3,850 0.5% 3,900 -0.8% Tianjin Wire Rod HPB300 8mm Spot RMB/t 3,550 3,550 0.0% 3,470 2.3% 3,390 4.7% National average Wire Rod HPB300 8mm Spot RMB/t 3,823 3,810 0.3% 3,748 2.0% 3,825 -0.1% Coiled Rebar Shanghai Coiled Rebar HRB400(E) 8mm Spot RMB/t 3,710 3,710 0.0% 3,580 3.6% 3,610 2.8% Beijing Coiled Rebar HRB400(E) 8mm Spot RMB/t 3,670 3,630 1.1% 3,550 3.4% 3,550 3.4% Guangzhou Coiled Rebar HRB400(E) 8mm Spot RMB/t 4,120 4,120 0.0% 4,100 0.5% 4,170 -1.2% Tianjin Coiled Rebar HRB400(E) 8mm Spot RMB/t 3,670 3,630 1.1% 3,570 2.8% 3,520 4.3% National average Coiled Rebar HRB400(E) 8mm Spot RMB/t 3,901 3,889 0.3% 3,818 2.2% 3,906 -0.1% H-beam Shanghai H-beam 200*100 Spot RMB/t 3,500 3,490 0.3% 3,430 2.0% 3,320 5.4% Beijing H-beam 200*100 Spot RMB/t 3,410 3,410 0.0% 3,400 0.3% 3,240 5.2% Guanghou H-beam 200*100 Spot RMB/t 3,680 3,680 0.0% 3,580 2.8% 3,310 11.2% Tangshan H-beam 200*100 Spot RMB/t 3,530 3,530 0.0% 3,440 2.6% 3,310 6.6% National average H-beam 200*100 Spot RMB/t 3,601 3,588 0.4% 3,522 2.2% 3,402 5.8% ＃ I-shaped Steel Shanghai I-shaped Steel 25 Spot RMB/t 3,690 3,690 0.0% 3,630 1.7% 3,500 5.4% ＃ Beijing I-shaped Steel 25 Spot RMB/t 3,410 3,410 0.0% 3,390 0.6% 3,270 4.3% ＃ Guangzhou I-shaped Steel 25 Spot RMB/t 4,220 4,220 0.0% 4,130 2.2% 4,070 3.7% ＃ Tianjin I-shaped Steel 25 Spot RMB/t 3,440 3,440 0.0% 3,400 1.2% 3,370 2.1% ＃ Shijiazhuang I-shaped Steel 25 Spot RMB/t 3,550 3,550 0.0% 3,470 2.3% 3,350 6.0% ＃ National average I-shaped Steel 25 Spot RMB/t 3,877 3,873 0.1% 3,797 2.1% 3,699 4.8% Steel Angle Shanghai Steel Angle 50*5 Spot RMB/t 3,780 3,780 0.0% 3,690 2.4% 3,590 5.3% Beijing Steel Angle 50*5 Spot RMB/t 3,450 3,450 0.0% 3,420 0.9% 3,300 4.5% Guangzhou Steel Angle 50*5 Spot RMB/t 4,130 4,130 0.0% 4,040 2.2% 3,950 4.6% Tianjin Steel Angle 50*5 Spot RMB/t 3,510 3,510 0.0% 3,470 1.2% 3,350 4.8% Shijiazhuang Steel Angle 50*5 Spot RMB/t 3,610 3,610 0.0% 3,530 2.3% 3,370 7.1% National average Steel Angle 50*5 Spot RMB/t 3,886 3,880 0.2% 3,815 1.9% 3,717 4.5% ＃ Steel Channel Shanghai Steel Channel 16 Spot RMB/t 3,700 3,700 0.0% 3,640 1.6% 3,520 5.1% ＃ Beijing Steel Channel 16 Spot RMB/t 3,570 3,570 0.0% 3,510 1.7% 3,350 6.6% ＃ Guangzhou Steel Channel 16 Spot RMB/t 4,190 4,190 0.0% 4,100 2.2% 4,020 4.2% ＃ Tianjin Steel Channel 16 Spot RMB/t 3,460 3,460 0.0% 3,420 1.2% 3,350 3.3% ＃ Shijiazhuang Steel Channel 16 Spot RMB/t 3,610 3,610 0.0% 3,530 2.3% 3,370 7.1% ＃ National average Steel Channel 16 Spot RMB/t 3,842 3,837 0.1% 3,764 2.1% 3,656 5.1% Welded Pipe Shanghai Welded Pipe 4* 3. 75 Spot RMB/t 3,970 3,970 0.0% 3,870 2.6% 3,660 8.5% Beijing Welded Pipe 4*3.75 Spot RMB/t 3,800 3,800 0.0% 3,730 1.9% 3,500 8.6% Guangzhou Welded Pipe 4*3.75 Spot RMB/t 4,050 4,050 0.0% 4,000 1.3% 3,740 8.3% Tianjin Welded Pipe 4*3.75 Spot RMB/t 3,750 3,770 -0.5% 3,710 1.1% 3,460 8.4% National average Welded Pipe 4*3.75 Spot RMB/t 3,920 3,915 0.1% 3,825 2.5% 3,661 7.1% Seamless Pipe Shanghai Seamless Pipe 108*4.5 Spot RMB/t 4,400 4,400 0.0% 4,300 2.3% 4,050 8.6% Beijing Seamless Pipe 108*4.5 Spot RMB/t 4,350 4,350 0.0% 4,350 0.0% 4,100 6.1% Guangzhou Seamless Pipe 108*4.5 Spot RMB/t 4,650 4,600 1.1% 4,600 1.1% 4,400 5.7% Tianjin Seamless Pipe 108*4.5 Spot RMB/t 4,350 4,350 0.0% 4,350 0.0% 4,100 6.1% National average Seamless Pipe 108*4.5 Spot RMB/t 4,543 4,536 0.2% 4,487 1.2% 4,297 5.7% Data Updated: 05/07/2017

Benchmark Grade Terms Units Latest Prev. Day D/D % Prev. Week W/W % Prev. Month M/M %

HRC Shanghai HRC 4.75mm Spot RMB/t 3,590 3,560 0.8% 3,520 2.0% 3,140 14.3% Beijing HRC 4.75mm Spot RMB/t 3,590 3,600 -0.3% 3,560 0.8% 3,170 13.2% Guangzhou HRC 4.75mm Spot RMB/t 3,700 3,680 0.5% 3,680 0.5% 3,260 13.5% Tianjin HRC 4.75mm Spot RMB/t 3,600 3,590 0.3% 3,560 1.1% 3,200 12.5% National average HRC 4.75mm Spot RMB/t 3,670 3,660 0.3% 3,592 2.2% 3,311 10.8% CRC Shanghai CRC 1.0mm Spot RMB/t 4,060 4,050 0.2% 3,940 3.0% 3,700 9.7% Beijing CRC 1.0mm Spot RMB/t 4,040 4,000 1.0% 4,000 1.0% 3,660 10.4% Guangzhou CRC 1.0mm Spot RMB/t 4,170 4,150 0.5% 4,030 3.5% 3,780 10.3% Tianjin CRC 1.0mm Spot RMB/t 4,010 3,970 1.0% 3,930 2.0% 3,610 11.1% National average CRC 1.0mm Spot RMB/t 4,150 4,120 0.7% 4,025 3.1% 3,858 7.6% Plate Shanghai plate Common-carbon 20mm Spot RMB/t 3,480 3,470 0.3% 3,390 2.7% 3,300 5.5% Beijing plate Common-carbon 20mm Spot RMB/t 3,520 3,520 0.0% 3,410 3.2% 3,280 7.3% Guangzhou plate Common-carbon 20mm Spot RMB/t 3,580 3,580 0.0% 3,510 2.0% 3,370 6.2% Tianjin plate Common-carbon 20mm Spot RMB/t 3,500 3,500 0.0% 3,380 3.6% 3,270 7.0% National average plate Common-carbon 20mm Spot RMB/t 3,573 3,563 0.3% 3,482 2.6% 3,390 5.4% Shipbuilding Shanghai shipbuilding plate 10mm Spot RMB/t 3,860 3,840 0.5% 3,810 1.3% 3,760 2.7% Plate Guangzhou shipbuilding plate 10mm Spot RMB/t 3,990 3,990 0.0% 3,960 0.8% 3,930 1.5% Wuhan shipbuilding plate 10mm Spot RMB/t 3,810 3,810 0.0% 3,780 0.8% 3,800 0.3% National average shipbuilding plate10mm Spot RMB/t 3,962 3,947 0.4% 3,911 1.3% 3,871 2.4% Strip Shanghai HR strip 2.5mm*232 Spot RMB/t 3,640 3,640 0.0% 3,590 1.4% 3,310 10.0% Guangzhou HR strip 2.5mm*232 Spot RMB/t 3,690 3,690 0.0% 3,660 0.8% 3,360 9.8% Tianjin HR strip 2.5mm*232 Spot RMB/t 3,600 3,600 0.0% 3,480 3.4% 3,280 9.8% Tangshan HR strip 2.5mm*232 Spot RMB/t 3,520 3,520 0.0% 3,500 0.6% 3,317 6.1% National average HR strip 2.5mm*232 Spot RMB/t 3,627 3,619 0.2% 3,558 1.9% 3,317 9.3% GI Shanghai GI 1.0mm Spot RMB/t 4,620 4,610 0.2% 4,560 1.3% 4,410 4.8% Beijing GI 1.0mm Spot RMB/t 4,410 4,410 0.0% 4,320 2.1% 4,330 1.8% Guangzhou GI 1.0mm Spot RMB/t 4,620 4,600 0.4% 4,600 0.4% 4,450 3.8% Tianjin GI 1.0mm Spot RMB/t 4,260 4,260 0.0% 4,200 1.4% 4,210 1.2% Boxing GI 1.0mm Spot RMB/t 4,680 4,680 0.0% 4,580 2.2% 4,410 6.1% National average GI 1.0mm Spot RMB/t 4,473 4,466 0.2% 4,411 1.4% 4,338 3.1% PPGI Shanghai PPGI 1.0mm Spot RMB/t 6,800 6,800 0.0% 6,500 4.6% 6,550 3.8% Beijing PPGI 0.476mm Spot RMB/t 4,900 4,900 0.0% 4,700 4.3% 4,650 5.4% Guangzhou PPGI 0.476mm Spot RMB/t 6,150 6,150 0.0% 6,050 1.7% 6,050 1.7% Tianjin PPGI 0.476mm Spot RMB/t 4,900 4,900 0.0% 4,700 4.3% 4,650 5.4% Boxing PPGI 0.476mm Spot RMB/t 4,620 4,620 0.0% 4,570 1.1% 4,570 1.1% National average PPGI 0.476mm Spot RMB/t 5,384 5,370 0.3% 5,265 2.3% 5,243 2.7% Silicon Steel Shanghai CR non-oriented silicon0.5*600*C steel Spot RMB/t 5,900 5,900 0.0% 5,750 2.6% 5,700 3.5% Guangzhou CR non-oriented silicon0.5*600*C steel Spot RMB/t 6,000 6,000 0.0% 5,850 2.6% 5,650 6.2% Wuhan CR non-oriented silicon steel0.5*600*C Spot RMB/t 5,800 5,800 0.0% 5,650 2.7% 5,350 8.4% Wuxi CR non-oriented silicon steel0.5*600*C Spot RMB/t 5,900 5,900 0.0% 5,750 2.6% 5,700 3.5% Stainless Wuxi stainless steel 201/NO.1 5mm Spot RMB/t 8,200 8,200 0.0% 7,900 3.8% 7,500 9.3% Steel Wuxi stainless steel 304/NO.1 5mm Spot RMB/t 13,850 14,050 -1.4% 13,350 3.7% 13,000 6.5% Wuxi stainless steel 201/2B 1mm Spot RMB/t 8,800 8,900 -1.1% 8,300 6.0% 8,300 6.0% Wuxi stainless steel 304/2B 2mm Spot RMB/t 13,800 13,900 -0.7% 13,100 5.3% 12,800 7.8% Wuxi stainless steel 316L/2B 2mm Spot RMB/t 19,150 19,150 0.0% 18,950 1.1% 18,550 3.2% Wuxi stainless steel 430/2B 2mm Spot RMB/t 9,950 9,950 0.0% 9,900 0.5% 9,500 4.7% Foshan stainless steel 201/NO.1 5mm Spot RMB/t 9,700 9,700 0.0% 9,400 3.2% 9,000 7.8% Foshan stainless steel 304/NO.1 5mm Spot RMB/t 12,900 13,200 -2.3% 12,400 4.0% 11,800 9.3% Foshan stainless steel 201/2B 1mm Spot RMB/t 8,700 8,900 -2.2% 8,400 3.6% 8,000 8.7% Foshan stainless steel 304/2B 2mm Spot RMB/t 13,800 14,100 -2.1% 13,300 3.8% 12,900 7.0% Foshan stainless steel 316L/2B 2mm Spot RMB/t 18,750 18,750 0.0% 18,350 2.2% 18,250 2.7% Foshan stainless steel 430/2B 2mm Spot RMB/t 10,100 10,100 0.0% 10,100 0.0% 8,750 15.4% Data Updated: 05/07/2017

BF Capacity Utilization vs. Mill Profitability (%) Mysteel Hot Metal Production Costs (RMB/t)

100% 90% 2,200 Profitability [RHS] BF Capacity Utilization [LHS] 80% 2,000 85% 1,800 60% 1,600 40% 80% 1,400 20% 1,200 0% 75% 1,000

Chinese blast furnaces increased capacity utilization Mysteel’s proxy for hot metal production costs has to 84.60% on 29th June 2017, from 83.53% on 1st continued to soften in response to relatively lower June, in response to robust steel profit margins. coke; standing at RMB1,840/t on 30th June 2017.

Nationwide Rebar Capacity Utilization (%) Tangshan Billet Inventories (10,000t)

80% 120 75% 100 70% 80 65% 60 60% 40 55% 20 50% 0

Nationwide rebar capacity utilization climbed to 73.3% Robust demand for long products, particularly from H- on Friday 30th June 2017, driven higher by increasing beam and Channels producers, has resulted in Tang- output from northern Chinese mills. shan billet stocks falling to 160kt on 30th June 2017.

Tangshan Billet vs. Production Cost (RMB/t) Blast Furnace Iron Ore Burden (%)

3,500 14% 78%

3,000 77% 13% 2,500 76% 12% 2,000 75% 11% 1,500 74% Pellet [LHS] Sinter [RHS] 1,000 10% 73%

Tangshan mill billet margins stood at RMB723/t on 5th Sinter composition in Chinese blast furnace burdens July, compared with RMB413/t a month earlier, as firm increased to a 4-month high of 75.5%, as mills have demand and low inventories have supported prices. recently scaled back their consumption of lump ore.

China implements nationwide safety inspections of metals and mining industry from July to October 2017

Chinese officials will carry out a nationwide safety checks on the domestic metals and mining industries from July to October 2017, to test whether production, equipment and management meet legal and safety standards. Furthermore, small mines and steel producers with poor safety records will be closed. For key industries which have recorded a high number of work place casualties, the Chinese government will disperse safety inspection teams to carry out level-to-level management. At the same time, key personnel and safety officials in the metals and mining industry will be required to pass examinations on knowledge of production safety and management. Mysteel understands the policies will be implemented in phases with “centralized renovation” in July, deep investigation in August and September, and field supervision in September and October.

Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

Steel Mill BF Utilization Rate % 85.06 84.85 0.2% 83.21 1.9% 85.26 -0.2% Blast Furnace BF Operating Rate % 77.76 77.35 0.5% 75.14 2.6% 79.42 -1.7% Maintenance* BF Maintenance Volume m³ 113,064 114,684 -1.4% 127,064 -11.0% 111,583 1.3% Molten Iron Output Reduced due to BF Maintenance 10,000t/d 32.88 33.51 -1.9% 37.85 -13.1% 30.74 7.0% Reduced Output due to BF Maintenance and Restrictions 10,000t/d 45.61 45.85 -0.5% 52.14 -12.5% 51.31 -11.1% Number of Mills Under BF Maintenance # 78 79 -1.3% 84 -7.1% 69 13.0% Profitable Steel Mills % 83.44 84.05 -0.6% 84.66 -1.2% 48.47 35.0% *Nationwide 163 sample mills blast furnace survey; accounting for 80% of crude steel output in 2012 Hebei BF Operating Rate % 80.95 80.32 0.6% 78.10 2.9% 84.76 -3.8% Blast Furnace BF Maintenance Volume m³ 36,735 37,895 -3.1% 46,805 -21.5% 34,100 7.7% Survey* Molten Iron Output Reduced due to BF Maintenance 10,000t/d 11.38 11.87 -4.1% 14.25 -20.1% 9.97 14.1% Reduced Output due to BF Maintenance and Restrictions 10,000t/d 14.45 14.51 -0.4% 17.36 -16.8% 16.53 -12.6% Number of Mills Under BF Maintenance # 37 38 -2.6% 41 -9.8% 30 23.3% Profitable Steel Mills % 80.82 80.82 0.0% 80.82 0.0% 57.53 23.3% *Provincial 72 sample mills blast furnace survey Blast Furnace Lump Burden Ratio % 11.62 11.65 0.0% 11.85 -0.2% 12.27 -0.7% Iron Burden Pellet Burden Ratio % 12.84 12.87 0.0% 13.02 -0.2% 11.82 1.0% Ratio* Sinter Burden Ratio % 75.54 75.48 0.1% 75.13 0.4% 75.91 -0.4% Molten Iron/Hot Metal Production Cost** RMB/t 1,840 1,848 -0.4% 1,917 -4.0% 1,292 42.4% *Provincial 64 sample mills blast furnace survey, **excl. VAT Data Updated: 30/06/2017

BF Size (m³) Fengnan Fengrun Yutian Guye Kaiping Qianxi Qian’an Luanxian Leting Total

Tangshan 450 4 1 1 - 2 - 10 3 - 21 Blast Furnace 480 ------2 - - 2 Maintenance* 500 - - 1 ------1 520 ------580 1 - - - - - 1 - - 2 600 2 ------2 660 ------680 ------1080 ------1 2 - 3 1280 ------1350 ------1580 ------1780 ------1 1 Quantity # 7 1 2 - 2 - 14 5 1 32 Volume m³ 3,580 450 950 - 900 - 7,120 3,510 1,780 18,290 *Provincial 164 sample mills blast furnace survey Data Updated: 30/06/2017

Chinese court orders Chonggang reorganisation

China’s heavily indebted Chongqing Iron & Steel received a reorganisation order from the Chongqing First Intermediate People’s Court on 3 July, according to Beijing Business Today. On 4 July Chonggang’s listed company confirmed the reorganisation decision, and also notes that it is facing being delisted after record- ing losses over 2015-2016. Chonggang was still losing money in the first quarter of 2017 according to the listed company’s report for the period. The steelmaker posted CNY 594 million ($87.51m) in net losses, based on sales income of CNY 1.655 billon, Kallanish notes. One of Chonggang’s creditors applied through the court for Chonggang to enter restructuring in April after it failed to pay back CNY 4.07 million in loans.

The creditor also claims that Chonggang’s current assets are not enough for them to pay back all debts. According to Chonggang’s 2016 annual financial report its net assets were a negative CNY 107 million. Chonggang is applying to continue normal production during the reorganisation process. The court has nominated Chongqing municipal deputy chief secretary Zhang Zhikui to lead the restructuring alongside a local law firm. Chonggang’s steel production suffered interruptions due to inadequate working capital over 2016 to the first half of 2017, and a reorganisation could further influence its steel production. In the first four months of 2017 Chonggang saw its crude steel output fall by -0.59% year-on-year at 866,400 tonnes. Over 2016 its crude steel output collapsed by -34.4% y-o-y to around 3.59 million tonnes..

Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

Rebar East Operation Rate % 73.20 72.50 0.7% 73.90 -0.7% 83.10 -9.9% Capacity Utilization Rate % 70.40 69.70 0.7% 67.90 2.5% 69.60 0.8% Number of lines # 142.00 142.00 0.0% 142.00 0.0% 142.00 0.0% Number of lines on stream # 104.00 103.00 1.0% 105.00 -1.0% 118.00 -11.9% Output 10000t 151.14 149.68 1.0% 145.86 3.6% 149.34 1.2% Capacity 10000t 214.72 214.72 0.0% 214.72 0.0% 214.72 0.0% North Operation Rate % 95.20 95.20 0.0% 80.60 14.6% 83.90 11.3% Capacity Utilization Rate % 80.30 79.20 1.1% 68.10 12.2% 73.30 7.0% Number of lines # 62.00 62.00 0.0% 62.00 0.0% 62.00 0.0% Number of lines on stream # 59.00 59.00 0.0% 50.00 18.0% 52.00 13.5% Output 10000t 79.97 78.81 1.5% 67.78 18.0% 72.96 9.6% Capacity 10000t 99.53 99.53 0.0% 99.53 0.0% 99.53 0.0% South Operation Rate % 73.30 72.30 1.0% 72.30 1.0% 79.20 -5.9% Capacity Utilization Rate % 70.80 71.40 -0.6% 70.00 0.8% 70.60 0.2% Number of lines # 101.00 101.00 0.0% 101.00 0.0% 101.00 0.0% Number of lines on stream # 74.00 73.00 1.4% 73.00 1.4% 80.00 -7.5% Output 10000t 100.43 101.32 -0.9% 99.36 1.1% 100.19 0.2% Capacity 10000t 141.92 141.92 0.0% 141.92 0.0% 141.92 0.0% Total Operation Rate % 77.70 77.00 0.7% 74.80 2.9% 82.00 -4.3% Capacity Utilization Rate % 72.70 72.30 0.4% 68.60 4.1% 70.70 2.0% Number of lines # 305.00 305.00 0.0% 305.00 0.0% 305.00 0.0% Number of lines on stream # 237.00 235.00 0.9% 228.00 3.9% 250.00 -5.2% Output 10000t 331.54 329.81 0.5% 313.00 5.9% 456.17 -27.3% Capacity 10000t 456.17 456.17 0.0% 456.17 0.0% 456.17 0.0% Data Updated: 30/06/2017

Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

Wire Rod East Operation Rate % 73.20 73.20 0.0% 73.20 0.0% 81.70 -8.5% Capacity Utilization Rate % 64.50 64.30 0.2% 65.00 -0.5% 64.70 -0.2% Number of lines # 71.00 71.00 0.0% 71.00 0.0% 71.00 0.0% Number of lines on stream # 52.00 52.00 0.0% 52.00 0.0% 58.00 -10.3% Output 10000t 64.52 64.31 0.3% 64.98 -0.7% 64.68 -0.2% Capacity 10000t 99.96 99.96 0.0% 99.96 0.0% 99.96 0.0% North Operation Rate % 79.20 79.20 0.0% 75.50 3.7% 69.80 9.4% Capacity Utilization Rate % 68.70 69.00 -0.3% 63.80 4.9% 65.50 3.2% Number of lines # 53.00 53.00 0.0% 53.00 0.0% 53.00 0.0% Number of lines on stream # 42.00 42.00 0.0% 40.00 5.0% 37.00 13.5% Output 10000t 47.09 47.31 -0.5% 43.74 7.7% 44.88 4.9% Capacity 10000t 68.56 68.56 0.0% 68.56 0.0% 77.80 -11.9% South Operation Rate % 71.10 71.10 0.0% 73.30 -2.2% 77.80 -6.7% Capacity Utilization Rate % 59.70 58.70 1.0% 61.50 -1.8% 61.90 -2.2% Number of lines # 45.00 45.00 0.0% 45.00 0.0% 45.00 0.0% Number of lines on stream # 32.00 32.00 0.0% 33.00 -3.0% 35.00 -8.6% Output 10000t 33.36 32.80 1.7% 34.36 -2.9% 34.62 -3.6% Capacity 10000t 55.90 55.90 0.0% 55.90 0.0% 55.90 0.0% Total Operation Rate % 74.60 74.60 0.0% 74.00 0.6% 76.90 -2.3% Capacity Utilization Rate % 64.60 64.40 0.2% 63.80 0.8% 64.20 0.4% Number of lines # 169.00 169.00 0.0% 169.00 0.0% 169.00 0.0% Number of lines on stream # 126.00 126.00 0.0% 125.00 0.8% 130.00 -3.1% Output 10000t 144.97 144.42 0.4% 143.08 1.3% 144.18 0.5% Capacity 10000t 224.42 224.42 0.0% 224.42 0.0% 224.42 0.0% HRC East Operation Rate % 100.00 92.86 7.1% 100.00 0.0% 100.00 0.0% Capacity Utilization Rate % 74.48 72.84 1.6% 72.96 1.5% 77.09 -2.6% Number of lines # 14.00 14.00 0.0% 14.00 0.0% 14.00 0.0% Number of lines on stream # 14.00 13.00 7.7% 14.00 0.0% 14.00 0.0% Output 10000t 63.56 62.16 2.3% 62.27 2.1% 65.79 -3.4% Capacity 10000t 85.34 85.34 0.0% 85.34 0.0% 85.34 0.0% North Operation Rate % 97.30 100.00 -2.7% 97.30 0.0% 91.89 5.4% Capacity Utilization Rate % 86.93 87.51 -0.6% 85.15 1.8% 81.21 5.7% Number of lines # 37.00 37.00 0.0% 37.00 0.0% 37.00 0.0% Number of lines on stream # 36.00 37.00 -2.7% 36.00 0.0% 34.00 5.9% Output 10000t 196.65 197.95 -0.7% 192.62 2.1% 77.80 152.8% Capacity 10000t 226.21 226.21 0.0% 226.21 0.0% 226.21 0.0% South Operation Rate % 92.31 92.31 0.0% 76.92 15.4% 92.31 0.0% Capacity Utilization Rate % 73.84 73.91 -0.1% 68.72 5.1% 83.02 -9.2% Number of lines # 13.00 13.00 0.0% 13.00 0.0% 13.00 0.0% Number of lines on stream # 12.00 12.00 0.0% 10.00 20.0% 12.00 0.0% Output 10000t 58.98 59.04 -0.1% 54.89 7.5% 77.80 -24.2% Capacity 10000t 79.88 79.88 0.0% 79.88 0.0% 79.88 0.0% Total Operation Rate % 96.88 96.88 0.0% 93.75 3.1% 93.75 3.1% Capacity Utilization Rate % 81.55 81.54 0.0% 79.14 2.4% 80.68 0.9% Number of lines # 64.00 64.00 0.0% 64.00 0.0% 64.00 0.0% Number of lines on stream # 62.00 62.00 0.0% 60.00 3.3% 60.00 3.3% Output 10000t 319.19 319.15 0.0% 309.78 3.0% 77.80 310.3% Capacity 10000t 391.42 391.42 0.0% 391.42 0.0% 391.42 0.0% Data Updated: 30/06/2017

Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

CRC East Operation Rate % 93.75 93.75 0.0% 93.75 0.0% 100.00 -6.3% Capacity Utilization Rate % 63.82 62.50 1.3% 68.26 -4.4% 72.74 -8.9% Number of lines # 16.00 16.00 0.0% 16.00 0.0% 16.00 0.0% Number of lines on stream # 15.00 15.00 0.0% 15.00 0.0% 16.00 -6.3% Output 10000t 14.97 14.66 2.1% 16.01 -6.5% 17.06 -12.3% Capacity 10000t 23.45 23.45 0.0% 23.45 0.0% 23.45 0.0% North Operation Rate % 94.74 94.74 0.0% 100.00 -5.3% 94.74 0.0% Capacity Utilization Rate % 89.30 89.02 0.3% 92.34 -3.0% 88.61 0.7% Number of lines # 19.00 19.00 0.0% 19.00 0.0% 19.00 0.0% Number of lines on stream # 18.00 18.00 0.0% 19.00 -5.3% 18.00 0.0% Output 10000t 44.10 43.96 0.3% 45.60 -3.3% 43.76 0.8% Capacity 10000t 49.38 49.38 0.0% 49.38 0.0% 77.09 -35.9% South Operation Rate % 75.00 75.00 0.0% 83.00 -8.0% 83.33 -8.3% Capacity Utilization Rate % 64.65 71.27 -6.6% 72.40 -7.8% 79.34 -14.7% Number of lines # 12.00 12.00 0.0% 12.00 0.0% 12.00 0.0% Number of lines on stream # 9.00 9.00 0.0% 10.00 -10.0% 10.00 -10.0% Output 10000t 18.35 20.23 -9.3% 20.55 -10.7% 22.52 -18.5% Capacity 10000t 28.38 28.38 0.0% 28.38 0.0% 28.38 0.0% Total Operation Rate % 89.36 89.36 0.0% 93.62 -4.3% 93.62 -4.3% Capacity Utilization Rate % 76.49 77.90 -1.4% 81.17 -4.7% 82.33 -5.8% Number of lines # 47.00 47.00 0.0% 47.00 0.0% 47.00 0.0% Number of lines on stream # 42.00 42.00 0.0% 44.00 -4.5% 44.00 -4.5% Output 10000t 77.42 78.85 -1.8% 82.16 -5.8% 83.34 -7.1% Capacity 10000t 101.22 101.22 0.0% 101.22 0.0% 101.22 0.0% Plate East Operation Rate % 81.82 77.27 4.6% 77.27 4.6% 86.36 -4.5% Capacity Utilization Rate % 68.20 64.16 4.0% 70.20 -2.0% 77.63 -9.4% Number of lines # 22.00 22.00 0.0% 22.00 0.0% 22.00 0.0% Number of lines on stream # 18.00 17.00 5.9% 17.00 5.9% 19.00 -5.3% Output 10000t 37.46 35.24 6.3% 38.56 -2.9% 42.64 -12.1% Capacity 10000t 55.08 55.08 0.0% 55.08 0.0% 55.08 0.0% North Operation Rate % 92.59 96.30 -3.7% 92.59 0.0% 85.19 7.4% Capacity Utilization Rate % 82.65 80.93 1.7% 77.62 5.0% 76.38 6.3% Number of lines # 27.00 27.00 0.0% 27.00 0.0% 27.00 0.0% Number of lines on stream # 25.00 26.00 -3.8% 25.00 0.0% 23.00 8.7% Output 10000t 55.24 54.09 2.1% 51.88 6.5% 77.09 -28.3% Capacity 10000t 67.02 67.02 0.0% 67.02 0.0% 67.02 0.0% South Operation Rate % 75.00 75.00 0.0% 75.00 0.0% 81.25 -6.3% Capacity Utilization Rate % 56.75 56.63 0.1% 59.83 -3.1% 63.92 -7.2% Number of lines # 16.00 16.00 0.0% 16.00 0.0% 16.00 0.0% Number of lines on stream # 12.00 12.00 0.0% 12.00 0.0% 13.00 -7.7% Output 10000t 23.18 23.13 0.2% 24.44 -5.2% 26.11 -11.2% Capacity 10000t 40.96 40.96 0.0% 40.96 0.0% 40.96 0.0% Total Operation Rate % 84.62 84.62 0.0% 83.08 1.5% 84.62 0.0% Capacity Utilization Rate % 71.26 69.16 2.1% 70.65 0.6% 73.67 -2.4% Number of lines # 65.00 65.00 0.0% 65.00 0.0% 65.00 0.0% Number of lines on stream # 55.00 55.00 0.0% 54.00 1.9% 55.00 0.0% Output 10000t 115.88 112.46 3.0% 114.88 0.9% 119.80 -3.3% Capacity 10000t 163.06 163.06 0.0% 163.06 0.0% 163.06 0.0% Data Updated: 30/06/2017

Tangshan Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

Costs Tangshan Operational Costs RMB/t 2,397 2,337 2.6% 2,326 3.1% 1,877 27.7% Tangshan Production Costs RMB/t 2,597 2,537 2.4% 2,526 2.8% 2,075 25.2% Mill, Port Zhengfeng 10,000t 9.90 10.60 -6.6% 17.30 -42.8% 7.70 28.6% & Warehouse Relian 10,000t - - 0.0% - 0.0% - 0.0% Inventories Zheshang 10,000t - - 0.0% - 0.0% - 0.0% Huiqi 10,000t - - 0.0% - 0.0% - 0.0% Beifang 10,000t - - 0.0% - 0.0% - 0.0% Bofeng 10,000t 2.00 2.00 0.0% 2.00 0.0% 2.00 0.0% Yongchang 10,000t - - 0.0% - 0.0% - 0.0% Zhengtai 10,000t - - 0.0% - 0.0% - 0.0% Jingtang Port 10,000t - - 0.0% - 0.0% 0.50 0.0% Jinghua 10,000t 0.30 0.30 0.0% 0.30 0.0% 0.30 0.0% Zhongyuan 10,000t 0.20 0.20 0.0% 0.20 0.0% 2.60 -92.3% ZJMI Qiqanan 10,000t 0.58 0.88 -34.1% 1.53 -62.1% 1.70 -65.9% Haiyi Hongrun 10,000t 2.00 2.50 -20.0% 2.50 -20.0% 2.40 -16.7% Runshun 10,000t 1.00 1.00 0.0% 1.00 0.0% 1.00 0.0% Dongkun 10,000t - - 0.0% - 0.0% 0.20 0.0% Total 10,000t 15.98 17.48 -8.6% 24.83 -35.6% 18.40 -13.2% Consumption H-beam 10,000/tpd 1.39 1.76 -21.0% 1.71 -18.7% 1.57 -11.5% by Finished Angles 10,000/tpd 1.76 1.56 12.8% 1.80 -2.2% 0.88 100.0% Product Channels 10,000/tpd 1.47 1.67 -12.0% 1.74 -15.5% 1.60 -8.1% Strip Steel width:145mm 10,000/tpd 1.71 1.56 9.6% 1.76 -2.8% 2.00 -14.5% Strip Steel width: >232mm 10,000/tpd 0.12 0.13 -7.7% 0.14 -14.3% 0.14 -14.3% Wire Rod 10,000/tpd 0.21 0.49 -57.1% 0.63 -66.7% 0.83 -74.7% Rebar 10,000/tpd 0.91 1.19 -23.5% 2.08 -56.3% 1.46 -37.7% Total 10,000/tpd 7.57 8.37 -9.6% 9.85 -23.1% 8.48 -10.7% Capacity H-beam % 65.12 82.56 -17.4% 80.23 -15.1% 95.03 -29.9% Utilization Angles % 58.64 52.16 6.5% 59.88 -1.2% 71.25 -12.6% of Finished Channels % 65.20 74.06 -8.9% 77.20 -12.0% 88.64 -23.4% Product Strip Steel width:145mm % 40.19 36.67 3.5% 41.32 -1.1% 47.09 -6.9% Producers Strip Steel width: >232mm % 54.22 59.85 -5.6% 64.45 -10.2% 65.53 -11.3% Wire Rod % 26.73 61.82 -35.1% 79.07 -52.3% 42.62 -15.9% Rebar % 60.84 79.57 -18.7% 80.01 -19.2% 41.72 19.1% Average % 52.99 63.81 -10.8% 68.88 -15.9% 64.55 -11.6% Billet Daily Kaiheng 10,000/tpd 0.55 0.55 0.0% 0.55 0.0% 0.60 -8.3% Sales Yangang 10,000/tpd - - 0.0% 0.40 0.0% 0.40 0.0% Volumes Songting 10,000/tpd 0.80 0.90 -11.1% 0.90 -11.1% 0.50 60.0% Xinda 10,000/tpd 1.10 1.10 0.0% 1.10 0.0% 0.70 57.1% Rongxin 10,000/tpd 0.80 0.80 0.0% 0.80 0.0% 0.80 0.0% Jiujiang 10,000/tpd 0.65 0.60 8.3% 0.60 8.3% 0.50 30.0% Xinglong 10,000/tpd - - 0.0% - 0.0% - 0.0% Jianbang 10,000/tpd - - 0.0% - 0.0% - 0.0% Rongcheng 10,000/tpd 0.25 0.25 0.0% 0.20 25.0% - #DIV/0! Anfeng 10,000/tpd - 0.50 0.0% 0.60 0.0% 0.10 0.0% Jingan 10,000/tpd 0.40 0.40 0.0% 0.25 60.0% 0.05 700.0% Antai 10,000/tpd - - 0.0% - 0.0% - 0.0% Guoyi 10,000/tpd 0.90 0.90 0.0% 0.20 350.0% 0.20 350.0% Hongxing 10,000/tpd 0.60 0.60 0.0% 0.80 -25.0% 0.80 -25.0% Baigong 10,000/tpd 0.55 0.55 0.0% 0.55 0.0% 0.20 175.0% Donghai Steel 10,000/tpd - - 0.0% 0.10 0.0% 0.20 0.0% Donghai Special Steel 10,000/tpd - - 0.0% - 0.0% 0.20 0.0% Chunxing 10,000/tpd 0.05 - #DIV/0! 0.20 -75.0% 0.30 -83.3% Huaxi 10,000/tpd 0.60 0.60 0.0% 0.55 9.1% 0.50 20.0% Donghua 10,000/tpd 0.30 - #DIV/0! - #DIV/0! - #DIV/0! Zhaofeng 10,000/tpd - - 0.0% - 0.0% - 0.0% Total 10,000/tpd 7.55 7.75 -2.6% 7.80 -3.2% 6.05 24.8% Data Updated: 30/06/2017

Rebar Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

East China Shanghai 10,000t 16.80 17.79 -5.6% 12.39 35.6% 25.78 -34.8% Hangzhou 10,000t 31.35 28.95 8.3% 21.95 42.8% 23.85 31.4% Hefei 10,000t 10.25 10.48 -2.2% 12.22 -16.1% 6.73 52.3% Nanjing 10,000t 6.45 6.39 0.9% 7.10 -9.2% 12.20 -47.1% Fuzhou 10,000t 8.04 8.38 -4.1% 7.69 4.6% 7.00 14.9% Jinan 10,000t 1.40 1.60 -12.5% 1.60 -12.5% 1.10 27.3% Nanchang 10,000t 16.80 17.20 -2.3% 15.20 10.5% 16.00 5.0% Central China Changsha 10,000t 7.30 7.00 4.3% 7.00 4.3% 8.00 -8.8% Zhengzhou 10,000t 14.48 14.39 0.6% 14.45 0.2% 16.70 -13.3% Wuhan 10,000t 21.20 21.50 -1.4% 25.20 -15.9% 21.80 -2.8% South China Nanning 10,000t 8.20 8.40 -2.4% 8.90 -7.9% 10.22 -19.8% Liuzhou 10,000t 6.80 7.20 -5.6% 6.50 4.6% 3.25 109.2% Guangzhou 10,000t 41.00 43.21 -5.1% 51.80 -20.8% 23.90 71.5% Southwest Chengdu 10,000t 17.00 16.50 3.0% 14.20 19.7% 15.60 9.0% China Guiyang 10,000t 16.70 17.00 -1.8% 12.30 35.8% 14.70 13.6% Kunming 10,000t 52.30 51.90 0.8% 55.70 -6.1% 56.90 -8.1% Chongqing 10,000t 18.10 19.30 -6.2% 19.70 -8.1% 23.80 -23.9% North China Beijing 10,000t 18.08 18.26 -1.0% 22.63 -20.1% 21.01 -13.9% Tianjin 10,000t 10.40 9.70 7.2% 12.00 -13.3% 7.30 42.5% Taiyuan 10,000t 0.25 0.30 -16.7% 0.50 -50.0% 1.70 -85.3% Shijiazhuang 10,000t 3.20 3.00 6.7% 3.50 -8.6% 0.50 540.0% Datong 10,000t 0.60 0.55 9.1% 0.52 15.4% 0.50 20.0% Jincheng 10,000t 0.30 0.30 0.0% 0.20 50.0% 0.60 -50.0% Changzhi 10,000t 0.60 0.50 20.0% 0.30 100.0% 0.90 -33.3% Linfen 10,000t 0.30 0.30 0.0% 0.20 50.0% 0.15 100.0% Yuncheng 10,000t 0.40 0.40 0.0% 0.30 33.3% 0.55 -27.3% Baotou 10,000t 5.15 4.32 19.2% 2.55 102.0% 2.50 106.0% Chifeng 10,000t 0.80 0.75 6.7% 0.75 6.7% 0.75 6.7% Northwest Lanzhou 10,000t 8.00 8.20 -2.4% 10.00 -20.0% 7.00 14.3% China Xi'an 10,000t 13.20 15.10 -12.6% 14.90 -11.4% 13.10 0.8% Yinchuan 10,000t 8.00 8.20 -2.4% 7.20 11.1% 10.30 -22.3% Northeast Harbin 10,000t 9.50 9.30 2.2% 15.50 -38.7% 8.80 8.0% China Changchun 10,000t 4.27 3.47 23.1% 4.59 -7.0% 3.11 37.3% Shenyang 10,000t 6.62 6.40 3.4% 4.51 46.8% 10.55 -37.3% Dalian 10,000t 3.91 3.66 6.8% 3.11 25.7% 2.14 82.7% Total 10,000t 387.75 389.90 -0.6% 397.16 -2.4% 378.99 2.3% Data Updated: 30/06/2017

Wire Rod Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

East China Shanghai 10,000t 2.47 3.46 -28.6% 4.67 -47.1% 4.75 -48.0% Hangzhou 10,000t 4.99 5.34 -6.6% 6.35 -21.4% 5.06 -1.4% Hefei 10,000t 4.08 4.00 2.0% 4.20 -2.9% 0.97 320.6% Nanjing 10,000t 0.40 0.40 0.0% 0.39 2.6% 0.27 48.1% Fuzhou 10,000t 1.40 1.30 7.7% 1.37 2.2% 2.20 -36.4% Jinan 10,000t 1.30 1.40 -7.1% 1.30 0.0% 0.45 188.9% Nanchang 10,000t 7.70 7.20 6.9% 5.50 40.0% 4.40 75.0% Central China Changsha 10,000t 2.10 2.00 5.0% 1.99 5.5% 1.00 110.0% Zhengzhou 10,000t 6.75 6.48 4.2% 6.30 7.1% 7.93 -14.9% Wuhan 10,000t 0.80 0.90 -11.1% 0.90 -11.1% 0.78 2.6% South China Nanning 10,000t 2.40 2.50 -4.0% 2.60 -7.7% 2.78 -13.7% Liuzhou 10,000t 1.00 1.20 -16.7% 0.80 25.0% 1.61 -37.9% Guangzhou 10,000t 27.32 28.81 -5.2% 34.10 -19.9% 24.80 10.2% Southwest Chengdu 10,000t 6.50 7.70 -15.6% 8.60 -24.4% 2.05 217.1% China Guiyang 10,000t 4.70 6.20 -24.2% 9.10 -48.4% 4.70 0.0% Kunming 10,000t 12.40 12.20 1.6% 10.70 15.9% 18.80 -34.0% Chongqing 10,000t 8.70 9.00 -3.3% 7.80 11.5% 4.30 102.3% North China Beijing 10,000t 0.37 0.43 -14.0% 0.56 -33.9% 0.73 -49.3% Tianjin 10,000t 2.22 2.30 -3.5% 2.00 11.0% 0.40 455.0% Taiyuan 10,000t 0.20 0.15 33.3% 0.30 -33.3% 1.00 -80.0% Shijiazhuang 10,000t 1.25 0.45 177.8% 0.50 150.0% 0.15 733.3% Datong 10,000t 0.25 0.20 25.0% 0.17 47.1% 0.15 66.7% Jincheng 10,000t 0.30 0.30 0.0% 0.20 50.0% 0.30 0.0% Changzhi 10,000t 0.40 0.30 33.3% 0.20 100.0% 0.20 100.0% Linfen 10,000t 0.20 0.20 0.0% 0.20 0.0% 0.10 100.0% Yuncheng 10,000t 0.30 0.30 0.0% 0.20 50.0% 0.10 200.0% Baotou 10,000t 1.05 0.98 7.1% 0.95 10.5% 0.80 31.3% Chifeng 10,000t 0.15 0.15 0.0% 0.15 0.0% 0.19 -21.1% Northwest Lanzhou 10,000t 2.50 2.80 -10.7% 3.50 -28.6% 3.50 -28.6% China Xi'an 10,000t 2.30 2.60 -11.5% 1.90 21.1% 4.30 -46.5% Yinchuan 10,000t 0.80 1.10 -27.3% 0.80 0.0% 1.50 -46.7% Northeast Harbin 10,000t 1.60 1.70 -5.9% 2.00 -20.0% 1.12 42.9% China Changchun 10,000t 1.17 1.08 8.3% 1.02 14.7% 0.85 37.6% Shenyang 10,000t 4.26 4.11 3.6% 4.82 -11.6% 6.52 -34.7% Dalian 10,000t 0.07 0.05 40.0% 0.06 16.7% 0.28 -75.0% Total 10,000t 114.40 119.29 -4.1% 126.20 -9.4% 109.04 4.9% Data Updated: 30/06/2017

HRC Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

East China Shanghai 10,000t 41.15 42.50 -3.2% 42.90 -4.1% 44.02 -6.5% Fuzhou 10,000t 2.10 1.90 10.5% 2.50 -16.0% 1.20 75.0% Hangzhou 10,000t 5.90 5.95 -0.8% 6.45 -8.5% 4.76 23.9% Hefei 10,000t 2.03 2.28 -11.0% 2.42 -16.1% 2.09 -2.9% Nanjing 10,000t 0.47 0.50 -6.0% 0.95 -50.5% 0.80 -41.3% Jinan 10,000t 1.20 1.40 -14.3% 1.40 -14.3% 1.35 -11.1% Nanchang 10,000t 0.99 0.91 8.8% 0.95 4.2% 1.40 -29.3% Wuxi 10,000t 6.70 6.60 1.5% 7.00 -4.3% 6.50 3.1% Changshu Port 10,000t 9.87 8.73 13.1% 6.33 55.9% 2.69 266.9% Taicang Port 10,000t 0.43 0.40 7.5% 0.40 7.5% 0.20 115.0% Central Changsha 10,000t 2.90 3.10 -6.5% 3.30 -12.1% 2.50 16.0% China Zhengzhou 10,000t 1.30 1.20 8.3% 1.30 0.0% 1.10 18.2% Wuhan 10,000t 9.90 10.02 -1.2% 10.20 -2.9% 9.80 1.0% South China Lecong (Guangzhou) 10,000t 51.50 55.50 -7.2% 67.10 -23.2% 36.30 41.9% Southwest Chengdu 10,000t 10.50 11.30 -7.1% 12.95 -18.9% 10.30 1.9% China Chongqing 10,000t 9.50 9.65 -1.6% 9.85 -3.6% 4.60 106.5% Guiyang 10,000t 1.20 1.35 -11.1% 1.65 -27.3% 0.82 46.3% Kunming 10,000t 6.00 6.00 0.0% 6.40 -6.3% 5.40 11.1% North China Beijing 10,000t 1.50 1.68 -10.7% 2.40 -37.5% 1.10 36.4% Tianjin 10,000t 20.50 23.00 -10.9% 30.00 -31.7% 13.40 53.0% Shijiazhuang 10,000t 0.35 0.37 -5.4% 0.36 -2.8% 3.90 -91.0% Tangshan 10,000t 4.50 5.00 -10.0% 5.10 -11.8% 3.90 15.4% Handan 10,000t 6.80 7.00 -2.9% 8.30 -18.1% 3.00 126.7% Taiyuan 10,000t 2.20 2.40 -8.3% 3.00 -26.7% 1.50 46.7% Baotou 10,000t 2.55 2.75 -7.3% 2.49 2.4% 1.15 121.7% Northwest Lanzhou 10,000t 0.90 1.00 -10.0% 1.10 -18.2% 1.20 -25.0% China Xi'an 10,000t 8.00 8.50 -5.9% 9.10 -12.1% 2.60 207.7% Urumqi 10,000t 3.40 3.40 0.0% 3.50 -2.9% 2.10 61.9% Northeast Harbin 10,000t 1.10 1.20 -8.3% 1.30 -15.4% 1.50 -26.7% China Changchun 10,000t 1.50 1.80 -16.7% 1.60 -6.3% 1.60 -6.3% Shenyang 10,000t 7.70 8.00 -3.8% 9.00 -14.4% 5.30 45.3% Anshan 10,000t 11.00 11.50 -4.3% 12.00 -8.3% 9.30 18.3% Dalian 10,000t 1.20 1.20 0.0% 1.70 -29.4% 1.60 -25.0% Total 10,000t 236.84 248.09 -4.5% 275.00 -13.9% 188.98 25.3% Data Updated: 30/06/2017

CRC Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

East China Shanghai 10,000t 28.17 29.10 -3.2% 29.34 -4.0% 45.95 -38.7% Fuzhou 10,000t 1.25 1.60 -21.9% 1.02 22.5% 0.50 150.0% Hangzhou 10,000t 1.61 1.69 -4.7% 1.78 -9.6% 0.84 91.7% Hefei 10,000t 0.25 0.28 -10.7% 0.37 -32.4% 0.72 -65.3% Nanjing 10,000t 1.12 1.13 -0.9% 1.25 -10.4% 0.64 75.0% Jinan 10,000t 1.90 2.10 -9.5% 2.10 -9.5% 1.10 72.7% Nanchang 10,000t 0.70 0.74 -5.4% 0.76 -7.9% 0.80 -12.5% Wuxi 10,000t 1.23 1.25 -1.6% 1.38 -10.9% 0.62 98.4% Changshu Port 10,000t 0.52 0.60 -13.3% 0.75 -30.7% 1.68 -69.0% Taicang Port 10,000t 0.30 0.30 0.0% 0.30 0.0% 0.15 100.0% Central Changsha 10,000t 0.56 0.60 -6.7% 0.72 -22.2% 1.00 -44.0% China Zhengzhou 10,000t 0.56 0.60 -6.7% 0.60 -6.7% 0.87 -35.6% Wuhan 10,000t 3.00 3.10 -3.2% 3.21 -6.5% 4.00 -25.0% South China Lecong (Guangzhou) 10,000t 40.30 40.50 -0.5% 40.80 -1.2% 44.23 -8.9% Southwest Chengdu 10,000t 3.46 3.15 9.8% 3.20 8.1% 2.75 25.8% China Chongqing 10,000t 10.70 10.36 3.3% 9.56 11.9% 3.90 174.4% Kunming 10,000t 0.74 0.83 -10.8% 0.73 1.4% 0.83 -10.8% North China Beijing 10,000t 0.25 0.26 -3.8% 0.35 -28.6% 0.24 4.2% Tianjin 10,000t 9.60 9.90 -3.0% 10.30 -6.8% 5.50 74.5% Shijiazhuang 10,000t 0.16 0.16 0.0% 0.11 45.5% 0.33 -51.5% Taiyuan 10,000t 0.05 0.05 0.0% 0.03 66.7% 1.10 -95.5% Northwest Lanzhou 10,000t 1.15 1.15 0.0% 1.10 4.5% 1.10 4.5% China Xi'an 10,000t 2.45 2.50 -2.0% 2.70 -9.3% 2.30 6.5% Northeast Harbin 10,000t 0.41 0.62 -33.9% 0.29 41.4% 0.48 -14.6% China Changchun 10,000t 0.16 0.15 6.7% 0.14 14.3% 0.15 6.7% Shenyang 10,000t 1.70 1.75 -2.9% 1.60 6.3% 1.95 -12.8% Total 10,000t 112.30 114.47 -1.9% 114.49 -1.9% 123.73 -9.2% Data Updated: 30/06/2017

Plate Mysteel Survey Units Latest Prev. Week W/W % Prev. Month M/M % Prev. Year Y/Y %

East China Shanghai 10,000t 11.25 11.24 0.1% 11.75 -4.3% 12.41 -9.3% Fuzhou 10,000t 0.80 0.80 0.0% 1.10 -27.3% 1.50 -46.7% Hangzhou 10,000t 6.50 6.95 -6.5% 6.17 5.3% 3.55 83.1% Hefei 10,000t 1.65 1.79 -7.8% 1.82 -9.3% 0.95 73.7% Nanjing 10,000t 1.10 1.20 -8.3% 1.45 -24.1% 0.95 15.8% Jinan 10,000t 6.30 6.60 -4.5% 6.70 -6.0% 6.85 -8.0% Nanchang 10,000t 1.10 1.10 0.0% 1.10 0.0% 1.30 -15.4% Wuxi 10,000t 5.22 5.12 2.0% 5.45 -4.2% 4.20 24.3% Changshu Port 10,000t 1.60 1.03 55.3% 2.89 -44.6% 4.15 -61.4% Central Changsha 10,000t 3.90 4.00 -2.5% 4.10 -4.9% 2.00 95.0% China Zhengzhou 10,000t 1.70 1.90 -10.5% 1.80 -5.6% 2.20 -22.7% Wuhan 10,000t 3.10 2.90 6.9% 2.70 14.8% 2.90 6.9% South China Lecong (Guangzhou) 10,000t 15.00 15.30 -2.0% 16.80 -10.7% 11.80 27.1% Southwest Chengdu 10,000t 4.50 4.90 -8.2% 5.50 -18.2% 3.42 31.6% China Chongqing 10,000t 4.35 4.20 3.6% 4.80 -9.4% 2.05 112.2% Guiyang 10,000t 0.40 0.36 11.1% 0.45 -11.1% 0.55 -27.3% Kunming 10,000t 1.60 1.70 -5.9% 2.20 -27.3% 2.10 -23.8% North China Beijing 10,000t 0.72 0.72 0.0% 0.52 38.5% 0.83 -13.3% Tianjin 10,000t 4.30 4.20 2.4% 4.00 7.5% 2.90 48.3% Shijiazhuang 10,000t 0.30 0.40 -25.0% 0.45 -33.3% 0.45 -33.3% Tangshan 10,000t 3.50 3.80 -7.9% 3.60 -2.8% 4.40 -20.5% Handan 10,000t 3.50 3.80 -7.9% 4.20 -16.7% 4.40 -20.5% Taiyuan 10,000t 0.35 0.40 -12.5% 0.50 -30.0% 0.70 -50.0% Baotou 10,000t 0.80 0.80 0.0% 0.72 11.1% 1.04 -23.1% Northwest Lanzhou 10,000t 0.40 0.50 -20.0% 0.60 -33.3% 1.20 -66.7% China Xi'an 10,000t 5.90 5.30 11.3% 6.00 -1.7% 1.50 293.3% Urumqi 10,000t 2.10 2.20 -4.5% 2.30 -8.7% 1.40 50.0% Northeast Harbin 10,000t 0.70 0.70 0.0% 0.60 16.7% 0.80 -12.5% China Changchun 10,000t 0.02 0.05 -60.0% 0.10 -80.0% 0.10 -80.0% Shenyang 10,000t 7.10 7.30 -2.7% 8.00 -11.3% 5.80 22.4% Dalian 10,000t 1.10 1.10 0.0% 1.20 -8.3% 0.80 37.5% Total 10,000t 100.86 102.36 -1.5% 109.57 -7.9% 89.20 13.1% Data Updated: 30/06/2017

About Shanghai Ganglian Mysteel’s information includes, but is not limited Shanghai Ganglian is a professional bulk com- to, various categories, such as: modities service provider. Founded in 2000 in Shanghai, Shanghai Ganglian is the parent • HRC/CRC company of two listed subsidiaries. It has set • plate up over 30 branches around the world and • colour coated/galvanized has more than 3,000 employees. Following its • plated sheet growth over the past 17 years, Shanghai Gan- • rebar/wire rod glian is now China’s leading bulk commodities • sections information, consulting, and E-commerce ser- • pipes vice provider. Supported by its large database • strips of information, Shanghai Ganglian has built • silicon steel an integrated E-commerce ecosystem for bulk • stainless steel commodities, including: • special steel • iron ore • electronic/web-based data services • metallurgical coal • upstream & downstream industry research • thermal coal • consulting services • coke • E-commerce trading platform • ferro-alloys • smart warehousing system • scrap • informational logistics system • pig iron • supply chain financing • non-ferrous • freight Shanghai Ganglian’s services cover a wide range of commodities, including steel, iron ore, About Mysteel Iron Ore Derivatives Brokerage metallurgical coal, thermal coal & coke, non- Mysteel Singapore is the first office for Mysteel ferrous metals, energy, chemical, agricultural outside of mainland China. Mysteel Singapore produce, etc. focuses on the broking of physical and deriva- tive iron ore contracts. Leaning on the vast About Mysteel data and contacts of Mysteel, from steel mills to Mysteel, a professional E-commerce services Chinese funds, Mysteel Singapore aims to bring company, provides a real-time news portal for closer the link between mainland China and the the Chinese iron & steel market in both English rest of the world. and Mandarin. The company provides qualita- tive and quantitative information on all of the Futures & Options Brokerage Singapore markets it covers, including: Myles Clement (Futures) [email protected] • daily prices (domestic, import and export) • indices Alex Williams (Options) • production [email protected] • shipments • trade Futures & Options Brokerage Shanghai • inventories Wiliam Yang (Futures) • capacity utilization [email protected] • analysis and commentary • research Coco Wang (Options) • steelmaker directory [email protected]

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