Daily Steel News - 8 Dec 09

SE Asian billet importers stay on the sidelines
Billet offer prices are steady at $465-475/t cfr Southeast Asia, trading sources in Southeast Asia tell Steel Business Briefing. These prices are for CIS billet. Trading sources report that import buying in the region is not active. Transactions in the region recently concluded at around $457-462/t cfr. A cargo of Brazilian-origin billet, diverted from its original destination of Vietnam, is being offered at $470/t cfr Indonesia. "We heard that the Vietnamese buyer cancelled because of financing problems," a trader tells SBB. Offers of Turkish billet are prevailing at $480-490/t cfr. Taiwanese-origin Grade 40 billet was open to bids last week at $465/t cfr Philippines. The Dubai debt crisis has caused Asian importers to be cautious. "It is a bit quiet. Buyers do not know what to do," a trader says. Uncertainty in future market direction is causing buyers to hesitate. A trader says that, while he is receiving buying enquiries, importers are concerned that offered shipments of CIS billet will arrive only in February or March. Vietnamese trading sources also say that their market is currently quiet. Some traders, however, note that buying interest in Indonesia has picked up and bookings will start soon.

China's domestic iron ore market remains stable
Chinese domestic iron ore prices have stabilised as steel mills' demand and the imported iron ore market are still rather weak, Steel Business Briefing learns from market sources. The price of 66% Fe iron ore concentrate in Tangshan, Hebei province, is around RMB 749-760/wet metric tone ($110-111/wmt), up about RMB 11-12/t from last week. In Hebei's Hanxin region, 66% Fe concentrate is priced at RMB 959/dry metric tonne ($140/dmt) including VAT, the same price it has held for the last three weeks. A trader from Rizhao, Shandong province, points out that the stable market price is due to lack of freight capacity at the end of the year. He also says that in December, both domestic iron ore producers and steel mills are planning maintenance work which will help to keep prices stable. Baosteel will begin the first round of iron ore price negotiations with overseas iron ore producers on behalf of Chinese steel mills in late December and local media said the contract price is expected rise at least 10-15%. Traders say this increase is expected to help drive demand for domestic iron ore.

Daily Steel News - 4 Dec 09

Weak sentiment, higher prices dampen E Asian scrap buying
The scrap import market in east Asia is quiet this week with traders reporting to Steel Business Briefing that there has not been any recent buying of bulk scrap shipments. Last week, two cargoes of HMS 1 from west coast, USA for December shipment were booked at $329/tonne cfr Korea. Trading sources say that Korean importers may have held off further buying after that booking because sentiment was negatively affected by Dubai's recent debt default problems. "The Dubai problem has caused sentiment to fall. The Koreans need more scrap," a regional trader says."I am very concerned myself about issues happening in Dubai because the world economy is very vulnerable now," a Southeast Asian scrap trader says. There are fewer offers of bulk scrap to the region because suppliers say that supply is tight. Limited bulk offers of 80:20 HMS 1/2 are heard at $340-350/t cfr but there are no takers. No recent import bookings have been heard in China, according to local trading sources. "Prices are too high," a local trader tells SBB. The last booking of US scrap concluded at $325/t cfr China for 80:20 HMS and $330/t cfr China for shredded. Meanwhile, containerised scrap is being offered this week at around $310-320/t cfr for 80:20 to Southeast Asia. Some material was booked at $310/t cfr Vietnam last week, local traders tell SBB. "Demand has slowed down because the regional mills are waiting out the current market. The year-end is approaching too," an importer says.

Scrap export role continues to drive US market
With all the speculation about whether US scrap prices will have one large price increase in December, or two smaller increases this month and next, market players are looking to whatever "real" indicators they can find. And US scrap export trends continue to be a critical factor. A market analyst added: "(Up) $30 a long ton (in December) is a good number.the strength is coming entirely from exports. Volumes are strong." He wondered if China and Turkey were getting ahead of the expected January price jump by buying in December "so that they don't have to in January. I don't think they have the same tax reasons for being out of the market as domestic producers do, so they probably don't mind sitting on inventory. and they love to fish for cheap prices." One mill source added, "We agree (there will be) upward bias on scrap prices for December, and maybe into January, although it will be interesting to watch whether the recent developments in Dubai will impact Turkey's consumption of scrap short-term." More than one market source said US shredded scrap is already selling for $280-290/l.t delivered to mills - even as much
as $300/l.t in the southern US market - about $35-40 above the last month's price. The south, where most of the country's minimills operate, seems to be the most active, one scrap procurer said. Meanwhile, in Asia, the market seems to be cooling, market sources tell SBB (see other story), at least in part because of the Dubai crisis.

China set to import 600m t of iron ore this year
China is on track to import almost 600m tonnes of iron ore this year, up 35% on the 444m t it imported in 2008, the country's Ministry of Industry & Information Technology (MIIT) said on Thursday. Between January and October this year China imported 514.8m t of iron ore, up 36.8% on the corresponding period in 2008. MIIT also forecast that China will produce 571m t of crude steel in 2009 compared with around 500m t last year. The huge increase in imported iron ore relative to the rise in steel production shows the extent to which imports have replaced domestic iron ore, Steel Business Briefing notes. For much of this year, when lower iron ore spot prices made it uneconomic to continue operating, a large number of domestic miners closed their doors. But rising spot prices and steel capacity being switched back on encouraged domestic miners to resume operating. In September, Macquarie Bank said 60% of previously mothballed domestic iron ore miners had reopened over the previous month. Prices of Indian 63.5% Fe hit $100/t at the end of July before dropping to around $85/t at the end of August. In 2008, China produced 824m t of iron ore concentrate, equivalent to 245m t at an average 30% Fe after processing. Total concentrate capacity by 2010 is likely to be 300-400m t/y.

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New Zealand extends AD duties on Thai, Malaysian imports
New Zealand's Ministry of Economic Development has decided to extend anti-dumping duties on imports of galvanized wire from Malaysia, and rebar and coil from Thailand for another five years. The duties have been in place since 2004 and will be extended until 2014, according to a sunset review concluded on 17 November. The ministry had imposed a 28% anti-dumping duty on rebar and coil imports (5-40mm in diameter) from Thailand, and a 15% ad valorem duty on galvanized wire imports from Malaysia. The review found a "risk of recurrence of dumping and material injury." In a statement sent to Steel Business Briefing, Pacific Steel general manager, Ian Jones, said the company had "no problem competing with fairly priced imports, but as our recent work has shown, we will vigorously defend our business against unfair trading behaviour." Auckland-based Pacific Steel is New Zealand's only producer of reinforcing bar and wire, and was the original complainant. It is a division of Fletcher Steel.
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China domestic iron ore prices stable
Despite weakening imported iron ore prices in China, the market for domestic iron ore is currently stable with transactions described as "healthy", Steel Business Briefing learns from market sources. The price of iron ore concentrates grading 66% Fe in Tangshan in Hebei province has remained at around RMB 737-749/wet metric tonne ($106-110/wmt). In the Hanxin region, also in Hebei, 66% Fe concentrate is priced at RMB959/dry metric tonne ($140/dmt) including VAT, also the same as the previous week. A major producer from Hanxin tells SBB that he hasn't seen any negative effects from the softening imported iron ore market yet, and says the current level of transactions is satisfactory. He predicts that the domestic iron ore market will remain firm in the short term as demand from mills is still good. Mills are also planning to lift their steel prices, which he believes will underpin higher prices. A trader from Qingdao in northern China says that mills' output has stayed at a high level, keeping demand for domestic iron ore relatively strong. But he says that demand is likely to reduce when mills begin their maintenance work in December.

Daily Steel News - 2 Dec 09

Shagang lifts early December rebar price by $7/t
Eastern China's Shagang has released its new rebar and wire rod prices for deliveries before 10 December. The price for 16-25mm HRB335 has increased by RMB 50/tonne ($7/t) to 3,730/t ($546/t), while its 6.5mm wire rod price remains unchanged at RMB 3,750/t, both with 17% VAT. Encouraged by Shagang's higher rebar prices, traders in Hangzhou markets have raised their offers slightly by RMB 30-50/t to RMB 3,680-3,700/t. "Before this adjustment, Shagang's ex-works prices were already higher than spot prices, but we will lose more money if we don't follow Shagang's lead," a Hangzhou trader says. But he admits that attempts to push up market prices have not been well received by potential buyers. In both Shanghai and Beijing, prices have generally remained flat despite Shagang's price change. Shanghai traders are offering RMB 3,530-3,550/t for 16-25mm HRB335, and about RMB 3,700/t for HRB400. Meanwhile, Beijing prices have stayed at about RMB 3,630-3,650/t since Monday. All market prices quoted include 17% VAT. "The markets are lukewarm, with few buying," a Shanghai trader says. Most market sources do not foresee any obvious improvement in December, which is typically a month of low temperatures and slim demand for steel. Steel Business Briefing understands that weakening futures prices are also contributing to market pessimism. Rebar contracts for next February delivery on the Shanghai Futures Exchange closed at RMB 3,938/t on 1 December, down from Monday's RMB 3,958/t.

Korean H-beam prices continue to soften
Domestic Korean demand for H-beams remains in the sluggish condition that it entered in September, with the price reduction announced by market leader Hyundai Steel last month doing nothing to boost demand. Local distributors are selling Hyundai's 300x300mm H-beams at KRW 800,000/tonne ($685/t) while Hyundai's list price for the same sized beams remains at KRW 860,000/t, Steel Business Briefing learns from market sources. So while the longs producer cut its list prices by KRW 50,000/t from 1 November, for distributors to sell its beams much lower indicates Hyundai is still offering special discounts, SBB notes. Korea's construction sector still remains depressed so the country's two major H-beam producers of Hyundai and Dongkuk Steel Mill have plans to adjust their output this month in parallel with the output cut they also plan for rebars. Most domestic rebar makers have already decided to close their works for around seven days this month due to rising rebar stock levels, as SBB reported. Meanwhile, the country's H-beam exports in November increased by 4,600 t or by 5% to 95,500 t from October. This also represented a 50% surge year-on-year from the same month last year of 63,500 t, according to data from the Korea Iron & Steel Association.

Output cuts weaken Korean scrap prices
The recent strength in domestic scrap prices in Korea will likely ease within the next few weeks as demand from mills is expected to decrease. Production cutbacks by longs producers to reduce high inventory levels, especially rebars, is bringing an end to the firmer scrap prices. Korean domestic scrap prices, as quoted by Korean mills, had begun recovering since late November after prices had slumped during the previous two months. Hyundai Steel, Korea's leading scrap consumer, raised its buying prices by KRW 25,000/t ($21/t) a week ago. But the mill is considering lowering prices by the same margin from next week citing production cutbacks, Steel Business Briefing learns from a local mill source. Scrap inventories held by steelmakers have declined slightly due to the continuing decline in domestic scrap prices. The source said his company has enough scrap for about 15 days' consumption. "This is not so high but is sufficient as the production cutback looms." But he declined to reveal actual stock levels.Meanwhile, Hyundai's bid prices for Japanese scrap have already started softening. Earlier this week it offered ¥25,500/t fob ($292/t) and ¥28,500/t ($326/t) for Japanese H2 and Shindachi grades respectively. This represents a ¥1,000/t decline from its previous bid price for H2 grade of ¥26,500/t a week ago. Hyundai's three rebar works in Incheon, Dangjin and Pohang will each stop for four-seven days this month. Other mills will close for similar periods. Rebar inventories held by Korea's seven major producers reached 300,000 tonnes by end-November, compared with normal stock levels of 200,000t.

Indian iron ore market weakens, export bookings thin
Indian iron ore exporters are lowering offer prices to China but actual transactions are few. During the 16 November week, offer prices for 63.5%/63% Fe fines to China touched $110/dry metric tonne cfr, but transactions remained sparse as traders became wary of the weakening sentiment. In the past week, transaction volumes thinned further while offer prices also declined in tandem to levels of $106/dmt cfr for the same grade of ore. Steel Business Briefing hears of one transaction early last week at $106/dmt cfr for 40,000 tonnes of 63.5%/63% fines from the port of Krishnapatnam in the south eastern state of Tamil Nadu. The ore was shipped on a single-port loading basis in a Handymax carrier. The freight cost for this deal was $22/t. The freight for double-port loaded ore remained at last week's level of $27-28/dmt. However, shipping of the ore on a two-port basis from Haldia in West Bengal and Paradip in Orissa inevitably takes longer due to a 25-day waiting period, driving up the actual freight to nearly $38/dmt, SBB hears. Meanwhile, transactions for lower-grade ores (50-60% Fe) are more active than those for their higher-grade counterparts. A deal for 55%/54% Fe ore from Goa was heard at $50/dmt fob. This amounts to $76/dmt cfr, SBB understands. "The Chinese are comfortable with their stocks for the moment, so the situation is expected to remain the same this month given the holiday season in India," a Karnataka-based exporter tells SBB. "We hope to see some improvement (in volumes) in January."

Daily Steel News - 25 Nov 09

Suppliers talk up scrap prices in east Asia
Scrap import prices continue their uptrend in east Asia. While traders are bullish that scrap prices can move up further, weak finished steel prices are likely to limit any large increase, trading sources tell Steel Business Briefing. Three cargoes of US west coast scrap were booked at $325/tonne cfr for shredded, and $320/t cfr for 80:20 HMS 1/2 last week, according to Chinese trading sources. Fresh offers of HMS 80:20 are prevailing at around $335/t cfr China and for shredded, $340/t cfr. "There are a lot of buying enquiries from China, and they include speculators," says a Chinese trader who believes that the current acceptance level is $330/t cfr for 80:20. "There are no buyers at the new offer prices," another says. But he admits that "nobody knows" if Chinese importers will keep chasing after higher prices. Scrap availability is tight after many US suppliers sold out their January shipments, a Korean trader says. An estimated 400,000 t were booked by Chinese importers from mid-October to November. He tells SBB that HMS 1 prices could rise to $350/t cfr by mid-December. "Suppliers are shouting higher numbers," a Southeast Asian importer says. He attributes recent buying to stocking up ahead of the holidays and year-end, but believes that it will quieten down when mills cut output and undergo maintenance. Offers for containerised 80:20 scrap from Africa and the Middle East are at $300-305/t cfr SE Asia but some material was booked at under $295/t cfr recently, SBB is told. Also, containerised 80:20 from South Africa concluded at $305/t cfr Haiphong, Vietnam.

Indian iron ore offer prices to China rise, transactions low
Indian iron ore offer prices to China rose last week to levels of $110/tonne cfr for fines of 63.5% Fe, but supply of ore from India is still tight with hardly any transactions concluded in the past week. The hike in price is mainly due to an increase in freight rates between the two countries. Steel Business Briefing hears of one transaction for a 50,000t parcel of Fe 63.5%/63% fines in a Handymax carrier from Krishnapatnam port in the southeast Indian state of Tamil Nadu at $104/t cfr on a single loading basis. "No bookings of new material are being heard of," a trader based in Bellary in the southern state of Karnataka tells SBB. "The parcel from Krishnapatnam was old material that had been lying at the port for over eight months." He added that freight for iron ore from east India to main Chinese ports had gone up to as much as $24/t on a single loading basis, from around $20-22/t. Double port loading freight has increased to levels of $25-26/t. "Chinese mills and traders are waiting as they are reluctant to buy at such high prices even though the Indians remain bullish about their offers," a Delhi-based trader says. "Prices may come down marginally this week or early next week." Lower grade ore from the western territory of Goa remains in demand. SBB hears of 58% Fe fines sold at $56/t fob on a two port loading basis with a freight of $25/t.

Daily Steel News - 9 Nov 09

Scrap import prices bounce back in east Asia
Offer prices for imported scrap in Asia rose by $5-10/tonne over the past week. Offers for bulk shredded scrap are prevailing at $305-310/t cfr China and at $320/t cfr Southeast Asia. The offered price for 80:20 HMS 1&2 scrap is $300-305/t cfr China and $315/t cfr Southeast Asia. The last bookings of around ten cargoes of scrap to China were concluded around two weeks ago at $295/t cfr China for 80:20 and at $300/t cfr for shredded. "Offer prices may have risen because domestic prices are slightly higher," a trader in Shanghai says, adding that there have been no recent import bookings in China. "Higher iron ore prices are behind higher scrap prices in China," a regional trader says. Japanese scrap prices have also firmed, he notes, adding that Southeast Asian importers have no choice but to accept these prices if they want to book material. Containerised scrap prices have also risen by $5/t. Vietnamese trading sources say that bookings of 5,000-7,000 tonnes from USA/Europe were concluded at $287-290/t cfr for 80:20 and at $292-295/t cfr for shredded. Bookings in Taiwan for containerised 80:20 have risen to $285/t cfr, up from $280/t cfr a week ago. "Prices have bottomed out. I think prices will be stable at this level," a trader in Vietnam says. A US exporter said markets began to move up with Tokyo Steel's announced increase. "Things were getting very sour, and now they're starting to pick up," he told Steel Business Briefing.

Iron ore prices surge in China on tight supply
Constrained supply and active buying from Chinese traders saw iron ore prices surge towards the end of last week, with the price of Indian 63.5% Fe iron ore increasing by around $8/tonne over the course of the week. For the first time since mid-August when steel prices in China began to slide, Steel Business Briefing heard of a number of transactions at or in some cases above $100/dry metric tonne cfr to China. Prices had been around $92-95/t cfr on Monday and Tuesday of last week, up from $90-93/t the week before. SBB heard of a deal struck 5 November for one Panamax vessel carrying 75,000 tonnes of 63% Fe fine ore leaving Goa port bound for China, which sold for $82/t fob, with freight currently at around $18/t. A Chinese trader said he knew of one cargo of lower Fe grade selling at close to $102/t cfr China.
Chinese traders have complained of tight supply from India . exacerbated by vessel waiting times of up to 20 days at Haldia and Paradip . and iron ore output in Karnataka state severely reduced because of political disturbances. Furthermore, rising steel output in Japan and Korea is resulting in very little iron ore being put onto the spot market by major producers Rio Tinto, BHP Billiton and Vale. "There is just nobody else to take up the slack," a China-based analyst told SBB. Chinese traders said bullish market sentiment on the back of rising steel prices, and the need for iron ore to be stocked ahead of winter, also contributed to active purchasing last week.

Korean scrap market may rebound in November
Deliveries of domestic scrap to Korean steel mills slowed down last week. Local dealers are anticipating that domestic scrap prices may stay stable in the coming weeks after Hyundai Steel's five consecutive price reductions since mid-September. Moreover, the uptrend in Japanese domestic scrap prices will lift its exports prices to Korea so this will help strengthen Korean domestic scrap prices in November, Steel Business Briefing learns from local scrap dealers. But the high volume of imported scrap inventory at Korean yards may delay any near-term improvement in the current sluggish Korean scrap market. Korea's scrap imports in October reached an all-time high of 883,600 tonnes. "We still need to monitor how Japan's scrap price hike will affect the Korean domestic market," a scrap trader tells SBB. Japan's scrap market leader Tokyo Steel Manufacturing has increased its domestic scrap purchasing prices by ¥1,000/t for all grades at all works effective 6 November. Meanwhile, in late October Korean government's public procurement service (PPS) booked 40,000 t of US scrap as an initial purchase to build up a national scrap stockpile near Dongbu Steel's Asan works at Dangjin south of Seoul. The cargo comprises 10,000 t of shredded, 24,000 t of HMS No.1 and 6,000 t of HMS No.2 and these were booked at $317/t cfr, $312/t and $307/t respectively.

Iron ore prices keep rising during the week: The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday show that the price for 62% Fe content iron ore has been moving steadily higher during the week and ended more than 8% above the previous Friday's level. Average weekly freight rates from India were almost unchanged, but rates on the other two key routes to China increased strongly during the week. The reference price for 62% Fe content iron ore fines finished the week at $95.60/dry metric tonne CFR Tianjin port, China. This was a $7.20/dry metric tonne increase from a week earlier. The reference price for 58% Fe content fines also moved generally higher during last week, and ended $7.20/dmt above the previous week's level, a 9% increase. Within the delivered prices, rates for shipments from both the West and East coasts of India were stable. Freight rates from Australia and Brazil to China continually firmed during the week, pushing the weekly average higher, with daily rates increasing around 12% from a week earlier. The Steel Index is majority-owned by Steel Business Briefing and specialises in compiling steel and iron ore reference prices based on actual transaction data. Further details of the methodology and specifications for the two grades of iron ore can be found on the website www.thesteelindex.com. Companies wishing to subscribe to the full set of reference prices or apply to submit iron ore or steel price data can do so on the website.

Daily Steel News - 5 Nov 09

China's Yonggang secures UK quality certificate for rebars
Jiangsu Yonggang Group, a Shagang subsidiary in eastern China's Jiangsu province, has obtained a CARES certificate for its rebar from the UK. Securing the quality approval will help the company expand its export business to the UK and other European countries and further increase its presence in the Middle East, Steel Business Briefing is told. The certificate is issued for rebar of 10-40mm diameter or 6-12mm rebar in coils, and produced according to British Standard BS 4449-1997 or BS4449-2005. A company source tells SBB that Yonggang had discovered some potential demand in the UK, but so far had not exported any rebar to that market. The CARES certificate will not only give the steelmaker an entry to the UK market but also qualify it to supply some large construction projects in the Middle East where the UK certification is accepted. The company's main export destinations are Middle East, Southeast Asia and Africa. Last year, Yonggang exported over 100,000 tonnes of rebar to these markets, but so far this year it has only shipped very small tonnage to Africa, due to the large price difference and low demand compared with strong domestic demand. Yongang's rebar and bar capacity has reached about 2.5m tonnes/year, and it also boasts a similar capacity for wire rod, SBB notes.

Daily Steel News - 27 Oct 09

Rebar import prices fall below $500/t cfr in east Asia
The offered price of imported rebar in east Asia has fallen to below $500/tonne cfr from $510/t cfr in mid-October. The decline is in tandem with weaker scrap prices and bearish sentiment for finished steel. Weak demand due to the approaching wintry conditions in the northern hemisphere has also contributed to the slowdown. "There are few buyers for rebar regardless of the price offered," a trader in Singapore notes. "Buyers are scared off when they see prices falling." Turkish rebar is being offered at $480-490/t cfr Singapore. Last heard offers from China were above $500/t cfr. "Buying has slowed down because there is more than enough rebar in the market to last through January," another Singapore trader says. "Buyers believe that they can get lower prices next month so they would rather wait for prices to settle," an importer adds. Offer prices of rebar in Hong Kong have dipped to around $480/t cfr for Turkish-, Korean- and Taiwanese-origin bars, trading sources say. "Demand is slow everywhere," a trader tells Steel Business Briefing. But he believes that this will change in the second quarter of next year due to the start of new construction projects in Hong Kong and Macau. Around 20,000 tonnes of Korean rebar was booked at $490/t cfr Hong Kong early last week, another trader tells SBB.

Billet import prices slide in bearish SE Asian market
Billet import offer prices have slipped by $15-20/t to $450-460/t cfr Southeast Asia in the past two weeks for December and January shipments from Russian Far East and Black Sea ports, and Turkey. Buying is sluggish because importers anticipate further softening in prices. "There is some buying in the region but buyers are holding back," a regional trader tells Steel Business Briefing. Quantities being booked are smaller than usual and are restricted to keeping rolling operations going. He tells SBB that $450/t is the current market price because higher-priced offers at $460/t cfr will not attract any buying interest. The Taiwanese have indicated that they can accept an export price of $450/t cfr Philippines but buyers are bidding at $440/t cfr, a trader in Manila tells SBB. Currently, buyers rather wait for prices to settle down than book billet. But they will start buying next month because they have to prepare for next year. "It will be a better first-quarter," he tells SBB. Traders report that a few small deals were concluded in the previous week at $460/t cfr Vietnam and at $465/t cfr Indonesia. Thai trading sources say that there was a prompt November shipment of CIS billet recently booked at $450/t cfr. "Buying is slow because it is just the end of the rainy season and worldwide sentiment is poor," a Thai trader says. He believes that Thai buyers will return to the market in mid-November in order to book January/February shipments.

Iron ore prices trend higher last week, says The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday show that the price for 62% Fe content iron ore has been trending higher during the week and ended more than 2% above the previous Friday's level. The reference price for 62% Fe content iron ore fines finished the week at $88.10/dry metric tonne CFR Tianjin port, China. This was a $1.80/dry metric tonne increase from a week earlier. The reference price for 58% Fe fines also moved generally higher during last week, and ended $2.10/dmt above the previous week's level. Within the delivered prices, rates for shipments from both the West and East coasts of India were stable. Freight rates from Australia to China began firming in the middle of the week, pushing the weekly average higher, while daily rates from Brazil to China increased nearly 20% during the week.

Daily Steel News - 9 Oct 09

Weak Chinese export prices create uncertainty - WSR
Falling Chinese export prices are influencing market sentiment, but they have yet to fall sufficiently to make a significant direct impact on global prices. Indirectly though, they are causing uncertainty, as potential buyers are delaying purchases, as they wait to see if export prices will decline further. However, as China is on holiday for a week or so, it will be some days before this situation clarifies. At the same time, with much restocking having been completed, some observers are fearing another price downturn, as global demand is still questionable. In such a "W" scenario though, this second decline is unlikely to be as deep as the first. Prime boron-added wire rod was being offered in recent weeks at $525-535/t cfr Southeast Asia, down from $540/t cfr previously. This contrasts with buyers bidding $505-510/t cfr. Billet from the CIS and elsewhere was also being offered last week at $495-510/t cfr East Asia. Trading sources tell SBB that with the narrowing of the rod-billet price differential, re-rollers prefer to import wire rod rather than roll their own billet. On the HRC front, Chinese offers into both northern and southern Europe were down to about €380/t ($552/t) cfr or less in some cases . equivalent to around $500/t fob China, or less. Offers to Korea were at a similar fob level. Rumours of much lower fob prices have been heard, but not confirmed. Meanwhile, scrap prices are typically weaker reflecting softer rebar and rod prices. As there are currently few signs of an immediate Middle East revival in demand, Turkish producers have been slow to re-enter the scrap market. Moreover, there are calls for excess capacity in the country to be closed.

Imports threaten stability of Russian domestic rebar prices
The Russian domestic market for long products is facing new challenges after a fairly stable summer, a major producer tells Steel Business Briefing. Weak international markets are threatening stable prices, which, should they remain unchanged, will attract more imports from neighbours, a source says. A thoughtful approach to stocking policies and thorough understanding of the diminished needs of customers led to a supply-demand balance during the summer. However, with post-Ramadan buying activity failing to show up so far and the traditional seasonal lull ahead of them, Russian producers are not optimistic. "Byelorussia, Moldova and Ukraine are closer to the regions where there is most of the demand," a major producer says. If prices don't fall this month, there are guaranteed to be more imports, he says. "Ukrainian imports have doubled in the last month," he notes. "We even attracted imports from Spain," another source adds. Sources close to Moldova Steel Works (MMZ) tell SBB that probably half of its wire rod allocations for this month will be going to Russia. The mill is said to be working at "good capacity utilisation rate, of at least 70%." Ukrainian producers' Makeyevka and Kriviy Rih decisions to cut production have been received well, another source says. From the June levels of around 13,800 roubles/tonne (€319/t) ex-warehouse (excluding 18% VAT) for rebar, prices today are 18,500-18,700 (€423 - €428/t) for regular grade, and up to €453/t for higher grades. But the volume of demand is expected to contract again, with both domestic and export markets' dynamics demonstrating that new waves of production cuts may be on the way.

Over-production threatens price weakness, executives say
Recovery for the European and global steel industry will be slow but steady over the end of this year and in 2010, industry executives comment to Steel Business Briefing. Stocks in both flat and long products all over the world are now lower and the industry is not going back to the worst levels of the recession, they believe. "There is a very delicate balance between demand and supply at the moment, but as soon as demand improves a little mills tend to increase production which causes again over-capacity and price weakening," one executive comments. Chinese prices are weakening and demand at the moment is low, but it has been like that for the past months and yet the general situation of prices, of demand and supply has improved from the worst levels of the past, they say. The European steel industry has proved to be resilient and strong in absorbing the crisis. When the price of hot rolled coils collapsed to €300/tonne mills were able to withstand this enormous price decreases and resulting production cuts. Despite the losses, companies still have a good financial position, one source says. For the next months there will be a gradual recovery characterized by oscillating prices . losing and gaining €20-30/tone. while demand will be unstable but not absent, executives agree.

Daily Steel News - 2 Oct 09

Holidays dull Asian sentiment for imported scrap
The import price for bulk shipment of deep-sea scrap into east Asia has fallen by around $5/tonne since last week to $340-345/t, trading sources tell Steel Business Briefing. "Turkish importers are still hesitating (to book scrap). Sentiment is weaker," a Korean trader tells SBB. Last week, Dongkuk Steel Mill's booking price for US-origin No.1 heavy melting scrap (HMS 1) was $346/t cfr, as SBB reported. Chinese trading sources say that the current import price of 80:20 HMS 1/2 is $340/t cfr this week whereas those in Southeast Asia say that offer prices are prevailing at $345-348/t cfr. A regional trader in SE Asia attributes the weaker sentiment to the market closure in China and Korea due to the holidays. "I do not foresee prices dropping further because there are few offers from suppliers," a trader in Vietnam says. He adds that since hardly any deals are being concluded, buyers are the ones talking the market down. Meanwhile, prices of containerised scrap are stable. Bookings by Taiwanese importers are unchanged at $320/t cfr for US-origin HMS 80:20. There are recent small-volume bookings by mills in SE Asia at $315-320/t cfr for containerized scrap from West Africa and Central America. Vietnamese trading sources tell SBB that containerised shredded from USA and Europe is currently offered at $335-340/t cfr.

SE Asian market hit by lower prices for Chinese longs
Prime boron-added wire rod from Chinese mills was offered last week at $525-535/t cfr Southeast Asia, down from $540/t cfr a week ago. This contrasts with buyers bidding $505-510/t cfr last week. And traders are heard inviting bids for Chinese wire rod at around $510/t cfr Philippines. Billet from the CIS and elsewhere is currently offered at $495-510/t cfr. Trading sources tell Steel Business Briefing that with the narrowing of the rod-billet price differential, re-rollers will prefer to import wire rod rather than keep their own rolling operations going. SBB is told also that some Chinese wire rod is imported to be cold-finished into smaller diameter rebar for lower-end usage in the region. Meanwhile, the export of Chinese billet declared as square bar is still taking place in SE Asia. The practice has emerged because boron-added square bar earns a 9% export rebate whereas billet exports are slapped a 25% export duty. "It is illegal," a Thai trader fumes. Prior to the arrival of the consignments at SE Asian ports in the Philippines, Indonesia and Thailand, the bills of lading are switched to declare these cargoes as billet. "The import duty of bar into the Philippines is 7% compared with the 3% import tax for billet," a Manila trader says. The current price for square bar into the region is $475-480/t cfr. However, traders say that the practice is not widespread. "There are offers but it is not a big volume. There cannot be too much billet being shipped this way or else it will draw the attention of the Chinese Customs," a trader in Hong Kong remarks.

Korean rebar demand sluggish, high prices blamed
September-October is traditionally the high season for Korean rebar sales yet domestic demand has remained depressed since earlier this month, market insiders tell Steel Business Briefing. Suggestions of speculative demand ahead of the country's 3 October Chuseok (harvest moon festival) holiday emerged around mid-September but actual rebar demand remains sluggish with no significant signs of improvement, they say. Chuseok is Korea's second largest festival. Industry insiders canvassed by SBB were unanimous in blaming high domestic prices for the sector's plight. From 1 September, rebar makers such as Hyundai Steel . citing the need to offset higher scrap costs . lifted their rebar list prices. Hyundai increased its list price for 10mm bar for supply to contractors by KRW 20,000/t ($17/t) to KRW 781,000/t ($621/t), as SBB reported. Speculation in the market that rebar makers would cut their prices soon has led some local distributors to begin offering rebar at KRW 750-760,000/t for immediate delivery, equal to KRW 20-30,000/t under mills' ex-works prices. But the mills insist no change. "We have already said we are firmly determined to maintain our current prices at home," a source at a major rebar maker insists. The rebar price cutback prompted by distributors is premature and likely to cause them losses, he adds.Meanwhile, in the two weeks from mid-September the country's rebar stocks have soared by 54,000 t to reach 220,000 t currently, SBB learns.

Russian scrap prices keep rising on fears of shortage
Russian scrap prices have risen again to 7,800-8,299 roubles/tonne ($258-272/t) delivered to domestic clients for grade A3 (HMS 1&2 80:20 equivalent). The increase comes as steelmakers continue to wind their offers up in a bid to secure tonnages, sources in the country tell Steel Business Briefing. Exports are $10/t cheaper, but the effective price is quite a bit higher after adding VAT and 15% export tax. With winter stocks not in place, it looks like the mills will be working on an "off the truck" basis, thus creating more danger of pushing up prices, they say. Admitting that any further scrap price rise needs to be supported by strengthening semis and finished product prices, one major steel producer says prices can only go up as high as 9,000 roubles/tonne ($298/t). "Prices are already close to the levels of last August/September . the highest ever . and it is unlikely to keep rising unless the finished product market goes through the roof," the steelmaker says. "Scrap is on the edge," another source confirms. There is only about 40% left of all the companies that used to operate in Russian scrap a year ago. Even with limits placed on the border points that can process scrap exports, there is simply not enough to go around, sources say. With winter upon us, there will be even less scrap available in the next several months, so prices are unlikely to fall. "Scrap is not yielding, longs market is not growing . confusing indeed," one seasoned observer concludes.

Daily Steel News - 15 Sept 09

Billet prices soften in SE Asia despite price stickiness
Billet offer prices in Southeast Asia have slipped by $10-20/tonne from late-August to $490-500/t, trading sources tell Steel Business Briefing. Most offers are at this price level but there are several at lower levels of $480-485/t cfr. "There is no market collapse. Some low-priced offers do not equate to the whole market coming down," a regional trader tells SBB. SBB is told that many mills are still reluctant to lower offer prices and are trying to maintain prices, despite the weaker sentiment. "Mills do not want to lower prices because scrap has been firm," an Indonesian importer says. There was a booking of 15,000 t of billet from Russian Far East port for early October shipment at $485/t cfr Philippines, local trading sources say. A trader is believed to have sold this position cargo. A cargo of 25,000 t of US-origin billet is recently heard offered at $485/t cfr Philippines for October shipment. Russian-origin 5sp/ps billet is being offered at $480/t cfr Taiwan. .It may have been a diverted cargo from China," a trader in Taipei tells SBB. But there is very little buying interest in Taiwan. "Demand for rebar is not good and stockists fear that prices will fall," the trader adds. He says that buyers are not keen to book "no matter what price is being offered" and adds that offers, as recently as a week ago, were heard at $500-510/t cfr. Domestic Taiwanese billet is now priced at the equivalent of $470-475/t fob or $490-495/t cfr Philippines. A booking of 5,000 t of Taiwanese-origin billet was booked to Vietnam more than a week ago at $495/t cfr Haiphong.

Korean H-beam demand weakens again
Korean domestic demand for H-beams has weakened again even though September-October is usually the high season for domestic sales. The softening presents challenges to mills that recently hiked prices. The Korean market for beams and other long products strengthened last month, but this was largely a temporary occurrence reflecting speculative demand ahead of expected price hikes from Hyundai Steel and other producers from this month. The downturn in market demand means that Hyundai faces difficulty gaining acceptance for its price hike from end-users. Hyundai's actual sales price for its 300x300mm H-beams being quoted by its distributors is around KRW 880-890,000/t ($716-724/t), lower than the mini mill's list price. Hyundai, Korea's largest long-products maker, lifted its new list price for 300x300mm beams to KRW 910,000/t from 1 September, as Steel Business Briefing reported, aiming to end discounting among its distributors from this month. "However, to sell at Hyundai's list price is difficult as market demand is not supporting its aim to raise prices," a distributor on Korea's southern coast tells SBB. Prospects for the rest of the year or early next year are also gloomy. "Normally, by this time of year there are new H-beam orders from consumers for the coming year's demand but we haven't seen any yet," he adds. Meanwhile, Korea's H-beam output this month from the two major producers Hyundai and Dongkuk Steel Mill is expected to decrease slightly by 14,300 t to 246,000 t compared with August's 260,300 t, SBB learns

Iron ore price turned upward at end of week: The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday show that the price for 62% Fe content iron ore fell back during most of the week from the previous Friday's level, but rose by more than 1.5% on Friday. Average weekly freight rates on all of the key shipping routes to China were lower than the previous week. The reference price for 62% Fe content iron ore fines finished the week at $77.30/dry metric tonne CFR Tianjin port, China. This was a $1.40/dmt, or 1.8%, decrease from a week earlier, but a rise of $1.20/dmt from the low of $76.1/dmt reached mid-week. The reference price for 58% Fe fines finished the week at $64.70/dry metric tonne CFR Tianjin port, China. Within these delivered prices, rates for shipments from both the west and east coasts of India and from Australia and Brazil to China fell steadily during the week. The Steel Index is majority-owned by Steel Business Briefing and specialises in compiling steel and iron ore reference prices based on actual transaction data. Further details of the methodology and specifications for the two grades of iron ore can be found on the website www.thesteelindex.com. Companies wishing to subscribe to the full set of reference prices or apply to submit iron ore or steel price data can do so on the website .

Daily Steel News - 21 Aug 09

SE Asian billet importers await direction from China
The recent softening of China's steel markets has affected sentiment in Southeast Asia, industry sources tell Steel Business Briefing. While there is little scope for the Chinese to export billet because of the 25% export duty, the massive size of the country's steel market exerts a large influence on the direction of business being done in the wider region, traders say. In Southeast Asia limited offers are prevailing at $500-530/tonne cfr for billet from the CIS and $500-510/t cfr Philippines and $520/t cfr Vietnam for Taiwanese material. Malaysian-origin billet is being offered at $510-520/t fob. Concluded prices in the region were around $500/t cfr last week. "There are not many offers or much bidding from the re-rollers," an Indonesian buyer says. Rebar prices are flat in the country and seem likely to improve only around end-September after the Islamic fasting month, he says. "Sentiment is bad in the region because of fears of a price correction. The flats market is not doing well and domestic prices in China have been falling," a trader in the Philippines warns. Little billet buying is taking place because Vietnamese importers are waiting to see what will happen next to the Chinese market. "The impact of China is not direct because debar prices are still high there. But reduced scrap buying from China may force scrap prices down and this will impact on billet." Vietnamese importers are bidding at under $500/t cfr, SBB hears. Others point out that the region does not have sufficient billet for the approaching months.

Turkish scrap booking continues, prices are increasing
Turkish steel mills kept on booking scrap from international suppliers this week. They bought six deep sea cargoes from the EU and the US, and new offer prices are increasing, market sources tell Steel Business Briefing. Recent bookings include: one HMS 1&2 70:30 and shredded mixed cargo for $317-325/tonne cfr. Two HMS 1&2 70:30 and bonus scrap mixed cargoes sold for $316-326/t cfr. One HMS 1&2 80:20 and shredded mixed cargo was valued at $324-329/t cfr. One HMS 1&2 70:30 cargo went for $313/t cfr and another HMS 1&2 80:20 and shredded mixed cargo for $322-327/t cfr. New offer prices from US and EU suppliers have increased on last week. HMS 1&2 80:20 is currently being offered at $325-330/t cfr, up by $5-10/t. HMS 1&2 70:30 is being offered at $317-320/t cfr (up by $7-10/t) and shredded scrap at $330-332/t cfr with a $5-7/t increase. CIS region prices also increased on last week by $5-10/t and offers are at $320-325/t cfr currently.

Daily Steel News - 20 Aug 09

Malaysia exempts mandatory standards for steel imports
Malaysia has temporarily suspended its new steel import policy that requires importers to obtain a certificate of approval (COA) for consignments. The suspension . from 13 August to 12 October 2009 . is to ease port congestion caused by delays in testing and quality assurance of steel imports (a COA requirement), Ministry of International Trade & Industry (Miti) sources tell Steel Business Briefing. The affected steel products fall under the HS classification chapters 72 and 73 and do not apply to the 57 long steel products that were enforced on 15 November 2008. The new ruling took effect on 1 August. Representatives of the Airfreight Forwarders Association of Malaysia and downstream steel user industries including the automotive, electronics and aerospace sectors have voiced displeasure over the need to obtain the COA before customs clearance. SBB is told a meeting will be held this week among representatives of Miti, Malaysia's certification, inspection and testing body SIRIM QAS, Malaysian Iron & Steel Industry Federation, Construction Industry Development Board and the Malaysian customs to discuss and identify a list of non-critical steel products. Less stringent COA requirements will apply to these, aiming to reduce port congestion when the suspension period is over. Meanwhile, SBB is told that SIRIM QAS will offset all fees and charges already incurred from 1-12 August 2009 and decentralize COA approvals in all SIRIM branches at the major ports of entry of Penang, Johor Bahru, Kota Kinabalu and Kuching. Currently, all approvals are decided at SIRIM, Shah Alam. Provisions within the new policy also include the halving of import duties on flat products to 25% effective 1 August, with a further reduction to 0-10% by 1 January 2018.

Turkish rebar mills finding it hard to recover input costs
Turkish rebar producers are finding it hard to pass on their raw material costs, market sources tell Steel Business Briefing. Slow demand in export markets is pushing export offers lower, and this sluggish demand is expected to continue for a couple of weeks Turkish rebar export offers are reported to be as high as $520-525/tonne (€365-369/t) fob due to increasing scrap and billet import offers, but slack demand has held prices as low as $495-500/t fob for late September shipment. One market player tells SBB he expects the next two weeks to be quiet, but that market circumstances are forecast to change starting from the second week of September. Some sales have been booked to Egypt for shipment early September. The increase in Egypt's local prices is considered positive by the Turkish mills who believe higher import prices might be accepted by the Egyptian market in the coming weeks.

Daily Steel News - 19 Aug 09

Hyundai seen lifting domestic rebar prices in September
Hyundai Steel is considering lifting domestic rebar sales prices from the beginning of September Steel Business Briefing learns from a company source. The increase margin is expected to be around KRW 20-30,000/tonne ($16-24/t) and will take the mini mill's new price for 10mm diameter bar for direct supply to contractors to KRW 750-760,000/t ($596-604/t). Hyundai's current price for base size rebars . changed 1 August . is KRW 731,000/t while its list price remains KRW 761,000/t. The KRW 40,000-50,000/t increase it introduced earlier this month was necessary to help offset higher scrap costs and maintain profits, as SBB reported. "But even with the increase this month, covering the input costs is still difficult because scrap prices are jumping much higher and faster," the Hyundai source says. Last week, Hyundai contracted four cargoes of ferrous scrap from West Coast USA at $358/t cfr for heavy melting scrap (HMS) 1 basis for September-October shipment. This booking price was around $10/t higher than was contracted the previous week by Chinese importers for US scrap and also more than some $20/t higher than similar contracts concluded at the beginning of August, as SBB reported. Meanwhile, an official from the Korea Construction Procurement Part Association describes Hyundai's move as an .absurd gesture'. "Hyundai's intention is to defend its prices against a drop because it worries that the depressed demand during the present low season will see prices decrease," the official says. He doubts that consumers will accept higher prices and that if so, Hyundai may offer discounts again.

SE Asian billet import prices reach $500/t cfr Levels
Offer prices of imported billet have risen to above $500/t cfr, compared to $480-490/t cfr only a week ago. Offers of Taiwanese billet were priced at $505/t cfr to the region during the week ending 14 August, trading sources tell Steel Business Briefing. Suppliers of Russian and Ukrainian billet are aiming at export prices of $510-520/t cfr and whereas offers of Malaysian billet are around $510/t fob. Traders report unconfirmed bookings of Taiwanese-origin material at $500/t cfr to Vietnam and the Philippines. Local traders note that buyers in Vietnam are still lagging behind in their bidding prices, at $480-485/t cfr. Small quantities of Malaysian billet are believed to have been recently booked at $490/t fob, a higher price because of a lower preferential import duty for Malaysian-origin billet. "Billet prices are really on the boil now," a trader in Ho Chi Ming says. He says that local importers "are trying to resist higher prices but they will buckle" because there is demand. Offers of billet are also very limited in the regional import market. "It is a big jump in prices because scrap has gone up," a regional trader tells SBB. But he says that buyers will be exercising caution having been "burnt before and will not book much, only what they need." Domestic rebar prices in many regional markets can cover the prevailing billet import cost, SBB is told.

SBB Special Report: China inks iron ore price deal with FMG
Chinese mills have welcomed the iron ore price settlement struck between Baosteel and China Iron & Steel Association (CISA), and Australia's third-largest miner Fortescue Metals Group, describing it as a fair result for all parties. Fortescue announced on 17 August that it had agreed to sell its Pilbara fines at US$0.94/dry metric tonne unit (dmtu) and lumps at $1/dmtu from 1 July until the end of this year. This represents a decrease of 35% and 50% respectively on 2008 benchmark prices. The deal is around 3% less than the benchmark price Rio Tinto agreed with other Asian mills in May but is still far from the 40-45% that CISA wanted. As part of the deal Chinese mills are committed to take 20m tones from Fortescue during this period. Fortescue spokesman Cameron Morse told Steel Business Briefing that despite producing just 28m t for the 12 months to 30 June, the miner would reach its July-December target of 20m t by the end of this year as planned. "It will certainly be up around that mark," he said. "It's effectively a (Chinese) government guarantee that mills will take that much ore from us at a time when there's little shortage of iron ore in China," he added. A Baosteel official said that as Fortescue has entered into long-term contracts with Chinese mills for most of its production and is unlikely to sell much on the spot market, it is more willing to agree benchmark terms with Chinese mills than are Rio, BHP Billiton and Vale. "CISA is more open to a flexible pricing system, but negotiations with the other three miners will remain tough," the Baosteel official told SBB. A mill official in eastern China said it made sense for CISA to negotiate a lower price with the Perth-based miner as its iron ore Fe grade is lower than the that of the other major miners. He believed the settlement does not make Fortescue more competitive than its rivals. "The current settled prices are just normal," he says. An analyst based in Perth said Fortescue's ore quality was 8% worse than Rio's but the smaller miner had only conceded a 3% price reduction. "Not a bad deal for them I would've thought," he said. A northern China-based mill official pointed out that the settlement is "conditional" on Chinese mills committing to purchase about 20m t of Fortescue's iron ore in the second half of this year. "It shows that CISA has conceded some ground in the negotiations, which may encourage the larger miners to also raise some additional requirements," he said.

Turkish demand for imported scrap remain slow on high prices
Turkish steel mills booked five deep sea scrap cargoes last week, and with the help of Far East buying prices have continued strengthening, Steel Business Briefing learns from market sources. In the latest transactions HMS 1&2 80:20 was sold for $317-318/tonne cfr, shredded scrap was $322/t cfr and HMS 1&2 70:30 $309/t cfr from US and EU suppliers. Current offer prices have increased a bit on last week. HMS 1&2 80:20 is currently being offered at around $320/t (up by $5-10/t), shredded at $325/t cfr (up by $5/t), and HMS 1&2 70:30 at $310-315/t cfr (up $10/t), SBB learns from traders. CIS prices are also standing firm. The latest transaction for A3 grade scrap was $315/t cfr, which shows $5/t increase on the previous week.

Tokyo Steel lifts scrap buying prices by $20
Tokyo Steel Manufacturing is lifting its scrap purchasing prices by a large ¥2,000/tonne ($21/t) for all grades at all works effective from 18 August arrivals. Though exports are a factor, pundits suggest Tokyo Steel is preparing customers to accept higher steel prices in September. Tokyo Steel is offering more for scrap not just because of stronger regional prices but also because other Japanese mini mills are quietly paying higher .behind prices' to secure supplies, a trader tells Steel Business Briefing. Nevertheless, exports are a factor. The winning bid in the Kanto Tetsugen's H2 scrap export auction held on 11 August was over ¥5,000/t higher than the winning bid in the previous month's auction and lifted the price to ¥31,970/t fas. Though only Korea is currently buying Japanese scrap, Korean mini mill Hyundai Steel has been aggressive with Japanese purchases and is now paying ¥31,800/t fob. But Japanese mini mills still have to collect scrap, and with scrap generation low many have been secretly offering higher prices to secure tonnage. Tokyo Steel's new H2 price at its Okayama works becomes ¥33,000/t ($349/t) for seaborne delivery and ¥32,000/t for truck delivery while H2 at Kyushu, Takamatsu and Utsunomiya will fetch ¥31,000/t, ¥31,500/t and ¥32,000/t respectively. It last changed its prices for 6 August arrivals adding ¥500/t . and held them for 10 days over Japan's .Obon' summer holidays. Tokyo Steel will table its domestic list prices for September on 18 August. "This scrap price increase might be Tokyo Steel's tactics to lift their list prices, blaming higher scrap costs," the scrap dealer noted

Daily Steel News - 13 Aug 09

Shagang nudges rebar prices up while spot slides
Eastern China's Shagang has tweaked its rebar prices upwards by RMB 50/tonne ($7/t) for mid-August delivery (11-20 August) and kept wire rod prices unchanged from early August levels. With the price change Shagang announced on 11 August, the new price for 18-25mm HRB335 has been lifted to RMB4,670/t ($683/t) while the price of its 6.5mm wire rod remains at RMB 4,650/t, both including 17% VAT. Just what strategy Shagang is pursuing is a mystery but certainly, it has not helped to stabilize the spot market in this region of China. In Hangzhou, prices of Shagang-sourced 18-25mm HRB335 rebar have slipped to about RMB 4,200-4,250/t, down by as much as RMB 400/t since 5 August. Meanwhile, beginning 10 August Shanghai market prices for 18-25mm HRB335 prices have further declined by about RMB 200/t to RMB 4,090-4,140/t. "No one is buying, even at a price of RMB 4,090/t," a Shanghai trader tells Steel Business Briefing, adding that he had heard some traders had lowered their prices even to RMB 4,050/t. Beijing traders are offering 16-25mm HRB335 rebar in a range of RMB 4,470-4,600/t, also down by about RMB 400/t compared with 6 August. "The market prices are confusing; many small traders have felt pressure of high inventories and want to speed up sales, but buyers would not purchase when the prices are rapidly falling," one says.

European rebar prices moving up slowly, plate weakens
The latest reference prices released by The Steel Index show that European rebar prices have risen since last week, but plate prices are slightly weaker. However, the US plate reference price is just higher. The southern European rebar reference price has increased to €360/tonne ($517/tonne) since last week, and the average delivery lead-time is just shorter at 3.7 weeks. The northern European rebar reference price ex-works also rose, by €9/t, and the average delivery lead-time is more than a week longer than last week at 4.2 weeks. The spreads between TSI's European rebar reference prices and the average LME Mediterranean weekly billet settlement price, which was $385/t last week, show a spread to TSI's southern European rebar price of $132/t, an increase of $19/t from last week. The spread to TSI's northern European rebar price is $82/t, up $10/t on the previous week. The northern European plate ex-mill reference price is slightly lower than last week at €464/t ($666/t), while the average delivery time is just shorter at 6.2 weeks. The southern European plate ex-mill reference price is also lower than last week, but the average delivery lead-time is unchanged at 5.5 weeks. The US plate FOB Midwest mill reference price is $4/short ton higher than last week at $581/short ton ($640/tonne), and the average delivery time is unchanged.

Japanese scrap export prices jump in Kanto auction
The auction for H2 grade scrap for export held by the Kanto Tetsugen group of scrap dealers on 11 August concluded with a winning bid price that was a huge ¥5,010/tone ($51.7/t) higher than the top bids in last month's tender. The highest bid price in Tuesday's auction was ¥31,970/t ($331/t) fas and the second highest was ¥31,910/t fas. Both winners were awarded 5,000 tonnes each. "The very high winning bid price surprised us: we wonder who would buy this expensive scrap," a Tokyo-based scrap dealer tells Steel Business Briefing. Just the day prior to the auction, Korean mini mill Hyundai Steel purchased Japanese scrap at ¥31,500/t ($326/t) fob, equivalent to ¥30,500/fas. Though the tonnage involved is unknown, the belief is Hyundai bought little because it wanted to wait and see the results of the Kanto auction. Unfortunately for Hyundai, the Kanto auction price was much higher and it will have to pay more for Japanese scrap in future, SBB hears. The Japanese mini mills are usually eager to collect scrap before Japan's .Obon' summer holidays in mid-August, and if they have already secured sufficient scrap stocks, they will just wait and see how the scrap market moves, the scrap dealer tells SBB. "But the generation of scrap is very low and the mini mills that do not have stocks in hand might have to lift their buying prices," he adds. By comparison, Tokyo Steel Manufacturing is currently offering ¥30,000/t for H2 delivered at its Utsunomiya works in the northern Kanto.

Daily Steel News - 11 Aug 09

Rebar prices to SE Asia move up, but local resistance
Offer prices for rebar to Southeast Asia have risen due to the continued strength in scrap prices, trading sources tell Steel Business Briefing. But importers in Singapore and Hong Kong are generally unwilling to pay above $500/t cfr because there is little change in demand in their home markets. In fact there are very few offers heard in this regional market, which normally receives supplies from Korea and Taiwan. Taiwanese trading sources tell SBB that the mills there would be aiming to export their rebar at around $500/t fob. Meanwhile offers from Turkey have risen to $525-540/t cfr, compared to just under $500/t cfr in mid-July. "Some suppliers are raising their export prices because they think that China will be a good market for their bar," a Singapore trader says. The Chinese domestic rebar market has moved up strongly recently, "but there could be some price correction soon," he adds. Traders say the domestic price in Singapore is around S$760/t delivered-basis ($530/t), which provides little incentive to import rebar.

Turkish mills turn to Asia for price support
Turkish mills are reported to be sending billet mainly to the Far East as demand is generally low in the Middle East. Transactions are reported to be at around $480-485/tone cfr Asia. Two cargoes of 40,000t of billet are reported to have been shipped to Far East customers, helping to create a "feasible" price level for Turkish mills, market sources tell Steel Business Briefing, but they are not particularly happy about the price level. One producer says that given the high price of scrap imports, they expected to find customers at $450/t fob, but the market could only achieve $435/t fob. Some demand is reported from Saudi Arabia, with 50,000t of billet booked by Saudi mills, SBB learns. Also a cargo for Canada has been booked, a producer tells SBB. The market sees this business as a sign that cost-based price increases are more likely to be accepted by the international markets, and that demand might recover after Ramadan. One trader tells SBB that scrap has been booked by Turkish traders in the expectation that rebar demand would recover after Ramadan, and that prices are not likely to go down from the current level. Turkish rebar offers are at $485-500/t fob, and some mills are reported to have concluded sales for $500/t fob.

Scrap import prices continue to rise as supply tightens
Imported scrap prices to east Asia rose during the week ending 7 August, trading sources tell Steel Business Briefing. Three cargoes of US scrap, for September and October shipment, were booked at a composite price of $350/tonne cfr eastern China. The cargoes were split equally (50:50) with 80:20 heavy melting scrap (HMS) 1/2 and shredded. The Chinese booked an estimated 30,000 tonnes of Japanese origin HS (plate & structural) at $365-370/t cfr during the same week, up from $350/t cfr previously. "Chinese buying may be slowing down," a trader in China tells SBB. New offer prices have risen to $380/t cfr. Suppliers are holding back offers of bulk HMS scrap, market sources in Southeast Asia say. Traders in the region report hearing of a bulk shipment of scrap from Europe to Malaysia at a composite price of $345/t cfr, concluded in the last week of July. This is believed to have comprised 15,000 t of 80:20, 10,000 t of shredded, 5,000 t each of HMS 1 and 5,000 t of P&S. Offers of containerised US scrap to Taiwan are prevailing at $325/t cfr Taiwan and for shredded, $330-335/t. A trader reports there are bookings but SBB is unable to confirm. In Vietnam, shredded-in-container from USA/Europe is being offered at $335-340t/cfr. A local trader, who says that he has a bid at $330/t cfr for this, believes that scrap prices will not soften in the near future. "There is a big shortage. Prices are rising and there is still buying," he tells SBB.

62% iron ore reference price exceeds $100/t: The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday (7 August) show that the price for 62% Fe has passed the $100/tonne cfr level. The reference price for 62% Fe content Iron Ore fines finished the week at $104.10/dry metric tonne CFR Tianjin port, China. This was a $8.80/dmt, or 9.2%, increase from a week earlier, and is 28% above the level a month ago. Within these delivered prices, the average weekly freight costs for all three key iron ore routes to China are reported to have slipped. The Steel Index is majority-owned by Steel Business Briefing and specialises in compiling steel and iron ore reference prices based on actual transaction data. Further details of the methodology and specifications for the two grades of iron ore can be found on the website www.thesteelindex.com. Companies wishing to subscribe to the full set of reference prices or apply to submit iron ore or steel price data can do so on the website.

Daily Steel News - 7 Aug 09

Billet offer prices to SE Asia continue to firm
Billet offer prices continue to rise, with offers at $470-480/t cfr Southeast Asia. But bidding prices by most buyers in the region are lagging behind by $10-20/t. Recent transactions were done at $460-465/t cfr, up by around $5/t from end-July, trading sources tell Steel Business Briefing. The appreciating scrap price is the main cause for the uptrend in billet offer prices, traders say. "I think prices will soon reach $470/t cfr," says one in the Philippines. The last booking done was $455/t cfr Philippines in middle of July and he is receiving bids at $460/t cfr now. Offers of Taiwanese material are prevailing at $475/t cfr and of Russian billet at $470-475/t cfr. Transactions were done at $460-465/t cfr Indonesia recently including for Turkish material, SBB is told. Ukrainian-origin billet was booked at $465/t cfr last week but new offers of Ukrainian billet are now at $480/t cfr. An importer says that he has received an offer for Indian material at $465/t cfr Indonesia. In Vietnam, buyers are generally bidding at the maximum of $455-460/t cfr whereas offers for CIS billet are prevailing at $470-480/t cfr, trading sources say. A trader reports CIS billet was last week booked at around $462/t cfr southern Vietnam for September shipment. Malaysian billet was heard booked recently at $485/t cfr Vietnam. Malaysian billet generally fetches a premium price because Asean-origin billet enjoys a preferential import duty and usually a shorter delivery time.

CIS billet export market up $30/tonne

CIS billet export prices
27 Jul 09 3 Aug 09 10 Aug 09* 17 Aug 09* 24 Aug 09* FOB $/t
390 -405 405 – 435 410 – 435 415 – 435 415 – 435 * SBB Forecast

The CIS billet export market is "defying all odds" as producers raise offer prices and buyers are tentatively accepting new higher levels, market sources tell Steel Business Briefing. Rising steadily from around $390-410/tonne fob (€271-285/t) Black Sea last week, and despite earlier expectations of weakening, the price of billet from the CIS is now around $420-435/t fob Black Sea. This includes a concluded deal at $435/t fob Black Sea into North Africa and the Middle East yesterday, sources say. Although the fundamentals of the market have not changed greatly, the majority of sources say that buyers appear to be "more adventurous in their deal-making". With stock market indexes showing modest improvement, government fiscal measures taking effect, and no sign of scrap prices yielding, the perception of the market has changed for the better, one seasoned market observer explains. Speculation is also rife, he adds. It is only the perception that has changed, another market source notes. While Asia and particularly China, are "still strongly out in the market", improvement in long finished products' demand is needed to sustain the current trend. It is clear now that it is a producers' market, although an influx of extra available tonnages could quickly change this situation, another source claims. "We need to see returning demand for, and buying of, long finished products from the big markets - Middle East, Algeria, Egypt and USA," a European producer concludes. He adds, however, that weakening is unlikely right now, in view of continuously rising costs and steadfast demand.

Shanghai merchant bar prices softening
Shanghai merchant bar prices are showing signs of weakening, but market sources do not envisage large price falls in the short-term. Since the beginning of August, merchant bar prices have risen a number of times, by RMB 400/tonnes ($59/t) in total, in the wake of massive price hikes for leading products such as rebar. While some traders are holding their offers at about RMB 4,450/t ($651/t) for 50x50x5mm angles sourced from Maanshan Iron & Steel (Magang), others have clipped prices by RMB 20/t to RMB 4,430/t for the same material. Meanwhile, 16a channels sourced from Magang are priced at about RMB 4,380/t. Steel Business Briefing notes that prices for both products have surged by about RMB 700/t this month compared with those for early July. "Rebar prices have started to decline and have dampened merchant bar market confidence to some extent," a Shanghai trader says. He adds that some traders remain profitable even after the small price cuts. Another local trader tells SBB that merchant bar inventories have not increased greatly, which could prevent a price collapse occurring. Further, the market anticipates that Baosteel will raise its prices for September, which will immediately lift the market again.

Daily Steel News - 4 Aug 09

Shagang stuns market with huge bar/rod price hike
Eastern Chinese steelmaker Shagang astonished the markets with a massive price increase of RMB 600/tone ($88/t) for rebar and RMB 500/t for wire rod for ex-works delivery during 1-10 August. 18-25mm HRB335 rebar and 6.5mm wire rod prices have been adjusted to RMB 4,620/t ($676/t) and RMB 4,650/t respectively, with 17% VAT. Steel Business Briefing notes that Shagang's rebar price has surpassed Hebei Iron & Steel's RMB 4,450/t and Shougang's RMB 4,475/t. Shagang's large price hike stimulated increases of about RMB 300/t in eastern China's main steel markets of Shanghai and Hangzhou on 3 August. Hangzhou prices for Shagang-produced 18-25mm HRB335 rebar have soared to about RMB 4,550/t. Meanwhile, Shanghai traders are offering 18-22mm HRB335 and 16-22mm HRB400 rebar at about RMB 4,440-4,450/t and RMB 4,500/t respectively. "The steel market price is like a balloon out of control and it's likely to fly higher if there's no downwards pressure on it. Growing market inventory could provide the pressure to drag down the balloon," a trader in eastern China says. Rebar futures prices on the Shanghai Futures Exchange have also continued to rise, with October contract prices closing at RMB 4,857/t on 3 August from 31 July's RMB 4,672/t, up 7%.

Korea's Hyundai lifts prices for rebar and beams
Despite being the season of low demand for long products in Korea, Hyundai Steel has raised its domestic sales prices by KRW 40,000-50,000/tonne ($33-41/t) from 1 August, citing the need to offset higher scrap prices. The increase lifted the price for 10mm diameter bar for direct supply to contractors by KRW 40,000/t to KRW 731,000/t ($594/t), from KRW 691,000/t ($562/t) at the beginning of July. Hyundai's 600x300mm H-beam sales price increased by KRW 50,000/t to KRW 850,000/t ($691/t) from KRW 800,000/t. However, the Korean mill's list prices for rebar and H-beam remain unchanged since 1 June at KRW 761,000/t ($619/t) and KRW 900,000/t respectively. "We decided to lift our prices to help our profitability. However, we will monitor the domestic market to see whether these higher prices will be accepted and adjust them accordingly later," a Hyundai source tells Steel Business Briefing. Korea's domestic scrap prices have been rising gradually from early July, with electric arc furnace (EAF) makers near Busan on the southeast coast now paying KRW 380-390,000/t ($309-317/t) for Shindachi grade from KRW 310-320,000/t a month ago. Decreasing volumes of domestic scrap and higher scrap import prices are the major reasons for the increases. Hyundai booked Japanese H2 grade scrap in its 31 July tender at ¥28,800/t ($303/t) fob from ¥28,000/t fob a week ago, up by ¥800/t ($8.4/t) as SBB reported. Meanwhile, Dongkuk Steel Mill also lifted its domestic prices for long products from 3 August. The new price for 10mm diameter bar is the same as Hyundai's at KRW 731,000/t, up by KRW 40,000/t.

Tokyo Steel lifts scrap purchase prices, again
Tokyo Steel Manufacturing has raised its scrap purchase prices by ¥500-1,000/tonne ($5.27-10.5/t) for all grades at all its works effective 4 August arrivals. The company has hiked its scrap purchase prices four times over a period of ten days and the total price increase is ¥1,000-2,000/t. Tokyo Steel's new H2 price at Okayama works is ¥30,500/t ($321/t) for seaborne delivery and ¥29,500/t for truck delivery. Its price at Kyushu, Takamatsu and Utsunomiya is ¥28,500/t, ¥29,000/t and ¥29,500/t respectively. "The current export price is becoming lower than Japanese domestic purchase prices. However, dealers are collecting
scrap for export because these would be for previously contracted export cargoes. "This means that the mini mills here have to lift their purchase prices to secure scrap," a scrap trader tells Steel Business Briefing. He believes that very low scrap generation, currently 30-40% lower year-on-year, has resulted in a very tight supply situation. Hyundai Steel's purchase price of Japanese H2 grade scrap on 31 July was ¥28,800/t ($303/t) fob, as SBB reported. "Hyundai was aiming to buy about 100,000 t but only could book about 20,000 t, because its bidding price was too low for dealers to make profit," another trader says. He believes that overseas mills will have to raise their purchase price after this week in order to secure sufficient

Scrap offer prices continue rising despite Turks' absence
Turkish steel mills remained away from the global scrap market last week because of higher prices, but Far East mills' buying is still strengthening the global scrap prices and Turkish mills are expected to resume buying soon, market sources tell Steel Business Briefing. Only one deep sea cargo was booked from EU after the previous week's eleven cargoes, and it was sold for $294/tonne cfr for HMS 1&2 70:30.
It is reported that the US and EU suppliers' offer prices continued climbing on Far East mills' strong demand. Current offer prices for HMS 1&2 70:30 are at $298/tone cfr, $8-13/t higher than the last week's offers. HMS 1&2 80:20 prices are at $310/tonne cfr, up by $10-15/tonne, and shredded scrap is at $315/tonne, also up by $10-15/tonne. However CIS prices for A3 grade scrap seem stable at $287/t cfr Istanbul and $292/t cfr Izmir levels. But it is expected to move above $300/tonne cfr very soon, SBB learns.

Daily Steel News - 28 Jul 2009

Rebar price hike making Chinese construction firm nervous
Shanghai Securities News reported that rebar prices advance successively steel users begin to worry about the supply. The demand of rebar in spot market has been driven into an unparalleled level by the lately started large infrastructural constructions and the improving operations in real estate sector. And some small steel user worries about the short of rebar supply in Q3 midseason of constructions. Under this situation, some small steel users turn to futures market to ensure the purchasing. As learned the number of registered cargoes gradually increases and the rebar stocks of Shanghai Futures Exchange firstly outnumber 10,000 tonnes this week. Small users tend to deal with future delivery since the minimum tonnage in the delivery is only at 300 tonnes fit for small trades. Prices for the futures contracts in Shanghai Futures Exchange all went up recently that for dominant contracts continued to break down records this week. The survey shows that spot prices for main rebar are traded at CNY 4093 per tonne to CNY 4456 per tonne and the average prices for futures delivery are at CNY 4100 per tonne to CNY 4269 per tonne. To sum up rebar prices are expected to head up both in spot and futures markets. Mr Xiong Zheng GM of Shanghai subsidiary of Soochow Securities said "Rebar prices bubbles up mainly due to the hot downstream demand." Government huge investments have brought in lots of demand of rebar which fears small users that they will be hard to let in rebar in the incoming midseason. Many small traders support the thought of buying future contract, when mills always give priorities to large steel consumers. Mr Wei Bin director of steel department of Shenyin Wanguo Future said "It's feasible for them to absorb products from futures market." If small agents want successful futures delivery there must be cargos in the depot and the depot should not be far from the agents. At present, the total storage capacity of rebar referred to Shanghai Futures Exchange is at 3 million tonnes including 0.54 million tonnes in Shanghai, 1.47 million tonnes in Jiangsu, 0.39 million tonnes in Zhejiang, 0.6 million tonnes in Tianjin. However the registered cargos are a bit few at present. Expert said that it needs more mills and traders to take part in the businesses.

Chinese iron ore importers look beyond traditional suppliers
Combined imports of iron ore from China's main supplying countries . Australia, Brazil and India . dipped slightly in June, Steel Business Briefing learns. According to Chinese customs statistics, imports from these countries amounted to 44.2m tonnes, 79.9% of China's total imports of 55.32m t. In May, iron ore shipments from these countries were 82.7% of the total. During the first half of this year, China imported 121.62m t of Australian iron ore, up by 42.93% from the corresponding period of last year. Imports from Brazil rose by 20.43% to 60.83m t while Indian-origin ore rose by 10.12% to 62.49mt. The next three main iron ore suppliers to China in June were South Africa, Ukraine and Russia and imports from these countries grew by 48.4%, 16.9% and 12.7% respectively over May. During the first half of this year, China's iron ore imports from South Africa, Ukraine and Russia also recorded sharp increases (see table). Chinese buyers are eager to develop new iron ore supply channels, to reduce dependence on the traditional three major supplying countries and strengthen their bargaining power, a Shanghai-based iron ore trader tells SBB. His company is now looking for some iron ore supply from Iran for his customers. "Mills are more flexible now to try iron ore from various sources," he says. However, he also points out iron ore project investments in many countries are facing difficulties. This means China's dependence on the traditional ore supplying countries is unlikely to change in the short term.
China's imports of iron ore million t. (Source: China customs)
Jun 09 May 09 m-o-m Jan-Jun 09 H1 09/08
Australia 23.72 21.71 9.26% 121.62 42.93%
Brazil 12.21 13.6 -10.2% 60.83 20.43%
India 8.29 8.92 -7.06% 62.49 10.12%
South Africa 4.2 2.83 48.41% 16.61 98.74%
Ukraine 1.52 1.3 16.92% 5.61 98.01%
Russia 1.24 1.1 12.73% 5.37 76.77%

China domestic iron ore prices continue to rise
Chinese domestic iron ore prices have continued to increase from June levels, market sources tell Steel Business Briefing. The price of iron ore concentrates grading 66% Fe is prevailing at around RMB 640-650/wet metric tone ($94-95/wmt) in north-eastern China's Liaoning province, on an ex-works basis including 17% VAT. This represents a near 16% climb from mid-June's RMB 550-560/wmt. The price of 66% Fe iron ore concs in eastern China's Anhui province is around RMB 680-690/wmt on the same basis, up from June's RMB 660-670/wmt. Traders say that for some mills to turn to domestic ore now is quite understandable, as high grade imported ores are generally too expensive. Overall demand for ore among the mills is increasing given that China's monthly crude steel output has shown continuous rises since May. A Beijing-based analyst says although domestic ore prices are also rising, the rate of increase is not as sharp as for imported iron ores. The mills are unlikely to stock too much domestic ore under current market conditions because of the uncertainty of the imported iron ore price negotiations. "In the short term, unless imported ore prices collapse suddenly, domestic ore prices will probably continue to rise, supported by strong domestic steel prices," the analyst predicts. CISA statistics suggest China produced about 83.26m t of crude iron ore in June, up from 65.55m t in May. In the first half of this year, China produced about 379.9m t of crude ore, down by 4.8% year-on-year.

Doubt cast on talk of ore price settlement by 1 August
Disagreement has emerged among several Chinese steelmakers over comments attributed to Li Xiaowei president of central Chinese steelmaker Valin Iron & Steel Group and a CISA vice chairman . to the effect that the iron ore price negotiations may be settled by 1 August. Though Li apparently continued to insist that China would not accept the 33% price decrease decided between Rio Tinto and the Japanese mills in late May, his comments nevertheless received wide coverage in the Chinese media and caused a stir in the Chinese market. But steel sources contacted by Steel Business Briefing doubted the talks would be concluded within the ten days that Li indicated. A Baosteel official said he had heard nothing to indicate the negotiations will be completed soon. Indeed, he knew of no schedule set for the talks to reconvene. Nobody at Valin was available for comment. A northern Chinese mill official suggested that the talks had reached an impasse that was unlikely to be broken unless either the miners or mills presented some new proposals. "However, so far there is no evidence showing that either negotiating party is willing to concede ground," he says. The current rising spot iron ore market is also making the negotiations increasingly difficult for the Chinese side. "China should be in no hurry to achieve a price settlement when spot ore prices are reaching record highs. It's better to wait until the market is a bit cooler," a Beijing-based iron ore trader says.

Daily Steel News - 13 Jul 09

SE Asian importers are wary in firm billet market
Billet import prices are holding firm at $450-460/tonne cfr in southeast Asia. Some 50,000 to 60,000 tonnes of Russian-origin 3sp/ps billet for September/October shipment was booked at $450/t cfr Philippines during the week ending 10 July, trading sources tell Steel Business Briefing. A Taipei-based trader describes the supplier for this deal as "hungry for orders" and sold at this attractive price because
it was "looking for the quantity." Nobody is buying at a higher price "because there is little room for the rerollers at current domestic debar prices," a Manila-based trader explains. Russian-origin 5sp/ps billet is being offered at $460-470/t cfr to the southeast Asia region, Taiwanese material at around $10/t more. "Buyers will have to pay $460/t cfr if they want to buy billet today," a Vietnamese trader notes. However, many Vietnamese importers are cautious about paying these high prices. Those in northern Vietnam have raised their bidding price to $450-455/t cfr, up from the previous week's $440/t cfr but it is hard to find supply at this level. Some 20,000 tonnes of Russian 5sp/ps billet was booked at $465/t cfr Vietnam recently, another trader claims. He believes that prices are on the uptrend. Local importers will have to accede to high prices when they return to book material in some weeks' time, he says. However, a regional trader in Singapore disagrees, saying falling crude oil prices will soften commodity prices in general, and the strengthening of the US dollar against local currencies will adversely impact import demand for steel. He adds that mills appear to be more willing to negotiate over bids this past week.

Daily Steel News - 10 Jul 09

Rebar offer prices jump in Singapore
Suppliers of rebar to Southeast Asia have raised their offer prices to above $500/tonne cfr. "Mills are testing new acceptance levels of buyers now," a Singapore trader says. He says that quotes from mills range between $515 and $530/t cfr Singapore. Smaller Turkish mills can offer at $515/t cfr whereas Korean material is now offered at $530/t cfr. "All mills are asking for more than $500/t cfr now, because scrap prices are not coming down," another Singapore trader tells Steel Business Briefing. He says that booking quantities of 3,000-5,000 tonnes are small because less risk is involved should prices fall by the time the steel arrives. Korean-origin rebar was reportedly booked at around $495/t cfr Singapore last week. Many traders say that the market is not ready yet to accept these higher offer prices because local rebar prices have not risen as quickly in Singapore. Although the domestic price of rebar was raised by $20/t this week to the equivalent of $525/t delivered Singapore, there is insufficient room for margins for importers if they book at current offer prices, SBB is told.

Korean domestic scrap prices rise ahead of summer
After falling continuously for more than two months, ferrous scrap prices in Korea have begun to rise but only in certain markets. Korea's largest scrap consumer Hyundai Steel, together with other EAF steel makers, has raised scrap buying prices by KRW 20,000/t ($16/t) from early July in the country's south-east region encompassing Busan. Between end-April and end-June the Korean mini mills led by Hyundai cut their buying prices five times by KRW 10-20,000/t ($8-16/t) each time, blaming high scrap inventories at yards and upcoming deliveries of imported scrap, as Steel Business Briefing reported. "Subsequently, the volume of scrap arising has decreased and collection volumes seriously declined in the south-east area in particular. This is why Hyundai lifted prices this time," a local scrap dealer says. With the price increase, Hyundai's new buying price for Shindachi grade is KRW 320-340,000/t ($249-264/t), up from KRW 300-320,000/t at end-June. However, the new scrap prices are unlikely to firm over the longer term as most Korean steelmakers have scheduled shutdowns for annual summer maintenance from mid-July to August. "This price hike is only for temporary purchases because steelmakers want to maintain their scrap stock levels. However, the prices will fall again in about two weeks," the dealer adds. The three EAFs at Hyundai's Pohang works near of Busan . the 75 tonne, 80 t and 120 t units . will be halted for 7-10 days from 20 July and the other EAFs at its Incheon and Dangjin works are slated to stop 10-24 August, SBB understands.

Capesize freight rates sink on inactivity, easing congestion
Capesize freight rates have continued to drift downwards since last week, shipbrokers and traders tell Steel Business Briefing. The spot market for Capes has lost in excess of 25% of its value over the last week, according to Norwegian shipping firm Fearnleys. Congestion has eased slightly off China and Australia, releasing more vessels into the market. In mid-June 18% of the global Capesize fleet, 154 ships, was queued off Australia, Brazil and China, brokers suggest. There are now 71 Capes waiting to berth off Chinese iron ore discharge ports, down 17 from this peak, according to a London-based brokerage. Chartering interest from the three major miners has also stagnated as China's benchmark negotiations have dragged on, with rates in both the Atlantic and Pacific basins stalling. As a result there has been a slight rise in prompt tonnage availability. There has also been some cancellation of tonnage by China, which may allude to a slowdown in ore buying, one analyst says. Rates for Tubarão-China (Beilun/Baoshan) movements fell from $46.10/tonne on Tuesday 30 June to just above $36/t by 7 July. Tubarão-Rotterdam rates fell from $26.10/t to just below $25/t and West Australia-China (Beilun/Baoshan) shipments dropped over $3.50/t to $14.90/t. Queensland (Hay Point)-Rotterdam coal shipments slipped to $25.57/t yesterday, down $1.03/t day-on-day. The price of 62% Fe iron ore material delivered into China (CFR Tianjin port) has fallen $1.3/t over the last week to $76.9/t, according to The Steel Index, a subsidiary of SBB. Over the last month prices for 62% Fe material delivered into China have risen more than 13%, TSI data indicate.

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Steel scrap buyers and sellers – now’s the time for action
The Chicago Climate Futures Exchange (CCFE) and World Steel Dynamics (WSD) announced on June 22, 2009 the formation of World Steel Exchange (WSE) to list futures contracts, initially for steel scrap. The contracts will trade and clear on CCFE’s internet accessible trading platform and will be based on the SteelBenchmarkerTM family of price indices. The massive swings in steel scrap prices have created a new world of increased profits, greater risks, more stress and new opportunities for those in the steel scrap industry. The trading of futures contracts on the World Steel Exchange will give those involved in buying or selling steel scrap, steel products and steelmakers’ raw materials the opportunity to hedge the price risk. The WSE expects to launch its first contracts later in 2009. We invite you to participate in launching “the dawn of financial transactions in steel scrap prices” by becoming a regular twice-per-month steel scrap price assessment provider to our SteelBenchmarkerTM system. Steel scrap and steel product financial (or futures) transactions, in which there is no physical delivery or holding of inventories, is a development many people think about positively given the extraordinary volatility of scrap and steel product prices in recent years. While the need to hedge against steel scrap price volatility is unquestioned, the problem has been the lack of a mechanism to fulfill the need. A mechanism, such as trading on an exchange based on benchmark prices, seems the most promising in the United States given the size, breadth, liquidity and global influence of the USA steel scrap market. We expect a big interest in trading steel scrap futures from scrap buyers and sellers, domestic and foreign steel mills, steel buyers and sellers, traders and financial players.

Daily Steel News - 30 Jun 09

Steel prices should rebound by year end –Macquarie
Macquarie Securities Group in London believes steel prices should rebound by the end of 2009 from their massive decline during the recession, as Chinese demand picks up, Chinese exports slow and users in the United States and Europe resume buying. Steel's longer-term outlook remains strong, said Jim Lennon, executive director at Macquarie, citing a slow rebuild of shuttered production capacity outside China relative to demand. Speaking this week at American Metal Market's Steel Survival Strategies conference, Lennon forecast 2009 world steel demand at 1.214 million tonnes compared with 1.352 million tonnes consumed in 2008. Excluding China, demand should fall 19.9 percent this year to 702 million tonnes. Biggest user China, should consume far more steel this year than any other region at 511 million tonnes, a 7.6 percent jump above its 475 million tonne demand last year. China's demand will be 25 to 30 million tonnes higher than actual consumption, because buyers have undergone a heavy inventory restocking after a deep destocking period last year. 'That explains why we can come up with a production number of 540 million tonnes compared with 500 million tonnes last year, despite the fact that it will no longer be exporting 50 million tonnes. But the 540 million has upside rather than downside risk,' the analyst said. Construction should dominate Chinese demand, with more than half of the total going to that sector. While export-oriented sectors should fall, China's domestic industries, like autos, shipbuilding, railways, oil and gas will all grow, he said. So far this year, motor vehicle production was up 20 percent, shipbuilding rose 40 percent, and construction activity grew by 10 percent compared with last year. By contrast, he said, he sees North American steel demand at 88 million tonnes this year, a steep 28.7 percent decline below the 123 million tonnes used in 2008. Unlike the United States, where little government stimulus money has made it to infrastructure rebuilding, the Chinese government has devoted massive funds to infrastructure. China's long steel product demand rose most sharply. Through May, it went up 23 percent year-on-year, whereas flat product demand was up only 2 to 3 percent, he said. Output also rose for long products, but fell for flat steel products. 'This suggests demand growth was very much been driven by construction, rather than flat product segments,' he said. In anticipation of future growth, Lennon said, 'China has realized this is a once-in-a-lifetime opportunity to purchase cheap commodities and raw materials to modernize its economy.' Imports of raw materials like oil, coal, and iron ore have soared. And it has been restructuring its domestic industries by closing many small, high-cost and dangerous coal and iron ore mines and replacing them with new ones. 'The risk is that when the rest of the world starts to pick up we get a renewed tightness in iron ore again,' said Lennon. With that in mind, he said, he sees iron ore and coal contract prices increasing next year, with coal going up 5 to 10 percent and iron ore contracts rising by 5 percent. And, though China has exported much less steel over the last 9 months, that has recently started to change. 'The feedback we're getting from China is that export orders are starting to pick up again. That's a function of the fact that, in North America and Europe, a lot of the people who were buying (steel) products from China destocked quite dramatically and are now coming back to buy fresh product.' 'So, we see a sign of pick up in the export oriented industries this year,' Lennon added.