Steel News - 23 Feb 2009

Low-priced offers of rebar depress markets in SE Asia
The optimism held by regional mills in Taiwan and Korea earlier this month that the regional markets for long products were picking up has now evaporated. The sellers were eying higher export prices of $510-520/tonne cfr Southeast Asia.A cargo of 20,000-30,000 tonnes of Turkish-origin rebar was booked by importers in Singapore and the region at $450/t cfr. Offers from regional suppliers in Taiwan and Korea are at $470/t cfr Singapore levels. There are also new suppliers to the region. Brazilian rebar was offered at $470/t cfr. An offer of Polish rebar offered at around $450/t cfr is not attracting much buying interest because the shipment time is relatively long. The last reported booking in Singapore was Korean-origin rebar at $490/t cfr around three weeks ago.

Bearish sentiments in SE Asia hold back billet deals
Offers of imported billet from the CIS are generally prevailing at $385-400/tonne cfr Southeast Asia. "There is no movement because prices are on the downtrend. Offer of Russian billet at $380/t cfr but is uncertain if bookings have been made. The last concluded deal involving Ukrainian billet was done at $385/t cfr Philippines. Offer prices to Vietnam are prevailing at $390-400/t cfr for Russian billet. The prevailing domestic price for local billet is around VND8.0m/t ($450/t).

CIS, Turkey’s billet price to slide further
European rebar, section and wire rod markets remain sluggish, leading CIS and Turkey’s billet price to fall again. It’s forecast that there’s still some room for the price to keep falling.Turkey’s long product price is sliding gradually and meanwhile the exchange rate of lira and US dollar has depreciated, making the US dollar price also drop. At present, the rebar price has fallen to US$400/ton, wire rod to US$425-435 and section price to US$450-480/ton. Because of the falling price of long products and the weak demand for scrap price, last week’s Turkish billet export quotation fell to US$370-390/ton. In addition, CIS billet export also fell last week, to US$345-360/ton.

Lack of confidence depresses rebar demand in MidEast
Rebar trading in Lebanon is reported to be very slow. The market is getting offers from Ukraine, Turkey and China, but China is uncompetitive as its offers are higher than those of Ukraine and Turkey.
Ukrainian rebar offers are reported to be at $400-410/tone cfr in Lebanon. Turkish offers still reported to be higher in the country at around $440-450/t cfr. China's last offers were around $500/t fob, with a freight rate to Lebanon of around $50/t.
The retail price for rebar is reported to be $540/t in the Lebanon market. The rest of the Middle East was out of market last week, with the expectation of prices to fall. Various offers from Turkey are being heard from $450/t fob and lower, but lack of confidence in the market pushes the demand down.

Taiwanese rebar market remains uncertain
Taiwan’s rebar prices are still prevailing at NT$15,500/ton this week; however, some mills have tried to promptly sell off the rebar, they have reduced the price to NT$14,500/ton even down to NT$14,300/ton in order to attract the buyers.Taiwan’s government tries to expand the projects of domestic demands to rescue the economy, but it still needs time to plan and prepare. Therefore, the mills have to wait and suffer the difficult situation until April.

H-beam, channel beam prices hold stable in China
China's market price of H-beam and channel beam prices remained stable on Monday. The price of H-beam of 346*174 (Q235) from Laisteel is currently at RMB3,850/ton, and that of 496*199 (Q235) from Masteel is at RMB3,700/ton. Regarding the channel beam, the price of 14#a(Q235) from Mateel is at RMB3,830/ton. And that of 36#a (Q235) from Laisteel is at RMB 4,050/ton.

Turkey's scrap imports up by 1.6% in 2008
Turkey imported 17.41 million tons of scrap in 2008, increased by 1.6 percent compared to the same period of last year. America was the biggest exporter of scrap to Turkey at 5.045 million tons, up by year-on-year 27.7 percent. Russia's scrap shipments to Turkey totaled 2.206 million tons, down by 36 percent from last year. Besides, U.K. occupied 1.823 million tons, Romania 1.431 million tons, and Netherland 1.117 million tons.

Korea's scrap imports soar by 6.3%
Korea imported 7.314 million tons of scrap in 2008, an increase of 433,000 tons or 6.3 percent compared to the same time last year. America was the biggest exporter of scrap to Korea at 2.865 million tons, up by year-on-year 40 percent.Japanese scrap product shipments to Korea totaled 2.33 million tons, down by 31.2 percent from last year. Besides, Russia occupied 1.184 million tons.

America's scrap export soar by 30.5% in 2008
America exported 21.712 million tons of scrap in 2008, increased by 4.9 percent compared to the same period of last year. Among them, Turkey ranked the first largest export destination at 4.482 million tons, up by year-on-year 37.4 percent; China ranked the second at 2.827 million tons, increased by 14.5 percent compared to the same period of last year; Korea ranked the third at 2.635 million tons, up by 93.1 percent from last year. Moreover, Taiwan occupied 2.58 million tons, Canada 1.676 million tons, Malaysia 1.273 million tons Thailand 1.063 million tons and India 883,000 tons.

Russia to place limits on scrap exports
Russia has decreed that the scrap export in its east gulf will basically be limited; this will have a serious impact on the Korean electric steel mills which depend on Russian scrap. The Russian government said in December that no area is allowed to export scrap except for the port of Petropavlovsk-Kamchatsky in Kamchatka peninsula. This means that Russian scrap can only be exported via Petropavlovsk-Kamchatsky. In 2002, the Russian custom committee also decreed limits to the exporting of scrap at its 8 ports because of shortages in the domestic market

China disagrees Vale's 10% reduction on iron ore
It is said that Vale still insisted on 10 percent reduction of the 2009-2010 iron ore contract price, and this proposal is firstly been raised by the end of January. But China's iron and steel manufacturers have asked for a greater rate of decline. The China Metallurgical Mining Enterprise Association (CMMEA) said that if China is willing to accept lower prices for iron ore 10 percent of the proposal, Vale will immediately sign the contract price, but no manufacturer is willing to accept it. China Iron and Steel Industry Association (CISIA) and Baosteel Group are working with Vale, Rio Tinto and BHP Billiton on the three iron ore giants 2009-2010 iron ore contract price negotiations.

BHP agrees price cut for coking coal with SAIL
It is reported that Australia’s BHP Billiton has entered into a re-negotiation agreement in response to a 50 percent price drop on the long term coking coal contract with the Steel Authority of India Ltd. (SAIL).The price of coking coal will drop to US$150/ton from US$300/ton.The long term contract will last till this June. The new prices in the next round will be based on the negotiation between BHB and Japan’s steelmakers. It is expected that the new price will be lower than the current level.

Iron ore reference prices fall back, reports The Steel Index
The latest iron ore spot prices released by The Steel Index last Friday show that both grades of iron ore covered have dropped in price since the previous week. The reference price for 62% Fe content iron ore fines fell by $4.70/dry metric tonne to $74.30/dry metric tonne cfr Tianjin port,China. This price had risen during the previous three weeks, but is now only just higher than it was a month ago. The reference price for 58% Fe content fines also fell, by 1.1%, to $64.70/dry metric tonne cfr Tianjin port. Prices for this grade are still $4.70/dry metric tonne higher than four weeks ago. The Steel Index is owned by Steel Business Briefing and specialises in compiling steel and iron ore reference prices based on actual transaction data.

Global crude steel output falls in January
According to statistics released by the World Steel Association (worldsteel), in January 2009 global crude steel output hit 85.768 million tons, down by 24 percent compared with 112.9 million tons in the same month of 2008.Japan's crude steel output fell by 37.8 percent to 6.37 million tons, while Korea dropped by 25.6 percent to 3.47 million tons.EU crude steel production in January reached 9.549 million tons, decreased by 45.9 percent. Among them, the German’s production was 2.651 million tons, down by 35.6 percent, Italian production was 1.592 million tons, down by 40.4 percent and France output hit 858,000 tons, down by 46.7 percent.CIS crude steel production in January dropped to 5.755 million tons, down by 46.9 percent. U.S. output was 4.09 million tons, down by 52.9 percent, Brazil produced crude steel about 1.617 million tons, down by 45.6 percent decline while in Turkey the output hit 1.951 million tons.

China to cut steel production by 8% in 2009
It is reported that China has decided to bring its steel production down by 8 percent as compared to last year and limit it at 490 million tons in 2009. This is against an output of 500 in 2008, of which more than 10 percent was exported while the export will only be 8 percent in 2009. Meanwhile, the government will support consolidation and maintain the current 10-25 percent export taxes on low-value products, but the VAT rebates on high-value products are likely to increase.Russia predicted to resume 70~80% of total steel capacity in MarchAccording to Russian official statistics, the steel capacity will rebound to 4.3~ 4.5 million tons in March, equivalent to 70~80 percent of total monthly capacity.Russian steel finished product output in January has surged to 3.5 million tons, up by about 30 percent compared to that of last November.Although its Steel finished product output recovered, the steel pipe market remained quite.

Indonesia's steel imports to fall in 2009
Executive director of Indonesia Iron and Steel Industry Association (IISIA), Mr. Hidayat Triseputro said that it was estimated that steel imports in Indonesia will decrease to 1.5 million tons this year due to weak international market and overstock in domestic market. The steel import amount was 6 million tons and 10 million tons in 2007 and 2008 respectively.