Daily Steel News - 13 Apr 09

Japanese rebars surge into Korea
The volume of Japan-origin rebars being shipped to Korea over the past few months has climbed markedly as Korean importers respond to the country's peak demand season of April to mid-May. "During the high season, Japanese rebar is likely to account for almost 100% of imported rebar in Korea," according to Choi Hyun-Seok, chairman of the Korea Steel Importers' Association. During January-March, Korea's rebar import volume climbed from 20,100 tonnes to 40,090 t and to 62,800 t. Within that total, Japanese rebar accounted for 72,000 t whereas Chinese bars reached only 32,900 t. Choi expects total April imports to reach 50,000 t. mostly from Japan . before declining slightly in May. For the time being, Japanese rebar is more competitive in both price and quality in the Korean market compared with domestic and Chinese bars. "There is almost no Chinese rebar arriving these days," Choi tells Steel Business Briefing. During January-February according to Korean customs data, the average price of Japanese rebar stood at $497/tonne compared with $604/t for Chinese bars. The Japanese landed price is also much lower than prevailing sales prices from Korean makers of KRW 740,000/t ($558/t). Hyundai Steel's list price remains at a high of KRW 831,000/t ($627/t) for 10mm dia bars. The Japanese rebar exports have also been helped by the fact that five Japanese mini mills have secured Korean Standards (KS) certification for their bars. Several Japanese mini mills based in eastern Japan including Tokyo Kohtetsu and Tokyo Tekko forecast slightly higher steel output during the present April-June quarter largely on the expectation of good export business, as SBB reported.

Chinese rebar producers cut prices by adding boron
Chinese rebar producers have cut prices by adding vanadium or boron to the rebar in a bid to benefit from the 13% export tax rebate introduced in April. Eastern China's Shagang is heard offering for vanadium added rebar at $460/tonne, similar to other mills in northern China. As Steel Business Briefing has reported, Shagang's early March export prices were $550/t fob. But even with the reductions, mills say it remains difficult for them to make deals in the face of more competitive prices from other countries and weak demand overall. "Southeast Asian clients can accept no more than $410 cfr; and Japanese offers to Korea are heard at only about $430-440/t cfr," a trader says. Another trader in Shanghai tells SBB that he has received offers from a Middle Eastern trader looking to sell rebar for $360/t fob. The materials were sourced from China last year but the client now wants to ship the goods back to China because there are no customers in the Middle East. "Though sounding very low, it's no cheaper than buying domestic products once you count freight rates, VAT and port handling costs. We'd rather directly source from Chinese producers as their rebar is new without any serious rust problems," he says. Domestic prices for 16-25mm HRB335 have picked up slightly by some RMB 40/t to about RMB 3,120/t ($457/t), with 17% VAT.