Daily Steel news - 6 Apr 09

Billet prices rising despite weak fundamentals in SE Asia
Traders are surprised that billet import prices are firming quickly in southeast Asia because the finished product markets there are still weak. Traders tell Steel Business Briefing that recent bookings are not large volumes and are for quick shipments on a "need basis." While traders say that offer prices for Russian billet are prevailing at around $385/t cfr in the region including Thailand and the Philippines, there are higher-priced deals reported. Bookings in the Philippines for Taiwanese 5sp/ps billet were at $405/t cfr late last week after an earlier booking at $398/t cfr. Vanadium-added Russian origin billet was booked at $395/t cfr Taiwan around ten days ago. Russian commercial billet was heard booked at $390/t cfr Vietnam. Many traders are not confident that prices can move up much more and say that recent higher-priced bookings are by rerollers who need material urgently because they had stopped importing for some time. "I think that there will be great resistance at $410-420/t cfr," a trader in Singapore says. "It is confusing now. No one can afford to take risks because who knows how the market will move?" a Taipei trader asks. "The price will not be able to hold at much higher levels because there is no real demand," a trader in the Philippines notes. Taiwanese and Malaysian mills are aiming to export at $390/t fob. A Vietnamese importer, however, says that demand in the country will be better during this quarter as it is the seasonal period for higher bar consumption, adding that billet prices can move up "a little more."

Vietnam Steel Corp cuts domestic prices for bar and rod
Vietnam Steel Corp (VNsteel) reduced the domestic prices of its long products by VND 200,000-560,000/tone ($11-31/t) with effect from 1 April in order to make its prices more competitive, company sources tell Steel Business Briefing. The price of its wire rod products is now around VND 9.6m/t ($531/t) and that for debar VND 10.0-10.3m/t. "Wire rods from overseas are priced lower especially from Asean countries and demand in Vietnam has not been good," a source tells SBB. "But the market should improve in the near future because it is the seasonal construction period for private housing projects. Also, new government projects are expected to start from next month," he adds. VNsteel supplies around 24% of the domestic market for long products, SBB understands. The Vietnamese authorities recently raised the export duty on construction long products from 12% to 15%. However, the preferential duty on imports from Asean countries remains at 0%. (See separate report on Vietnam Steel Association's proposal to limit imports.)

Korean mill targets higher H-beam exports
The country's total H-beam export volume during the two months increased by 11% year-on-year to 158,400 t, Kosa notes. Surprisingly, Canada was the largest buyer taking 33,800 t, compared with last year's 2,760 t. "The volume (to Canada) was booked during November-December when the buying sentiment there was still good," a Korean trader in Seoul said. The second-largest export market was Saudi Arabia which bought 16,000 t. Korean traders are now eyeing large export volumes to Southeast Asia during the second half. SBB is told that traders are offering metric-sized H-beams to Southeast Asia
at around $500-540/t cfr, an increase of $20-30/t over the past two weeks. By contrast, the Korean domestic price for 600x300mm beams is KRW 880,000/t ($656/t). However, export prices are likely to be flat in Q2 in the region, one Korean trader believes. Korea's only other rolled H-beam producer is Dongkuk Steel Mill which produced nearly 1.1m t of beams last year and exported 157,000 t.