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.
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.
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.
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