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.
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.
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