Daily Steel News - 25 Nov 09

Suppliers talk up scrap prices in east Asia
Scrap import prices continue their uptrend in east Asia. While traders are bullish that scrap prices can move up further, weak finished steel prices are likely to limit any large increase, trading sources tell Steel Business Briefing. Three cargoes of US west coast scrap were booked at $325/tonne cfr for shredded, and $320/t cfr for 80:20 HMS 1/2 last week, according to Chinese trading sources. Fresh offers of HMS 80:20 are prevailing at around $335/t cfr China and for shredded, $340/t cfr. "There are a lot of buying enquiries from China, and they include speculators," says a Chinese trader who believes that the current acceptance level is $330/t cfr for 80:20. "There are no buyers at the new offer prices," another says. But he admits that "nobody knows" if Chinese importers will keep chasing after higher prices. Scrap availability is tight after many US suppliers sold out their January shipments, a Korean trader says. An estimated 400,000 t were booked by Chinese importers from mid-October to November. He tells SBB that HMS 1 prices could rise to $350/t cfr by mid-December. "Suppliers are shouting higher numbers," a Southeast Asian importer says. He attributes recent buying to stocking up ahead of the holidays and year-end, but believes that it will quieten down when mills cut output and undergo maintenance. Offers for containerised 80:20 scrap from Africa and the Middle East are at $300-305/t cfr SE Asia but some material was booked at under $295/t cfr recently, SBB is told. Also, containerised 80:20 from South Africa concluded at $305/t cfr Haiphong, Vietnam.

Indian iron ore offer prices to China rise, transactions low
Indian iron ore offer prices to China rose last week to levels of $110/tonne cfr for fines of 63.5% Fe, but supply of ore from India is still tight with hardly any transactions concluded in the past week. The hike in price is mainly due to an increase in freight rates between the two countries. Steel Business Briefing hears of one transaction for a 50,000t parcel of Fe 63.5%/63% fines in a Handymax carrier from Krishnapatnam port in the southeast Indian state of Tamil Nadu at $104/t cfr on a single loading basis. "No bookings of new material are being heard of," a trader based in Bellary in the southern state of Karnataka tells SBB. "The parcel from Krishnapatnam was old material that had been lying at the port for over eight months." He added that freight for iron ore from east India to main Chinese ports had gone up to as much as $24/t on a single loading basis, from around $20-22/t. Double port loading freight has increased to levels of $25-26/t. "Chinese mills and traders are waiting as they are reluctant to buy at such high prices even though the Indians remain bullish about their offers," a Delhi-based trader says. "Prices may come down marginally this week or early next week." Lower grade ore from the western territory of Goa remains in demand. SBB hears of 58% Fe fines sold at $56/t fob on a two port loading basis with a freight of $25/t.

Daily Steel News - 9 Nov 09

Scrap import prices bounce back in east Asia
Offer prices for imported scrap in Asia rose by $5-10/tonne over the past week. Offers for bulk shredded scrap are prevailing at $305-310/t cfr China and at $320/t cfr Southeast Asia. The offered price for 80:20 HMS 1&2 scrap is $300-305/t cfr China and $315/t cfr Southeast Asia. The last bookings of around ten cargoes of scrap to China were concluded around two weeks ago at $295/t cfr China for 80:20 and at $300/t cfr for shredded. "Offer prices may have risen because domestic prices are slightly higher," a trader in Shanghai says, adding that there have been no recent import bookings in China. "Higher iron ore prices are behind higher scrap prices in China," a regional trader says. Japanese scrap prices have also firmed, he notes, adding that Southeast Asian importers have no choice but to accept these prices if they want to book material. Containerised scrap prices have also risen by $5/t. Vietnamese trading sources say that bookings of 5,000-7,000 tonnes from USA/Europe were concluded at $287-290/t cfr for 80:20 and at $292-295/t cfr for shredded. Bookings in Taiwan for containerised 80:20 have risen to $285/t cfr, up from $280/t cfr a week ago. "Prices have bottomed out. I think prices will be stable at this level," a trader in Vietnam says. A US exporter said markets began to move up with Tokyo Steel's announced increase. "Things were getting very sour, and now they're starting to pick up," he told Steel Business Briefing.

Iron ore prices surge in China on tight supply
Constrained supply and active buying from Chinese traders saw iron ore prices surge towards the end of last week, with the price of Indian 63.5% Fe iron ore increasing by around $8/tonne over the course of the week. For the first time since mid-August when steel prices in China began to slide, Steel Business Briefing heard of a number of transactions at or in some cases above $100/dry metric tonne cfr to China. Prices had been around $92-95/t cfr on Monday and Tuesday of last week, up from $90-93/t the week before. SBB heard of a deal struck 5 November for one Panamax vessel carrying 75,000 tonnes of 63% Fe fine ore leaving Goa port bound for China, which sold for $82/t fob, with freight currently at around $18/t. A Chinese trader said he knew of one cargo of lower Fe grade selling at close to $102/t cfr China.
Chinese traders have complained of tight supply from India . exacerbated by vessel waiting times of up to 20 days at Haldia and Paradip . and iron ore output in Karnataka state severely reduced because of political disturbances. Furthermore, rising steel output in Japan and Korea is resulting in very little iron ore being put onto the spot market by major producers Rio Tinto, BHP Billiton and Vale. "There is just nobody else to take up the slack," a China-based analyst told SBB. Chinese traders said bullish market sentiment on the back of rising steel prices, and the need for iron ore to be stocked ahead of winter, also contributed to active purchasing last week.

Korean scrap market may rebound in November
Deliveries of domestic scrap to Korean steel mills slowed down last week. Local dealers are anticipating that domestic scrap prices may stay stable in the coming weeks after Hyundai Steel's five consecutive price reductions since mid-September. Moreover, the uptrend in Japanese domestic scrap prices will lift its exports prices to Korea so this will help strengthen Korean domestic scrap prices in November, Steel Business Briefing learns from local scrap dealers. But the high volume of imported scrap inventory at Korean yards may delay any near-term improvement in the current sluggish Korean scrap market. Korea's scrap imports in October reached an all-time high of 883,600 tonnes. "We still need to monitor how Japan's scrap price hike will affect the Korean domestic market," a scrap trader tells SBB. Japan's scrap market leader Tokyo Steel Manufacturing has increased its domestic scrap purchasing prices by ¥1,000/t for all grades at all works effective 6 November. Meanwhile, in late October Korean government's public procurement service (PPS) booked 40,000 t of US scrap as an initial purchase to build up a national scrap stockpile near Dongbu Steel's Asan works at Dangjin south of Seoul. The cargo comprises 10,000 t of shredded, 24,000 t of HMS No.1 and 6,000 t of HMS No.2 and these were booked at $317/t cfr, $312/t and $307/t respectively.

Iron ore prices keep rising during the week: The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday show that the price for 62% Fe content iron ore has been moving steadily higher during the week and ended more than 8% above the previous Friday's level. Average weekly freight rates from India were almost unchanged, but rates on the other two key routes to China increased strongly during the week. The reference price for 62% Fe content iron ore fines finished the week at $95.60/dry metric tonne CFR Tianjin port, China. This was a $7.20/dry metric tonne increase from a week earlier. The reference price for 58% Fe content fines also moved generally higher during last week, and ended $7.20/dmt above the previous week's level, a 9% increase. Within the delivered prices, rates for shipments from both the West and East coasts of India were stable. Freight rates from Australia and Brazil to China continually firmed during the week, pushing the weekly average higher, with daily rates increasing around 12% from a week earlier. The Steel Index is majority-owned by Steel Business Briefing and specialises in compiling steel and iron ore reference prices based on actual transaction data. Further details of the methodology and specifications for the two grades of iron ore can be found on the website www.thesteelindex.com. Companies wishing to subscribe to the full set of reference prices or apply to submit iron ore or steel price data can do so on the website.

Daily Steel News - 5 Nov 09

China's Yonggang secures UK quality certificate for rebars
Jiangsu Yonggang Group, a Shagang subsidiary in eastern China's Jiangsu province, has obtained a CARES certificate for its rebar from the UK. Securing the quality approval will help the company expand its export business to the UK and other European countries and further increase its presence in the Middle East, Steel Business Briefing is told. The certificate is issued for rebar of 10-40mm diameter or 6-12mm rebar in coils, and produced according to British Standard BS 4449-1997 or BS4449-2005. A company source tells SBB that Yonggang had discovered some potential demand in the UK, but so far had not exported any rebar to that market. The CARES certificate will not only give the steelmaker an entry to the UK market but also qualify it to supply some large construction projects in the Middle East where the UK certification is accepted. The company's main export destinations are Middle East, Southeast Asia and Africa. Last year, Yonggang exported over 100,000 tonnes of rebar to these markets, but so far this year it has only shipped very small tonnage to Africa, due to the large price difference and low demand compared with strong domestic demand. Yongang's rebar and bar capacity has reached about 2.5m tonnes/year, and it also boasts a similar capacity for wire rod, SBB notes.