SBB Prices & Indexes
World price +/-
World HRC $/t 664 -16
World Rebar $/t 626 -6
M'sia Rebar $/t 639
Indexes
SBB World 232 -3
Europe Flat 173 -3
Europe Long 194 -1
Asia Flat 201 -1
Asia Long 286 -1
N.America Flat 178 -4
N.America Long 234 0
Malaysia Steel Assn seeks export duty on iron ore
The newly-formed Malaysia Steel Association (MSA) believes that investment in upstream facilities, especially in iron-making, will enable the steel industry to be more self-sufficient in its raw materials supply and achieve greater cost efficiency. It also wants the Malaysian government to open 3,000~5,000 acres of land containing iron ore and metallurgical coal to local steel producers to undertake commercial mining. MSA also wants “an export duty on iron ore – of say, 30% or RM 140/ tonne ($45.4/t), whichever the higher – to encourage further processing of the ore into finished products locally," MSA president Tan Sri William Cheng said at the association’s launch Tuesday. Noting that Malaysia imports about 3m tonnes/year of scrap and that many countries ban scrap exports to ensure sufficient domestic supplies, Cheng said MSA is appealing for the export duty on scrap to be raised to 30% from the existing 10%, or to RM350/t, whichever is higher. The proposed measures to assist the industry are similar to those practised in other countries, Cheng said, and will provide Malaysian steel producers with a “level playing field to compete more effectively with other foreign steel mills.” The MSA’s nine founding members – Amsteel Mills, Ann Joo Steel, Ann Joo Integrated Steel, Antara Steel Mills, Kinsteel, Malaysia Steel Works, Megasteel, Perfect Channel and Perwaja Holdings – have a combined steel-making capacity exceeding 9m t/y, representing 85% of Malaysian upstream capacity. "Southern Steel (the only other Malaysian crude steel producer) will join MSA,” Chow Chong Long, its coo tells Steel Business Briefing. However, Southern Steel will remain in the Malaysian Iron & Steel Industry Federation
(Misif) and recognises that Misif represents the entire iron and steel industry in Malaysia, SBB understands. Chow is the current president of Misif.
China’s coking coal imports from Mongolia grow rapidly
The importance of Mongolia to China’s coking coal supply is increasing, as Steel Business Briefing learns from industry sources. “We knew little about Mongolia before,” says a trader from Tianjin. “As more ports opened, and China’s demand for imported coking coal increased last year, we are buying more coking coal from Mongolia.” SBB notes that China’s coking coal imports from Mongolia reached 1.2m tonnes in April this year, when winter weather ended in the country, and imports have remained above 1m tonnes/month since then and even surpassed imports from Australia in some months, according to China’s Customs statistics. In September, China imported 1.8m t of coking coal from Australia, up by 112% from 850,000 t in August. Imports from Mongolia reached 1.5m t down 6% from 1.6m t in the previous month. “Mongolia’s coking coal is less expensive than Australian coal,” a trader tells SBB. “Especially for central Chinese provinces such as Shanxi which don’t have sea ports.” Another trader adds that the quality of Mongolia’s coking is quite high and can be “placed directly” in a coke battery. Mongolia imported crude coking coal is currently being sold at around RMB 740/tonne ($111/t) including 17% VAT at ports in the Inner Mongolia autonomous region. Prices of Australian hard coking coal are currently $225-230/t fob E. Australian port.
However, Australia is still the largest coking coal exporter to China. China’s total coking coal imports in January-September were 33.5m t. Imports from Australia for the period were 13.2m t, 39% of the total volume. Imports from Mongolia reached 9.9m t, making up 30% of the total volume for the period.
China’s iron ore port stocks keep falling; demand slipping
Iron ore port stocks at Chinese main ports have dropped further in the past week, while offer prices for the material are up. But in the face of falling demand transactions are being completed at lower prices Steel Business Briefing learns from market sources. Port stocks of iron ore on 29 October was 68.81m t, down by 1% compared with 69.63m t on 22 October, according to data provided by SXcoal. Iron ore port stocks from Australia, Brazil and India all dipped.
“Transactions of port stock iron ore are a little better than a week before,” says a Beijing-based trader. Traders tell SBB port stock iron ore at main northern Chinese ports is selling at RMB 1,180-1,210/wet metric tonne ($177-181/wmt) including 17% VAT on 2 November, up by RMB 10-20/wmt ($2-3/wmt) from RMB 1,160-1,200/wmt on 26 October. However, transaction prices are around RMB 1,150-1,180/wmt as mills’ demand appears to weakening. “My customs are pessimistic about the market’s future, so they are delaying their purchases,” says the Beijing trader. “There is lots of room for haggling.” “Many of my customers are located in Hebei province’s Tangshan city,” adds another trader in Shanghai. “So demand there is limited due steel production cuts in support of the provincial government’s energy conservation policy.”
Iron ore port stocks at China's main ports
Million tonnes
Month-on-month change
Total 68.81 -1.2%
Australia 24.16 -1.2%
Brazil 17.26 -1.1%
Wednesday, November 3, 2010
Monday, November 1, 2010
Daily Steel News - 01 Nov 10
SBB Prices & Indexes
World price +/-
World HRC $/t 680 -4
World Rebar $/t 639 +5
Indexes
SBB World 236 +1
Europe Flat 177 -13
Europe Long 204 -2
Asia Flat 201 -1
Asia Long 286 -1
N.America Flat 178 -4
N.America Long 234 0
Suppliers hike offer prices of billet to SE Asia
Offer prices of billet to Asia have been hiked by $10/tonne or more in recent days. Transaction prices had
earlier hit lows of around $555-560/tonne cfr Southeast Asia last week. Russian billet was heard booked to the Philippines at $555/t cfr and Korean billet at $560/t cfr. Since Korean billet entering the Philippines enjoys duty exemption of 3%, this is equivalent to $543/t, local trading sources tell Steel Business Briefing. "Suppliers of Korean billet were aggressive last week," a local trader tells SBB. However, offer prices have since rebounded. New offers are now prevailing at around $575/t cfr Philippines for material from Taiwan and Korea. Taiwanese-origin is now being offered at $580/t cfr Indonesia. In Taiwan, offers of Russian-origin billet were heard last week at around $560/t cfr but local importers are bidding at $545/t cfr. “Domestic billet is cheaper in Taiwan but I expect billet prices to rise very soon because scrap is going up,” a trader in Taipei says. Importers have also stayed away for a while and will need to resume buying to replenish inventory, he adds. “Domestic debar prices are being pushed up (so) billet prices will rise,” another local trader says. Korean billet from Vietnam was also booked at around $560/t cfr last week. However, new offers for Koreanorigin billet have since risen to around $580/t cfr. Russian-origin billet is offered at a minimum of $570/t cfr Vietnam and of $575/t cfr Thailand. Many Thai importers are bidding at $540-550/t cfr. Thai mills are aiming to export billet at $575-580/t fob and Malaysian mills, $580/t fob. Traders tell SBB that these export prices, around $595-605/t cfr SE Asia, are uncompetitive.
Sims on scrap: near-term steady, long-term more volatile
The outlook for scrap markets in the current quarter is without significant volatility, according to executives
at recycler Sims Metal Management, though the longer term outlook remains uncertain Steel Business Briefing notes. “General tightness in scrap availability, especially in North America, could result in seasonally higher selling prices with the onset of Northern Hemisphere winter, especially in the important deep sea ferrous markets, but we do not expect to encounter significant price volatility over the balance of this half-year period,” Sims said in a quarterly earnings statement. “Additionally, a weaker US dollar could support higher deep sea ferrous scrap prices in the near-term, particularly for US-generated material. However, until ferrous demand becomes more consistent, we expect to see continued volatility in the longer term beyond our second quarter.” The company reported a net profit of Australian $8.2m (US $7.9m) on revenues of A$1.88bn (US $) for its fiscal 2011 first quarter, which ended September 30. Scrap flows and margins remain constrained, especially in North America, the company said. Sims purchased 3.4m tonnes and shipped 2.9m t during the quarter, compared to 3.6m t purchased and 3.4m t shipped in the previous quarter.
TSI reports higher 62% Fe iron ore monthly average price
The daily iron ore reference prices released by The Steel Index (TSI) yesterday show that at the end of October the price for 62% Fe content iron ore was higher than a month earlier. The reference price for 62% Fe content iron ore fines finished the month at $149.10/dry metric tonne CFR Tianjin port, China. This is $8.00/dmt above the price at the end of September. TSI’s monthly average price for October was $148.48/dmt for the 62% Fe content reference product, calculated as the mean of all the daily 62% reference prices during the calendar month. This is used as the final settlement price for October for iron ore swaps cleared on the Singapore Exchange (SGX), LCH.Clearnet (London) and CME Group (Chicago), and will be used by NOS Clearing (Oslo) from today. The October settlement price is 5.6% higher than that for September. TSI's two-month average 62% Fe price for September-October is $144.46/dmt. This is 4.4% higher than the average of the “pricing quarter” of June-August, which is being used as a basis in many index-linked iron ore supply arrangements for the October to December quarter. Some contracts specify that the quarterly price will remain unchanged if the reference price change quarter-on-quarter is less than 5%.
World price +/-
World HRC $/t 680 -4
World Rebar $/t 639 +5
Indexes
SBB World 236 +1
Europe Flat 177 -13
Europe Long 204 -2
Asia Flat 201 -1
Asia Long 286 -1
N.America Flat 178 -4
N.America Long 234 0
Suppliers hike offer prices of billet to SE Asia
Offer prices of billet to Asia have been hiked by $10/tonne or more in recent days. Transaction prices had
earlier hit lows of around $555-560/tonne cfr Southeast Asia last week. Russian billet was heard booked to the Philippines at $555/t cfr and Korean billet at $560/t cfr. Since Korean billet entering the Philippines enjoys duty exemption of 3%, this is equivalent to $543/t, local trading sources tell Steel Business Briefing. "Suppliers of Korean billet were aggressive last week," a local trader tells SBB. However, offer prices have since rebounded. New offers are now prevailing at around $575/t cfr Philippines for material from Taiwan and Korea. Taiwanese-origin is now being offered at $580/t cfr Indonesia. In Taiwan, offers of Russian-origin billet were heard last week at around $560/t cfr but local importers are bidding at $545/t cfr. “Domestic billet is cheaper in Taiwan but I expect billet prices to rise very soon because scrap is going up,” a trader in Taipei says. Importers have also stayed away for a while and will need to resume buying to replenish inventory, he adds. “Domestic debar prices are being pushed up (so) billet prices will rise,” another local trader says. Korean billet from Vietnam was also booked at around $560/t cfr last week. However, new offers for Koreanorigin billet have since risen to around $580/t cfr. Russian-origin billet is offered at a minimum of $570/t cfr Vietnam and of $575/t cfr Thailand. Many Thai importers are bidding at $540-550/t cfr. Thai mills are aiming to export billet at $575-580/t fob and Malaysian mills, $580/t fob. Traders tell SBB that these export prices, around $595-605/t cfr SE Asia, are uncompetitive.
Sims on scrap: near-term steady, long-term more volatile
The outlook for scrap markets in the current quarter is without significant volatility, according to executives
at recycler Sims Metal Management, though the longer term outlook remains uncertain Steel Business Briefing notes. “General tightness in scrap availability, especially in North America, could result in seasonally higher selling prices with the onset of Northern Hemisphere winter, especially in the important deep sea ferrous markets, but we do not expect to encounter significant price volatility over the balance of this half-year period,” Sims said in a quarterly earnings statement. “Additionally, a weaker US dollar could support higher deep sea ferrous scrap prices in the near-term, particularly for US-generated material. However, until ferrous demand becomes more consistent, we expect to see continued volatility in the longer term beyond our second quarter.” The company reported a net profit of Australian $8.2m (US $7.9m) on revenues of A$1.88bn (US $) for its fiscal 2011 first quarter, which ended September 30. Scrap flows and margins remain constrained, especially in North America, the company said. Sims purchased 3.4m tonnes and shipped 2.9m t during the quarter, compared to 3.6m t purchased and 3.4m t shipped in the previous quarter.
TSI reports higher 62% Fe iron ore monthly average price
The daily iron ore reference prices released by The Steel Index (TSI) yesterday show that at the end of October the price for 62% Fe content iron ore was higher than a month earlier. The reference price for 62% Fe content iron ore fines finished the month at $149.10/dry metric tonne CFR Tianjin port, China. This is $8.00/dmt above the price at the end of September. TSI’s monthly average price for October was $148.48/dmt for the 62% Fe content reference product, calculated as the mean of all the daily 62% reference prices during the calendar month. This is used as the final settlement price for October for iron ore swaps cleared on the Singapore Exchange (SGX), LCH.Clearnet (London) and CME Group (Chicago), and will be used by NOS Clearing (Oslo) from today. The October settlement price is 5.6% higher than that for September. TSI's two-month average 62% Fe price for September-October is $144.46/dmt. This is 4.4% higher than the average of the “pricing quarter” of June-August, which is being used as a basis in many index-linked iron ore supply arrangements for the October to December quarter. Some contracts specify that the quarterly price will remain unchanged if the reference price change quarter-on-quarter is less than 5%.
Wednesday, October 27, 2010
Daily Steel News - 27 Oct 10
SBB Prices & Indexes
World price +/-
World HRC $/t 681 -3
World Rebar $/t 639 +5
M'sia Rebar $/t 632
Indexes
SBB World 237 +2
Europe Flat 177 -13
Europe Long 204 -2
Asia Flat 204 -2
Asia Long 288 -5
N.America Flat 183 -5
N.America Long 234 +8
SE Asia rebar import market sees offer prices rebound
Mills are trying to raise their offer prices for rebar into Southeast Asia. New offers for theoretical weight rebar from Turkey are now at $600-610/tonne cfr Singapore. There are no offers heard for Korean nor Taiwanese rebar to Singapore. Prices were previously under $600/t cfr. Several bookings of Turkish-origin theoretical weight rebar were last concluded at $575-585/t cfr Singapore around two weeks ago. About ten days ago, rebar of theoretical weight from Korea transacted at around $585/t cfr Singapore and for actual weight, $590-595/t cfr Hong Kong. Traders tell Steel Business Briefing that offer prices have risen because of the firming scrap market. “Mills have to hike their prices because they cannot afford to sell at previous levels,” a trader tells SBB. However, trading sources stressed that, while offer prices have risen, no confirmed deals at these prices have been struck as yet. Chinese-origin boron-added rebar was last concluded at $585/t cfr Hong Kong. There was a position cargo of this grade and origin rebar at the same price to Singapore. This is likely to have been booked, since this is the price buyers are willing to pay, traders tell SBB. Demand in Hong Kong for imported rebar is described as steady. In Singapore, buyers are generally
adopting a wait-and-see approach because they are uncertain of market direction.
China's iron ore demand may slow until 2020
Liu Yongshun, a former official with Baosteel’s iron ore negotiating group, has predicted that the growth rate of Chinese iron ore demand will slow until 2020. “Under the supposition that China’s GDP increases 8% each year for the next ten years, the growth rate of Chinese crude steel production will be 5%, the same as the global average,” Liu told a conference in eastern China’s Hefei city. Therefore Liu expects China’s iron ore demand to slow, as steel demand will also decline during that time. But Liu did not add why he expects steel demand to pick up in 2020. Steel Business Briefing notes that Chinese crude steel production grew 13% in 2009. However, industry analysts express their suspicions about Liu’s analysis. “The GDP growth rate may not hold at 8% in the following ten years,” says a Shanghai-based analyst. He adds that development of China's central and western regions has not been strong enough to indicate that those regions can replace eastern China in leading the country's economic growth and maintaining steel demand. Another analyst from Shanghai agrees, saying Liu's prediction is for "too a long period”.
Beijing has not suggested a clear target for China’s GDP growth rate in the next five-year plan (2011- 2015), which has left analysts guessing whether China will reduce its focus on GDP growth, SBB notes.
US scrap prices rebound as exports grow
Anticipation that ferrous scrap prices will rise in the US market next month is already pushing US scrap export prices higher, according to Blake Kelley of Sims Group. Until now, domestic prices were mostly levelpegged with exports, he told the BIR scrap conference in Brussels yesterday. US scrap export volumes began to grow significantly in August to 21.6m tonnes, if calculated on an annualised basis, he notes. This compares with a year-to-date annualised average of 19.7m t, and “was one of the first indications that world scrap prices were about to increase”, he says. US prices are already up in some areas by about $25/t, compared to the bottom of the market earlier this month, he told Steel Business Briefing. This was when HMS was about $320/t delivered, shredded at $345/t and busheling at $385/t. Many believe a key factor for the rebound is “inadequate supply and low collection rates, especially for unprepared shredder feed”, he said. “Steel producers simply did not initially buy all they wanted, and when they re-entered the market for more, supplier attitudes changed,” he concludes. Meanwhile, domestic prices in Canada are unlikely to fall further, especially as the cold winter approaches, he added. The US dollar is at a 15 year low against the yen, and at relatively lower values compared to other major industry currencies, he noted.
Iron ore swaps prices edge higher despite physical weakness
Iron ore swaps prices have moved up over the last week after a period of selling, sources in the market tell Steel Business Briefing. January prices jumped from $141/tonne on 18 October to $143.50/t on 25 October, according to Iron Ore & Steel Derivatives Association data seen by SBB. February swaps prices increased from $140.85/t to $142.50/t, while March prices rose from $140.71/t to $141.50/t. Prices have risen after a period of selling when people sensed the physical market weakening, one source says. While swaps prices have risen over the last week, physical prices have softened. The Steel Index’s reference price for 62% Fe fines delivered into China, used to settle swaps on the Singapore Exchange and LCH.Clearnet, moved down 1.8% over the course of last week, hitting $149.4/t on Monday (25 October). “We have seen some decline of demand out of China on the physical side, there’s only been a couple of cargoes gone through in the last week or so,” one broker says. Certain sellers are apparently offering ore, for November delivery, at cheap prices and increased pressure from the Chinese government on energy
conservation is seeing mills cut production again. All this, combined with higher supply as the Indian monsoon season finishes, may result in another period of paper selling, SBB hears. The volume of swaps cleared on the Singapore Exchange fell from 3,105 lots in August, equating to around 1.5m tonnes, to 2,682 lots (1.3mt) in September.
World price +/-
World HRC $/t 681 -3
World Rebar $/t 639 +5
M'sia Rebar $/t 632
Indexes
SBB World 237 +2
Europe Flat 177 -13
Europe Long 204 -2
Asia Flat 204 -2
Asia Long 288 -5
N.America Flat 183 -5
N.America Long 234 +8
SE Asia rebar import market sees offer prices rebound
Mills are trying to raise their offer prices for rebar into Southeast Asia. New offers for theoretical weight rebar from Turkey are now at $600-610/tonne cfr Singapore. There are no offers heard for Korean nor Taiwanese rebar to Singapore. Prices were previously under $600/t cfr. Several bookings of Turkish-origin theoretical weight rebar were last concluded at $575-585/t cfr Singapore around two weeks ago. About ten days ago, rebar of theoretical weight from Korea transacted at around $585/t cfr Singapore and for actual weight, $590-595/t cfr Hong Kong. Traders tell Steel Business Briefing that offer prices have risen because of the firming scrap market. “Mills have to hike their prices because they cannot afford to sell at previous levels,” a trader tells SBB. However, trading sources stressed that, while offer prices have risen, no confirmed deals at these prices have been struck as yet. Chinese-origin boron-added rebar was last concluded at $585/t cfr Hong Kong. There was a position cargo of this grade and origin rebar at the same price to Singapore. This is likely to have been booked, since this is the price buyers are willing to pay, traders tell SBB. Demand in Hong Kong for imported rebar is described as steady. In Singapore, buyers are generally
adopting a wait-and-see approach because they are uncertain of market direction.
China's iron ore demand may slow until 2020
Liu Yongshun, a former official with Baosteel’s iron ore negotiating group, has predicted that the growth rate of Chinese iron ore demand will slow until 2020. “Under the supposition that China’s GDP increases 8% each year for the next ten years, the growth rate of Chinese crude steel production will be 5%, the same as the global average,” Liu told a conference in eastern China’s Hefei city. Therefore Liu expects China’s iron ore demand to slow, as steel demand will also decline during that time. But Liu did not add why he expects steel demand to pick up in 2020. Steel Business Briefing notes that Chinese crude steel production grew 13% in 2009. However, industry analysts express their suspicions about Liu’s analysis. “The GDP growth rate may not hold at 8% in the following ten years,” says a Shanghai-based analyst. He adds that development of China's central and western regions has not been strong enough to indicate that those regions can replace eastern China in leading the country's economic growth and maintaining steel demand. Another analyst from Shanghai agrees, saying Liu's prediction is for "too a long period”.
Beijing has not suggested a clear target for China’s GDP growth rate in the next five-year plan (2011- 2015), which has left analysts guessing whether China will reduce its focus on GDP growth, SBB notes.
US scrap prices rebound as exports grow
Anticipation that ferrous scrap prices will rise in the US market next month is already pushing US scrap export prices higher, according to Blake Kelley of Sims Group. Until now, domestic prices were mostly levelpegged with exports, he told the BIR scrap conference in Brussels yesterday. US scrap export volumes began to grow significantly in August to 21.6m tonnes, if calculated on an annualised basis, he notes. This compares with a year-to-date annualised average of 19.7m t, and “was one of the first indications that world scrap prices were about to increase”, he says. US prices are already up in some areas by about $25/t, compared to the bottom of the market earlier this month, he told Steel Business Briefing. This was when HMS was about $320/t delivered, shredded at $345/t and busheling at $385/t. Many believe a key factor for the rebound is “inadequate supply and low collection rates, especially for unprepared shredder feed”, he said. “Steel producers simply did not initially buy all they wanted, and when they re-entered the market for more, supplier attitudes changed,” he concludes. Meanwhile, domestic prices in Canada are unlikely to fall further, especially as the cold winter approaches, he added. The US dollar is at a 15 year low against the yen, and at relatively lower values compared to other major industry currencies, he noted.
Iron ore swaps prices edge higher despite physical weakness
Iron ore swaps prices have moved up over the last week after a period of selling, sources in the market tell Steel Business Briefing. January prices jumped from $141/tonne on 18 October to $143.50/t on 25 October, according to Iron Ore & Steel Derivatives Association data seen by SBB. February swaps prices increased from $140.85/t to $142.50/t, while March prices rose from $140.71/t to $141.50/t. Prices have risen after a period of selling when people sensed the physical market weakening, one source says. While swaps prices have risen over the last week, physical prices have softened. The Steel Index’s reference price for 62% Fe fines delivered into China, used to settle swaps on the Singapore Exchange and LCH.Clearnet, moved down 1.8% over the course of last week, hitting $149.4/t on Monday (25 October). “We have seen some decline of demand out of China on the physical side, there’s only been a couple of cargoes gone through in the last week or so,” one broker says. Certain sellers are apparently offering ore, for November delivery, at cheap prices and increased pressure from the Chinese government on energy
conservation is seeing mills cut production again. All this, combined with higher supply as the Indian monsoon season finishes, may result in another period of paper selling, SBB hears. The volume of swaps cleared on the Singapore Exchange fell from 3,105 lots in August, equating to around 1.5m tonnes, to 2,682 lots (1.3mt) in September.
Friday, October 22, 2010
Daily Steel News - 22 Oct 10
Iron ore reference prices stable - The Steel Index
The latest daily iron ore reference prices released by The Steel Index (TSI) yesterday, show that the prices for both 62% and 58% Fe content iron ore have been fairly stable during the past week, after the sharp increases from a week earlier. The 62% Fe content price wavered on a daily basis, ending slightly lower. Both prices are still around 9% higher than four weeks ago. Average weekly freight rates from Australia and Brazil were stable, but average rates from both coasts of India rose steadily. The reference price for 62% Fe content iron ore fines stood at $151.80/dry metric tonne CFR Tianjin port, China. This is a $0.90/dmt, or 0.6%, decrease on the price a week ago. The reference price for 58% Fe content iron ore fines ended the week $1.10/dmt, or 0.9%, above the level of a week earlier. Daily freight rates from Australia and Brazil to China rose by 3% at the start of the week. Rates from Australia slipped back later, but rates from Brazil continued to firm. Daily freight rates for shipments from east coast of India rose 4.5% from the level at the end of the previous week, while rates from west coast of India rose 8% in midweek before falling back again. TSI 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.
World output falls for fourth month in a row
Crude steel production fell for the fourth successive month in September, according to World Steel Association data covering 66 countries. Steel Business Briefing calculates that monthly production has
dropped by almost 10% since it peaked at 124m tonnes in May. September output of 111mt was 0.9% higher than in the same month last year. It took the total for the first nine months of this year to 1,045mt, 19% more than last year’s equivalent figure. China’s September production of 47.9mt was almost 6% lower than the same month in 2009, as steelmakers cut output to meet government-mandated energy saving targets. In contrast, the month saw increases in other Asian countries’ production – of 11% in Japan, 6% in India and 3% in Korea. North American September output, of 9.3mt, was 18% ahead of that of September 2009. The USA, Mexico and Canada all reported gains, but South American production last month was down by 2% year-on-year mostly because of a 36% fall in Venezuela. September production in the European Union was almost 4% greater than the same 2009 month, aided by a near-20% increase in the EU’s second largest steelmaking country, Italy. Turkish production last month was up almost 18%.
CIS crude steel output of 8.7mt was 1.5% lower than in September last year as Ukraine’s output fell 12%.
The latest daily iron ore reference prices released by The Steel Index (TSI) yesterday, show that the prices for both 62% and 58% Fe content iron ore have been fairly stable during the past week, after the sharp increases from a week earlier. The 62% Fe content price wavered on a daily basis, ending slightly lower. Both prices are still around 9% higher than four weeks ago. Average weekly freight rates from Australia and Brazil were stable, but average rates from both coasts of India rose steadily. The reference price for 62% Fe content iron ore fines stood at $151.80/dry metric tonne CFR Tianjin port, China. This is a $0.90/dmt, or 0.6%, decrease on the price a week ago. The reference price for 58% Fe content iron ore fines ended the week $1.10/dmt, or 0.9%, above the level of a week earlier. Daily freight rates from Australia and Brazil to China rose by 3% at the start of the week. Rates from Australia slipped back later, but rates from Brazil continued to firm. Daily freight rates for shipments from east coast of India rose 4.5% from the level at the end of the previous week, while rates from west coast of India rose 8% in midweek before falling back again. TSI 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.
World output falls for fourth month in a row
Crude steel production fell for the fourth successive month in September, according to World Steel Association data covering 66 countries. Steel Business Briefing calculates that monthly production has
dropped by almost 10% since it peaked at 124m tonnes in May. September output of 111mt was 0.9% higher than in the same month last year. It took the total for the first nine months of this year to 1,045mt, 19% more than last year’s equivalent figure. China’s September production of 47.9mt was almost 6% lower than the same month in 2009, as steelmakers cut output to meet government-mandated energy saving targets. In contrast, the month saw increases in other Asian countries’ production – of 11% in Japan, 6% in India and 3% in Korea. North American September output, of 9.3mt, was 18% ahead of that of September 2009. The USA, Mexico and Canada all reported gains, but South American production last month was down by 2% year-on-year mostly because of a 36% fall in Venezuela. September production in the European Union was almost 4% greater than the same 2009 month, aided by a near-20% increase in the EU’s second largest steelmaking country, Italy. Turkish production last month was up almost 18%.
CIS crude steel output of 8.7mt was 1.5% lower than in September last year as Ukraine’s output fell 12%.
Wednesday, September 15, 2010
Daily Steel News - 15 Sept 10
East Asian traders expect stable steel prices for Q4
Steel prices are expected to stabilise in fourth quarter. With Beijing-directed electricity usage controls resulting in steel production cuts, Chinese demand for spot iron ore will soften, a chinese trader rationalises. Less steel supply will be offset by weak steel demand so steel prices will stabilise at current levels, he adds. Current price levels appear to be in equilibrium for both users and sellers, a Hong Kong trader tells Steel Business Briefing. He says this with reference to spot iron ore prices prevailing at $135-145/tonne, long-term contract iron ore settlement prices dipping by 13% in Q4 and hot rolled coil prices at around $600/t and more levels. Others say that steel production cuts in China are likely to be temporary because other Chinese mills will crank up their production in order to benefit from higher domestic steel prices. “The production cuts are good. They will help stabilise prices because China is overstocked now. But these cuts will be temporary,” says a Taiwanese trader who adds that the cuts have not been voluntary. Lower Q4 iron ore prices may encourage increased sales and stock-piling of raw material. “Scrap prices could fall because we expect the power cuts to have more of an impact on Chinese EAF operations and this will mean lower demand for scrap,” warns a manager with a Vietnamese longs steel mill. Traders cite the strengthening of many Asian currencies against the US dollar as a contributing factor to steel price volatility. “There are no longer any long term trends in the steel markets. The market has become very reactive and difficult to predict,” the Taiwanese trader adds.
Iron ore forward prices slip on Chinese steel output cuts
Forward prices for cash-settled iron ore swaps moved down in line with a slow physical market last week as the Chinese government moved to slow steel production to meet end-of-year energy saving targets. Brokers expect China’s output cuts to continue through the fourth quarter, impacting future demand for iron ore. Concerns over the extent of the cuts grew mid-week, while the market was further confused by mixed signals from steel futures on the Shanghai Futures Exchange (SHFE), widely watched by swap market participants as an indicator of Chinese steel market sentiment. A slow physical iron ore market and holidays in Singapore on Friday 10 September further dampened swap market activity. The TSI reference price for 62% Fe fines, used exclusively to settle swap contracts on the Singapore Exchange (SGX), LCH.CLearnet and CME, was down 3.1% last week, as Steel Business Briefing has reported. The September swap on the Singapore Exchange (SGX) slipped by around $4/t between Friday 3 September and the end of last week, closing at $131.13/t on 10 September. The October swap declined by a greater amount, falling by almost $7/t over the same period to close at $130.5/t. The market opened quietly this week.
Steel prices are expected to stabilise in fourth quarter. With Beijing-directed electricity usage controls resulting in steel production cuts, Chinese demand for spot iron ore will soften, a chinese trader rationalises. Less steel supply will be offset by weak steel demand so steel prices will stabilise at current levels, he adds. Current price levels appear to be in equilibrium for both users and sellers, a Hong Kong trader tells Steel Business Briefing. He says this with reference to spot iron ore prices prevailing at $135-145/tonne, long-term contract iron ore settlement prices dipping by 13% in Q4 and hot rolled coil prices at around $600/t and more levels. Others say that steel production cuts in China are likely to be temporary because other Chinese mills will crank up their production in order to benefit from higher domestic steel prices. “The production cuts are good. They will help stabilise prices because China is overstocked now. But these cuts will be temporary,” says a Taiwanese trader who adds that the cuts have not been voluntary. Lower Q4 iron ore prices may encourage increased sales and stock-piling of raw material. “Scrap prices could fall because we expect the power cuts to have more of an impact on Chinese EAF operations and this will mean lower demand for scrap,” warns a manager with a Vietnamese longs steel mill. Traders cite the strengthening of many Asian currencies against the US dollar as a contributing factor to steel price volatility. “There are no longer any long term trends in the steel markets. The market has become very reactive and difficult to predict,” the Taiwanese trader adds.
Iron ore forward prices slip on Chinese steel output cuts
Forward prices for cash-settled iron ore swaps moved down in line with a slow physical market last week as the Chinese government moved to slow steel production to meet end-of-year energy saving targets. Brokers expect China’s output cuts to continue through the fourth quarter, impacting future demand for iron ore. Concerns over the extent of the cuts grew mid-week, while the market was further confused by mixed signals from steel futures on the Shanghai Futures Exchange (SHFE), widely watched by swap market participants as an indicator of Chinese steel market sentiment. A slow physical iron ore market and holidays in Singapore on Friday 10 September further dampened swap market activity. The TSI reference price for 62% Fe fines, used exclusively to settle swap contracts on the Singapore Exchange (SGX), LCH.CLearnet and CME, was down 3.1% last week, as Steel Business Briefing has reported. The September swap on the Singapore Exchange (SGX) slipped by around $4/t between Friday 3 September and the end of last week, closing at $131.13/t on 10 September. The October swap declined by a greater amount, falling by almost $7/t over the same period to close at $130.5/t. The market opened quietly this week.
Friday, August 20, 2010
Daily Steel News - 20 Aug 10
Offer prices dip for Turkish rebar to Singapore
Turkish rebar suppliers have lowered their offer prices for September production and October shipments this week to $608-610/tonne cfr Singapore. These prices caught traders in Singapore off-guard because offers from Turkey had been rising to around $650/t cfr last week, up from $610-630/t cfr. “They want to clear their rebar because their orders for rebar are not full. This is due to the ongoing fasting month,” a local trader tells Steel Business Briefing. However, offers for Turkish billet are still as high as $620/t cfr because billet demand is good and it is easier to sell to rolling mills in Asia, SBB is told. A trader claims that some 4,000-5,000 t of boron-added rebar (including 10mm and 13mm in diameter) from China was booked last week at $612/t cfr Singapore before the fall in Turkish rebar offer prices. Korean rebar is currently offered at $625/t cfr Singapore. Demand for rebar is not strong in Singapore, traders report. The relatively low domestic price of rebar at the equivalent of S$820 (US$606/t) delivered has dampened import buying, especially since offer prices have been rising. SBB is told that the domestic price has since been raised this week to S$850/t (US$628/t). “Inventory levels in Singapore will remain high till October,” a trader notes. "There are no bookings heard yet," he adds, referring to lower-priced Turkish rebar.
Turkish rebar suppliers have lowered their offer prices for September production and October shipments this week to $608-610/tonne cfr Singapore. These prices caught traders in Singapore off-guard because offers from Turkey had been rising to around $650/t cfr last week, up from $610-630/t cfr. “They want to clear their rebar because their orders for rebar are not full. This is due to the ongoing fasting month,” a local trader tells Steel Business Briefing. However, offers for Turkish billet are still as high as $620/t cfr because billet demand is good and it is easier to sell to rolling mills in Asia, SBB is told. A trader claims that some 4,000-5,000 t of boron-added rebar (including 10mm and 13mm in diameter) from China was booked last week at $612/t cfr Singapore before the fall in Turkish rebar offer prices. Korean rebar is currently offered at $625/t cfr Singapore. Demand for rebar is not strong in Singapore, traders report. The relatively low domestic price of rebar at the equivalent of S$820 (US$606/t) delivered has dampened import buying, especially since offer prices have been rising. SBB is told that the domestic price has since been raised this week to S$850/t (US$628/t). “Inventory levels in Singapore will remain high till October,” a trader notes. "There are no bookings heard yet," he adds, referring to lower-priced Turkish rebar.
Monday, July 12, 2010
Daily Steel News - 12 Jul 10
SE Asian billet importers bid below higher-priced offers
Buying interest for imported billet continues in Vietnam and Thailand but the price gap between importers and sellers is limiting deals from taking place, regional trading sources tell Steel Business Briefing. There is little change in transacted prices of $530-535/tonne cfr and importers are generally bidding at up to $530/t cfr. They are unwilling to pay more for billet because rebar prices are still sluggish in their domestic markets. In Vietnam, offer prices are prevailing at $540/t cfr for Korean billet and $540-545/t cfr for Russian material. "There is buying demand but customers do not want to pay," a trader in Vietnam tells SBB. Importers want to book now because scrap prices are rising but they have to raise their prices in order to secure billet, he adds. Offers from Thailand more than a week ago were at $565-570/t cfr Vietnam, and Malaysian mills are indicating offers at around $565/t cfr. Asian-origin billet shipped to Vietnam enjoys a lower preferential import duty. In Thailand, Ukrainian Black Sea billet is generally offered at $530-540/t cfr while Russian billet is being offered at $530-550/t cfr. Traders also report offers of Ukrainian Black Sea billet at $525/t cfr Thailand and at $530/t cfr Indonesia. Black Sea billet is not popular because it takes longer for shipments to arrive. Offers in the Philippines are prevailing at $535-545/t cfr, mostly for Russian material, and at the higher price level for Turkish-origin billet. A regional trader has heard of billet transacted at $525/t cfr Philippines, while another says that buying activity is very slow.
Weak Korean scrap prices to continue through summer
Korean domestic scrap buying prices quoted by local steelmakers continue falling. Hyundai Steel, the country's leading scrap buyer, is this week planning its third consecutive cutback in scrap prices. "The certain day for the coming reduction in our scrap buying prices will be announced by mid-week," a Hyundai source says. Hyundai had slashed its domestic buying prices for all grades at all works by KRW 10-15,000/t ($8-12/t) on 1 July and again a week later. The price declines took Hyundai's scrap buying prices to KRW 380-390,000/t ($313-321/t) currently for H1 grade, Steel Business Briefing understands. With eight successive declines in scrap buying prices from mid-May, Hyundai has clipped its prices by a total of around KRW 80,000/t. The extensive summer maintenance shut downs planned for July-August by most Korean EAF makers of long products are serving to weaken local market scrap prices. Hyundai's Incheon works is slated to halt EAF operations by turns from 19 July to 20 August. Dongkuk Steel Mill and other rebar makers are also scheduling maintenance stoppages during this month and next.Meanwhile, Korea's imports of scrap in June dipped to 690,000 t from May's 720,000 t while inventories of scrap at steelmaker yards are still high on the back of smooth supplies by local dealers. The depressed demand for finished steel products like longs is also lowering the scrap requirement at home, and thus any jump in scrap import tonnage is unlikely in July-August. "We hardly heard of any bookings for scrap imports last month," a scrap trader tells SBB.
Iron ore prices continue sharp decline - The Steel Index
The latest daily iron ore reference prices released by The Steel Index (TSI) last Friday show that the price for both 62% and 58% Fe content iron ore fell sharply from a week earlier. Average weekly freight rates from Australia and Brazil also dropped continuously from the previous week. The reference price for 62% Fe content iron ore fines finished the week at $121.80/dry metric tonne CFR Tianjin port, China. This is a $12.60/dmt, or 9.4%, decrease on the previous week's price. This reference price has fallen by $21.30/dmt, or nearly 15%, since four weeks ago. The reference price for 58% Fe content iron ore fines ended the week $7.10/dmt, or 7.1%, below the level of a week earlier. Daily freight rates from Australia to China fell sharply during the week, ending 11.5% lower. Freights from Brazil to China also fell, even more heavily, during last week and ended down more than 20%. TSI 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.
Buying interest for imported billet continues in Vietnam and Thailand but the price gap between importers and sellers is limiting deals from taking place, regional trading sources tell Steel Business Briefing. There is little change in transacted prices of $530-535/tonne cfr and importers are generally bidding at up to $530/t cfr. They are unwilling to pay more for billet because rebar prices are still sluggish in their domestic markets. In Vietnam, offer prices are prevailing at $540/t cfr for Korean billet and $540-545/t cfr for Russian material. "There is buying demand but customers do not want to pay," a trader in Vietnam tells SBB. Importers want to book now because scrap prices are rising but they have to raise their prices in order to secure billet, he adds. Offers from Thailand more than a week ago were at $565-570/t cfr Vietnam, and Malaysian mills are indicating offers at around $565/t cfr. Asian-origin billet shipped to Vietnam enjoys a lower preferential import duty. In Thailand, Ukrainian Black Sea billet is generally offered at $530-540/t cfr while Russian billet is being offered at $530-550/t cfr. Traders also report offers of Ukrainian Black Sea billet at $525/t cfr Thailand and at $530/t cfr Indonesia. Black Sea billet is not popular because it takes longer for shipments to arrive. Offers in the Philippines are prevailing at $535-545/t cfr, mostly for Russian material, and at the higher price level for Turkish-origin billet. A regional trader has heard of billet transacted at $525/t cfr Philippines, while another says that buying activity is very slow.
Weak Korean scrap prices to continue through summer
Korean domestic scrap buying prices quoted by local steelmakers continue falling. Hyundai Steel, the country's leading scrap buyer, is this week planning its third consecutive cutback in scrap prices. "The certain day for the coming reduction in our scrap buying prices will be announced by mid-week," a Hyundai source says. Hyundai had slashed its domestic buying prices for all grades at all works by KRW 10-15,000/t ($8-12/t) on 1 July and again a week later. The price declines took Hyundai's scrap buying prices to KRW 380-390,000/t ($313-321/t) currently for H1 grade, Steel Business Briefing understands. With eight successive declines in scrap buying prices from mid-May, Hyundai has clipped its prices by a total of around KRW 80,000/t. The extensive summer maintenance shut downs planned for July-August by most Korean EAF makers of long products are serving to weaken local market scrap prices. Hyundai's Incheon works is slated to halt EAF operations by turns from 19 July to 20 August. Dongkuk Steel Mill and other rebar makers are also scheduling maintenance stoppages during this month and next.Meanwhile, Korea's imports of scrap in June dipped to 690,000 t from May's 720,000 t while inventories of scrap at steelmaker yards are still high on the back of smooth supplies by local dealers. The depressed demand for finished steel products like longs is also lowering the scrap requirement at home, and thus any jump in scrap import tonnage is unlikely in July-August. "We hardly heard of any bookings for scrap imports last month," a scrap trader tells SBB.
Iron ore prices continue sharp decline - The Steel Index
The latest daily iron ore reference prices released by The Steel Index (TSI) last Friday show that the price for both 62% and 58% Fe content iron ore fell sharply from a week earlier. Average weekly freight rates from Australia and Brazil also dropped continuously from the previous week. The reference price for 62% Fe content iron ore fines finished the week at $121.80/dry metric tonne CFR Tianjin port, China. This is a $12.60/dmt, or 9.4%, decrease on the previous week's price. This reference price has fallen by $21.30/dmt, or nearly 15%, since four weeks ago. The reference price for 58% Fe content iron ore fines ended the week $7.10/dmt, or 7.1%, below the level of a week earlier. Daily freight rates from Australia to China fell sharply during the week, ending 11.5% lower. Freights from Brazil to China also fell, even more heavily, during last week and ended down more than 20%. TSI 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.
Monday, June 7, 2010
Daily Steel News - 7 Jun 10
Billet importers wait for SE Asian market to bottom out
Billet from the CIS is now being offered at $530-540/tonne cfr Southeast Asia, compared to $540-550/t cfr a week ago, while offers for billet from Turkey are at $550-560/t cfr SE Asia. Regional importers including those in Vietnam and the Philippines are inactive. "Buyers want to wait and see. They are not keen on booking because they expect prices to come down," a regional trader tells Steel Business Briefing. Traders report some small-volume bookings of Russian-origin billet at $530-540/t cfr Thailand and around 30,000~40,000 t of 5sp/ps billet from Ukraine concluded at $520/t cfr Taiwan. Taiwanese trading sources also report that 5sp/ps billet from Russia was recently offered at $520/t cfr, and at $550/t cfr for vanadiumadded billet. Billet from Thailand was recently offered at $560-565/t cfr Vietnam while locally-produced billet there is currently offered at VND 10.5-10.7m/t ($554-564/t) excluding 10% VAT. “The Vietnamese re-rollers want to buy billet but do not want to import. Domestic billet is cheaper now,” an importer tells SBB. An import duty buy billet but do not want to import. Domestic billet is cheaper now,” an importer tells SBB. An import duty of 3-7% is levied on billet entering Vietnam. Regional importers are hesitating in their purchases because scrap prices are still soft and finished steel prices in domestic markets are weak. An optimistic trader says: “Prices are bottoming out. Buyers in the Philippines will be returning soon to book." He believes that US scrap suppliers will not cut their prices further.
Tokyo Steel cuts scrap prices for third time in a week
Tokyo Steel Manufacturing has decided to reduce all its scrap buying prices by ¥1,000/tonne ($11/t) effective from 5 June arrivals. The cut, announced on 4 June, made for the mini mill’s third in a week and took the total reduction to ¥2,500-4,000/t. Behind Tokyo Steel’s decision seems to be the fact that after slashing buying prices by ¥1,000-1,500/t for all works from 3 June, other mini mills clipped their prices in tandem. This resulted in scrap collectors making more deliveries to Tokyo Steel. One scrap trader explains that some mills are limiting arrivals or stopping accepting scrap, but Tokyo Steel is trying to lower its acceptance volumes by cutting prices. He noted that this condition will continue while scrap exports are weak. Last week saw no apparent change in movements of Japanese scrap for export, with prevailing H2 grade offer prices at around ¥33,000/t fob, almost the same as the last contracted price by Korean mills. Inquiries for Japanese scrap traders are not active.
Billet from the CIS is now being offered at $530-540/tonne cfr Southeast Asia, compared to $540-550/t cfr a week ago, while offers for billet from Turkey are at $550-560/t cfr SE Asia. Regional importers including those in Vietnam and the Philippines are inactive. "Buyers want to wait and see. They are not keen on booking because they expect prices to come down," a regional trader tells Steel Business Briefing. Traders report some small-volume bookings of Russian-origin billet at $530-540/t cfr Thailand and around 30,000~40,000 t of 5sp/ps billet from Ukraine concluded at $520/t cfr Taiwan. Taiwanese trading sources also report that 5sp/ps billet from Russia was recently offered at $520/t cfr, and at $550/t cfr for vanadiumadded billet. Billet from Thailand was recently offered at $560-565/t cfr Vietnam while locally-produced billet there is currently offered at VND 10.5-10.7m/t ($554-564/t) excluding 10% VAT. “The Vietnamese re-rollers want to buy billet but do not want to import. Domestic billet is cheaper now,” an importer tells SBB. An import duty buy billet but do not want to import. Domestic billet is cheaper now,” an importer tells SBB. An import duty of 3-7% is levied on billet entering Vietnam. Regional importers are hesitating in their purchases because scrap prices are still soft and finished steel prices in domestic markets are weak. An optimistic trader says: “Prices are bottoming out. Buyers in the Philippines will be returning soon to book." He believes that US scrap suppliers will not cut their prices further.
Tokyo Steel cuts scrap prices for third time in a week
Tokyo Steel Manufacturing has decided to reduce all its scrap buying prices by ¥1,000/tonne ($11/t) effective from 5 June arrivals. The cut, announced on 4 June, made for the mini mill’s third in a week and took the total reduction to ¥2,500-4,000/t. Behind Tokyo Steel’s decision seems to be the fact that after slashing buying prices by ¥1,000-1,500/t for all works from 3 June, other mini mills clipped their prices in tandem. This resulted in scrap collectors making more deliveries to Tokyo Steel. One scrap trader explains that some mills are limiting arrivals or stopping accepting scrap, but Tokyo Steel is trying to lower its acceptance volumes by cutting prices. He noted that this condition will continue while scrap exports are weak. Last week saw no apparent change in movements of Japanese scrap for export, with prevailing H2 grade offer prices at around ¥33,000/t fob, almost the same as the last contracted price by Korean mills. Inquiries for Japanese scrap traders are not active.
Friday, June 4, 2010
Daily Steel News - 04 Jun 10
SE Asia: H-beam Prices May Bottomed Out
Thursday, 03 June 2010
Summary: 1) H-beam demand remains sluggish in South East Asia market, however traders suspect prices has bottomed out and due for recovery soon as impending government projects in the region has not been reduced. Currently, H-beams offered to the region are as follow:
a) Korea origins – RM2,546/t cfr Singapore
b) China origins – RM2,024/t cfr Viet Nam
c) Taiwan origins – RM2,481/t cfr Singapore
(Yahoo ! Currency Converter – 3rd June 2010 : US$1 = RM3.264)
The H-beam market in Southeast Asia has softened and buying interest is weak. Regional mills are aiming to maintain their export prices of imperial-sized H-beam to Singapore at base prices of $790/tonne cfr for Korean material and $780/t cfr for other origins, trading sources tell Steel Business Briefing.
This compares with offers at highs of $810/t cfr Singapore (but not concluded) just three weeks ago. An offer for Taiwanese-origin beams was recently made at $750-760/t cfr but the offer did not comprise the complete size range.
Mills are unwilling to trim their export prices further because they think that a market rebound is possible since raw material prices could be bottoming out. Offers are being given on an enquiry basis since the mills are unwilling to make open offers.
“Nobody’s going to buy if prices are cut further,” a trader notes on why the mills prefer to hold on to their prices. “Sentiment has changed but there is no change in demand for H-beams. We have not heard of any government in the region pulling back on projects using beams,” a Thai trader tells SBB.
H-beams under 350mm from China are offered at $610-620/t cfr Vietnam and there are stock lots being offered as low as $580/t cfr Vietnam, local trading sources tell SBB. “Demand in the market is very low. Buyers are taking a wait-and-see attitude,” says a Vietnamese trader.
Saudi’s June Rebar Prices Uncertain
Thursday, 03 June 2010
Summary: 1) According to market information, rebar buyers in Saudi are holding back their order until the release of June prices from local mills, but at the same time local mills are waiting for clearer picture on market demand to decide their June pricing! Currently rebars offered by Hadeed Sabic, one of the major local mill in Saudi, is around RM2,437 – 2,524/t.
(Yahoo ! Currency Converter – 3rd June 2010 : SAR10 = RM8.7033)
Saudi Arabian rebar buyers are holding off from placing new orders until prices for June are announced. Producers are working to understand the market sentiment for the rest of the summer, and decide on rebar prices for June accordingly.
Up to now the major local producer Hadeed Sabic has not yet announced new prices for June, and other producers prefer to wait till the beginning of next week to be sure of international market trends. Rebar might see a downward correction, market participants tell Steel Business Briefing.
The availability of lower priced import offers to the country – the most attractive market in the Middle East due to stability of prices since the beginning of the year – now seems to have created an expectation for a slight drop.
Authorities try to balance out the demand and international market prices, to avoid a crash in prices like that which happened in 2008. Local producers are planning to announce new prices for June, after analysing the market demand, risks from imported material and raw material prices, SBB learns from market participants.
Sabic’s current rebar prices is at around SAR 2,800-2,900/tonne ($747-773/t). Other local producers’ prices are slightly higher, and are likely to be closer to Sabic’s prices for June, SBB understands from the comments of market sources.
China: June Long Prices Maintained
Wednesday, 02 June 2010
Summary: 1) Chinese mills are maintaining their rebar and wire rod prices for early June delivery, currently these long prices are as follow:
a) Shagang – rebar (16-25mm) HRB335 – RM1,935/t inclusive 17% VAT
b) Shagang – wire rod (6.5mm) Q235 – RM2,054/t inclusive 17% VAT
c) Hangzhou (Shagang) – rebar (16-25mm) HRB335 – RM1,902 – 1,911/t inclusive 17% VAT
d) Shanghai (tier-two mill) – rebar (16-25mm) HRB335 – RM1,830 – 1,839/t inclusive 17% VAT
e) Beijing (Hebei) – rebar (16-25mm) HRB335 – RM2,002 – 2,007/t inclusive 17% VAT
(Yahoo ! Currency Converter – 3rd June 2010: RMB100 = RM47.7717)
Shagang has retained prevailing rebar and wire rod prices for early June delivery. Thus, the leading east-China mill’s 16-25mm HRB335 rebar and 6.5mm Q235 wire rod remain at RMB 4,050/tonne ($593/t) and RMB 4,300/t ($630/t) respectively, with 17% VAT.
Since mid-April, Shagang had slashed prices for rebar and wire rods by RMB 550/t ($81/t) and RMB 400/t ($59/t) respectively to reflect declining domestic market prices, Steel Business Briefing notes.
In the market, prices in Hangzhou for 16-25mm HRB335 rebar sourced from Shagang, had inched downwards by Tuesday by RMB 20/t ($3/t) or so from last Friday to about RMB 3,980-4,000/t ($583-586/t).
Shanghai prices for the same product, sourced from tier two mills, had softened slightly from last Thursday’s RMB 3,840-3,860/t ($562-565/t) to RMB 3,830-3,850/t ($561-564/t). In Beijing, offers for HRB335 rebar made by Hebei Iron & Steel had dropped to RMB 4,190-4,200/t ($613-615/t), down by about RMB 20/t from last Thursday. Some market watchers claim to have heard transaction prices of about RMB 4,160-4,170/t ($609-611/t).
A Shanghai trader maintained that before end-June, the market will experience another round of corrections, and that prices have yet to bottom out. “Futures prices once dropped to as low as RMB 4,150/t,” he says. “It’s also likely we’ll see spot prices return to the lows seen in late February of around RMB 3,600/t.”
On the futures market, Shanghai prices for August and October rebar contracts dropped RMB 50/t ($7/t) and RMB 59/t ($9/t) respectively on Tuesday from the previous day’s trade.
Taiwan: Rebar Prices Drop Again
Wednesday, 02 June 2010
Summary: 1) Weakening global scrap prices and demand are forcing Taiwanese mills to slash their rebar prices to the following:
a) Feng Shin (Taichung) – rebar (SD280) – medium sized – RM1,982/t
b) Wei Chih (Tainan) – rebar (SD280) – medium sized – RM1,941/t
c) Hai Kwang (Kaohsiung) – rebar (SD280) – medium sized – RM1,921/t
(Yahoo ! Currency Converter – 3rd June 2010: TWD100 = RM10.1603)
Taiwan’s leading rebar makers including Feng Hsin Iron & Steel, Hai Kwang Enterprise Corp and Wei Chih Steel Industrial Co continue to lower their domestic prices – this week by TWD 700/tonne ($22/t) – on weak global scrap prices.
The cuts take Feng Hsin’s and Wei Chih’s ex-works prices for SD280 medium-sized rebar to TWD 19,500/t ($605/t) and TWD 19,100/t ($593/t) respectively this week. Hai Kwang’s selling price for the same product dropped to TWD 18,900/t ($587/t) this week.
Officials continued to cite softening scrap prices as the prime reason for the price adjustments but all agree that demand is weak at the moment. “Customers just want to wait-and-see. They will only start buying when they expect raw material prices to rise,” Feng Hsin’s spokesman tells Steel Business Briefing.
Hai Kwang’s spokeswoman says buyers are staying away from the market as scrap prices are still falling. But she notes that customers’ inventory levels are becoming low.
Beginning mid-May Taiwanese rebar producers have tabled price cuts for three consecutive weeks that now total TWD 1,400-1,500/t ($43-47/t).
Feng Hsin is based in central Taichung, Wei Chih in southern Tainan and Hai Kwang in southern Kaohsiung.
Hyundai Trims Domestic Long Prices
Wednesday, 02 June 2010
Summary: 1) Weakening global scrap prices and strengthening of Korean Won, has prompted Hyundai Steel to cut its local long prices to the following:
a) Rebar – 10mm – RM2,149/t
b) H-beam – 300x300mm – RM2,468/t
(Yahoo ! Currency Converter – 3rd June 2010: TWD1000 = RM2.682)
Hyundai Steel has decided to cut domestic long product prices by KRW 30,000/tonne ($24/t) for June. The Korean mill points to softening domestic scrap prices to explain its decision, but doubtless the country’s weak construction steel market was also a major factor.
Effective 1 June, Hyundai’s price for rebars became KRW 801,000/t ($654/t) for 10mm diameter bars directly supplied to building contractors. The mill’s price for 300x300mm H-beams is now KRW 920,000/t ($751/t), Steel Business Briefing learns from the company.
“The price decline for long products this time is to reflect the cut we made for domestic scrap prices last month of KRW 30,000 (in total),” the mill says in a statement. It added that in fact, there was little justification for the cut in the finished product prices because of the Korean won’s strength against the US dollars through last month.
As Hyundai imports about 50% of its total scrap requirement, a stronger won makes dollar-denominated imported scrap more costly.
More likely, Hyundai’s chief motivation for slashing prices was because of stagnant market conditions at home, SBB notes. Low demand for rebar in Korea is sending inventory levels climbing by the week. Total stocks held by the country’s seven major producers had approached 300,000 t by the end of last week, up 30,000 t from a week earlier.
Market sources assume that with summer approaching and construction activity set to slow, the domestic market is unlikely to see any improvement through June.
Sluggish Demand & Falling Scrap Hampering UK Rebar Prices
Tuesday, 01 June 2010
Summary: 1) UK mills are trimming their rebar selling prices again as global scrap prices weaken, currently local rebar offers in UK is around RM2,164 – 2,212/t delivered. However at the same time, demand
remain sluggish coupled with the fact, buyers have restocked earlier and most buyers are adopting wait and see approach besides tempted by cheaper imports offered at RM2,116/t delivered.
(Yahoo ! Currency Converter – 3rd June 2010: £1 = RM4.8092)
Rebar prices in the UK have dropped again in connection with softening scrap prices, local traders and stockholders tell Steel Business Briefing.
Prices from UK producers Celsa and Thamesteel are pegged at around £450-460/tonne (€529-540/t) delivered, down from around £500/t a week or two ago.
Import penetration has increased, with import prices at around £440/t (€517/t) delivered, traders ascertain, and this may force the domestic mills to react. “There is a reasonable amount of imports coming in, enough to place pressure on local mills,” one trader says.
Activity is still very sluggish, as customers have restocked and are cautious in the face of uncertain scrap prices and market direction, sources concur. If scrap prices decrease substantially this month, following a drop in activity and in Turkish scrap buying prices, this could affect rebar prices, a stockist says.
Thamesteel has a good order book. However, it is behind on deliveries after a recent production stoppage and is unsure when they will be fulfilled, according to a note to customers obtained by SBB. Jeff Peanick, who joined Thamesteel as chief executive in January, is no longer listed as such on the company’s website. Thamesteel declined to comment on whether or not Peanick has left his position.
Egyptian Largest Rebar Mill Trims June Prices
Tuesday, 01 June 2010
Summary: 1) In facing sluggish demand during summer, Egypt largest rebar maker, Ezz Steel, is cutting its rebar prices by another RM144/t to RM2,046/t inclusive taxes for its June offers.
(Yahoo ! Currency Converter – 3rd June 2010: EGP100 = RM57.6169)
Egyptian steel producer Ezz Steel is reducing its rebar prices by EGP 250/tonne ($44/t). In June the company’s rebar price will be EGP 3,550/t ($627/t) including taxes.
Egyptian market was very slow in the last week of May, and the price cut had been expected. Reduced prices might trigger some demand, market sources hope, but consumption remains slow, and the summer period is not helping steel demand to recover, Steel Business Briefing was told.
The company also in a stock exchange filing said it has had no official notification from the Algerian authorities that its project to build a new steelworks there has been cancelled. As SBB reported, the Algerian government announced last week that the project would not go ahead.
Japan's Mills Lifting Rebar Prices for June
Monday, 31 May 2010
Summary: 1) Despite weakening global scrap prices, Japanese mills are hiking their June rebar prices to counter weakening other product prices! Currently rebar prices in Japan are as follow:
a) Kyoei Steel (Osaka) – rebar (16-25mm) – RM2,757/t June contracts
b) Kyoei Steel (Osaka) – rebar (13mm) – RM2,827/t June contracts
c) Tokyo Steel – rebar (base-size) – RM2,368/t delivered
d) Osaka – rebar (base-size) – RM2,297/t delivered
(Yahoo ! Currency Converter – 3rd June 2010: ¥100 = RM3.5338)
Kyoei Steel, Japan’s largest rebar producer, has decided to lift rebar prices at its Hirakata works in Osaka by ¥3,000/tonne ($33/t) for June contracts, Steel Business Briefing hears from the company.
The increase – Kyoei’s latest in a series that began in February – takes the price of its base size rebar (16-25mm) for June contracts to ¥78,000/t ($855/t) and that for 13mm bars to ¥80,000/t. So far this year, the Osaka-based mini mill has added ¥23,000/t to its rebar prices.
The price rise is aimed at countering weakening product prices in the market, a Kyoei spokesman tells SBB. Nakayama Steel Products and Daiwa Steel, both in Osaka, have also decided to lift their rebar prices by ¥3,000/t for June contracts. Kyoei is planning to lift prices by the same margin for bars produced at its Nagoya works in central Japan and at Yamaguchi in western Japan.
Kyoei argues that scrap prices are weakening but Japanese blast furnace and special steel makers are lifting their production and thus tightening the scrap supply-demand balance. The mini mill also fears rising exports of Japanese scrap may force local mills to lift their scrap buying prices, and thus increase production costs.
Tokyo Steel Manufacturing has kept its product prices unchanged for June. Its base-size rebar price remains at ¥64,000/t cif, equivalent to about ¥67,000/t delivered. But Tokyo Steel’s rebar output is comparatively small and its price adjustments have little impact on the market, a trader notes.
Current market prices of base-size rebars in Tokyo are around ¥68,000/t and those in Osaka are around ¥65,000/t, unchanged from mid-May.
Thursday, 03 June 2010
Summary: 1) H-beam demand remains sluggish in South East Asia market, however traders suspect prices has bottomed out and due for recovery soon as impending government projects in the region has not been reduced. Currently, H-beams offered to the region are as follow:
a) Korea origins – RM2,546/t cfr Singapore
b) China origins – RM2,024/t cfr Viet Nam
c) Taiwan origins – RM2,481/t cfr Singapore
(Yahoo ! Currency Converter – 3rd June 2010 : US$1 = RM3.264)
The H-beam market in Southeast Asia has softened and buying interest is weak. Regional mills are aiming to maintain their export prices of imperial-sized H-beam to Singapore at base prices of $790/tonne cfr for Korean material and $780/t cfr for other origins, trading sources tell Steel Business Briefing.
This compares with offers at highs of $810/t cfr Singapore (but not concluded) just three weeks ago. An offer for Taiwanese-origin beams was recently made at $750-760/t cfr but the offer did not comprise the complete size range.
Mills are unwilling to trim their export prices further because they think that a market rebound is possible since raw material prices could be bottoming out. Offers are being given on an enquiry basis since the mills are unwilling to make open offers.
“Nobody’s going to buy if prices are cut further,” a trader notes on why the mills prefer to hold on to their prices. “Sentiment has changed but there is no change in demand for H-beams. We have not heard of any government in the region pulling back on projects using beams,” a Thai trader tells SBB.
H-beams under 350mm from China are offered at $610-620/t cfr Vietnam and there are stock lots being offered as low as $580/t cfr Vietnam, local trading sources tell SBB. “Demand in the market is very low. Buyers are taking a wait-and-see attitude,” says a Vietnamese trader.
Saudi’s June Rebar Prices Uncertain
Thursday, 03 June 2010
Summary: 1) According to market information, rebar buyers in Saudi are holding back their order until the release of June prices from local mills, but at the same time local mills are waiting for clearer picture on market demand to decide their June pricing! Currently rebars offered by Hadeed Sabic, one of the major local mill in Saudi, is around RM2,437 – 2,524/t.
(Yahoo ! Currency Converter – 3rd June 2010 : SAR10 = RM8.7033)
Saudi Arabian rebar buyers are holding off from placing new orders until prices for June are announced. Producers are working to understand the market sentiment for the rest of the summer, and decide on rebar prices for June accordingly.
Up to now the major local producer Hadeed Sabic has not yet announced new prices for June, and other producers prefer to wait till the beginning of next week to be sure of international market trends. Rebar might see a downward correction, market participants tell Steel Business Briefing.
The availability of lower priced import offers to the country – the most attractive market in the Middle East due to stability of prices since the beginning of the year – now seems to have created an expectation for a slight drop.
Authorities try to balance out the demand and international market prices, to avoid a crash in prices like that which happened in 2008. Local producers are planning to announce new prices for June, after analysing the market demand, risks from imported material and raw material prices, SBB learns from market participants.
Sabic’s current rebar prices is at around SAR 2,800-2,900/tonne ($747-773/t). Other local producers’ prices are slightly higher, and are likely to be closer to Sabic’s prices for June, SBB understands from the comments of market sources.
China: June Long Prices Maintained
Wednesday, 02 June 2010
Summary: 1) Chinese mills are maintaining their rebar and wire rod prices for early June delivery, currently these long prices are as follow:
a) Shagang – rebar (16-25mm) HRB335 – RM1,935/t inclusive 17% VAT
b) Shagang – wire rod (6.5mm) Q235 – RM2,054/t inclusive 17% VAT
c) Hangzhou (Shagang) – rebar (16-25mm) HRB335 – RM1,902 – 1,911/t inclusive 17% VAT
d) Shanghai (tier-two mill) – rebar (16-25mm) HRB335 – RM1,830 – 1,839/t inclusive 17% VAT
e) Beijing (Hebei) – rebar (16-25mm) HRB335 – RM2,002 – 2,007/t inclusive 17% VAT
(Yahoo ! Currency Converter – 3rd June 2010: RMB100 = RM47.7717)
Shagang has retained prevailing rebar and wire rod prices for early June delivery. Thus, the leading east-China mill’s 16-25mm HRB335 rebar and 6.5mm Q235 wire rod remain at RMB 4,050/tonne ($593/t) and RMB 4,300/t ($630/t) respectively, with 17% VAT.
Since mid-April, Shagang had slashed prices for rebar and wire rods by RMB 550/t ($81/t) and RMB 400/t ($59/t) respectively to reflect declining domestic market prices, Steel Business Briefing notes.
In the market, prices in Hangzhou for 16-25mm HRB335 rebar sourced from Shagang, had inched downwards by Tuesday by RMB 20/t ($3/t) or so from last Friday to about RMB 3,980-4,000/t ($583-586/t).
Shanghai prices for the same product, sourced from tier two mills, had softened slightly from last Thursday’s RMB 3,840-3,860/t ($562-565/t) to RMB 3,830-3,850/t ($561-564/t). In Beijing, offers for HRB335 rebar made by Hebei Iron & Steel had dropped to RMB 4,190-4,200/t ($613-615/t), down by about RMB 20/t from last Thursday. Some market watchers claim to have heard transaction prices of about RMB 4,160-4,170/t ($609-611/t).
A Shanghai trader maintained that before end-June, the market will experience another round of corrections, and that prices have yet to bottom out. “Futures prices once dropped to as low as RMB 4,150/t,” he says. “It’s also likely we’ll see spot prices return to the lows seen in late February of around RMB 3,600/t.”
On the futures market, Shanghai prices for August and October rebar contracts dropped RMB 50/t ($7/t) and RMB 59/t ($9/t) respectively on Tuesday from the previous day’s trade.
Taiwan: Rebar Prices Drop Again
Wednesday, 02 June 2010
Summary: 1) Weakening global scrap prices and demand are forcing Taiwanese mills to slash their rebar prices to the following:
a) Feng Shin (Taichung) – rebar (SD280) – medium sized – RM1,982/t
b) Wei Chih (Tainan) – rebar (SD280) – medium sized – RM1,941/t
c) Hai Kwang (Kaohsiung) – rebar (SD280) – medium sized – RM1,921/t
(Yahoo ! Currency Converter – 3rd June 2010: TWD100 = RM10.1603)
Taiwan’s leading rebar makers including Feng Hsin Iron & Steel, Hai Kwang Enterprise Corp and Wei Chih Steel Industrial Co continue to lower their domestic prices – this week by TWD 700/tonne ($22/t) – on weak global scrap prices.
The cuts take Feng Hsin’s and Wei Chih’s ex-works prices for SD280 medium-sized rebar to TWD 19,500/t ($605/t) and TWD 19,100/t ($593/t) respectively this week. Hai Kwang’s selling price for the same product dropped to TWD 18,900/t ($587/t) this week.
Officials continued to cite softening scrap prices as the prime reason for the price adjustments but all agree that demand is weak at the moment. “Customers just want to wait-and-see. They will only start buying when they expect raw material prices to rise,” Feng Hsin’s spokesman tells Steel Business Briefing.
Hai Kwang’s spokeswoman says buyers are staying away from the market as scrap prices are still falling. But she notes that customers’ inventory levels are becoming low.
Beginning mid-May Taiwanese rebar producers have tabled price cuts for three consecutive weeks that now total TWD 1,400-1,500/t ($43-47/t).
Feng Hsin is based in central Taichung, Wei Chih in southern Tainan and Hai Kwang in southern Kaohsiung.
Hyundai Trims Domestic Long Prices
Wednesday, 02 June 2010
Summary: 1) Weakening global scrap prices and strengthening of Korean Won, has prompted Hyundai Steel to cut its local long prices to the following:
a) Rebar – 10mm – RM2,149/t
b) H-beam – 300x300mm – RM2,468/t
(Yahoo ! Currency Converter – 3rd June 2010: TWD1000 = RM2.682)
Hyundai Steel has decided to cut domestic long product prices by KRW 30,000/tonne ($24/t) for June. The Korean mill points to softening domestic scrap prices to explain its decision, but doubtless the country’s weak construction steel market was also a major factor.
Effective 1 June, Hyundai’s price for rebars became KRW 801,000/t ($654/t) for 10mm diameter bars directly supplied to building contractors. The mill’s price for 300x300mm H-beams is now KRW 920,000/t ($751/t), Steel Business Briefing learns from the company.
“The price decline for long products this time is to reflect the cut we made for domestic scrap prices last month of KRW 30,000 (in total),” the mill says in a statement. It added that in fact, there was little justification for the cut in the finished product prices because of the Korean won’s strength against the US dollars through last month.
As Hyundai imports about 50% of its total scrap requirement, a stronger won makes dollar-denominated imported scrap more costly.
More likely, Hyundai’s chief motivation for slashing prices was because of stagnant market conditions at home, SBB notes. Low demand for rebar in Korea is sending inventory levels climbing by the week. Total stocks held by the country’s seven major producers had approached 300,000 t by the end of last week, up 30,000 t from a week earlier.
Market sources assume that with summer approaching and construction activity set to slow, the domestic market is unlikely to see any improvement through June.
Sluggish Demand & Falling Scrap Hampering UK Rebar Prices
Tuesday, 01 June 2010
Summary: 1) UK mills are trimming their rebar selling prices again as global scrap prices weaken, currently local rebar offers in UK is around RM2,164 – 2,212/t delivered. However at the same time, demand
remain sluggish coupled with the fact, buyers have restocked earlier and most buyers are adopting wait and see approach besides tempted by cheaper imports offered at RM2,116/t delivered.
(Yahoo ! Currency Converter – 3rd June 2010: £1 = RM4.8092)
Rebar prices in the UK have dropped again in connection with softening scrap prices, local traders and stockholders tell Steel Business Briefing.
Prices from UK producers Celsa and Thamesteel are pegged at around £450-460/tonne (€529-540/t) delivered, down from around £500/t a week or two ago.
Import penetration has increased, with import prices at around £440/t (€517/t) delivered, traders ascertain, and this may force the domestic mills to react. “There is a reasonable amount of imports coming in, enough to place pressure on local mills,” one trader says.
Activity is still very sluggish, as customers have restocked and are cautious in the face of uncertain scrap prices and market direction, sources concur. If scrap prices decrease substantially this month, following a drop in activity and in Turkish scrap buying prices, this could affect rebar prices, a stockist says.
Thamesteel has a good order book. However, it is behind on deliveries after a recent production stoppage and is unsure when they will be fulfilled, according to a note to customers obtained by SBB. Jeff Peanick, who joined Thamesteel as chief executive in January, is no longer listed as such on the company’s website. Thamesteel declined to comment on whether or not Peanick has left his position.
Egyptian Largest Rebar Mill Trims June Prices
Tuesday, 01 June 2010
Summary: 1) In facing sluggish demand during summer, Egypt largest rebar maker, Ezz Steel, is cutting its rebar prices by another RM144/t to RM2,046/t inclusive taxes for its June offers.
(Yahoo ! Currency Converter – 3rd June 2010: EGP100 = RM57.6169)
Egyptian steel producer Ezz Steel is reducing its rebar prices by EGP 250/tonne ($44/t). In June the company’s rebar price will be EGP 3,550/t ($627/t) including taxes.
Egyptian market was very slow in the last week of May, and the price cut had been expected. Reduced prices might trigger some demand, market sources hope, but consumption remains slow, and the summer period is not helping steel demand to recover, Steel Business Briefing was told.
The company also in a stock exchange filing said it has had no official notification from the Algerian authorities that its project to build a new steelworks there has been cancelled. As SBB reported, the Algerian government announced last week that the project would not go ahead.
Japan's Mills Lifting Rebar Prices for June
Monday, 31 May 2010
Summary: 1) Despite weakening global scrap prices, Japanese mills are hiking their June rebar prices to counter weakening other product prices! Currently rebar prices in Japan are as follow:
a) Kyoei Steel (Osaka) – rebar (16-25mm) – RM2,757/t June contracts
b) Kyoei Steel (Osaka) – rebar (13mm) – RM2,827/t June contracts
c) Tokyo Steel – rebar (base-size) – RM2,368/t delivered
d) Osaka – rebar (base-size) – RM2,297/t delivered
(Yahoo ! Currency Converter – 3rd June 2010: ¥100 = RM3.5338)
Kyoei Steel, Japan’s largest rebar producer, has decided to lift rebar prices at its Hirakata works in Osaka by ¥3,000/tonne ($33/t) for June contracts, Steel Business Briefing hears from the company.
The increase – Kyoei’s latest in a series that began in February – takes the price of its base size rebar (16-25mm) for June contracts to ¥78,000/t ($855/t) and that for 13mm bars to ¥80,000/t. So far this year, the Osaka-based mini mill has added ¥23,000/t to its rebar prices.
The price rise is aimed at countering weakening product prices in the market, a Kyoei spokesman tells SBB. Nakayama Steel Products and Daiwa Steel, both in Osaka, have also decided to lift their rebar prices by ¥3,000/t for June contracts. Kyoei is planning to lift prices by the same margin for bars produced at its Nagoya works in central Japan and at Yamaguchi in western Japan.
Kyoei argues that scrap prices are weakening but Japanese blast furnace and special steel makers are lifting their production and thus tightening the scrap supply-demand balance. The mini mill also fears rising exports of Japanese scrap may force local mills to lift their scrap buying prices, and thus increase production costs.
Tokyo Steel Manufacturing has kept its product prices unchanged for June. Its base-size rebar price remains at ¥64,000/t cif, equivalent to about ¥67,000/t delivered. But Tokyo Steel’s rebar output is comparatively small and its price adjustments have little impact on the market, a trader notes.
Current market prices of base-size rebars in Tokyo are around ¥68,000/t and those in Osaka are around ¥65,000/t, unchanged from mid-May.
Thursday, May 27, 2010
Daily Steel News - 27 May 01
Billet import market continues to weaken in SE Asia
Billet import prices are down to $540-550/tonne cfr Southeast sia compared to $570-580/t cfr late last week. Several traders are also making offers of commercial material from Ukraine and Turkey at $530-540/t cfr. These traders are said to be short-selling, making offers of billet at low prices to induce bids without cargoes-in-hand. Once they receive bids from buyers, they ask supplying mills to accept these low prices. Traders also report offers at around $550/t cfr. “These offers can do June shipments, so they must be position cargoes,” says a regional trader who saw Russian billet offered at this price. A Thai trader cites an offer for Ukrainian billet at $545-550/t cfr. However, there is very little buying interest for these lower-priced cargoes because of fears that billet prices will continue to fall. Europe’s financial turmoil continues to dent sentiment in Asia and the recent depreciation of Asian currencies against the US dollar has added uncertainties for importers. “Buyers will not book anything unless prices stabilise,” a trader in the Philippines tells Steel Business Briefing. “It will be clearer in mid-June.” Supplying mills will pare output rather than sell at low prices and operate at losses, he believes. A Thai trader says Thai re-rollers need to make their billet bookings because they have not made sufficient bookings since March. An offer of Ukrainian-origin billet at $550/t cfr Indonesia may not be booked however, local traders say. Though due for end-July shipment, after factoring in the 30-day shipment time the cargo will arrive during the Islamic fasting month which commences mid-August – typically a period of slow demand.
Shanghai H-beam prices drop
Shanghai H-beam prices have dropped from mid-May, reflecting the price declines in China’s steel market generally, Steel Business Briefing learns from market sources. Currently, prices for 200x200mm H-beams sourced from Maanshan Iron & Steel (Magang) have declined to about RMB 4,060-4,100/tonne ($595-600/t), with 17% VAT, compared with early May prices of RMB 4,350/t ($637/t). Prices of 400x400mm H-beams, also produced by Magang, are around RMB 4,400-4,450/t ($644-652/t), a significant drop of over RMB 300/t ($44/t) from early May. A Shanghai trader says transactions have improved slightly. But demand remains soft, and he believed that prices might decrease further. “We cannot depend on production costs to predict and analyse where market prices are going – when prices are falling and in an atmosphere of weak market sentiment,” he says. As SBB has reported, Magang will lose about 50,000 tonnes or one-third of its H-beam production this month because of scheduled maintenance. But even this reduction was not sufficient to prevent market
prices from their deep declines. Market sources say the company’s June list prices for H-beams will be cut by RMB 200/t ($29/t) before tax, with 200x200mm and 400x400mm priced at RMB 4,399/t ($644, with VAT) and RMB 4,774/t ($699/t).
Iron ore forward curve firm as spot prices continue to fall
Forward prices for exchange-cleared iron ore swaps have remained firm over the past week in the face of rapidly declining spot prices for the raw material. “Swaps traders think the [spot] market has already, or will very soon, hit the bottom,” a broker tells Steel Business Briefing. “There is also consideration given to the idea that the Q3 contract price will be at around $160/t, and the spot iron ore market is likely to converge with that,” he adds. Meanwhile, other commodity prices have staged a slight recovery, and sentiment in China has improved a little as steel screen and futures prices have firmed slightly, another market watcher points out. The June and July swaps for 62% Fe content iron ore on the Singapore Exchange (SGX) were at $142.75/t and $142.37/t respectively on 26 May, up from $139.20/t and $137.78/t on Monday of last week (17 May), SBB notes. The sentiment is that swap prices are currently relatively fairly valued, sources say, and this has led to some stability in forward prices. However, if the spot price falls below $140/dmt, or if there is any worsening in macroeconomic conditions, this could change, the broker warns. The daily 62% Fe reference price from The Steel Index (a unit of SBB), used exclusively to settle swap contracts on SGX, and also on LCH.Clearnet, slipped to $142.7/dmt cfr China yesterday, down $43.8/dmt from its peak of $186.5/dmt reached on 21 April.
Billet import prices are down to $540-550/tonne cfr Southeast sia compared to $570-580/t cfr late last week. Several traders are also making offers of commercial material from Ukraine and Turkey at $530-540/t cfr. These traders are said to be short-selling, making offers of billet at low prices to induce bids without cargoes-in-hand. Once they receive bids from buyers, they ask supplying mills to accept these low prices. Traders also report offers at around $550/t cfr. “These offers can do June shipments, so they must be position cargoes,” says a regional trader who saw Russian billet offered at this price. A Thai trader cites an offer for Ukrainian billet at $545-550/t cfr. However, there is very little buying interest for these lower-priced cargoes because of fears that billet prices will continue to fall. Europe’s financial turmoil continues to dent sentiment in Asia and the recent depreciation of Asian currencies against the US dollar has added uncertainties for importers. “Buyers will not book anything unless prices stabilise,” a trader in the Philippines tells Steel Business Briefing. “It will be clearer in mid-June.” Supplying mills will pare output rather than sell at low prices and operate at losses, he believes. A Thai trader says Thai re-rollers need to make their billet bookings because they have not made sufficient bookings since March. An offer of Ukrainian-origin billet at $550/t cfr Indonesia may not be booked however, local traders say. Though due for end-July shipment, after factoring in the 30-day shipment time the cargo will arrive during the Islamic fasting month which commences mid-August – typically a period of slow demand.
Shanghai H-beam prices drop
Shanghai H-beam prices have dropped from mid-May, reflecting the price declines in China’s steel market generally, Steel Business Briefing learns from market sources. Currently, prices for 200x200mm H-beams sourced from Maanshan Iron & Steel (Magang) have declined to about RMB 4,060-4,100/tonne ($595-600/t), with 17% VAT, compared with early May prices of RMB 4,350/t ($637/t). Prices of 400x400mm H-beams, also produced by Magang, are around RMB 4,400-4,450/t ($644-652/t), a significant drop of over RMB 300/t ($44/t) from early May. A Shanghai trader says transactions have improved slightly. But demand remains soft, and he believed that prices might decrease further. “We cannot depend on production costs to predict and analyse where market prices are going – when prices are falling and in an atmosphere of weak market sentiment,” he says. As SBB has reported, Magang will lose about 50,000 tonnes or one-third of its H-beam production this month because of scheduled maintenance. But even this reduction was not sufficient to prevent market
prices from their deep declines. Market sources say the company’s June list prices for H-beams will be cut by RMB 200/t ($29/t) before tax, with 200x200mm and 400x400mm priced at RMB 4,399/t ($644, with VAT) and RMB 4,774/t ($699/t).
Iron ore forward curve firm as spot prices continue to fall
Forward prices for exchange-cleared iron ore swaps have remained firm over the past week in the face of rapidly declining spot prices for the raw material. “Swaps traders think the [spot] market has already, or will very soon, hit the bottom,” a broker tells Steel Business Briefing. “There is also consideration given to the idea that the Q3 contract price will be at around $160/t, and the spot iron ore market is likely to converge with that,” he adds. Meanwhile, other commodity prices have staged a slight recovery, and sentiment in China has improved a little as steel screen and futures prices have firmed slightly, another market watcher points out. The June and July swaps for 62% Fe content iron ore on the Singapore Exchange (SGX) were at $142.75/t and $142.37/t respectively on 26 May, up from $139.20/t and $137.78/t on Monday of last week (17 May), SBB notes. The sentiment is that swap prices are currently relatively fairly valued, sources say, and this has led to some stability in forward prices. However, if the spot price falls below $140/dmt, or if there is any worsening in macroeconomic conditions, this could change, the broker warns. The daily 62% Fe reference price from The Steel Index (a unit of SBB), used exclusively to settle swap contracts on SGX, and also on LCH.Clearnet, slipped to $142.7/dmt cfr China yesterday, down $43.8/dmt from its peak of $186.5/dmt reached on 21 April.
Thursday, April 29, 2010
Daily Steel News - 29 Apr 10
Scrap importers in East Asia watching, out of market
The scrap import markets in East Asia are quiet as importers continue to stay on the sidelines and delay their buying. Prices of containerised scrap have fallen by around $10/tonne from last week. Some 1,000 t of HMS 1&2 80:20 from Latin America was booked this week at $405/t cfr Singapore, down from offers at
$415/ a week ago. “Prices keep falling,” a trader in Vietnam tells Steel Business Briefing. He says that Vietnamese importers are not booking containerised 80:20 being offered at $430/t cfr, compared to $440-450/t a week ago. “Vietnamese buyers want to book at $400/t cfr,” he adds. Containerised 80:20 was heard by some traders to have been recently booked at $410/t cfr Taiwan. This may have been from small suppliers because large US scrap suppliers are still offering at $420/t cfr. Taiwanese importers have also lowered their bidding price to around $400/t cfr. Containerised scrap was offered at $420-425/t cfr but Korean bids were at $415/t cfr. There are less bulk scrap offers than containerised offers in the market. An offer for US bulk 80:20/shredded scrap was heard last week at $460/t cfr Singapore and for European scrap $460-465/t cfr. The Chinese mills are absent from the imported scrap market. “They cannot buy because local scrap prices are lower,” a trader in Shanghai says. US-origin bulk shredded is offered now at $440/t cfr, he adds. Chinese domestic scrap prices are generally unchanged from last week but described by local traders as soft. HMS 1 is prevailing at RMB 3,100-3,200/t ($454-469), including 17% VAT.
Rebar prices fall further in China
China’s rebar prices are weakening further this week, as more market players become bearish on market prices and make efforts to speed up sales. Steel Business Briefing learns from market sources that Shanghai prices for 18-25mm HRB335, sourced from tier-two mills, have dipped to a prevailing RMB 4,200/t ($615/t), with 17% VAT, compared with last Wednesday’s RMB 4,230-4,250/t ($620-623/t). The approaching Shanghai World Expo is said to have affected local demand, with construction idling in downtown and end-users taking a wait-and-see attitude, but a trader says they should still be able to deliver steel to markets close to Shanghai. In northern China’s Beijing, prices for the same material sourced from Hebei Iron & Steel (Hegang) have declined from last Wednesday’s RMB 4,700/t ($689/t) to about RMB 4,600/t ($674/t). A Beijing trader complained that mills have passed higher raw materials costs onto them by continually raising their ex-works prices, but market prices have dropped far below mills’ ex-works prices; and he reported that Hegang is rumoured to be planning to further hike prices in May. Major mills are yet to re-adjust their export offers, with prevailing prices basically unchanged at about $650-670/t fob for vanadium-added rebar, according to traders. Market offers for wire rod are around $640- 650/t fob, compared with mid-April’s $650/t fob. “Domestic prices are falling. We dare not purchase from mills right now; it’s quite risky,” a Shanghai exporter says.
LME billet price continues down amid record level of trading
The London Metal Exchange’s Mediterranean billet futures contract price has continued to soften this week from last week, and saw record levels of trading activity on Tuesday. The three-month price was at $499-505/tonne (€378-382/t) and cash $471-475/t at the end of Tuesday, softening from $550-560/t and $530-530.50/t respectively at this time last week, Steel Business Briefing learns from LME data. “The month of May is usually a quiet one as Middle Eastern, Ukrainian and Russian buyers have bought the material they need in the physical market,” a trader says. Merchants have possibly taken the opportunity to sell off material as they expect a quieter May, he adds. “So it would not be a good time to hold onto long positions.” The volatility in the strength of the euro and a strengthening dollar are also affecting the price. “We wouldn’t expect it be above $550/t in the short term,” the trader says. The LME said that a new record in trading was achieved on Tuesday with 1,514 lots (98,410t) of the Med contract turned over. This was 17.5% higher than the previous record of 1,288 lots on 19 March.
China domestic iron ore prices become volatile
Rising production costs are forcing Chinese steel mills to decrease purchases of domestic iron ore. This,
combined with a drop in prices of imported Indian iron ore, is causing price swings in the market, Steel Business Briefing learns. In the Hanxin region of northern China’s Hebei province, the price for 66% Fe iron ore concentrate climbed by RMB 94/dry metric tonne ($14/dmt) to reach RMB 1,533/dmt ($225/dmt), including VAT, up from RMB 1,439/dmt ($211/dmt) on 14 April. But in Hebei’s Tangshan city 66% Fe concentrate sold at around RMB 1,158-1,170/wet metric tonne ($170-171/wmt) including VAT, some RMB 71-82/wmt lower than on 14 April. A Tianjin trader notes that weakening prices of imported Indian iron ore have put downward pressure on the Chinese market, while lower demand from mills has also pushed prices down. Steelmakers are using both higher and lower priced iron ore together, in order to control costs, he notes. However, many mills have almost exhausted their stocks of lower-priced ore now and can hardly afford the current high prices. Thus, they are delaying purchases until prices fall. A major iron ore producer in Hanxin notes that being fortunately surrounded by several mills, he has maintained his prices at RMB 1,533/dmt since last week and has sold out of stock. He predicts that purchasing will pick up if prices continue to fall, as mills will return to the market once their ore stocks a
The scrap import markets in East Asia are quiet as importers continue to stay on the sidelines and delay their buying. Prices of containerised scrap have fallen by around $10/tonne from last week. Some 1,000 t of HMS 1&2 80:20 from Latin America was booked this week at $405/t cfr Singapore, down from offers at
$415/ a week ago. “Prices keep falling,” a trader in Vietnam tells Steel Business Briefing. He says that Vietnamese importers are not booking containerised 80:20 being offered at $430/t cfr, compared to $440-450/t a week ago. “Vietnamese buyers want to book at $400/t cfr,” he adds. Containerised 80:20 was heard by some traders to have been recently booked at $410/t cfr Taiwan. This may have been from small suppliers because large US scrap suppliers are still offering at $420/t cfr. Taiwanese importers have also lowered their bidding price to around $400/t cfr. Containerised scrap was offered at $420-425/t cfr but Korean bids were at $415/t cfr. There are less bulk scrap offers than containerised offers in the market. An offer for US bulk 80:20/shredded scrap was heard last week at $460/t cfr Singapore and for European scrap $460-465/t cfr. The Chinese mills are absent from the imported scrap market. “They cannot buy because local scrap prices are lower,” a trader in Shanghai says. US-origin bulk shredded is offered now at $440/t cfr, he adds. Chinese domestic scrap prices are generally unchanged from last week but described by local traders as soft. HMS 1 is prevailing at RMB 3,100-3,200/t ($454-469), including 17% VAT.
Rebar prices fall further in China
China’s rebar prices are weakening further this week, as more market players become bearish on market prices and make efforts to speed up sales. Steel Business Briefing learns from market sources that Shanghai prices for 18-25mm HRB335, sourced from tier-two mills, have dipped to a prevailing RMB 4,200/t ($615/t), with 17% VAT, compared with last Wednesday’s RMB 4,230-4,250/t ($620-623/t). The approaching Shanghai World Expo is said to have affected local demand, with construction idling in downtown and end-users taking a wait-and-see attitude, but a trader says they should still be able to deliver steel to markets close to Shanghai. In northern China’s Beijing, prices for the same material sourced from Hebei Iron & Steel (Hegang) have declined from last Wednesday’s RMB 4,700/t ($689/t) to about RMB 4,600/t ($674/t). A Beijing trader complained that mills have passed higher raw materials costs onto them by continually raising their ex-works prices, but market prices have dropped far below mills’ ex-works prices; and he reported that Hegang is rumoured to be planning to further hike prices in May. Major mills are yet to re-adjust their export offers, with prevailing prices basically unchanged at about $650-670/t fob for vanadium-added rebar, according to traders. Market offers for wire rod are around $640- 650/t fob, compared with mid-April’s $650/t fob. “Domestic prices are falling. We dare not purchase from mills right now; it’s quite risky,” a Shanghai exporter says.
LME billet price continues down amid record level of trading
The London Metal Exchange’s Mediterranean billet futures contract price has continued to soften this week from last week, and saw record levels of trading activity on Tuesday. The three-month price was at $499-505/tonne (€378-382/t) and cash $471-475/t at the end of Tuesday, softening from $550-560/t and $530-530.50/t respectively at this time last week, Steel Business Briefing learns from LME data. “The month of May is usually a quiet one as Middle Eastern, Ukrainian and Russian buyers have bought the material they need in the physical market,” a trader says. Merchants have possibly taken the opportunity to sell off material as they expect a quieter May, he adds. “So it would not be a good time to hold onto long positions.” The volatility in the strength of the euro and a strengthening dollar are also affecting the price. “We wouldn’t expect it be above $550/t in the short term,” the trader says. The LME said that a new record in trading was achieved on Tuesday with 1,514 lots (98,410t) of the Med contract turned over. This was 17.5% higher than the previous record of 1,288 lots on 19 March.
China domestic iron ore prices become volatile
Rising production costs are forcing Chinese steel mills to decrease purchases of domestic iron ore. This,
combined with a drop in prices of imported Indian iron ore, is causing price swings in the market, Steel Business Briefing learns. In the Hanxin region of northern China’s Hebei province, the price for 66% Fe iron ore concentrate climbed by RMB 94/dry metric tonne ($14/dmt) to reach RMB 1,533/dmt ($225/dmt), including VAT, up from RMB 1,439/dmt ($211/dmt) on 14 April. But in Hebei’s Tangshan city 66% Fe concentrate sold at around RMB 1,158-1,170/wet metric tonne ($170-171/wmt) including VAT, some RMB 71-82/wmt lower than on 14 April. A Tianjin trader notes that weakening prices of imported Indian iron ore have put downward pressure on the Chinese market, while lower demand from mills has also pushed prices down. Steelmakers are using both higher and lower priced iron ore together, in order to control costs, he notes. However, many mills have almost exhausted their stocks of lower-priced ore now and can hardly afford the current high prices. Thus, they are delaying purchases until prices fall. A major iron ore producer in Hanxin notes that being fortunately surrounded by several mills, he has maintained his prices at RMB 1,533/dmt since last week and has sold out of stock. He predicts that purchasing will pick up if prices continue to fall, as mills will return to the market once their ore stocks a
Monday, April 26, 2010
Daily Steel News - 26 Apr 10
Billet import offer prices weaken by around $10/t in SE Asia
Offer prices for billet have slipped by around $10/tonne to around $650-665/t cfr Southeast Asia but regional importers are generally staying away, trading sources tell Steel Business Briefing. “The region is quiet this past week,” a regional trader tells SBB. Traders say that the market is taking a wait-and-see stance because rebar demand in regional markets is not strong. Taiwanese-origin billet has been offered at $650-660/t cfr SE Asia and Malaysian billet at $660-665/t cfr. One lot of Russian billet was recently offered at $660/t cfr Indonesia and Japanese billet at $660/t cfr Indonesia, down from $670/t cfr previously. Trading sources report billet from the CIS is still offered at $660-665/t cfr Vietnam but there are also higher offer prices for Russian and Turkish billet at $670-680/t cfr. “The future is not bright for the Taiwanese longs market for the short term,” a Taiwanese trader says. Domestic scrap and rebar prices have been dropping and no rebound is expected yet. He last heard an import booking of containerised US-origin vanadium-added billet some two weeks ago at $657/t cfr. A buyer in Indonesia says that there has not been any concluded deal recently although he has heard of bidding at $650/t cfr for 20MnSi grade material. A small-volume lot of Japanese origin billet was booked early last week at $653/t cfr Vietnam. Japanese billet enjoys a preferential import duty of around 4.5% compared to normal duty of 7%for imports.
Indian longs prices falter on weak demand
Indian domestic prices of thermo mechanically treated (TMT) rebars and mild steel billets produced by mid-tier steelmakers have declined by Rs 1,500-2,000/tonne ($34-45/t) from early April levels on slackened demand. Fe 500 TMT rebars (12mm) are priced at Rs 34,000-35,500/t ($765-788/t) including taxes and freight, down from Rs 36,000-37,500/t in early April. Average country-wide prices of Fe 415 TMT rebars (12mm) are Rs 33,500-35,000/t all inclusive. At the same time, 8mm Fe500 TMT rebars in north India are priced at Rs 36,600/t, while 10mm rebars cost
Rs 36,000/t all inclusive. Prices of 16mm, 20mm and 25mm TMT rebars are Rs 35,200-36,000/t all inclusive. EAF-manufactured mild steel billets (100mm) in west India are priced at Rs 27,000/t ex-works without taxes, and Rs 30,900/t including of taxes and local freight. North Indian billet prices hover at Rs 30,000- 40,000/t all inclusive. Billet prices are Rs 1,500/t lower than early April levels of Rs 31,500-41,500/t. Meanwhile, induction furnace-manufactured pencil ingots at Mandi Gobindgarh in the northern state of Punjab have been hovering at Rs 29,000-30,300/t including taxes and freight, and Rs 28,000-28,500/t in Raipur in the central state of Chhattisgarh. “Domestic demand is weak, not only because of financial market constraints, but also through the low availability of other construction-related raw materials such as sand,” a rebar manufacturer tells Steel Business Briefing. However, with the monsoons approaching in mid-June, the industry expects a pick-up in domestic demand soon, as buyers can stock up on their inventories before the seasonal rains begin.
Hyundai raises longs prices for May
Korean integrated mill Hyundai Steel has decided to lift domestic long product prices by KRW 40,000/tone ($35/t) for May, blaming consistently rising scrap prices. From 1 May, Hyundai’s price for rebars will be KRW 831,000/t ($745/t) for 10mm diameter bars directly supplied to building contractors while its 300x300mm H-beams will be priced at KRW 950,000/t ($852/t). The company will also raise prices of sections such as angles and channels to KRW 940,000/t for base sizes from next month, Steel Business Briefing learns from the company. “The price hike for long products this time is inevitable because scrap prices have kept surging,” Hyundai says. In April, it added KRW 50,000/t to the prices of all its long products for the same reason. Market watchers had long expected that Hyundai would hike prices but the increase margin this time is slightly smaller than many had been forecasting. “This is because of Hyundai’s concern about resistance from contractors given that the recovery in construction activity is still very weak,” a source says. Meanwhile, Hyundai will also increase its domestic prices for hot rolled coil and heavy plate from 1 May [see other article]. As a result, the new price for Hyundai HRC will be KRW 850,000/t ($762/t) and that for plate will be KRW 900,000/t ($807/t). Hyundai commissioned its first blast furnace in January to boost flats production but it still operates EAFbased works at Incheon and Pohang producing longs, SBB notes.
62% iron ore price eases back from peak: The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday show that the prices increased strongly from a week earlier, though the 62% price eased back from its midweek peak. Average weekly freight rates from Australia and Brazil firmed during the week, but weekly freights from India moved slightly lower. The reference price for 62% Fe content iron ore fines finished the week at $184.80/dry metric tonne CFR Tianjin port, China. This is a $6.70/dmt, or 3.8%, increase on the previous week’s price, but is slightly below the highest level of $186.50/dmt which was recorded on Wednesday. The reference price for 58% Fe fines finished the week $7.70/dmt, or 5.4%, above the level of a week earlier. Daily freight rates from Australia and Brazil to China rose slowly since the start of the week. Daily freight rates for shipments from both west and east coasts of India continued to slip downwards during the week. 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 .
Offer prices for billet have slipped by around $10/tonne to around $650-665/t cfr Southeast Asia but regional importers are generally staying away, trading sources tell Steel Business Briefing. “The region is quiet this past week,” a regional trader tells SBB. Traders say that the market is taking a wait-and-see stance because rebar demand in regional markets is not strong. Taiwanese-origin billet has been offered at $650-660/t cfr SE Asia and Malaysian billet at $660-665/t cfr. One lot of Russian billet was recently offered at $660/t cfr Indonesia and Japanese billet at $660/t cfr Indonesia, down from $670/t cfr previously. Trading sources report billet from the CIS is still offered at $660-665/t cfr Vietnam but there are also higher offer prices for Russian and Turkish billet at $670-680/t cfr. “The future is not bright for the Taiwanese longs market for the short term,” a Taiwanese trader says. Domestic scrap and rebar prices have been dropping and no rebound is expected yet. He last heard an import booking of containerised US-origin vanadium-added billet some two weeks ago at $657/t cfr. A buyer in Indonesia says that there has not been any concluded deal recently although he has heard of bidding at $650/t cfr for 20MnSi grade material. A small-volume lot of Japanese origin billet was booked early last week at $653/t cfr Vietnam. Japanese billet enjoys a preferential import duty of around 4.5% compared to normal duty of 7%for imports.
Indian longs prices falter on weak demand
Indian domestic prices of thermo mechanically treated (TMT) rebars and mild steel billets produced by mid-tier steelmakers have declined by Rs 1,500-2,000/tonne ($34-45/t) from early April levels on slackened demand. Fe 500 TMT rebars (12mm) are priced at Rs 34,000-35,500/t ($765-788/t) including taxes and freight, down from Rs 36,000-37,500/t in early April. Average country-wide prices of Fe 415 TMT rebars (12mm) are Rs 33,500-35,000/t all inclusive. At the same time, 8mm Fe500 TMT rebars in north India are priced at Rs 36,600/t, while 10mm rebars cost
Rs 36,000/t all inclusive. Prices of 16mm, 20mm and 25mm TMT rebars are Rs 35,200-36,000/t all inclusive. EAF-manufactured mild steel billets (100mm) in west India are priced at Rs 27,000/t ex-works without taxes, and Rs 30,900/t including of taxes and local freight. North Indian billet prices hover at Rs 30,000- 40,000/t all inclusive. Billet prices are Rs 1,500/t lower than early April levels of Rs 31,500-41,500/t. Meanwhile, induction furnace-manufactured pencil ingots at Mandi Gobindgarh in the northern state of Punjab have been hovering at Rs 29,000-30,300/t including taxes and freight, and Rs 28,000-28,500/t in Raipur in the central state of Chhattisgarh. “Domestic demand is weak, not only because of financial market constraints, but also through the low availability of other construction-related raw materials such as sand,” a rebar manufacturer tells Steel Business Briefing. However, with the monsoons approaching in mid-June, the industry expects a pick-up in domestic demand soon, as buyers can stock up on their inventories before the seasonal rains begin.
Hyundai raises longs prices for May
Korean integrated mill Hyundai Steel has decided to lift domestic long product prices by KRW 40,000/tone ($35/t) for May, blaming consistently rising scrap prices. From 1 May, Hyundai’s price for rebars will be KRW 831,000/t ($745/t) for 10mm diameter bars directly supplied to building contractors while its 300x300mm H-beams will be priced at KRW 950,000/t ($852/t). The company will also raise prices of sections such as angles and channels to KRW 940,000/t for base sizes from next month, Steel Business Briefing learns from the company. “The price hike for long products this time is inevitable because scrap prices have kept surging,” Hyundai says. In April, it added KRW 50,000/t to the prices of all its long products for the same reason. Market watchers had long expected that Hyundai would hike prices but the increase margin this time is slightly smaller than many had been forecasting. “This is because of Hyundai’s concern about resistance from contractors given that the recovery in construction activity is still very weak,” a source says. Meanwhile, Hyundai will also increase its domestic prices for hot rolled coil and heavy plate from 1 May [see other article]. As a result, the new price for Hyundai HRC will be KRW 850,000/t ($762/t) and that for plate will be KRW 900,000/t ($807/t). Hyundai commissioned its first blast furnace in January to boost flats production but it still operates EAFbased works at Incheon and Pohang producing longs, SBB notes.
62% iron ore price eases back from peak: The Steel Index
The latest daily iron ore reference prices released by The Steel Index last Friday show that the prices increased strongly from a week earlier, though the 62% price eased back from its midweek peak. Average weekly freight rates from Australia and Brazil firmed during the week, but weekly freights from India moved slightly lower. The reference price for 62% Fe content iron ore fines finished the week at $184.80/dry metric tonne CFR Tianjin port, China. This is a $6.70/dmt, or 3.8%, increase on the previous week’s price, but is slightly below the highest level of $186.50/dmt which was recorded on Wednesday. The reference price for 58% Fe fines finished the week $7.70/dmt, or 5.4%, above the level of a week earlier. Daily freight rates from Australia and Brazil to China rose slowly since the start of the week. Daily freight rates for shipments from both west and east coasts of India continued to slip downwards during the week. 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 .
Tuesday, April 20, 2010
Daily Steel News - 20 Apr 2010
Billet offer prices levelling off in SE Asia, buyers nervous
Offer prices for billet imports appear to be stabilising at $660-670/tonne cfr Southeast Asia after a series of price hikes. Buying is thin because regional importers regard current prices as too high and resistance
towards rising rebar prices is increasing in the region. "The market has not fallen but sentiment has changed. Buyers are nervous that prices have gone up too fast and by too much," a regional trader tells Steel Business Briefing. Malaysian mills are offering commercial grade billet to Vietnam at around $670/t cfr. Taiwanese and Korean material is being offered at $660-670/t cfr SE Asia and Japanese billet at around $670/t cfr. Limited offers from the CIS are prevailing at $660-665/t cfr. Containerised Indian-origin billet is offered at $660/t cfr Philippines. Vietnamese importers booked sufficient quantities for re-stocking last month and in early April. Re-rollers are also turning to domestic billet, priced at around VND13m/t ($686/t) excluding 10% VAT. “Billet prices are too high so there's not much recent buying. But scrap buying continues,” a Vietnamese importer says. Malaysian-origin billet, which enjoys preferential import duties, was booked at $665-670/t cfr. In the Philippines, some 25,000t of Russian billet for July arrival was booked at $655-660/t cfr more than a week ago. The peak price was achieved because the buyer would be averaging his costs with lower-priced imported material, SBB believes. A cargo of Russian billet for May shipment is being offered at $660/t cfr. Some 5,000t of Chinese-origin billet equivalent to 20MnSi grade was heard booked at $655/t cfr Indonesia, and 3,000t of odd-sized Chinese Q235 billet at $640/t cfr.
New iron ore pricing to bring 'instability,' Steinbruch says
Brazilian steel and iron ore producer CSN has increased its iron ore prices by up to 100% over 2009's contract prices, but is concerned about the new quarterly pricing system led by the world's three largest miners and adopted by minor ore producers as well. Steel Business Briefing learns from CSN CEO Benjamin Steinbruch that the new pricing model can impact the steel supply chain since mills will repass raw material cost hikes to consumers. "Personally, I think the new quarterly-based pricing system will bring instability to steel markets," explains the executive. Steinbruch confirms that CSN is talking to its steel buyers about new arrangements for steel pricing. However, he puzzles over the outcomes of the change: "How can you say to a carmaker that prices will change every three months?" Currently, CSN - the country's second largest iron ore miner - is producing about 27m tonnes a year at its Casa de Pedra and Namisa mines. However, this volume is under an expansion plan targeting 70m t/y by 2014, with 40m t to be produced at Casa de Pedra this year.
Iron ore price negotiations - Hebei Steel breaks ice with Vale - Report
Dow Jones quoted an official with the Chinese giant international trading arm said Hebei Iron and Steel Group has agreed to extend iron ore volume contracts with Brazilian miner Vale SA and Anglo Australian BHP Billiton Ltd from 2010. Mr Yan Liang deputy GM of the group's international trading department said at an industry conference that the deal makes Hebei Iron Vale's largest customer in China.
Monday Market Monitor - China - Correction starts
Chinese steel market, vanguard of global steel industry accounting for 50% of the global steel production, has started to reflect weak sentiments since Wednesday of last week after increasing on Monday and Tuesday. Whether it is the cost push or the demand pull China sets the trend. A concurrent analysis of the price movements bring out nearly 17% increase in Chinese domestic levels for both long and flat products since March beginning.
Monday Market Monitor - EU - Doubts emerging
Although, steel prices in Europe are continuing to go up amid tight availability, buyer’s sentiment is changing from positive to doubtful and they are reported to be adopting a very conservative stance in last few days. Because of consumption and demand remaining quite low, all distributors are puzzled about future trend as they cannot recharge the successive price increases to their customers.
Monday Market Monitor - CIS - Signs of stability
After 6 weeks of hectic activity, billet market seems to have stabilized this week as their prices rolled down a little bit but kept the levels in general. The sellers’ idea of price is closer to USD 625 per tonne to USD 640 per tonne with buyers looking at USD 600 per tonne to 620 per tonne. Generally we understood that the market is around USD 610 per tonne to USD 630 per tonne. It is reported that the buying was quite limited in terms of quantities and May volumes are not fully allocated yet.
Monday Market Monitor - Iron Ore - Party is on
The surge in spot prices of Indian iron ore fines is continuing and the CFR prices for 63.5%/63% are reported to have crossed USD 180 per tonne. As a result, FOB India levels have surged by about 15% in last 15 days especially for higher grades. Market players are totally puzzled and do not understand what is happening, why its is happening and how long it would last. They are highly concerned over the future and sustainability of such levels. It is clear that the surge in iron ore prices is propelled by speculators as the quantum of steel prices hike in Chinese domestic market does not justify so much increase in iron ore import prices.
Offer prices for billet imports appear to be stabilising at $660-670/tonne cfr Southeast Asia after a series of price hikes. Buying is thin because regional importers regard current prices as too high and resistance
towards rising rebar prices is increasing in the region. "The market has not fallen but sentiment has changed. Buyers are nervous that prices have gone up too fast and by too much," a regional trader tells Steel Business Briefing. Malaysian mills are offering commercial grade billet to Vietnam at around $670/t cfr. Taiwanese and Korean material is being offered at $660-670/t cfr SE Asia and Japanese billet at around $670/t cfr. Limited offers from the CIS are prevailing at $660-665/t cfr. Containerised Indian-origin billet is offered at $660/t cfr Philippines. Vietnamese importers booked sufficient quantities for re-stocking last month and in early April. Re-rollers are also turning to domestic billet, priced at around VND13m/t ($686/t) excluding 10% VAT. “Billet prices are too high so there's not much recent buying. But scrap buying continues,” a Vietnamese importer says. Malaysian-origin billet, which enjoys preferential import duties, was booked at $665-670/t cfr. In the Philippines, some 25,000t of Russian billet for July arrival was booked at $655-660/t cfr more than a week ago. The peak price was achieved because the buyer would be averaging his costs with lower-priced imported material, SBB believes. A cargo of Russian billet for May shipment is being offered at $660/t cfr. Some 5,000t of Chinese-origin billet equivalent to 20MnSi grade was heard booked at $655/t cfr Indonesia, and 3,000t of odd-sized Chinese Q235 billet at $640/t cfr.
New iron ore pricing to bring 'instability,' Steinbruch says
Brazilian steel and iron ore producer CSN has increased its iron ore prices by up to 100% over 2009's contract prices, but is concerned about the new quarterly pricing system led by the world's three largest miners and adopted by minor ore producers as well. Steel Business Briefing learns from CSN CEO Benjamin Steinbruch that the new pricing model can impact the steel supply chain since mills will repass raw material cost hikes to consumers. "Personally, I think the new quarterly-based pricing system will bring instability to steel markets," explains the executive. Steinbruch confirms that CSN is talking to its steel buyers about new arrangements for steel pricing. However, he puzzles over the outcomes of the change: "How can you say to a carmaker that prices will change every three months?" Currently, CSN - the country's second largest iron ore miner - is producing about 27m tonnes a year at its Casa de Pedra and Namisa mines. However, this volume is under an expansion plan targeting 70m t/y by 2014, with 40m t to be produced at Casa de Pedra this year.
Iron ore price negotiations - Hebei Steel breaks ice with Vale - Report
Dow Jones quoted an official with the Chinese giant international trading arm said Hebei Iron and Steel Group has agreed to extend iron ore volume contracts with Brazilian miner Vale SA and Anglo Australian BHP Billiton Ltd from 2010. Mr Yan Liang deputy GM of the group's international trading department said at an industry conference that the deal makes Hebei Iron Vale's largest customer in China.
Monday Market Monitor - China - Correction starts
Chinese steel market, vanguard of global steel industry accounting for 50% of the global steel production, has started to reflect weak sentiments since Wednesday of last week after increasing on Monday and Tuesday. Whether it is the cost push or the demand pull China sets the trend. A concurrent analysis of the price movements bring out nearly 17% increase in Chinese domestic levels for both long and flat products since March beginning.
Monday Market Monitor - EU - Doubts emerging
Although, steel prices in Europe are continuing to go up amid tight availability, buyer’s sentiment is changing from positive to doubtful and they are reported to be adopting a very conservative stance in last few days. Because of consumption and demand remaining quite low, all distributors are puzzled about future trend as they cannot recharge the successive price increases to their customers.
Monday Market Monitor - CIS - Signs of stability
After 6 weeks of hectic activity, billet market seems to have stabilized this week as their prices rolled down a little bit but kept the levels in general. The sellers’ idea of price is closer to USD 625 per tonne to USD 640 per tonne with buyers looking at USD 600 per tonne to 620 per tonne. Generally we understood that the market is around USD 610 per tonne to USD 630 per tonne. It is reported that the buying was quite limited in terms of quantities and May volumes are not fully allocated yet.
Monday Market Monitor - Iron Ore - Party is on
The surge in spot prices of Indian iron ore fines is continuing and the CFR prices for 63.5%/63% are reported to have crossed USD 180 per tonne. As a result, FOB India levels have surged by about 15% in last 15 days especially for higher grades. Market players are totally puzzled and do not understand what is happening, why its is happening and how long it would last. They are highly concerned over the future and sustainability of such levels. It is clear that the surge in iron ore prices is propelled by speculators as the quantum of steel prices hike in Chinese domestic market does not justify so much increase in iron ore import prices.
Wednesday, April 14, 2010
Daily Steel News - 14 Apr 10
Taiwan rebar prices continue upwards on rising scrap, demand
Major Taiwanese rebar producers have again raised their prices because of higher scrap prices and strong demand, taking ex-works list prices to TWD 21,600-21,700/tonne ($684-688/t) this week. Prices have risen by TWD 1,600-2,200/t ($51-70/t) since the beginning of April. Feng Hsin Iron & Steel in central Taichung increased prices of its standard SD280 medium-sized rebars by TWD 1,000/t ($32/t) to TWD 21,700/t this week. The recent surge in rebar prices has not dampened orders, a Feng Hsin spokesman tells Steel Business Briefing. “Customers understand that the raw materials price rise is the reason for the increase,” he says. Wei Chih Steel in southern Tainan raised its SD280 prices by TWD 1,200/t ($38/t) to TWD 21,700/t this week. Demand, particularly from Southeast Asia, remains strong, says a senior Wei Chih official. “Customers have no problems accepting the price increases as their inventory is low as well,” he adds. Hai Kwang Enterprise in southern Kaohsiung raised its SD280 prices to TWD 21,600/t this week. Hai Kwang, which did not table offer prices at the beginning of last week, later raised its prices firstly to TWD 21,000/t and then to TWD 21,300/t over the course of the week, from TWD 20,000/t in late March. The company is selling a limited quantity of rebars this week as raw materials prices are rising too rapidly, and it does not rule out another price hike in the near-term, says a Hai Kwang spokeswoman. “Customers are worried that if they don’t buy now, prices will rise even further later on,” she adds.
Billet prices approaching $615/t in northern China
Spurred by rising raw material and steel prices, billet prices in northern China’s Tangshan city have galloped to a level close to RMB 4,200/tonne ($615/t), Steel Business Briefing learns from industry sources. In Tangshan, ex-works prices for 150x150mm Q235 billet are prevailingly at RMB 4,180/t ($612/t), with VAT and on a cash payment basis. Prices last Wednesday were around RMB 3,980/t ($583/t). Since early March, prices have increased by about RMB 780/t ($114/t). As SBB has reported, since last weekend leading steel mills such as Shagang and Hebei Iron & Steel have decided to further increase their ex-works prices by RMB 150-250/t ($22-37/t) to cover higher production costs or expected rises in those costs. With much higher raw material prices from last year, the current billet prices have well exceeded their previous highs of about RMB 3,900/t ($571/t) achieved in early August of 2009. But a local billet producer tells SBB that some traders started loosening their prices late on Tuesday, because of slowing transactions. They initially were offering at RMB 4,190/t ($614/t) delivered to local buyers, and reduced offers to about RMB 4,150/t ($608/t). He suggests most mills will keep their ex-works prices stable over the next few days to wait for a clear market direction. They might make slight price cuts if slow buying conditions go on, but no deep adjustments are expected in the short term.
Major Taiwanese rebar producers have again raised their prices because of higher scrap prices and strong demand, taking ex-works list prices to TWD 21,600-21,700/tonne ($684-688/t) this week. Prices have risen by TWD 1,600-2,200/t ($51-70/t) since the beginning of April. Feng Hsin Iron & Steel in central Taichung increased prices of its standard SD280 medium-sized rebars by TWD 1,000/t ($32/t) to TWD 21,700/t this week. The recent surge in rebar prices has not dampened orders, a Feng Hsin spokesman tells Steel Business Briefing. “Customers understand that the raw materials price rise is the reason for the increase,” he says. Wei Chih Steel in southern Tainan raised its SD280 prices by TWD 1,200/t ($38/t) to TWD 21,700/t this week. Demand, particularly from Southeast Asia, remains strong, says a senior Wei Chih official. “Customers have no problems accepting the price increases as their inventory is low as well,” he adds. Hai Kwang Enterprise in southern Kaohsiung raised its SD280 prices to TWD 21,600/t this week. Hai Kwang, which did not table offer prices at the beginning of last week, later raised its prices firstly to TWD 21,000/t and then to TWD 21,300/t over the course of the week, from TWD 20,000/t in late March. The company is selling a limited quantity of rebars this week as raw materials prices are rising too rapidly, and it does not rule out another price hike in the near-term, says a Hai Kwang spokeswoman. “Customers are worried that if they don’t buy now, prices will rise even further later on,” she adds.
Billet prices approaching $615/t in northern China
Spurred by rising raw material and steel prices, billet prices in northern China’s Tangshan city have galloped to a level close to RMB 4,200/tonne ($615/t), Steel Business Briefing learns from industry sources. In Tangshan, ex-works prices for 150x150mm Q235 billet are prevailingly at RMB 4,180/t ($612/t), with VAT and on a cash payment basis. Prices last Wednesday were around RMB 3,980/t ($583/t). Since early March, prices have increased by about RMB 780/t ($114/t). As SBB has reported, since last weekend leading steel mills such as Shagang and Hebei Iron & Steel have decided to further increase their ex-works prices by RMB 150-250/t ($22-37/t) to cover higher production costs or expected rises in those costs. With much higher raw material prices from last year, the current billet prices have well exceeded their previous highs of about RMB 3,900/t ($571/t) achieved in early August of 2009. But a local billet producer tells SBB that some traders started loosening their prices late on Tuesday, because of slowing transactions. They initially were offering at RMB 4,190/t ($614/t) delivered to local buyers, and reduced offers to about RMB 4,150/t ($608/t). He suggests most mills will keep their ex-works prices stable over the next few days to wait for a clear market direction. They might make slight price cuts if slow buying conditions go on, but no deep adjustments are expected in the short term.
Tuesday, April 13, 2010
Daily Steel news - 13 Apr 10
Rebar import prices edge upwards in Singapore
Rebar import prices in Singapore have moved up over recent days. Korean-origin rebar was last week transacted at $680/tonne cfr Singapore, up from bookings at around $670/t cfr for both Korean and Taiwanese rebar at end-March. Domestic rebar prices in Singapore – prevailing at the equivalent of around $660-680/t delivered to site – may be deterring importers from booking higher-priced imports, traders tell Steel Business Briefing. Offers of Turkish rebar at $750-760/t cfr Singapore are finding no takers. Chinese boron-added rebar is offered at $665-670/t whereas those without boron are offered at close to $700/t cfr because they are subject to higher export duty. There are no offers recently heard from Taiwan, but traders estimate that mills in that country would be seeking to export at close to $700/t cfr. Rebar producers in the region have been hiking their domestic prices significantly to keep up with rising feed costs. Despite awareness among buyers that the mills have little choice but to raise their prices, buying at these hiked prices is not strong, SBB understands. Trading sources say that buyers are concerned about price ustainability because these price hikes are mostly due to cost-push factors. “Current market demand may not justify these fast rising prices,” a trader notes.
LME billet price continues rising
The Mediterranean billet futures contract prices on the London Metal Exchange continue to rise and have now breached the previous highs reported by Steel Business Briefing in March. At the end of last week, Mediterranean contract prices were at $600-601/tonne (cash) and $611-616/t (three months). This radual increase over the last month is “a reflection of current market conditions and is likely to continue for the short term at least”, a trader tells SBB. He adds that prices are likely to continue rising as a result of the greater overall demand for raw materials, particularly from the Far East and domestic demand in Turkey. However, demand in Europe still remains flat.
Iron ore in deficit for next three years: Deutsche Bank
Demand for iron ore is expected to run ahead of supply until 2013, when Chinese demand slows and a number of new iron ore projects are commissioned globally, Steel Business Briefing learns from a recent research report by Deutsche Bank. According to the investment bank’s forecasts, apparent demand for iron ore will increase from an estimated 1,663 million tonnes worldwide in 2009 to 1,896m t this year and 2,057m t in 2011. Global production in 2010 and 2011 of 1,893m t and 2,051m t, espectively, will thus leave a shortfall of 4-6m tonnes over the next two years. The deficit is expected to widen to 42m t in 2012, with forecast production of iron ore to reach 2,213m t against apparent demand of 2,255m t. However, iron ore supply is expected to move back into a surplus of 50m t in 2013, when global output of 2,411m t exceeds forecast demand of 2,361m t. Meanwhile, Deutsche Bank expects higher iron ore prices to last through 2012, with the FOB price of Australian fines to Asia rising 34% this year and 3% the following year, before remaining flat in 2012. However, a slight dip is expected at the end of this year: prices are forecast to rise 65% for the current quarter followed by a further 10% rise in Q3, but decline by 15% in Q4 Chinese demand growth slows.
Chinese mills increase rebar/rod prices
Chinese bar and rod producers have kept raising their ex-works prices, and this has helped to further strengthening spot market prices, Steel Business Briefing learns from market sources. Over the weekend, eastern China’s Shagang hiked 16-25mm HRB335 rebar by RMB 200/tonne ($29/t) for mid-April delivery to RMB 4,550/t ($667/t), with 17% VAT. Prices for 6.5mm Q235 wire rod were lifted by RMB
150/t ($22/t) to RMB 4,650/t ($681/t). Meanwhile, Hebei Iron & Steel (Hegang) in northern China increased its 16-25mm HRB335 rebar and 6.5mm Q235 wire rod prices by RMB 250/t ($37/t) and RMB 150/t respectively to RMB 4,600/t ($674/t) and RMB 4,500/t ($659/t), also with VAT. The announcement of new price increases generated more price increases on the spot markets. Hangzhou prices for 18-25mm HRB335 produced by Shagang have risen by RMB 50/t ($7/t) or so from last Friday to a prevailing RMB 4,500/t, with 17% VAT, and some traders are offering the same product as high as RMB 4,530/t ($664/t). Compared with the beginning of April, prices have risen by about RMB 200/t. In Shanghai, 18-25mm HRB335 rebar, sourced from tier-two mills, is offered at about RMB 4,260-4,300/t ($624-630/t), up by at least RMB 40/t ($6/t) from last Friday. Some market players halted sales on Monday afternoon in expectations of further increases the next day. Similarly, Beijing prices for Hegang-sourced HRB335 rebar have increased by up to RMB 70/t ($10/t) to RMB 4,700-4,720/t ($689-691/t), with certain high offers already achieving RMB 4,750/t ($696/t).
Rebar import prices in Singapore have moved up over recent days. Korean-origin rebar was last week transacted at $680/tonne cfr Singapore, up from bookings at around $670/t cfr for both Korean and Taiwanese rebar at end-March. Domestic rebar prices in Singapore – prevailing at the equivalent of around $660-680/t delivered to site – may be deterring importers from booking higher-priced imports, traders tell Steel Business Briefing. Offers of Turkish rebar at $750-760/t cfr Singapore are finding no takers. Chinese boron-added rebar is offered at $665-670/t whereas those without boron are offered at close to $700/t cfr because they are subject to higher export duty. There are no offers recently heard from Taiwan, but traders estimate that mills in that country would be seeking to export at close to $700/t cfr. Rebar producers in the region have been hiking their domestic prices significantly to keep up with rising feed costs. Despite awareness among buyers that the mills have little choice but to raise their prices, buying at these hiked prices is not strong, SBB understands. Trading sources say that buyers are concerned about price ustainability because these price hikes are mostly due to cost-push factors. “Current market demand may not justify these fast rising prices,” a trader notes.
LME billet price continues rising
The Mediterranean billet futures contract prices on the London Metal Exchange continue to rise and have now breached the previous highs reported by Steel Business Briefing in March. At the end of last week, Mediterranean contract prices were at $600-601/tonne (cash) and $611-616/t (three months). This radual increase over the last month is “a reflection of current market conditions and is likely to continue for the short term at least”, a trader tells SBB. He adds that prices are likely to continue rising as a result of the greater overall demand for raw materials, particularly from the Far East and domestic demand in Turkey. However, demand in Europe still remains flat.
Iron ore in deficit for next three years: Deutsche Bank
Demand for iron ore is expected to run ahead of supply until 2013, when Chinese demand slows and a number of new iron ore projects are commissioned globally, Steel Business Briefing learns from a recent research report by Deutsche Bank. According to the investment bank’s forecasts, apparent demand for iron ore will increase from an estimated 1,663 million tonnes worldwide in 2009 to 1,896m t this year and 2,057m t in 2011. Global production in 2010 and 2011 of 1,893m t and 2,051m t, espectively, will thus leave a shortfall of 4-6m tonnes over the next two years. The deficit is expected to widen to 42m t in 2012, with forecast production of iron ore to reach 2,213m t against apparent demand of 2,255m t. However, iron ore supply is expected to move back into a surplus of 50m t in 2013, when global output of 2,411m t exceeds forecast demand of 2,361m t. Meanwhile, Deutsche Bank expects higher iron ore prices to last through 2012, with the FOB price of Australian fines to Asia rising 34% this year and 3% the following year, before remaining flat in 2012. However, a slight dip is expected at the end of this year: prices are forecast to rise 65% for the current quarter followed by a further 10% rise in Q3, but decline by 15% in Q4 Chinese demand growth slows.
Chinese mills increase rebar/rod prices
Chinese bar and rod producers have kept raising their ex-works prices, and this has helped to further strengthening spot market prices, Steel Business Briefing learns from market sources. Over the weekend, eastern China’s Shagang hiked 16-25mm HRB335 rebar by RMB 200/tonne ($29/t) for mid-April delivery to RMB 4,550/t ($667/t), with 17% VAT. Prices for 6.5mm Q235 wire rod were lifted by RMB
150/t ($22/t) to RMB 4,650/t ($681/t). Meanwhile, Hebei Iron & Steel (Hegang) in northern China increased its 16-25mm HRB335 rebar and 6.5mm Q235 wire rod prices by RMB 250/t ($37/t) and RMB 150/t respectively to RMB 4,600/t ($674/t) and RMB 4,500/t ($659/t), also with VAT. The announcement of new price increases generated more price increases on the spot markets. Hangzhou prices for 18-25mm HRB335 produced by Shagang have risen by RMB 50/t ($7/t) or so from last Friday to a prevailing RMB 4,500/t, with 17% VAT, and some traders are offering the same product as high as RMB 4,530/t ($664/t). Compared with the beginning of April, prices have risen by about RMB 200/t. In Shanghai, 18-25mm HRB335 rebar, sourced from tier-two mills, is offered at about RMB 4,260-4,300/t ($624-630/t), up by at least RMB 40/t ($6/t) from last Friday. Some market players halted sales on Monday afternoon in expectations of further increases the next day. Similarly, Beijing prices for Hegang-sourced HRB335 rebar have increased by up to RMB 70/t ($10/t) to RMB 4,700-4,720/t ($689-691/t), with certain high offers already achieving RMB 4,750/t ($696/t).
Monday, April 12, 2010
Daily Steel News - 12 Apr 10
Export prices jump in latest Japanese scrap auction
The highest winning bid in the export auction for H2 grade Japanese scrap held on 9 April by the Kanto Tetsugen group of scrap dealers increased by ¥5,050/tonne ($54/t) from last month’s auction. The winning bids were ¥39,100/tonne ($417.8/t) for 5,000 tonnes, ¥38,800/t for 10,000t and ¥38,550/t for two winners 6,000t and 5,000t. In total 26,000t was traded. “The winning bids were much higher than we expected and we were surprised,” a Tokyo-based scrap trader tells Steel Business Briefing. Trading sources in Japan believe that the cargoes will be exported to Taiwan or China, and that Korean mills, which have been holding off buying Japanese H2 grade scrap, will feel the urgency and may soon start lifting their offer prices. The trader says that the export price for Japanese scrap will continue to be strong and that Korean mills will soon bid at above ¥39,000/t fob. Korean mills last booked Japanese H2 scrap at ¥38,500/t fob, equivalent to ¥37,500/t fas about two weeks ago. The Japanese mini-mills may also have to lift their prices, in line with rising export prices, particularly since they are due to start securing sufficient scrap so that they can operate during Japan’s Golden Week holidays starting 29 April to take advantage of lower electricity rates. Tokyo Steel Manufacturing last raised its scrap buying prices by ¥1,000/t for all grades at all works effective 30 March arrivals. The H2 price at its Utsunomiya works in northern Kanto is currently ¥39,000/t.
UK scrap market direction unclear, say merchants
Not all UK scrap prices for this month are settled and views vary on the market’s direction, local participants tell Steel Business Briefing. Some scrap merchants say one domestic steel producer has agreed to price hikes as high as £50/tone for April deliveries, taking prices for obsolete material to around £260-280/t ($398-429/t) delivered, with shredded pegged at similar levels. Other mills will have to follow suit, they say. HMS 80:20 scrap has been sold at £295/t delivered into India, one merchant notes. “It is crazy, scrap should not jump by this much,” he continues. Mill inventories are low and material is scarce, one merchant adds, suggesting April prices have increased by £45-55/t depending on grade. However, other merchants believe the market is “overheated” and “overtalked”, with even smaller increases of £20-30/t unobtainable. Turkish buying, which had forced up prices considerably, seems to have hit a plateau for the time being, as most mills that wanted to buy have bought. “Turkish mills are pulling out of the market. Do not think this market is up, up and going to remain up forever,” one trader says. “The fundamentals have changed in that now steel order books are much better, but it will come down, there is no doubt,” he adds.
Monday Market Monitor - India (WEEK 14) - Longs start cooling off
Indian domestic steel prices exhibited mixed sentiments last week. After climbing for 5 consecutive week chinks began appearing for long products last week as they retracted by about 1%. But the loss is negligible as compared to the rally of more than 15% in 5 previous weeks. The price correction in last week, for long products especially rebars, strengthens our belief that the surge in prices during March was not on account of real growth in demand but was due to end users as well as stockiest preponing their purchases to avoid escalated prices in April as the general perception among them was that steel majors would go for a major hike on account of increased raw material costs. An important point to be noted is that the market for long product has weakened despite price hike announced by Indian steel majors and reflects the ground level situation as far as real demand pick up is concerned. On the other hand, the cost hype led price push prevailed for flat products although the current prices are far above the cost of Indian steel makers, even if we assume that they are paying spot prices for iron ore and coking coal, which probably they are not as some of tem have their own captive iron ore mines which results in less than USD 10 per tonne for own iron ore as against global spot levels of USD 170 per tonne. The surge in Indian domestic prices of flats has far exceeded rising global levels which are at USD 700 per tonne CFR levels, translating to INR 34,000 per tonne without MODVAT component. Indian steel minister Mr Virbhadra Singh during an interview expressed his concern on rising steel prices in India and warned that “I believe steel companies need to have a relook at prices because they have to do business with responsibility. Today, steel is not a luxury item, it is a necessary item. If prices are increased without justification, it will harm projects related to housing, road construction and highways. But steel is a deregulated subject and so the government has no control over its prices. What we do exercise is moral authority. I am going to soon tell them to hold prices. The present hike in prices has taken place on the basis of a high degree of speculation. The steel industry in India should not work as a cartel. I want a more responsible stance from them.”
Monday Market Monitor - Middle East (WEEK 14) – Hibernating
After unprecedented hike last 30 days, the steel market paused last week in most the markets in Middle East as the buyers went into hibernation and trade remained extremely thin. It seems that the shock of this surge put the buyers, especially projects, in a quandary as they have to review their project costs. As a result although the sellers and stockiest continued to offer at new levels, most of the buyers abstained from the market. In other words, the limited demand of steel has been further hit in the region as the steel prices increase was certainly not demand driven and was a result of hype created on cost push as well as surging import offers. The highest surge has been in the prices of rebars, which is an essential component for construction activity. Rebar prices have zoomed, in last 30 days, by 35% in Bahrain, 37% in Kuwait, 50% in Saudi Arabia and 46% in UAE. As a result respective governments are quite concerned on this surge and are planning to bring in some order to the market. On the other hand, buyers are hoping that this frenzy would end in some time and they would be able to resume buying steel at reasonable levels for their projects.
Monday Market Monitor - CIS (WEEK 14) - Unabated frenzy
The steel market at Black Sea remained in top gear last week and mills & sellers continued to hike their offers by each passing day. In case of billets, it was seen that some big market players suspended their offers adding fuel to the fire. It is rumored that traders are ready to buy at USD 620 per tonne to USD 625 per tonne FOB Black Sea but producers are already sure to achieve minimum USD 630 per tonne. So, it seems like rally continues but we have to see for how long as the average costing is mush lesser and mills are reported to be running hand to mouth on their order books. For finished longs also some of major steel mills held their offers and did not trade much last week. We heard that the biggest steel mill offered rebars at USD 660 per tonne to USD 670 per tonne on FOB basis and WRC at USD 670 per tonne to USD 690 per tonne. For finished flats, prices have risen last week. The Ukrainian quotations are now close to USD 650 per tonne to USD 660 per tonne for HRC and producers have already started to push prices up to USD 670 per tonne to USD 680per tonne FOB black Sea. The Russians current offers are at USD 680 per tonne to USD 700 per tonne FOB Black Sea. It seems like that more and more people are thinking about lasting of current trends and expect severe market correction.
Monday Market Monitor - Iron Ore (WEEK 14) - Crosses USD 170 CFR
Spot prices of Indian iron ore fines for higher and medium grades continued to march north last week with 3% to 8% gains on FOB India basis.
Some of the key factors affecting the iron ore market in India have been as follows
1. Severe crack down by government on illegal mining leading to curtailed availability and hiked prices on East Coast
2. Hike in railway freight by INR 300 per tonne
3. Imposition of 5% and 10% export duty iron ore fines and lumps
4. Iron ore majors Vale, BHP Billiton and Rio Tinto targeting quarterly pricing rather than annual with a 100% hike in prices leading to an imbroglio with Chinese buyers once again
5. Clamor by steel ministry for 20% export duty on iron ore fines to discourage export to augment domestic availability mills vie for capacity expansion.
6. Restrictive approach of Chinese buyers by banning import by traders with turnover of less than 1 million tonne is 2009
7. Banning import of lower grade iron ore below Fe 60% through traders
8. Banning import of iron ore for 2 months to arm twist Big 3 from dictating price levels for quarterly contracts.
9. Anticipated devaluation of Chinese currency under pressure from Western world.
All the above factors cumulatively is bound to exert downward pressure in the market sentiments as India being a major player in lower grade iron ore will be left with surplus volume to be ultimately diverted to domestic market thereby bring down the prices. However it should be music to Indian manufacturers in the long run as cost deescalates bloating their margin.
Extensive report on iron ore sector in India
The global iron ore market is hot. Everything good or bad about economic activities is visible here. On the one hand, there is strong recovery of demand with the global economic prospects back on track, statistically so till date, concerns nevertheless remain. On the other, speculators are back with panic driven Chinese steel industry rushing to build stock before they set the table for talks with the iron ore mining industry for the year’s contract. The spot prices for iron ore fines have shot over USD 145 per tonne on China’s coast. This means, the contracts for 2010 will be at levels at least 40% higher than in 2009. The Indian government’s action to impose an export tax on fines and raise the same on lumps will help the iron ore majors to stand firm in talks when it comes to the Chinese. Last year’ the Chinese mills made a strategic blunder not signing the annual contract. They won’t repeat that this time around. The future of the global iron ore industry depends on China. Many believe the steel industry’s growth in China will slow down. At this stage, such a statement will be termed speculative only. The Chinese mills, however, may not yield much ground. They will dig more into their own resources, import more from the spot market and thereby reduce their dependence on contracted volumes, if the prices are not favorable. They have also invested heavily overseas on iron ore assets and will bring in substantial quantities from there to meet some critical needs. The iron ore industry knows that pushing the Chinese mills to a tightrope will boomerang in the long term. More the Chinese mills are stressed, more assets will they acquire, which ultimately will reduce the dependence on the global iron ore cartel. China cannot be ignored by the iron ore miners after all they produce nearly half of world’s steel. A question has always been in the forefront : should the global coal or iron ore contracts be floating types indexed to steel prices, or a market based free float, or of a short duration, say, a month or a quarter? So far, the global majors, tied to annual contracts, have not been able to capitalize on the higher spot prices running through the year on the average. It is not necessary that this will happen every year. Yet, an optimistic mining industry globally is pushing for this. This will effectively bring an end to the annual contracts. The rise in global ocean freight has a very significant impact on the iron ore prices. A higher freight will effectively reduce the contract levels set on fob basis. Any attempt to push the burden of rising ocean freight on to the buyer will be resisted. And if iron ore shipping volumes drop, the dry bulk rates will also crash! One does not really know who will bear the brunt of this. It depends on the strength of the market: who is weak and who is not on the negotiating table. India has taken a protectionist stance. The government needs revenue to support the routine development expenditure and also the stimulus measures. This also sends a signal to the local industry that rampant exports cannot be permitted forever when the local industry faces shortage. In addition, it has sent a strong signal that illegal mining has to stop. Many mines are currently under investigation with their mines lying closed. The local mining industry is lobbying hard to get out of the multiple crises. “India’s Iron Ore: Following the Global Meltdown” is the latest report form SNRS. The report discusses the current iron ore business in India, prospects for the future and unfolds the opportunities to provide strategic guidance to investors and all others related to iron ore business in India.
The highest winning bid in the export auction for H2 grade Japanese scrap held on 9 April by the Kanto Tetsugen group of scrap dealers increased by ¥5,050/tonne ($54/t) from last month’s auction. The winning bids were ¥39,100/tonne ($417.8/t) for 5,000 tonnes, ¥38,800/t for 10,000t and ¥38,550/t for two winners 6,000t and 5,000t. In total 26,000t was traded. “The winning bids were much higher than we expected and we were surprised,” a Tokyo-based scrap trader tells Steel Business Briefing. Trading sources in Japan believe that the cargoes will be exported to Taiwan or China, and that Korean mills, which have been holding off buying Japanese H2 grade scrap, will feel the urgency and may soon start lifting their offer prices. The trader says that the export price for Japanese scrap will continue to be strong and that Korean mills will soon bid at above ¥39,000/t fob. Korean mills last booked Japanese H2 scrap at ¥38,500/t fob, equivalent to ¥37,500/t fas about two weeks ago. The Japanese mini-mills may also have to lift their prices, in line with rising export prices, particularly since they are due to start securing sufficient scrap so that they can operate during Japan’s Golden Week holidays starting 29 April to take advantage of lower electricity rates. Tokyo Steel Manufacturing last raised its scrap buying prices by ¥1,000/t for all grades at all works effective 30 March arrivals. The H2 price at its Utsunomiya works in northern Kanto is currently ¥39,000/t.
UK scrap market direction unclear, say merchants
Not all UK scrap prices for this month are settled and views vary on the market’s direction, local participants tell Steel Business Briefing. Some scrap merchants say one domestic steel producer has agreed to price hikes as high as £50/tone for April deliveries, taking prices for obsolete material to around £260-280/t ($398-429/t) delivered, with shredded pegged at similar levels. Other mills will have to follow suit, they say. HMS 80:20 scrap has been sold at £295/t delivered into India, one merchant notes. “It is crazy, scrap should not jump by this much,” he continues. Mill inventories are low and material is scarce, one merchant adds, suggesting April prices have increased by £45-55/t depending on grade. However, other merchants believe the market is “overheated” and “overtalked”, with even smaller increases of £20-30/t unobtainable. Turkish buying, which had forced up prices considerably, seems to have hit a plateau for the time being, as most mills that wanted to buy have bought. “Turkish mills are pulling out of the market. Do not think this market is up, up and going to remain up forever,” one trader says. “The fundamentals have changed in that now steel order books are much better, but it will come down, there is no doubt,” he adds.
Monday Market Monitor - India (WEEK 14) - Longs start cooling off
Indian domestic steel prices exhibited mixed sentiments last week. After climbing for 5 consecutive week chinks began appearing for long products last week as they retracted by about 1%. But the loss is negligible as compared to the rally of more than 15% in 5 previous weeks. The price correction in last week, for long products especially rebars, strengthens our belief that the surge in prices during March was not on account of real growth in demand but was due to end users as well as stockiest preponing their purchases to avoid escalated prices in April as the general perception among them was that steel majors would go for a major hike on account of increased raw material costs. An important point to be noted is that the market for long product has weakened despite price hike announced by Indian steel majors and reflects the ground level situation as far as real demand pick up is concerned. On the other hand, the cost hype led price push prevailed for flat products although the current prices are far above the cost of Indian steel makers, even if we assume that they are paying spot prices for iron ore and coking coal, which probably they are not as some of tem have their own captive iron ore mines which results in less than USD 10 per tonne for own iron ore as against global spot levels of USD 170 per tonne. The surge in Indian domestic prices of flats has far exceeded rising global levels which are at USD 700 per tonne CFR levels, translating to INR 34,000 per tonne without MODVAT component. Indian steel minister Mr Virbhadra Singh during an interview expressed his concern on rising steel prices in India and warned that “I believe steel companies need to have a relook at prices because they have to do business with responsibility. Today, steel is not a luxury item, it is a necessary item. If prices are increased without justification, it will harm projects related to housing, road construction and highways. But steel is a deregulated subject and so the government has no control over its prices. What we do exercise is moral authority. I am going to soon tell them to hold prices. The present hike in prices has taken place on the basis of a high degree of speculation. The steel industry in India should not work as a cartel. I want a more responsible stance from them.”
Monday Market Monitor - Middle East (WEEK 14) – Hibernating
After unprecedented hike last 30 days, the steel market paused last week in most the markets in Middle East as the buyers went into hibernation and trade remained extremely thin. It seems that the shock of this surge put the buyers, especially projects, in a quandary as they have to review their project costs. As a result although the sellers and stockiest continued to offer at new levels, most of the buyers abstained from the market. In other words, the limited demand of steel has been further hit in the region as the steel prices increase was certainly not demand driven and was a result of hype created on cost push as well as surging import offers. The highest surge has been in the prices of rebars, which is an essential component for construction activity. Rebar prices have zoomed, in last 30 days, by 35% in Bahrain, 37% in Kuwait, 50% in Saudi Arabia and 46% in UAE. As a result respective governments are quite concerned on this surge and are planning to bring in some order to the market. On the other hand, buyers are hoping that this frenzy would end in some time and they would be able to resume buying steel at reasonable levels for their projects.
Monday Market Monitor - CIS (WEEK 14) - Unabated frenzy
The steel market at Black Sea remained in top gear last week and mills & sellers continued to hike their offers by each passing day. In case of billets, it was seen that some big market players suspended their offers adding fuel to the fire. It is rumored that traders are ready to buy at USD 620 per tonne to USD 625 per tonne FOB Black Sea but producers are already sure to achieve minimum USD 630 per tonne. So, it seems like rally continues but we have to see for how long as the average costing is mush lesser and mills are reported to be running hand to mouth on their order books. For finished longs also some of major steel mills held their offers and did not trade much last week. We heard that the biggest steel mill offered rebars at USD 660 per tonne to USD 670 per tonne on FOB basis and WRC at USD 670 per tonne to USD 690 per tonne. For finished flats, prices have risen last week. The Ukrainian quotations are now close to USD 650 per tonne to USD 660 per tonne for HRC and producers have already started to push prices up to USD 670 per tonne to USD 680per tonne FOB black Sea. The Russians current offers are at USD 680 per tonne to USD 700 per tonne FOB Black Sea. It seems like that more and more people are thinking about lasting of current trends and expect severe market correction.
Monday Market Monitor - Iron Ore (WEEK 14) - Crosses USD 170 CFR
Spot prices of Indian iron ore fines for higher and medium grades continued to march north last week with 3% to 8% gains on FOB India basis.
Some of the key factors affecting the iron ore market in India have been as follows
1. Severe crack down by government on illegal mining leading to curtailed availability and hiked prices on East Coast
2. Hike in railway freight by INR 300 per tonne
3. Imposition of 5% and 10% export duty iron ore fines and lumps
4. Iron ore majors Vale, BHP Billiton and Rio Tinto targeting quarterly pricing rather than annual with a 100% hike in prices leading to an imbroglio with Chinese buyers once again
5. Clamor by steel ministry for 20% export duty on iron ore fines to discourage export to augment domestic availability mills vie for capacity expansion.
6. Restrictive approach of Chinese buyers by banning import by traders with turnover of less than 1 million tonne is 2009
7. Banning import of lower grade iron ore below Fe 60% through traders
8. Banning import of iron ore for 2 months to arm twist Big 3 from dictating price levels for quarterly contracts.
9. Anticipated devaluation of Chinese currency under pressure from Western world.
All the above factors cumulatively is bound to exert downward pressure in the market sentiments as India being a major player in lower grade iron ore will be left with surplus volume to be ultimately diverted to domestic market thereby bring down the prices. However it should be music to Indian manufacturers in the long run as cost deescalates bloating their margin.
Extensive report on iron ore sector in India
The global iron ore market is hot. Everything good or bad about economic activities is visible here. On the one hand, there is strong recovery of demand with the global economic prospects back on track, statistically so till date, concerns nevertheless remain. On the other, speculators are back with panic driven Chinese steel industry rushing to build stock before they set the table for talks with the iron ore mining industry for the year’s contract. The spot prices for iron ore fines have shot over USD 145 per tonne on China’s coast. This means, the contracts for 2010 will be at levels at least 40% higher than in 2009. The Indian government’s action to impose an export tax on fines and raise the same on lumps will help the iron ore majors to stand firm in talks when it comes to the Chinese. Last year’ the Chinese mills made a strategic blunder not signing the annual contract. They won’t repeat that this time around. The future of the global iron ore industry depends on China. Many believe the steel industry’s growth in China will slow down. At this stage, such a statement will be termed speculative only. The Chinese mills, however, may not yield much ground. They will dig more into their own resources, import more from the spot market and thereby reduce their dependence on contracted volumes, if the prices are not favorable. They have also invested heavily overseas on iron ore assets and will bring in substantial quantities from there to meet some critical needs. The iron ore industry knows that pushing the Chinese mills to a tightrope will boomerang in the long term. More the Chinese mills are stressed, more assets will they acquire, which ultimately will reduce the dependence on the global iron ore cartel. China cannot be ignored by the iron ore miners after all they produce nearly half of world’s steel. A question has always been in the forefront : should the global coal or iron ore contracts be floating types indexed to steel prices, or a market based free float, or of a short duration, say, a month or a quarter? So far, the global majors, tied to annual contracts, have not been able to capitalize on the higher spot prices running through the year on the average. It is not necessary that this will happen every year. Yet, an optimistic mining industry globally is pushing for this. This will effectively bring an end to the annual contracts. The rise in global ocean freight has a very significant impact on the iron ore prices. A higher freight will effectively reduce the contract levels set on fob basis. Any attempt to push the burden of rising ocean freight on to the buyer will be resisted. And if iron ore shipping volumes drop, the dry bulk rates will also crash! One does not really know who will bear the brunt of this. It depends on the strength of the market: who is weak and who is not on the negotiating table. India has taken a protectionist stance. The government needs revenue to support the routine development expenditure and also the stimulus measures. This also sends a signal to the local industry that rampant exports cannot be permitted forever when the local industry faces shortage. In addition, it has sent a strong signal that illegal mining has to stop. Many mines are currently under investigation with their mines lying closed. The local mining industry is lobbying hard to get out of the multiple crises. “India’s Iron Ore: Following the Global Meltdown” is the latest report form SNRS. The report discusses the current iron ore business in India, prospects for the future and unfolds the opportunities to provide strategic guidance to investors and all others related to iron ore business in India.
Friday, April 9, 2010
Daily Steel News - 9 Apr 10
Billet prices rise in SE Asia, suppliers hike prices further
Suppliers continue to raise their billet export prices in Southeast Asia. New offers of Taiwanese billet are now $630/tonne fob ($650-660/t cfr SE Asia), up from $620/t fob earlier this week. Certain Malaysian mills
are indicating an export price of $660/t fob ($680-685/t cfr), up from $650/t fob. “If you estimate scrap at $480/t cfr today, the price of billet should be around $630/t fob, assuming conversion cost of $150/t,” a Hong Kong trader tells Steel Business Briefing. Russian-origin billet was recently booked at $615/t cfr Philippines, up from $605/t cfr in late-March. Malaysian billet was also concluded at $645/t cfr Vietnam. A trader’s position cargo of billet, believed to be Taiwanese-origin, was sold earlier this week at $625/t cfr Vietnam. There are a few offers of CIS billet at $660-670/t cfr Indonesia. Brazilian-origin billet was heard offered at $680/t cfr Vietnam. “It is still positive for at least a month,” a regional trader tells SBB. Supply is tight due to the lack of offers, but buying is slow since offer prices are high, he adds. Since rebar prices in regional domestic markets have risen significantly, billet importers can afford to pay more. Indonesian re-rollers raised their bids for imported billet by $20/t from last week to $$630-640/t cfr after increasing domestic rebar prices several times. But there are limits, some traders caution. “Billet offer prices are being hiked more than once in one week,” one tells SBB. Despite rising rebar prices, rebar demand is not strong enough to support such frequent price hikes for billet. “Prices may collapse if billet prices keep shooting up,” he warns.
Korean mills pay more for scrap imports
Korea’s Posco on 7 April booked Japanese scrap at ¥43,900/tonne ($471/t) cfr for both Shindachi and HS grades. The estimated 10,000-tonne purchase will be delivered during this month and next, local trading sources tell Steel Business Briefing. These prices reflect a surge of some ¥3,000/t compared with Posco’s buying price of ¥41,000/t cfr for Shindachi in mid-March. No new booking of H2 grade scrap is heard since the last concluded purchase at ¥38,500/t around two weeks ago. “The Kanto Tetsugen tender will be held on 9 April and the market is expected to come back to book H2 next week,” a Korean trader tells SBB Over a week ago, Hyundai booked two bulk cargoes of US scrap at $455/tonne cfr for HMS No.1 for May deliveries, up from $448/t cfr in mid-March. However, some medium and small-sized Korean mini mills are still monitoring the international scrap market trend. They are adopting a wait-and-see attitude after scrap deliveries from local dealers to these mills’ yards improved recently following a hike in domestic scrap prices, a mini mill source tells SBB. Meanwhile, the country’s total imports of scrap in March rose by 7% month-on-month to 730,000 t, representing the highest level during the past ten months, according to Korea Iron & Steel Association. The US was the largest scrap exporter to Korea, delivering 344,000 t of scrap last month, more than a threefold increase compared with February’s 101,000 t. Japan is the next largest with 251,000 t, but scrap volume from Japan plummeted by 51% m-o-m.
Mills face steep cost increases: not much froth - WSR
Large iron ore price rises and the introduction of quarterly iron ore contracts dominated the markets last week. Details of the new costs to be faced by steel producers are scant: however, rises of 80-130%, depending on the supplier, buyer, quality, freight, volume and duration of the contract, seem likely. In addition, coking coal cost increases of around 55% were confirmed by Posco, and global scrap prices continued to strengthen in many (but not all) parts of the world. These trends left most buyers uncertain. Some responded by buying smaller volumes, adopting a waitand- see approach, fearing offer prices would collapse. Others bought more, fearing prices would rise; both are possible. The cost increases are the immediate cause of the higher finished asking prices. And as many of the new 2010 April-to-June quarter iron ore prices seem pegged to the average of spot prices in January to February, or March, depending on supplier, an immediate collapse seems unlikely. However, the iron ore forward curves are suggesting some softness in the second half of 2010. This would impact prices in October-December 2010 and early 2011. Some mills and a small number of steel buyers are already hedging their purchases - either on an exchange, or an Over the Counter (OTC) market given this uncertainty. A decline in global raw material costs is possible if Beijing seriously cools China’s economy: they would then feed into lower finished steel prices. Alternatively, if China’s steel production continues to grow, requiring more raw material imports, supply bottlenecks may keep coking coal and iron ore prices high, pumping up finished prices further. For mini-mills, where scrap is the main feedstock, scrap pricing seems likely to mirror iron ore price developments: so they will not escape a squeeze on margins.
BHPB settles quarterly iron ore price with ArcelorMittal
ArcelorMittal has settled prices to buy iron ore from BHP Billiton during the April-June quarter, Steel Business Briefing has learned from informed market observers. Both BHPB and ArcelorMittal declined to comment on the matter. Rio Tinto also declined to comment on whether it had settled prices as yet. The agreed price is based on average published prices in January-February for CFR China spot business, adjusted for freight. An independent trader tells SBB that this deal appears to make sense in relation to the quarterly pricing that BHPB has agreed with Asian steelmakers, highlighting the continuing interdependence of the global iron ore market. A number of analysts, both independent and those at investment banks, yesterday confirmed the ArcelorMittal/ BHPB price settlement. Macquarie Bank also quoted Japanese steel industry sources, who indicated that BHPB had now settled with most of its Asian customers at a price of $120.08/tonne fob for 62% Fe fines. One analyst said that the move to quarterly pricing marks the next step in the revolution of iron ore sales, allowing for an increased flexibility in price while retaining a stability not found in LME traded metals with their daily price changes.
Suppliers continue to raise their billet export prices in Southeast Asia. New offers of Taiwanese billet are now $630/tonne fob ($650-660/t cfr SE Asia), up from $620/t fob earlier this week. Certain Malaysian mills
are indicating an export price of $660/t fob ($680-685/t cfr), up from $650/t fob. “If you estimate scrap at $480/t cfr today, the price of billet should be around $630/t fob, assuming conversion cost of $150/t,” a Hong Kong trader tells Steel Business Briefing. Russian-origin billet was recently booked at $615/t cfr Philippines, up from $605/t cfr in late-March. Malaysian billet was also concluded at $645/t cfr Vietnam. A trader’s position cargo of billet, believed to be Taiwanese-origin, was sold earlier this week at $625/t cfr Vietnam. There are a few offers of CIS billet at $660-670/t cfr Indonesia. Brazilian-origin billet was heard offered at $680/t cfr Vietnam. “It is still positive for at least a month,” a regional trader tells SBB. Supply is tight due to the lack of offers, but buying is slow since offer prices are high, he adds. Since rebar prices in regional domestic markets have risen significantly, billet importers can afford to pay more. Indonesian re-rollers raised their bids for imported billet by $20/t from last week to $$630-640/t cfr after increasing domestic rebar prices several times. But there are limits, some traders caution. “Billet offer prices are being hiked more than once in one week,” one tells SBB. Despite rising rebar prices, rebar demand is not strong enough to support such frequent price hikes for billet. “Prices may collapse if billet prices keep shooting up,” he warns.
Korean mills pay more for scrap imports
Korea’s Posco on 7 April booked Japanese scrap at ¥43,900/tonne ($471/t) cfr for both Shindachi and HS grades. The estimated 10,000-tonne purchase will be delivered during this month and next, local trading sources tell Steel Business Briefing. These prices reflect a surge of some ¥3,000/t compared with Posco’s buying price of ¥41,000/t cfr for Shindachi in mid-March. No new booking of H2 grade scrap is heard since the last concluded purchase at ¥38,500/t around two weeks ago. “The Kanto Tetsugen tender will be held on 9 April and the market is expected to come back to book H2 next week,” a Korean trader tells SBB Over a week ago, Hyundai booked two bulk cargoes of US scrap at $455/tonne cfr for HMS No.1 for May deliveries, up from $448/t cfr in mid-March. However, some medium and small-sized Korean mini mills are still monitoring the international scrap market trend. They are adopting a wait-and-see attitude after scrap deliveries from local dealers to these mills’ yards improved recently following a hike in domestic scrap prices, a mini mill source tells SBB. Meanwhile, the country’s total imports of scrap in March rose by 7% month-on-month to 730,000 t, representing the highest level during the past ten months, according to Korea Iron & Steel Association. The US was the largest scrap exporter to Korea, delivering 344,000 t of scrap last month, more than a threefold increase compared with February’s 101,000 t. Japan is the next largest with 251,000 t, but scrap volume from Japan plummeted by 51% m-o-m.
Mills face steep cost increases: not much froth - WSR
Large iron ore price rises and the introduction of quarterly iron ore contracts dominated the markets last week. Details of the new costs to be faced by steel producers are scant: however, rises of 80-130%, depending on the supplier, buyer, quality, freight, volume and duration of the contract, seem likely. In addition, coking coal cost increases of around 55% were confirmed by Posco, and global scrap prices continued to strengthen in many (but not all) parts of the world. These trends left most buyers uncertain. Some responded by buying smaller volumes, adopting a waitand- see approach, fearing offer prices would collapse. Others bought more, fearing prices would rise; both are possible. The cost increases are the immediate cause of the higher finished asking prices. And as many of the new 2010 April-to-June quarter iron ore prices seem pegged to the average of spot prices in January to February, or March, depending on supplier, an immediate collapse seems unlikely. However, the iron ore forward curves are suggesting some softness in the second half of 2010. This would impact prices in October-December 2010 and early 2011. Some mills and a small number of steel buyers are already hedging their purchases - either on an exchange, or an Over the Counter (OTC) market given this uncertainty. A decline in global raw material costs is possible if Beijing seriously cools China’s economy: they would then feed into lower finished steel prices. Alternatively, if China’s steel production continues to grow, requiring more raw material imports, supply bottlenecks may keep coking coal and iron ore prices high, pumping up finished prices further. For mini-mills, where scrap is the main feedstock, scrap pricing seems likely to mirror iron ore price developments: so they will not escape a squeeze on margins.
BHPB settles quarterly iron ore price with ArcelorMittal
ArcelorMittal has settled prices to buy iron ore from BHP Billiton during the April-June quarter, Steel Business Briefing has learned from informed market observers. Both BHPB and ArcelorMittal declined to comment on the matter. Rio Tinto also declined to comment on whether it had settled prices as yet. The agreed price is based on average published prices in January-February for CFR China spot business, adjusted for freight. An independent trader tells SBB that this deal appears to make sense in relation to the quarterly pricing that BHPB has agreed with Asian steelmakers, highlighting the continuing interdependence of the global iron ore market. A number of analysts, both independent and those at investment banks, yesterday confirmed the ArcelorMittal/ BHPB price settlement. Macquarie Bank also quoted Japanese steel industry sources, who indicated that BHPB had now settled with most of its Asian customers at a price of $120.08/tonne fob for 62% Fe fines. One analyst said that the move to quarterly pricing marks the next step in the revolution of iron ore sales, allowing for an increased flexibility in price while retaining a stability not found in LME traded metals with their daily price changes.
Monday, March 15, 2010
Daily Steel News - 15 Mar 2010
Scrap offer prices shoot up in E. Asia, buyers bid lower
Suppliers of scrap continue to hike their offer prices to east Asia despite importers' bid prices trailing below these high levels. Offers of bulk scrap remain limited. Offers of containerised scrap have thinned recently due to increased container freight rates, trading sources tell Steel Business Briefing. This has led to offers of lower-priced containerised scrap from the Middle East, Central America and West Africa drying up. New offers of containerised 80:20 HMS 1&2 from USA are at $400-405/tonne cfr Taiwan and $420-430/t cfr Southeast Asia. Traders report hearing that the highest price that Taiwanese importers paid for 80:20 was around $390. "Those buying now have no choice but to pay these high levels if they need scrap," a regional trader notes. “Finished steel prices are still weak. It is hard for the regional mills to accept these prices,” a trader in Singapore tells SBB. Bulk scrap from USA is being offered at $440-460/t cfr Malaysia/Singapore for 80:20 and at $440-450/t cfr Korea for HMS 1. Bulk scrap offers of mixed 80:20/shredded were at $420-430/t cfr 1-2 weeks ago. “No Korean mill can accept this price level,” a Korean trader says. Korean mills are now more focused on booking Japanese scrap, he adds. "Chinese mills prefer to source local scrap," a Chinese trader says. Chinese importers are only bidding bulk 80:20 at $370-375/t cfr. The prevailing local delivered price for 80:20 HMS including 17% VAT is RMB 2,800-2,900/t ($410-425/t). But local scrap prices are firming due to rising international prices, he tells SBB.
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