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).