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.