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.