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%.