Daily Steel News - 24 Jan 11

SBB Prices - World price +/-
World HRC $/t 765 +77
World Rebar $/t 728 +60
Rebar prices rise in Singapore
Bookings of 15,000-20,000 tonnes of Turkish-origin theoretical-weight rebar were made two weeks ago at
$715-720/t cfr Singapore. These were position cargoes for February shipment offered by traders because
mills’ asking prices are $730/t cfr upwards. “The trader had booked the cargo at below $700,” a trader tells Steel Business Briefing. At that same time, around 20,000 t of Chinese-origin boron-added rebar was also sold to a stockist at $690-695/t cfr Singapore, also believed to be a position cargo. Prime Korean rebar was booked at $730/t cfr Singapore, some traders claim. The domestic price for rebar is currently quoted at S$980-1,000/t ($754-769/t). All prices refer to theoretical-weight rebar. “The market is slowing down for the Chinese New Year holidays. There is no point buying now because prices are not cheap,” a trader in Singapore tells SBB. “It will be clearer after the holidays but sentiment is still firm,” he adds. Due to ongoing projects, demand is good “at the right price,” another says. “The market will pick-up after the holidays,” he tells SBB. As SBB reported previously, offers for imported rebar were prevailing at $660-680/t cfr Singapore in end- December and bookings took place at $650-660/t cfr in second-half December.

Billet prices in Vietnam rise to finished steel levels
Certain Vietnamese billet producers have raised their domestic prices to VND 15-15.4m/tonne ($714- 733/t), up from previous bookings of VND 14.0-14.2m/t ($667-676/t), excluding VAT. “These new prices are too high and are not workable,” a re-roller tells Steel Business Briefing. "Crazy mills are giving these
crazy prices," says a trader who acknowledges that these new billet prices are around the same level as finished steel prices. The prices of state-owned Vietnam Steel Corp's construction long products are unchanged since December because its application to raise prices was turned down by the government. The prices of its wire rod and rebar are listed at VND 14.6-14.9m/t and VND14.7-15.3m/t respectively in South Vietnam. "It is hoped that the government will give its acceptance of higher steel prices before the (Lunar New Year) holidays," a re-roller says. Rebar prices are around VND 14.7m/t in North Vietnam. “People will likely buy billet (at the hiked prices) because there is no chance to get much cheaper material,” a trader in Ho Chi Minh city says. While he acknowledges that the domestic market is not yet at
this new price level, he believes that re-rollers will have to adapt soon. Meanwhile, certain Vietnamese suppliers are aiming to export billet at $685-700/t fob. Since this is higher than the current asking price of $680/t fob for Thai and Malaysian billet, there is very little buying interest. "We prefer selling to the domestic market because prices are good," a manager with a local mill says. He says that supply is "just enough to meet domestic demand."

Iron ore wrap: trading slows as holiday approaches
Trading slowed in the iron ore spot market on Friday after an active day on Thursday. International traders now appear happy to delay sales until after the Chinese New Year holiday (2-8 February), anticipating higher prices when buyers return. Spot prices remained firm with 63% Indian iron ore fines being offered at $193/dry metric tonne cfr China unchanged from the day before, while 62%/61% Indian fines were on offer at $183/dmt. The 62% reference price published by The Steel Index (TSI), a subsidiary of Steel Business Briefing, closed the week at $185.70/dmt, up $0.30/dmt from the day before. Transactions of iron ore stocked at Chinese ports have also slowed as buyers are already leaving the market for the holiday (See related article). But Chinese steel market sentiment remains positive, and steel futures prices on The Shanghai Futures Exchange (SHFE) continue to rise. The most liquid May rebar contract gained 1% to close at RMB 4,950/tonne ($752/t) at the end of the week. However, Thursday saw a sell-off on iron ore swaps following news that the iron ore ban in India’s Karnataka state may be lifted in the next few weeks. The Q2 swap was rumoured to have traded at as low as $160/t that day. This compares with over $170/t earlier in the week.

Poor demand and falling $ hit Rotterdam scrap exporters
Spanish scrap buyers are said to have followed Turkey’s lead, and are standing back from the north European export market. No bulk cargoes were known to have sold out of Rotterdam last week. “With things so very quiet, we can only estimate fob value,” a Dutch merchant tells Steel Business Briefing. Shredded has softened, and would be around $472-478/tonne fob, say traders. HMS 1&2 80:20 should be $6/t below the top of this range at $472/t, whereas 70:30 is $12 lower, a source added. That said, scrap merchants cited just one offer last week, which while around this level had no apparent takers: HMS 1&2 70:30 was available from Belgium for $489/tonne cfr Turkey, with freight costs at just over $20/t, some say. “In addition to slack demand, the euro/dollar exchange rate has moved against us,” says an EU scrap exporter. By Friday 21 January, one euro was worth nearly $1.36, compared to less than $1.30 between 7-12 January. In euro terms, the receipts from a $500/t cargo have fallen some €17/t ($25/t), from around €385/t to under €368/t. “And, while the Turks pay in dollars, we pay our suppliers in euros,” the trader explains. Back on 7 January, when the exchange rate was “most favourable”, shredded was said to have sold at $490/t fob. Exporters are also being squeezed by a growing discrepancy in what they paid scrap collectors at the top of the market, and what they can now achieve in a falling market from their overseas buyers, a source adds.

Turkish mills stop deep-sea scrap bookings, offers stay high
Turkish mills have stopped deep-sea scrap bookings after the prices have peaked quickly, but the supply is also tight from both US and EU and the market’s direction remains unclear, Steel Business Briefing learns from market sources. After the recent offers from USA at $515-520/t cfr for HMS 1&2 80:20 and shredded scrap, no bookings or offers were being heard at the end of last week. While some Turkish producers believe that the USA prices will make a correction downwards as the mills stepped away from the bookings, traders tell that US suppliers will not reduce their export prices as the US scrap collectors will not want to sell more cheaply at a time when bad weather is restricting collection. On the other hand, some domestic scrap is now coming into the Turkish market as the collectors/suppliers were waiting for higher prices and were supplying tightly since mid December. This is helping the mills while they are out of the deep sea scrap market. There is still an EU supplier’s offer available at $489/t cfr for HMS 1&2 70:30 since last week, which has not been booked so far. The sources also believe the next week might be determinative, as the Chinese holiday is approaching and the Chinese mills might secure some stocks before the holiday period which would push the scrap prices upwards. "USA domestic prices for February will be set late next week, and current expectations are sideways to up $15/t," says a US supplier. In the CIS region export prices have fallen by around $10/t to $480-485/t levels for A3 grade scrap but are recovering back quickly. The March prices are expected to be over $510-515/t cfr and April is estimated to be over $525/t as the demand for Turkish finished products is expected to peak in this period.