Shagang lifts early December rebar price by $7/t
Eastern China's Shagang has released its new rebar and wire rod prices for deliveries before 10 December. The price for 16-25mm HRB335 has increased by RMB 50/tonne ($7/t) to 3,730/t ($546/t), while its 6.5mm wire rod price remains unchanged at RMB 3,750/t, both with 17% VAT. Encouraged by Shagang's higher rebar prices, traders in Hangzhou markets have raised their offers slightly by RMB 30-50/t to RMB 3,680-3,700/t. "Before this adjustment, Shagang's ex-works prices were already higher than spot prices, but we will lose more money if we don't follow Shagang's lead," a Hangzhou trader says. But he admits that attempts to push up market prices have not been well received by potential buyers. In both Shanghai and Beijing, prices have generally remained flat despite Shagang's price change. Shanghai traders are offering RMB 3,530-3,550/t for 16-25mm HRB335, and about RMB 3,700/t for HRB400. Meanwhile, Beijing prices have stayed at about RMB 3,630-3,650/t since Monday. All market prices quoted include 17% VAT. "The markets are lukewarm, with few buying," a Shanghai trader says. Most market sources do not foresee any obvious improvement in December, which is typically a month of low temperatures and slim demand for steel. Steel Business Briefing understands that weakening futures prices are also contributing to market pessimism. Rebar contracts for next February delivery on the Shanghai Futures Exchange closed at RMB 3,938/t on 1 December, down from Monday's RMB 3,958/t.
Korean H-beam prices continue to soften
Domestic Korean demand for H-beams remains in the sluggish condition that it entered in September, with the price reduction announced by market leader Hyundai Steel last month doing nothing to boost demand. Local distributors are selling Hyundai's 300x300mm H-beams at KRW 800,000/tonne ($685/t) while Hyundai's list price for the same sized beams remains at KRW 860,000/t, Steel Business Briefing learns from market sources. So while the longs producer cut its list prices by KRW 50,000/t from 1 November, for distributors to sell its beams much lower indicates Hyundai is still offering special discounts, SBB notes. Korea's construction sector still remains depressed so the country's two major H-beam producers of Hyundai and Dongkuk Steel Mill have plans to adjust their output this month in parallel with the output cut they also plan for rebars. Most domestic rebar makers have already decided to close their works for around seven days this month due to rising rebar stock levels, as SBB reported. Meanwhile, the country's H-beam exports in November increased by 4,600 t or by 5% to 95,500 t from October. This also represented a 50% surge year-on-year from the same month last year of 63,500 t, according to data from the Korea Iron & Steel Association.
Output cuts weaken Korean scrap prices
The recent strength in domestic scrap prices in Korea will likely ease within the next few weeks as demand from mills is expected to decrease. Production cutbacks by longs producers to reduce high inventory levels, especially rebars, is bringing an end to the firmer scrap prices. Korean domestic scrap prices, as quoted by Korean mills, had begun recovering since late November after prices had slumped during the previous two months. Hyundai Steel, Korea's leading scrap consumer, raised its buying prices by KRW 25,000/t ($21/t) a week ago. But the mill is considering lowering prices by the same margin from next week citing production cutbacks, Steel Business Briefing learns from a local mill source. Scrap inventories held by steelmakers have declined slightly due to the continuing decline in domestic scrap prices. The source said his company has enough scrap for about 15 days' consumption. "This is not so high but is sufficient as the production cutback looms." But he declined to reveal actual stock levels.Meanwhile, Hyundai's bid prices for Japanese scrap have already started softening. Earlier this week it offered ¥25,500/t fob ($292/t) and ¥28,500/t ($326/t) for Japanese H2 and Shindachi grades respectively. This represents a ¥1,000/t decline from its previous bid price for H2 grade of ¥26,500/t a week ago. Hyundai's three rebar works in Incheon, Dangjin and Pohang will each stop for four-seven days this month. Other mills will close for similar periods. Rebar inventories held by Korea's seven major producers reached 300,000 tonnes by end-November, compared with normal stock levels of 200,000t.
Indian iron ore market weakens, export bookings thin
Indian iron ore exporters are lowering offer prices to China but actual transactions are few. During the 16 November week, offer prices for 63.5%/63% Fe fines to China touched $110/dry metric tonne cfr, but transactions remained sparse as traders became wary of the weakening sentiment. In the past week, transaction volumes thinned further while offer prices also declined in tandem to levels of $106/dmt cfr for the same grade of ore. Steel Business Briefing hears of one transaction early last week at $106/dmt cfr for 40,000 tonnes of 63.5%/63% fines from the port of Krishnapatnam in the south eastern state of Tamil Nadu. The ore was shipped on a single-port loading basis in a Handymax carrier. The freight cost for this deal was $22/t. The freight for double-port loaded ore remained at last week's level of $27-28/dmt. However, shipping of the ore on a two-port basis from Haldia in West Bengal and Paradip in Orissa inevitably takes longer due to a 25-day waiting period, driving up the actual freight to nearly $38/dmt, SBB hears. Meanwhile, transactions for lower-grade ores (50-60% Fe) are more active than those for their higher-grade counterparts. A deal for 55%/54% Fe ore from Goa was heard at $50/dmt fob. This amounts to $76/dmt cfr, SBB understands. "The Chinese are comfortable with their stocks for the moment, so the situation is expected to remain the same this month given the holiday season in India," a Karnataka-based exporter tells SBB. "We hope to see some improvement (in volumes) in January."
Eastern China's Shagang has released its new rebar and wire rod prices for deliveries before 10 December. The price for 16-25mm HRB335 has increased by RMB 50/tonne ($7/t) to 3,730/t ($546/t), while its 6.5mm wire rod price remains unchanged at RMB 3,750/t, both with 17% VAT. Encouraged by Shagang's higher rebar prices, traders in Hangzhou markets have raised their offers slightly by RMB 30-50/t to RMB 3,680-3,700/t. "Before this adjustment, Shagang's ex-works prices were already higher than spot prices, but we will lose more money if we don't follow Shagang's lead," a Hangzhou trader says. But he admits that attempts to push up market prices have not been well received by potential buyers. In both Shanghai and Beijing, prices have generally remained flat despite Shagang's price change. Shanghai traders are offering RMB 3,530-3,550/t for 16-25mm HRB335, and about RMB 3,700/t for HRB400. Meanwhile, Beijing prices have stayed at about RMB 3,630-3,650/t since Monday. All market prices quoted include 17% VAT. "The markets are lukewarm, with few buying," a Shanghai trader says. Most market sources do not foresee any obvious improvement in December, which is typically a month of low temperatures and slim demand for steel. Steel Business Briefing understands that weakening futures prices are also contributing to market pessimism. Rebar contracts for next February delivery on the Shanghai Futures Exchange closed at RMB 3,938/t on 1 December, down from Monday's RMB 3,958/t.
Korean H-beam prices continue to soften
Domestic Korean demand for H-beams remains in the sluggish condition that it entered in September, with the price reduction announced by market leader Hyundai Steel last month doing nothing to boost demand. Local distributors are selling Hyundai's 300x300mm H-beams at KRW 800,000/tonne ($685/t) while Hyundai's list price for the same sized beams remains at KRW 860,000/t, Steel Business Briefing learns from market sources. So while the longs producer cut its list prices by KRW 50,000/t from 1 November, for distributors to sell its beams much lower indicates Hyundai is still offering special discounts, SBB notes. Korea's construction sector still remains depressed so the country's two major H-beam producers of Hyundai and Dongkuk Steel Mill have plans to adjust their output this month in parallel with the output cut they also plan for rebars. Most domestic rebar makers have already decided to close their works for around seven days this month due to rising rebar stock levels, as SBB reported. Meanwhile, the country's H-beam exports in November increased by 4,600 t or by 5% to 95,500 t from October. This also represented a 50% surge year-on-year from the same month last year of 63,500 t, according to data from the Korea Iron & Steel Association.
Output cuts weaken Korean scrap prices
The recent strength in domestic scrap prices in Korea will likely ease within the next few weeks as demand from mills is expected to decrease. Production cutbacks by longs producers to reduce high inventory levels, especially rebars, is bringing an end to the firmer scrap prices. Korean domestic scrap prices, as quoted by Korean mills, had begun recovering since late November after prices had slumped during the previous two months. Hyundai Steel, Korea's leading scrap consumer, raised its buying prices by KRW 25,000/t ($21/t) a week ago. But the mill is considering lowering prices by the same margin from next week citing production cutbacks, Steel Business Briefing learns from a local mill source. Scrap inventories held by steelmakers have declined slightly due to the continuing decline in domestic scrap prices. The source said his company has enough scrap for about 15 days' consumption. "This is not so high but is sufficient as the production cutback looms." But he declined to reveal actual stock levels.Meanwhile, Hyundai's bid prices for Japanese scrap have already started softening. Earlier this week it offered ¥25,500/t fob ($292/t) and ¥28,500/t ($326/t) for Japanese H2 and Shindachi grades respectively. This represents a ¥1,000/t decline from its previous bid price for H2 grade of ¥26,500/t a week ago. Hyundai's three rebar works in Incheon, Dangjin and Pohang will each stop for four-seven days this month. Other mills will close for similar periods. Rebar inventories held by Korea's seven major producers reached 300,000 tonnes by end-November, compared with normal stock levels of 200,000t.
Indian iron ore market weakens, export bookings thin
Indian iron ore exporters are lowering offer prices to China but actual transactions are few. During the 16 November week, offer prices for 63.5%/63% Fe fines to China touched $110/dry metric tonne cfr, but transactions remained sparse as traders became wary of the weakening sentiment. In the past week, transaction volumes thinned further while offer prices also declined in tandem to levels of $106/dmt cfr for the same grade of ore. Steel Business Briefing hears of one transaction early last week at $106/dmt cfr for 40,000 tonnes of 63.5%/63% fines from the port of Krishnapatnam in the south eastern state of Tamil Nadu. The ore was shipped on a single-port loading basis in a Handymax carrier. The freight cost for this deal was $22/t. The freight for double-port loaded ore remained at last week's level of $27-28/dmt. However, shipping of the ore on a two-port basis from Haldia in West Bengal and Paradip in Orissa inevitably takes longer due to a 25-day waiting period, driving up the actual freight to nearly $38/dmt, SBB hears. Meanwhile, transactions for lower-grade ores (50-60% Fe) are more active than those for their higher-grade counterparts. A deal for 55%/54% Fe ore from Goa was heard at $50/dmt fob. This amounts to $76/dmt cfr, SBB understands. "The Chinese are comfortable with their stocks for the moment, so the situation is expected to remain the same this month given the holiday season in India," a Karnataka-based exporter tells SBB. "We hope to see some improvement (in volumes) in January."
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