Daily Steel News - 22 May 09

China's Shagang lifts rebar and rod prices again
In line with market expectations, Shagang has increased rebar and wire rod ex-works prices for late May deliveries (21-31 May). Prices of 16-25mm HRB335 rebar and 6.5mm carbon wire rod have been respectively lifted by RMB 70/tonne ($10/t) and RMB 80/t to RMB 3,520/t ($516/t) and RMB 3,550/t, including 17% VAT. In total, Shagang has lifted rebar prices by RMB 170/t and wire rod prices by RMB 210/t during May, Steel Business Briefing notes. "Shangang raised prices to catch up with the market but I don't think its new prices will push up spot prices . they will just squeeze traders' profits," a Hangzhou trader says. As the trader predicted, Shagang's announcement did not see prices rise in either Hangzhou or Suzhou on 21 May. Hangzhou prices for Shagang sourced 16-25mm HRB335 remain unchanged at around RMB 3,530-3,550/t. Shanghai traders, however, tell SBB that local prices have increased slightly but transactions have yet to really improve. 16-25mm HRB335 rebar is offered at about RMB3,420-3,440/t, up by over RMB 20/t, and similar sized HRB400 rebar is priced at about RMB 3,520-3,530/t. A Suzhou trader thinks the price is likely to remain stable for a while, since new deliveries from mills are at normal levels. But given that billet prices in northern China's Tangshan area have dipped by about RMB 100/t to RMB3,100/t compared with the previous week, some traders worry rebar prices could also drop. All market prices include 17% VAT.

Daily Steel News - 20 May 09

Malaysian steel demand bottoming out
Malaysia's apparent steel demand in 2008 fell by 10.7% year-on-year and is forecast to contract by an additional 25% this year. There was a sharp drop in steel demand of more than 60% in fourth quarter 2008, and this low steel demand continued into the first quarter of this year. The market appears to be bottoming out, with de-stocking likely to continue taking place this year until Q3, says Chow Chong Long, president of the Malaysian Iron & Steel Industry Federation (Misif). Misif projects that demand for finished steel will pick up by 10-15% each quarter this year after prices reached lows in December that continued into first quarter 2009. "We are starting to see a pick-up in demand, and orders (for both domestic and export) are coming in slowly," Chow tells Steel Business Briefing. Since demand will take 2-3 years to reach levels seen in 2007, mills must exercise restraint, SBB is told. They cannot operate at full capacity yet unless there is demand from markets outside Malaysia. Steel demand has been helped by small government construction projects. The large government projects will take a little longer to be implemented, however. The government is also committed to a second stimulus package. Misif estimates that 25% or over $15bn will be spent on construction projects over the next two years. The average price of billet dipped to M$1,900/tonne ($538/t) in December 2008 and remained at that level for January and February 2009. Production levels and sales volumes dropped by an average of 60%, and the industry has only begun seeing a slight a recovery in sales or exports in recent weeks

SE Asian billet prices continue to surge
Billet import prices have risen in Southeast Asia to around $420-430/t cfr levels. Import buying was most active in Vietnam last week, regional trading sources tell Steel Business Briefing. The country has witnessed buoyant growth in its construction and building sectors in recent months. Bookings in Vietnam for Russian material took place at $420-425/t cfr. Higher-priced bookings were also heard for prompt shipments, especially for Asean-origin billet which enjoy a preferential import duty of 5% as compared to 8% for imports from elsewhere. Traders believe that Malaysian-origin billet was recently booked at around $435/t cfr. Some traders in Vietnam tell SBB that there are fewer offers of billet in the market because some mills are holding back offers in anticipation of higher prices. "Just when you think prices cannot go up further, mills ask for higher prices. Demand is there but price is an issue," a trader in Ho Chi Minh says. Offers of Taiwanese-origin billet were prevailing at $425-430/t cfr. Taiwanese trading sources say that the Taiwan mills will be seeking higher export prices of around $425/t fob because scrap prices have risen recently. This is the same export asking price of certain Malaysian mills. Bidding in the Philippines is at $415-420/t cfr and a booking was done there for Russian-origin billet at $420/t cfr. A small volume was concluded in Thailand last week at around the same price level, SBB is told.

Daily Steel News - 18 May 09

Scrap import prices ascend in east Asia
The scrap import market in east Asia continues to firm. A tender in Taiwan for a bulk shipment of P&S (plate and structural) scrap attracted offers at around $320/tonne cfr. Offers of bulk shipment to Southeast Asia are prevailing at around $295/t cfr for 80:20, importing sources tell Steel Business Briefing. Containerised 80:20 scrap was recently booked at around $270/t cfr Taiwan and new offer prices are prevailing at $280-285/t cfr. A trader claims a booking was closed at $275/t cfr after the importer negotiated down from the initially offered $280/t cfr. In Southeast Asia, offers of containerised 80:20 are prevailing at $280-285/t cfr. Importers in Vietnam are generally bidding at up to $290/t cfr for shredded in containers and $285/t cfr for 80:20. Traders say they cannot source at these bidding prices because limited offers are priced $5-10/t above bidding prices. The Japanese scrap market is also firm. Dongkuk Steel last week secured H2 grade at ¥24,500/t ($258/t) fob and HS (P&S) grade scrap at ¥26,500/t fob respectively. The Korean mill's booking was for June shipment totalling around 30,000t. Trading sources tell SBB that China and Taiwan are now actively making enquiries to book Japanese scrap because of rising offer prices from other sources. A lot of 5,000 t of HS grade was recently sold to China at $297/t cfr.

CIS billet export market is under pressure
Last week was not particularly active for the CIS billet export market, as producers were not budging in response to buyers' low bids, market sources tell Steel Business Briefing. As price expectations diverged, with buyers prepared to pay $340/tonne fob Black Sea, according to trading sources, and some traders offering $365/t fob Black Sea, there was very little business done. Consistent demand from China for the past three weeks has pushed up prices from $390/t to $425/t cfr, and now Chinese buyers are starting to get nervous, one major trader says. Although there is still a shortage of billet in the Far East, the knowledge that theirs is the only demand in the market right now gives them considerable bargaining power, he says. Indeed, after buying an estimated 400,000 plus tonnes of long products last month, Egypt is now quiet, with enough stock to last until the end of June, according to some sources. Turkey continues to be out of the equation, still unable to sell rebar, sources say. There was still demand for small quantities in Vietnam and the Philippines, at $415/t cfr, one major producer notes. Some traders say there were offers as low as $360-370/t fob Black Sea which were not accepted by the market. The sentiment is that there is a "negative wind", and with stocks being in moderately good shape, buyers might not start buying at all, unless demand livens up in Turkey and the Middle East. "Buyers and producers are in a stand-off," one source underlines.