H-beam import prices still firm in SE Asia, demand weak

Offer prices of imperial-size base S275 wide-flange beams for September/October shipments from mills in east Asia including Korea and Thailand are prevailing at $880/tonne cfr Singapore. Bookings took place at around $860/t cfr earlier this month, trading sources tell Steel Business Briefing. Prices are unchanged from last month.
Current demand is very slow due to the rainy season and Ramadan. Hence, mills are unwilling to lower prices because this will not result in higher sales. European-origin beams for October shipment are offeredthis week at $865-870/t cfr Singapore.
“I expect H-beam prices to remain at $850-880/t cfr levels for one month more,” a bullish Thai trader says.
Prices could rebound to $900/t cfr thereafter because demand normally improves in the fourth quarter, he adds.
Trading sources tell SBB that Asian mills are unable to reduce export prices because raw materials and production costs remain firm. These mills are also under pressure to retain the value of their exports because the dollar has weakened against local currencies.
Prices are likely to be fairly stable for the rest of the year, a regional trader says. “I don’t think mills can press for large price hikes because of uncertainties over the global economies," he says. In fact prices may dip towards year-end because of the seasonal slow-down before the Lunar New Year holidays, he adds.

Chinese trading sources say in Vietnam that Chinese-origin 150-350mm boron-added beams are offered at $730-740/t cfr, with some deals concluded at $730/t cfr, up from $720-730/t cfr in July.



Chinese steel prices will continue to be volatile
Chinese domestic steel prices will continue to be volatile for the next few months but are unlikely to see significant price swings, the China Iron & Steel Association (CISA) predicts in its latest monthly market review. The association adds that the current domestic oversupply will offset pressure from high raw material prices and strong demand for construction steel to raise prices.
ISA foresees that demand for long steel products will remain strong for the rest of this year given the boom of affordable housing construction and water conservation projects. The flat steel market will be faced with a more competitive environment compared with the first half this year due to the slowing of the manufacturing sector, especially in areas such as shipbuilding, auto and machinery production.

The inventories of rebar and wire rod in China’s 26 major cities continued to decline in July for the fifthconsecutive month by 3% and 15% respectively month-on-month as a result of strong demand. However,the hot rolled coil and plate inventories in the 26 cities rose in July by 0.5% and 3% m-o-m.
Steel Business Briefing notes that the HRC inventories in Shanghai and Guangdong’s Lecong steelmarket have increased ever since mid-July by 60,000 t and 50,000 t respectively to the current 1.53mt and 770,000 t. Traders say poor end-user demand and new deliveries have caused market stocks to swell.
Both the rebar and HRC spot prices in Shanghai have been in a range of RMB 4,710-4,820/tonne ($737-754/t) with 17% VAT or RMB 4,026-4,120/t non-VAT since early July. Traders believe the high steel production and tight liquidity are the major factors hindering significant price increases.