SEA - Vietnam Steel Price & Market Updating

SE Asian billet import market quiet, direction unclear

Offer prices for Korean billet to Southeast Asia are prevailing at $620-630/tonne CFR, regional trading sources say. Most offers to Thailand and Philippines are prevailing at $630/t CFR. A Thai trader has heard of Korean 150 billet, albeit an unpopular size, offered at $620/t CFR Thailand.

Taiwanese billet is being offered at around $610/t CFR in the Philippines. “So especial customers are getting offers at $620/t CFR,” a trader in Manila reports. Korean billet at $620/t CFR with its 3% import duty advantage earns that it is $20/t lower cheaper when compared to billets of other origin imported into the Philippines.
The Korean and Taiwanese mills are generally offering their billet on FOB basis at $600-605/t and $595-600/t respectively, regional trading sources tell SBB. Russian billet offers are at $615-620/t CFR in the region, SBB is told. Suppliers are currently giving offers for next month's deliveries.
“It has been quiet this past week. So sellers think that the market is bottoming out and are holding back on offers. At the sales tie, buyers are not anxious to book material,” a regional trader says. Despite offer prices falling by $5-10/t since last week, most regional importers are not interested because they are aiming to book at $600/t CFR. So buyers are even expecting billet prices to fall to $580-590/t CFR.
Offers to Indonesia are at $630-635/t CFR for Korean material. No import deals are reported to have taken place, however. The dollar's recent strengthening against regional currencies has also dented buying interest. "The rupiah is weakening. This is contributing to importers' hesitation to book billet now," an Indonesian re-roller tells SBB.


Vietnamese apparent steel consumption dips 10.

Production of construction long products in Vietnam during October reached 358,000 tonnes, a fall of14.2% fro the previous month and a 19.4% decrease year-on-year, according to Vietnam Steel Association (VSA) data. Sales of longs in October at 327,000t dipped by 14.4% -o- and fell by a significant 27% y-o-y.
Cumulative production of longs during this year’s first ten months reached 4.1t, up 2.4% fro the corresponding period of 2010. Sales rose to 3.97 t, an increase of 1.5% over January-October last year.
“Apparent consumption of finished steel in January-October is estimated to have fallen by 10% year-on-year,” VSA vice-chairman and general secretary Dinh Huy Ta tells SBB. The volume of steel Vietnam imported during January-October dropped by around 1t y-o-y. “The fall in consumption of at steel is sharper than for longs. Exports of steel products rose too,” he adds.
Ta is not optimistic about the Vietnamese steel market this month because the slump in international markets – as well as the uncertain global economic landscape – has caused market players to adopt a
wait-and-see approach„
Policies implemented by the Hanoi government to rein in very high inflation, such as the setting of bank lending interest rates at nearly 20% and other credit-tightening measures, have dampened steel demand.Since inflation was 17.05% during the first ten months and is expected to reach 18% by year-end, these tight monetary and fiscal policies are expected to continue beyond this year.
The VSA tracks data fro its member steel ills that together contribute around 85% of Vietnam's long steel production.

HRC import prices in SE Asia dip on iron ore price plunge

Import prices of commercial quality 3-12mm thick hot rolled coil have fallen to $630-635/tonne CFR Vietnam. Some deals involving small volumes of SS400B HRC from China were concluded at these level last week, trading sources tell SBB. “There are also some buyers who are waiting for prices to fall to $620/t CFR or even lower to $600/t CFR,” a Vietnamese trader says. Chinese offers for this grade were heard at $640-650/t cfr a week ago. The slide in HRC prices is mainly attributed to the plunge in iron ore spot prices. Some stockists in Vietnam expect Chinese export prices to dip to $585-590/t fob, a local trader says.

Some market sources maintain that these low-priced offers are from speculators or stockists in China since offers from Chinese mills average $645-650/t CFR Vietnam. They say the fall in HRC prices is slowing down and that the market could improve by end-November. "The global economic outlook is better with the agreement to boost the euro-zone's bailout fund," a Vietnamese trader says. And the Chinese domestic market will improve after announced production cuts.

Offers of Korean-origin 2mm base SAE 1006 HRC have dropped to $680-685/t CFR Vietnam compared to $685-690/t CFR a week ago. Some Korean offers are heard at lower levels of $665-670/t CFR. “Nobody is buying, so they have to lower prices,” a regional trader says. A Taiwanese re-roller is heard, but not confirmed, to have offered SAE 1006 2mm HRC at $670/t CFR Vietnam–

Some 20,000 tonnes of Japanese-origin SAE 1006 2mm HRC for December shipment was sold to two customers at $690/t CFR two weeks ago.


SE Asian billet importers stay away in bearish market

Sentiment for imported billet continues to be weak in Southeast Asia as iron ore and scrap spot price plummet across the region. A booking of CIS Black Sea billet is heard booked last week at $630/t CFR Thailand. In Philippines, Russian-origin billet was offered at $630/t CFR Philippines and for Korean-origin billet at $640-645/t CFR, which is $5-10/t lower than a week ago.

Traders are generally believed to be making these low-priced offers. “Billet makers in Korea are stepping back and not making fresh offers,” a Korean trader tells SBB.

Vietnamese induction furnace mills are looking to export billet today at $620-630/t fob, local traders tell SBB. “The billet producers are using high-priced scrap so they face difficulties in lowering export prices,” trader in Ho Chi Minh City tells SBB. "Production costs are not competitive," another says. ""I don't think that there are any deals," he adds. An offer of induction furnace billet from Vietnam is heard at $645/t CFR Thailand. Freight within the region is estimated at $20-25/t.

Buying interest is very weak because of fears of offer prices falling further. Regional rebar markets are sluggish. As long as scrap prices continue to tumble, the billet import market in the region will continue to be under pressure, SBB is told.


Vina Kyoei gets approval for new billet plant, bar mill

The Vietnamese government has approved plans by Vina Kyoei Steel to build a meltshop, billet caster and rolling facilities to nearly double the mill’s capacity to about 900,000 tonnes/year when the expansion is completed around 2013.

The new meltshop will host a 90-tonne AC furnace and a billet caster capable of producing 130-150mmsquare billets to 6 metre lengths, and a 500,000 t/y rolling mill. Located at Vung Tau in southern Vietnam,the mill is currently operating at full capacity at 400,000 t/y producing rebars and wire rods from imported and domestically-sourced billets.

Vina Kyoei is owned 45% by Japanese mini-mill Kyoei Steel, 40% by Vietnam Steel Corp, and 9% and 6% respectively by Japanese traders Mitsui and Marubeni-Itochu Steel.

“We have been planning a meltshop at Vina Kyoei to supply billet ourselves to improve competitiveness,”Kyoei spokesman tells SBB. To date, Kyoei has been supplying about 5,000-6,000 t/m of billet from its Osaka plant to Vina Kyoei. “Exports to Vina Kyoei will decrease but we have customers in Southeast Asia and also in Japan, so we will have no problem with losing Vina Kyoei as a billet consumer,” he said.

Vina Kyoei has also been importing billet from other sources and procuring domestically-produced lower priced semis.

With the new facilities Vina Kyoei will start producing angles too, though the company has not decided production volume. Last month it began producing screw bars with technologies transferred from Kyoei.


Source: SBB

SE Asian HRC import prices continue slide, buyers hold off

Offer prices for hot rolled coil continue to tumble in Southeast Asia, particularly in Vietnam. Chinese offer for 3-12mm thick SS400B HRC to Vietnam are now heard at $640-650/tonne CFR, down from $665-675/t week ago.

“Chinese HRC prices appear to be collapsing,” a Vietnamese importer tells SBB. The plummet in Chinese HRC prices has been sharp and rapid – down around $50/t over the past two weeks. Regional traders believe that Chinese exporters are in a hurry to sell because of liquidity problems and concerns over slowing economic growth in the country.

The prices for other origins are similarly falling. Offers of 2mm SAE 1006 Korean HRC are now $685-690/mt CFR from around $705/t CFR a week ago. A lot of around 25,000t of Japanese 2mm base re-rolling grade HRC was booked last week at around $695/t CFR Vietnam.

Around 25,000t of Ukrainian 2-3mm commercial grade HRC was booked at $680/t CFR Vietnam more than two weeks ago. “It was before the plunge in coil prices,” says a trader who believes that importers will rather delay purchases since prices have not bottomed out.

Importers are hesitating to book in the current bearish market. "Traders keep lowering prices to get bids. But buyers cannot decide whether to buy if prices keep falling,” a local trader tells SBB. This constant lowering of prices is undermining buyers' confidence in the market, he adds.


The Taiwanese mills are noticeably not offering HRC to Vietnam. "The mills here cannot compete," Taiwanese trader says. They are aiming to export HRC at around $700/t FOB.

Hyundai lifts H-beam export prices by $20-30/ft

Export offer prices for Korean wide-flange beams are tipped to strengthen for September/October deliveries. Hyundai Steel, the largest H-beam exporter in the country, says it is raising its H-beam export offer prices by $20-30/tonne to offset higher input costs.

“The export markets in Southeast Asia appear to be sluggish currently so it is difficult to say whether our new prices will be workable in the region,” a company source tells Steel Business Briefing. While demand in the Middle Eastern countries is weak now due to Ramadan, he foresees that this will improve steadily next month after the fasting period ends.

Prevailing offer prices of wide-flange beams for September/October shipments from Korea were around$880/t cfr Singapore in early August, as SBB reported. Hyundai did not reveal its new offer prices this time but market rumours suggest that new offer beam prices from Korea have climbed to about $900/t cfr. InJuly, Korean beam exports amounted to 103,000 tonnes in total, down 14% month-on-month. Hyundai's beam products accounted for more than 90,000 t, an industry source notes. Another Korean H-beam producer, Dongkuk Steel Mill, exported the remaining tonnage. In the first half of this year, the two steel makers' exports were a combined 668,200 t, up 6% year-on-year.

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.