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.

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.