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.

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

The rapid decline in hot rolled coil offer prices in Southeast Asia has caught regional market players offering 3-12mm SS400B HRC at $675-680/tonne CFR Vietnam compared to $690-695/t cfr early last week.

Certain low-priced offers of Chinese-origin 3-12mm thick SS400B HRC are at $665-670/t cfr Ho Chi Minh local stockists tell SBB.“The low-priced offers are due to pre-selling by traders and stockists" a Chinese trader says. Likewise, some traders are offering 2mm base SAE 1006 HRC from Korea and Taiwan at around $705/t CFR Vietnam, down $10/t from last week.

Despite the lower prices, buying is very thin – chiefly because of the general market perception that prices could dip by a further $20-25/t before stabilising.

Some pessimistic market gossip in Vietnam suggests that Chinese HRC prices could fall as low as $630 cfr before recovering. But a Vietnamese trader dismisses this: "the Chinese mills will not allow HRC price to fall so far because they will lose money. They will cut output before this happens.

“There are some brave and bold buyers,” a Singapore-based regional trader tells SBB. “They think that since prices have fallen steeply, prices will also jump steeply and are buying on this basis.” However,traders say that the main problem they face now is getting importers to give bids.

The weakening of regional currencies against the dollar last month sparked the recent downturn in HRC prices, combined with softening iron ore and coking coal spot prices. "Demand has been thin for a longtime and mills now realise that they need to lower prices if they want to move their products,” says trader.