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

Sales volume of construction long products in Vietnam in July reached 359,000 tonnes, an increase of 20.5% from the previous month but down 32.4% year-on-year, according to the Vietnam Steel Association (VSA). Production of longs in June at 308,000 t was down by 11.2% m-o-m and lower by 29.1% y-o-y.

Cumulative sales of longs during the first seven months of this year reached 2.78m t, up 3.2% compared with January-July 2010. Production rose to 2.89m t, an increase of 7.7% over the corresponding period last year.

“Steel sales slowed down in June,” VSA vice-chairman and general-secretary Dinh Huy Tam tells Steel Business Briefing with reference to sales dipping to just under 300,000 t for that month. He tells SBB that steel demand in August will be adversely affected by a slowdown in construction activity. This is due to the rainy season as well as the Hungry Ghost Festival taking place this month.

The tight monetary and fiscal policies being implemented in Vietnam to stem high inflation continues to have a negative impact on steel consumption, says Tam. Inflation during the first seven months of this year reached 14.6% and bank borrowing interest rates are prevailing at more than 20% per annum.

The VSA tracks data from its member steel mills that together contribute around 85% of Vietnam's long steel production.


Korean domestic H-beam prices firm slightly.

Korean spot market prices for H-beams produced by domestic mills have climbed to KRW 970,000r - 990,000/t ($892-910/t) for SS400 grade ‘junior’ beams this week, up by KRW 20,000-30,000/t ($18-27/t) from late July.

The climb reflects efforts by local dealers to pass on their higher input costs to end-users in tandem with rising prices from the two producers Hyundai Steel and Dongkuk Steel Mill.

In late July, Hyundai announced higher sales prices for H-beams and sections starting from 1 August of KRW 30,000-40,000/t depending on product and size, as SBB reported. With an upturn in market sentiment, spot prices for China-origin H-beams of similar size have also seen a small rise over the past two weeks of KRW 10,000-20,000/t to reach KRW 880,000-900,000/t ($809-827/t).

Buying activity among end-users remains thin for the moment, but industry sources believe H-beat prices will remain firm for the rest of this half. They cite several factors including higher input costs for mill from new electricity charges, output constraints during July-August due to summer maintenance, and expected better construction sector demand from autumn, as SBB has reported.

Meanwhile, Korea’s total H-beam output in this year’s first half stood at 1.53mt, up 4% from 1.47mt in H1 2010, according to Korea Iron & Steel Association data. Within the total, exports reached 668,200 t, up 6.1% y-o-y. But the total output for sections including angles and channels in H1 declined by 5.1% y-o-y to 2.08mt.

Source: SBB

Sales of construction long products in Vietnam in June amounted to 298,000 tonnes, a fall of 23.5% from the previous month and also down 16.1% year-on-year, according to the Vietnam Steel Association(VSA)”Production of longs in June at 347,000 t was down by 20.8% m-o-m but up by 9.9% y-o-y”

Tighter monetary and fiscal policies being undertaken by Hanoi to rein in inflation are the main reasons for the fall in June’s steel figures, VSA vice-chairman and general-secretary Dinh Huy Tam tells Steel Business Briefing. "These policies are affecting steel demand more so than the current rainy season", he says

Sales of longs during the first six months of this year reached 2.42m t, up nearly 12% compared with January-June 2010. Production rose to 2.58m t, an increase of 14.8% over the corresponding period last year”

Tam describes these cumulative figures as “not too bad," but cautions that the situation this year is "tougher than the Asian financial crises”. He explains that ongoing measures such as high bank interest rates exceeding 20% per annum, difficulties faced by enterprises in obtaining loans, and a slowdown in investment spending have had a negative impact on steel consumption. GDP growth for 2011 is expected. to dip below the target of 7-7.5% set by the Vietnamese authorities at the beginning of this year", he adds.

The VSA tracks data from its member steel mills that together contribute around 85% of Vietnam's long steel production”

Hot rolled coil prices decline further in Korea

Continuing soft domestic demand has led spot prices of hot rolled coil in Korea to weaken further this week”

Retail prices of 3mm SS400 commodity grade HRC sourced from domestic mills were pegged at KRW890,000-910,000/tonne ($833-852/t) on Monday, down KRW 10,000-20,000/t ($9-18/t) from a week earlier” Some materials were being offered for as low as KRW 860,000-870,000/t”

Weak buying interest from end-users including pipe makers has led local dealers to reduce their offer prices. But high HRC inventory levels at customers' yards – and market sloth ahead of Korea’s approaching summer holidays – are unlikely to help boost their sales at present, Steel Business Briefing notes”

Spot prices for China-origin commodity grade HRC have declined too, by KRW20-30,000/t to KRW 800 - 820,000/t ($749-768/t) this week”

Another reason behind the soft HRC prices could be Hyundai Steel, which has ramped up HRC output using feeds from its two new 4m t/y blast furnaces, an industry source charges. Hyundai sold some 950,000 tonnes of HRC during May-June in Korea’s home market while Posco supplied only 719,000 t during the same period", it adds.

“The HRC market is dull for the moment," a source in Seoul admits to SBB. "Many buyers have adopted wait-and-see attitude as most have high stock levels." He adds that at the earliest HRC buyers may start replenishing their inventories from next month”

Nippon Steel deepens H-beam production cut

In a tacit admission that its production cuts have been insufficient to reduce stocks, Nippon Steel has decided to halt production on section mills at its Kimitsu works near Tokyo and its Sakai works in Osaka beyond their scheduled maintenance stoppages.

The steelmaker had earlier decided to bring forward 2-3 week stoppages for regular maintenance at its works to the July-September quarter from the initially planned October-December period, as Steel Business Briefing reported. But after it learned that H-beam stocks at end-June had again increased month-on-month, it decided to schedule an additional week of stoppages at both mills from late July”

“Stopping the mills is a direct way to decrease stocks,” a Nippon Steel spokesman noted. He was talking Tuesday after Nippon Steel announced that H-beam stocks held by its ‘Tokiwakai’ grouping of stockists at end-June had increased by 4.7% or 9,600 tonnes from end-May to 215,400 t. This took the stock ratio to 2.73 months or well above the 2-month level Nippon Steel considers “adequate”

Sections demand from small-scale construction projects is increasing but this small demand does not help to lift total delivery volumes, it admits. Regarding pricing, Nippon Steel says cutting stocks and improving market conditions are its priority so will hold H-beam prices for July contracts (unchanged from April).

Nippon Steel does not reveal its prices, but SBB believes its senior-sized beams are at around ¥100,000/t($1,250/t). This is way above prevailing Tokyo market levels of ¥78,000-80,000/t and those by rival Tokyo Steel Manufacturing at ¥76,000/t. “Nippon Steel’s high price is just like asking distributors to not buy,” Tokyo-based distributor remarked.

Source: SBB