Steel Products
Asian Scrap Markets Regressing from the Recent Highs
Written by Diana Packard
August 4, 2013
Written by: Damon Sun, Daido International
The Far East markets will be rather quiet this week.
Finished demand is still rather poor. Mills were able to lift construction steel prices up about $10/mt, but scrap prices moved up $20/mt. Rebar prices in Taiwan and in S. E. Asia have retreated/sideways from last week and mills are on a wait and see attitude on raw materials. Steel mills will lose money on import scrap converting to rebar (approx. $12/mt loss). So the dynamics on a continual increase in scrap prices into Asia do not look well.
Iron ore to China also have retreated from recent highs. Swings in iron ore prices have been rather dramatic in last 3 weeks and we are definitely coming off the highs.
Plate prices and Coils seem to be doing well and holding/slight up trend. But these were the most severely hit in last 3 months.
There has been a gradual change this year with mills moving towards bulk ship scrap versus containerized. This is mainly due to quality concerns and container logistics costs have increased with shipping lines charging/supplementing the freight with container damage charges. Likely this trend will continue as long as the price differences between containerized and bulk stay within a $20-$25/mt gap. At moment, containerized HMS to Taiwan at $345/mt level CFR (down $5 from highs), while bulk offers at $375/mt CFR but most indications from the mill side at $365/mt level.
Currency exchange rates continue to be a major factor in Far East with the U.S. dollar fluctuating dramatically against any USA economic news. Impact is most felt against the Japanese Yen.
Overall finished demand in Far East has been lackluster for 2013. As example, Taiwan overall finish demand is down approx 30% with import raw materials demand down about 22% for 2012.
News from the USA regarding scrap prices trending sideways/slightly down also has affected the Asian mills wait and see attitude.
The markets should be rather lackluster for next 2 weeks. Likely, we will be regressing from the recent highs for August.
Diana Packard
Read more from Diana PackardLatest in Steel Products
Tariffs, ample domestic supply cause importers to shift or cancel HR import orders
Subdued demand is causing importers to cancel hot-rolled (HR) coil orders and renegotiate the terms of shipments currently enroute to the US, importers say. An executive for a large overseas mill said customers might find it difficult to justify making imports buys after US President Donald Trump doubled the 25% Section 232 tariff on imported steel […]
Drilling activity slows in the US, grows in Canada
Oil and gas drilling activity was mixed this week, according to Baker Hughes. US totals slipped for a sixth straight week, while Canada saw a slight bump in activity.
Commerce finds no Korean OCTG shipments below market value
US Department of Commerce (Commerce) review found no South Korean oil country tubular goods (OCTG) exporters or producers sold products below market value
Drilling activity slows further in US and Canada
Oil and gas drilling activity declined again this week in both the US and Canada, according to Baker Hughes.
SMU Community Chat: Zekelman calls for more support for steel consumers
“Unless the administration actually gets serious about levelling the playing field… for consumers of steel, then everything they've done on the steel side is useless."