Overseas
Comments from Asia
Written by John Packard
October 23, 2016
One of our key Asian steel and commodity trading sources has provided SMU with details about the Chinese steel markets as well as what is happening in Asia,including comments about the circumvention suit which involves Vietnam:
Export offers from China have basically risen by USD20/mt in the past two weeks, and it has become a regional market for China, meaning S.E. Asia the past 2 months as even with the increases, no one can compete with Chinese prices in S.E. Asia.
Hot rolled coil (HRC) is now booked full till January 2017 with orders to Vietnam, India and Bangladesh. Prices on 2.0mm HRC in SAE1006/1008 Al Killed for Cold Reduction is 410/mt FOB ST. LSD with uptick to USD415-418/mt today (Thursday, October 20).
Billets in 130mm Gr. 40/60 Debar grade are at USD340/mt FOB ST. LSD.
Reason for the uptick is Mill closures are REAL, Crackdown on overcapacity is REAL, Coke and Coking Coal prices have actually doubled in last 2 months and prices are sticking, the Automotive and Home Appliance market is stable and increasing and the Real Estate market has stabilized and on an upward trend.
The Government is cracking down on exports of Long Products into S.E. Asian region due to Anti Dumping cases being filed, and normally FORM E Certificate of Origins are required to S.E. Asian countries which is an ASEAN Trade Pac Agreement type FORM allowing importing countries a lower TAX rate on the Imported products, and the Government has informally notified the issuing Agency for this FORM E to stop the issuance, and this is bringing Wire Rod, Debar and Billet exports to a halt recently. Already with Anti Dumping cases Being filed, with a FORM E issuance, these countries get an additional 3-5% Tax break on the imports and you can imagine what this does to the import Prices.
As for Iron Ore, prices will remain at the stable level of USD50-55/mt in coming Months.
On Vietnam and USA, China is not blinking an eye right now as they see it as “They are not the only ones being punished”. If it were ONLY China, then the gloves would come off so to speak. I think one of your Bulletins last week had a very thorough review from a Letter to the Editor on Vietnam where the person had been to Vietnam and made a solid case against the accusations.
John Packard
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